Kirwan v Technical Engineering and Electrical Union

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 14 January 2005
• Neutral Citation: [2005] IEHC 5
• Docket Number: [No. 1868 P/1998]
• Court: High Court
• Date: 14 January 2005

[2005] IEHC 5

THE HIGH COURT

[No. 1868 P/1998]

KIRWAN v TECHNICAL ENGINEERING & ELECTRICAL UNION

BETWEEN/

PHILIP KIRWAN

PLAINTIFF

AND

TECHNICAL ENGINEERING AND ELECTRICAL UNION

DEFENDANT

EMPLOYMENT

employment contract

Contract of service - Test to be applied in determining whether contract of service or contract for service - Whether plaintiff employed pursuant to contact of service - Rogers v Booth [1937] 2 All ER 751; Davies v Presbyterian Church of Wales [1986] ICR 280; Birmingham Mosque Trust Ltd v Alavi [1992] ICR 435; South East Sheffield Citizens' Advice Bureau v Grayson [2004] ICR 1138; Amalgamated Engineering Union v Minister of Pensions [1963] 1 WLR 441 considered - Declaration that contract of service granted (1998/1868P - Laffoy - 14/1/2005) [2005] IEHC 5

KIRWAN v TECHNICAL ENGINEERING & ELECTRICAL UNION

the plaintiff performed tasks for the defendant as a delegate representing trade union members for which he received a quarterly salary along with other hourly rates and travelling and subsistence expenses. He had previously received a decision from the Department of Social Welfare that he was insurable under the Social Welfare Acts for all benefits received from the defendant as there was a contract of serviced present. Following a decision by the defendant in 1998, the plaintiff became aware that he would not be paid for acting as a delegate thenceforth. He adopted the stance that he was discharging executive functions as a full-time employee and sought a declaration from the High Court that he was and continued to be employed by the defendant pursuant to a contract of service.

Held by Laffoy J in declaring that the plaintiff was and continued to be employed by the defendant pursuant to a contract of service that the work the plaintiff performed for the defendant and the manner in which he was remunerated for it was governed by arrangements outside the defendant’s rules. The reality was that those arrangements were contractual in nature taking account of the fact that: the plaintiff performed work for the defendant and in return received remuneration which was measured exclusively by the work actually performed; he worked in and from the defendant’s offices and used its equipment.

Reporter: P.C.

Miss Justice Laffoy

1 At the hearing of these proceedings, which were initiated by a plenary summons which issued on 11th February, 1998, the only relief sought by the plaintiff was a declaration that he is and continues to be employed by the defendant pursuant to a contract of service.

2 The defendant is a registered trade union within the meaning of the Trade Union Act, 1871 which was formed on the amalgamation in 1991 of two unions: the National Engineering and Electrical Trade Union (NEETU) and the Electrical Trade Union. Prior to the amalgamation, the plaintiff was the branch secretary of the Drogheda branch of NEETU. He was first elected to that position in 1981. Following the amalgamation, he was elected branch secretary of the Drogheda branch of the defendant (the Branch) and he continues to hold that position. The Branch is one of the largest branches of the defendant, comprising about 1,400 members.

3 From 1966 until 1982 the plaintiff was a full-time employee of Irish Cement Limited in Drogheda. In 1982 he availed of voluntary redundancy. Thereafter he continued to be the branch secretary of the Drogheda Branch of NEETU. He was frequently appointed the delegate by the Branch in connection with the functions of the Branch and, in that capacity, he represented and negotiated on behalf of members of the Branch in relation to various industrial relations issues at various levels û in the workplace, before a Rights Commissioner, and before the Labour Court and such like. For this work he received remuneration on the basis of an hourly rate and he also received travelling and subsistence expenses. Initially the hourly rate reflected the rate he was paid while employed by Irish Cement Limited. Later he received the hourly local craft rate recognised by the Construction Industry Federation. Because he was available and because he was good at the work, he was, in effect, the permanent delegate of the Branch from 1983 onwards.

