ADJ-00037806 - Workplace Relations Commission Michelle Collins v Tile & Wood Factory Outlet (Limerick) Limited

• Jurisdiction: Ireland
• Judgment Date: 03 May 2023
• Court: Workplace Relations Commission
• Docket Number: ADJ-00037806
• Date: 03 May 2023
• Respondent: Tile & Wood Factory Outlet (Limerick) Limited

Procedure:

In accordance with Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and S.I. 359 of 2020, which designates the WRC as a body empowered to hold remote hearings.

At the hearing the parties were advised that, in accordance with the Workplace Relations (Miscellaneous Provisions) Act 2021, hearings before the Workplace Relations Commission are now held in public and, in most cases, decisions are no longer anonymised. The parties are named in the heading of the decision. For ease of reference, the generic terms of Complainant and Respondent are used throughout the text.

The parties were also advised that the Workplace Relations (Miscellaneous Provisions) Act 2021 grants Adjudication Officers the power to administer an oath or affirmation. All participants who gave evidence were sworn in. Both parties were offered, and availed of, the opportunity to cross-examine the evidence.

Background:

The Complainant commenced her employment with the Respondent on 1 May 2017. Her employment terminated on 22 October 2021. The Complainant referred her complaint to the Director General of the WRC on 15 March 2022 alleging that she was unfairly dismissed.

Summary of Respondent’s Case:

The Respondent raised a preliminary matter of the Complainant’s employment status. The Respondent asserted that the Complainant was a director and not an employee of the Respondent. The Respondent submits that that company directors, such as the Complainant, should be treated as office holders, on the basis that a company director holds that position as an office holder under the constitution of the company and has duties to the company under the Companies Act 2014 and pursuant to company law generally. The fact that someone can claim to be a director of a company does not entail or imply that that person is also an “employee” by virtue of that position. It is perfectly possible to act as a director of a company and have no rights under employment law. Equally however, the positions of “director” and “employee” are not mutually exclusive, and it is also possible that a director of a company may enter into a contract of employment, the effect of which would be to entitle that individual to the protections of employment law. If an individual is a director solely, he or she can be removed from the board by an ordinary resolution passed by the members of the company, pursuant to the provisions of Section 146 Companies Act 2014, as happened in the case of the Complainant. In this instance, as noted above, the Complainant was afforded notice of the resolution and was invited by letter of the 19 August 2021 to put in representations on the resolution. The Complainant chose not to put in a representation. By letter of the 19 October 2021 the Complainant was advised that the resolution had passed and the Complainant had accordingly ceased to be a member of the Respondent company. The position under company law was that the Complainant’s position as director of the Respondent had been validly determined and there has been no correspondence from the Complainant taking issue with that position. To obtain a remedy under the Unfair Dismissals Act 1977, as amended, the Complainant must establish that, in addition to her position as a director, she also held the position of “employee”. That is a question of fact. The nature of the Complainant’s employment is not clear from the complaint form lodged with the Workplace Relations Commission. In terms of position held, the complaint form simply states, “Director & Employee”. In fact, the Complainant took issue at an earlier juncture when the Respondent sought to deal with a number of allegations of misconduct on the basis of the company’s honesty policy and disciplinary procedures, which applied to employees of the Respondent. The Complainant disputed the authority of the Respondent and the other co-directors to enter into a disciplinary investigation. By letter of the 1 July 2021, she sought, amongst other things; “Full details in relation to the authority you have to roll out a disciplinary investigation in relation to me in circumstances where we are Co. Directors”. The Complainant also sought; “A copy of my Contract of Employment and Job Specification.” The Complainant knew no such documents existed. This refusal to engage with the disciplinary investigation process was significant in circumstances where serious issues involving the misappropriation of company monies had been raised, but the Complainant declined to address the point of substance and declined the invitation to respond to the allegations. The position of the Complainant is relevant in that the Complainant put in dispute her status as an employee and emphasised her position solely as a director of the company, but now suggests that she was an employee after all, without divulging to the WRC what the Complainant contends she was employed to do. The Complainant does not have, and never has had, a written Contract of Employment. There was no agreement between the parties as to duties to be carried out by the Complainant and there was no “Job Specification”, as the Complainant refers to it. The relationship between the Complainant and the Respondent lacked what has been referred to as the “mutuality of obligation” which is the characteristic feature of a contract of service. This essential requirement of the employment relationship was recently re-visited in the Court of Appeal decision of Karshan (Midlands) Limited trading as Domino’s Pizza V. The Revenue Commissioners (2022) IECA 124. This was described by Mr. Justice Haughton as the sine qua non of the employment relationship, in the following terms, quoting from the judgment of Edwards J. in Minister for Agriculture V. Barry (2009) 1 IR 215 (at 230): “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 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….”. The position in this instance was that the Complainant was the wife of the co-director and single member of the company. There were no set duties assigned to the Complainant and whilst the Complainant helped in the business, she was not subjected to supervision or minimum work hours. An examination of the Complainant’s payslips furnished by the Complainant demonstrates that, whilst the payslips make provision for hours to be recorded, the hours section for the Complainant always shows up as “0”. There was an established roster for employees of the Respondent which recorded hours worked by employees of the Respondent. The Complainant was never assigned hours and was never rostered as an employee to work certain hours, which would have been the case if the Complainant and the Respondent had understood the relationship subsisting between them to be one of a contract of service. The Complainant was not part of any reporting structure within the Respondent company and would engage in various tasks as agreed with her husband and co-director. In that context, the Complainant might work on the shop floor on a given day but would also carry out activities consistent with the role of director and officer of the Respondent, including making lodgements at the bank for the Respondent or preparing books and receipts for the company accountant. For that, the Complainant received a static director’s salary, on which she paid S class PRSI contributions only, not the A class contributions applicable to employees. The Complainant took time off away from the business either at the same time as her husband and co-director or through discussion and arrangement with her co-director. The Complainant was not restricted to taking statutory holidays or annual leave pursuant to the provisions of the Organisation of Working Time Act 1997. Previously, the Complainant had taken issue with the Respondent’s attempt to treat her as an employee by reference to the Respondent’s Honesty Policy and disciplinary procedures as contained in the Respondent’s staff handbook and had declined to participate in a disciplinary investigation process. The Complainant now seeks to resile from that position and claim that she was an employee of the Respondent after all, without identifying what her employment was. It is submitted that there is no basis to be found in the Complainant’s arrangements with the Respondent, to support the inference that the Complainant was ever...