In Matthew McGranaghan v. MEPC Music Ltd (ADJ-00037668), the Complainant brought a number of complaints...

In Matthew McGranaghan v. MEPC Music Ltd (ADJ-00037668), the Complainant brought a number of complaints to the Workplace Relations Commission (“the WRC”) alleging that he was an employee and not self-employed and on that basis, he claimed that he was unfairly dismissed; not paid his notice entitlement; not paid his annual leave or public holiday entitlement. He also claimed compensation for the Respondent’s failure to comply with the minimum notice requirement. The Adjudicator, Caroline Reidy, found in his favour and awarded him a total amount of €43,840

Facts: The Complainant is a musician (fiddler) who started providing his services to the Respondent band in January 2014. In May 2020 the Complainant contacted the Scope Section of the Department of Social Protection alleging that he believed he fitted the criteria for being an employee and was therefore eligible for the Pandemic Unemployment Payments. Scope determined that the Complainant was an employee for the purposes of social insurance. However, the Respondent successfully appealed this decision to the Appeals Officer.

The Complainant worked on average 4 days per week for the Respondent between rehearsals and gigs. He would send an invoice at the end of every week indicating the number of gigs he played. Apparently, the Complainant had negotiated his rate of pay with the Respondent. He was also free to play with other bands, which he did. He was also able to determine when he was or wasn’t available but he was only not available on 2 occasions. When the Complainant was not available the Respondent would get someone else and pay that person directly. When the Complainant played with the Respondent he had to wear the uniform of the band and he had to learn the music in advance. Due to Covid-19 shut down, the Complainant had not played for the Respondent since March 2020 and he lodged his complainant form with the WRC on 4 March 2022. The Respondent alleged that all the claims were out of time.

Decision:

Time Limit – The Adjudicator acknowledged that the reason why the Complainant had not worked since March 2020 was mainly due to Covid-19. Although the Respondent wrote to the Complainant offering him a gig in August 2021, which the Complainant was not available for. The Adjudicator held that the email of 22 September 2021 which the Respondent wrote to the Complainant confirming that they would no longer require his services was the last date of contravention and therefore the claims were lodged within 6 months from that date. This would result in the claims for unfair dismissal, notice payment, compensation for failure to pay notice and Terms of Employment (Information) Act claim all being within time. However, the Adjudicator did not explain in her decision how she awarded the Complainant annual leave and public holiday when he had not worked within the statutory annual leave year to which the claim related and nor had he worked 5 weeks before the public holiday that was within the relevant period. This may have been explained through oral submissions at the hearing.

Employment Status - The Adjudicator applied the 5-step test set out by the Supreme Court in the decision of Karshan (Midlands) Ltd t/a Domino’s Pizza v. Revenue Commissioners (the “Karshan Case”) and found as follows –

Unfortunately, the Adjudicator did not get into the issue of continuity of service and/or reckonable service in this decision, which the Supreme Court did not address either. It appears that the Covid-19 shut down made such an exercise very difficult in this case.

The Complainant was awarded 6 months salary for the unfair dismissal claim which amounted to €26,880. He was awarded 4 weeks pay in respect of his notice and a further 4 weeks compensation for the Respondent’s failure to pay his notice entitlement. However, he was only awarded €500 in respect of not having received a contract of employment. He was awarded €5,000 in respect of not being paid annual leave and €1,500 in respect of not receiving his public holiday entitlement. This totalled €43,840 gross.

Takeaway for employers: This decision illustrates how easy it is now going to be for workers to  be able to prove that in reality they are employees. It is vital that all businesses that engage with contractors who provide personal service review their arrangements and either permit substitution by which the contractor engages and pays the substitute or insist that the contractor operates through a limited company going forward or change the arrangement to that of an employment relationship. There are careful steps that need to be considered in respect of each of these options. However, doing nothing is no longer a viable option.

Link: https://workplacerelations.ie/en/cases/2024/august/adj-00037668.html

Author- Anne O’Connell