Agency Workers
Cases
O’Rourke v. Caldwell
[1998] IEHC 50
Mr. Justice Kevin O’Higgins
“I have been referred by Counsel to the following cases: Construction Industry Training Board -v- Labour Force Limited (1970 3 A.E.R at page 220), Ironmonger -v-Movefield Limited t/a Deerings Appointments 1998 I.R.L.R. page 461, The Minister for Labour -v- P.M.P.A. Insurance Company (under Administration) 1986 5 J.I. SLL and Phelan v- Coilte & Ors. 1993 I.R. page 8 as well as a passage from Robert Clarke’s book on Contract 3rd Ed. page 128.
In Ironmonger -v- Movefield Limited t/a Deerings Appointment both the parties went on the basis that, in that particular case there was a contract between the agency and the persons whose services the agency provided to the third party. The issue was only as to the precise nature of that contract. For this reason that decision is of limited aid in the present case.
In the case of The Minister for Labour -v- P.M.P.A. Insurance Company (under Administration) the Court considered the position of a temporary typist engaged by the Defendants under an agreement between them and an employment bureau. There was a separate agreement between the bureau and the typist.
12. The learned Judge at page 216 of the report said:-
“The primary issue in the present case is accordingly to determine whether or not a contract existed between the defendant and the employee. Only if such a contract existed, would it be necessary to consider whether or not it was a contract of service. For there to be a contract there must be an agreement between the parties under which the rights and duties enforceable inter se have been created. Where, as here, there are three parties, it is necessary to look to the relationship of each of them to the other or others. Undoubtedly the employee worked under the control of the defendant. As a temporary typist it would probably not have been possible to distinguish the duties performed by her and the manner in which they were allocated to her from the duties performed by and allocated to the permanent typists employed by the defendant. The primary question is not however (sic) she did the same work or was subject to the same control as permanent typists, but what rights and duties each had in respect of that work.
I am satisfied that the rights and duties of the defendant and the employee respectively sprang from the two contracts to which I have already referred. So far as the defendant was concerned its rights and duties in relation to the employee were enforceable solely under its agreement with the Bureau and against the Bureau. So far as the employee was concerned her rights and duties were equally enforceable solely under the terms of her agreement with the Bureau and against the Bureau. In such a contractual situation I see no room for any implied contractual relationship between the defendant and the employee.”
13. Barron J. did not regard the facts in that case as establishing any contract, express or implied, between the defendant and the employee, and stated that he was supported in his conclusion by the English decision in the case of Construction Industry Training Board -v- Labour Force Limited .
In the case of Phelan -v- Coilte Teoranta & Ors the Court was concerned to determine whether a particular contract was a contract of service or a contract for services and is accordingly not pertinent to the issue I have to decide in this case.
14. From the foregoing it is apparent that the case rests very much on its own facts.
15. The questions to be decided in this case seem to me as follows:-
1. Did the Plaintiff make a binding contract with the first named Defendant?
2. Did the Plaintiff have a binding contract with the second named Defendant?
3. If the contract was with the first named Defendant was he (the first named Defendant) led into that contract by a misrepresentation of the second named Defendant?
4. If the contract was made with the first named Defendant, was he acting merely as agent for the second named Defendant?
5. Is there a term implied that the contract could be terminated at one week’s notice?
6. Did the Plaintiff fail to mitigate his loss?
Brightwater Selection (Ireland) Ltd -v- Minister for Social and Family Affairs
[2011] IEHC 510 ( Gilligan J.
“Contracts Sui Generis
26. It is open to a court or tribunal to hold that an individual is engaged under neither a contract of service nor a contract for services, but instead under a contract sui generis. In Construction Industry Training v. Labour Force Ltd. [1970] 3 All ER 220, Cooke J. concluded as follows:-
“I think there is much to be said for the view that, where A contracts with B to render services exclusively to C, the contract is not a contract for services, but a contract sui generis, a different type of contract from either of the familiar two.”
27. It was held on the facts of that case that no contract existed between the end-user and the agency worker, and that the contract between the agency and the agency worker was not a contract of service. The contract was described as a contract sui generis, or contract of its own kind.
28. In Minister for Labour v. PMPA Insurance Company [1986] JISLL 215, the High Court in Ireland adopted a similar approach. There, a typist had been employed by PMPA on a temporary basis, and had been engaged through an employment agency. Under the terms of the contract, the agency would pay PMPA and it was PMPA who controlled and supervised the typist’s work. Barron J. considered the decision in Construction Industry Training and held that two separate contracts existed; one between PMPA and the agency and the other between the typist and the agency. Barron J. found, however, that no contract existed between PMPA and the typist. Barron J. stated as follows:-
“So far as [PMPA] was concerned its rights and duties in relation to the employee were enforceable only under its agreement with the [agency] and against the [agency]. So far as the employee was concerned her rights and duties equally were enforceable solely under the terms of her agreement with the [agency] and against the [agency]. In such a contractual situation I see no room for any implied contractual relationship between [PMPA] and the employee.”
29. In Minister for Agriculture and Food v. John Barry & Ors. (7th July, 2008, Unreported) HC, the respondents had worked as temporary veterinary inspectors (TVIs) at a meat factory. In order to become a TVI, each respondent had to apply for approval from the appellant. Once approved, each respondent applied in writing to the appellant to be included on a TVI panel, from which they would periodically selected to do work. The EAT decided that the respondents had all been employed under contracts of service and had therefore been employees of the appellant. Edwards J. held that the EAT had erred in law by formulating the issue as a straight choice between a contract of service or a contract of services and stated that other possibilities should have been considered, such as whether each respondent was employed under a single contract (either of service or for services), or whether on each selection they entered into a new contract, or whether the relationship had been refined into an enforceable “umbrella” contract by virtue of a course of dealing over a lengthy time. Edwards J. stated as follows:-
“It is possible that the Employment Appeals Tribunal decided of its own motion to adopt this approach, and there was no demurral by the parties, or it may be that this approach was suggested by the parties and agreed to by the tribunal. However, even if was the case that the parties themselves were of the view that it was a straight choice between a single contract of service and a single contract for services, that would not have been decisive of the matter or binding on the tribunal. It seems to this court that there were a much wider range of possibilities, and it was unjustifiable to limit the possibilities to just two.”
30. It is well accepted that other characters of contract exist outside of the ‘contract of service’ and ‘contract for services’ classifications. In the case at hand, I am of the opinion that the Appeals Officer erred in law in failing to direct his mind to whether the contract between the appellant and Ms. Keenan constituted a contract sui generis, or indeed in failing to consider the existence of an alternative category to those of ‘contract of service’ or ‘contract for services’.
Mutuality of Obligation
31. The English courts have attempted to resolve the issue of the employment status of agency worker on the basis of whether ‘mutuality of obligation’ existed between the parties. It should be noted in advance that the majority of the case-law in relation to the concept of mutuality of obligation concerns the determination of employment status as between agency worker and end-user, and not as between agency worker and the agency itself. Nonetheless, an analysis of the jurisprudence in this area is necessary in order to determine the importance of the concept as regards the determination of employment status.
32. In Nethermere (St Neots) Ltd. v. Taverna and Gardiner, [1984] IRLR 240, the concept of ‘mutuality of obligation’ was described as “an irreducible minimum” of a contract of service. Stephenson LJ described mutual obligations as follows:-
“… a continuing obligation on the employer to provide work and pay and a continuing obligation on the employee to do the work provided.”
33. Stephenson LJ went on to ask:
“Does the law require any and what mutual obligations before there can be a contract of service?”
34. The Judge concluded:
“There must, in my judgment, be an irreducible minimum of obligation on each side to create a contract of service.”
35. The mutuality of obligation approach can have harsh results, particularly for more casual working arrangements. In Carmichael and Leese v. National Power Plc. [1999] 1 WLR 2042, the applicants were engaged as tour guides and worked on a ‘casual as-required basis’. The defendants paid the workers, and deducted income tax and national insurance payments from their wages, and the workers wore the company uniform, received company training and used a company vehicle where necessary. The industrial tribunal found that the applicants were not employees, which decision was ultimately upheld by the House of Lords. Although the court held that documentation was not determinative of the existence or otherwise of a particular relationship, Lord Irvine LC concluded:-
“… that the documents did no more than provide a framework for a series of ad hoc contracts of service or for services which the parties might subsequently make; and that when they were not working as guides they were not in any contractual relationship with the CEGB. The parties incurred no obligations to provide or accept work, but at best assumed moral obligations of loyalty in a context where both recognised that the best interests of each lay in being accommodated to the other… [T]he words imposed no obligation on Mrs. Leese and Mrs. Carmichael, but intimated that casual employment on the pay terms stated could ensue as and when the CEGB’s requirements for the services of the guides arose.
If this appeal turned exclusively – and in my judgment it does not – on the true meaning and effect of the documentation of March 1989, then I would hold as a matter of construction that no obligation of the CEGB to provide casual work, nor on Mrs. Leese and Mrs. Carmichael to undertake it, was imposed. There would therefore be an absence of that irreducible minimum of obligation necessary to create a contract of service…” (Emphasis added)
36. The English Court of Appeal has adopted an imaginative approach in relation to agency workers in order to take into account the atypical nature of their employment status. In Dacas v. Brook Street Bureau (UK) Ltd. [2004] EWCA Civ 217, the courts signified their willingness to imply a contract of employment in the absence of an express agreement between the agency worker and end-user. The applicant in that case was registered with an employment agency. The agreement between the applicant ant the agency expressly stated that it did not give rise to a contract of employment. The applicant was assigned to work as a cleaner in a hostel for a Borough Council. Her work was done at the council’s premises and under its supervision and control. The agency had a separate contract with the council that set the applicant’s rates of pay, and the agency paid the applicant’s wages from payments made to it by the council. The Employment Tribunal held that the applicant was neither employed by the agency nor the council. The applicant only appealed the decision as against the agency, but the court considered what the position would have been had she appealed against the council. Mummery LJ stated:-
“The formal written contracts between [the applicant] and [the agency] and between [the agency] and the Council relating to the work to be done by her for the Council may not tell the whole of the story about the legal relationship affecting the work situation. They do not, as a matter of law, necessarily preclude the implication of a contract of service between [the applicant] and the Council. There may be evidence of a pattern of regular mutual contact of a transactional nature between [the applicant] and the Council, from which a contract of service may be implied by the tribunal. I see no insuperable objection in law to a combination of transactions in the triangular arrangements, embracing an express contract for services between [the applicant] and [the agency], an express contract between [the agency] and the Council and an implied contract of service between [the applicant] and the Council, with [the agency] acting in certain agreed respects as an agent for [the applicant] and as an agent for the Council under the terms of the express written agreements.
I approach the question posed by this kind of case on the basis that the outcome, which would accord with practical reality and common sense, would be that, if it is legally and factually permissible to do so, the applicant has a contract, which is not a contract of service, with the employment agency, and that the applicant works under an implied contract, which is a contract of service, with the end-user and is therefore an employee of the end-user with a right not to be unfairly dismissed. The objective fact and degree of control over the work done by [the applicant] at West Drive over the years is crucial. The Council in fact exercised the relevant control over her work and over her. As for mutuality of obligation, (a) the Council was under an obligation to pay for the work she did for it and she received payment in respect of the work from [the agency], and (b) [the applicant], while at West Drive, was under an obligation to do what she was told and to attend punctually at stated times.”
37. The court concluded that the applicant was an employee based on the element of control exercised over the applicant and the existence of mutuality of obligation.
38. The Court of Appeal in James v. Greenwich London Borough Council [2008] EWCA Civ 35, limited the circumstances in which a contract of employment could be implied between an end-user and the agency worker. Mummery LJ held that:-
“[The Employment Appeals Tribunal was] entitled to conclude that [the applicant] was not an employee of the Council because there was no express or implied contractual relationship between her and the Council. Her only express contractual relationship was with the employment agency… The Council’s only express contractual relationship was with the agency. There were no grounds for treating the express contracts as anything other than genuine contracts.”
39. Mummery LJ pointed out that the mutuality of obligation test was only of critical importance in deciding whether the agreement between the parties is a contract of employment, and not of significant assistance in cases where the question is whether or not a contract existed between the parties at all:-
“[In] this case the question of the presence of the irreducible minimum of mutual obligation, which was addressed by the ET and … the Council …, was not the essential point. The mutuality point is important in deciding whether a contract, which has been concluded between the parties, is a contract of employment or some other kind of contract. In this case, on the findings of fact by the ET about the arrangements, how they operated in practice, about the work done by [the applicant] and the conduct of the Council, there was no contract at all between [the applicant] and the Council: there was no express contract and there were insufficient grounds for requiring the implication of a contract.”
40. A comprehensive test was adopted by McKenna J. in Readymix Concrete (South East) Ltd. v. Minister for Pensions and National Insurance, [1968] 2 QB 497, where he adopted an open-ended approach to the question of determining employment status, stating:-
“A contract exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work for his master. (ii) He agrees, expressly or implicitly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with it being a contract of service… The servant must be obliged to provide his own work and skill. Freedom to do a job by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be.”
41. In Diageo Global Supply v. Mary Rooney [2004] ELR 133, the Irish Labour Court applied the three-pronged test formulated by MacKenna J. in Ready Mixed to the question of whether an agency worker was under a contract of employment. The applicant worked part-time for the respondent company and was under the supervision and control of the company, but her wages were paid by a recruitment agency. First, the court held that the applicant did work under a contract for the respondent company:-
“While the agreement was not reduced to writing it defined the rights and duties of the parties inter se, and there was valuable consideration. There was also mutuality of obligations in the sense that the respondent undertook to provide work and the claimant undertook to perform that work. Whilst it was agreed that the consideration, in the form of wages, would be paid through IRC, this does not mean that consideration did not pass from the respondent. The court is satisfied that IRC were acting on behalf of the respondent in paying the claimant’s wages from funds provided by the respondent.”
42. Secondly, the court held that the contract between the applicant and the respondent company was one of service largely because of the control exercised over the applicant by the respondent, particularly as the respondent directed the applicant as to her work at all times. Third, while accepting that payment of her remuneration through the agency was not consistent with a finding of a contract of employment, the court was satisfied that the agency was at all times acting on behalf of the respondent.
43. For illustrative purposes, the test in Henry Denny & Sons v. Minister for Social Welfare [1998] 1 IR 34, should be set out at this juncture. Keane J. (as he then was) referred to the English decision of Market Investigations v. Minister of Social Security [1969] 2 QB 173, where Cooke J. noted that no exhaustive list could be compiled of considerations which are relevant in determining whether a person is under a contract of employment. Keane J. concluded that:-
“[W]hile each case must be determined in the light of particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself. The degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. The inference that the person is engaged in business on his or her own account can be more readily drawn where he or she provides the necessary premises or equipment or some other form of investment, where he or she employs others to assist in the business and where the profit which she derives from the business is dependent on the efficiency with which it is conducted by him or her.”
44. In Minister for Agriculture and Food v. John Barry & Ors. (7th July, 2008, Unreported), Edwards J., as set out above, first held that the EAT had erred in law by formulating the issue as a straightforward choice between a contract of service or a contract of services. Edwards J. secondly held that the EAT had erred in law in its approach to the correct test to be applied. The EAT had first looked at whether mutuality of obligation existed between the parties. Edwards J. held that, while the mutuality of obligation approach was an important filter, in that in its absence the Court need not go further in examining the relationship, the existence of such an obligation could not be determinative of the issue. He further held that the EAT had been incorrect in deriving a mutuality of obligation from an implied agreement as between the parties where he found that no such agreement existed.
45. Edwards J. described the requirement of mutuality of obligation as follows:-
“The requirement of mutuality of obligation is the requirement that there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. If such mutuality is not present, then either there is no contract at all or whatever contract there is must be a contract for services or something else, but not a contract of service. It was characterised in Nethermere (St Neots) Ltd. v. Gardiner [1984] I.C.R. 612 at p. 632 as the ‘one sine qua non which can firmly be identified as an essential of the existence of a contract of service.’ Moreover, in Carmichael v. National Power plc. [1999] ICR 1226 at p.1230, it was referred to as ‘that irreducible minimum of mutual obligation necessary to create a contract of service’. Accordingly the mutuality of obligation test provides an important filter. Where one party to a work relationship contends that that relationship amounts to a contract of service, it is appropriate that the court or tribunal seized of that issue should in the first instance examine the relationship in question to determine if mutuality of obligation is a feature of it. If there is no mutuality of obligation it is not necessary to go further: whatever the relationship is, it cannot amount to a contract of service. However, if mutuality of obligation is found to exist, the mere fact of its existence is not, of itself, determinative of the nature of the relationship and it is necessary to examine the relationship further.”
46. Thirdly, Edwards J. held that the EAT had misconstrued the decision of Keane J. in Henry Denny when they had referred to it as a “single composite test”, the enterprise test. Edwards J. held as follows:-
“Contrary to a misapprehension held in some quarters, I do not believe that it is a correct interpretation of the passage in question to regard it as the formulation by Keane J. of “a single composite test”, either for determining the nature of the work relationship between two parties, or even for determining whether a particular employment is to be regarded as governed by a contract for services or a contract of service which is a somewhat narrower issue. To the extent that this passage from his judgment has given rise to a degree of confusion, I believe that this confusion derives primarily from misguided attempts to divine in the judgment the formulation of a definitive, “one size fits all”, test in circumstances where the judge was not attempting to formulate any such test. In relation to the rush to discern a test, and to label it, it seems to this court that this is a classic example of the type of situation where a particular approach that has been advocated is subsequently labelled conveniently, but mis-characteristically, as the “such and such test”, a step that is taken with the intention that it should be helpful, but which proves to be ultimately unhelpful, because the so called test turns out to be insufficiently discriminating. Put simply, such loose labelling can often create more problems than it solves. In the context of trying to correctly characterise the nature of a work relationship between two parties, I think it can sometimes be unhelpful to speak of a “control test”, or of an “integration test”, or of an “enterprise test”, or of a “mixed test”, or of a “fundamental test” or of an “essential test”, or of a “single composite test” because, in truth, none of the approaches so labelled constitutes a “test”, in the generally understood sense of that term, namely, that it constitutes a measure or yardstick of universal application that can be relied upon to deliver a definitive result.”
47. Edwards J. concluded that every case must be considered in the light of its particular facts and it is for the court or tribunal considering those facts to draw the appropriate inferences from them. This case emphasises that no one test can be determinative of the issue and that the court or tribunal in any given case should consider a wide range of factors in coming to its conclusion.
48. Mutuality of obligation exists where there is an obligation on a body to provide work to an individual, and a corresponding obligation on the individual to perform the work. It is clear from a perusal of the authorities that no definitive test has been set out by the courts to be used in the context of determining whether a person is engaged under a contract of employment and it follows that a court or tribunal, in making such determination, should have regard to all relevant considerations. It is quite straightforward to derive from the case-law, and set out in the abstract, a non-exhaustive list of considerations that should be taken into account, such as inter alia: whether one party has the power of deciding what work is to be done and the manner in which it is to be done; whether the work of the engaged person is an integral part of the business; whether the person provides their own work or skill in the performance of some service; how the person is engaged and dismissed; how the person is remunerated; who chooses the times of work; who provides the workplace and so forth. As a tribunal should take into account all the relevant circumstances, mutuality of obligation is undoubtedly a consideration that regard should be had to, and indeed, is an important factor in determining the employment relationship.
