ADJUDICATION OFFICER DECISION/RECOMMENDATION
Adjudication Reference: ADJ-00006600
Parties:
| Complainant | Respondent |
Anonymised Parties | A Restaurant Worker | A Restaurant |
Representatives | Gerald Kean of Keans Solicitors; The Complainant in person | J.M. Deane & Co Solicitors , instructing Padraic Lyons B.L. |
Complaint(s):
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997 | CA-00008988-002 | 06/01/2017 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00008988-003 | 06/01/2017 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00008988-004 | 06/01/2017 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00008988-005 | 06/01/2017 |
Date of Adjudication Hearing: 07/02/2018
Workplace Relations Commission Adjudication Officer: Emile Daly
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015, following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
Background:
The Complainant is from Romania. He worked for the Respondent in the Respondent’s restaurant from January 2014 until October 2016 when their working relationship came to an acrimonious end. The preliminary issue to be determined is whether or not, the relationship between the parties was that of an employer/ employee relationship. The Respondent contends that it was not, the Complainant contends that it was. If the agreement was not that of employment then the rights that the Complainant now seeks to exercise in this complaint do not arise and I have no jurisdiction to proceed with the complaint. The preliminary application raised by the Respondent is two-fold. Firstly, he contends that there is no employment contract and the complaint should fail for want of jurisdiction. Secondly, he contends that if there was an employment contract at the early stage of their dealings, that this ceased in January 2015 and therefore the time limit would be 6 months from the date that he was last employed (being January 2015) and, as the present complaint was made in January 2017 the complaint is out of time. I propose to deal with the preliminary application now. |
Summary of Complainant’s Case:
1. The Complainant came to Ireland from Romania in 2007. He met the Respondent in 2009 in Portlaoise 2. The Respondent had and has a number of restaurant businesses, a printing business and other business interests. 3. One restaurant premises was in west Dublin. In the mornings, this premises was leased by the Respondent to a third party as a coffee shop and during the evenings it was a pizza restaurant and alongside this pizza business there was an online food delivery business. 4. The Complainant had worked as a pizza chef in Portlaoise for the previous owners of the pizza restaurant in west Dublin. 5. In January 2014 the Complainant started working for the Respondent as a pizza chef. 6. The terms of his employment were that he was paid €60 per day and €80 for weekend days. 7. The Complainant proved to be effective at not only working as a chef but also managing orders, answering the phone and managing other staff. He became the de facto manager of the restaurant. When the Complainant could not work, the Respondent covered his duties for him. 8. His hours of work were 4.30pm until 2 am and his duties included working as a pizza chef, answering phones, operating the till, closing the ill account at the end of the shift, training staff, paying wages, organising deliveries and ordering stock. 9. From his commencement in January 2014 the Complainant never received any form of written contract. 10. In May 2015, the Respondent asked the Complainant if he would take on the running of the shop himself. He told him that if he did not accept that he would ask someone else and that someone might not keep the Complainant on as an employee. The Complainant felt pressurised and was worried not only for his job but also the staff that he had recruited, who were also from Romania and who were dependent on their wages. 11. The Complainant accepted the Respondent’s offer and from then, the business arrangement changed. However, his work and his responsibilities did not change other than his duties now also included liaising with the Respondent’s accountant about VAT and Revenue matters. 12. The Respondent’s accountant organised everything, the Companies Office registered the business into the Complainant’s name, he became liable for health and safety in relation to food production within the premises and for this was registered with the H.S.E. He was registered with the Revenue Commissioners and registered for VAT. 13. However during this period the Respondent still maintained control of the business. Examples of this are as follows: (a) If the Complainant needed to take time off work, he still needed the Respondent’s permission (b) If the Complainant wished to go home to Romania, he required the Respondent’s permission and indeed, on a number of occasions, the Respondent refused him permission to go home. One such occasion was when his parents died, which is still a cause of bitter regret for the Complainant. (c) The Respondent still hired staff without the consent of the Complainant (d) The Complainant was obliged to and did hire the Respondent’s daughter and son (e) The accountant who was ostensibly acting on behalf of the Complainant was in fact working for the Respondent. Everything that was set up to make it seem like the Complainant owned the business when he did not. The accountant was still more accountable to the Respondent than to him. (f) The Respondent took money out of the on-line food delivery bank account 14. In October 2016 the Complainant was at home in Romania attempting to get a driving licence that the Respondent had insisted that he get. While there he became sick and had to be hospitalised. He then received a phone call from Dublin saying that the oven in the restaurant was broken but he could not return to Dublin for 2 weeks. 15. The Respondent then sent the Complainant a text stating that he was not to attend the restaurant on his return. 16. This was the termination of his employment |
