Supreme Court decision provides ‘ammunition’ to those seeking to challenge contractor status, says union

Thousands of workers may have been provided with “ammunition” to claim employment rights by the Supreme Court decision last Friday in relation to the tax status of Domino’s drivers but for the moment they face the prospect of arguing their individual cases at the Workplace Relations Commission (WRC).

Large numbers of workers currently regarded as self-employed could pursue claims for holiday and sick pay, bank holiday premiums and, as auto-enrolment becomes a reality, pension entitlements at the WRC over the coming months.

At least until the implications of the decision in what was a tax status case are interpreted by another court in relation to employment law, however, it will be up to individuals or those working on the same terms for a particular company to make arguments based on their own specific employment relationship, according to some of those who have been weighing the outcome of the case up since Friday.

The country’s largest union, Siptu, says it is awaiting a full assessment of the decision from its legal department and could consider taking a test case to clarify the decision’s implications for instances of what it regards as bogus self-employment.

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There is general agreement, however, that the decision in Karshan Midlands Ltd (trading as Domino’s Pizza) v Revenue Commissioners, which set out five questions intended to help assess the nature of the relationship between a company and a worker but relegated the significance of the previously key “mutuality of obligations” test leaves a lot depending on the particulars of individual cases.

The Department of Enterprise, Trade and Employment like the Revenue Commissioners and Karshan Midlands, have said they are considering the implications of the decision.

Dublin based employment solicitor Anne O’Connell believes “most of the ‘gig economy workers will be affected.”

“I think a lot of those arrangements are based on the fact they are not guaranteed work (part of the mutuality of obligations test) and that’s the factor the companies rely on in order to determine that they are not employees”.

As it happens, she says, the decision comes a matter of weeks too late to allow for claim for holiday payments for the last statutory annual leave period which finished at the end of March as such claims have to be taken within six months.

Ms O’Connell believes many workers could also argue for protections under the Employment Equality Act but that the issue of continuity of employment would likely prevent securing entitlements to redundancy or unfair dismissals rights.

“It’s a very interesting decision,” acknowledges Nichola Harkin, Head of Employment Law at Ibec. “In reality, it would still, however, kind of align with the advice that we would have always been providing to our members with regard to employment status.

“Is it, in reality, an employment relationship or is it, in reality, an independent contractor relationship? That’s an exercise we do with members all the time. And I don’t think that this Supreme Court decision changes that so much because a lot of the questions remain the same even if the “mutuality of obligations” issue is not as prominent as it previously was.

“I think claims could flow from this case. But I think those claims could always have been made where an individual felt they would more properly be described as an employee. They could always go to the WRC and make a claim for annual leave, or for an employment contract, or, if the relationship terminated for unfair dismissal.

“So this case might inspire some people to take those cases but these are often very nuanced arguments and I don’t see the floodgates opening.”

Siptu’s Services Division Organiser, Teresa Hannick suggests the decision will provide valuable “ammunition” for those seeking employee status and the rights that go with it but accepts the challenges involved in taking such cases may indeed have a limiting effect on the number of claims made.

Still, she argues, there is the potential for the effects of the decision to be felt across many sectors of the economy.

“We are waiting for an assessment of this from our legal unit and there is the potential for a test case but the fact it was a tax case means that, unlike in some other European countries, a lot of the implications are not clearcut.

“We have fallen way behind Europe, even the UK, on this issue and we see instances of bogus self-employment not just in deliveries but even in IT and financial services. The fact is all workers should have the sorts of protections we are talking about here.”

Chartered Institute of Personnel and Development Director, Mary Connaughton, meanwhile, said: “In general we welcome the thrust of the Supreme Court findings, that certain contractors are in fact employees and should be treated as such.

“However we recognise that the detailed working arrangements in many organisations will need to be reviewed to understand which roles should in fact operate under contracts of employment, and which are legitimate contractor roles. The labour market in Ireland needs to have space for both types of work, to meet various different types of work.”