4 After the plaintiff's employment with Irish Cement Limited terminated, from mid-1983 until 1985 or 1986 he was in receipt of disability benefit from the Department of Social Welfare. The plaintiff's evidence was that the then Financial General Secretary of NEETU raised the matter with the Department of Social Welfare and the Department found that the plaintiff was working for NEETU, whereupon his entitlement to disability benefit ceased and his only source of income was the remuneration he received from NEETU. The documentary record held by the defendant is not consistent with the plaintiff's evidence in this regard. The defendant put before the court a decision of a deciding officer under s. 111 of the Social Welfare Consolidation Act,1981 on the issue as to whether the plaintiff was in insurable employment under the Social Welfare Acts from 20th December, 1981 onwards. The deciding officer decided on 17th February, 1986 that he was not. The deciding officer gave the following reasons for his decision:

"Mr. Kirwan was elected to the Office of Branch Secretary of the NEETU in accordance with the Union's Rules and was re-elected to the Office by an AGM each year. The payments he receives in respect of his services as Branch Secretary are by way of allowances and expenses as provided under Rule 12 of the Union Rules. Rule 12.2 states that “idle members shall be paid for lost-time plus expenses for delegation during working hours”. Mr. Kirwan, as Branch Secretary, may be suspended or expelled from office by the Regional Executive Council under Rule 11 for conduct prejudicial to the interests of the Union.

I consider that as an elected Officer of the Union Mr. Kirwan is not employed under contract of service by the Union. I am holding therefore that he is not insurably employed while carrying out the clerical/negotiation activities of a Branch Secretary of the NEETU during the period from July, 1983 and I decide accordingly."

5 Under the rules of the defendant adopted on the amalgamation (the Rules) there is provision for the election of branch officers, including the branch secretary, by the Committee of a branch. Officers are elected for a two-year period and are eligible for re-election. The duties of the branch secretary are set out in detail in the Rules. It is provided that, where the position is part-time, the branch secretary shall have a quarterly salary payable as directed by the National Executive Council (NEC) of the defendant. Since the amalgamation the plaintiff has been in receipt of such a quarterly salary, the quantum of which is based on a scale which reflects the number of members of the Branch.

6 The Rules also provide for the appointment of delegates. Rule 178 deals with the appointment of members of the Union to act as delegates by the NEC. Rule 179 provides that any branch shall have power to appoint delegates for any purpose of the business of the branch, subject to the Rules. Remuneration of delegates is dealt with in Rule 180 which provides as follows:

"When any member is delegated to the Union's business he/she shall be paid as follows:"

(a) For all time lost from his/her work.

(b) A delegation fee.

(c) Where necessary to stay away from home overnight, an overnight allowance for each night.

(d) In addition, members are entitled to subsistence, travelling expenses.

(e) Where suitable public transport is not available and where the use of a member's car has been sanctioned by a Branch or the EMC [the Executive Management Committee], a mileage allowance shall be paid.

…

7 The amounts of the above fees, allowances and travelling time shall be as laid down by the NEC from time to time."

8 In early 1995, at a time when the plaintiff was under medical care and was unable to function on behalf of the defendant, the Branch raised with the General Secretary of the defendant the issue of the plaintiff's non-eligibility for social welfare benefits of any kind and indicated that it was most anxious that the General Secretary would take whatever actions were necessary to rectify the situation. At the end of April, 1995 the Branch was furnished with a document from the General Secretary and Treasurer of the defendant entitled "Administrative Information and Guidance for the attention of all Branch Committees" (the 1995 Document). This document dealt with the then established position in relation to PRSI contributions and income tax payments in connection with payments to branch officers, delegates and shop stewards. It discloses that the defendant had entered into a special collective agreement with the Inspector of Taxes whereby PAYE at the rate of 30% would be deducted from all payments made by the defendant, which would include the PRSI contribution Class K deduction in respect of health contributions at the rate of 2.25%. The document also set out the changes to the Terms of Amalgamation consequent on the agreement. In relation to payments to delegates it was expressly provided that, in the event that the delegation included a member who happened to be unemployed, that member was entitled to be paid lost-time during normal working hours at the minimum basic union rate applying within his or her relevant industry, but that the payment should be fully processed for PAYE. As I understand it, lost-time in this context was notional and the entitlement was that the unemployed member would be paid at the relevant rate for the time during which he was engaged on the defendant's business.

9 Although the plaintiff may have thought otherwise at the time, the fact that under the new arrangements he would be paid by...