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High Court Considers Whether Translator/Interpreter is Employee for Unfair Dismissal Purposes

In the case of Mc Kayed v Forbidden City Limited t/a translations.ie [2016 IEHC 722]  the issue arose as to whether or not the plaintiff was an employee of the defendant in the context of a potential claim under the Unfair Dismissal Acts 1977 (as amended). The judgement of Ms Justice Ni Raifeartaigh was delivered on 16th November 2016 and a copy of the decision is available to download here.BackgroundThe defendant was an Arabic translator, and the defendant was/is a company which provides interpretation and translation services, including interpretation services for suspects being interviewed while in Garda detention and persons being interviewed in the context of asylum applications. The plaintiff commenced employment in July 2008 and signed a document dated 8th August 2008 setting out terms of the working arrangements which was the standard document for all interpreters and translators. The plaintiff also signed a document entitled “Memo re Declaration of Interests: which provided:“I hereby re-affirm my agreement that I represent FC translations in court, Garda stations and in similar and related areas of operation of FC translations. Including visits to new commercial customers introduced to me through the company.I agree to not work for another company operating competitively in the same area as FC Translations. Unless I have declared this fact to company management, and I will consider at all times the sensitive and trustworthy area in which I am engaged. And so, in doing, I prioritise work for FC Translations and I do not represent any competitor parties operating in the same areas. Especially where that work could lead to confusion or is likely to be considered a conflict of interest, howsoever arising,I will abide by the rules, standards, codes of conduct and the methods of operation adopted by the company and that may be adopted in the future and communicated directly to me, or, written. I will not engage in any dishonest practice regarding any aspect of the company’s work, or conduct my business or behaviour in any manner possibly resulting in negative reaction, while representing FC translations,In return, the company will prioritise me for work in these fields to ensure that it is in my interest and benefit to remain part of FC translations. The company will maintain good relations and will place a high level of trust in me knowing that I not only represent myself but also many others working with the company on sensitive public and legal matters. The company will arrange appointments for me and endeavour to maintain sufficient work for me, and promptly pay me on receipt of correctly submitted invoices or time sheets.”The declaration contained a reference to conflict of interests which provided:“According to the terms of our agreement, I declare here, so as to highlight potential conflicts of interest, or situation arising, that, I work for these companies/groups/individuals etc. listed below, operating in the same area as FC translations, whether or not I am providing interpreting/translation, freely or for reward, howsoever trivial.” The plaintiff wrote none under this paragraph.The plaintiff also signed a code of conduct which contained references such as the plaintiff would not “…..delegate work, nor accept delegated work, without the consent of the company and the client…….You will not allow the distribution of your phone number or that of any co-worker to any defendants, clients or solicitors. All such queries should be directed to the company’s office. Give the company business card if requested…..Not pass on your appointed work to others; all appointments are scheduled by the office….”. Full details of the code of practice are set out in the judgement. The plaintiff also signed a statement of confidentiality.Legal SubmissionsCounsel for the defendants argued the situation was governed by Minister for Agriculture v. Barry [2009] 1 I.R. 215, and that the first issue to be addressed by the Court was whether there was ‘mutuality of obligation’ between the parties. Counsel argued that the requisite mutuality of obligation was lacking in circumstances where (a) the defendant company had no control over the hours of interpreting work that might become available to the plaintiff and had not guaranteed any particular volume or hours of work to the plaintiff or that there would necessarily be work on an ongoing basis. Counsel stated that the High Court in Barry had described the ‘mutuality of obligation’ principle as a ‘filter’ for, or ‘sina qua non’ of, an employment contract.The plaintiff, representing himself,  contended that the decision of the High Court in Barry v Minister for Agriculture [2009] 1 I.R. 215 was wrong and should not be applied to his case. He challenged the appropriateness of the mutuality of obligation principle described in the Barry case. He said that