FTD204

1. Appeal of Adjudication Officer Decision No. ADJ-00018309,CA-00023511-001.

BACKGROUND:

2. The Employer appealed the Adjudication Officer’s Decision to the Labour Court on 10 December 2019. A Labour Court hearing took place in a virtual courtroom on the 26 November 2020.

The following is the Labour Court's Determination:-

DETERMINATION :

This is an appeal by Department of Employment Affairs & Social Protection against the decision of an Adjudication Officer ADJ-00018309, CA-00023511-001 in a claim by Ms Collette Kennedy that her employer failed to provide her with a contract of indefinite duration pursuant to Section 9(3) of the Protection of Employees (Fixed-Term Work) Act 2003 (the Act). The Adjudication Officer found her claim to be well founded.

The parties are referred to in this Determination as they were at first instance. Hence, Ms Collette Kennedy is referred to as “the Complainant” and Department of Employment Affairs & Social Protection is referred to as “the Respondent” or “DEASP”.

The claim was referred under the Act to the Workplace Relations Commission on 25th November 2018.

The Respondent did not attend the hearing before the Adjudication Officer. The Adjudication Officer held that the Complainant was on a contract of service with the named Respondent, that she had not been given a contract on the commencement of her role, she had been given ad hoc contracts over the years to demonstrate compliance to the Workplace Inspectorate and accordingly found that section 8(2) of the Act had been breached. Therefore, she held that the Complainant was entitled to, and awarded her, a contract of indefinite duration.


Background

The Complainant was first employed by FÁS as a Community Employment Supervisor in 1993 and she continues in that role. The sponsor of the scheme is South East Community Service Wexford Limited (“the Sponsor”), a company established on 15th October 2007.

Preliminary Issue

The Respondent raised a preliminary issue that the Complainant was not an employee of the Respondent, as it held that she was employed by the Sponsor.

The import of the submission advanced by the Respondent had the potential to deprive the Complainant of the necessary legal standing (locus standi) to pursue her claim against the DEASP, therefore the Court would have no jurisdiction to hear the substantive case under the Act.

In the interest of efficiency of process, the Court proposed to consider this issue as a preliminary matter, as it had the potential to be determinative of the appeal in its entirety. The parties agreed to proceed accordingly. The Court proceeded to hear the extensive submissions presented by both sides on this matter.

Summary of the Named Respondent’s Position on the Preliminary Issue

Mr David Dodd, B.L. instructed by the Chief State Solicitors Office on behalf of the Respondent, stated that a Community Employment (CE) contract for services was established on 15th October 2007 between the Respondent and the CE sponsor, South East Community Service Wexford Limited (SECSW). In turn, SECSW employs the Complainant as a CE Supervisor.

Mr Dodd said that the Respondent is not the employer of the Complainant and does not employ anyone on the Community Employment (CE) projects. He said that it is a function of the Respondent to promote and fund Community Employment Schemes, and as such is responsible for ensuring proper governance, monitoring the deployment of public funds and promoting the purposes of the scheme itself.

Mr Dodd stated that the function of the Minister in relation to employment schemes and related schemes is addressed in section 359A of the Social Welfare Consolidation Act 2005 as amended. Under that Act, the Minister may provide, or arrange for and co-ordinate, the provision of employment schemes and assistance in obtaining work experience. Under section 359A(2), the Minister may provide for the community employment scheme previously provided by FÁS. Subsection (4) is clear that the Minister is not the employer arising from the funding by him or her to a person pursuant to a scheme or programme provided under this section.

