Electricity Supply Board v Minister for Social Community & Family Affairs and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Gilligan
• Judgment Date: 21 February 2006
• Neutral Citation: [2006] IEHC 59
• Docket Number: No. 113SP/2002
• Court: High Court
• Date: 21 February 2006

ELECTRICITY SUPPLY BOARD (ESB) v MIN FOR SOCIAL & FAMILY AFFAIRS & ORS

IN THE MATTER OF THE SOCIAL WELFARE (CONSOLIDATION) ACT 1993 ELECTRICITY SUPPLY BOARD

APPLICANT

AND

THE MINISTER FOR SOCIAL COMMUNITY AND FAMILY AFFAIRS, EAMONN SHERIDAN, HELEN KIELY, BRENDAN JOYCE, FRANCIS SLATTERY, JOHN MCALEER AND AIDAN BRADY

RESPONDENTS

[2006] IEHC 59

No. 113SP/2002

No. 187SP/2002

THE HIGH COURT

EMPLOYMENT Contract Status - Employee or independent contractor - Contract for services or contract of service - Electricity meter readers - Entrepreneur test - Control test - Importance of written contract - Whether significant changes in nature of employment since previous assessment - Whether able to use substitutes - Whether control exercised - Whether employee able to increase profits - Whether evidence to support conclusions of appeals officer - Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare [1998] 1 IR 34; Castleisland Cattle Breeding v Minister for Social Welfare [2004] IESC 40, [2004] 4 IR 150; Ready Mix Concrete Ltd v Minister of Pensions [1968] 2 QB 497 and Narich Property Ltd v Commissioner of Payroll Tax [1984] ICR 286 considered - Social Welfare (Consolidation) Act 1993 (No 27), ss 263 and 271 - Appeal dismissed: employees retained under contracts of service (2002/113 & 187Sp - Gilligan J - 21/2/2006) [2006] IEHC 59 Electricity Supply Board v Minister for Social, Community and Family Affairs

WORDS AND PHRASES "Contract of service" "Contract for services" - "Employee" - "Independent contractor" - Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare [1998] 1 IR 34 and Castleisland Cattle Breeding v Minister for Social Welfare [2004] IESC 40; [2004] 4 IR 150 followed - Social Welfare (Consolidation) Act 1993 (No 27), ss 263 and 271 - Appeal dismissed: employees retained under contracts of service (2002/113 & 187Sp - Gilligan J - 21/2/2006) [2006] IEHC 59 Electricity Supply Board v Minister for Social, Community and Family Affairs

The Appeals officer of the First Named respondent classified six contract meter readers as engaged in a contract of service rather than a contract for services. An appeal on a point of law was made to the High Court pursuant to s. 271 Social Welfare (Consolidation) Act 1993.

Held by Gilligan J. that the appeal was concerned with a point of law only and that inferences of fact could not be disturbed in the absence of unreasonableness. The appeals officer was entitled to look beyond the contract of employment. Factors to determine which form of contract was provided for included who provided the premises and whether the profit derived was dependent on the efficiency of the person concerned. The Appeals Officer was entitled to draw the inference that there was a change in the level of control exercised by the ESB over the individual meter readers which entitled her to come to a conclusion that a contract of service arose.

Reporter: E.F.

SOCIAL WELFARE (CONSOLIDATION) ACT 1993 S271

SOCIAL WELFARE (CONSOLIDATION) ACT 1993 S263

HENRY DENNY & SONS (IRL) LTD v MIN FOR SOCIAL WELFARE 1998 1 IR 34

DEELY v INFORMATION CMSR 2001 3 IR 439

BRIDES v MIN AGRICULTURE 1998 4 IR 250

CASTLEISLAND CATTLE BREEDING SOCIETY v MIN FOR SOCIAL & FAMILY AFFAIRS 2004 4 IR 150

MARA (INSPECTOR OF TAXES) v HUMMINGBIRD LTD 1982 ILRM 421

RYANAIR LTD v LABOUR COURT UNREP HANNA 14.10.2005 2005/53/11132

NARICH PROPERTY LTD v COMMISSIONERS OF PAYROLL TAX 1984 ICR 286

EXPRESS & ECHO PUBLICATIONS LTD v TANTON 1999 IRLR 367

READYMIX CONCRETE v MIN OF PENSIONS 1968 2 QB 497O

COINDEALBHAIN v MOONEY 1990 1 IR 422

TIERNEY v AN POST 2000 1 IR 536 2000 2 ILRM 214 1999 ELR 293

Mr. Justice Gilligan

1 The appeal of the ESB is on a point of law against the decision of the Appeals Officer of the first named respondent to classify six contract meter readers as being engaged under a contract of service rather than a contract for services for the purposes of social welfare contributions. The appeal is brought pursuant to section 271 of the Social Welfare (Consolidation) Act,1993. The summonses were issued by way of appeal against the decisions of the Appeals Officer of 23rd January, 2002, and the Chief Appeals Officer of the 15th April, 2002. By Order of this Court on the 15th November, 2004, [Kelly J.] the proceedings were consolidated.