49. The mutuality consideration is by no means a determinative test, but is an irreducible minimum of a contract of service. Although the existence of mutuality of obligation is not determinative, without mutuality no contract of service can exist. It would be logical, therefore, for a court or tribunal to begin their analysis of the employment relationship by determining whether such mutuality exists and then inquire further into the relationship.
50. In the case at hand, although the Appeals Officer did mention the phrase ‘mutuality of obligation’, he did not engage in a substantive appraisal of whether the appellant was under any duty to provide work to Ms. Keenan, nor whether Ms. Keenan was under any duty to perform work given to her by the appellant. I am of the opinion that, in the circumstances, mutuality was a highly relevant consideration and that regard should have been had to the existence or otherwise of mutuality in the relationship in question. In failing to address the issue, the Appeals Officer erred in law.
51. There was some disagreement between the parties as to the effect of the decision in Prater v. Cornwall County Council [2006] 2 All ER 1013. My finding in the instant case is that the Appeals Officer erred in law in failing to consider whether mutuality of obligation existed, and it would be superfluous for the Court to determine the effect of Prater on this area of the law.
Franks v Reuters Ltd. & Anor
[2003] EWCA Civ 417
Lord Justice Mummery :
“The Legal Position Discussed
Drawing a line between those who are employees (and so have statutory employment rights) and those who are not entitled to statutory employment protection has become more, rather than less, difficult as work relations in and away from the workplace have become more complex and diverse. This development makes it all the more important that the employment tribunal, as the tribunal of fact, should consider all the relevant evidence about the dynamics of the work relationship between the person claiming to be an employee and the putative employer. Before characterising the relationship, the tribunal must make clear and comprehensive findings of fact on the relevant evidence.
Even if the work relations are documented, the documents do not necessarily present the complete picture. That is why the tribunal in Carmichael were held by the House of Lords to have acted correctly in examining not only the correspondence, but also the circumstances surrounding it, the subsequent conduct of the parties, and the way in which the parties operated and understood the situation. Unless and until the tribunal have conducted this exercise and obtained an overall picture of the work relationships between the parties, it is impossible in many cases for them to reach an informed and sound conclusion on whether there is mutuality of obligation in the form of an express or implied contract of service.
In some cases it may be unnecessary to look beyond or beneath the documents, which the parties have agreed should embody the exclusive record regulating their relations. As Lord Irvine LC recognised in Carmichael at p.2047A, where the case turns exclusively on the true meaning and effect of the documentation, further inquiry about what the parties said and did may not be appropriate.
The instant case does not turn exclusively on the construction of documents. The available documentation relates almost entirely to the regulation of the relations between (a) Mr Franks and First Resort and (b) First Resort and Reuters. The crucial relationship is that between Mr Franks and Reuters. It is the third limb of the tripartite work arrangements. It is hardly documented at all. It must be considered against the background of the other relationships which are documented, but the very lack of documentation of the work relations between Mr Franks and Reuters highlights the importance of considering all the evidence relevant to the possible formation of an oral or implied contract of service.
I agree with Mr Supperstone that the tribunal’s findings of fact do not appear to be based on a full and properly directed consideration of all the relevant evidence relating to the work relations between Mr Franks and Reuters between 1994 and 1999. As a result the findings are limited in extent and there are some uncertainties and omissions in the facts found in paragraph 5 of the extended reasons. In making such criticisms I am, of course, aware that the extended reasons must be read in a fair and reasonable way, without excessive concentration on the detail and not over-critically. I am also conscious that this court is indebted for the help from leading counsel on each side, which was not available to the tribunal.
In my judgment, a gap in the extended reasons is identified by Reuter’s own respondent’s notice, in which it is contended that the decisions of the employment tribunal and the appeal tribunal be upheld on the additional ground that
” a. There was no contractual relationship of any kind between the Appellant Mr Franks and Reuters. The absence of any contract results in the Appellant failing in his claim.”
Unlike the tribunal in Carmichael, this tribunal did not clearly address the issue of whether, on the evidence, there was a contractual basis (whether express or implied) for the work done by Mr Franks at Reuters, apparently full time ” complying with the hours they set for him” for over five years; whether, in particular, a contract between Mr Franksand Reuters could be implied from the circumstances of his work for Reuters and from what was said and done by the parties at the time when he started work or subsequently; and, if so, what were the rights and obligations of the parties under it in relation, for example, to the nature of the work to be done, the regularity and number of hours worked, the fixing of rates of pay, arrangements for payment, disciplinary matters and so on. It was necessary for the tribunal to undertake the exercise of ascertaining the obligations (if any) of the parties in order to determine whether mutuality of obligation existed between Mr Franks and Reuters.
The evidence summarised in the extended reasons and the documents referred to demonstrates that there was certainly a contractual background to the work done by Mr Franksfor Reuters.
First, there was a written Temporary Worker Agreement made in 1988 regulating the relations between Mr Franks and First Resort. It is marked “CONTRACT FOR SERVICES.” It expressly provided that First Resort would try to find work for him, though Mr Franks was under no obligation to First Resort to accept the assignment offered. The only express obligation of First Resort was, if he accepted the assignment offered, to see that he was paid out of the money paid to them for the work that he did. First Resort issued another “Temporary Workers” Contract in respect of Mr Franks when he was selected to be a Help Desk Operator in 1999. The express provisions in those documents were the basis of First Resort’s argument, which was accepted by the tribunal, that Mr Franks was not employed by them. That conclusion could not, of course, by itself be determinative of the issue of mutuality of obligation as between Mr Franks and Reuters. The First Resort documents do, however, form part of the factual matrix of the relations between Mr Franks and Reuters.
Secondly, there was a contract between First Resort and Reuters contained in a document called “Terms & Conditions of Business.” This document appears to have been supplied by First Resort to Reuters when First Resort successfully tendered for the supply of contract personnel to Reuters under a “Vehicles Operations Contract.” The “Conditions of Business-Temporary” set out the standard terms on which First Resort transacted business with a “Client”, such as Reuters, by supplying “a Temporary” such as Mr Franks,”with a view to carrying out work for the Client.” Those conditions regulated the relations as between First Resort and Reuters in respect of the work done by Mr Franks for Reuters. They provided for payment of “charges” to be made by the Client to First Resort based on hourly charges notified to the Client and for payments of NI contributions. Condition 8 was referred to in the extended reasons and has been quoted in paragraph 15 above. As in the case of the Temporary Worker Agreement, the Conditions of Business are not determinative of the question whether Mr Franks had an express or implied contract of service with Reuters, but it is part of the factual matrix of the relations between Mr Franks and Reuters. Although the tribunal were right in law to state that First Resort and Reuters could not determine by agreement in paragraph 8 of the Conditions that Mr Franks was an employee of Reuters, the tribunal should have considered the relevance of that paragraph and of the remaining conditions as some evidence of the understanding of First Resort and of Reuters on the work situation of Mr Franks. Having held that the Conditions of Business could not determine that question, the tribunal seem to have gone further and excluded it entirely from their consideration of the issue whether or not Mr Franks had been an employee of Reuters.
Thirdly, there is another document in the bundle, which does not feature in the extended reasons, but appears to have been associated with the tender documents. It set out variousrequirements concerning the drivers, such as Mr Franks: the holding of driving licences, the importance of punctuality and of starting work at 0700 every morning, standards of smart dress and good behaviour, the supply of vehicles for the drivers and provision for regular operational and price reviews of the arrangements.
The tribunal also excluded from their consideration evidence of the length of time for which Mr Franks worked at Reuters. The length of time in this case is unusual for a person, who is described in the documents as a “Temporary Worker.” Most temporary workers are not entitled to the right not to be unfairly dismissed or to redundancy pay, because they have not served for the qualifying period of service. The question whether they are employees or not is usually irrelevant. Whilst I would agree that a person cannot become an employee simply by reason of the length of time for which he does work for the same person, the tribunal appear to have treated the evidence of length of service as irrelevant to the employment issue. In my judgment, it is not irrelevant evidence in the context of an individual who sought a temporary placement through an employment agency, but was then allowed to stay working in the same place for the same client for over five years, during which period he was re-deployed. Dealings between parties over a period of years, as distinct from the weeks or months typical of temporary or casual work, are capable of generating an implied contractual relationship. That possibility should have been addressed by the tribunal as part of its consideration of the overall situation in relation to his work, first, as a driver and then as Help Desk Operator.
Brook Street Bureau (UK) Ltd v Dacas
[2004] EWCA Civ 217
LORD JUSTICE MUMMERY
“The particular problem in this case may in due course be regarded as a matter for legislation. It arises from a similar triangular set -up for the organisation of work, which is not necessarily “temporary” from the point of view of the employment agency, the worker (using a legally neutral in the present context) or the end-user. Within the triangle variouscontractual relationships are expressly created and documented in detail in connection with the organisation of the work to be done by individual workers i.e. type, place and hours of work, rates of pay, dismissal and so on. The rights and obligations normally found in employment relationships are, however, distributed differently in the contractual documents, thereby creating an initial impression of functional dislocation. To take just one example, the applicant not only finds work through the agency; the agency pays for the work done for the end-user, who is under an obligation to make regular payments to the agency based on the hours worked by the applicant for the end-user.
The legal problems are articulated by Professor Freedland at p. 55 of his work:
“Our analysis of the current state of the law of personal employment contracts showed that there was a complex of serious functional problems with regard to employment arrangements or relations involving an end-user of services and an intermediary entity such as an employment agency having some kind of employing role between that end-user and the worker. The problems were firstly, that there is great resistance to the construction of triangular personal employment contracts, secondly, that there may be great difficulty in deciding whether the worker’s bilateral personal employment contract is with the end-user or the intermediary, but thirdly and most fundamentally that the triangular nature of the arrangement may have the effect that the worker fails to qualify as having a contract of employment or even as having a personal work or employment contract of any kind.”
It is plain that increasing numbers of people, both those who do the work and those who pay for the work done, find themselves in situations of the kind described by Professor Freedland and faced with the problems identified by him. The specific legal question in this case is whether the applicant works under a contract of service (express or implied) when (a) the applicant has entered into a written agreement, expressed to be a contract for services and not a contract of service, with an employment agency; and (b) the employment agency has entered into an express contract with its client (i.e. the end-user of work done by the applicant) for the provision of “agency staff”, including the applicant; but (c) no formal contract of any kind has ever been expressly entered into between the applicant and the end-user, in whose premises the applicant works regularly, exclusively and for reward until dismissal takes place on the initiative of the end-user.
Temporary Workers: the Practical Reality
If such arrangements are truly intermittent, casual or temporary, claims for unfair dismissal will not in practice involve a risk of liability on the part of the end-user, as the applicant will not satisfy the qualifying period requirement. As recent cases have shown, however, the arrangements are not always temporary for the applicant and the end-user. Dismissal, the triggering event, may not occur until years after the particular triangular arrangements first connected the applicant with the end-user.
I have mentioned the potential liability of the end-user to the applicant before that of the employment agency, because the first impression gained, on looking at the practical realities of the triangular arrangement, is that the applicant is more likely to be regarded as an employee of the end-user than as an employee of the employment agency or as not being an employee at all. There is no dispute in cases like the present that the applicant has done work for the end-user at the end-user’s premises and under the control of the end-user, who has indirectly paid the applicant for the work by means of regular payments to the employment agency calculated according to time sheets recording the number of hours worked for the end-user.
Although it normally makes sense to look at things as they actually are and to shy away from the distorting tendencies of the law, the legal difficulties mentioned by Professor Freedland in the passage quoted above have to be faced. The main difficulty lies in tracking down a relevant contract of service under which the applicant works. Without a contract of service, as required by the statutory definition of a contract of employment, the applicant cannot be treated as an employee of the end-user.
The starting point is that it is highly unlikely that paid work was done by the applicant in the absence of a contract of some kind. In a triangular arrangement for the organisation of work a range of possibilities is available as to the particular contract under which the applicant does the work. There may be no contract at all between the applicant and the end-user. That was held by the Employment Tribunal to be the case here. The applicant’s only express contract may be with the employment agency. That was the conclusion of the Employment Appeal Tribunal, which, differing from the Employment Tribunal, construed the relevant document as a contract of service, under which the applicant worked. The employment agency may also have an express contract with the end-user relating to the supply of “agency staff,” such as the applicant, required to work at the premises and under the control of the end-user.
Implied Contract of Service
The statutory definition of a contract of employment as a “contract of service” expressly includes an “implied” contract. This should not be overlooked. I think that it has been. Like other simple contracts, a contract of service does not have to be in any particular form. Depending on the evidence in the case, a contract of service may be implied- that is, deduced – as a necessary inference from the conduct of the parties and from the circumstances surrounding the parties and the work done. As already indicated, the overall situation under consideration is shaped by the triangular format used for the organisation of the work: the applicant, the employment agency and the end-user are all involved. Each participant in the triangular situation may have an express contract with either one of, or with each of, the other two parties.
The critical point is that, although the construction of the contractual documents is important, it is not necessarily determinative of the contract of service questions, as contractual documents do not always cover all the contractual territory or exhaust all the contractual possibilities. In determining the true nature of the relationship (if any) between each of the respective parties, it is necessary to consider the total situation occupied by the parties. The totality of the triangular arrangements may lead to the necessary inference of a contract between such parties, when they have not actually entered into an express contract, either written or oral, with one another. Although there was no express contract between the applicant and the end-user in this case, that absence does not preclude the implication of a contract between them. That depends on the evidence, which includes, but may not be confined to, the contractual documents.
As a matter of law, when an issue is raised about the status of the applicant in unfair dismissal proceedings, an implied contract between parties who have no express contract with one another is a possibility that should be considered by the Employment Tribunal in making its findings of fact. It is relevant to the decision whether the applicant works under a contract, and, if so, what kind of contract it is and with whom it was made. There may be no contract of any kind, because it is found that there is no mutuality of obligations. There may be an implied contract, which may be characterised as a contract of service or as a contract for services. There may be an implied contract of some as yet unclassified kind, wedged within the traditional dichotomy, such as a “semi-dependent worker’s contract,” as mentioned by Professor Freedland in his book, or a quasi-dependent worker’s contract, as mentioned in the work of Professors Deakin and Morris on Labour Law (2001) at p.168.
If the applicant has a contract of service in a triangular situation of this kind, it may be with (a) the end-user, the contract usually being an implied one, or (b) the employment agency, depending on the construction of the express contract between the applicant and the agency and on other admissible evidence or, though this is more problematical, (c) more than one entity exercising the functions of an employer, namely the employment agency and the end-user jointly (see Freedland at pp. 42-43).”
……..The Authorities
The court was referred to a number of authorities on the issue of a contract of service in various contexts, including cases specifically involving employment agencies
The judgments of the Divisional Court in Construction Industry Training Board v. Labour Force [1970] 3 All ER 220 support the result in the Employment Tribunal that Mrs Dacas did not have a contract of service with Brook Street or the Council. The case was not, however, concerned with unfair dismissal or employment rights. It was an industrial training levy case in which there was an appeal on a point of law against the imposition of the levy on a company, Labour Force Limited, which was not an employment agency but was engaged in the supply of labour to contractors in the construction industry. The contractors paid Labour Force, who in turn paid the workers, but Labour Force exercised no control at all over the work done by them for the contractors, who had the right to terminate. As for the contractors, who took no part in the proceedings, it was simply said (at p 223c-d) that the Industrial Tribunal had come to the right conclusion in holding that there was no contract of any kind between the contractor and the workman. Implied contracts of service were not considered. As for Labour Force, it was held that the contracts between Labour Force, as principal, and the workers to do work for a third party, the contractor, were not contracts of service. They were described as contracts sui generis: see p225d-g.
McMeechan v. Secretary of State was not an unfair dismissal case. The applicant was a temporary worker on the books of an employment agency, which went into insolvent liquidation. He claimed that he had a contract of service with the agency. That formed the basis of his application to the Secretary of State under the relevant employment protection legislation for payment of money owing to him in respect of his last engagement. The Secretary of State disputed his entitlement on the ground that he was not an employee of the agency and was self employed. It was not contended that the client of the agency, to whom Mr McMeechan was specifically assigned for four days, was his employer. The end-user took no part in the proceedings. The case is helpful to Mrs Dacas to the extent that it held that, even if there was no umbrella contract of service, as was conceded to be the case here, a contract of service between the temporary worker and the employment agency could be inferred in respect of a single engagement or assignment of the temporary worker by the employment agency to an end user. Counsel for Mrs Dacas submitted that West Drive was a specific assignment or engagement-giving rise to a contract of service between Mrs Dacas and Brook Street.
The judgments of this court in Montgomery v. Johnson Underwood [2001] IRLR 264 support Brook Street on this appeal. The court held that the applicant was not employed by the employment agency, which exercised no control over the work to be done by the applicant as a part time receptionist/ telephonist for the end-user. Applying the criteria laid down in Ready Mixed Concrete the court held that, in the absence of a framework of control, direction or supervision by the agency, there was no contract of service with it. As for the client of the employment agency, it was joined as a party to unfair dismissal proceedings in the Employment Tribunal, which held that the applicant was an employee of the agency and not of the end-user. In the Employment Appeal Tribunal, the end-user, as well as the agency, took part and the appeal was dismissed. The end-user took no part in the appeal to the Court of Appeal, which was only concerned with the issue whether the applicant was employed by the agency. The appeal by the agency was allowed. It was held that the applicant had no contract of service with the agency, as there was no mutuality of obligation between her and the agency and there was no control of her by the agency. The question of an implied contract of service between the applicant and the end-user did not arise for consideration in the Court of Appeal.
The decision of the Employment Appeal Tribunal in Stephenson v. Delphi Diesel Systems Ltd supports the Council’s contention that Mrs Dacas had no express or implied contract of service with it. The applicant in that case was an agency worker with an employment agency. It was held that the end-user was under no legal obligation to pay the applicant and the applicant was under no legal obligation to work for the end-user. Control over the applicant by the end-user was explicable by virtue of the contract between the applicant and the agency, which made it unnecessary to imply a contract between the applicant and the end-user.
Munby J, whose judgment I have read in draft, quotes and relies on the key passages in paragraphs 12-14 of the judgment given on behalf of the Appeal Tribunal by Elias J. The judgment is certainly the most fully reasoned to be found in the authorities on this point. The reasoning supports the Council’s submission that it would be impossible in this case to imply a contract of service between the Council and Mrs Dacas. I do not, however, find all of the submissions of counsel (Mr Mansfield) for the end-user in that case as persuasive as the Employment Appeal Tribunal found them or as Munby J finds them.
