SPEEDKING COURIERS LIMITED T/A FASTWAY COURIERS MIDLANDS
SUBJECT:1.Appeal Of Adjudication Officer Decision No ADJ-00021612
This is an appeal by Mr John Read (‘the Complainant’) from a decision of an Adjudication Officer (ADJ-00021612, dated 9 March 2020) under the Unfair Dismissals Act 1977.Neither the Complainant nor his legal representative were in attendance at the hearing before the Adjudication Officer due to “an administrative oversight”.
The Adjudication Officer, having satisfied himself that all Parties had been duly notified of the arrangements for the hearing, proceeded to hear and decide the complaint. He found that the Complainant had not been unfairly dismissed by Speed King Couriers Limited T/A Fastway Couriers Midlands (‘the Respondent’)The Complainant’s Notice of Appeal was received by the Court on 17 April 2020.
The Court heard the appeal in a virtual courtroom on 13 January 2022.Preliminary Issue.
The matter at issue in this appeal is whether the Complainant, tasked with delivering parcels to the Respondent’s customers, was working under a contract of service or whether he was working under a contract for services.
It is submitted on behalf of the Respondent that the Complainant was at all material times an independent contractor, engaged pursuant to a contract for services. The burden of establishing that the Complainant was, in reality, engaged pursuant to a contract of service – and therefore havinglocus standito maintain the within proceedings – rests on the Complainant.
The Complainant’s Evidence.
The Complaint gave the Court a brief outline of his working life as a professional driver.
He drove articulated and rigid lorries for many years before establishing his own business providing school transport services and tours, including tours to the United Kingdom. For health reasons, he decided to discontinue this business. In October 2017, the Complainant became aware of an opportunity to drive for the Respondent. He had an initial series of telephone calls with a representative for the Respondent and thereafter attended for a brief interview with a Mr Ryan. He was advised that he would have to supply his own van and be registered for VAT.
The Complainant’s recollection is that he signed a document at the interview confirming both of those matters.
The Complainant commenced driving as a deliver courier for the Respondent in late October 2017. He invoiced the Respondent weekly in arrears at the rate of €190.00 plus VAT per day. This rate was determined by the Respondent, he says. He used his own van, paid for whatever fuel he used and for the insurance on his vehicle (including goods in transit insurance), he had a mobile phone the tariff on which he paid himself. He was provided with a scanning device (and trained in its use) by the Respondent.
He was required to wear a company-supplied uniform and to display an A4 sized company logo on the front screen of his vehicle. The Complainant’s evidence is that he did not pay the Respondent for the uniform or for the use of the scanner.
The Complainant says that he was assigned to three different delivery areas over the course of his engagement with the Respondent.
At all times, he attended between 5.00 am and 6.00 am each morning to collect items for delivery from the Respondent’s depot and finished his daily round of deliveries normally between 3.00 and 4.00 pm.
At busy times – for example in advance of Christmas – he says he worked up to fifteen hours per day. He often had to take telephone calls in the evenings from customers or from the Respondents in relation to parcels that may have gone missing.
The Complainant told the Court that his understanding was that he was required to give personal service at all times and could not substitute another driver in circumstances where he needed to take time off. He also stated in evidence that he was not able to avail himself of annual leave during the entire period of his employment nor was he paid for public holidays.
The only days on which he didn’t work were days when he was sick or on which his vehicle broke down and needed repairs. He did not invoice for those days. On a number of occasions, he was compelled to attend meetings, along with other drivers, at the Respondent’s depot, where issues such as health and safety were addressed. He recalled Mr Billy Kehoe (the Respondent’s representative at the within hearing) addressing a number of those meetings.
The Complainant also told the Court that he proceeded on the basis that he was working exclusively for the Respondent.
His evidence was that it would have been completely impractical for him to consider taking on additional work elsewhere having regard to the time of the day that he normally finished his delivery round for the Respondent. Also, he would have had to change out of his uniform and remove the sign with the Respondent’s logo from his van were he to undertake work elsewhere.