2 The ESB engages the services on a contractor basis of approximately 300 persons who are engaged in the task of reading electricity meters. This practice has been ongoing since in or about 1955. The contract meter reader is paid a fee at a rate agreed between the ESB and the meter reader in respect of the number of customer visits completed by the contract meter reader. A higher fee has been agreed for such meter readings in rural areas as against urban areas. The ESB also engages under contracts of employment, employees described as "Network Technicians" and as part of their duties and functions, such employees carry outinter alia meter reading work. It is accepted that they are employed under a contract of service.

3 The status for social welfare purposes of the contract meter readers has been the subject of adjudication by Appeals Officers of the Department of Social Community and Family Affairs on six occasions since 1955. All of these decisions confirmed their status as engaged under a contract for services. In August, 2000, six contract meter readers (the second to seventh named respondents herein) referred the matter of their classification for social welfare insurability purposes to the first named respondent for a decision. A report was prepared by a social welfare inspector of the first named respondent and forwarded to a Deciding Officer. The Deciding Officer on the 15th November, 2000, issued a decision confirming that the six contract meter readers were engaged under a contract for services and not a contract of service.

4 The decision of the Deciding Officer was appealed by the six contract meter readers to an Appeals Officer of the first named respondent. An appeal hearing was held before the Appeals Officer on 9th August, 2001. The Appeals Officer reversed the decision of the Deciding Officer in all six cases and found that for the purposes of social welfare insurability, the six contract meter readers were engaged under a contract of service.

5 By letter of 13th February, 2002, the ESB sought a revision of the decision of the Appeals Officer by the Chief Appeals Officer (CAO) pursuant to section 263 Social Welfare (Consolidation) Act,1993. By letter of 15th April, 2002, the ESB was notified of the decision of the CAO refusing to revise, and, affirming the decision of the Appeals Officer.

6 The matter of the status of personnel engaged by the ESB as contract meter readers has been the subject of numerous decisions by Appeals Officers of the first named respondent over the years. There are six such decisions of Appeals Officers which confirm the status of meter readers as being engaged under a contract for services. These comprise two decisions in 1955, a decision in 1968, two further decisions in 1976 and a decision in 1994. These decisions have been accepted and relied upon by the ESB and the contractors (save these six in 2000) and the position adopted for over 50 years has been upheld by all decisions of Appeals Officers and the Deciding Officer in these six cases. One of those decisions which confirms the status of contract meter readers as being engaged under a contract for services is a decision in 1994 concerning the status for social welfare insurance purposes of Eamonn Sheridan, the second named respondent in the proceedings herein.

7 The six contract meter readers have been engaged by the ESB as meter readers for periods ranging respectively from 1966 (in respect of Eamonn Sheridan) through to 1998 (in respect of John McAleer). During the period of their engagement, the only reference made by any of these six contract meter readers regarding their status for social welfare insurance purposes was that made by Eamonn Sheridan which, as previously referred to herein, resulted in a decision of an Appeals Officer of the first named respondent in 1994 confirming his status as engaged under a contract for services. Since 1994, no other contract meter reader has referred the matter of their status to the first named respondent for a decision save for the present reference by the second to the seventh named respondents.

8 The appellant being the Electricity Supply Board seeks an order setting aside, reversing and/or quashing the decision of the Appeals Officer. The appellants also seek a declaration that the contract meter readers are insurable under Class S and are engaged under a contract for services.

9 The appellant claims that:

10 i i. The Appeals Officer erred in law in failing to have regard for the written terms of the contract between the parties.

11 ii ii. The Appeals Officer wrongly held that there were new facts or evidence which justified a revised decision on the insurability of the meter readers to those arising from previous appeals.

12 iii iii. The Appeals Officer erred in her analysis of the distinction between contract meter readers and the full time meter readers and also as to the significance to be attached to the introduction of hand held devices for the purposes of data logging. The Appeals Officer misconstrued the terms of the contracts in concluding that there is a requirement for the meter readers to provide personal service and in ignoring the express terms which permit the use by the contract meter readers of substitutes and subcontractors to undertake the work.

13 iv iv. The Appeals Officer applied the incorrect legal principles. In particular, the Appellants place particular emphasis on the Appeals Officer's consideration of the right to sub-contract...