Worker

Employer

Anonymised Parties

A Worker

An Employer

Representatives

SIPTU

Arthur Cox LLP

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act 1969

IR - SC - 00002163

25/01/2024

The dispute is in connection with the Worker’s classification as an independent contractor in the period 2013 to 2019.

The Worker sought the financial value of certain employment-related benefits and rights for the previously mentioned period.

This is a dispute referred by an individual Worker and is within the scope of section 13 of the Industrial Relations Act 1969.

The Worker commenced employment with the Employer in 2008 and was denied many of his employment rights through the Employer’s use of a series of independent/sole trader contracts.  The focus for the purpose of this dispute referral is in respect of the period from 2013 to 2019. 

The Worker incurred financial loss attributable to nil contributions to the Employer’s contributory pension scheme and absence of annual leave, public holiday and privilege day benefits in the reference period.

In 2018, the Trade Union Group (the “TUG”) and management in the Employer organisation agreed to engage a third-party to conduct a review of employment status of over 400 independent contract holders in the Employer organisation.  The review outcome confirmed that many, including the Worker, had been misclassified as independent/sole traders and recommended this be corrected. 

The Worker received a casual contract of employment with the Employer in October 2019.

Following the third-party review process, the TUG initiated discussions with the Employer on retrospection and recognition of previous service.   The parties agreed to engage joint facilitators to assist the parties in their discussions on retrospection.  The facilitators presented a proposal to deal with recognition of previous continuous service, maternity leave, paternity leave and an ex-gratia lump sum. 

Individual offers were made to relevant staff members using the formula proposed by the facilitators on a full and final settlement basis.  An individual was free to accept or reject the offer.  The proposal did not exclude an individual from pursuing a case should they decide not to accept the terms offered.

Whilst many staff members accepted the offers made under the retrospection process, the decisions of others did not bind the Worker to also accept the offer. Staff members were not balloted on the individual proposals rather it was a matter for the individual to accept or reject the offer.  There was no collective agreement in relation to the individual offers made.

The Worker did not accept the full and final settlement offer made to him in September 2022 under the process.  The Worker felt the figure did not accurately reflect his treatment and the losses he suffered by reason of deliberate misclassification of his employment status by the Employer over the years.  The Worker was unsuccessful in his appeal at local level.

In 2021, the Worker was informed of the Department of Social Protection’s decision that from 1 January 2013 the Worker’s employment with the Employer was insurable under the Social Welfare Acts at PRSI Class A.

The Employer’s refusal to countenance anything above the terms offered to the Worker under the retrospection proposal is grossly unfair and does not account for the Worker having worked for so long in precarious employment.  It was further submitted that the formula used for calculating the retrospection offer rewarded shorter serving employees and was to the detriment of longer serving employees, such as the Worker in this case.

The Worker has experienced huge emotional strain and uncertainty in connection with his work status with the Employer. 

The Commission does not have jurisdiction in relation to this matter under section 13(2) of the Industrial Relations Act 1969.   This dispute is one of a number of identical cases submitted by the Union on the same day, all of which seek “payment of the outstanding balance”.  It is clear that this matter involves a body of workers and is connected with rates of pay.  The specifics and principles are the same across all the cases.

Various decisions of the Labour Court and Commission were cited in support of the Employer’s position on section 13(2) of the 1969 Act and its submissions generally. 

The Employer has developed robust internal industrial relations mechanisms in conjunction with the TUG, which Group is comprised of three unions. There is provision for local level engagement with internal union representatives and facility to refer collective matters to an internal Industrial Relations Tribunal.  This dispute is particularly significant from the perspective of the long standing and agreed industrial relations processes at local level between the Employer and the TUG.

Following a third-party review in 2017/2018 of contractual arrangements of a total of 433 contractors, a report issued in June 2018 which assessed 106 of those reviewed as having “attributes akin to employment”.  The Worker was one of the 106.  A recommendation of the report was that the Employer review the contractor population as prioritised.

Following the report, the Employer entered into a process with the TUG, the purpose of which was to come to an agreement on the contractor review process.  Governing Principles for this review process were agreed between the TUG and the Employer.  The Union involved in this dispute referral was a party to the Governing Principles and the subsequent retrospection process. 

In 2019, the Worker was offered a contract of employment under the contractor review process.  When the Worker queried certain terms of the contract offered, the Employer’s Head of HR explained the methodology which was based on engagement over the previous two years.  The 2019 contract of employment was accepted by the Worker.  In or around October 2020, the Worker was offered, and accepted, a full-time contract of employment.

In 2021, the Employer engaged with the TUG to address areas of retrospection as per the Governing Principles.

Two independent facilitators were nominated by the TUG and Employer as joint facilitators to assist in discussions on retrospection, with commitment by the TUG and Employer to progress matters to an agreed outcome.  There were multiple engagements between the joint facilitators and the parties in the period April to August 2022.  The joint facilitators’ final proposal to the TUG and the Employer was published on 10 August 2022 and was accepted by the Employer and the TUG as the best terms available under the industrial relations process.  The proposal included a service commencement date based on the SCOPE assessment and a method for calculating an ex-gratia lump sum payment based on past continuous service and full-time equivalent service.   The parameters of the terms offered to relevant contract holders were set out in the proposal.

The Employer wrote to the Worker on 30 August 2022 regarding the offer specific to him under the retrospection proposal.  The offer was subject to the Worker signing an agreement in full and final settlement of all claims related to the matter.  The Worker did not accept the offer.    81.5% of those who were made offers under the retrospection proposal accepted the terms offered. 

The agreement on retrospection has consistently been recognised as a collective agreement, including by an Expert Advisory Committee. An individual recommendation by the Adjudication Officer has the potential to undermine the integrity and validity of the collective agreement on retrospection.