In support of its contention, the Respondent cited the High Court case of Martin v. Minister for Social Protection [2017] IEHC 361. This case also concerned a community employment funded by the Respondent. In Martin, Binchy J. refused an application to judicially review the Minister arising from the dismissal of the applicant by Tolka Area Partnership Ltd. The High Court found that all matters relating to the applicant's employment were between the applicant and the Partnership, not the Department, and were matters of private law. Binchy J. stated at para. 40

"The applicant has undoubtedly made out a case that her dismissal from her employment by the Partnership was effected in a manner that is contrary to fair procedures, although because the Partnership is not a party to these proceedings (and nor could it be, it being a private body) the Court does not have the benefit of knowing what the Partnership would have to say in response to the allegations of the applicant. But in any case, those are matters between the applicant and the Partnership, and not between the applicant and the respondent. It is abundantly clear that all matters relating to the employment of the applicant by the Partnership were matters of private law as between those parties, and that the decision to dismiss the applicant from her employment was one taken by the Partnership, and not by the respondent. As such...any complaint that the applicant has arising out of her dismissal is a complaint that should be directed to the Partnership. and not the respondent. As a matter of law, it is not possible to deem the decision of the Partnership to be a decision of the respondent, and for this simple reason it is not possible to grant the applicant the relief which she seeks by these proceedings."

At paragraph 43 the High Court was clear that the Minister was not the employer of the applicant

"While the respondent established and funded the Scheme, the responsibility for the administration of the Scheme, insofar as it concerns matters relating to the employment of the applicant, rested entirely with the Partnership and not with the respondent. That is clear both from the terms of the T�s implementation agreement, and the T�s community workplace initiative, conditions and rules. The applicant's employment was governed by the contract of employment which she entered into with the Partnership and not the respondent. While it is true that she was obliged to enter into this contract of employment in order to maintain her entitlement to Jobseeker's Allowance, that does not in any way alter the fact that her contract was with the Partnership.”
Mr Dodd also cited Minister for Education and Skills v Boyle [2018] IESC 52, the Supreme Court reached a similar conclusion. He said that although the facts and context was different (i.e. not concerning CE schemes) the principles and conclusion are informative. In Boyle, the Supreme Court held that the Department was not the "employer" of a teacher within the meaning of Protection of Employees (Part-Time Work) Act 2001, it held that the school was her employer.

Mr Dodd told the Court that the Complainant is not paid by the Respondent. She is paid by her employer, South East Community Services Wexford Limited. Her employer then submits an application, after payment, for a grant from the Respondent. Provided the appropriate procedures are followed and the employment (and attendance) is verified, the grant will issue from the DEASP to South East Community Services Wexford Limited, as an approved CE sponsor.

The primary objective of the Community Employment Scheme is to assist people who are unemployed to gain experience, training and to move from community employment to employment in the labour market. The Respondent funds Community Employment Scheme, however, it does not employ any CE Employees. He said that the central theme behind the scheme is to ensure independence from the State and instead to have it driven by the community. He said that it would change the entire dynamics of the Scheme if participants were to report to the State.

The CE Sponsor applies to the DEASP for funding to operate a CE Project. The CE Sponsor is contracted to deliver the CE Project in accordance with the CE Agreement (Contract) and the CE Procedures Manual. The CE Sponsor in this case must be a company limited by Guarantee, must be registered as an employer with Revenue and be Tax compliant to seek funding from the DEASP. The CE Sponsor must employ the services of a certified Auditor to make their Company returns to the Companies Registration Office (CRO).

The DEASP conducts CE Monitoring visits to ensure the CE Sponsor (not the Complainant) is operating the CE Project in compliance with the CE Agreement and the DEASP CE Procedures Manual.

All claims for funding from the CE Sponsor are applied for retrospectively, there must be vouched invoices, receipts and copies of cheques etc. for all items where funding is requested. The CE Sponsor must keep attendance sheets that are signed daily by all employees in order to claim the grant for the Allowance for Wages and Supervision.

Mr Dodd said that the Complainant wrongly claims that the Respondent pays her wages. This is not correct. Under Section 8 of the signed annual agreement between the Sponsor and the DEASP, the CE Sponsor pays each participant a weekly wage payment. The DEASP under Section 8 reimburses the Sponsor for these payments, provided that it is satisfied that the costs have been properly incurred and verified.

