Labour Law (Intro)

  1. Briefly explain the various tests used by the courts to determine if a worker is an employee. What are the advantages and disadvantages of each? Does any particular test now predominate? Looking in detail at the various tests, is it possible to trace any unifying elements or theme? 

The Tests:

(i) Control: Not just control as to what is done but as to how it is to be done also. Walsh J said the fact that the master does not exercise the power of control is irrelevant (potential control)

  • ***Patrick Roche v Patrick Kelly

(ii) Integration: Whether the worker is an integral part of the business? If you are fully integrated, you are an employee.

  • If you are merely an accessory, then you are a self-employed person or independent contractor. – **Re Sunday Tribune & ***Whittaker v Minister for Pensions

(iii) Multifactoral/*Ready Mixed Concrete:

  •  They are an employee if:
    1. They work in return for pay.
    2. There is sufficient control by employer
    3. The other provisions are consistent with a contract of service.
      • E.g. investment or risk taken by worker.

(iv) Entrepreneurial: Is the worker in business on his or her own account?

  • ***Market Investigations v Minister for Social Security

(v) Mutuality of Obligation: Is the employer obliged to provide work and is the employee bound to do it?

  • **Nethermere v Gardiner – in a contract of service, you need an irreducible minimum of obligation on both sides.
  • ***Express & Echo Publications v Tanton – Here, there was an issue of whether there was a requirement of personal service.

(vi) Overall Picture: Is the overall picture one of employee and employer?

  • ***Lorimer – freelancer producting TV shows.

Evolution of the Tests:

  • Initially the control test (See Topic 10 -Tort Law) was dominant. This however is no longer determinative and merely a factor to be considered.For a while the “integration” (organizational) test was also fashionable. This test provided that if the work was considered ‘integral‘ to the employer’s business then the worker would be labeled as an employee. This however is difficult in many cases. 
    • What is the problem with the control test?
      • The courts kept requiring higher and higher levels of control. It became unrealistic.
      • The test became unsuited or outdated in the modern era as the modern employee is usually very highly skilled.
      • The usability of the test has declined. There are many situations where the control test is useful, but it is becoming less and less so. All we can say nowadays is that the higher the degree of control the employer has, the more likely that person is an employee. A lack of control is not fatal, but a higher degree is indicative of an employee based relationship.
  • The approach favoured now is a multifaceted one and is most aptly seen in the ‘entrepreneurial‘ test. 
    • It views the relationship holistically and is summarized as: “was the worker in business on his/her own account?” Arose in *US v Silk.
    • This approach was approved in England with **Ready Mix Concrete Ltd v Minister of Pensions.

So, what is the test?

  • It remains a vexed and complex one with some fundamental issues being whether the worker was in business on his/her own account, whether they used their own equipment, or whether he/she could profit from their own efficiency can prove crucial.
    • The factors taken into consideration in this regards are:
      1. Mutuality of Obligation
      2. Control
      3. Parties’ own description of the relationship; and
      4. Personal service
  • The most recent and leading case, authoritative on the matter is:
    • ****Henry Denny & Sons (Ireland) v Minister for Social Welfare [1998] 1 IR 34
      • Keane J: “Each case must be considered in light of its particular facts and of the general principles which the courts have developed.
        • It was seen in **Minister for Agriculture and Food v Barry that the approach by Keane J in Henry Denny was not intended to create a single overarching test, instead it was to aggregate the relevant tests to a specific factual matrix and resolve those. 
      • Facts
        • The appellants engaged in-store product demonstrators on yearly contracts. The demonstrators would be contacted when needed and invoices would be submitted and signed. They were paid by the day and given a mileage allowance but not nentitled to enter pension scheme or trade union. The demonstrator in question was under renewable contracts. The written contract described her as an independent contractor and carried out her own tax affairs. However, she was provided with written instructions as to how to carry out her work. She was supplied with the materials etc. and require consent prior to sub-contracting out any work.
        • Keane J noted that whether the individual was in business on his or her own account was fundamental as well as thedegree of control.
          • “The fact that there was no continuous supervision of the demonstrator by the appellants, that she was provided with the clothing/equipment necessary for the demonstration and made no contribution, financial or otherwise, to the business were all indicators that she was an employee.”
          • The contract in stating she was an independent contractor was considered but not found determinative.
          • Held: Employee and not independent contractor. 

Trends:

In this modernized world, not all working relationships are clearly defined. Increased competitiveness and greater work specialization has led to the creation of more flexible working relationships. The demarcation between employer or employee and independent contractor can and has become blurred in many senses.

No clear and unequivocal test has been developed yet and as a consequence it is difficult to identify a unifying theme through the case law.

  • Much would seem however to depend on the background policy considerations. In **Lane v Shire Roofing Company Ltd [1995] TLR 104 the Court of Appeal in England held that a worker who fell from a ladder while carrying out work for the defendant company was an employee, notwithstanding the fact that the claimant had his own business, dealt with his own tax affairs and did not work under the control or supervision of the defendant company.
    • Health and safety were the underlying policy considerations that were seen to be stronger than imposing liability, even when seemingly unfairly. There was a ‘real public interest’ according to the judge.
    • Although difficult, the aim is to “identify correctly those who should fall within the embrace of Employment Law and to exclude those who have sufficient economic independence to make it unnecessary to protect them.”
  • With the advent of the Henry Denny & Sons case, the sheer number of ‘tests’ that may be applied may be used to question the validity of the tests, in and of themselves. Nevertheless, one can argue that policy considerations are at the forefront of the resulting decisions in most cases. 

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