INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
CONNAUGHT GOLD CO-OP SOCIETY LIMITED
(REPRESENTED BY ROCHFORD GALLAGHER & CO SOLICITORS)
- AND -
(REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION)
Chairman: Ms Jenkinson
Employer Member: Mr Murphy
Worker Member: Ms Ni Mhurchu
1. Appeal against Rights Commissioner's Recommendation r-038735-IR-05/TB
2. A division of the Society's business is its Marts and Property Division where cattle and sheep are sold in four separate venues. The Union claims that for the previous 26 years up to September, 2005, the worker concerned was employed by the Society as an Auctioneer in Ballymote, Co. Sligo. In September, 2005, he was withdrawn from this post although he continues to be employed at the Society's mart in Balla, Co. Mayo. The dispute between the parties is whether the worker was employed by the Society (as the Union claims) or only engaged as an independent contractor (as the Society maintains.) The Union claims that the worker, who was paid €189 per day in 2005, has suffered a significant loss of wages and will continue to do so into the future.
The dispute was referred to a Rights Commissioner and his recommendation was as follows:
"While it is arguable that the respondent did not treat the claimant fairly all the evidence would appear to indicate that the claimant is a self-employed contractor and as such is not covered by the terms of the Industrial Relations Act.
On that basis I have concluded that I do not have jurisdiction to deal with the matter."
The Union appealed the recommendation to the Labour Court on the 28th June, 2006, in accordance Section 13(9) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 13th February, 2008, in Sligo, the earliest date suitable to the parties.
3. 1. The worker is an employee of the Society under a contract of service. A continual relationship existed and continues to exist between the Society and the worker. Whilst it is true that the worker has his own business it is separate from the work he did with the Society for 26 years.
2. The claimant works under the control of the Society. He must carry out his role as Auctioneer at the Mart on set sales days and at times determined by the Society.
3. The Society acted in total contravention of all fair procedures. His earnings have decreased each year since 2004.
4. 1. Whilst it is true that the worker was involved with the Society for 26 years he was not an employee. He is self-employed. There is a full-time auctioneer who is employed by the Society.
2. The worker provides his own office, telephone, including mobile, fax and e.mail where he is available to be contacted by any customer to whom he offers his services at large.
3. The worker was not paid any pension or holiday pay. Any expenses incurred by him, e.g. travel, are solely his own responsibility.
The case before the Court concerns an appeal against a Rights Commissioner’s recommendation which found that the claimant was a self-employed contractor and, as such, was not covered by the Industrial Relations Act, 1969. The claimant is a livestock auctioneer who has worked with the Co-Op for over 26 years. He sought compensation for loss of earnings when the Society reduced his hours of work. The Union submitted that there was an employer/employee relationship between the worker and Connaught Gold Co-op Society Limited; it stated that he was an employee working under a contract of service.
Counsel on behalf of the Society submitted that the claimant was engaged as an independent contractor on a contract for services and that there was no employer/employee relationship between the parties. It put forward the following points to substantiate its position:
-The claimant is engaged in business on his own account. His headed notepaper (submitted to the Court) reads “Brendan Corrigan, Auctioneering, Livestock Salesman & Valuer with Department of Agriculture”
-He submits an invoice to the Society for his services and charges VAT.
-As a business he is properly registered for VAT and must make VAT returns.
-He was engaged by the Society as an independent contractor and not as an employee. PAYE and PRSI were not deducted by the Society.
-He provides his own office, telephone, mobile phone, fax and e-mail.
-He has not been paid annual leave pay or pension.
-If he was not available to attend the Society at a particular time, the Society made alternative arrangements with another Auctioneer.
-The Society has no control over the way he operates his business nor over any other tasks he might perform. It does not impose restrictions over how he provides his services elsewhere.
-He is not paid any travel or other expenses. He submits VAT invoices for the services he provides to the Society.
-His profit or loss is dependent on how he manages his own business.
The Union, representing the claimant, submitted that the claimant was not a self-employed contractor, that he has been working under a contract of service and, therefore, was an employee of the Society for the past 26 years. To substantiate its position it submitted the following points:
-The claimant has worked on Thursdays in the Society’s Ballymote Mart for the past 26 years and in Balla Mart for the past 24 years.