Summary of Respondent’s Case:
1. The dates given by the Complainant are incorrect. 2. The parties did meet in Portlaoise and the Complainant was employed by the Respondent but this was in March 2014 until December 2014. 3. The Complainant proved to be an excellent worker and having skills much wider than pizza making and he was keen to take on greater responsibilities. As he had managed a similar restaurant before and knew what that involved the Complainant suggested that he take over the running of the business from the Respondent and instead he would pay the Respondent rent. 4. The Respondent agreed and told the Complainant that his accountant would organise all the paperwork that attended this change. He would require a bank account, he would need to be registered with the Revenue as the employer and he would need to register for VAT. He would also require a certificate from the HSE that he was responsible for food production. 5. This was all organised and a P45 issued to the Complainant in December 2014 as the plan was set in place for the Complainant to become to owner of the business from January 2015 onwards. 6. This suited the Respondent as it freed him up from any day to day involvement with the restaurant. 7. As a result, from then on the Complainant was responsible for the running of the business. He paid for stock, he purchased pizza boxes from the Respondents printing business (€350 per week). He set up his own business bank account, (the takings from the pizza sales went into this account) This bank account was in the Complainant’s name. The rent was agreed at €800.00 per week however this amount was never met. The Respondent accepts that he took money out of the credit card account that serviced the online food delivery business but this ran as a separate business from the pizza restaurant. In terms of the pizza restaurant profits, these went into the Complainant’s own business bank account and that was his and his alone to manage. 8. When the Revenue Commissioners and NERA inspected the premises, the Complainant was regarded by these State authorities as the employer. The tax settlement that was reached was discharged by the Complainant. There was no question at this time that the tax liability should flow to the Respondent to discharge. 9. The Complainant was in business in his own account. The profits that he made were his to keep and the liabilities that arose were his to discharge. Monies that were taken by the Respondent were in respect of rent, which was never fully discharged because there were not always enough takings. After the termination of their dealings in October 2016 the Respondent sought to recover the unpaid rent but this remains undischarged. 10. The control of the business on a day to day basis was not the Respondent’s, it was the Complainant’s.
|
Findings and Conclusions:
1. The second preliminary application, that the complaint is time barred is dependent on the first application that there was no contract of employment. There were no significant difficulties between the parties until October 2016 and if the Complainant is correct that there was an employment relationship up until October 2016, the complaint is not out of time. However, if the employment relationship came to an end when the Respondent contends, namely in January 2015 or even later during that year, then the issue of time does not come into play, because there is no jurisdiction without employment. Therefore, firstly I must consider the primary preliminary application made by the Respondent, that there was no employment relationship. 2. The tests to determine whether or not there is a contract of employment are varied depending on the type of work involved. The control is a simple test but this does not allow for highly skilled jobs where the employee has a lot of independence and is not subject to direction. Whether someone can make a profit is more relevant in this case. This test is sometimes described as “whether someone is in business in their own account.” However again the limitations on this test are that in some instances, a business can be set up in such a way so that, through formalities a relationship can be made look like an independent contract whereas he or she is not in reality independent. This is why, in cases such as this, the failure by the Respondent to formalise the relationship that he had with the Complainant must be considered carefully. 3. In this case the lack of written agreement created an ambiguity that ultimately best suited the Respondent’s interests, namely being able to profit from but not have any responsibilities for the business, which he is entitled to do but whether his control was in fact maintained has to be scrutinised. The question arises why did the Respondent formalise his relationships with the morning shift business into a clearly worded lease agreement but not to do that in respect of the Complainant? If, which was suggested that the agreement was more akin to a franchise agreement, then why was such a franchise agreement not drawn up? Especially in circumstances where the first language of the Complainant was not English. The Respondent is a person with considerable experience running restaurants and such a loose handed approach was either one of two things; deliberate or careless. The Complainant says that it was deliberate. 