Respondent ordered to pay musician €43,000 in bogus self-employment dispute
Key Learnings:
In this case, a musician successfully argued that he was employed under an employment contract and not under a contract for service.
The decision serves as a reminder to all Organisations that engage workers under contracts for service to regularly review these arrangements to ensure there is no exposure to claims by contractors who may be deemed to be Employees by operation of law.
To establish the correct employment status of workers who are not working under a contract of service, Organisations should begin by applying the five-step test set out by the Supreme Court in Karshan (Midlands) Ltd t/a Domino’s Pizza v. Revenue Commissioners.
Organisations that misclassify contractors may be exposed to both potential tax and social welfare liabilities as well as employment law claims from aggrieved contractors.
Background:
The Complainant who was a musician in the band of the Respondent claimed that he was an Employee, not a self-employed contractor and therefore was entitled to a range of employment law entitlements. The Respondent refuted the claims which centred around the employment status of the Complainant who asserted that he was an Employee while the Respondent maintained that he was a self-employed contractor.
Summary of Complainant’s Case:
The Complainant met with the Respondent in November 2013 about being a fiddle player in a band which would tour in Ireland and the UK.
The Complainant stated he was asked to send his terms to the Respondent which he sent in an email in 2013 confirming he was receiving €250 per night but that he would want travel and accommodation costs to be included on top of his nightly rate. The Complainant stated that he was instructed by the Respondent on the music to play, the uniform to wear and that he was paid by cheque every Friday.
The Complainant explained that in 2014, he was told to start submitting invoices and he did this from August 2014. He stated the average was 4 gigs per week mostly over the weekend. He stated the work started with sound checks and rehearsal which could be up to an hour. He stated there was a rehearsal rate which was half the full rate if the rehearsal took longer and was on a different day. He stated that musicians in the band would get messages/emails to rehearse/learn a song which would be done on the musician’s own time.
Following a number of disagreements between the musicians and the band’s management, the Complainant stated he became aware of bogus employment. The Complainant stated that in May 2020 he asked the Department of Social Protection to investigate and determine if he was an Employee. He stated that in December 2020, this scope investigation determined that the Complainant was an Employee.
The Respondent successfully appealed this decision before the Complainant lodged his claim to the WRC on the ground that there was precedent demonstrating that the WRC had authority to overturn decisions of the Department of Social Protection.
Summary of Respondent’s Case:
The Respondent refuted that the Complainant was ever an Employee.
The Respondent stated that the Complainant could and did turn down work without facing any disciplinary sanction and referred to dates where it had hired a different fiddle player to play in the Complainant’s absence.
The Respondent submitted that it did not have any control over the Complainant outside of his obligations to play on the dates agreed. The Respondent argued that each date formed an individual contract, with mutual obligations only being established when the Complainant confirmed his availability to play and subsequently performed his duties under that contract.
They Respondent denied that it determined the Complainant’s working hours. The Respondent offered a list of dates where the Complainant’s services were required and asked him to confirm his availability. If the Complainant or any musicians were unavailable, the Respondent simply contacted another musician to work on the relevant date.
The Respondent also pointed out that during the time of alleged employment, the Complainant did perform work for others and also did studio recordings of his own. The Respondent alleged that this evidence did not support the Complainant’s assertion that he was an Employee.
Findings and Conclusions:
Initially, the Adjudication Officer noted that there is no interdependency between a person’s tax or social welfare status and employment status in the eyes of the legislation.
The question of whether a person is an Employee or is self-employed for the purposes of Irish employment rights legislation depends on the definition contained in each specific piece of legislation.
The Complainant stated that he was effectively an “Employee” on a Contract of Service as defined under the Minimum Notice and Terms of information Act,1973, Section 1,
“employee” means an individual who has entered into or works under a contract with an employer, whether the contract be for manual labour, clerical work or otherwise, whether it be expressed or implied, oral or in writing, and whether it be a contract of service or of apprenticeship or otherwise, and cognate expressions shall be construed accordingly.