-He continues to be employed in the Balla Mart.
-The on-going arrangement between the parties obliges the claimant to present himself at the Marts on the days of the livestock sales in each location and obliges the Society to provide him with work on those days.
-He is directed by and reports to the local Mart Manager.
-He is obliged to remain at work until he has auctioned all the animals that are presented for sale.
-If he is absent for work due to illness, he must inform the Mart Manager, who will arrange to provide cover.
-From time to time the Mart Manager has requested him to carry out other duties or to provide cover for another Auctioneer.
-If he has a grievance he brings it to the attention of the Mart Manager.
-He plays a key role in the operation of the Marts and is central to their business.
-He does not earn commission on sales and is paid a daily rate.
-He is not engaged in a business on his own account when he is providing his services to the Society.
-The responsibility for premises, equipment, investment and financial risk falls on the Society.
-He does not employ others to assist him.
-He has no opportunity for profit from sound management in the performance of his task. He is paid an agreed daily rate for each day he attends.
-His other jobs (Auctioneering, Livestock Salesman & Valuer with Department of Agriculture) are separate and not connected with his role in the Society.
-The Department of Social Welfare, Community and Family Affairs decided that his employment status with the Society was one of an employer/employee relationship.
The Union told the Court that, having examined the claimant’s employment situation in relation to the criteria set out in theCode of Practice for Determining Employment or Self-Employment Status of Individuals, it was satisfied that he fulfilled the criteria for employment status.
Findings of the Court
The Court has consistently held that a self-employed person is characterised by a number of features with no single feature being in itself decisive - typically he owns the assets; he is not paid a predetermined wage. Instead he runs the chance of profit or the risk of loss according to his own efficiency in limiting his costs; he is often not obligated to work personally but may delegate the carrying out of a job to a third party.
The Labour Court in Determination No. EDA047,Western People Newspaper v A Worker,examined the legal complexity surrounding the area of the distinction between a contract of service and a contract for services. It outlined the series of tests which have evolved at common law to assist in this identification process. It accepted that the distinction is a fine one and may be difficult to apply in borderline cases. It held that“Traditionally, the existence of a contract of employment was dependent in part on the amount of control exercised by the employer, but the Court accepts that this test is not an absolute one”.The Union cited this case to support its contention, that just like the claimant in this case, “an employee can have a second or third job and this has no bearing on their employment status in any one of them”.
The leading Irish case isHenry Denny & Sons (Ireland) Ltd - v - Minister for Social Welfare(1998) 1 I.R. 34. The appellant was employed as a supermarket demonstrator under a yearly contract. Her contract described her as "self-employed". Henry Denny & Sons provided the equipment. If she could not do the job, only a person approved by Henry Denny & Sons could do it for her. She had to wear the uniform provided. She was paid by the day. The question before the Court was whether the appellant was in insurable employment. The Company claimed that she was in business on her own account. However, the premises and equipment belonged to Henry Denny & Sons, her profit did not depend on efficiency, therefore, even though there was a statement in her contract stating, "I am not an employee of Henry Denny & Sons", the Supreme Court held that the assessment of employment status was based on objective terms and found that the appellant was not self-employed and, therefore, that she was employed.
In Determinations of this Court inMaher v Department of Agriculture, Food and Rural Development DWT 22/2002andO'Reilly v Department of Agriculture, Food and Rural Development DWT 32/2002,the Court has takenopposing views in the cases of two Veterinary Inspectors. In theMahercase a Veterinary Inspector was found to be engaged under a contract of service whereas in theO’Reillycase a Veterinary Inspector was found to be employed under a contract for services. Having considered the various tests and theCode of Practice,the Court found that thedifference between the two cases lay in the finding in theO’Reillycase, that he was "a free agent with an economic independence of the person engaging the service" and, therefore, was found to be engaged under a contract for services.