Some of the Council’s arguments on this point, which are based on Stephenson, are clearly correct. The arrangements were not a sham. The parties would have realised that the triangular arrangements were not “normal” for a contract of service. Brook Street was acting as “an independent party” in incurring certain obligations and was not simply acting as agent finding work for Mrs Dacas or finding workers for the Council. As for the subjective intentions of the parties, it is probably correct to say that there was no intention on the part of the Council or on the part of Brook Street that the Council should enter into a direct contractual relationship with Mrs Dacas. I am not, however, persuaded without the benefit of relevant findings of fact made by an Employment Tribunal which has addressed the question of implied contract, that no contract of service can be implied between Mrs Dacas and the Council because such a contract is “simply not compatible with the documents” or because the fact of control by the Council is wholly explicable by virtue of the contractual obligation that exists between Mrs Dacas and Brook Street. Before reaching a conclusion on those points I would like to know what in fact went on between the Council and Mrs Dacas during the years when she was working at West Drive. What is lacking in this case is any finding by the Employment Tribunal about the facts of the daily contact between Mrs Dacas and the Council at West Drive and the nature and extent of the dealings between them. This information is lacking because the Employment Tribunal did not address the possibility of an implied contract, which it should have addressed and should have been asked to address.
Carmichael v. National Power Plc was not an employment agency case and did not deal with the question of an implied contract of service. The reasoning of the speeches is important, however, on two points of principle: first, on the point that, if mutuality of obligation is lacking, as it was held to be in a casual, “as required” arrangement, there could be no contract of service; and, secondly, even where there are documents evidencing the arrangements between the parties, if the documents were not intended to constitute an exclusive record of the agreement, the Employment Tribunal are entitled, in deciding whether there was a contract of service, to make inferences from what the parties said and did both at the time when the applicant was engaged and subsequently.
Franks v. Reuters [2003] IRLR 423, a decision of this court, was an employment agency case. The result in the Employment Tribunal, which heard the applicant’s claim against both the employment agency and the end-user, was that the applicant did not have a contract of service with either of them. The Employment Appeal Tribunal dismissed the appeal by the applicant. In the Court of Appeal the employment agency took no part as Mr Franks only pursued his appeal against the decision that he had no contract of service with the end-user, Reuters, for whom he had, through the employment agency, done work for six years. The case was remitted to a differently constituted Employment Tribunal to determine whether there was an implied contract of service between the applicant and the end-user.
Royal National Lifeboat Institution v Bushaway
[2005] UKEAT 0719_04_2204
“51. It is therefore, apparent from these authorities that a Tribunal not only has to look at the written agreements which the parties concluded, but also at their conduct and how they operated the arrangement in practice. A label which the parties place on the arrangement is a helpful indication of the situation, but it is no more than that, and the Tribunal must look at the reality of the situation.”
Then at paragraphs 56-58 it stated:
“56. We are well aware that in the present case there had been agreements between the agency and the Respondent, the agency and the Applicant and the Applicant and the Respondent These documents are all recorded on pages 9 to 19 of Rl and there are also the letters to which we have referred in our findings of fact above.
57. These documents purport to suggest that the Applicant was self-employed and was therefore not employed either by the agency or by the Respondent.
58. However, we are aware that we should not necessarily take at face value the description which the parties place upon an agreement and it is the Tribunal’s duty to look at the reality of the situation and, as already indicated in the previous authorities, it is necessary to look at all the surrounding circumstances.”
The Tribunal went on to examine the facts and concluded that there was a contract of employment in existence for the whole of the period between October 2002 and March 2003.
The Respondent challenges this conclusion on three grounds: (1) that the Tribunal erred in law in construing the contractual documents, (2) that it misconstrued the expression “Temporary Worker” in the contractual documentation, and (3) that it failed to take material evidence into account or was perverse in its findings.
As to the first ground, the Respondent referred to the entire agreement clauses at clause 8.1 of the Respondent/agency agreement (ie the terms of business), and clause 5.3 of the Respondent/Applicant agreement. Counsel submitted that the Tribunal erred in law in holding that it was its duty to examine the factual situation outside the contractual documentation. He relied on Carmichael v National Power [1999] ICR 1226 at 1230-1231 where Lord Irvine LC said:
“In my judgment it would only be appropriate to determine the issue in these cases solely by reference to the documents in March 1989, if it appeared from their own terms and/or from what the parties said or did then, or subsequently, that they intended them to constitute an exclusive memorial of their relationship.”
He also referred to Franks v Reuters Ltd [2003] ICR 1166, where Mummery LJ said at
para 20:
“In some cases it may be unnecessary to look beyond or beneath the documents, which the parties have agreed should embody the exclusive record regulating their relations. As Lord Irvine LC recognised in Carmichael’s case, at p 1230G, where the case turns exclusively on the true meaning and effect of the documentation, further inquiry about what the parties said and did may not be appropriate.”
and Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 where Mummery LJ said at
para 17:
“The critical point is that, although the construction of the contractual documents is important, it is not necessarily determinative of the contract of service questions, as contractual documents do not always cover all the contractual territory or exhaust all the contractual possibilities.”
We note in passing that since the conclusion of the hearing in this case the EAT (Chairman His Honour Judge Serota QC) in Cable and Wireless plc v Muscat (EAT/0661/04/LA) has decided Dacas was not decided per incuriam He submitted that these passages recognised that there are cases when the contractual documentation does contain the totality of the contractual terms and conditions, that recourse to extraneous evidence will not then be appropriate, and there will be some cases where the documentation is, on its face, intended to be an “exclusive memorial” of the relationship. This rule, he submitted, was the established law as to contractual construction as embodied in the “parol evidence rule”.
He referred to various authorities containing dicta about the rule, to the Law Commission report on the rule and (Law Com No.154) and Chitty on Contracts (29th Ed, 2004) at para12-098 which contains the following passage:
“Whether the parties did so agree [that the written document should contain the entirety of the agreement] or intend is a matter to be decided by the court upon consideration of all the evidence relevant to this issue. It is therefore always upon to a party to adduce extrinsic evidence to prove that the document is not a complete record of the contract. If, on that evidence, the court finds that terms additional to those in the document were agreed and intended by the parties to form part of the contract, then the court will have found that the contract consists partly of the terms contained in the document and partly of the terms agreed outside of it. The parol evidence rule will not apply.”
Counsel submitted that a written agreement containing all of the terms one would expect to find in an agreement of that nature will raise a strong presumption that it is intended to be a complete record of that agreement. The position was still more obvious where the document contains an entire agreement clause. It followed, in his submission, that the Tribunal was wrong to look beyond the written agreements. It followed, he suggested, that the Tribunal should not have looked beyond the written words and should therefore have concluded that the Applicant was self-employed and providing services under a contract of services until her formal permanent engagement.
Beyond that he submitted that even if the Tribunal was right to look beyond the documents, it erred in law in describing the parties’ description of their arrangements as a “helpful indication of the situation but… no more than that”, as it did at paragraph 51 of its reasons. It should, as Lord Irvine described it in Carmichael, have recognised that the written contract was “one, albeit important, relevant source from which it was entitled to infer the parties’ true intentions.” His submission continued that one would expect a balancing exercise to have been conducted between the factors supporting the existence of an employment relationship and the factors supporting the existence of a non-employment relationship, but that did not occur. Instead, the Tribunal simply recited all of the factors supporting the existence of an employment relationship and concluded that one existed. Because there was no reference to the contractual labels after paragraph 58 of the decision, it was, he said, apparent from the Tribunal’s reasoning that the parties’ agreement as to the nature of their relationship was thereafter disregarded.
In our judgment this criticism of the Tribunal is misconceived. There may be cases in which it is not permissible to look beyond the written terms of the written agreement, but this is not one of them. The existence of an entire contract clause is not conclusive. When one looks at the written agreement between the Respondent and the Applicant in the context of what was actually negotiated and what was done both before and after the Applicant started work, it is clear that it does not reflect and contain the entire bargain between the parties, as can be seen from the matters set out below.
Paragraph 1.3 did not accurately reflect the relationship between the parties. There was an agreement as to the hours the Applicant was to work: hence the terms of the letter from the agency to the Applicant referring to “(hours as agreed)”. Hence also the need for the Applicant to negotiate time off rather than just refusing to work when she wanted to take a complete week off for the birth of her grandchild.
Similarly the provisions for overtime in clause 2.2 did not accord with the provision for her to work a 37.5 hour week at £6.00 per hour.
The provisions relating to pay in clause 2.1 were inconsistent with the way in which she was actually paid. She was paid (as envisaged by her and the agency in her letter of “Confirmation of Appointment” and the agency and the Respondent in the agency’s terms of business) by the agency against signed off time sheets and not by the Respondent direct. Further the clause did not identify the hourly rate at which she was to be paid but referred to “an hourly rate negotiated and agreed with the Agency on behalf of the Temporary worker”.
Whilst the Respondent was correct to submit that the authorities envisage that there may be cases in which the parties intend that all the terms of their agreement other than those implied by law are contained in the contractual document or documents, this was not such a case. As Lord Hoffman said in Carmichael at para 29:
“… I think that the Court of Appeal pushed the rule about the construction of documents too far. It applies in cases in which the parties intend all the terms of their contract (apart from any implied by law) to be contained in a document or documents. On the other hand, it does not apply when the intention of the parties, objectively ascertained, has to be gathered partly from documents but also from oral exchanges and conduct. In the latter case, the terms of the contract are a question of fact. And of course the question of whether the parties intended a document or documents to be the exclusive record or the terms of their agreement is also a question of fact.”
In Cable and Wireless plc at para 49 Judge Serota QC followed this dictum saying:
“Secondly, that in ascertaining the terms of any contract a Court or Tribunal is not precluded from going outside the terms of written agreements and indeed is bound to do so, unless it is clear that the parties intended all the terms of their contract apart from those implied by law, to be contained in relevant a document or documents.”
This was a case like very many others in the employment field where (notwithstanding the entire agreement clause in the written agreement) the written agreement did not, contain the entirety of the agreement.
As to the suggestion that the Tribunal gave inadequate weight to the label attached to the relationship by the parties, it does not seem to us that the description of the label attached as “a helpful indication… but no more than that” indicates any error of law. The passage in Lord Irvine’s speech to which counsel referred was a passage relating to the weight to be given to the whole of the written contract, not merely the label attached to the relationship in the written document. It is plain from the totality of the Tribunal’s reasoning that it looked with care at the written documents and gave them considerable weight, although they found other factors outweighed the labels given by the written documents.
The structure of the decision was such that it is not a fair criticism to suggest that the Tribunal, having decided it should look beyond the written word, ignored the labels attached completely. It had made a long series of findings of fact, then dealt with the submission of law and held that it should look at all the relevant circumstances. Having done that, it related the factors which it relied upon in reaching the conclusion that the Applicant was from the beginning an employee. It does not follow that it failed to give due weight to the labels merely because it did not expressly refer again to them again. Indeed at paragraph 56 the Tribunal makes it clear that the written documents are well in mind.
It follows that the first ground of appeal fails.
Team Obair Ltd v Costello
AWD 130
Labour Court
DETERMINATION:
This is an appeal by Mr Robert Costello (represented by SIPTU) against the Decision of a Rights Commissioner in his claim against his employer, Team Obair Limited. The claim is taken under the Protection of Employees (Temporary Agency Work) Act 2012 (the Act).
In this Determination Mr Costello is referred to as the Claimant and Team Obair Limited is referred to as the Respondent.
The Respondent is an employment agency. The Claimant is employed by the Respondent as a forklift truck driver.He is assigned by the Respondent to a third party, namely Logistics Company Shannon Transport Logistics (STL), hereafter referred to as the ‘hirer’.
The Union contends that the Claimant is being paid less in terms of basic pay to that which he would have been paid had he been employed directly by the hirer to perform the same work. The claim is made in reliance on s.6(1) of the Act.
The Court was told that the Claimant is one of a number of agency workers employed by the Respondent each of who are pursuing similar claims based on similar facts. It appears that in the case before the Rights Commissioner it was decided that the within claim should proceed first and that the other claims would be considered in light of the findings in the instant case.
The Rights Commissioner found that the claim was not well-founded. The Claimant appealed to the Court.
….
The Law
…..Unlike other similar employment rights statutes the Act does not require a claim for equal pay to be grounded by reference to an actual comparator. Nevertheless, the rate that is paid to employees of the hirer who are engaged in the same type of work is an important evidential tool. Where a rate of pay is generally applicable to all workers performing the same work as that performed by the agency worker it may readily be inferred that if the agency worker was employed by the hirer he or she would be similarly paid. However, it may be that the relevant rate paid by the hirer is in whole or in part attributable to factors that do not apply to the agency worker. Or it may be that rates generally applied by the hirer have or would have changed since the rate relied upon was established. In such eventualities the Court could reasonably infer that had the agency worker been employed by the hirer at the time the assignment commenced (or was deemed to have commenced) he or she would have been paid a different rate of pay than that claimed.
However, these are questions of fact that can only be established on reliable evidence, which in most cases, will be within the peculiar knowledge or power of procurement of the Respondent and beyond a Claimant’s capacity of proof. Hence, it would appear that the onus of proving that a rate of pay established within the hirer employment would not have applied to an agency worker had he or she been directly employed by the hirer rests with the party making that assertion.
Application to this case
In this case the only evidence relied upon by the Respondent is a pro form document used by the hirer for the purpose of providing information to the Respondent pursuant to s.15 of the Act. This section provides: –
(1)It shall be the duty of the hirer of an agency worker to provide the employment agency that employs that agency worker with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under this Act in relation to the agency worker.
This document, which was put in evidence, sets out a list of employment related issues against which information is filled in by the hirer. In the column marked‘Pay rate per hour as per comparator’ the response‘€11 for GO, €13.50 for Forlift Driver / Shunter’is given.
The provider of this information did not give evidence. It is, however, undisputed that the hirer does not employ any workers on those rates at the St James Gate facility and there is no evidence that it applied them elsewhere. It was suggested by the Respondent that the rates specified are those that the hirer would pay if it now employed workers to perform the same work as that undertaken by the Claimant. The Union pointed out that rates upon which it relies are established within the hirer and it did not agree, nor would it agree, to any reduction of those rates for new entrants.
Conclusion of the Court
The points raised in this case are novel and are not governed by any authority of which the Court is aware. Accordingly they must be approached by the application of first principles.
There are rates of pay for fork lift drivers within the hirer which are established by an arrangement of long standing. While this is acknowledged by the Respondent it contended that those rates are historical. It submitted that if the hirer took on new employees at the time that the Claimant’s assignment is deemed to have commenced the rates payable would be those specified in the s.15 notification upon which it relies. That, however, is a mere assertion which cannot be elevated to an evidential basis upon which the Court could make findings of fact. In particular, the Respondent has not pointed to any pay determination arrangement operated by the hirer the application of which might result in fork lift drivers being paid €13.50 per hour.
There are other factors which undermine the validity of the submission advanced by the Respondent. The rates specified in the notice furnished by the hirer are precisely those paid by the Respondent. It is at least probable that the information furnished by the hirer is predicated on the assumption that if the Respondent can employ labour on those rates it could do likewise. If a bare statement based on such a premise were to be accepted as definitive the purpose of the Act, and that of the Directive, would be seriously subverted and the protection which they are intended to provide would be rendered nugatory. Moreover, the principle of non-regression (which is a general principle of European Law) and which is reflected in Article 9.2 of the Directive, operates so as to preclude an employer from reducing the level of protection afforded to directly employed workers as a mode of compliance with the Directive and the Act.
There is a further consideration of some significance in this case. The Court is aware from its own knowledge and experience that there would be potential for serious industrial relations conflict if an employer, in the circumstances of the hirer, were to employ workers on significantly different rates of pay to perform the same work. The hirer recognises SIPTU for industrial relations purposes, including collective bargaining. It is inherently unlikely that it would or could seek to reduce established rates of pay without some level of engagement with the Union. There has been no such engagement and according to the Union there would be little or no chance of it agreeing to accept rates for employees of the hirer in line with those currently paid by the Respondent.
For these reasons, and in the absence of any reliable evidence to the contrary, the Court has come to the conclusion that it is more probable than not that had the Claimant been employed by the hirer on 5thDecember 2011 he would have been paid €18.50 in line with other fork lift drivers similarly employed. Accordingly, that is the rate to which he is entitled pursuant to s.6(1) of the Act. Accordingly the Court must hold that the Claimant is entitled to succeed in this appeal.
Redress
The mode of redress that may be ordered by a Rights Commissioner, and by extension by this Court, is set out at Paragraph 1(3) of Schedule 2 of the Act. It provides: –
A decision of a rights commissioner under subparagraph (2) shall do one or more of the following, namely—
(a) declare that the complaint was or, as the case may be, was not well founded,
(b) require the employer to take a specified course of action (including reinstatement or reengagement of the employee in circumstances where the employee was dismissed by the employer), or
(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances but not exceeding 2 years remuneration in respect of the employee’s employment,
and the references in the foregoing clauses to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, as references to the person who, by virtue of the change, becomes entitled to such ownership.
In accordance with Clauses (a) and (b) of subparagraph (3) above, the Court declares that the Claimant’s complaint is well founded and it directs the Respondent herein to adjust the Claimant’s rate of pay to €740 per 40 hour week, or €18.50 per hour, with effect from 5thDecember 2011.
Determination
The Decision of the Rights Commissioner is set aside and substituted with the terms of this Determination
ssioner is set aside and substituted with the terms of this Determination
ARRAVASC LIMITED v C
TEAM OBAIR LIMITED v RC
Mulholland -v- QED Recruitment Ltd
Elizabeth Stafford v Ernest Isaacson and Others
AWD142
Labour Court
6 February 2014
[2014] 25 E.L.R. 259
Subject
1. Appeal of Rights Commissioner’s Decision Numbers r-127/494/505/507/508/511/512/515/516/522/524/526/527/529/881-TAW-12/RG.
*261
Background
2. The employer appealed the Rights Commissioner’s Decision dated July 17, 2013 to the Labour Court in accordance with s.25(2) of the Protection of Employees (Temporary Agency Work) Act 2012 on August 19, 2013. The Court heard the appeal on November 6, 2013.
Determination
This is an appeal under the Protection of Employees (Temporary Agency Work) Act 2012 (the Act), by Elizabeth Stafford (the respondent) against Rights Commissioner Decision Numbers R-127494-taw-12/RG, R-127505-taw-12/RG, R-127507-taw-12/RG, R-127508-taw-12/RG, R-127511-taw-12/RG, R-127512-taw-12/RG, R-127515-taw-12/RG, R-127516-taw-12/RG, R-127522-taw-12/RG, R-127524-taw-12/RG, R-127526-taw-12/RG, R-taw-127527-12/RG, R-127529-taw-12/RG and R-127881-taw-12/RG issued on July 17, 2013. The Rights Commissioner decided that the respondent infringed s.6 of the Act and ordered it to “provide the claimants with the same basic working and employment conditions as permanent employees of Cronin’s effective from May 16, 2013.” The appeal was lodged with the Court on July 17, 2013. The case came on for hearing before the Court on November 6, 2013.
