Two Types of Employment

Two Types of Employment There are two categories of employment available to people: to be an employee or to be self-employed. These two types of employment are known as a ‘contract of service’ and a ‘contract for service’. Someone under a ‘contract of service’ refers to a person who is, for example a person working in a supermarket as a shop assistant is under a ‘contract of service’.

In contrast, someone under a ‘contract for service’ refers to a person who is self-employed (also known as an ‘independent contractor’), for example a plumber contracted by a supermarket to repair the supermarket’s sinks is under a ‘contract for service’. The distinction between a contract of service and a contract for service is very important as the distinction is not always obvious and sometimes the courts are required to conduct tests to determine which of the two categories a person falls under.

The reasons why the distinction between the two is so important include the fact that there are different levels of protection through employment legislation for each of the two, employers are much more liable for employees than for independent contractors, in the case of company liquidation employees are treated as preferential creditors whereas independent contractors are treated as unsecured debts, employers are responsible for the deduction of tax and social insurance of their employees but are not responsible for the deduction of tax and social insurance of independent contractors that they pay for a service.

Examples of How to Make the Distinction the Control Test Case: Ready Mixed Concrete (South East) Ltd –vs. – Minister of Pensions and National Insurance (1968) In this case the plaintiff, Ready Mixed Concrete, had stated in a contract between the company and lorry driver, Mr. Latimer, that he Mr. Latimer was an independent contractor. Mr. Latimer had been working as a yard batcher for the company from 1959 to 1963 before taking up a new role as a lorry driver. In order to take this position he was required to have his own lorry and so Mr. Latimer got his own lorry by hire-purchase.

The lorry was painted with the company’s colours and Mr. Latimer was required by the company to wear a uniform. He was paid per mile driven. The case had arose because the company had not been paying national insurance on Mr. Latimer’s behalf. The company specified that this was because he was self-employed but this was disputed by the ‘Minister of Pensions and National Insurance’ who deemed Mr. Latimer to be under a ‘contract of service’. The case was subsequently brought to the ‘Court of Appeal’ where Judge McKenna disagreed with the verdict of the minister.

Judge McKenna stated that in order to determine that a person was under a ‘contract of service’ three conditions were to be considered (conditions now known as the ‘Control Test’): whether or not the employer had an adequate degree of control over the work carried out by the employee, if the employer had control over the way the work was carried out and whether or not the employer had control over the suspension/dismissal of the employee. Judge McKenna concluded based on these conditions that Mr. Latimer was, in fact, an independent contractor and not an employee of Ready Mixed Concrete.

Case: Tierney –vs. – An Post (1996) The Enterprise test In this case the plaintiff, Tierney, had been in the position of postmaster for ‘An Post’ and when his contract was terminated by ‘An Post’ appealed the decision stating that the correct disciplinary procedures had not been followed. ‘An Post’ disputed this claiming the Tierney was an ‘independent contractor’ and not an employee of theirs. The contract between Tierney and ‘San Post’ stated that Tierney was not entitled to sick pay, annual leave, medical assistance, that the post-office was to be kept to a standard set out by ‘An Post’.

The ‘Economic Reality Test’ was decisive in the outcome of this case as the court found that Tierney bore the whole financial risk of the business and if the business succeeded he would gain any profits. Therefore the court found Tierney to be an independent contractor and under a ‘contract for service’. Jim’s Painting and Decorating Jim: Below is a suggested contract to suit the job requirements and to fulfil your legal obligations with regard under the ‘Terms of Employment Information Acts 1994-2001’. Contract of Employment Dear John Doe, Following your recent interview for the position of Assistant

Painter/Decorator for ‘Jim’s Painting and Decorating’ I would like to offer you the position on the following terms: Post: Assistant Painter/Decorator You will be employed at Jim’s Painting and Decorating, Douglas, Cork as an Assistant Painter and Decorator. Place of Work: Jim’s Painting and Decorating, Douglas, Cork Your normal place of work will be the above mentioned location, however you will be required to travel to customers to complete painting and decorating that they have requested. Commencement Date Your employment will commence on the 01/01/2014 and will terminate on 01/06/2014.

