In the case of John Read v. Speedking Couriers Ltd t/a Fastway, the Complainant had his contract terminated with one week’s notice and without the application of any procedure whatsoever by the Respondent Company.  The Complainant brought a claim for Unfair Dismissal which was not upheld at the WRC but the Complainant was not in attendance due to an administrative error. Subsequently, the Complainant appealed the WRC decision to the Labour Court.

Facts: The Respondent claimed that the Complainant was an independent contractor rather than an employee and therefore not covered by the Unfair Dismissals Act.  The Labour court was required to determine this as a preliminary matter and thereafter whether he was unfairly dismissed and provide a remedy if appropriate.

The Complainant commenced work for the Respondent in October 2017.  In describing his working relationship with the Respondent, the Complainant explained that he supplied his own van and registered for VAT, invoiced the Respondent weekly in arrears for payment.  He understood that personal service was required, and that he could not provide a substitute in the event that he was unable to work.  The Respondent did not pay him sick pay and he did not accrue annual leave.

He argued that despite this, he was in fact an employee of the Respondent, working regular hours and days and being subject to control by the Respondent.   By way of example of the Respondent’s control over his work, he gave evidence that he was required to wear the company uniform and display the company logo in the window of his van. The Respondent provided him with a scanning device and trained him in its use.  He was required to attend training at the Respondent’s premises, and it was the Company who determined his routes and areas of work.  In February 2019 a representative of the Respondent phoned the Complainant and informed him that his usual route was no longer required and he would be moved to another route for which he would be compensated by way of additional pay.   The Complainant was required to attend training for this route, which he did.  However, on one of the training days he was informed that his services were no longer required and his contract was at an end.  He was paid one week’s notice.

In response to the Complainant’s claim for Unfair Dismissal the Respondent disputed that the Complainant could not substitute his services but conceded that had he done so it would be the Respondent and not the Complainant who the substitute would be required to invoice.  Further, they did not challenge the fact that no procedure was applied to the Complainant’s dismissal on the basis that he was not entitled to the benefit of the Unfair Dismissals Act because he was an independent contractor.

The Labour Court considered the case of Henry Denny & Sons v Minister for Social Welfare, in determining the case on its own facts (the Supreme Court’s ‘reality test’) in order to determine the status of a working relationship. This involves an assessment of the degree of control the company has over the worker as well as how integral the services provided are to the company’s purpose, and all the facts of each case.    The Labour Court had particular regard to Karshan (Midlands) Limited t/a Dominos Pizza v Revenue Commissioners which share a number of facts to the within case, including that the worker in that case paid her own tax and provided her own vehicle.   In Re The Sunday Tribune the integration of the work that the worker does into the business i.e whether it was merely accessory or integral to the core business was considered and the Labour court also had regard to this stating that the delivery of parcels is the Respondent’s core business and the only service that the Complainant provided.

Decision: Having heard the arguments and giving consideration to the case law, the Labour Court decided that the Complainant was subject to considerable control, worked exclusively for the Respondent, could not sub-contract his work, and provided services integral to the business.  It was decided that the Complainant was, therefore, an employee.  It followed from this that his dismissal was unfair given that no procedure was followed, fair or otherwise.

However, when considering the obligation to mitigate his financial loss, the Labour found that the Complainant had no documentary evidence whatsoever to illustrate that he had made attempts to secure alternative employment. On that basis, the Labour Court held that they were restricted to a maximum of 4 weeks’ gross pay, being €3,800 which they awarded. This award restriction in the Unfair Dismissals Act is only where there is no financial loss but the Labour Court deemed that where there is no evidence of mitigation of loss that this is the restriction that applies.

Takeaway for Employers– It is important to always be mindful of the nature of the relationships within the business having particular regard the level of control exercised over the worker.  This case sets out a number of factors to be considered but it is not exhaustive. It is also important to ensure that proper enquires are made in relation to the Complainant’s efforts to mitigate his loss before the hearing of any case.

Link – https://www.workplacerelations.ie/en/cases/2022/february/udd225.html

Authors – Nicola MacCarthy & Anne O’Connell