The Adjudicator referred to the Supreme Court judgment of 20 October 2023 in ‘The Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza’ which recommended that questions of employment status should be resolved by reference to five questions.
The Supreme Court suggested that the first three questions are to be viewed as a filter. If any of these are answered negatively, there cannot be a contract of employment. If the first three questions are answered affirmatively, questions four and five must then be considered to determine if a contract of employment exists.
The Adjudicator considered the 5 tests under the framework suggested by the Supreme Court as follows: –
Question 1: Work/wage bargain: Does the contract involve the exchange of a wage or other remuneration for work?
Answer: Yes. The Complainant’s fee is a set amount for each gig/rehearsal in return for him providing his personal service of being the resident fiddle player for the band over an extended period of time from January 2014 to September 2022 and he was paid every Friday and on occasion for work in advance.
Question 2: Personal Service: Is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party to the Employer?
Answer: The Complainant provides his fiddle playing services for the band as the resident fiddle player and he would get 3-6 months’ notice of gigs in advance normally 3-4 times a week. In the very limited occasions out of the 1,200-1,300 gigs he did (he was not available 2/3 times in that time) a substitute was found to cover his fiddle playing for that specific gig. The substitution however was not considered a regular option but only to be used on an exceptional basis which was the case in practice.
Question 3: Control: does the Employer exercise sufficient control over the putative Employee to render the agreement one that is capable of being an employment agreement?
Answer: Yes. The Complainant has no flexibility as to when the work is performed as the gigs are scheduled in advance, he is told what music to play, wears the band uniform and is instructed by the Company for all work-related matters.
Question 4: All the circumstances of the employment must then be considered: whether the terms of the contract between Employer and worker interpreted in the light of the admissible factual matrix and having regard to the working arrangements between the parties as disclosed by the evidence, are consistent with a contract of employment, or with some other form of contract having regard, in particular, to whether the arrangements point to the putative Employee working for themselves or for the putative Employer.
Answer: The facts of the case cannot support the notion that the Complainant is self-employed for this engagement based on all the circumstances of the arrangement and evidence presented. The Adjudicator determined that the Complainant was an Employee in practice based on the arrangement in place.
Question 5: Legislative context: Finally, it should be determined whether there is anything in the particular legislative regime under consideration that influences the employment status in question.
Answer: There is no particular legislation that requires an adjustment or supplement to any of the questions and considerations above.
Based on the above test and based on all the evidence presented by the parties both orally and in written submission and having considered the “totality” of the relationship between the parties, the Adjudicator ruled that the Complainant met the definition of an “Employee” under the relevant statutes.
The Adjudicator then considered each claim individually and found that:
- The Complainant did not receive a Sunday premium as required under working time legislation.
- The Complainant did not receive notice and payment from the Respondent on terminating his employment.
- The Complainant did not receive his paid holiday/annual leave entitlement.
- The Complainant did not receive his public holiday entitlement
- The Complainant did not receive a contract of employment or his core written terms.
- The Complainant was unfairly dismissed.
Decision:
The Adjudicator determined that the Complainant’s employment status was that of an Employee and ordered the Respondent to pay the Complainant €43,840 in total for breaches of five different employment statutes.
Complainant awarded €51k in unfair dismissal claim while pregnant
Key Learnings:
Employers should be aware Irish law provides robust protections for pregnant Employees and new mothers. The Employment Equality Acts, spanning from 1998 to 2015, are foundational in combating discrimination in the workplace. These Acts prohibit discrimination on several grounds, including gender, with specific provisions addressing pregnancy and maternity. This means Employers are legally obligated to ensure that pregnant Employees are not subjected to less favourable treatment and that their rights are fully respected throughout their pregnancy, maternity leave, and upon their return to work.
