Are pizza delivery workers employees or self-employed?
This is a question that the Irish High Court has addressed with a judgment in December 2019 in a case involving Domino’s Pizza delivery drivers.
It is an issue that has previously been addressed in the UK courts in cases involving Uber and Deliveroo delivery drivers. But this High Court case involving Karshan (Midlands) Limited (t/a Domino’s Pizza) v Revenue Commissioners [2019] IEHC 894 was the first time an Irish court had to decide the issue.
Background
The Revenue Commissioners had decided that the delivery drivers delivering pizza for the company trading as Domino’s Pizza were employees for tax purposes. The company insisted they were self-employed and therefore responsible for their own tax affairs and returns. The company trading as Domino’s Pizza appealed the decision of the Tax Appeal Commissioners to the High Court on a number of grounds, the most important of which was that the Revenue Commissioners had erred in law in applying some well-established principles to the case.
These principles are:
- Mutuality of obligation-that is, does the company have to provide work and does the delivery driver have to accept it? The company argued that the delivery drivers were not obliged to work, they could pick an choose their jobs, and therefore the necessary mutuality of obligation between the parties was absent.
- Substitution-normally, if you are allowed to substitute someone else to do your job or carry out duties you are not an employee, you are self employed
- Integration-were the delivery drivers integrated into the business? If they were then they were likely to be employees but the company argued that they were an “accessory” to the business, not integral
- Contractual terms-the company argued that the Revenue Commissioners did not place enough weight on the actual terms and conditions between the parties and placed too much emphasis on how the contract was actually operated
The High Court Findings
The High Court found that once the drivers filled out an availability sheet they then had an obligation to be available. Because of this the High Court held there was mutuality of obligation.
The High Court also found that the purported substitution clause only allowed the driver to nominate a replacement who would then be approved and paid by Dominos. This was not true substitution.
The Court, in looking at the question of integration into the business, found that the drivers were integral to and played a vital role in the business. It also noted the drivers were obliged to wear uniforms and take orders from Dominos, not the general public or end user.
When it looked at the contractual terms the High Court found that the Revenue Commissioners not made a mistake in looking at how the contract was actually performed, as opposed to the terms and conditions set out in the written contract.
For all of these reasons the High Court held that the delivery drivers were employees for tax purposes.
Takeaway (no pun intended)
One of the most important points to take from this case is the High Court’s observation that there is “no comprehensive statutory or common law definition” of who is self-employed and who is an employee. For this reason each case will be decided on its particular facts and circumstances.
It also noted there was no box ticking exercise that you could complete to answer the question; each case must be looked at and a close scrutiny of the relationships between the parties must be carried out to be sure of the position.
This has important implications for employers who need to be aware of the emphasis that will be placed on the actual relationship between the parties, and not just on what is contained in the written contract.
Read the full decision in Karshan (Midlands) Limited (t/a Dominos Pizza) v Revenue Commissioners [2019] IEHC 894