During this period both you and the company have the right to terminate your employment with one week’s notice in writing. Flexibility As an Assistant Painter/Decorator you will be required to work on any day of the week and at any time between 8am and 6pm. Your working week may change on a regular basis and you will be required to work whenever you are scheduled unless prior notice has been given. Salary/Wage Your salary/wage will be €10 per hour which will be paid weekly in arrears by means of credit transfer into your bank account. Holidays The company runs its holiday year from January 1st to December 31st.

Your holiday entitlement is 20 days per annum for full time staff or will be dependent on hours that have been worked and will be proportionally less for staff with less than 12 months service. Part time workers will receive holiday entitlements in accordance with current legislation. The company requests that all holidays are taken in the calendar year as holidays are not permitted to be carried forward. Hours of Duty Your normal working week will consist of variable hours from Sunday through to Saturday. Sundays and public holidays are paid in line with current legislation. All overtime must be approved by the owner/manager. Grievance

If at any time you have a grievance regarding your terms and conditions of employment we would ask that you refer to the grievance procedure which will be issued on your first day of work. Copies can be obtained at any time from the owner/manager. Uniform Uniforms and name badges are provided by the company. You are required to wear the uniform supplied at all times while at work. This includes any protective equipment supplied by the company. Medical Clearance The company reserves the right to have you examined at any time by a nominated medical practitioner in order to determine your fitness for work in general or specific duties.

In this respect you may be required to provide samples of blood and/or urine. Notice Periods You or the company may terminate your employment according to the Minimum Notice and Terms of Employment Act. Employees of the company for between 13 weeks and 2 years are required to give at least one week’s notice, while employees of between 2 years and 5 years are required to give at least 2 weeks’ notice. Employees of between 5 years and 10 years are required to give at least 4 weeks’ notice. Employees of between 10 and 15 years are required to give 6 weeks’ notice and employees of more than 15 years are must give 8 weeks’ notice.

Please indicate your acceptance of this contract by signing both copies. Unfair Dismissal Dear John, I am sorry to hear of your misfortune with being dismissed from your position as cinema usher. I hope my advice will prove useful to you and I believe it will as I feel you have a very strong case for appeal. You have a right to file for unfair dismissal as you have been working for the cinema for more than one year. If you have received a letter of dismissal this will prove that you were dismissed and if you were just dismissed verbally it is important to be sure the words used constituted dismissal and that the manager meant it.

There are many procedures that an employer must follow prior to the dismissal of an employee and it seems to me, from what you have already stated, that the management of the cinema did not follow correct procedures. Disciplinary procedures broadly state that prior to the dismissal of an employee working with the company the company must first give an employee a verbal warning, followed by a written warning, followed by a final warning.

Subsequently, the employer then has the right to suspend and/or dismiss the employee following these three warnings. I assume given that you have a good work record that you never received such warnings. The fact that the cinema management dismissed you having previously stated that: ‘any employee arriving late for work on the day of the match would be suspended and docked a day’s pay’ is contradictory to their statement and makes me wonder whether there was any other employees late on the day and, if so, what disciplinary measures were used.

If there were others disciplined for the same thing and not given the same measure then you were denied your right to equality under the ‘Equal Status Acts 2000-08’. You also stated that since you became a trade union representative that you had a few clashes with the management as a result, this would perhaps indicate discrimination and denial of your right to equality. In fact in a successful case of unfair dismissal in 1978 between Williams and Gleeson, the plaintiff was told to choose between the union and his job.

Such threats made to employees are absolutely illegal and against a worker’s rights as well as company policy. If you do decide to appeal you can initially bring your claim before the Right’s Commissioner and if you are not satisfied with the outcome you may appeal to the Employment Appeals Tribunal within six weeks although I cannot imagine a court ruling against you. Similarly if you felt the need to appeal after the Employment Appeals Tribunal you may appeal it further to the Circuit Court and from there up to the High Court and the Supreme Court, if necessary.

If any of the abovementioned courts were satisfied that the dismissal was unfair they may grant reinstatement of the employee to the same position, re-engagement to a different position in the same company, or compensation of up to anywhere between four weeks and two years pay. I hope this information helps and if you have any more questions do not hesitate to contact me. You can find more information on employment law as well as your rights at www. citizensinformation. ie . Yours sincerely,