With regard to the Complainant’s contention that the Respondent is in full control of her employment, her terms and conditions of employment, her day to day activities and monitoring her employment, Mr Dodd totally refuted his assertion. He stated that the DEASP has a duty and responsibility for the governance and operation of all CE Schemes, to ensure compliance with the requirements of the scheme by CE Sponsors, to avoid waste of public monies or fraud and to ensure the objectives of the community employment schemes are being met. Therefore, the DEASP inspects and monitors all payment made by the CE Sponsor. A key requirement of CE Supervisor role is to liaise with the DEASP. It monitors:-

• • Attendance records, work rosters and Contracts of Employment for all staff,
  • Original Bank Statements, Bank Reconciliations and Cheque Book/s,
  • Online Banking Reports,
  • Details of any other bank accounts operated by the project,
  • Payroll detail,
  • Income & Expenditure: Receipts Book and Payments Book,
  • Supplier & Employee Bank Authorisation Forms,
  • Petty Cash Book/Records (if applicable),
  • Capital Assets Register (if Capital items exist),
  • Original Materials and Training Invoices and Receipts.

Summary of the Complainant’s Position on the Preliminary Issue The Complainant appeared before the Court as a litigant in person. She told the Court that while she did not have a written contract of service, she maintained that her contract of service was with the DEASP not the Sponsor. She said that at no time in her 27 plus years of service had the Sponsor ever directed any work instructions to her, and that all instructions came from the DEASP. She contended that she was falsely employed and that her true employer is the DEASP and on that basis that she was entitled to a contract of indefinite duration with the DEASP.

The Complainant contended that the State continuously link employment of Supervisors to participation on a work scheme, which is misleading and unjust. She said that the Sponsor comprises of non-paid volunteers who would be incapable of handling the vast volume of operational policies and procedures generated by the DEASP to carry out the work. She said that whenever she has a query it is directed to the DEASP and not the Sponsor. She said that she is trained by the DEASP to be an expert in the work and is monitored by them. The Complainant maintained that the Respondent has 100% control over her employment, she outlined the following examples:

 tend her interview,

 provided trained for the job,

control wages with a clear directive of no extra pay by Sponsor,

control hours of work,

control holiday pay,

control sick pay and sick leave,

control and monitor attendance using their own forms,

performance manage her work as Supervisor through evaluation and monitoring,

regularly communicate with her to lead, advise and control the work,

decide if the scheme should “rollover” i.e. whether she keeps her job or not.

It is clear that the Complainant has no express contract of employment with the Respondent, however, she contended that there exists an implied contractual employment relationship between her and the Respondent. In that regard, she places heavy reliance on the assertion that the Respondent, as distinct from the Sponsor, has total control over her work. The Respondent denies the existence of a contract of employment with the Complainant and submits that the Sponsor is her employer.

The Court has given careful consideration to the written and oral submissions of the parties. Furthermore, in reaching its conclusion the Court has taken account of the statutory base for Community Employment Schemes, has examined the CE Procedures Manual which was devised to assist DEASP Officers and Sponsor organisations in the management of Community Employment and has inspected the Agreement between DEASP and South East Community Service Wexford Limited.

Section 359A of the Social Welfare Consolidation Act 2005 as amended provides:-

Functions of Minister in relation to employment schemes and related schemes and programmes

(1)The Minister may –

• • (a) provide, or arrange for an co-ordinate the provision of –
  • 
    (i) employment schemes

    (ii) assistance in obtaining employment,

    (iii) assistance in obtaining work experience

    (iv) job placement schemes that facilitate persons seeking employment, in obtaining employment, including the provision of –

  • 1. guidance, advice and information in respect of choice of career and employment, and

    2. services, whereby persons seeking employment are introduced to persons offering employment, and

  (b) assist, whether financial or otherwise, in the provision of schemes and programmes referred to in paragraph (a)

