ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00003030
Complaint for Resolution:
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00004152-001 | 29/04/2016 |
Procedure:
In accordance with Section 8(1B) of the Unfair Dismissals Act, 1977, and following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
The Complainant entered into an agreement with the Respondent on 25th August 2011. This agreement was terminated by the Respondent on 11th March 2016. The Complainant was paid Commission only.
The Complainant referred a complaint to the Workplace Relations Commission on 29th April 2016 alleging she had been unfairly dismissed by the Respondent.
Preliminary Issue. – Status of the Complainant.
Summary of Complainant’s Position.
The Complainant commenced employment with the Respondent on 25th August 2011. The Respondent is one of the largest home credit businesses in Ireland and operates through a network of branches. The Complainant stated she does recall signing a contract but does not recall this being explained to her and she did not receive a copy, to the best of her knowledge. She did not consider herself self-employed. She asserted that she was informed by the Respondent that her work with them was to be her main source of work. She worked on average 15 hours a week.
The Complainant stated that she regularly met the commercial targets set by the Respondent for her. The Complainant stated that she engaged customers for the Respondent through a variety of methods. There was an existing customer base and she was instructed to target them and re-engage them as customers. She was engaged directly in marketing and sales activities for the Respondent. This involved going door to door to engage new customers. Once an individual had been granted a loan her job was to call on a weekly basis in order to collect the weekly payments due from the loan. She stated that she visited the local Head Office twice a week to leave in paperwork and collect the relevant paperwork for the following week, which included the weekly commercial targets that she was expected to achieve.
In relation to the preliminary issue the Complainant stated in relation to her status that she considered herself to be an employee. She stated that she met all the guidelines that are best practice when determining a person’s status as follows;-
They are under the control of another person who directs as to how, when and where the work is to be carried out.
Supplies labour only.
Cannot subtract the work. If the work can be subtracted and paid on by the person subcontracting the work, the employee/employer relationship may simply be transferred on and the work is carried on under the Respondent’s terms.
Does not supply material for the job.
Does not provide equipment other than the small tools of the trade. The provision of tools or equipment might not have a significant bearing on concluding that employment status may be appropriate having regard to all the circumstances of a particular case.
Is not exposed to personal financial risk in carrying out the work.
Does not assume any responsibility for investment and management in the business.
Works set hours or a given number of hours per week or month.
Works for one person or for one business. However an individual could have considerable freedom and independence in carrying out work and remain an employee.
An employee with specialist knowledge may not be directed as to how the work is carried out.
An individual who is paid by commission, by share, or by piecework, or in some other atypical fashion may still be regarded as an employee.
Some employees work for more than one employer at the same time.
Some employees do not work on the employer’s premises.
Statements in contracts…..are of minimal value in concluding as to the work status of the person engaged.
An employee will have rights in respect of working time, holidays, Maternity/parental leave, and protection from unfair dismissal.
The Complainant stated that her working relationship with the Respondent meets all the above guidelines.
Summary of Respondent’s Position.
The Respondent operates a home credit business. They are registered and licenced by the Central Bank of Ireland and they are required to apply on an annual basis for a licence to carry out money lending activities. They are governed by a number of regulatory controls, relevant legislation, codes and Central Bank guidelines. These were outlined in a written submission to the Hearing.
The home credit service is provided on a weekly basis via a network of self-employed agents engaged by the Respondent to act on its behalf. Agents operate an agency, which involves them visiting customers each week to issue loans and collect payments. Subject to certain lending limits imposed by the Respondent, it is the agent’s decision which customers to lend to and how much and as Agents they are paid commission based almost entirely on the amount collected by their agency.
The Respondent has around 650 self-employed agents in the Republic of Ireland with some 106,000 customers. The Respondent directly employs 147 employees in the ROI who are located in various offices across the country. An Area Manager heads each Branch and they have a number of Development Managers. Each Development Manager Is responsible for a group of around 8 – 10 self-employed agents.
The Respondent imposes certain administrative controls on agents especially in relation to the completion of paperwork and the day to day monies that are paid in by the Agents. This is necessary to comply with the Respondent’s obligations to account for customer’s payments and accounts. Agents are able to run their agency as they choose, subject to complying with the legal and regulatory requirements. The Respondent has to provide briefings and instruction and exercise a degree of control in respect of compliance with the law. New agents are required to complete learning materials and pass a test on compliance and personal safety and there is an annual refresher requirement to ensure compliance with the respondent’s legal and regulatory obligations. Agents are not paid for attending any briefings or seminars.
Agents must have their own moneylending licence if they provide customer credit themselves whilst running an agency and they are obliged to comply with the agents agreement and provide 52 weeks cover on their agency but the Agent is not required to provide that cover herself. The Complainant had a clear right of substitution. The Agent is free to appoint Deputy Agents and she did on a number of occasions when she appointed named Deputy Agents in her Agency. She was free to delegate as much work as she choose to one or more of her deputies and agree payment terms with them, which had no input from the Respondent.
The Respondent referenced a number of Cases, some which been previously taken against the Respondent, including a High Court Decision , two Decisions of the Employment Appeals Tribunal and a number of Decisions of the Social Welfare Appeals Office in relation to named individuals.