Background
The claimants are employed by the respondent, an Employment Agency within the meaning of the Act. They are assigned to work for Cronin Movers Group Limited (the hirer). They submitted a complaint to the Right Commissioner on October 30, 2012 in which they asserted that, contrary to s.6(1) of the Act, they were paid less than directly employed workers doing the same or similar work. The respondent rejected the complaint stating that it had been advised by the hirer that directly employed workers who were paid more than the complainants had long service and had been employed when the business environment was more benign and the company’s financial circumstances were better. It advised the respondent that it had not recruited staff on or around December 5, 2011 but had it done so it would have paid them the rates that apply to the claimants. It noted that it had recruited staff subsequent to December 5, 2011 and paid them at that rate.
The claimants rejected the respondent’s position and submitted a complaint to the Rights Commissioner. The Rights Commissioner upheld the complaint as outlined above. The respondent appealed against that decision to this Court.
Preliminary issue
The complainants state that the respondent submitted the appeal to the Labour Court outside the time-limit set out in the Act. They argue that the Rights Commissioner issued her decision on July 17, 2013. They argue that the *262 respondent did not submit an appeal to the Labour Court until September 23, 2013. They argue that as this was outside the time-limit for appeals set out in the Act the Court does not have jurisdiction to consider the appeal.
The respondent argues that the Rights Commissioner issued her decision on July 17 and that it submitted an appeal to the Court on August 19, 2013. In that appeal it correctly identified the Rights Commissioner Decision Numbers under appeal but mistakenly named the hirer in place of the employment agency on the form. It submits that the Court, within the six-week time-limit, set a date for a hearing. The error on the form was corrected by letter dated September 23, 2013. It submits that the intention to appeal the relevant Rights Commissioner decisions was clearly notified to the Court within the permitted period under the Act. It argues the Court has jurisdiction to consider the appeal.
Findings of the court
The law
Schedule 2 sets out the relevant provisions regarding appeals to this Court from a decision of a rights commissioner. It states
“2.(1) A party concerned may appeal to the Labour Court from a decision of a rights commissioner under paragraph 1 and, if the party does so, the Labour Court shall—
(a) give the parties an opportunity to be heard by it and to present to it any evidence relevant to the appeal,
(b) make a determination in writing in relation to the appeal affirming, varying or setting aside the decision, and
(c) communicate the determination to the parties.
(2) An appeal under this paragraph shall be initiated by the party concerned, giving, not later than six weeks (or such greater period as the Court may determine in the particular circumstances) from the date on which the decision to which it relates was communicated to the party, a notice in writing to the Labour Court containing such particulars as are determined by the Labour Court under subparagraph (4) and stating the intention of the party concerned to appeal against the decision.”
The Court finds that the respondent submitted a notice of appeal against the decision of the Rights Commissioner within six weeks of the date on which it was communicated to the parties. The Court notes that there was an error on the face of the notice. The Court finds that the error was not fatal to the appeal. The notice form used by the respondent is an administrative assistance to the parties to an appeal and an aid to the Court. It is not a statutory document containing rules of court. What the Court seeks to determine is whether the document discloses an intention to appeal against a decision of the Rights Commissioner and whether that intention was communicated in writing to the Court within the statutory time-limit. In this case the Court is satisfied that this was done.
The Court further notes that, quite unusually, the time-limit for making an *263 appeal under the Act is six weeks or “such greater period as the Court may determine in the particular circumstances.” This provision gives the Court a wide discretion with regard to the extension of time beyond the six-week period. The Court does not see the need to exercise its discretion under this section in this case. However if it is wrong in its decision above the Court extends the time for the appeal until the correcting letter of September 23 was received in the Court.
Decision on the preliminary issue
The Court decides that the appeal was submitted to the Court within the statutory time-limit of six weeks and that it has jurisdiction to consider the appeal in this case. If it is wrong on this point the Court extends the time for appeal to the date on which the letter of September 23 was received by the Court.
Position of the parties
The complainants state that they are agency workers within the meaning of the Act and are currently employed as general operatives, drivers and acting foreman and paid the following rates of pay:
General Operative €9.00 per hour
Driver €11.00 per hour
Acting Foreman €12.50 per hour
They state that workers directly employed by the hirer to do the same or similar work are paid the following rates of pay:
General Operative €10.93 per hour
Driver €13.17 per hour
Acting Foreman €13.00 per hour.
They argue that they are entitled under the Act to the same basic conditions of employment as directly employed workers. They argue that by paying them lower rates of pay the respondent is in breach of s.6(1) the Act.
Mr James Perry, on his own behalf, and on behalf of the other complainants states that discussions between the complainants and both the hirer and the respondent regarding the basic conditions of employment including the hourly rate of pay and the implications of the Directive for them took place between December 2011 and May 2012. He states that they were assured in the course of those discussions that their rate of pay would be adjusted to bring it into line with directly employed workers after the Act came into force. The complainants accepted these assurances at face value. However after the Act came into force the assurances were not honoured, despite numerous requests to the respondent and hirer to do so. In October 2012 the complainants submitted a complaint to *264 the Rights Commissioner under the Act. They argued that they are entitled to the same basic pay rates as workers directly employed by the hirer doing the same work.
He states that in reply the respondent identifies two directly employed workers that are paid less than the going rate that applies generally to directly employed workers. He states that they do not undertake the same work as the complainants.
He states that one of those workers, Mr Danut Danila, was on December 5, 2012, employed as a warehouse supervisor. He states that none of the complainants are employed in that capacity.
He states that the second of those workers, Mr Sam Darcy, is primarily employed as a warehouse operative. He states that none of the complainants are employed in that capacity.
He states that on rare occasions they assist with moves. He states however that all staff, in exceptional circumstances, undertake work outside their normal duties in order to ensure that client needs are met. He states that this does not alter the core nature of their duties as outlined above.
He further states that Mr Sam Darcy did not commence employment with the company until May 21, 2012, i.e. after the date on which the Act came into force (May 16, 2012) and some five months after the relevant date (December 5, 2011), for determining the pay and conditions of employment that generally applied to workers employed on the same work by the hirer. He further states that Mr Darcy occasionally worked outside the warehouse delivering and picking up crates. He states that this work was normally undertaken by a courier and not by the complainants.
He acknowledges that since the complaint was lodged with the Rights Commissioner both Mr Danila and Mr Darcy have been more regularly involved in moves.
Respondent’s position
The respondent states that it has been advised by the hirer that it employs a number of workers at historic rates of pay but that the business environment and the trading circumstances of the company would not have allowed it to employ workers on those rates of pay had they been hired on December 5, 2011. The hirer told the respondent that it would have hired direct workers on the rates currently paid by the respondents to the complainants.
It states that, prior to December 5, 2011, its most recent direct employee was recruited on March 12, 2009 as a driver/general operative on a rate of €9.00 per hour. This was increased to €10.00 per hour with effect from 5 August 2010 when he was promoted to the position of Warehouse Supervisor.
Another worker, a nephew of the managing director, commenced employment on May 21, 2012 on an hourly rate of €8.00 per hour. This was increased to €9.00 per hour on August 29, 2012.
The respondent submits that the complainants are employed in a number of different capacities on any given day. They may be employed as drivers, warehouse staff, general operatives or assistant foremen. They are paid a rate appropriate to each duty for the hours they work in that capacity. This could give rise to them being paid different hourly rates of pay depending on the duties being performed at different times on any given day.
The hirer suffered a severe downturn in business from January 2008 to December 2012 inclusive (details supplied to the Court). It also incurred substantial losses over that time. The numbers employed were reduced and the rates of pay and conditions of employment were reduced where possible (details with the Court).
In 2009 the rates paid to agency workers employed as general operatives were reduced from €10.50 per hour to €9.50 per hour and subsequently to €9.00 per hour for new agency workers employed after 2010. The rates paid to agency drivers were reduced from €12.50 per hour to €11.00 per hour. Directly employed workers were asked to take a five per cent reduction in pay but they by and large declined to do so. Their rates were left unchanged.
The respondent acknowledges that the hirer did not employ any new direct workers in or around December 5, 2011 but argues that the evidence supports its contention that, had it done so, they would have been paid the rates currently paid to the complainants.
The law
This Act was signed into law on May 16, 2012. It transposes into Irish law Directive 2008/104 of the European Union on Temporary Agency Work. Consequently the Court is obliged to interpret and apply the Act, as far as possible, in light of the wording and purpose of the Directive so as to achieve the result envisaged by the Directive. The Act commenced on May 16, 2012. Sections 2, 3, 4, 5, and 6 are deemed to have commenced on December 5, 2011, the date on which Members States were required to implement the Directive.
The purpose of the Directive is set out at Article 2 thereof as follows:
“The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary-work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.”
The principle of equal treatment, referred to in this Article, is elaborated by Article 5 as follows: *266
“The principle of equal treatment
1. The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.”
Section 6 of the Act transposed Article 5 of the Directive as follows:
“6.—(1) Subject to any collective agreement for the time being standing approved under section 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.”
Subsection (3) of s.6 of the Act provides:
“(3) Where the assignment of an agency worker commenced before December 5, 2011 and ended or ends on or after that date, that assignment shall, for the purpose of determining the agency worker’s basic working and employment conditions in accordance with subsection (1), be deemed to have commenced on that date.”
The meaning to be ascribed to the term “basic working and employment conditions” is set out at s.2 of the Act as follows:
“‘basic working and employment conditions’ means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer, and that relate to—
(a) pay,
(b) working time,
(c) rest periods,
(d) rest breaks during the working day,
(e) night work,
(f) overtime,
(g) annual leave, or
(h) public holidays”
Pay is defined by the same section as:
“(a) basic pay, and
(b) any pay in excess of basic pay in respect of—
(i) shift work,
(ii) piece work, *267
(iii) overtime,
(iv) unsocial hours worked, or
(v) hours worked on a Sunday”
Section 15 states:
“(1) It shall be the duty of the hirer of an agency worker to provide the employment agency that employs that agency worker with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under this Act in relation to the agency worker.”
Findings of the Court
It would appear that the purpose of the Directive and the Act is to ensure that agency workers and directly employed workers occupying the same job enjoy the same basic working and employment conditions including, among other things, pay rates. Where the basic working and employment conditions of directly employed workers are established by law or by collective agreement agency workers come within the scope of the legislation or collective agreement. Where no collective agreement or legislation applies agency workers are entitled to “any arrangement that applies generally” in respect of directly employed workers occupying the same job.
In this case no collective agreement or legislation applies. Accordingly the Court must have regard to “any arrangement that applies generally” in determining whether the respondent is complying the Act.
It is common case that the claimants in this case were assigned to work for the hirer before December 5, 2011 and accordingly s.6(3) of the Act applies to these workers.
It is common case that there is a group of workers occupying the same job who are paid a higher rate of pay than the complainants. The respondent states that these workers have long service and enjoy a legacy rate of pay that would not be paid to workers employed on December 5, 2011. The respondent argues that those rates of pay are historic and date from a time when the business could afford such rates.
It is common case that the hirer employed two workers, referred to above, who were paid less than that historic rate. It argues that the rates paid to these workers are indicative of the rates of pay that would have been paid to directly employed workers employed on or around December 5, 2011 when the Act is deemed to have come into effect.
In response Mr Perry states that neither of those workers occupy the same job, within the meaning of s.6(1) of the Act, as the complainants. He argues that the first mentioned worker occupied the job of warehouse foreman and only occasionally worked on the transport fleet. They argue that the second *268 worker was a relative of the managing director and occupied a different job in a different capacity.
Based on the information supplied to it the Court finds that the first identified worker does not occupy the same job as the complainants. He is described by the respondent as a “warehouse foreman” and undertakes work primarily in the warehouse. He is occasionally assigned to work on the transport fleet but the Court finds that that is not his core duty and he cannot be said to occupy the same job as a driver, an assistant foreman or a general operative. Accordingly the Court finds that he does not occupy the same job as the complainants. The Court finds that he is not relevant for the purposes of this complaint.
The Court was told that the second named worker, a relative of the managing director, was employed so as to give him some work experience. He is primarily employed in the warehouse and in the collection of crates in a small transport vehicle. He is not employed as a driver, an assistant foreman or as a general operative and accordingly is not occupying the same job as the complainants.
The respondent argues that it complied with s.6(1) of the Act as the rate notified to it by the hirer is the rate on which direct employees would have been employed had they been hired on December 5, 2011.
Article 5(1) states:
“The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.”
It argues that the evidence supports the contention that they are paid the rate of pay that “would apply if they had been recruited directly by that undertaking to occupy the same job” on the relevant date. It submits that by so doing it has discharged its obligations under the Act.
The Court does not accept that that is a proper construction of the Act and would be incompatible with the Directive.
Section 6(1) must be read together with s.2 of the Act and the Directive. Section 2 of the Act states:
“‘basic working and employment conditions’ means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer.”
Article 2 of the Directive states:
“The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the *269 principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary-work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.”
The principle of equal treatment (Article 5):
“1. The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.”
When read together, the Court finds that the complainants are entitled to be paid the rate of pay that “applies generally” to directly employed workers occupying the same job. To put it simply they are entitled to the going rate for the job. This may be established by way of statute, by way of collective agreement or by way of an arrangement that generally applies to workers occupying the same job.
Where a statute or a collective agreement applies the appropriate rate of pay can be simply determined. Where no statute or collective agreement applies the Court must establish the rate that generally applies to directly employed workers occupying the same job. It is not a notional rate that would be paid to workers employed on that date. It is the actual rate that generally applies to directly employed workers occupying the same job. That cannot be a notional rate that the respondent simply asserts would be applied to workers employed on a particular day. It is the rate that actually applies generally and is similar to a rate set out by statute or by collective agreement. It is a matter of fact to be determined by the Court on the basis of the evidence presented. If the Court were to consider a hypothetical rate as distinct from the rate that actually applies it would undermine the principle of equal treatment and defeat the purpose of the Directive and of the Act.
There may be some workers that are paid a higher or a lower rate than that which generally applies. Such exceptional rates are not relevant for the purposes of applying the Act. The rate to which the Court must have regard in that which applies generally and not exceptional rates that apply to individuals irrespective of the reasons for those rates of pay. The principle of equal treatment set out in the Act and the Directive is intended to establish a parity between the directly employed and agency workers in respect of the generally applied basic working and employment conditions including pay. Accordingly exceptional arrangements cannot be relevant to that consideration.
In this case the evidence submitted by the respondent in supplementary submissions discloses that on December 5, 2011 the rates payable to the class of workers concerned were as follows. There were six drivers directly employed *270 by the company of which five were paid €13.19 per hour while one was paid €11.47 per hour. There were four assistant foremen employed three of whom were paid €13.19 per hour while one was paid €13.00 per hour. One general operative was employed who was paid €10.93 per hour. One general operative/van driver was paid €13.00 per hour.
The respondent acknowledges that no directly employed workers were recruited by the hirer on or around December 5, 2011. The respondent submitted evidence of hourly rates paid to other workers who were employed in May 2012 and thereafter. It seeks to rely on the rates paid to these workers as evidence of the rate of pay on which workers would have been employed on December 5, 2011.
This is a misunderstanding of the Act. A directly employed worker recruited on a particular rate of pay on December 5, 2011 would not of itself establish a generally applied rate of pay for a category of workers. What the Court must examine is the rate of pay of directly employed workers occupying the same job as agency workers as set out in statute, in a collective agreement or which applies generally to those workers. An individual, recruited on a particular day, occupying the same job and paid a different rate of pay would constitute an exception which the Court must disregard unless they were representative of a class of worker within the meaning of the Act. Establishing such a class of worker would be a relatively easy matter were new workers employed after a particular date covered by a collective agreement or by statute setting out their terms and conditions of employment. However identifying such a group where no collective agreement or statute applies would be a more difficult matter to be established on evidence by the person asserting that proposition. Thus the burden of proof in that case would lie with the person asserting that proposition. To do otherwise would defeat the intention of the Directive and the Act as it would deprive an agency worker of the protection of equal treatment. It would amount to the Court setting aside the basic working and employment conditions that applied generally on the basis of a mere assertion. That could not be countenanced by the Court.
Equally the Court does not accept that rates of pay introduced five months after December 5, 2011, the date on which the Act is deemed to have come into force for the complainants, can be of any assistance to it in determining the rates of pay that generally applied on that date. Subject to the observations above the Court must determine the going rate of pay in place on December 5 by reference to the rates in payment at that time.
In this case documents submitted by the respondent disclose that directly employed workers occupying the same job as the complainants were paid a higher hourly rate of pay than that paid to agency workers whose assignment commenced on December 5, 2011.
The respondent presented two arguments in favour of its position. Firstly it argued that the Court should consider the rates of pay of two named workers as indicative of the rates that would generally apply to workers recruited around *271 the time the Act came into operation. The two workers it sought to rely on do not occupy the same job as the complainants and consequently are not relevant for the purposes of the complaint before the Court. It then argued that the rates of pay of workers occupying the same job as the complainants employed after the Act came into force should be considered by the Court. The Court finds that the Act sets December 5, 2011 as the relevant date on which the Court must determine the basic working and employment conditions to which the complainants are entitled under the Act.
The Court finds that the evidence discloses that the rates of pay that applied generally to directly employed workers occupying the same job on that date were significantly higher than those paid to the complainants. The Court therefore rejects the argument presented by the respondent on that point.
The respondent finally argued that the downturn in business made it unaffordable for it to pay new employees the same rate of pay as those that applied to long serving workers. The Court must approach this argument with the utmost caution. The CJEU has decided that cost alone cannot compromise a fundamental right set out in European law. (Schönheit v Stadt Frankfurt am Main Case C-4/02 [2003] E.C.R. I-12575 at para.85, and Zentralbetriebsrat der Landeskrankenhäuser Tirols v Land Tirol Case C-486/08 [2010] E.C.R. I-3527 at para.46.) The Directive confers on agency workers a fundamental right to equal treatment with directly employed workers occupying the same job. The benefit of the directive in an individual case cannot be compromised by the cost of so doing. The right is established in law and must be afforded to agency workers in accordance with law. Were the Court to accept the hypothetical argument put forward by the respondent in this case it would in effect be allowing it to plead cost as a justification for not applying to agency workers the rate that “applies generally” to directly employed workers. The Court cannot adopt this approach as to do so would defeat the purpose of the Directive and of the Act. This is particularly the case where the rate claimed by the complainants applies generally to directly employed workers occupying the same jobs whereas the rate contended for by the respondent was in fact paid to no directly employed workers at the relevant time.
For these reasons the Court in this case determines that the complaints are well-founded.
Redress
The Act states:
“A decision of a rights commissioner under subparagraph (2) shall do one or more of the following, namely—
(a) declare that the complaint was or, as the case may be, was not well founded,
(b) require the employer to take a specified course of action (including *272 reinstatement or reengagement of the employee in circumstances where the employee was dismissed by the employer), or
(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances but not exceeding two years remuneration in respect of the employee’s employment,
and the references in the foregoing clauses to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, as references to the person who, by virtue of the change, becomes entitled to such ownership.”
