Employment
“In light of the decision, it is recommended that any business which engages contractors, sub-contractors or other workers on a self-employed basis, review their current arrangements and consider what implications it may have for their business.”
SUPREME COURT REFORMULATION AND RESTATEMENT OF LAW IN DOMINO’S PIZZA CASE
The Supreme Court recently delivered a significant judgment in which it examined in detail the law in Ireland on the distinction between employees and self-employed persons, and reformulated and restated that law. Overturning the decision of the Court of Appeal, the Supreme Court in The Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza [2023] IESC 24 held that, on the facts of the case, pizza delivery drivers were properly categorised by Revenue as employees and not as independent contractors.
The decision provides a somewhat helpful clarification on factors that indicate an employment relationship.
The Court has highlighted as one of the limitations of the decision that the Taxes Consolidation Act 1997 does not require an element of continuity of service and, as such, the question of whether the drivers accrue continuity of service for the purposes of employment rights legislation (such as redundancy or unfair dismissal) is not answered by this decision of the Court.
This means that companies engaging workers in the gig economy on contracts for services may be liable for payment of pay related taxes and social contributions if those workers are found to satisfy the above test. However, where the test is met, it may be likely that the net is cast wider and several other workers are classified as employees. It remains to be seen how this decision will be applied in the context of employment rights’ claims where continuity of service is, by its very nature, an important element. This will have significant implications on employers both from a tax as well as employment law perspective.
Our briefing, available here, takes a detailed look at the Supreme Court’s decision.