Further safeguards are enshrined in the Maternity Protection Acts of 1994 and 2004. These Acts establish a comprehensive framework for maternity leave entitlements, outlining the rights of Employees during their leave and offering crucial protection against dismissal due to pregnancy or maternity leave. They clearly define Employer obligations regarding the duration of maternity leave, any applicable pay, and the right to return to work afterwards.
Beyond these fundamental rights, the Safety, Health and Welfare at Work (Pregnant Employees) Regulations of 2007 delve into the specific health and safety needs of pregnant Employees, new mothers, and those who are breastfeeding. These regulations mandate that Employers conduct thorough risk assessments to identify and mitigate potential hazards in the workplace, ensuring a safe and healthy environment for these Employees.
Taken together, these legal provisions create a comprehensive safety net for pregnant Employees and new mothers in Ireland, safeguarding their rights and well-being in the workplace.
Background:
The Complainant, working as a Junior Buyer, filed a complaint against her Employer alleging she was discriminated against and penalized because of her pregnancy. Her troubles began when she informed her Employer that she was expecting a baby. Shortly after sharing this news, she was placed on layoff. This period was marked by poor communication from her Employer, and she even faced unsettling threats of redundancy. Adding to her worries, the company delayed processing her maternity benefit forms, which led to significant financial strain.
Despite these difficulties, she continued to work until February 2023, when she was abruptly laid off without any warning or explanation. Her attempts to obtain clarity and secure her maternity benefits proved futile, leaving her with no choice but to rely on the significantly lower Jobseeker’s Allowance. This unexpected drop in income further compounded her financial woes.
The situation deteriorated even further after the birth of her child. The stress of her precarious employment situation, coupled with the challenges of new motherhood, led to health issues, exacerbating her already difficult circumstances.
A hearing with the Workplace Relations Commission (WRC) was scheduled for June 2024 to address her complaint. The Employer, referred to as the Respondent in the case, was formally notified of the hearing in April 2024, including details about the process and the possibility of postponing the hearing if needed. However, the Respondent failed to appear at the scheduled hearing. The WRC made further attempts to contact the Respondent by phone, even providing a 30-minute grace period, but these efforts were met with silence. Based on these facts, the WRC concluded that the Respondent had been properly informed of the hearing but chose not to attend.
Summary of Complainant ’s Case:
This is a case of alleged pregnancy discrimination. The Complainant, a Junior Buyer, claims her Employer (the Respondent) discriminated against her after she informed them of her pregnancy.
The Complainant alleges the Respondent:
- Placed her on forced unpaid layoff while she was pregnant.
- Ignored her requests for information and assistance.
- Threatened her with redundancy.
- Refused to sign her maternity benefit forms, preventing her from receiving timely financial support.
- Harassed and victimised her.
Timeline of Events:
The Complainant started working for the Respondent in August 2020 and was promoted to Junior Buyer in January 2023.
In February 2023, the company was sold to a new owner. Initially, the Complainant was told her job was safe, but she was later placed on indefinite unpaid layoff. She was seven months pregnant at the time.
Despite attempts to get information, the Complainant was left in the dark about her employment status. She was offered no alternative role and told redundancy was possible.
The Respondent refused to sign her maternity benefit forms, forcing her to rely on the lower Jobseeker’s Allowance after her baby was born in May 2023.
It wasn’t until August 2023, after contacting the liquidator, that the Complainant received confirmation of her employment, maternity leave, and backdated maternity pay. However, she was made redundant in September 2023.
This whole ordeal caused the Complainant significant financial loss, emotional distress, and health problems. She believes she was discriminated against because of her pregnancy.
Impact on the Complainant:
Financial: The Complainant suffered a significant financial loss due to the delayed maternity benefits and redundancy.
Emotional: The situation caused immense stress during what should have been a joyous time, impacting her health and family.
Practical: Her employment status remained unclear, causing issues with her Jobseeker’s Allowance.
The Complainant believes the Respondent violated the Employment Equality Acts 1998-2015 and seeks resolution.