In the English decision ofMarket Investigations v Minister of Social Security  2 Q.B 173the Court considered, as a fundamental test on this question, if the person was performing the service as a person in business on his own account. If the answer to that question is "yes", than the contract is one for services. If the answer is "no" then the contract is one of service.
That approach was adopted in this jurisdiction by the Supreme Court inHenry Denny & Sons (Ireland) Limited v Minister for Social Welfare  IR 34. Here Keane J (as he then was) quoted with approval the following passage from the judgment of Cook J inMarket Investigations:
- “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."
The Code of Practice states that generally an individual should satisfy the self-employed guidelines; otherwise he would normally be regarded as an employee. However, the difference between this case and other cases which required such scrutiny is that there is no disagreement that the claimant runs his own auctioneering, livestock sales & valuation business and in recent years has developed the property end of the business. However, what is clearly at issue is his status while engaged in work for the Society.
For the following reasons, in the circumstances of this case, the Court finds it inconsistent with the relationship being that of employer and employee: -
-The Court is satisfied that the intent of the parties, as evidenced by his failure to seek employments rights for 26 years, was that the relationship was not one of an employee/employer relationship, but one of a customer/client relationship.
-He was not integrated into the Society, he was called upon as necessary, in the slack season there was no work for him as there were no marts, he was not part of the management team, he was not included in the sick pay or pension schemes. He had no set hours of work, his services as an auctioneer were required on the days of the Marts; when all the livestock were sold, regardless of the number involved, he was free to engage in any of the other activities of his business.
-He had the right to decide whether or not to accept work, there was no prohibition on him engaging in his other work, whether on his own or another's behalf. His contract would not have been penalised if he were not available to the Society on a particular day.
-The fact that he was on a fixed rate for the work he carried out for the Society was due to the agreement reached between the Society and the Union on behalf of a number of auctioneers providing similar services to the Society.
-He did not pay PAYE or PRSI, but charged VAT. He always returned his income, including his remuneration from the Society for the past 26 years, to the Revenue as a self-employed person. He was liable for his own public liability cover, indemnity insurance, etc.
The Court notes the decision of the Scope Section of the Department of Social, Community and Family Affairs that he was working under a contract of service and subject to Class A PRSI contributions. This was decided upon without a hearing and without any contribution from the Society. As this decision is currently under appeal by the Society, the Court does not consider it as a persuasive factor in this case.
Taking account of all the factors in this case the Court is satisfied that when he was engaged by the Society he was providing a service in the course of his business, i.e.“Auctioneering, Livestock Salesman & Valuer with Department of Agriculture”under a contract for services with the Society and not as an employee working under a contract of employment, he was“a free agent with an economic independence of the person engaging the service”.
The Industrial Relations Act 1969
Section 23 of the Industrial Relations Act 1969 defines the term “worker” as follows: -
- " 'Worker' means any person aged 15 years or more who has entered into or works under a contract with an employer, whether the contract be for manual labour, clerical work or otherwise, whether it be express or implied, oral or in writing, and whether it be a contract of service or of apprenticeship or of a contract personally to execute any work or labour”
This definition was extensively considered for the purpose of determining the scope of the Registered Employment Agreement (Construction Industry Wages and Conditions of Employment), by Murphy J inBuilding and Allied Trades Union and Another v The Labour Court and Others,High Court Unreported, 15th April 2005. Here the Judge found that the definition was wide enough to encompass persons providing services personally to another under either a contract of service or a contract for service.
The Court notes that the claimant has no other Auctioneers employed in his business, however, it is satisfied that by its very nature, if he did so employ an Auctioneer, he would not have had to personally provide his services to the Society and would have been free to send someone else to the Mart in his place.
For all the reasons out above the Court is not satisfied that the claimant is a person providing servicespersonallyto another under either a contract of service or a contract for services. His business provides the service to the Society and, consequently, the Court does not accept that the claimant can be classified as a worker under the Industrial Relations Act, 1969.
Consequently, the recommendation of the Rights Commissioner is upheld and the appeal fails.
Signed on behalf of the Labour Court
20th March, 2008______________________
Enquiries concerning this Decision should be addressed to Ciaran O'Neill, Court Secretary.