there was no reference to the ‘mutuality of obligations’ principle in the leading Supreme Court decision of Denny & Sons (Ireland) Ltd v. Minister for Social Welfare [1998] 1 I.R. 34. He cited various authorities (including Cornwall County Council v Prater [2006] EWCA Civ 102; Stephenson v Delphi Diesel Systems [2003] ICR 471; and James v Greenwich Case C-256/01) to suggest that the definition of mutuality provided in Barry is not universally accepted. The plaintiff also referenced a number of additional cases including those of the Indian Supreme Court to support his argument that the cogency of the mutuality of obligations test had not been universally accepted. The plaintiff also made reference to the ‘Report of the Employment Status Group- PPF’, noting that the mutuality of obligation test was not afforded a prominent role or quoted as a sine qua non to establish employment status in that document. He also referred to academic articles and argued the mutuality of obligations principle should not be applied and/or dominant and that, having regard to all the factors in his case, the Court should find that there had been a contract of employment in his case. He argued that over the course of dealings between the parties, a mutual obligation had built up whereby he was paid for the work done and was obliged to provide his own work and skill in the performance of a service for the employer, and the employer had an obligation into the future to provide him with work.The Legal AuthoritiesThe Court noted that “….the question of how to approach the question of whether the relationship between two parties is one of employment has been the subject of many authorities. A leading case in modern Irish law is the decision of the Supreme Court in Denny & Sons (Ireland) Ltd. v. Minister for Social Welfare [1998] 1 I.R.“. In a judgment delivered by Keane J. in the Supreme Court it was held that in deciding whether a person was employed under a contract of service or under a contract for services, “each case must be considered on its own facts and the general principles developed by the courts”. Keane J in that judgement noted however“The criteria which should be adopted in considering whether a particular employment, in the context of legislation such as the Act of 1981, is to be regarded as a contract “for service” or a contract “of services” have been the subject of a number of decisions in Ireland and England. In some of the cases, different terminology is used and the distinction is stated as being between a “servant” and “independent contractor”. However, there is a consensus to be found in the authorities that each case must be considered in the light of its particular facts and of the general principles which the courts have developed: see the observations of Barr J., in McAuliffe v. Minister for Social Welfare [1995] 2 I.R. 238“.It was also noted that the extent and degree of the control which was exercised by one party over the other in the performance of the work was regarded as decisive but later authorities demonstrated that :that test does not always provide satisfactory guidance”. In Cassidy v. Ministry of Health [1951] 2 K.B. 343, it was pointed out that, although the master of a ship is clearly employed under a contract of service, the owners are not entitled to tell him how he should navigate the vessel.In the English decision of Market Investigations v. Min. of Soc. Security [1969] 2 Q.B. 173, Cooke J., at p. 184 having referred to these authorities said:-‘The observations of Lord Wright, of Denning L. J. and of the judges of the Supreme Court suggest that the fundamental test to be applied is this: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account?’. If the answer to that question is ‘yes’, then the contract is a contract for services. If the answer is ‘no’, then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.’It was also noted in Graham v. Minister for Industry and Commerce [1933] I.R. 156 that the essential test was whether the person alleged to be a “servant” was in fact working for himself or for another person. The court observed that the degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. Justice Ni Raifeartaigh noted that the defendant relied heavily upon the judgment of the High Court (Edwards J.) in Minister for Agriculture and Food v. Barry and Ors [2009] 1 I.R. 215 for the proposition that “sina qua non of any employment relationship is what is known as ‘mutuality of obligation.” She noted the facts in Barry and the analysis by Edwards J in the High Court on the relevant legal principles. “In the first instance, he held that the EAT had erred in limiting the issue before it to a binary question as between a contract of service and a contract for service, when there were other possibilities. He then noted that “the EAT had adopted a two-stage process in reaching its decision; (1) it applied a mutuality of obligation test; and (2) it applied the ‘enterprise’ test. He observed:“The appellants have no