It is important for employers to keep abreast of the movements within the employment tribunals and the determinations that they are publishing as it will allow employers to exercise due caution when dealing with their own internal employee matters. In this regular piece we review a recent employment tribunal decision and the potential implications of that decision for us employers.
This week we focus McCotter -v- Quinn Insurance Limited (Dublin) (UD 242/2011) which concerned claims made under the Redundancy Payments Acts and Unfair Dismissals Acts and which focused on the key question of whether or not the claimant was an employee or an independent contractor. This can be a somewhat grey area and as such it is always extremely useful to see how the Employment Appeals Tribunal (EAT) will investigate such a matter.
Background
The individual here worked as a regional Claims Manager for the company under a Service Contract Agreement for the provision of Insurance Investigation and Settlement Services. When attempting to take a claim to the EAT the company argued that the claimant was not an employee under a ‘contract of service’, and therefore could not take an employment, but instead that he was an independent contractor under a ‘contract for services’.
Employee or Independent Contractor?
In order to identify whether or not the individual was an employee or an independent contractor the EAT took into account “
all the factors relating to the working relationship between the Claimant and the Respondent”. The following factors would suggest an employment relationship in fact existed;
- he had to carry out the work himself and could not delegate his functions;
- he had to be available for work between 9am to 5.30pm;
- he was given business cards by the respondent;
- his voicemail had to be changed to state that he worked with the respondent;
- he was provided with an email address by the respondent.
However, the following factors suggested that an independent contractor relationship existed;
- the claimant considered himself an independent contractor since 2004;
- he had no guarantee of work from the respondent who did not have to provide work for him;
- he was responsible for paying all his own taxes as a self- employed person;
- the claimant was a 100% shareholder in another company and all payments for work done were paid to this company and not to him personally;
- he was not paid when out sick;
- he was not paid for holidays;
- he was not part of any pension scheme;
- he was not paid wage increases when other employees were;
- he could work for other clients so long as there was no conflict of interest;
- he submitted invoices for his services;
The EAT referred to some prominent High Court and Supreme Court case law in their decision and stated that there is no one single test to identify whether or not an individual is an employee or a contractor. They stated that each case must be considered in isolation and there can’t be one overall test. Indeed, in the present case they identified that there were several factors that pointed on the one hand to the individual being an employee whereas other factors suggested that he was a contractor. Importantly they went on to state that it isn’t a case of adding up how many bullet points, as above, fall under the employee or contractor headings, but instead you must take into account all such factors and then “
stand back and look at the picture as a whole, to see if the overall effect is that of a person working in a self-employed capacity or a person working as an employee in somebody else's business. If the evidence is evenly balanced, the intention of the parties may then decide the issue.” In applying this stand back and see approach, the EAT also considered whether or not there was an obligation on the respondent to provide work and the claimant to perform that work, they considered whether or not the claimant carried out the work on his own account and they also considered the level of control that the respondent had over the claimant in the performance of his day-to-day activities.
Conclusion
In this particular case the EAT determined that the claimant was to be deemed an independent contractor and that therefore he could not take these employment claims. In essence this case determined that there is no single test when determining a person’s employment status and that each matter must be considered in isolation against its own facts. It was also deemed particularly important that this individual considered himself to be a contractor since 2004 and this can often be a deciding factor. However, it is important to remember that this is not the determining factor.
If you are unsure as to whether or not a particular individual would be deemed to be an employee or an independent contractor then please contact the Peninsula 24 Hour Advice Service on 01 855 50 50 and one of our experienced advisors will be more than happy to advise you through the process.
