In the recent decision of Eamonn McCotter v Quinn Insurance Group UD 242/2011; RP290/2011 the Employment Appeals Tribunal considered the question of whether it had jurisdiction to hear the Claimant’s unfair dismissal/redundancy claim in circumstances where the Respondent argued that the Claimant was not an employee.
Although the conclusion reached by the Tribunal is of no surprise, the decision is nonetheless a useful synopsis of the law in this area.
The Claimant in this case carried out work as a regional claims manager for the Respondent under a service contract and agreement for the provision of insurance investigation and settlement services. Clause 1(f) of the Agreement provided:
“The contractor will not be prevented or restricted by virtue of its relationship with (QI) from providing services to any other clients, subject to no conflict of interest arising”.
The Claimant was a director and 100% shareholder of a company AI Limited through which he received payment from the Respondent. The Claimant had requested that all payments made to him be made through the Company by email dated 22nd September 2009. Prior to this all payments were made directly to his personal bank account.
The Tribunal heard evidence of other elements of the arrangement the Claimant had with the Respondent namely:
- The Claimant submitted invoices to the Respondent for payment;
- The Claimant accepted that he had no guarantee of work and that the Respondent did not have to provide any work for him;
- The Claimant had no control over the amount of work given to him;
- The Claimant did not receive holiday or sick pay and was not part of a pension scheme
- The Claimant looked after his own tax affairs and used his car in carrying out his duties
- The Claimant submitted tax returns to the Revenue Commissioners as a self-employed person in accordance with Schedule D from 2007 onwards.
The Claimant also gave evidence that he had to carry out the work for himself and could not delegate duties and that he was provided with business cards by the Respondent and was given a QI Limited email address. He noted that his voicemail reflected that he was from the Respondent company and he gave evidence to the outside world that he was an employee of the Respondent and that he had to be available for work between 9.00a.m. and 5.30p.m. each day. The Claimant confirmed that he regarded himself as self-employed but he had no choice as the Respondent refused to employ him as a PAYE worker.
The Tribunal noted the following which emerged during the hearing and noted that some factors supported the contention that the Claimant was engaged as an independent contractor and others supportive of the Claimant’s status as an employee:
- The Claimant considered himself as an independent contractor since 2004;
- The Claimant was responsible for paying his own taxes;
- The claimant’s email of September 22nd 2009 to the Respondent which requested that it was more tax efficient for him to trade as a limited company rather than a sole trader and all payments should be made through the company bank account;
- The Claimant was not paid sick leave. holidays, pension, he was not entitled to wage increases and could work for other clients once there was no conflict of interest;
- The Claimant submitted invoices for his services;
- The Claimant had to carry out work for himself and could not delegate services
- The Claimant used the Respondent’s email address and was given business cards by the Respondent.
The Tribunal then referred to the case of Minister for Agriculture and Food v Barry  IEHC 216;  1IR 215 where the High Court allowed an appeal by the Department of Agriculture against the decision of the Employment Appeals Tribunal which found that five temporary veterinary inspectors (TVI’s) were employees and accordingly entitled to payments under the Redundancy Payments Acts and Minimum Notice Acts following the closure of the Galtee Meat Plant at Mitchelstown, County Cork.
Edwards J found that the TVI’s were in fact independent contractors and looked at the “mutuality of obligation test” which was referred to in the Employment Appeals Tribunal decision. It noted mutuality of obligation exists where the employer is obliged to provide work for the employee and the employee is obliged to perform that work as in normal employer/employee relationship. The High Court agreed with the Department’s view that they had no control over the level of work available to the inspectors as this was within the control of Galtee.
Edwards J in the High Court further noted that it was incumbent on the Department to ask three questions;
- Whether the relationship between each TVI and the Department was subject to just one contract or more than one contract?
- What was the scope of each contract?
- What was the nature of each contract?
Edwards J noted that it was possible that each time the TVI’s worked that they may have entered a new contract and he noted that depending on the circumstances each individual contract should then be analysed to determine if it was a contract of service or a contract for service.
Edwards J also looked at the “so-called enterprise test” or whether a person is in business on their own account which was adopted by the Supteme Court in Ireland in Henry Denny and Sons Ireland Limited v Minister for Social Welfare  1IR 34 and in the subsequent cases of Tierney v An Post  1IR 536, Castleisland Cattle Breeding Society Ltd v Minister for Social and Family Affairs  IESC 40 and the Electricity Supply Board v Minister for Social Community and Family Affairs  IEHC 59. In looking at the Henry Denny case, Edward J noted that “each case must be considered in the light of its particular facts and of the general principles which the court has developed”.
The Tribunal noted that the test regarding whether “a person is in business on their own account” was reduced from being the fundamental test to being one of the many factors that have to be taken into account in light of the facts of each particular case. It further stressed that “the issue is not determined by adding up the numbers of factors pointing towards employment and comparing that result with the number pointing towards self employment. It is the matter of the overall effect which is not necessarily the same as the sum total of all individual details…………when the detailed facts have been established the right approach is to 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……“.
The Tribunal concluded that the working relationship between Claimant and the Respondent, taking into account the caselaw referred to above, was one of a contract for services and that the Claimant was working as an independent contractor. The claim under the Unfair Dismissal Acts 1977(as amended) and the Redundancy Payments Act 167 (as amended) failed.