(2) Without prejudice to the generality of subsection (1), the Minister may provide for any employment scheme or programme provided, immediately before the coming into operation of section 30 of the Social Welfare and Pensions Act, 2010, by An Foras Áisenna Saothair, pursuant to paragraph (b) and (g) of section (1) of the Labour Services Act 1987 including the following schemes and programme provided by An Foras Áisenna Saothair immediately before the coming into operation of section 30 of the Social Welfare and Pensions Act 2010:

(a) the scheme known as Community Employment;

(b) the programme commonly known as work placement programme referred to in section 142B(4);

(c) the scheme known as the Jobs Initiative Scheme referred to in section 234.

(3) The Minister may amend or terminate, at any time, a scheme or programme referred to in subsection (2).

(4) the Minister shall not be, or be deemed to be, an employer, within the meaning of the Terms of Employment (Information) Acts 1994 and 2001 by reason only of the provision of funding by him or her to a person pursuant to a scheme or programme provided under this section.

The Role of the Sponsor

“The role of the Sponsor of a Community Employment project is to provide a meaningful work programme and training plan for each participant.

The Sponsor is required to facilitate the participants in undertaking training and development, appropriate to their progression and employment goals. The Sponsor will;

Incorporate as a legal entity and remain incorporated for the full duration of the project. The Sponsor must form a Company Limited by Guarantee (CLG) with no share capital, or as a co-operative…”

“Be fully responsible for the management and the administration of the project”

“Comply with all the relevant statutory and legal obligations of a Sponsor/employer”

“Comply with the terms and conditions laid down in the Agreement with DEASP”

“Co-operate fully with DEASP requirements”

Paragraph 1.6 deals with “The Role of DEASP”

“DEASP will provide advice and grant aid to the approved project for a period of 52 weeks towards; Wages for project participants
 

Wages for full-time supervision where applicable
 Certain overheads (described as Materials Grant)
 Development and training, as approved within the individual Learner Plan

DEASP will conduct project monitoring visits on the implementation of the Individual Learner Plan and work programme. DEASP will also conduct financial monitoring of the project.”

Chapter 3 of the Procedures Manual is entitled “The Workforce” and gives details of the steps to be taken in recruiting/appointing the project participants and the project supervisor and the terms and conditions of work applicable to both. Paragraph 3.3 covers “Recruiting the Supervisor”. Paragraph 3.3.1. is entitled:-

“The Role of the Supervisor”.

“The quality of the Supervisor can be the single most important factor in the success or failure of Community Employment Project.”

“No offer of appointment should be made until DEASP has been informed of the proposed appointee, and has agreed in writing to funding the post and the starting salary point.”

Paragraph 3.3.7.1 states:- “The period for which the Sponsor contracts with the Supervisor is a matter between the Sponsor as the employer, and the Supervisor as employee…. As per employment law, Community Employment Sponsors must provide the Supervisor with a job description and a written contract of employment.” At Paragraph 3.3.7.2 it states:- “The supervisory role must be designated on a full-time basis to the support of CE participants, administration of the scheme and to meeting the key output indicators contained in the application approved by the Department.”

At paragraph 3.3.7.5 it states that the Sponsor must pay employers PRSI in respect of the Supervisor.

Paragraph 3.4 is headed “Responsibilities of the Sponsor”.

“The Sponsor organisation is the legal employer of the CE Supervisor and the participants. As the employer, the Sponsor should be fully aware of all relevant legislation and be committed to fully implementing its spirit and letter at all times.”

The provisions outlined above are reflected in the latest Agreement signed between the DEASP and the Sponsor, South East Community Services Wexford Limited on 27^th August 2018, (copy provided to the Court). The Court notes that

at clause 15 of the Agreement states:-

“It is agreed and understood that in no way shall the participants or Supervisors be employees of the Department of Employment Affairs and Social Protection.”