Determination
In accordance with clauses (a) and (b) of subparagraph (3) above, the Court declares that the claimant’s complaint is well-founded and it directs the respondent herein to pay the complainants the rates, as determined above, that “applied generally” to directly employed workers occupying the same job with effect from May 17, 2012. The Court determines those rates as follows:
General operative €10.93 per hour
Driver €13.19 per hour
Assistant foreman €13.19 per hour
The Decision of the Rights Commissioner is amended accordingly and substituted with the terms of this Determination.
The Court so determines.
Diageo Global Supply v Mary Rooney
PTD042
Labour Court
15 January 2004
[2004] 15 E.L.R. 133
Subject
Appeal against a Rights Commissioner’s Decision PT12424/02/GF.
Background
The dispute before the Court concerns a claim by the union on behalf of its member that she has been treated less favourably than a comparable full-time employee. The union claims that the company is in breach of the Protection of Employees (Part-Time Work) Act 2001, ss.9(1) and 15(2) by treating the claimant in an unfair manner, selecting her for reduction to her hours of work and changing her pattern of attendance, because of her part-time status.
The company maintain that the claimant is not an employee of their company but an employee of a Recruitment Agency and that the claim should rest with that organisation.
The dispute was referred to a Rights Commissioner for investigation. The Rights Commissioner’s Decision issued on July 9, 2003, as follows:
“I have given this matter very careful consideration and on the basis of all the evidence produced at the hearings I have come to the conclusion that the claimant has been unfairly treated by her employer whom I decide to be Guinness/Diageo Global Supply.
I am satisfied she has been treated in a less favourable manner than her comparator full time employee colleague and the Company have breached the Protection of Employees (Part Time Work) Act 2001.
The claimant is seeking the maximum compensation allowed under the Act but I am not convinced the transgression would warrant such an amount. Therefore, I am deciding in the claimant’s favour and recommending she be paid three months salary in compensation in full and final settlement of the complaint.”
The company appealed the Decision to the Labour Court on July 15, 2003, in accordance with s.17(1) of the Protection of Employees (Part Time Work) Act 2001. A Labour Court hearing took place on December 10, 2003.
Determination
The claimant is a registered general nurse and works part-time at the occupational health department at the Guinness brewery in Dublin. She provides cover for other nurses during sick leave, absences and holidays and is called in to work as she is required. The claimant contends that she was treated less favourably in respect of her conditions of employment than a comparable fulltime employee of the respondent The respondents contend that they are not the *136 claimant’s employer. They say that at all material times she was employed by Irish Recruitment Consultants (IRC) which is a licensed employment agency. This agency pays the claimant’s wages and it is submitted that they are deemed to be her employer by virtue of the definition of that term contained at s.3 of the Protection of Employees (Part-Time Work) Act 2001 (the Act).
The claimant contends that she never entered into any contractual arrangements with IRC and that they merely acted as the paying agents of the respondent. The claimant further contends that she works under the direction and control of the respondent and is its employee.
The hours of work available to the claimant were reduced in November 2002. She contends that this was because she refused to take on a full-time job. Further, the claimant is not paid while on sick leave whereas comparable fulltime employees are covered by a sick pay scheme.
Issue for Determination
A part-time employee can only have a cause of action under the Act if he or she is treated less favourably in respect of their conditions of employment than a comparable full-time employee is treated. If the part-time employee is an agency worker within the meaning of the Act, the comparable full-time employee with whom comparison is drawn must also be an agency worker. The term “agency worker” is defined by s.7 of the Act by reference to the definition of the term “contract of employment” contained at s.3. The combined effect of these provisions is that a person who is contracted by an employment agency to supply work or service to a third party, is an agency worker.
In respect to the instant case, the respondent informed the Court (and it is not disputed by the claimant) that all locum/part-time staff in the medical centre are employed under the same arrangements as the claimant and on the same conditions. Hence, if the claimant is an agency worker the conditions of employment afforded to full-time nurses employed by the respondent cannot be relied upon to ground her claim as those nurses cannot be regarded as comparable full-time employees for the purposes of the Act. Moreover, if the respondent is not the claimant’s employer they can have no liability to her under the Act and her claim against them cannot succeed.
Consequently, the first issue which the Court must determine is whether the respondent or IRC is the claimant’s employer.
This case has raised serious questions as to the circumstances in which part-time, casual or temporary staff can be classified as agency workers for the purposes of the Act. For this reason the Court considers it appropriate to address the issues raised in a level of detail which might not be strictly necessary to determine this particular case.
*137
Status of Agency Workers
At common law the employment status of agency workers was fraught with uncertainty. In a line of authorities in the UK starting with the decision in Construction Industry Training Board v Labour Force Ltd [1970] 3 All E.R. 220 it has been held that where a person agrees with another to render services exclusively to a third party, the resulting contract is not one of service. Some later authorities, notably McMeechan v Secretary of State for Employment [1997] I.R.L.R. 353 and Mountgomery v Johnson Underwood Ltd [2001] I.R.L.R. 269, have accepted that in certain limited circumstances a specific assignment can give rise to a contract of service between an agency worker and the agency. Nonetheless the dominant view, which both of those cases confirmed, is that the typical arrangements entered into between a worker seeking work and an employment agency lacks the necessary elements of control and mutuality of obligations to constitute a contract of service.
In Minister for Labour v PMPA Insurance [1986] J.I.S.L.W. 215, Barron J. had to consider if a temporary typist supplied to the defendant by an employment agency was an employee of the defendant. The person had entered into an agreement with the agency to undertake temporary, casual or holiday relief work for clients of the agency. On foot of that agreement the typist was assigned to work for PMPA and she did so under the direction and control of PMPA management. It was held that the person could not be an employee of PMPA because she had never entered into a contract with that company but was assigned to them on foot of a contract which they had with the agency.
These cases highlighted a lacuna in the law. A person on the books of an employment agency could not generally be regarded as an employee of the agency because they did not work under the control of the agency. The client of the agency, for whom the worker did work, could not be regarded as the employer because no contractual relationship existed between them; the only contract being between the agency and the client.
To overcome this anomaly the legal meaning of a contract of employment, and the term employer, was modified in most employment legislation to include contracts, and the parties thereto, whereby an individual agrees with an employment agency to perform work for a third party. The Act contains such a provision at s.3, as follows:
“‘Contract of Employment’ means
(a) a contract of service or apprenticeship, and
(b) any other contract whereby a person agrees with another person, who is carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971, and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a *138 party to the contract).”
The term “employer” is defined by reference to the definition of “contract of employment” and provides as follows:
“‘Employer’ means, in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or, where the employment has ceased, entered into or worked under) a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of ‘contract of employment’ is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the employer.”
It seems clear that these statutory definitions are based on the proposition that agency workers are not engaged on a contract of service (or apprenticeship) with anyone. If they were engaged on such a contract they would be covered by paragraph (a) of the definition of a contract of employment and their employer would be the other party to that contract. This is also clear from the wording used in paragraph (b), which refers to “any other contract” and must be taken to mean any contract other than a contract of service or apprenticeship.
Consequently the Court is of the view that it should first consider if the claimant is engaged by the respondent on a contract of service. If she is engaged by the respondent on such a contract there is no need to consider the applicability of paragraph (b) of the definition of contract of employment. Likewise, the deeming provision in the definition of employer, upon which the respondent relies, would also be inapplicable since it is only operative where the contract is one which is designated as a contract of employment by paragraph (b) of the definition.
Is there a contract of service?
Over time the courts have developed a variety of test to determine whether a particular employment relationship is to be regarded as constituting a contract of service. In many cases the question for determination is whether a person is engaged as an employee or is self-employed on a contract for service. In such cases the modern approach is to apply an enterprise test. This essentially asks if the person is in business on their own account or are they an integral part of the business of the other party (see O’Coindealbhan v Mooney [1990] 1 I.R. 422, Denny v Minister for Social Welfare [1998] 1 I.R. 34 and Tierney v An Post [1999] E.L.R. 293). However, this test is not appropriate in the present case, as it is not suggested that the claimant is self-employed.
*139
A useful and frequently relied upon test for determining the existence of a contract of service is that formulated by McKenna J. in Ready Mixed Concretes Ltd v Minister for Pensions [1962] 2 Q.B. 497. Here three essential characteristics of a contract of service were identified as follows:
1. The employee agrees that in consideration of a wage or other remuneration he or she will provide his or her own work and skill in the performance of some service for the employer.
2. The employee agrees, expressly or impliedly that in the performance of that service he or she will be subject to the others control in a sufficient degree to make that other the employer.
3. That the other conditions of the contract are consistent with it being a contract of service.
Did the claimant work under a contract with the respondent?
Applying that test to the present case it is first necessary to consider if the claimant concluded an agreement with the respondent which conforms to part 1 of the test. If she did conclude such an agreement it would then be necessary to consider if it is a contract of service.
The evidence disclosed that on or about April 1991 the claimant became aware of a vacancy for a nurse to work part-time with the respondent. She wrote a letter of application to Ms Mary Ryan who was the sister in charge of the respondent’s Occupational Health Centre. The complainant was subsequently contacted by Ms Ryan and was interviewed by her for the post. Ms Ryan later offered her the post and her hours of work, rate of pay and other particulars of her duties and benefits were agreed with Ms Ryan.
On being initially employed the claimant was told by Ms Ryan that her wages would be paid through IRC. Throughout the continuance of her employment the claimant’s wages were paid by IRC and her P60 tax form was issued by IRC. However, the claimant never met with any person representing IRC and did not negotiate with them in relation to her conditions of employment.
The Court is satisfied that there was an offer of employment made by Ms Ryan which was accepted by the claimant. Whilst the agreement was not reduced to writing it defined the rights and duties of the parties inter se, and there was valuable consideration. There was also mutuality of obligations in the sense that the respondent undertook to provide work and the claimant undertook to perform that work. Whilst it was agreed that the consideration, in the form of wages, would be paid through IRC, this does not mean that consideration did not pass from the respondent. The Court is satisfied that IRC were acting on behalf of the respondent in paying the claimant’s wages from funds provided by the respondent. The law has long regarded it as possible in appropriate contexts that an act which A procures B to do should be regarded as done by A. *140 Accordingly, the Court is satisfied that a concluded contract existed between the claimant and the respondent and that at all material times the claimant worked under that contract.
Was the contract one of service?
In determining if the contract under which the claimant works is one of service, the second part of the Ready Mixed Concrete test indicate that it is necessary to consider the extent to which she was controlled in her work and who could exercise that control. In Roche v Kelly [1969] I.R. 100, Walsh J. observed:
“[W]hile many ingredients may be present in the relationship of master and servant, it is undoubtedly true that the principal one, and almost invariably the determining one, is the fact of the master’s right to direct the servant not merely on what is to be done but as to how it is to be done. The fact that the master does not exercise the right as distinct from possessing it, is of no weight if he has the right.”
The control test has diminished in importance in some modern employment relationships or in some occupations where employees have a significant degree of autonomy in carrying out their work. It nonetheless remains as a highly relevant factor in defining a contract of service.
The control test was recently applied by the Employment Appeals Tribunal for Scotland in a case which was very similar on its facts to the instant case. In Motorola Ltd v Davidson and Other [2000] I.R.L.R. 4, the claimant (Mr Davidson) responded to an advertisement for a job repairing mobile telephones with Motorola at their plant at Bathgate. He worked at the plant for two years and was then suspended by Motorola’s regional manager who later terminated his assignment with the company.
Throughout his employment the claimant was paid by an employment agency and he was regarded by Motorola as working under terms and conditions between him and the agency which were set out on the back of a time sheet which he signed each week. These conditions described him as working for the agency on a contract for service. He made a complaint of unfair dismissal to an industrial tribunal which held that he was employed by Motorola and that his case should proceed against that company.
In upholding the decision of the Employment Tribunal, the EAT, per Lindsay J., analysed the degree of control which Motorola exercised over the claimant and observed as follows:
“Once Mr Davidson was at the Motorola site he became largely subject to control much as would have been the case had he been an ordinary *141 full-time employee. He went through a Motorola induction course. He worked at the Motorola site; he received instructions from Motorola employees. He used Motorola tools for all his work. If he wanted a holiday he would get permission from (and only from) Motorola. He arranged absences from work directly with his Motorola superior. If he had a grievance, he simply contacted his Motorola supervisor, Tommy Wright. His evidence was that he had to be available for overtime if his Motorola foreman required that. He obeyed, he said, the usual Motorola factory rules. He wore a Motorola uniform with Motorola badges. When he caused, or was thought to have caused, some disciplinary offence, it was a Motorola manager, John Carslaw, and Mr Wright that constituted a disciplinary hearing for him. It was Mr Carslaw who suspended him and it was Mr Carslaw who, after discussion with Mr Wright, ‘decided that he would terminate Mr Davidson’s assignment with’ Motorola”.
In this case the respondent’s director of medical services directed the claimant in her employment at all material times. From time to time the claimant sought increases in pay and this was negotiated and agreed with the respondent. The claimant was required by the respondent to be a member of a trade union and they paid the union contribution on her behalf. The respondent determined the claimant’s hours of work and when she was required for work the respondent would contact her. The Court is satisfied that she was contractually bound to attend for work when so contacted.
The reduction in the claimant’s hours of work, which gave rise to this claim, was decided upon by the respondent and was conveyed to her by the respondent. The complainant works exclusively at the respondent’s Occupational Health Centre. She has never been assigned to other locations during periods in which the respondent does not require her services.
Against that background, the Court is satisfied on the evidence that the contract between the parties allows the respondent to exercise control over the claimant in the performance of her work to such a degree as to make them her employer.
Other aspects of the contract
Finally, the Court must consider if the other aspects of the contract are consistent with it being one of service. In that regard, as has already been observed, the complainant’s wages were paid through IRC and this might not seem consistent with the respondent being her employer. However, the Court is satisfied that IRC was at all times acting on behalf of the respondent as its paymaster. As was also already observed, the contract between the parties provided that the respondent would make work available to the claimant which she would personally perform. The claimant worked exclusively for the respondent and *142 did so over a period of 11 years. Her work was integral to the medical service provided by the respondent and she appears to have been accepted as part of the staff of the Medical Centre in that she always attended the staff Christmas party.
The Court is further satisfied that the other aspects of the claimant’s contract with the respondent are consistent with it being a contract of service.
Conclusion
Consequently, the Court is satisfied that the respondent is the claimant’s employer and that she is entitled to maintain these proceedings against them. Furthermore, the Court is satisfied that the full-time nurses employed by the respondent are comparable employees for the purposes of the Act.
For the sake of completeness, and while it is not strictly necessary to do so, the Court has considered if the claimant had any contractual relationship with IRC. In response to questions from the Court, the respondent was unable to indicate if a contract had ever been concluded between the claimant and IRC and if so, what it contained. For her part, the claimant was emphatic that she had never entered into any form of agreement with IRC. On the evidence, the Court is fully satisfied as a matter of fact that the claimant never had any contractual relationship with IRC. Consequently, paragraph (b) of the definition of contract of employment, and the deeming provision in the definition of employer, could have no application in this case.
Subsistence of the complaints
The claimant contends that she was treated less favourably than a comparable full-time nurse in that she was not paid while on sick leave. This is not denied. This constitutes less favourable treatment of the claimant of a type prohibited by s.9. Accordingly this aspect of the complaint is well-founded.
The complainant also contends that she was penalised within the meaning of s.15 in having her hours reduced because she refused to work full-time. It is not denied that the claimant’s hours were reduced. It is, however strenuously denied that this was any form of penalisation. The Court is satisfied that the claimant was advised that two full-time vacancies were to be filled. She was offered an opportunity to apply for them. In this respect the respondent was fulfilling its obligation under Article 5 of the Framework Agreement annexed to Directive 97/81 (Part-Time Work Directive). The claimant did not apply for full time work, preferring to continue working part-time.
Section 15 of the Act provides that penalisation occurs where an employee is subjected to unfavourable treatment, inter alia, for refusing to accede to a request by the employer to transfer from performing part-time work to performing full-time work. The evidence in this case indicates that the respondent informed the complainant of full-time vacancies. There is no evidence that the *143 respondent requested the complainant to transfer from part-time work to fulltime work. It follows that the reduction in hours could not be regarded in any sense as penalisation of the claimant for having refused to accede to a request to transfer to full-time work.
The INO on behalf of the complainant argued in the alternative that the reduction in the claimant’s hours of work constituted less favourable treatment contrary to s.9(1) of the Act. This line of argument is based on the fact that the respondent employed additional full-time staff rather than offering additional hours of part-time work to the claimant. The respondent pointed out that the claimant’s hours of work always varied and was dependent upon the availability of locum and other relief work covering temporary absences. They submitted that the reduction in the amount of work available to the claimant was due entirely to the reduction in the requirement for the type of temporary cover which she provided.
It is acknowledged that nurses employed full-time by the respondent did not have their hours of attendance changed. In effect, the respondent contended that if the claimant was less favourably treated, such treatment was objectively justified. Section 9(2) of the Act provides that a part-time worker can be afforded less favourable treatment than a comparable full-time employee provided the less favourable treatment is objectively justified. Section 12 of the Act provides, in effect, that objective justification can only arise where the less favourable treatment is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose. In the normal course, an employer would be expected to have considered alternative means of achieving the objective being pursuant which might have a less detrimental affect on the part-time worker concerned. It is only if it can be demonstrated that there are no viable, less discriminatory means of achieving the objective being pursued can the defence of objective justification succeed.
The complainant’s trade union sought to invoke the respondent’s grievance procedure for the purpose of discussing the reduction in hours with the respondent. However, the respondent refused to meet with the union claiming that they were not the claimant’s employer. It is at least probable that had a meeting taken place some alternative arrangements could have been agreed having a less deleterious affect on the complainant’s employment. In these circumstances, and in the absence of any evidence of alternatives having been considered, the Court cannot be satisfied that the reduction in the claimant’s hours was objectively justified.
Determination
The Court is satisfied that the complainant was treated less favourably than a comparable full-time employee in not being paid whilst on sick leave and in having her hours of work reduced. The Court considers that the appropriate *144 order to make in this case is one directing the respondent to pay the claimant her full remuneration in respect of her absence on sick leave on the same terms and conditions as apply in the case of comparable full-time employees. The Court further directs that the respondent provides the claimant with access to the same grievance procedure as is available to comparable full-time employees for the purpose of processing her complaints regarding the reduction in her hours of work.
The Court further determines that the complainant be paid compensation in the amount of €2000.
With the modifications contained herein the decision of the Rights Commissioner is upheld and the respondent appeal is disallowed.
Division of the Labour Court: Mr Duffy (Chairman), Mr Grier, Mr Somers
Agnieszka Spyra v Ryanair Limited
EE/2012/141
Equality Tribunal
23 December 2013
[2014] 25 E.L.R. 156
1. Claim
1.1. The case concerns a claim by Ms Agnieszka Spyra that Ryanair Ltd discriminated against her on the ground of race or nationality contrary to s.6(2)(h) of the Employment Equality Acts 1998 to 2011, in terms of discriminatory dismissal.
