Anthony Fay Solicitor, Principal of Anthony Fay & Company*
Upgrading the Workplace: From Brick Phones to Modern Employment Laws.
A 1980s brick phone wouldn’t cut the mustard now in the high-octane environment of the corporate world. Contracts of employment are no different and need to keep pace with legislative changes, otherwise there could be severe consequences including fines, compensation awards, reputational damage, and even criminal sanctions. A prime example is The Transparent and Predictable Working Conditions Regulations, which recently transposed an EU directive into Irish law. This legislation places greater responsibilities on employers in terms of providing more detailed terms of employment to employees within five days of starting a job, imposes strict rules on probationary periods, and limits the restriction of parallel employment (i.e., having a second job).
This year is proving to be a seminal one with minimum-wage increases, a hard focus on bogus self-employment arrangements, and the right to request remote working. The courts, both domestically and in other jurisdictions, have also been a hive of activity. The Revenue Commissioners v. Karshan (Midlands) Ltd trading as Domino’s Pizza was a landmark Supreme Court decision in Ireland delivered last October. The court unanimously held that drivers working for Domino’s Pizza were employees (as opposed to independent contractors) for tax purposes. The Superior Court in this erudite judgment applied a filter test to determine whether there was a contract of employment in existence.
However, legal outcomes can be fact-specific. For example, a month later the UK Supreme Court, in the case of Independent Workers Union of Great Britain (IWGB) v. Central Arbitration Committee, unanimously held that riders for Deliveroo were not employees! The reasons included that the riders were free to reject offers of work, had a broad power to appoint a substitute rider, and could undertake work for competitors. This perennial issue of differentiating between a contract of services (i.e., an employee) and a contract for services (i.e., self-employed) will no doubt run.
The above case law will have wider ramifications beyond the gig economy for misclassified workers, which potentially could affect consultants, contractors, freelancers, platform workers, and service providers. By all accounts, 2023 was a busy year for HR departments, in-house counsel, employment lawyers, and tax advisers pouring over such contracts to determine, in particular, whether it was necessary to regularise matters. EU mandarins are further advancing the Platform Work Directive, which proposes to improve working conditions for platform workers.
Side letters also grabbed the public’s attention at the early stages of the RTÉ controversy (although likely related to a client-contractor scenario). An employer or client may sometimes furnish these letters by way of commitment or comfort to an employee or contractor respectively. A side letter should ideally be scrutinised as rigorously as an employment contract. For instance, would the provider be at ease that this side letter could be legally enforceable, for example, as a separate and/or collateral agreement? An employer could otherwise find themselves defending a breach of contract/quasi-contract claim before the courts.
An employer should also be prudent even in verbal communications. There is precedent, wherein the High Court held that a prospective employer owed a duty of care to avoid making a negligent representation or misstatement in the pre-contractual negotiation stages that had the effect of inducing a prospective employee to act to their detriment. The underlying message is don’t make empty promises.
The key takeaway is that employers need to be alert to the potential pitfalls of the ever-evolving employer-employee relationship. To piggyback on the dialogue of the 90s cult film Trainspotting, choose a written contract, choose an employee handbook, choose a social media policy, choose hybrid working…choose a tripartite agreement…choose a barter account…choose wisely!
*Former Winner Irish Law Awards – Sole Practitioner of the Year.
Web: www.anthonyfay.com
Phone: 01 836 9805