It seems clear to the Court from the statutory base for the establishment of CE Schemes; from the express provision of both the Procedure Manual and from the Agreement between the DEASP and the Sponsor that it was never intended that the Supervisor of the Scheme would be an employee of the DEASP. This fact has been confirmed by the High Court in Martin.

The Complainant drew a distinction between Martin and the instant case as the former concerned a T�S programme rather than a CE Scheme. Having studied the description of the T�S programme in Martin, the Court is satisfied that the implementation agreement referred to is similar to the Agreement in place between the DEASP and the Sponsor in the instant case. Paragraph 23 in Binchy J’s judgement is a description given by the applicant of the T�S programme:-

"2.2.6 Each implementing Body is responsible for its own employment policies and compliance with statutory requirements in respect of its employees. Accordingly, the Department has no function in respect of any employment matters other than to require that all practices meet general good practice norms..”

And by the respondent at paragraph 32:-

"7. The implementing body shall at all times be an independent contractor for all purposes and all persons recruited by the implementing body shall be their sole responsibility. It is agreed and understood that in no way shall any person or employee of the implementing body, in any capacity whatsoever, in relation to Tus, be considered to be an employee of the department or its agents.

8.The implementing body must ensure that valid contracts are in place with all parties involved in Tus, including those persons on work placements, supervisor's/team leader and any other applicable parties. It is the responsibility of the implementing body to ensure that all contracts are enforceable, properly signed, dated, recorded and filed securely and are in line with the guidance issued by the Department.”

The Complainant was adamant that she has been controlled by the Respondent to such an extent that there existed an employer/employee relationship present. While the Sponsor did not participate in the hearing before the Court, it seems clear to the Court that the Complainant has been carrying out the work of the Scheme, single handed for many years. While she is required by her job description to report to the Chairperson of the Sponsoring Management Committee, she told the Court that she liaises with the DEASP whenever she required assistance rather than with the Sponsor, as she said they were simply volunteers in the community.

The Court notes that the preface of the CE Procedures Manual states :-

“The purpose of this combined DEASP Officer and Sponsor manual is to facilitate ease of cross-reference between the Sponsor and the DEASP Officer and to ensure a consistent approach by DEASP staff in responding to queries or giving advice.”

Therefore, the Court finds it not unreasonable that the Complainant would liaise with the DEASP rather than the Sponsor whenever she required advice or assistance on the Scheme.

The Complainant referred to the DEASP’s monitoring of her performance. This is clearly provided by both the CE Procedure Manual and the Agreement between the DEASP and the Sponsor. Counsel for the Respondent stated that the DEASP is the department responsible for the CE Schemes and the expenditure of public money.

He said that when it was run by FÁS, CE Schemes became mired in well-publicised allegations concerning wasted public expenditure and allegations of fraud, therefore the need for internal and external accountability was paramount. The DESAP has a duty and responsibility for the governance and operation of all CE Schemes to ensure compliance.

Taking all these factors into account, the Court finds that the Complainant was liaising with the DESAP in accordance with the provisions of the Procedure Manual and the Agreement, in the absence of what appears to be inexperience and unfamiliarity from the members of the Sponsor, rather than under the control of the DEASP.

Conclusion

This Court is clearly bound by the judgment of the High Court in Martin, where Binchy J. held:-

“matters relating to the employment of the applicant, rested entirely with the Partnership and not with the respondent”

Applying the reasoning of the Martin judgment, the Court is satisfied that the Respondent is not the employer of the Complainant in this case.

Determination

Based on the Court’s findings above, the Court determines that the Respondent is not the employer of the Complainant. Consequently, the Complainant lacks locus standi to bring the complaint under the Protection of Employment (Fixed-Term Work) Act 2003 against the Respondent, on that basis, her claim cannot be entertained by the Court.

The appeal is allowed, and the Decision of the Adjudication Officer is set aside.

The Court so Determines.

	Signed on behalf of the Labour Court
	Caroline Jenkinson
NJ	______________________
17 December 2020	Deputy Chairman