On or around 15 February 2019, the Complainant was out in his van making deliveries when he received a telephone call from Mr Mattie Ryan inviting him to return to the Respondent’s depot.
The Complainant declined as it was located at a considerable distance from where he was then located. He asked Mr Ryan what the purpose was of the proposed meeting at the depot. Mr Ryan informed him that he was to be let go as there was no more work for him. Shortly, after that conversation, Mr Ryan contacted the Complainant that another route, in the Templemore area, had become available starting the following Monday and the Respondent would be willing to pay him an extra €30.00 per day to work that route.
The Complainant began training with the outgoing driver on the new route the following Monday but was informed by the Respondent on the Wednesday of that week that the route was being sold and his contract was being terminated. That was his last working day with the Respondent.
The Complainant said that he picked up some work from different sources between mid-February and Christmas 2019 but it was intermittent and irregular.
He obtained continuous work in 2020 on a self-employed basis.
He estimated that his loss was in the region of €20,000.00 gross for 2019.
The Complainant did not furnish the Court with any paperwork to substantiate his claimed loss nor did he produce any documentary evidence of his efforts to mitigate his loss.Mr Kehoe, for the Respondent, declined to cross-examine the Complainant.
In response to questions from the Court, the Complainant said that he was not familiar with a form entitled ‘Interim Couriers Contract’, a blank unsigned copy of which was exhibited in his papers submitted to the Court. He said that this had been included in the Respondent’s submission before the Workplace Relations Commission but he hadn’t seen it before then.Mr Kehoe’s Evidence.
Mr Kehoe outlined in some detail the Fastway business model. He stated the model is based on selling franchises to individuals in respect of designated areas. However, the Respondent engages Interim Couriers on a self-employed basis pending the sale of a franchise. Interim Couriers are required to sign a copy of the Interim Couriers Agreement exhibited in the Complainant’s papers before the Court.
The Respondent’s preference, he said, is to encourage and assist such Interim Couriers to purchase a franchise for the territory that that they have been covering as they are already familiar with the routes and aware of the potential to grow the business in that area. However, where this doesn’t happen and a franchise for that area is sold to a third party, the Interim Courier’s temporary engagement ceases.
According to the witness, an Interim Courier is not required to put a full set of decals on their van; they are simply required to place an A$-sized logo in the windscreen to identify themselves to members of the public (particularly in rural areas) as couriers working for the Respondent.
Mr Kehoe confirmed to the Court that he was not in a position to produce a copy of the Interim Couriers Contract signed by the Complainant. He confirmed that that contract provided that a contractor would be required to rent the scanner from the Respondent and pay the Respondent for the uniform supplied. He was not, however, in a position to rebut the Complainant’s evidence that he was not required to pay for either of these items. Mr Kehoe said he disagreed with the Complainant’s assertions that he was not free to provide services other than to the Respondent and not free to substitute another driver on occasion.
He said this happens regularly but that the substitute driver had to be approved in advance by the Respondent and had to be given some basic training in relation to dealing with customers etc.
He agreed that Mr Ryan most likely did contact the Complainant in mid-February 2019 to inform him that there would be no more work for him as the business was struggling financially at that time.
The witness said that he had given instructions to Mr Ryan to review all costs in the business, including those associated with the engagement of couriers, in order to reduce overheads.
Finally, he said it was his understanding that the Complainant was paid the equivalent of one week’s payment in lieu of notice when his contract was terminated.
The Complainant’s Submission.
