Facts: This was an appeal by the Respondent, Camphill Communities of Ireland, against a WRC decision that the Respondent unfairly dismissed the Complainant, Ms. Elke Williams. The WRC had awarded compensation in the amount of €40,000.

The Respondent organisation provides support on a residential and non-residential basis to individuals with intellectual disabilities and other needs in a community-based environment. The Complainant joined the Respondent charity in September 1994 and performed a variety of roles as a Long-Term Co-Worker (“LTCW”). As an LTCW she was not paid a salary, but her accommodation and “reasonable needs” were met by the community. The Complainant and her family lived in accommodation provided by the Respondent in the community.

The role of LTCW ceased to exist after 31 December 2018 as part of a move to formalise structures in the Respondent in line with issues raised by the HSE, one of its main funding bodies. However, while most of the Complainant’s colleagues were afforded the opportunity to transition to the new employee model, the Complainant was not, and she was not provided with any reasons for this decision.

The Complainant claimed that she was employed by the Respondent and that she was unfairly dismissed on 31 December 2018. She received her final monthly allowance of €1,000 in December and 31 December 2018 was the date by which she and her family had to vacate the apartment that had been provided for their use.

The Respondent claimed that the Complainant was never an employee and that she left of her own volition on 15 October 2018 when she and her family moved out of their community accommodation. While the Complainant and her family moved out in October 2018, they continued to have access to the apartment until 31 December 2018.

Preliminary Issues: The Respondent raised the following preliminary issues:

The Court considered these issues as part of the full hearing of the matter.

Decision:

Wages/remuneration

The Court was satisfied that there was a contractual relationship between the parties. It then moved on to consider whether or not the Complainant was an employee of the Respondent. The Court considered the definition of a “volunteer” under the Civil Law (Miscellaneous) Act 2011. It noted that although the Complainant was not paid what would normally be regarded as a salary or wage, she was paid more than reimbursement for expenses and as such fell outside the definition of a volunteer. The Complainant received holidays, travel, accommodation, food, clothing, education, medical expenses, and shared access to a car in respect of her and her family on a “needs met” basis.

The Respondent claimed that as the Complainant was not paid a wage, she could not be regarded as an employee. However, the Court noted that the Respondent accepted that the benefits received by the Complainant constituted taxable income and determined that the benefits fell within the definition of “wages” under the Payment of Wages Act and the definition of “remuneration” under the Unfair Dismissals Acts.

Mutuality of obligation

Both parties accepted that mutuality of obligation was an essential feature of a contract of employment. Mutuality of obligation refers to the mutual obligations on an employer on the one hand to provide work for an employee, and on an employee on the other hand to perform work for an employer. The Court found that the residential and day care service provided by the Respondent were, in general, regular and predictable and were carried out at the same location each week. The contractual relationship between the parties required the Complainant to carry out the work that was required in exchange for her accommodation and other needs to be met by the Respondent. Evidence was provided on behalf of the Respondent that an LTCW was not free to decide not to attend work and that there would be consequences if an LTCW failed to attend. Evidence was also given on behalf of the Respondent that the LTCWs were interchangeable with paid employees and that the main difference between them was that the employees received a wage. The Court found that “[i]n the nature of this case once mutuality of obligation was established at the commencement of the contract it continued without break or interference.” The Court also noted that “[i]f…the only difference in terms of the roles they carried out was the nature of the payment they received, the Court struggles to see how mutuality of obligation existed for the group that got paid a wage but did not exist for the group that got paid in kind.” The Court found that there was mutuality of obligation between the parties.

The Court went on to consider that, in addition to mutuality of obligation, the requisite elements of integration and control also existed. It determined that the Complainant was an employee of the Respondent.

Notwithstanding that the Respondent’s argument that the Complainant and her family moved out of their community accommodation on 15 October 2018, it was accepted in evidence on behalf of the Respondent that the Complainant finished with the Respondent on 31 December 2018 and received remuneration up to that date. Accordingly, the complaint was found to be in time.

It was accepted in evidence on behalf of the Respondent that the Complainant was not given reasons for the decision not to transition her to the role of paid employee along with most of the other LTCWs. Evidence was provided that the decision was based on unsubstantiated allegations regarding “trust issues” that were never investigated or put to the Complainant. There was no appeal available. The Court found that the dismissal came “nowhere near the standard required to establish that the Complainant was afforded fair procedure.”

The Court determined that the Complainant was unfairly dismissed and awarded €60,640 to her.

Takeaway for Employers: This case demonstrates that employers should exercise caution in relying on their own categorisation of an individual as an independent contractor or, as in this case, as a volunteer. Adjudicating bodies will make their own assessments of the nature of the contractual relationship based on the reality of the situation. Mutuality of obligation continues to be an essential feature of the employment relationship, the absence of which will be fatal to a claim of employee status. It is clear from this case that the definition of “wages” or “remuneration” is broad and encompasses payment in the form of benefits in kind and an individual may be found to be an employee despite not receiving a traditional salary or wage.

Link  – https://www.workplacerelations.ie/en/cases/2021/september/udd2155.html

Authors – Jenny Wakely and Anne O’Connell