In conducting my investigation, I have taken into account all relevant oral and written submissions presented to me by the parties.

My investigative function in respect of this trade dispute referral is subject to the provisions of section 13 of the Industrial Relations Act 1969, as amended, (the “1969 Act”). 

Section 13(2) of the 1969 Act excludes from referral scope disputes connected with rates of pay of, hours or times of work of, or annual holidays of, a body of workers.

I am satisfied that the Worker is a worker and relevant party for the purposes of a dispute referral under the 1969 Act.  I am further satisfied that the Worker is not precluded from referring a dispute to the Commission in the sense that he did not accept and sign up to the full and final settlement agreement offered.

It was submitted on behalf of the Worker that the dispute referral is of an individual nature pertaining to this individual Worker, does not have collective implications and does not fall within the exclusion set out in section 13(2) as the dispute relates to a number of issues other than rates of pay, hours of work or annual holidays.

By way of general observation, it is my view that a recommendation in the terms sought would have implications of a collective nature in terms of undermining the outcome of an agreed industrial relations process, which outcome was accepted by the TUG and Employer.  Whilst I acknowledge that those that accepted offers made under the retrospection proposal did so on a full and final settlement basis, this does not mean that there would not be repercussions from a recommendation in favour of the Worker. 

It is worth briefly setting out the backdrop to this dispute. 

A third-party was appointed to conduct an independent review of the Employer’s engagement of contractors.  The review resulted in recommendations, which included recommendations to the Employer to review its current contractor cohort and review and update contracts currently in use.  Further to the previously mentioned recommendations, in February 2019, the TUG and the Employer agreed governing principles for how the third-party recommendations would be implemented (the “contractor review process”).  A key principle of the contractor review process was that contracts of employment offered would reflect the engagement pattern over the previous 2 years.  The contract of employment offered and accepted by the Worker in this case in 2019 resulted from the contractor review process and reflected the previously mentioned principle.  The governing principles also provided for the matter of retrospection to be addressed separately following conclusion of the contractor review process.  In this regard, the TUG and Employer agreed for two nominated persons to act as Joint Facilitators to assist the parties in addressing the retrospection issue.  The Joint Facilitators’ final proposal to TUG and the Employer issued by way of a written document dated 10 August 2022.  The TUG and Employer accepted the Joint Facilitators’ proposal.  The Worker did not accept the retrospection terms offered to him further to the Joint Facilitators’ proposal.  The dispute referred by the Worker to the Commission claims for loss of employment-related entitlements and benefits in respect of the period 2013-2019. 

In terms of the subject matter of the dispute, the Worker is seeking a sum of money for loss of pension contributions, annual leave, public holidays and privilege days over a 6-year period arising from his classification as an independent contractor in the period. Clearly therefore, part of the dispute, as expressed, relates to annual holidays.  Furthermore, whilst the dispute has been presented in the above terms referable to employment benefits and entitlements, I am satisfied that the underlying issue is the terms offered under the retrospection proposal.  In other words, had these terms being satisfactory to the Worker, he would not have this dispute.  Insofar as the terms offered under the proposal relate to ex-gratia lump sum payments and payments in respect of maternity leave/paternity leave, it is my view that the underlying issue comes within the scope of rates of pay.

The referral of a dispute by completion of a dispute / complaint form in respect of this individual Worker does not in and of itself make it a dispute of an individual nature.  This is one of five identical disputes referred to the Commission on the same day against the same Employer.  I was provided with redacted copies of the other complaint forms, and, on review, the Employer is correct in its submission that they all seek “payment of the outstanding balance”.  It is further clear from the identical complaint specific detail or statement provided that the disputes arise from the same set of facts or circumstances, namely the agreed processes at local level.  In my view a recommendation in the Worker’s favour could not be confined in its application to the Worker alone by reason of the foregoing and/or the fact that the Joint Facilitators’ proposal applied to a particular cohort of workers.

Notwithstanding my views above on the application of the section 13(2) exclusion, I consider it appropriate to provide my opinion on the merits of the dispute as it was presented, namely referable to employment benefits and rights for a certain period when the Worker was classified as an independent contractor.

The financial loss put forward by the Worker presupposes the Worker having been an employee or contract of service holder from 2013 and the application of employment rights legislation and specific terms of an employment contract during the relevant period.  I am not however satisfied that a contract of service for the relevant period is established, whether through the agreed industrial relations processes and outcomes referred to above or otherwise.  The contract of employment offered to the Worker in 2019 arose from a voluntarily agreed third-party review process and contractor review process.  These processes did not provide for backdated contractual benefits and employment rights.  The decision of the Department of Social Protection is confined to insurability and does not establish employment status for the purpose of employment rights and contractual benefits.  It is further worth noting that the Joint Facilitators’ proposal referred to the assessed insurability date as the deemed commencement of service date for three specific matters in the future, and that the offer under the proposal was made without any admission of liability on the part of the Employer. 

In the circumstances, I do not consider there to be merit in the dispute referable to employment rights and contractual benefits, grounded as it is on industrial relations processes and agreements.

I wish to acknowledge the frustration and grievance expressed by the Worker in relation to the terms of the contract of employment offered in 2019 and the terms offered under the retrospection proposal.  However, based on my remit under the 1969 Act, I am unable to make a recommendation in the terms sought by him. 

In conclusion, it is my view that a recommendation in the terms sought would be inappropriate, and further that it would be unsupportive from an industrial relations perspective of the agreed processes and outcomes referred to above.

Industrial Relations Act 1969 – Trade dispute – Collective nature – Section 13(2) exclusion - Employment rights