1.2. The complainant referred a complaint under the Employment Equality Acts 1998–2008 to the Director of the Equality Tribunal on March 1, 2012. A submission was received from the complainant on May 18, 2012. A submission was received from the respondent on July 16, 2012. On October 25, 2013, in accordance with his powers under s.75 of the Acts, the Director delegated the case to me, Stephen Bonnlander, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Pt 7 of the Acts. On this date my investigation commenced. Additional submissions were requested from the complainant on October 25, 2013 and received on November 7, 2011. The respondent’s response was received on November *158 15, 2011. As required by s.79(1) of the Acts and as part of my investigation, I proceeded to hold a joint hearing of the case on December 10, 2013.
2. Summary of the complainant’s written submission
2.1. The complainant states that she started to work for Ryanair, as an agency worker, from October 1, 2007. Her role was one of customer services agent. The complainant states that her employment with Ryanair was terminated on October 31, 2011, along with three other workers. One of these was Irish, one was Polish like the complainant, and one was Lithuanian. The Irish worker was subsequently taken back on. The complainant contends that this amounts to discriminatory dismissal on the ground of race.
3. Summary of the respondent’s written submission
3.1. The respondent points out that it did not have a contract of employment with the complainant, and that it did not pay the complainant. It therefore disputes that it ever was her employer.
3.2. Specifically with regard to her complaint, it states that 14 staff during September and October 2011 had their assignments ended due to a seasonal downturn in business.
3.3. The respondent states that in November 2011, four positions became available in its reservations department. For these positions, the respondent would have been the direct employer. Four former agency workers, including the complainant, applied, out of a total of 160 applications. Of the three others, one was Irish and two were other nationalities. All four were offered employment, but the offer for the complainant was withdrawn following an unfavourable reference. The three other applicants took up positions with the respondent. The respondent also states that subsequent agency placements became available to the complainant in December 2011 and June 2012, which she rejected.
4. Summary of the written submission of the employment agency
4.1. Parallel proceedings were brought against the employment agency which placed the complainant with the respondent at the time of the alleged dismissal. In its written submission, that company raises a number of points that are germane to the case within. In particular, it confirms the respondent’s statement that during the months of September and October 2011, assignments were discontinued and a total of 14 workers, 11 of whom were Irish and three of whom were non-Irish nationals, were no longer offered agency work. It also confirms that after October 31, 2011, five non-Irish nationals were placed with the respondent again. It therefore disputes that nationality was a factor in these staff fluctuations as alleged.
*159
5. Conclusions of the Equality Officer Preliminary issue: whether stopping to provide agency work is a dismissal within the meaning of the Acts
5.1. The Employment Equality Acts state clearly, in s.8(3), that: “In subsections (4) to (8), references to an employee include references to an agency worker and, in relation to such a worker, references to the employer include references to the provider of agency work.” This includes s.8(6), which deals with discriminatory dismissals. I am satisfied that the within respondent is properly described as a provider of agency work to the complainant.
5.2. In terms of the provisions of the Acts, it is further relevant to note that s.2 defines a “contract of employment” as:
“(a) a contract of service or apprenticeship, or
(b) any other contract whereby – an individual agrees with another person personally to execute any work or service for that person, or an individual agrees with a person carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971 to do or perform personally any work or service for another person (whether or not the other person is a party to the contract),whether the contract is express or implied and, if express, whether oral or written”.
5.3. The preliminary issue for decision in this case is therefore whether ceasing to offer agency work to an agency worker can be comprehended as a dismissal within the meaning of the Acts. With regard to that question, I requested the parties to present arguments at the hearing, taking into account the Labour Court decision in Ntoko v Citibank [2004] E.L.R. 116.
5.4. In its Ntoko decision, the Labour Court does not address the above issue in any detail; indeed it appears from the text of the decision that all parties accepted from the outset that Mr Ntoko, an agency worker, was dismissed from the appellant bank, who was his provider of agency work within the meaning of the Acts.
5.5. Counsel for both sides highlighted the fact that implied contracts can also be contracts of employment. Counsel for the respondent argued that since no contract existed between the complainant and the respondent, and since “dismissal” within the meaning of the Acts requires the existence of a contract, no dismissal could have taken place when the complainant was no longer provided with agency work.
5.6. Counsel for the complainant argued that apart from the provisions of the Acts, as outlined in paragraph 5.1 above, the High Court case of Brightwater Selection (Ireland) Limited v Minister for Social and Family Affairs [2011] IEHC 510, is authority that an implied contract of employment can exist between a provider of agency work and an agency worker. That case itself is concerned with the obligations of an employment agency vis-à-vis the Department of Social *160 Protection with regard to an agency worker it has under contract, which is not entirely on all fours with the question I have to address.
5.7. However, two cases quoted by Gilligan J. in his decision are relevant to the case on hand. One is the decision by the English Court of Appeal in Dacas v Brook Street Bureau (UK) Limited [2004] EWCA Civ 217, in which Mummery L.J. stated:
“I approach the question posed by this kind of case on the basis that the outcome, which would accord with practical reality and common sense, would be that, if it is legally and factually permissible to do so, the applicant has a contract, which is not a contract of service, with the employment agency and that the applicant works under an implied contract, which is a contract of service, with the end-user and is therefore an employee of the end-user with a right not to be unfairly dismissed. The objective fact and degree of control over the work done by [the applicant] at West Drive over the years is crucial. The council in fact exercised the relevant control over her work and over her. As for mutuality of obligation, (a) the council was under an obligation to pay for the work she did for it and she received payment in respect of the work from [the agency], and (b) [the applicant], while at West Drive, was under an obligation to do what she was told and to attend punctually at all times.” [Emphasis added]
5.8. Gilligan J. further cited the findings of the Labour Court in Diageo Global Supply v Rooney [2004] E.L.R. 133, in which that court held that despite the fact that no written agreement existed, and despite the fact that her wages were being paid through an employment agency, Ms Rooney worked for the appellant company. The Labour Court found that the appellant did pay valuable consideration for the respondent’s work, and that it exercised considerable control over the day-to-day work of the respondent, as it directed the respondent as to her work at all times.
5.9. It is clear from evidence which the respondent relied on during the hearing of the complaint that the complainant was indeed under its day-to-day control with regard to how she carried out her work. Her manager gave direct evidence to that effect, and it is also apparent from the performance appraisal which the respondent carried out with the complainant in August 2011, and which will be discussed in further detail below. Nobody denied that the respondent was paying the employment agency which had placed the complainant with it consideration for her work, which was passed on to the complainant as her salary. The managing director of the employment agency stated that the agency had no part in the complainant’s daily management or in the complainant’s performance appraisal, and this was not contested.
5.10. From the provisions contained in the Employment Equality Acts, and which are cited in paragraph 5.1 above, it is clear that the Oireachtas sought to protect agency workers against discrimination, including discriminatory *161 dismissal, as much as it did for permanent employees. I take this to mean that agency work may be withdrawn from agency workers by a provider of agency work only for the exigencies connected with the use of agency work on the part of an undertaking, or because of issues of personal conduct of an agency worker, but not for one of the characteristics which are protected by the Acts. I am further willing to accept, based on the evidence I have heard and the authorities that were opened to me, that an implied contract of employment within the meaning of s.2 of the Acts existed between the complainant and the respondent, which came to an end when the respondent withdrew agency work from the complainant, thereby amounting to a dismissal within the meaning of the Acts. Accordingly, I find that I have jurisdiction to investigate whether work was withdrawn from the complainant because of her Polish nationality, that is, for a discriminatory reason.
Main issue: discrimination complaint
5.11. In evaluating the evidence before me, I must first consider whether the complainant has established a prima facie case pursuant to s.85A of the Acts. The Labour Court has held consistently that the facts from which the occurrence of discrimination may be inferred must be of “sufficient significance” before a prima facie case is established and the burden of proof shifts to the respondent.
5.12. In coming to my decision, I have considered all oral and written evidence presented to me by the parties, and I have also considered the written submission and oral evidence provided by the employment agency which placed the complainant with Ryanair.
5.13. At the hearing of the complaint, the complainant accepted that a total of 14 agency workers had work withdrawn by the respondent in September and October 2011, and that 10 of them were Irish. However, she insisted that these Irish workers had only been taken on over the summer, whereas she had four years of service with the respondent. She further accepted that autumn brings a downturn in business for airlines, but stated that in previous years, she had been put on part-time work rather than having her work withdrawn. She also accepted that when she later applied for a position with the respondent, not as an agency worker but as an employee of the respondent, she was offered that position, until the offer was withdrawn due to an unsatisfactory reference.
5.14. For the respondent, its regional manager for Ireland, Mr A., gave evidence first. He stated that 90 per cent of Ryanair’s staff are non-Irish, as are 87 per cent of its supervisors. The airline has two seasons: summer, which is its peak season, and autumn, winter and spring, which is its off-peak season. This is in line with other carriers and simply dictated by the demands of the tourist season. Staffing levels are adjusted accordingly, which is one reason for the use of agency staff. He stated that in 2009 and 2010, between three and four aircraft of the respondent would not be flown during off-peak, whereas in 2011, seven aircraft were grounded. He stated that this necessitated withdrawing work from *162 long-term agency staff who had previously been accommodated with part-time work during the winter months, like the complainant.
5.15. In order to facilitate the decision-making process, performance appraisals were carried out with all check-in agents, including the complainant who had never before been appraised for her performance. The complainant scored second from the bottom. One Irish worker who scored one point lower than the complainant was nevertheless re-instated. The complainant, when confronted with her own performance appraisal and the performance appraisals of her two comparators, including the worker just mentioned, argued that the appraisals were biased in favour of her Irish comparators. Furthermore, counsel for the complainant pointed out that several categories of the assessment, such as team integration, cooperation with management, customer service (which includes points like “smiling”, wishing passengers a pleasant flight, etc.), and “general attitude”, while the same for all workers assessed, are somewhat subjective for the purpose of rating performance.
5.16. The respondent’s argument for re-instating the named Irish worker who had scored one point lower than the complainant was the relatively short service of that worker, and that it was felt by management that she had considerable potential, whereas the complainant, with her long service, should have been a better worker at the time of her appraisal.
5.17. I accept the complainant’s evidence that the first time she had sight of the performance appraisals of her comparators was at the hearing of the complaint, and I am satisfied that she was entitled in her response to same to raise the point as to whether bias in the assessment process, in favour of her Irish comparators, may have influenced the decision to withdraw work from her, but to re-instate an Irish worker who had scored lower than herself. The Labour Court, in Nevins, Murphy, Flood v Portroe Stevedores Limited [2005] E.L.R. 282, among other cases, has pointed out that:
“Discrimination is usually covert and often rooted in the subconscious of the discriminator. Sometimes a person may discriminate as a result of inbuilt and unrecognised prejudice of which he or she is unaware. Thus, a person accused of discrimination may give seemingly honest evidence in rebuttal of what is alleged against them. Nonetheless, the court must be alert to the possibility of unconscious or inadvertent discrimination and mere denials of a discriminatory motive, in the absence of independent corroboration, must be approached with caution. Finally, it must be borne in mind that the proscribed reason need not be the sole or even the principal reason for the conduct impugned; it is enough that it is a contributing cause in the sense of being a ‘significant influence’ (see Nagarajan v London Regional Transport [1999] I.R.L.R. 572, per Lord Nicholls at p.576).”
5.18. It is for this reason that I requested sight of another performance appraisal from the respondent, this time from one of the four workers among the five *163 top scorers who were Polish nationals. It is from this evidence, as well as the respondent’s uncontroverted evidence that of the workers who were kept on during the winter, seven were Polish, one was Estonian and only two were Irish, that the respondent has successfully rebutted the presumption that its worker assessments may have been influenced by conscious or unconscious biases in favour of Irish workers. I am satisfied that when the respondent needed to withdraw agency work from a number of long-time agency staff, the complainant was selected because of her mediocre performance and that her Polish nationality played no part in this. Accordingly, her complaint of discriminatory dismissal must fail.
6. Decision
6.1. Based on all of the foregoing, I find, pursuant to s.79(6) of the Acts, that Ryanair did not discriminatorily dismiss Ms Agnieszka Spyra, by withdrawing agency work from her, within the meaning of s.8(3) and s.8(6) of the Employment Equality Acts 1998–2011, on the ground of her nationality contrary to s.6(2) of the Acts.
GUIDANCE
Brief Overview
does not purport to present a legal interpretation of the Act.
Rationale for the Act
the Act i.e 16th May, 2012.
Who is affected by the Act?
How will the Act affect Agency Workers?
Obligations for employment agencies:
What is meant by basic working and employment conditions?
What is included in “Pay”?
Anti Avoidance Provisions:
Working Time and annual leave entitlements
Collective Facilities and Amenities
Access to information on job vacancies
Pay between assignments (also known as the “Swedish Derogation”)
Redress – Rights Commissioner
Appeals
Robert Costello Team Obair Limited
AWD134
Labour Court
7 November 2013
[2014] 25 E.L.R. 76
(November 7, 2013)
(1) That it was more probable than not that had the claimant been employed by the hirer on December 5, 2011 he would have been paid the same basic pay as other forklift drivers similarly employed.
(2) That the purpose of the Act is to transpose into Irish law Directive 2008/104 of the European Union on Temporary Agency Work. Consequently the Court is obliged to interpret and apply the Act, as far as possible, in light of the wording and purpose of the Directive, which purpose is set out in Article 2 thereof.
(3) That subs.(3) of s.6 of the Protection of Employees (Temporary Agency Work) Act 2012 provides that for the purpose of applying subs.(1) of that section, where a claimant’s assignment commences before December 5, 2011 and ends or is due to end after that date, that assignment is to be treated as having commenced on December 5, 2011.
(4) That, in order to be “basic working conditions” for the purpose of the 2012 Act the conditions in issue must be provided by virtue of “any enactment or collective agreement, or any arrangement that applies generally in respect of employees or any class of employees, of a hirer”, and that it must be the enactment, collective agreement or arrangement that must be of general application rather than the rate of pay or conditions of employment that result from the utilisation thereof.
(5) That the inclusion of “any arrangement” in s.6 gives that section a wide ambit so as to encompass conditions of employment established within a hirer by systems used for that purpose in employments where collective bargaining does not take place. It also includes less formal arrangements established by way of custom and practice.
(6) That, the Protection of Employees (Temporary Agency Work) Act 2012 does not require a claim for equal pay to be grounded by reference to an actual comparator but that the rate that is paid to employees of the hirer who are engaged in the same type of work is an important evidential tool.
(7) That the onus of proving that a rate of pay established within the hirer employment would not have applied to an agency worker had he or she been directly employed rests with the respondent, as same could only be established on reliable evidence which in most cases will be in the peculiar knowledge or power of procurement of the respondent.
(8) The claimant was entitled to the same rate of basic pay pursuant to s.6(1) of the Act as other forklift drivers employed by the hirer.
(9) The respondent was directed to adjust the claimant’s rate of pay to that of the comparator direct employees with effect from the commencement date of s.6 (December 5, 2011).
(10) Obiter dictum: That, the principle of non-regression (which is a general principle of European law) and which is reflected in Article 9.2 of the Directive, operates so as to preclude an employer from reducing the level of protection afforded to directly employed workers as a mode of compliance with the Directive and the Act.
No cases referred to in determination.
The full text of the Labour Court’s decision was as follows:
Subject
1. An appeal against a Rights Commissioner’s Decision r-127463-taw-12/SR.
Background
2. The employee appealed the Rights Commissioner’s Decision dated July 30, 2013 to the Labour Court in accordance with s.25(2) of the Protection of Employees (Temporary Agency Work) Act 2012 on August 28, 2013. The Court heard the appeal on October 31, 2013.
The following is the determination of the Court.
Determination
This is an appeal by Mr Robert Costello (represented by SIPTU) against the Decision of a Rights Commissioner in his claim against his employer, Team Obair Limited. The claim is taken under the Protection of Employees (Temporary Agency Work) Act 2012 (the Act).
In this determination Mr Costello is referred to as the claimant and Team Obair Limited is referred to as the respondent.
The respondent is an employment agency. The claimant is employed by the respondent as a forklift truck driver. His basic pay is €13.50 per hour. He is assigned by the respondent to a third party, namely Logistics Company Shannon Transport Logistics (STL), hereafter referred to as the “hirer”.
The union contends that the claimant is being paid less in terms of basic pay to that which he would have been paid had he been employed directly by the hirer to perform the same work. The claim is made in reliance on s.6(1) of the Act.
The Court was told that the claimant is one of a number of agency workers employed by the respondent each of whom are pursuing similar claims based on similar facts. It appears that in the case before the Rights Commissioner it was decided that the within claim should proceed first and that the other claims would be considered in light of the findings in the instant case.
The Rights Commissioner found that the claim was not well-founded. The claimant appealed to the Court.
The facts
The material facts of the case are not in dispute and can be summarised as follows:
The claimant is employed at a plant operated by Diageo Guinness Ireland Limited at St James Gate Dublin. The work in which he is engaged was historically undertaken by workers directly employed by that company. As a result of restructuring by Diageo Guinness Ireland Limited this work was contracted out to third party undertakings during the 1990s. The contracts for the provision of this service were awarded by way of tender. Various third parties were awarded the contract through this process in the intervening years.
The respondent was contracted to provide agency workers to the original third party contractors and on each occasion on which the contract passed from one *79 contractor to another the respondent retained the business of providing agency workers to the incoming contractor. It appears that on each occasion on which the contract changed, the employees of the outgoing contractor were transferred to the incoming contractor pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003).
The claimant was employed by the respondent in or about March 2007. He has been continuously employed at the plant at which he now works since that time. He was originally assigned to an entity that preceded the hirer as contractor at the St James Gate site. It appears that the hirer obtained the contract in or about January 2012 and the respondent continued to provide the services of the claimant to the hirer. The hirer employs a number of workers who are engaged in work that is identical in all material respects to that performed by the claimant.
The employees of the hirer are members of SIPTU and it appears that the hirer recognises the SIPTU for industrial relations purposes, including collective bargaining.
Position of the parties
The rates of pay applicable to employees of the respondent, including the claimant, are €11.50 for general operative work and €13.50 for driving forklift trucks. SIPTU contends that employees of the hirer who are engaged in identical work are paid €740 per week for a 40-hour week, or €18.50 per hour. The union nominated a number of employees of the hirer as comparators and it produced pay statements furnished to those comparators in verification of its contention in that regard. It contends that had the claimant been employed directly by the hirer on or after the date on which s.6 of the Act came into effect he would have been paid at the aforementioned rate.
The respondent told the Court that when it commenced the contract it obtained a statement in writing from the hirer, pursuant to s.15 of the Act, setting out the basic terms and conditions that it would apply if it employed workers directly on the same work as that undertaken by agency workers assigned to it by the respondent. In that statement the hirer indicated that it would pay forklift workers the same rate as that paid to the claimant by the respondent.
The respondent further pointed out that the comparators nominated by the claimant were all employed prior to the coming into effect of s.6 of the Act on December 5, 2011. On that account the respondent contends that they cannot be relied upon as valid comparators for the purposes of the within claim. It was further pointed out that the named individuals have service ranging from 18 years to nine years. The respondent argued that this is an additional factor which rendered the comparison with those employees invalid for the purposes of the Act. There is, however, no suggestion that the rates paid to those individuals is in any way service-related.
