In a seminal decision last year of Revenue Commissioners V Karshan (Midlands) Ltd. the Supreme Court set out a new test which considered whether a person was an employee or a contractor. The reason this is significant is that if the person is considered to be an employee then they have the protection of employment law rights under the Unfair dismissal legislation. In the Karshan case the Supreme Court said that the test that needs to be considered is whether there was an exchange of money for work, the court had to have regard to the level of control which the alleged employer was entitled to exercise over the alleged employee and whether the purported employee was providing personal services or had the rights to engage a substitute.
In the McGranaghan case the WRC held that the relationship between Mr McGranaghan and his employer (MEPC Music) involved the weekly exchange of payment for services provided as well as the provision of his personal services as the band’s “resident fiddle player”. He could only replace himself with a substitute in exceptional circumstances. Further the WRC held that Mr McGranaghan had no flexibility with when he played with the band. It found that he had to wear a uniform, was told what to play and he took direction from the company.
In the circumstances the adjudicator ruled that Mr McGranaghan had to be an employee of the company which meant that he was entitled to make a decision on the various employment rights complaint which he had lodged.
It was found in his favour on the basis of unfair dismissal and also for which he was awarded €26,880. He was also awarded a further sum of €12,840 for breaches of the Working Time Act, the Terms of Employment (information) Act of 1994 and the Minimum Notice and Terms of Employment Act 1973. He was also awarded a further sum of €4,480 under the Payment of Wages Act 1997. In total he received compensation of €43,840.
The very clear message from the WRC is the case that if the tests set out by the Supreme Court can be proven then the WRC will have little difficulty in making a finding that the claimant is an employee.
In the event that you have any query to this or any related employment case please do not hesitate to contact Brendan Dillon or Donna Phelan at 01 296 0666.
