Domino’s Pizza driver ruling could have wide-ranging implications

Businesses across the economy who employ contract and casual workers will be carefully reviewing the Supreme Court’s decision in the Karshan v Revenue Commissioners case which has the potential to have wide-ranging implications for both companies and workers, according to prominent employment solicitor Anne O’Connell.

The Supreme Court delivered its decision on Friday in the case which started when the Tax Appeals Commission decided in 2018 that delivery drivers working for Karshan (Midlands) Ltd trading as Domino’s Pizza should be treated as PAYE employees rather than self-employed independent contractors. The High Court upheld that decision before the Court of Appeal overturned it in a two-to-one decision.

The seven-judge Supreme Court overturned the Court of Appeal decision in a unanimous decision. The case has long been seen as having significant implications for the gig economy.

“It’s a long and detailed decision but it has the potential to have a massive impact,” said Ms O’Connell, who has worked in the area for 20 years and is a member of the Employment Law Association of Ireland committee.

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“There will be a lot of employers, in particular those with a high proportion of casual workers, who will be sitting up and going through the decision with a fine-tooth comb to see how it affects their working arrangements and what they need to change to maintain the current status of various workers as independent contractors if at all possible. They will be looking to limit their liabilities.

[ Domino’s Pizza drivers were employees, not contractors, Supreme Court rules ]

“I have to read the decision in more detail myself but there is a lot here that could impact on the current employment environment,” said Ms O’Connell.

“What the court has done is set out fairly simple questions [in relation to the employment relationship] but the application of those questions will end up being a lot more complex because every case in these situations is based on the factual matrix of the arrangements between the parties as to whether it’s a contract for or a contract of employment.

“The decision, though, has the potential to have huge implications, although it could be that while the result is that more casual workers find themselves being considered employees for tax purposes, they still might not gain the protections of employment legislation.

“Workers certainly might point to this when they look to argue for things like holiday pay but that might require a whole other exercise to resolve.

“There will be a lot of employment lawyers reading through the decision with interest this weekend to look at the detail of what is said and the implications,” she said.

Reacting to the decision yesterday, Irish Congress of Trade Unions general secretary Owen Reidy said that while the implications of the decision would have to be weighed up, his initial reaction was positive, although “it shouldn’t have come to this, we should have stronger legislation in the first place to guard against bogus self-employment”.

In a statement, meanwhile, the Revenue Commissioners said: “The Supreme Court judgment and its implications are being carefully considered by Revenue.”