*80
Conclusions of the Court
The Law
This Act was signed into law on May 16, 2012. Its purpose is to transpose in Irish law Directive 2008/104 of the European Union on Temporary Agency Work. Consequently the Court is obliged to interpret and apply the Act, as far as possible, in light of the wording and purpose of the Directive so as to achieve the result envisaged by the Directive. The Act commenced on May 16, 2012, although ss. 2, 3, 4, 5, and 6 are deemed to have commenced on December 5, 2011, the date on which Members States were employed to implement the Directive.
The purpose of the Directive is set out at Article 2 thereof as follows:
“The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.”
The principle of equal treatment, referred to in this Article, is elaborated by Article 5 as follows:
“The principle of equal treatment
1. The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.”
Section 6 of the Act faithfully transposed Article 5 of the Directive in providing as follows:
“6.—(1) Subject to any collective agreement for the time being standing approved under section 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.”
Subsection (3) of s.6 of the Act provides:
“(3) Where the assignment of an agency worker commenced before 5 December 2011 and ended or ends on or after that date, that assignment shall, for the purpose *81 of determining the agency worker’s basic working and employment conditions in accordance with subsection (1), be deemed to have commenced on that date.”
There was some argument addressed to the Court as to the effect of that subsection. However, it appears to the Court that it is intended to provide that, for the purpose of applying subs.(1) of the section, where a claimant’s assignment commenced before the commencement date of the section and ends or is due to end after that date, the assignment is to be treated as having commenced on December 5, 2011.
The meaning to be ascribed to the term “basic working and employment conditions” is set out at s.2 of the Act as follows:
“‘basic working and employment conditions’ means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hire, and that relate to—
(a) pay,
(b) working time,
(c) rest periods,
(d) rest breaks during the working day,
(e) night work,
(f) overtime,
(g) annual leave, or
(h) public holidays;”
Pay is defined by the same section as:
“(a) basic pay, and
(b) any pay in excess of basic pay in respect of—
(i) shift work,
(ii) piece work,
(iii) overtime,
(iv) unsocial hours worked, or
(v) hours worked on a Sunday,”
It is clear from the opening words of this provision that in order to constitute “basic working conditions” for the purpose of the Act the conditions in issue must be provided by virtue of “any enactment or collective agreement, or any arrangement that applies generally in respect of employees or any class of employees, of a hirer”. It seems clear from a reading of this provision as a whole that it is the enactment, collective agreement or arrangement that must be of general application rather than the rate of pay or conditions of employment that results from the utilisation thereof.
There will be little difficulty in practice in identifying conditions of *82 employment derived from an enactment or a collective agreement. But the term “any arrangement” is less certain. It seems that the use of this term was intended to give s.6 of the Act a wide ambit so as to encompass conditions of employment established within a hirer by systems used for that purpose in employments where collective bargaining does not take place. It can also include less formal arrangements established by custom and practice. However the term connotes an objective modus operandi for determining conditions of employment rather than a subjective assessment of individuals.
In this case the rates paid by the hirer are not formally prescribed in a collective agreement. According to the union they are determined by an arrangement established by custom and practice whereby rates are carried forward and modified from time to time by collective bargaining. The respondent did not take issue with the union’s contention in that regard.
As appears from s.6 and Article 5 of the Directive an agency worker is entitled to the same basic employment conditions as those to which he or she would be entitled if employed by the hirer. That raises a question as to what employment conditions the agency worker would have become entitled to under any enactment, collective agreement, or any arrangement of general application to similar workers if he or she had been employed by the hirer at the time his or her assignment commenced (or is deemed to have commenced under s.6(3) of the Act). That question involves an element of hypothesis but it must be grounded on reliable evidence rather than by mere speculation or assertion.
Unlike other similar employment rights statutes the Act does not require a claim for equal pay to be grounded by reference to an actual comparator. Nevertheless, the rate that is paid to employees of the hirer who are engaged in the same type of work is an important evidential tool. Where a rate of pay is generally applicable to all workers performing the same work as that performed by the agency worker it may readily be inferred that if the agency worker was employed by the hirer he or she would be similarly paid. However, it may be that the relevant rate paid by the hirer is in whole or in part attributable to factors that do not apply to the agency worker. Or it may be that rates generally applied by the hirer have or would have changed since the rate relied upon was established. In such eventualities the Court could reasonably infer that had the agency worker been employed by the hirer at the time the assignment commenced (or was deemed to have commenced) he or she would have been paid a different rate of pay than that claimed.
However, these are questions of fact that can only be established on reliable evidence, which in most cases, will be within the peculiar knowledge or power of procurement of the respondent and beyond a claimant’s capacity of proof. Hence, it would appear that the onus of proving that a rate of pay established within the hirer’s employment would not have applied to an agency worker had he or she been directly employed by the hirer rests with the party making that assertion.
*83
Application to this case
In this case the only evidence relied upon by the respondent is a pro forma document used by the hirer for the purpose of providing information to the respondent pursuant to s.15 of the Act. This section provides:
“(1) It shall be the duty of the hirer of an agency worker to provide the employment agency that employs that agency worker with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under this Act in relation to the agency worker.”
This document, which was put in evidence, sets out a list of employment-related issues against which information is filled in by the hirer. In the column marked “Pay rate per hour as per comparator” the response “€11 for GO, €13.50 for Forlift Driver/Shunter” is given.
The provider of this information did not give evidence. It is, however, undisputed that the hirer does not employ any workers on those rates at the St James Gate facility and there is no evidence that it applied them elsewhere. It was suggested by the respondent that the rates specified are those that the hirer would pay if it now employed workers to perform the same work as that undertaken by the claimant. The union pointed out that rates upon which it relies are established within the hirer and it did not agree, nor would it agree, to any reduction of those rates for new entrants.
Conclusion of the Court
The points raised in this case are novel and are not governed by any authority of which the Court is aware. Accordingly they must be approached by the application of first principles.
There are rates of pay for forklift drivers within the hirer which are established by an arrangement of long standing. While this is acknowledged by the respondent it contended that those rates are historical. It submitted that if the hirer took on new employees at the time that the claimant’s assignment is deemed to have commenced the rates payable would be those specified in the s.15 notification upon which it relies. That, however, is a mere assertion which cannot be elevated to an evidential basis upon which the Court could make findings of fact. In particular, the respondent has not pointed to any pay determination arrangement operated by the hirer the application of which might result in forklift drivers being paid €13.50 per hour.
There are other factors which undermine the validity of the submission advanced by the respondent. The rates specified in the notice furnished by the hirer are precisely those paid by the respondent. It is at least probable that the information furnished by the hirer is predicated on the assumption that if the *84 respondent can employ labour on those rates it could do likewise. If a bare statement based on such a premise were to be accepted as definitive the purpose of the Act, and that of the Directive, would be seriously subverted and the protection which they are intended to provide would be rendered nugatory. Moreover, the principle of non-regression (which is a general principle of European law) and which is reflected in Article 9.2 of the Directive, operates so as to preclude an employer from reducing the level of protection afforded to directly employed workers as a mode of compliance with the Directive and the Act.
There is a further consideration of some significance in this case. The Court is aware from its own knowledge and experience that there would be potential for serious industrial relations conflict if an employer, in the circumstances of the hirer, were to employ workers on significantly different rates of pay to perform the same work. The hirer recognises SIPTU for industrial relations purposes, including collective bargaining. It is inherently unlikely that it would or could seek to reduce established rates of pay without some level of engagement with the union. There has been no such engagement and according to the union there would be little or no chance of it agreeing to accept rates for employees of the hirer in line with those currently paid by the respondent.
For these reasons, and in the absence of any reliable evidence to the contrary, the Court has come to the conclusion that it is more probable than not that had the claimant been employed by the hirer on December 5, 2011 he would have been paid €18.50 in line with other forklift drivers similarly employed. Accordingly, that is the rate to which he is entitled pursuant to s.6(1) of the Act. Accordingly the Court must hold that the claimant is entitled to succeed in this appeal.
Redress
The mode of redress that may be ordered by a Rights Commissioner, and by extension by this Court, is set out at para.1(3) of Schedule 2 of the Act. It provides:
“A decision of a rights commissioner under subparagraph (2) shall do one or more of the following, namely—
(a) declare that the complaint was or, as the case may be, was not well founded,
(b) require the employer to take a specified course of action (including reinstatement or reengagement of the employee in circumstances where the employee was dismissed by the employer), or
(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances but not exceeding 2 years remuneration in respect of the employee’s employment,
and the references in the foregoing clauses to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, as references to the person who, by virtue of the change, becomes entitled to such ownership.”
*85
In accordance with clauses (a) and (b) of subparagraph (3) above, the Court declares that the claimant’s complaint is well founded and it directs the respondent herein to adjust the claimant’s rate of pay to €740 per 40-hour week, or €18.50 per hour, with effect from December 5, 2011.
Determination
The Decision of the Rights Commissioner is set aside and substituted with the terms of this Determination.
Norton v HSE
Claire Norton, Susan Kileen, Amanda Keenan, Janice Lynch, Teresa Ryan, Jennie Moore, Sarah Roberts v Health Service Executive
High Court
16 March 2012
[2013] 24 E.L.R. 313
(Murphy J.)
MURPHY J.
delivered his judgment on March 16, 2012 saying:
1. Notice of Motion
The plaintiffs have sought an interlocutory injunction restraining the HSE from terminating their employment and an order compelling their reinstatement to their existing positions, to cease training any new person to replace them and restraining the HSE from advertising their posts as being vacant.
They sought a declaration that the redundancy under which the plaintiffs were being dismissed was not a legitimate redundancy and was illegal and contrary to the laws of the State and it should not be so construed. They also sought a declaration that their contracts with the HSE had been breached by the HSE’s conduct.
The application was grounded on the affidavits of the plaintiffs.
2. The Affidavit of Claire Norton
The affidavits of the other plaintiffs were similar to that of Ms Norton whose affidavit, it was submitted, was representative of the facts grounding each of *316 the plaintiffs’ claims. Claire Norton said that in or about September 2004, she commenced work with the HSE as a student social care worker as part of a student placement. She was advised that there was regular work available and that she should sign up with Ace Nursing Agency, a commercial entity used by the HSE through whom her salary was paid. She was not required to undergo any competitive interview and, she averred, Ace Nursing Agency had no other input into her work and gave no directions to her. All the instructions, directions, control and work organisation was controlled by the management of the defendants.
She said that she received her qualifications as a social care worker in October 2006 and was interviewed by Liam Conway who had set up a new outreach and respite service known as the OARS Project. She said she was the first full-time staff member in that service. She said that in or about February 2007, Liam Conway had informed her that she had to sign up with an agency known as “Don Bosco” because the HSE policy was to use Don Bosco instead of Ace Nursing Agency in the future. She said that that had no effect on her position in the OARS Project. She said she believed she was employed by the agency to overcome difficulties with the HSE policy of not recruiting people directly. She believed that that was to overcome the recruitment embargo within the HSE. Don Bosco was headed by Caroline Cranley, HSE manager, who was seconded from the HSE for the purpose of setting up Don Bosco under the direction of the HSE. In June 2001 Ms Cranley ended her secondment and returned to the HSE.
Claire Norton said she was not offered a contract of employment from 2004 until 2007. She said she was given contracts of employment which indicated that she would be employed in the HSE in Dublin North Central as follows:
(i) February 1, 2007, with no duration specified
(ii) May 2, 2008 to May 2, 2010,
(iii) May 1, 2010 to May 1, 2011.
She said that she believed that she had been employed in the same position in the OARS Project and subsequently renamed as OARS Family Services from November 27, 2006 to the present and that there had been no break in her employment.
She said that in around 2007, she was made aware by Liam Conway that two posts within the OARS Family Services were to be designated as HSE positions. She was interviewed by HSE staff and was successful in her application and accepted the offer. She filled out a number of forms. Mr Conway later informed her that the decision to formalise the posts was retracted because of an employment embargo within the HSE. That made no difference to her daily working schedule and her manager never formally treated her any differently after this. She said she continued to be paid by Don Bosco.
She said that at all material times she was employed by the HSE as a family *317 worker in the HSE. At no point in her employment was she a relief social care worker as set out in the contracts of employment at (ii). She said she performed all of her duties as instructed by her HSE line manager, Liam Conway. She had never taken direction in any form from anybody else save the HSE. She said she was treated as a HSE employee. She paid into a public service HSE pension fund. She referred to a letter dated January 27, 2012 and to a Labour Relations Commission’s proposal of January 9, 2012 wherein the management of the HSE indicated that all social care posts were to be made redundant.
The letter of January 27, 2012, on Don Bosco note paper, and signed by Lorraine Perkins, Deputy Social Care Manager, read as follows:
“To whom it may concern:
The above named is an employee of Don Bosco House HR Social Care Relief Panel, the purpose of which is to provide the required relief cover for HSE children’s residential centres in Dublin Central and Dublin North East.
The administration of this panel is the responsibility of Don Bosco House HR. Claire pays into a public service HSE pension fund, which is deducted from her gross earnings. Additional to this is a PRD deduction which is a pension related deduction. If you require any further information please contact me at the above contact details.”
The letter in relation to the Labour Relations Commission proposals came from IMPACT trade union to its members on January 9, 2012, as follows:
“Dear Member,
You will be aware that under the auspices of the Labour Relations Commission talks were conducted between representatives of IMPACT, HSE Dublin North East and Don Bosco on December 16, 2011 and January 9, 2012. I attach for your information the proposal which has been issued by the Labour Relations Commission.
IMPACT is recommending acceptance of the terms of this proposal and believes that it is the best available outcome in the current climate. Please see details below of meeting arranged to discuss those proposals:
Friday 13th January, 2012.
Venue: Impact, Nerney’s Court, Dublin 1.
Time: 10.00 am
Catherine Keogh, Assistant General Secretary Impact.”
The Labour Relations Commission letter from Mairead Daly, Industrial Relations Officer was dated January 9, 2012.
The proposal read as follows:
“The severance terms on offer two week’s statutory redundancy (which includes the one week’s bonus) and two weeks ex gratia. Calculations of salary for redundancy *318 payments will be based on service prior to September 1, 2011, in accordance with normal guidelines.
The HSE has agreed that salary deductions made on foot of a pay cut for public servants will be reimbursed by the HSE. Accrued pension benefits will be preserved. The HSE has agreed to explore with the Revenue Commissioners the situation in regard to the pension levy and revert to the union side.
In relation to the one admin staff and two social care managers, the HSE indicated that they are prepared to explore options with the three individuals in question if all the staff are classified as administrative staff, otherwise the severance terms set out above will apply.
This proposal is in full and final settlement of the issues in dispute and is issued on the understanding that it is recommended for acceptance by all parties. If it is rejected by either party, it will be deemed withdrawn and has no further status.”
Claire Norton further averred that in or around June 2011, she and her colleagues were informed that the HSE then wished to transfer the arrangements in place with Don Bosco to a different trading entity, called CPL recruitment. On July 4, 2011, she and her colleagues were requested to attend a meeting organised by Caroline Cranley and attended by Pat Dunne of the HSE and representatives from the CPL. They were advised to register with CPL with immediate effect and were advised that there would likely be a degradation of terms and conditions and that they would not be considered as employees of the HSE. That was the first time she had heard of that. She referred to the minutes of that meeting.
She said that Pat Dunne of the HSE replied to her solicitor’s letter of August 26, 2011, saying that neither she nor any of her colleagues were named on the payroll of the HSE. She referred to Mr Dunne’s letter of September 16, 2011.
Details of the duties she performed for the HSE were given including her holding an access control card owned by the HSE which allowed her access into the HSE building where she was based. She said she had represented the HSE in court, worked as a lone worker and prepared reports on HSE headed paper and sent files to the HSE data storage archives.
She said in addition she had received her Hepatitis B injections and the swine flu and flu jab from the HSE. In August 2011, she attended a HSE team leader interview to be placed on the HSE panel as part of the HSE national recruitment campaign. She said she was successful in that interview and placed on a team leader panel and referred to correspondence.
She said that on the July 6, 2011, her colleagues and she received an email from Fr Patrick Hennessey of Don Bosco referring to a meeting on July 4. She said that he refuted the assertion by Mr Dunne that she and her colleagues were not employees of the HSE and highlighted the fact that Don Bosco had received definitive legal advice confirming that the HSE was their employer. He had also pointed out that the HSE was the beneficiary of the work that was performed and was their legal employer. Accordingly, she said that only the HSE could make *319 them redundant. She said she had received a further notice from Fr Hennessey on December 5, 2011, where Fr Hennessey pointed out that the decision to cease providing work was the sole decision of the HSE and that that happened without consultation or notification to Don Bosco.
She referred to the notice to Fr Hennessey dated December 19, 2011, where Fr Hennessey said that Don Bosco were not invited by either party to attend the conciliation conference which took place solely between the HSE and the Impact trade union.
She said that on January 16, 2012, Liam Conway informed her that two permanent staff members had been sanctioned for the OARS Family Services and that he informed her that he was going to advertise her position immediately to existing HSE staff. He said he would put a deadline of Friday January 27, 2012, for internal HSE staff to apply for those positions which included her position. She said that notwithstanding the fact that she was being made redundant that other individuals were being identified to fill her post.
As a result of all of that, she was informed on February 13, 2012, that her employment would be extinguished as a result of other staff taking over her position. She said that an advertisement was sent to certain HSE employees which advised that two full-time positions had arisen in the OARS Family Services and that one of those was her position. She believed that no redundancy situation existed.
She said that on January 30, 2012, she received an email from Fr Hennessey regarding the implementation of the LRC proposal. He indicated that the HSE were providing access to the HSE staff care service for anyone affected by the aforesaid redundancy programme. The HSE will provide a standard reference for all affected employees.
3. Replying affidavit of Patrick Dunne
Mr Dunne averred that in 2006 a project was established between the defendant and Don Bosco whereby staff were recruited and trained by Don Bosco for the purpose of providing a relief staffing service to support the HSE to provide a better quality service. The project was run on a “not for profit” basis.
Staff were recruited and employed by Don Bosco House in full compliance with the HSE standards of recruitment and were employed and remunerated on Department of Health and Children Consolidated Pay Scales. The service was funded by the HSE. All of the staff were on the Don Bosco payroll. Don Bosco dealt with all of their statutory deductions and returns. All employer liability and responsibility was a matter for Don Bosco House. The HSE funding provided cover for running costs of the service only which included administration and non-pay costs. Don Bosco was responsible for issuing its employees with an appropriate contract of employment.
Mr Dunne said that it was a contract for services (termed a Service Level *320 Agreement) between HSE and Don Bosco.
He said that since the introduction of a moratorium on recruitment in the Irish Public Service in 2008, a number of staff including the plaintiffs were employed on a full-time and continuing basis in HSE childcare residential units and were accountable to HSE staff and reported to them on a day to day basis: that was normal practice regarding all agency staff.
While the plaintiffs claim that their employer is the HSE, this is denied by the defendant and is a matter of dispute as is clear from the affidavits and the exhibits thereto. The plaintiffs never had a contract of employment with the HSE.