difficulty with the fact that the mutuality of obligation test was applied but they vehemently dispute the purported finding of mutuality of obligation on the evidence that was before the tribunal. They also say that the Employment Appeals Tribunal was incorrect to apply the so called enterprise test as it is not determinative of the issue, and the Employment Appeal Tribunal’s belief to the contrary is grounded in a misconstruction of Keane J’s judgment in Henry Denny & Sons (Ireland) Ltd. v Minister for Social Welfare [1998] 1 IR 34.”Ultimately Edwards J concluded that the EAT’s finding of mutuality of obligation was flawed and referred with approval to the decision in the English case of O’Kelly v. Trusthouse Forte plc [1983] ICR 728, which concerned an ‘umbrella contract’ with regard to casual catering staff used by the banqueting department of a hotel company. The claimants lost their claim for unfair dismissal compensation on the basis the important ingredient of mutuality of obligation was missing.  Edwards J referred to Denny for the proposition that every case had to be considered in light of its particular facts by reference to the general principles developed by the courts, and that it was unhelpful to speak of ‘tests’ as no one test could constitute a measure or yardstick of universal application. The court noted that the Barry case had returned to the EAT for a second determination which was appealed to the High Court and then the Supreme Court set aside the High Court decision on the basis that the central question on the appeal had not been addressed (Barry v. Minister for Agriculture and Food [2015] IESC 63). The mutuality of obligations test was addressed again in Ahktar Mansoor v. Minister for Justice, Equality and Law Reform [2010] IEHC 389, where Lavan J said: -“Given the significance of the distinction it is unfortunate that no definitive line of authorities, or indeed legislation, can be identified so as to provide a clear test. There is no, as Edwards J. described it in Minister for Agriculture and Food v. Barry [2009] 1 I.R. 215 ” ‘one size fits all’ test”. This uncertainty was eluded to by Keane J. in the leading Irish case of Denny (Henry) & Sons (Ireland) Ltd. v. Minister for Social Welfare [1998] 1 I.R. 34 where he observed that ‘each case must be considered in the light of its particular facts and of the general principles which the courts have developed’. Having said this, a number of important factors can and have been distilled from the case law which assist in determining whether or a person is an independent contractor or an employee. These include, but are importantly not limited to, (a) whether the person is engaged in business on his or her own account; (b) whether they are referred to as an employee under the contractual arrangement; (c) whether the person is responsible for their own tax affairs; (d) whether the person is free to engage people as substitutes when he or she is not available; (e) the level of control exercised by the employer who engaged him or her; and (f) whether he or she is entitled to payments that normally accrue to employees, such as pension contributions, sick pay, maternity leave, annual leave etc.Although important, I do not believe it is necessary for me to consider all of these factors in this case. Before a tribunal is required to consider the above factors an important filtering mechanism must first be traversed; a task that is not completed here. This mechanism has been described recently by Edwards J. as the ‘mutuality of obligations test’. Simply put the test requires the employer to provide work for the employee and that the employee is obliged to complete that work. The following passage from his judgment in Minister for Agriculture and Food v. Barry [2009] 1 I.R. 215 is worth quoting in detail:-‘the mutuality of obligation test provides an important filter. Where one party to a work relationship contends that that relationship amounts to a contract of service, it is appropriate that the court or tribunal seized of that issue should in the first instance examine the relationship in question to determine if mutuality of obligation is a feature of it. If there is no mutuality of obligation is not necessary to go further. Whatever the relationship is, it cannot amount to a contract of service.’ [Emphasis added]”The court observed that that the High Court in the Ahktar case applied the approach described by Edwards J. in the Barry case, namely that the ‘mutuality of obligation’ issue should be addressed in the first instance, and that it serves the function of a ‘filter’ for cases which may fail in limine.In Brightwater Selection (Ireland) Ltd. v. Minister for Social and Family Affairs [2011] IEHC 510, the High Court (Gilligan J.) engaged in a thorough review of the authorities as to when a contract of employment exists and examined the role of the ‘mutuality of obligations’ concept in such an analysis. In the course of his review, Gilligan J cited the Barry case with approval and, expressing his conclusions on the issue of mutuality of obligation, he said:-“Mutuality of obligation exists where there is an obligation on a body to provide work to an individual, and a corresponding obligation on the individual to perform the work. It is clear from a perusal of the authorities that no definitive test has been set out by the courts to be used in the context of determining whether a person is engaged under a contract of employment and it follows that a court or tribunal, in making such determination, should have regard to all relevant considerations. It is quite straightforward to derive from the case-law, and set out in the abstract, a non-exhaustive list of considerations that should be taken into account, such as inter alia: whether one party has the power of deciding what work is to be done and the manner in which it is to be done; whether the work of the engaged person is an integral part of the business; whether the person provides their own work or skill in the performance of some service; how the person is engaged and dismissed; how the person is remunerated; who chooses the times of work; who provides the workplace and so forth. As a tribunal should take into account all the relevant circumstances, mutuality of obligation is undoubtedly a consideration that regard should be had to, and indeed, is an important factor in determining the employment relationship”Justice Ni Raifeartaigh observed “The mutuality consideration is by no means a determinative test, but is an irreducible minimum of a contract of service. Although the existence of mutuality of obligation is not determinative, without mutuality no contract of service can exist. It would be logical, therefore, for a court or tribunal to begin their analysis of the employment relationship by determining whether such mutuality exists and then inquire further into the relationship“The court also referred to a number of judgements in respect of the binding nature of consistent High Court case law including In the Matter of Worldport Ireland Limited (in Liquidation) [2005] IEHC and Kadri v Governor of Wheatfield Prison [2012] IESC 27, 31. Application of Mutuality of Obligation TestThe court considered that the Barry case was the correct approach and looked at whether there was mutuality of obligation in the arrangement between the plaintiff and defendant. Justice Ni Raifeartaigh looked at the obligations of the defendant under the Declaration of Interests document which provided:“In return, the company will prioritise me for work in these fields to ensure that it is in my interest and benefit to remain part of FC translations. The company will maintain good relations and will place a high level of trust in me knowing that I not only represent myself but also many others working with the company on sensitive public and legal matters. The company will arrange appointments for me and endeavour to maintain sufficient work for me, and promptly pay me on receipt of correctly submitted invoices or time sheets.” (emphasis added)“She noted:”Accordingly, it is in my view plain that the defendant’s side of the bargain was merely to try to give the plaintiff work but that there was no guarantee of work, in circumstances where the defendant itself had no control over the amount of work that might come to it from the Garda Siochana or other State entities….“The court noted that the plaintiff relied upon the fact that he had written the word ‘none’ under the last paragraph of the ‘Declaration of Interests’ document which required a declaration of the names of other companies, groups or individuals for which the plaintiff was providing translation services. He said that this indicated that he had an exclusive arrangement with the defendant company and therefore was their employee. The court noted that “…the very fact that there was such a clause in the contract underlined the fact that, from the defendant’s point of view, he was entitled to work for others as well as the defendant; all that was being required here was that he disclose those names in order to prevent potential conflicts of interest in the actual work of interpreting/translating“The court also noted that whilst priority was to be given to work for the defendant company, the plaintiff was not prohibited from working for other companies provided there was no conflict of interest. Furthermore “the fact that work was given regularly for a period of time is not determinative of whether one party had a legal obligation to provide the other party with workConclusionJustice Ni Raifeartaigh concluded that the plaintiff was not an employee of the defendant and that””In the circumstances, I am of the view that the defendant company was not under a contractual obligation to furnish the defendant with any, or any particular, volume of work into the future and that the requisite mutuality of obligation for an employment contract was therefore absent.”  

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