In his closing submission to the Court, Counsel for the Complainant submitted that the Court should find that the Complainant was engaged by the Respondent on contract of service basis and was therefore qualified to proceed with the within appeal for the following reasons:(i) The Complainant was required and expected to provide personal service at all times and, the submissions of the Respondent notwithstanding, he had no realistic possibility of substituting somebody else to drive on his behalf if he needed to take time off;(ii) The Respondent exercised considerable control over the Complainant in terms of the routes he was required to drive and the means and methods by which he completed the work assigned to him;(iii) The Respondent provided essential equipment (such as the scanner) to the Complainant at no cost to him and the Complainant was required to wear the Respondent’s uniform and to display the Respondent’s logo on his van; and(iv) Having regard to the number of hours per day the Complainant was required to work in order to complete the work assigned to him by the Respondent, his employment with the Respondent can only be regarded as full-time in nature, one on which the Complainant was entirely dependent to make a living as there was no realistic prospect of him being able to undertake additional work elsewhere on top of the work he did for the Respondent.
Counsel further submitted that should the Court find in the Complainant’s favour in relation to his employment status, that it should follow that his claim of unfair dismissal under the 1977 Act succeeds in the absence of any fair procedures on the Respondent’s part prior to the termination of the Complainant’s employment. Finally, Counsel advised that the Complainant’s preferred remedy should the Court uphold his complaint under the Act was compensation having regard to his claimed financial loss of €20,000.00.
The Respondent’s Submission.
Mr Kehoe, in summing up, said that the Court should have regard to the fact that the Complainant had run his own business before the commencement of his engagement by the Respondent and conclude that the Complainant, therefor, entered into an agreement with the Respondent “with his eyes open” and was “fully aware of what he was getting into”.
The question of a worker’s employment status is a mixed question of fact and law.
A considerable body of jurisprudence – both of the superior courts in this, and in other common law, jurisdictions and of expert employment, taxation and social welfare tribunals – has developed over the years in which those bodies have elucidated the correct legal principles to be applied to the determination of disputes of this nature. However, the judgment of the Supreme Court inHenry Denny & SonsvThe Minister for Social Welfarecontinues to be the leading authority on the issue in this jurisdiction in so far as it identifies the prevailing approach adopted by the superior courts here when required to determine issues of employment status.
In that case, the Supreme Court adopted an approach sometimes referred to as the ‘mixed test’ or reality test.’ This approach reflects the complex and varied nature of contemporary employment relationships and requires a decision-maker to consider a variety of factors including, but not limited to, the degree of control exercised by the party for whom work is being done over the party doing the work, the level of integration of the latter into the former’s business, whether or not the party doing the work has the marks of an entrepreneur in the way he carries out the work in question such that he can be said to be in business of his own account.
The emphasis to be placed, according to the Court, on any one or more of the foregoing factors, was to be determined by the particular facts of the case, in the light of the applicable legal principles:
“The criteria which should be adopted in considering whether a particular employment, in the context of legislation such as the Act of 1981, is to be regarded as a contract "for service" or a contract "of services" have been the subject of a number of decisions in Ireland and England.
In some of the cases, different terminology is used and the distinction is stated as being between a "servant" and "independent contractor". However, there is a consensus to be found in the authorities that each case must be considered in the light of its particular facts and of the general principles which the courts have developed: see the observations of Barr J, inMcAuliffe v Minister for Social Welfare 2 IR 238.” (Keane J)
The Court also emphasised that while it should have regard to the terms of any written agreement in place between parties to an employment arrangement, the terms of such an agreement cannot be regarded as determinative of the true nature of their relationship:
“Whether Ms Mahon was retained under a contract of service depends essentially on the totality of the contractual relationship express or implied between her and the appellants and not upon any statement as to the consequence of the bargain.
Certainly, the imposition of income tax and the manner of its collection falls to be determined in accordance with the appropriate legislation and the regulations made thereunder as they impinge upon the actual relationship between parties and not their statement as to how liability should arise or be discharged.” (Murphy J)
This Court, in applying the relevant legal principles to the particular facts of the within case, is also guided by the decision of the High Court inKarshan (Midlands) Limited t/a Dominos Pizza v Revenue Commissioners IEHC 894;  31 ELR 142. In that case, the High Court upheld, in a case stated, a decision of a Tax Appeals Commissioner (23TACD2018, October 2018) that pizza delivery drivers engaged by the appellant company were employed pursuant to a contract of service and not a contract for services as the appellant had contended for.