In early 2001 the HSE completed a new national tendering process which was implemented in effect from February 21, 2011 with CPL who were available for the provision of relief social care worker services. If staff wished to continue to work as relief staff, they had to register with CPL.
At a meeting in July 2011 staff of Don Bosco were informed of its decision to withdraw from the arrangement and the options resulting were being explored by way of redundancy or seeking employment through CPL.
In January 2012 an agreement was reached under the auspices of the Labour Relations Commission at a time when the budget environment had changed dramatically since July 2011 with a significant reduction required in the overall number of people employed in the public service including children and family services. As a result these services were reconfigured and re-organised which resulted in the closure of a children’s residential centre and with more scheduled for closure in 2012. The staff were redeployed within the Dublin Northeast region to meet the priority needs of the services. There was an obligation to comply with government policy regarding the reduction in budget and staffing members.
Negotiated redundancy with the 75 members of the panel resulted in them being served with RP50 forms by Don Bosco in respect of redundancies on February 16, 2012 and notice of termination of their employment on March 16, 2012. The redundancy package was negotiated at the Labour Relations Court and recommended for acceptance by IMPACT union representing panel members.
Mr Dunne said he was advised that any challenge to redundancy was a matter for determination by the Employment Appeals Tribunal.
Mr Dunne replied to the affidavits of each of the plaintiffs saying that it was clear in the contracts of employment that the employer was identified as Don Bosco House and that the HSE regarded the employer of each of the plaintiffs as being Don Bosco House.
He said that Ms Norton, Jennifer Moore and Sara Roberts were successful in the interview for a whole-time temporary position within the HSE but the campaign of recruitment was subsequently stopped as a result of the recruitment embargo and those positions were not subsequently filled.
Mr Dunne said that even if the plaintiffs were found to be employees of the defendant, that what had occurred was a lawful and genuine redundancy *321 programme in the context of re-organisation of staffing within the HSE service generally. Such re-organisation was a result of redeployment of existing HSE staff and did not result from the creation of new posts.
He said that the HSE had agreed to fund a redundancy programme affecting 75 social care workers of whom the plaintiffs were seven. The plaintiffs’ belief that there was no redundancy situation and that if a redundancy situation existed that they had been unfairly selected for redundancy and, as a consequence, were being wrongfully or constructively dismissed, was a matter solely and exclusively within the jurisdiction of the Employment Appeals Tribunal.
In a supplemental affidavit, Pat Dunne referred to the notice of termination served on the plaintiffs.
In a third supplemental affidavit Mr Dunne exhibited the service agreement between the HSE and Don Bosco detailing the contractual arrangements between the HSE, referred to as “the executive”, and the provider being Don Bosco House, a company limited by guarantee whose chairperson is Fr Paddy Hennessy. The contract deals with quality, standards, delivery specification, performance monitoring and information requirements. In addition, it deals with funding, insurance, complaints, staffing and change control in relation both to children and families and to aftercare services for children and families as distinct care groups.
With Amanda Keenan, Claire Norton, Janice Lynch, Teresa Ryan, a number of staff were employed on a full-time and continuing basis in HSE childcare residential units. Schedule 9 deals with staffing and outlines the key roles and responsibility of such social care workers who “will be expected to perform his/or her duties in accordance with the job description laid down by the HSE, be subject to the policies and procedures outlined in the Don Bosco staff handbook and to the policies and procedures in the HSE” who would assist Don Bosco and the provision of training for staff.
It is stated that the social care workers would be line managed by Don Bosco who would maintain a “operational employee file” to include records of all details pertaining to supervision/all leave types as well as training and development undertaken as well as any record of grievances/disciplinary issues arising.
It was stated that a joint management group comprising the director of Don Bosco, a social care manager at Don Bosco, LH Manager, North Dublin and a senior manager of LH would be responsible for the operation of the agreement. Disputes arising between the employees and/or the HSE which cannot be dealt with through the line management structure, would be managed by that group. I understand that LH is the local health (manager).
4. Plaintiffs’ submissions
It was submitted on behalf of the plaintiffs’ case that, notwithstanding that they had signed contracts with an agency, they were, in relation to uncontroverted *322 facts, employed by the HSE.
They relied on the judgment of Keane J. in Henry Denny and Sons (Ireland) Limited v Minister for Social Welfare [I998] 1 I.R. 34 where it was held:
“It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor when he or she is performing those services for another person and not for himself or herself. The degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. The inference that the person is engaged in business on his or her own account can be more readily drawn where he or she provides the necessary premises or equipment or some other form of investment, where he or she employs others to assist in the business and where the profit which he or she derives from the business is dependent on the efficiency with which it is conducted by him or her.”
While this was the determination in relation to the social welfare entitlement of a supermarket demonstrator, whose written contract stated that she was self-employed, it is submitted that this applies equally to the circumstances where each of the plaintiffs worked in the HSE on the same terms and conditions as other employees.
In Autoclenz Limited v Belcher [2011] U.K.S.C. 41, the Appeal Court held that written documentation might not reflect the reality of the relationship between the parties. It was necessary to determine the parties’ actual agreement by examining all the circumstances, which the written agreement was only part and identify the parties’ actual legal obligations. On the basis of findings of the Employment Tribunal which was entitled to disregard the terms of the written documents insofar as they were inconsistent with the findings, the Tribunal held that the claimants were workers, because they were working under contracts of employment within the meaning of the national minimum wage regulations.
However, in Minister for Labour v PMPA Insurance Company [1986] JISLW 215, Barron J. held that Philomena McNulty, a temporary typist engaged by PMPA under an agreement with Alfred Marks Bureau, was not an employee of PMPA as her rights and duties in relation to employment were enforceable solely against the Bureau under the agreement with the Bureau. Barron J. stated:
“So far as the employee was concerned her rights and duties equally were enforceable solely under the terms of her agreement with the Bureau and against the Bureau. In such a contractual situation I can see no room for any implied contractual relationship between the defendant and the employee.”
In Dacas v Brook Street Bureau [2004] I.C.R. 1437, Mummery J. examined the overall legal effect of the triangular arrangements in relation to the status of the *323 plaintiff. The court held:
“the Employment Tribunal should not focus so intently on the express terms of the written contracts entered into by Brook Street with Mrs Dacas and the council that it is deflected from considering finding facts relevant to a possible implied contract of service between Mrs Dacas and the council in respect of the work actually done by her exclusively for the council at its premises and under its control, until it took the initiative in terminating that arrangement. The formal written contracts between Mrs Dacas and Brook Street and between Brook Street and the council relating to the work to be done by her for the council may not tell the whole of the story about the legal relationships affecting the work situation. They did not, as a matter of law, necessarily preclude the implication of a contract of service between Mrs Dacas and the council. There may be evidence of a pattern of regular mutual contact of a transactional character between Mrs Dacas and the council, from which a contract of service may be implied by the tribunal. I see no insuperable objection in law to a combination of transactions in the triangular arrangements, embracing an express contract for services between Mrs Dacas and Brook Street, an express contract between Brook Street and the council and an implied contract of service between Mrs Dacas and the council, with Brook Street acting in certain agreed respects as an agent for Mrs Dacas and as an agent for the council under the terms of the express written agreements.”
In James v Greenwich London Borough Council [2008] I.C.R. 545, the claimant had worked for the respondent council until 1997, when she ceased working for a short time. She subsequently started working again for the council through an employment agency from 2001 to 2003, where she moved to another agency which paid a better hourly rate. There was no express contract between the claimant and the council. The terms for a contract with the agency provided that it was a contract for services between the claimant and the agency and did not give rise to any contract of employment with the agency or with the council. She was not entitled to sick pay or holiday pay. Arrangements in respect of sickness and holidays were made by the agency. She was absent from work due to sickness in August and September 2004.
The agency provided another worker in her absence. On her return, she was told that she was no longer required as the agency had replaced her. She claimed for unfair dismissal.
The Employment Tribunal in James had found that, as there was no obligation on the claimant to provide her services to the council, or on the council to provide her with work, sick pay or holiday pay there were no irreducible minimum of mutuality of obligation necessary to create a contract of service, and no facts from which such a contract could be implied between the claimant and the council except on appeal by the claimant from the determination by the employment of the Appeals Tribunal. Her appeal was dismissed. It was held that: *324
“The real question was whether it was necessary, in the tri-partite setting of a worker, employment agency and end user, to imply a contract of service between the worker and the end user to explain the provision of work by the worker to the end user or the end user’s payment of the worker by the agency; that the question was to be decided in accordance with common law principles of implied contract and, in some very extreme cases, by exposing sham arrangements; and that, on the facts found by the Tribunal, the provision of work by the council, its payment to the agency and the performance of work by the claimant was fully explained by the express contracts each entered into with the Employment Agency, and it was unnecessary to imply the existence of a third contract.”
In Diageo Global Supply v Rooney [2004] E.L.R. 133, the claimant was a nurse working part time at the occupational health department at the Guinness Brewery and worked under its direction. Her wages were paid through a recruitment agency. She claimed that she was being treated less favourably in respect of her conditions of employment than a comparable full time employee.
On the basis of the Henry Denny decision, the Labour Court found that she was an employee.
5. Submissions on behalf of the defendant
The defendant’s case is that the plaintiffs are all employees of Don Bosco House, with whom they have contracts of employment and who make all relevant statutory deductions from their pay. They never had a contract of employment with the HSE.
The project established between the HSE and Don Bosco House was for the purpose of providing a relief staffing service where approximately 75 relief social care workers were employed by Don Bosco House on a panel.
The HSE accepted that since the introduction of a moratorium on recruitment into the public service in 2008, a number of social care workers employed by Don Bosco had been employed full time in HSE child care residential units. It was accepted that the seven plaintiffs in the proceedings had provided a continuous as opposed to a relief service in recent years.
The affidavit of Pat Dunne sworn on February 21, 2012, referred to the plaintiffs’ being part of the panel of 75 social workers who were the subject of a redundancy package.
In December 2010, Don Bosco House advised the HSE of their intention to withdraw from the agreement regarding the provision of relief social care workers staff. A conciliation conference at the Labour Relations Commission negotiated a redundancy programme for all of the 75 members of that panel. Those negotiations took place between the HSE, Don Bosco House and Impact trade union on behalf of the social care workers. The proposed redundancy package was recommended by the IMPACT union.
The plaintiffs were served with RP50 Forms in respect of their redundancy *325 on February 16, 2012, and notice of termination of their employment by Don Bosco House on March 16, 2012.
The HSE says that any challenge to redundancy is a matter for determination of the Employment Appeals Tribunal in the course of proceedings initiated under either the Unfair Dismissals Acts or the Redundancy Payments Acts. The High Court did not have jurisdiction to determine matters sought to be litigated by the plaintiffs and it was not appropriate and was against the general principles governing the grant of interlocutory injunctions to claim the reliefs in the notice of motion of February 3, 2012.
In order to do so they needed to show at least that they had a strong case that was likely to succeed at the hearing of the action (Maha Lingham v Health Service Executive [2006] E.L.R. 137 and Bergin v Galway Clinic Doughiska Limited [2008] 2 LR. 205)
The defendants rely on Parsons v Iarnród Éireann [1997] 2 I.R. 523 and Orr v Zomax [2004] 1 I.R. 486, where both Barrington J. and Carroll J. distinguished between a claim for unfair dismissal and the common law claim for wrongful dismissal being mutually exclusive and that it was not open to the plaintiff to argue that the principles applicable under the statutory scheme should be imported into the common law.
The HSE relied, in particular on Nolan v Emo Oil Services Limited [2009] IEHC 15 where the plaintiff had sought, inter alia, an interlocutory injunction restraining the defendant from giving effect to his purported dismissal by reason of redundancy. Laffoy J. refused the reliefs sought on the basis that the redundancy dispute could only be pursued by a claim under the Unfair Dismissals Act. It was held:
“The Oireachtas in enacting the Unfair Dismissal Acts 1977 to 2008 and in introducing the concept of unfair dismissal provided for specific remedies for unfair dismissal and specific procedures for obtaining such remedies in specific forums, before a Rights Commissioner or the Employment Appeals Tribunal. For the courts to expand its common law jurisdiction in parallel to the statutory code in relation to unfair dismissal and redundancy would, to adopt Lord Nicholls’s terminology, end up supplanting part of the code.”
The HSE submitted that the plaintiffs’ claim is, in essence, a claim of unfair dismissal challenging the proposed redundancies. It submitted that the High Court does not have the jurisdiction to determine such a dispute at first instance and it is not open to the plaintiffs to attempt to bypass the statutory route by seeking the reliefs claimed.
The plaintiffs, as applicants, submitted that reliefs claimed by them were distinguishable from Emo Oil . In the present case the HSE had not recognised that the plaintiffs were its employees. The applicants submitted that this was a breach of contract and a breach of the implied term of mutual trust and confidence *326 between an employer and the employee.
6. Decision of the court
The notice of motion seeks interlocutory relief in relation to the employment status of each of the plaintiffs with the defendant (at paras 1, 2, 3, 4, and 6). The fifth relief sought is a declaration that the redundancy under which the plaintiffs are being dismissed is not a legitimate redundancy and is illegal and contrary to the laws of the State and should not be construed as a redundancy. It is a matter which may have to be directed to Don Bosco House as the party who issued the notices of redundancy and is, in any event, a matter for the Employment Appeals Tribunal.
The issue of the employment status of the plaintiffs is ultimately a matter for the plenary hearing with regard to the tests laid down by the decisions in Henry Denny & Sons (Ireland) v the Minister for Social Welfare in relation to the particular facts and circumstances of the provision of the plaintiffs’ services.
Moreover, the court following the authority of Autoclenz Ltd v Belcher is of the view that the written documentation in this case may not reflect the reality of the relationship between the parties.
The defendants accept that the plaintiffs are not relief workers though they insist that they are employed by Don Bosco House and not by the HSE.
The court is also satisfied that the overall effect of the triangular relationship between the agency of Don Bosco in supplying the plaintiffs’ work with the HSE, should not focus so intently on the express terms of the written contracts between the executive and provider and that the decision of Mummery J. in Dacas v Brook Street Bureau is relevant.
The court has considered the earlier decision of Barron J. in Minister for Labour v PMPA Insurance Group regarding the temporary typist supplied by a bureau and the case of James v Greenwich London Borough Council and distinguishes them on the facts of those cases. The temporary worker in the first case and a worker who had ceased working and had moved to another agency to be paid a better hourly rate does not accord with the position of the applicants in the present case and have no relevance to the case that the plaintiffs wish to make.
The court is of the view that the test of proving an irreducible minimum of mutuality of obligation necessary to create a contract of service is a refinement of the control test. The plaintiffs’ averments of fact other than the issue of their formal contract have not been controverted by the defendants.
Those uncontroverted averments were as follows:
1. The plaintiffs worked exclusively for the HSE under similar conditions to equivalent workers in the HSE.
2. They were introduced to the agency. *327
3. Having been interviewed by the HSE and not the agency.
4. Don Bosco was headed by a HSE manager on secondment.
5. Contracts of employment indicated that employees would be working for HSE.
6. There was no break in the employment.
7. The HSE position was offered and accepted in the case of Claire Norton, Teresa Ryan and Jenny Moore.
8. All the plaintiffs liaised directly with Liam Conway, the HSE manager, to whom they reported.
9. As HSE manager he dealt with discipline, hours worked, caseloads and administration holidays, sick leave and training. Any directions in any form were not taken from anyone outside the HSE in relation to the work schedule.
10. Payments were made into the Public Service HSE Pension Fund, and were deducted from payments due.
11. Pay cuts, as applied to the public service workers in 2009, were made to their salaries.
12. The tasks were performed and supervised by the HSE as outlined in para.17 of the affidavit of Claire Norton and Fr Hennessey of Don Bosco said in writing that the plaintiffs were HSE employees and not employees of Don Bosco.
7. Temporary workers’ directive
While no relief was sought in the notice of motion in relation to the Temporary Workers’ Directive, the applicants argued that it has application. Counsel on behalf of the respondent also made submissions in relation thereto.
Article 6 of the Directive 2008/104 of November 19, 2008 on temporary agency work came into effect in Ireland on December 5, 2011. A notice published by the Department of Jobs, Enterprise and Innovation stated that legislation transposing the Directive was being finalised and that a Bill would be published shortly to give legislative effect to the Directive.
Article 6 deals with access to employment, collective facilities and vocational training and art.6(1) is of relevance:
“l. Temporary agency workers shall be informed of any vacant posts in the user undertaking to give them the same opportunity as other workers in that undertaking to find permanent employment. Such information may be provided by a general announcement in a suitable place in the undertaking for which, and under whose supervision, temporary agency workers are engaged.
2. Member States shall take any action required to ensure that any clauses prohibiting or having the effect of preventing the conclusion of a contract of employment or an employment relationship between the user undertaking and the temporary agency worker after his assignment are null and void or may be declared null and void. *328
This paragraph is without prejudice to provisions under which temporary agencies receive a reasonable level of recompense for services rendered to user undertakings for the assignment, recruitment and training of temporary agency workers.”
The published notice by the Department advises hirers and employment agencies to make appropriate arrangements to ensure that equal treatment is put in place from December 5, 2011 for all temporary agency workers, including those assigned on or after that date.
While the notice would appear to refer to conditions of work, Article 6(1) refers specifically to the same opportunity as other workers to find permanent employment.
It would appear that this State regards the Directive as having direct effect.
It would seem to follow that the applicants in this case, even though such relief is not claimed in the notice of motion, are entitled to the same opportunity as other workers to compete for the positions that are being rationalised and advertised to equivalent workers in the HSE.
In revision to the other reliefs sought, the court notes that the reliefs other than the relief at para.5 relating to redundancy presupposes the determination of the plaintiffs’ employment with the defendant. Having found that the applicants have made out a strong case in relation to their employment with the respondent, the court is of the view that they are entitled to an interlocutory injunction restraining the defendant, its servants or agents or anyone whomsoever from terminating the plaintiffs’ purported employment with the defendant.
The court also considers that an order in terms of para.4 should be granted in a different form and will, accordingly, make an order that the defendant, its servants or agents advertise the posts which are being re-organised within the HSE so as to allow the plaintiffs the same opportunity as other workers to compete.
8. Reliefs
The court has already referred to the reliefs sought in the notice of motion and notes that the interlocutory relief in the main begs the question of the employment status of the applicants. The court is of the view that the fact of redundancy notices served on the plaintiffs by Don Bosco House does not determine the issue of employment.
Having regard to the findings of fact and the view of the court that the plaintiffs have established, on balance, a strong case in relation to their employment status, the court at interlocutory stage, will grant relief in terms of para.I of the notice of motion.
The court is of the view that notwithstanding that no claim is made in relation to Directive 2008/104 of November 19, 2008, given that the matter was raised by the applicants and replied to by the respondents, it will consider an application to amend the pleadings and consider granting relief pursuant to art.6(1) allowing *329 the applicants to apply for the vacancies arising from the reorganisation of the posts advertised to the equivalent workers of the HSE.