In a recent case before the WRC, the Adjudicator sets out some of the key points to consider in determining whether there is a contract of services (employee) or a contract for services (self employed). This case centered on a sales consultant who had an arrangement with an e-commerce company whereby he would not be paid a salary but given a share option arrangement. The consultant worked full time for another firm and was limited in the hours provided to the respondent. In addition limited control was exercised by the respondent over the consultant who directed how he performed the work.
Although a number of legal tests were considered, one of the key tests concerned the mutuality of obligation test whereby, in order for a contract of service to exist there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. Reference was made to the recent High Court case of Minister for Agriculture and Food v Barry & Ors whereby the mutuality test of obligation was endorsed by Edwards J. when he stated, ”The requirement of mutuality of obligation is the requirement that there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. If such a mutuality is not present, then either there is no contract at all or whatever contract there is must be a contract for services or something else, but not a contract of service”.
The complainant in this case was found to be self employed and therefore the complaint under the Unfair Dismissal Act was dismissed on the basis the WRC had no jurisdiction to hear it.