The High Court confirmed that, in arriving at her decision, the Tax Appeals Commissioner had correctly applied the law to the facts as found by her. A number of the material facts inKarshanare notably similar to those in the within case: in both cases the workers were required to provide their own vehicles and insurance to make deliveries on behalf of the party who had engaged them; the workers were deemed by their employer to be responsible for their own tax affairs and social insurance affairs; the rates at which they were remunerated were pre-determined by the employer and the workers lacked any bargaining power in respect of negotiating higher individual rates of pay; the workers in both cases were required to give personal service, albeit the possibility of a driver with the prior approval of the employer was not disputed inKarshanand the Tax Appeal Commissioner found on the facts that such a substitute driver would not become a sub-contractor of the worker as he was paid directly by the employer on foot of an invoice; again in both cases, the drivers were required to wear a company uniform, identifying the organisation by which they were engaged and, finally, they were both supplied with company logos to display in their respective vehicles.
The Tax Appeal Commissioner determined that the drivers inKarshanwere subject to a degree of control consistent with a contract of service, they were intimately integrated into the employer’s business and did not exhibit any significant entrepreneurial characteristics that would mark them out as being in business of their own account and they were not per se in a position to make a profit by carrying out the work in a more efficient manner; on very rare occasions, an individual driver might be in such a position but this was for reasons outside of his/her control e.g. when the demand for deliveries was proportionally higher than the number of drivers rostered. She, therefore, concluded that the relationship between the drivers and the appellant company was one of a contract of service.
Discussion and Decision Personal ServiceandSubstitution.
The Complainant’s uncontested evidence was that he provided personal service during the entire period of his engagement with the Respondent. He told the Court that he never been informed that he could substitute another driver if he needed to take time off or avail himself of annual leave. He missed a day very seldom and for reasons beyond his control e.g. when his vehicle broke down or when he was ill.
The Respondent, on the other hand, stated that it was open to the Complainant to provide a substitute driver subject to that person having been trained in relation to the Respondent’s systems etc.
There may be a large element of truth in the position as outlined by both Parties. However, as there was no evidence before the Court that the Complainant ever received or signed a copy of the written terms of engagement exhibited by Mr Kehoe, the Court has to prefer the Complainant’s evidence in this regard.
The Court notes, based on the evidence of Mr Kehoe, that in the event that the Complainant provided a substitute driver, that substitute driver would be required to invoice the Respondent directly and would be paid by the Respondent. Such a substitute, therefore, did not become a subcontractor of the Complainant. This tends to undermine the Respondent’s assertions regarding the Complainant’s employment status: clearly, he was not free to sub-contract his work to another driver.
Taken at its height, the Respondent’s position – had it been established – is that there are arrangements in place whereby an interim courier can, for example, take leave if they can nominate a substitute driver to cover their routes subject to such a driver having met the Respondent’s training and other requirements and that driver entering into a contract – ostensibly – for services with the Respondent for the period of the interim courier driver’s absence. It does not appear to the Court that such an arrangement is incompatible with a requirement for personal service.
InDenny & Sons (Ireland) Ltd. v Minister for Social Welfare 1 IR 34, at page 50, Keane J. stated:
“It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself.
The degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. Therefore, the question of control, though not determinative, is a factor to be taken into consideration in the analysis.”
There are a number of facts that suggest that the Respondent exercised a high degree of control over the Complainant. The Respondent dictated the terms of engagement and set the daily rate of pay.
The Complainant had to undergo a period of training to ensure that he met the Respondent’s standards and understood its way of doing business.
The Complainant was obliged to deliver only on the routes determined in advance by the Respondent. He was further obliged to wear a uniform emblazoned with the Respondent’s logo and to display that logo on his vehicle when providing services for the Respondent. Although a person engaged under a contract of service isn’t ordinarily required to provide an asset necessary for his work as substantial as a vehicle, it is significant in this case that the Respondent had very strict requirements in relation to the colour and type of vehicle that the Complainant should have available to him.