4. But to assess this the facts in relation to the control of the business must be objectively considered. 5. The test that is most appropriate in this case is a combination test: Control, i.e. whether the worker was in business in his own account and, to a lesser degree, mutuality of obligation i.e. was the Respondent obliged to provide work for the employee. 6. Some evidence in this case is in conflict but those parts of the evidence that are agreed are significant from the point of view of assessing whether or not a contract of employment was in place. (a) It is immaterial who suggested that the Complainant take over the running of the business. It is immaterial too as to when this was agreed. What is material is that it was agreed and taking the Complainant’s version of events, this new arrangement operated from July 2015. I am of the view that the Complainant was a hard worker who wanted to do better for himself. I am of the view that he was keen to take over the running of the business because it allowed him to make decisions as to the day to day running of the business and it allowed him to help people by hiring staff who like him when he arrived first from Romania in 2007 had difficulty getting work. In any event the Complainant accepted the new terms of engagement in the summer of 2015, again whether he pushed for this or whether it was pushed upon him is less relevant to the fact that he accepted the new terms and gave effect to them. (b) A P45 issued by the Respondent indicates that the employment ended in December 2014 (which the Complainant denies receiving) however the Respondent accepts that the VAT registration and change in business name in the Companies Office did not occur then at that time but later in the summer of 2015. (c) It is common case that by July 2015 at the latest, the Complainant was responsible for the running of the business. This is based on the evidence of the Complainant himself. He ran the business on a day to day basis, he was there every day, he was responsible for ordering stock, he opened and closed the restaurant, he paid the staff. Significantly he was registered for VAT, he was registered as the owner of the business with the Companies Office, he was registered with the Revenue Commissioners as an employer of the staff and significantly, he was liable for the tax bill after a tax inspection revealed that VAT was owing from the business and he was again liable after a NERA inspection showed that no PRSI had been paid for the staff. He had his own bank account and did not need permission of the Respondent when withdrawing monies from this account. His evidence is that the Respondent took monies out of a related but separate business, namely the online food delivery business is accepted by the Respondent, but there is no evidence that the Respondent withdrew money or had control over the bank account that was used for the pizza restaurant, which was managed by the Complainant. (d) In October 2017 after a dispute with the Respondent the Complainant was excluded from the premises. However, this is could also occur in a lease type arrangement so this exclusion is not necessarily proof of control exerted under a contract of employment. (e) My sympathies are with the Complainant, especially given the way that the relationship ended in circumstances that he was in hospital in Romania, however the test for employment status is an objective one and cannot take account of this. 7. Taking into account all the evidence, I find that the control of the business lay primarily with the Complainant from July 2015 onward. I find that through clever marketing and good management, he developed the business into a successful and profitable business and that the Respondent did not have any obligation to provide work for him. Applying the control test and the mutuality of obligation test, I am of the view that the relationship between the parties was not one of a contract of employment and I therefore have no jurisdiction to hear the complaints that are made on foot of the above Acts. On this basis, this complaint cannot succeed. 8. In doing so I take account of the following case authorities:
Minister for Agriculture v. Barry 2009 IR 215 Henry Denny and Sons Ireland Ltd v. Minister for Social Welfare 1998 1 IR 34 Brightwater Selection v. Minister for Social and Family Affairs 2011 IEHC 510 FAI v. Hand 2014 FTD 143
|
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
CA-00008988-002 – This complaint fails for want of jurisdiction because the Complainant was not an employee, but rather was an independent contractor CA-00008988-003 – This complaint fails for want of jurisdiction because the Complainant was not an employee, but rather was an independent contractor CA-00008988-004 – This complaint fails for want of jurisdiction because the Complainant was not an employee, but rather was an independent contractor CA-00008988-005 – This complaint fails for want of jurisdiction because the Complainant was not an employee, but rather was an independent contractor |
Dated: 4th April 2018
Workplace Relations Commission Adjudication Officer: Emile Daly
Key Words:
Contract of employment or independent contractor |