On the basis of the evidence, written submissions from both Parties and the general principles established over the years in respect of relevant EAT/Court and Social Welfare adjudications I find as follows:
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The original approach was to examine the Contract between the Parties. The business of the Respondent is primarily carried out by the appointment of Agents as provided for in the Consumer Credit Act, 1995. Agents, like the Complainant are issued with a Contract/ Agreement and a manual which sets out the formal relationship between the Parties. This Contract/Agreement of 25th August 2011 was signed by both Parties. This states at Paragraph 1 – We agree you will act as a self-employed agent working with us…The terms of your Agency are set out in this agreement.
This Agreement did not provide for payment of Wages, overtime, sick or holiday pay. There was no reimbursement of expenses incurred by the Complainant in her Agency. There was no evidence presented by the Complainant that she had raised these issues with the Respondent during the course of her five years with the Respondent.
However the case law has considerably modified this approach to include other considerations such as whether there was a mutuality of obligation and a requirement on the Respondent to offer work and on the Complainant to perform this work; whether the Respondent exercised control over the Complainant; whether the Complainant was in business on their own behalf; and whether the Complainant had been integrated into the Respondent’s business; Taxation/Vat payment and who made these payments.
Mindful of the legal principles set out in previous case law, including Minister for Agriculture v Barry and Castleisland Cattle Breeding Society v Minister for Social and Family Affairs, each case must be considered in light of its own particular facts.
Control.
The Supreme Court in Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare (1998) stated – The degree of control exercised over how the work is performed, although a factor to be taken into account is not decisive.
The Respondent operates a money lending business which is regulated and licensed by the Central Bank of Ireland and there are a number of CBI Guidelines, Codes, regulations and legislation governing the business. The evidence was that each Agent was required to comply with these requirements in their Agency and to have a moneylending licence for their Agency. The requirement on the Complainant to provide on a weekly basis administrative forms and documents concerning repayments by customers in not indicative of a contract of employment but rather of the regulatory environment within which the Complainant and the Respondent conducted their work of money lending to customers. I note that the Complainant carried out her work between 10am and 9pm on a Thursday and Friday each week, however this is within the statutory time limits when agents can call to clients.
The Contract/Agreement between the Parties allows the Complainant to employ a substitute or deputy agent to provide cover for the Complainant’s absences and the evidence from both Parties was that the Complainant appointed Deputy Agents on a number of occasions. The Respondent had no responsibility in remunerating these deputies. In Tierney v An Post (1998) the High Court held “the fact remains that it is not normal to find in a contract of service that the employee can hire assistants to perform the work which he or she is employed to do”.
I find that on the basis of this evidence this test is not conclusive that the contract/Agreement was a contract of service.
Mutuality of Obligation.
In order for a Contract of Service to exist there must be a mutual obligation on the Employer to provide work for the Employee and on the Employee to perform work for the Employer. There is an ongoing obligation to provide work and one to accept work.
The High Court in Minister for Agriculture and Food v Barry & Ors stated as follows – 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 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 was required under the Contract/Agreement signed between the Parties, to operate her Agency for 52 weeks of the year and to arrange an approved deputy or substitute if the Complainant was absent and not available. This is clearly indicative of a contract for service not a contract of service as employees do not have to find replacements when they are absent or not available.
There was no evidence presented that the Respondent was required to provide work for the Complainant. The evidence was that the Complainant was responsible, through her own Agency, to secure customers, The Complainant was paid Commission, which was related to the level of activity generated by the Complainant, and not to work assigned to her by the Respondent.
Both Parties did confirm at the Hearing that in certain circumstances or by mutual agreement customers can be assigned to an Agent but this is in clearly defined situations and where the Respondent has a legal or statutory obligation to intervene.
There was no evidence presented to me at the Hearing or by way of submission that the Complainant was arguing that she was integrated into the business of the Respondent Company.
In Business of her own Account.
The Code of Practice for Determining Employment or Self-Employment Status of Individuals issued through the Department of Social Protection provides some understanding of this issue. It States – “The overriding consideration or test will always be whether the person performing the work does so ‘as a person in business on their own account’. Is the person a free agent with an economic independence of the person engaging the service. This economic test is paramount.”
The evidence was that the Complainant operated her own Agency and was in business on her own account and that her economic independence depended on the level of activity she generated through her agency. I also note that the Complainant appointed Deputy Agents when she was not available or absent to ensure the agency remained open 52 weeks of the year. There was no restriction on the Complainant to carry out other work except as constrained by the Contract/Agreement in working for another consumer credit agency.
Respondent and other Adjudications.
The Employment Appeals Tribunal has made a number Determinations in respect of the same issue and the same Respondent in relation to a number of Claimants as follows-
Case No.UD915/2006
Case No. UD1595/2014
Case No.UD844/2014
All determined that the relationship was one of a Contract for Service rather than a Contract of Service.
On 21st July 2016 the Department of Social Protection issued 4 Decisions in relation to employment status of four named Complainants who acted as Agents for the Respondent. In all four decisions the Appeals Officer assigned by the Chief Appeals Officer to hear the insurability appeal found that the four complaints were insurable at Class S which is Self-Employed.
On the basis of my findings above on the Preliminary Issue I decide I do not have jurisdiction to hear this complaint under the Unfair Dismissals Act, 1977, as the evidence shows that the Contract/Agreement between the Complainant and the Respondent of 25th August 2011 was one of a Contract for Services.
Rosaleen Glackin
Adjudication Officer
Date: 19th April 2017