In conclusion, it is clear that the Respondent exercised a significant degree of control over work done and the manner by which work was to be done by the Complainant and control of this nature is indicative of the existence of a contract of service.
InStevenson, Jordan and Harrison Ltd. v McDonald and Evans 1 TLR 101, Lord Denning, at page 111, stated;
“One feature which seems to run through the instances is that, under a contract of service a man is employed as part of the business, whereas under a contract for services, his work, although done for the business is not integrated into it but is only accessory to it.”
InRe Sunday Tribune Limited IR 505, at page 507, Carroll J. described the integration test as follows:
“The test which emerges from the authorities seems to me, as Denning LJ said, whether on the one hand the employee is employed as part of the business and his work is an integral part of the business, or whether his work is not integrated into the business but is only accessory to it.”
It found that the integration test was satisfied on the basis that the valeters were fully integrated into the respondent’s business and that they had no other real source of work.
In order to ascertain to what extent an individual who works for a business is integrated into that business, one must identify the core activity of the business.
Having carefully considered the evidence before it, the Court finds that the Respondent’s core business relates to delivery of small to medium parcels via courier service. Mr Kehoe, in his evidence, sought to attach considerable weight to the Respondent’s ultimate objective as being to sell franchised delivery routes. However, even if that is the Respondent’s preferred business model, it doesn’t change, in the Court’s view, the Respondent’s core business which is the provision of courier delivery services, the very activity which the Complainant was engaged to perform.
The Court, in this context, finds that the Complainant’s submission to the effect that he was not in a position to take on additional work over and above that he performed for the Respondent credible and convincing having regard to his uncontested evidence in relation to the actual number of hours he worked daily for the Respondent company.
Even if Court is incorrect in this regard, Mr Keogh told the Court several times that the Respondent’s ideal was to facilitate interim couriers purchasing a franchise for the delivery route they had worked and helped to develop. Mr Kehoe further stated that the split between interim courier drivers and franchisees was approximately 50:50 at any given time.
It follows that the Respondent viewed a period of service as an interim courier driver as intimately connected to the potential purchase of a franchise by that driver. Furthermore, both the Complainant and Mr Kehoe, in their evidence, told the Court that Complainant was required to identify and develop potential sales leads as part of his work for the Respondent.
Having regard to the foregoing, the Court, in summary, finds that the Complainant was subject to considerable control by the Respondent in the manner in which he performed his work.
The Complainant was required to give personal service in so far as he could not sub-contract the work. Finally, the work done by the Complainant was part and parcel of the Respondent’s core business. He was, therefore, an integral part of that business.
The Court concludes that the Complainant was in reality, and notwithstanding appearances to the contrary, engaged at all material times by the Respondent under a contract of service.
Finding of Unfair Dismissal and Redress.
It is accepted by Mr Kehoe that the Complainant’s employment was unilaterally terminated by the Respondent with one week’s pay in lieu of notice and that the Respondent did not engage in any procedures before dismissing the Complainant as the Respondent at all times regarded the Complainant as an independent contractor outside the scope of the Act.
The Court, having found that the Complainant was in fact engaged under a contract of service must also find, having regard to the foregoing, that the Complainant’s dismissal was an unfair dismissal for the purposes of the Act.The Court finds the Complainant’s evidence in relation to loss and mitigation deeply unsatisfactory.
No documentary evidence was produced to the Court that demonstrated that the Complainant made the necessary efforts to obtain alternative employment as mandated by the Act. That being the case, the Court determines that the maximum compensation that can be awarded to the Complainant in respect of his unfair dismissal is four weeks’ gross pay. The Court, accordingly, awards him €3,800.00.The Court so determines.
Enquiries concerning this Determination should be addressed to Sinead O'Connor, Court Secretary.