Summary of Respondent’s Case:
There was no attendance by or on behalf of the Respondent.
On 19 December 2023, during the Case Management Conference, the Respondent’s correct name was confirmed and it was reflected in the Decision.
In a letter from the WRC dated 18 April 2024, the Respondent was informed of the details of the Hearing to take place on 25 June 2024. The same letter also set out the procedure regarding postponement requests.
On 25 June 2024, when the Respondent did not attend, the WRC attempted unsuccessfully to contact the Respondent by telephone. A grace period of 30 minutes was allowed for the Respondent to contact the WRC and/or to attend the Hearing. As the Adjudicator did not hear anything further, they proceeded with the Hearing.
On 26 June 2024, JW Accountants emailed the WRC. They confirmed that Mr. Joseph Walsh was appointed Liquidator of the Company (the “Liquidator”) on 7 September 2023, by Order of Mr. Justice Quinn of the High Court. They further confirmed that as this complaint relates to matters which predate the Liquidator’s appointment, he was not familiar with the background to the complaint and therefore was not in a position to assist in the Hearing.
In the circumstances, the Adjudicator was satisfied that the Respondent was on notice of the Hearing and decided not to attend.
Findings and Conclusions:
This text outlines the legal framework for discrimination cases in Ireland, specifically focusing on pregnancy-related discrimination.
Discrimination:
- Treating a pregnant Employee unfairly compared to other Employees is considered gender discrimination.
Harassment:
- Any unwanted behaviour that creates a hostile or offensive environment for someone is harassment, regardless of the harasser’s intention.
- Employers are responsible for their Employees’ harassing behaviour at work.
Victimization:
- It’s illegal for an Employer to punish an Employee for making a discrimination complaint.
Burden of Proof:
- If an Employee shows evidence suggesting discrimination, the Employer must prove they did not discriminate.
- Pregnancy alone is strong evidence, putting the burden on the Employer to prove fair treatment.
Compensation:
- Employees can receive compensation for discrimination. The amount depends on their earnings and the severity of the discrimination.
- Compensation should not only cover financial losses but also discourage future discrimination.
Conforming Interpretation:
Irish law must be interpreted in a way that aligns with European Union law, ensuring effective protection against discrimination.
This simplified version clarifies the key legal concepts and removes the complex legal language, making it easier to understand.
This is a legal case where a pregnant Employee (Complainant) alleged gender discrimination against her Employer (Respondent).
The Complainant’s claims:
Forced layoff while pregnant: Despite initially being promised a transfer within the company, the Complainant was placed on unpaid layoff with no notice.
Ignored and uninformed: The Respondent repeatedly ignored the Complainant’s requests for information about her job and redundancy.
Delayed maternity benefits: The Respondent delayed providing necessary documentation for the Complainant to receive maternity benefits, causing her significant stress.
The legal arguments:
Discrimination: The Complainant proved that she was treated unfairly due to her pregnancy. The Respondent failed to provide any evidence to the contrary.
Victimization: The Complainant did not provide enough evidence to support these claims.
Compensation: Although the Complainant wasn’t receiving pay at the time of the complaint (due to the layoff), the court decided that she was still entitled to compensation because she was employed by the Respondent during the discrimination.
Outcome:
The court found that the Complainant was discriminated against because of her gender (pregnancy) and awarded her €51,000 in compensation.
Decision:
Section 79 of the Employment Equality Acts 1998-2015 requires that the Adjudicator make a decision in relation to the complaint in accordance with the relevant redress provisions under section 82 of the Act.
For the reasons outlined above, the Adjudicator found that the Complainant was discriminated against on the ground of gender. The Adjudicator order the Respondent to pay to the Complainant compensation in the amount of €51,000.
For the reasons set out above, the Adjudicator find that the Complainant was not harassed on the ground of gender.
Finally, for the reasons set out above, the Adjudicator find that the Complainant was not victimised.