WRC ‘pierces corporate veil’ on worker status

A webinar on employment law has heard that the Workplace Relations Commission (WRC) has been “rigorous” in implementing the Supreme Court’s key Karshan judgment on employment status.

The event (24 June) was organised by Law Society Professional Training in collaboration with the Law Society’s Employment and Equality Law Committee.

As well as presentations on the latest employment-law trends, the webinar included a discussion of capacity issues currently facing the WRC and an outline of recent case-law developments.

Discussing employment status, Fieldfisher partner Barry Walsh told the webinar that Karshan had set out a five-step  test to determine whether a worker was an employee or an independent contractor and had led to the publication of a code of practice on the issue in October 2024.

Labels

Drawing lessons from recent case law, the Fieldfisher partner said that courts and the WRC were prepared to “consistently overlook” incorrect labels attached to  written agreements.

“Just because the parties enter into an agreement identifying the worker as an independent contractor, that's going to be of limited value if that label disregards the reality of the relationship between the parties,” he stated.

Citing the case of Paul Lingard v Randridge International Ltd (In Examinership), where an individual had provided services through a limited-liability company, he said that the WRC had looked at the day-to-day relationship between the parties, pierced the "corporate veil", and held it to be one of employment.

Walsh told the event that, in trying to determine employment status, the key was to examine the Karshan tests and the code of practice on a fact-specific basis, which typically involves getting into the “nitty-gritty” of the arrangements.

Rise in protected-disclosure complaints

In a presentation on protected disclosures, Emmet Whelan of Byrne Wallace Shields told the event that there had been a “big uplift” in such complaints to the WRC over the last couple of years, attributing this to increased awareness in the area after the legislation was amended in 2022.

He said that he believed that most of the 249% increase in whistleblower complaints recorded last year could be attributed to penalisation complaints, where a worker can take a complaint if they are caused some form of detriment as a result of making a protected disclosure.

Whelan added that complaints about unfair dismissal as a result of protected disclosures were also rising.

“Normally, for unfair dismissal, you would need to have one year of service, but if you can show that you were dismissed for having made a protected disclosure, then you have protection from day one,” he pointed out.

Interim-relief applications

The Byrne Wallace Shields partner also noted an increase in interim-relief applications under the Protected Disclosures Act to the Circuit Court, describing this as a “powerful right” for employees.

This normally occurs in cases where there may be a delay in hearing a complaint before the WRC and the employee needs immediate relief.

The Protected Disclosures (Amendment) Act 2022 extended the option for such relief to penalisation complaints, as well as unfair dismissal, Whelan pointed out.

He told the webinar that this relief had been considered by the High Court in a ruling last year in Breban v Catch Security Systems.

In this case, the court granted interim relief to a worker whose employment had been terminated after raising alleged fire-safety concerns, after the Circuit Court had refused relief.

‘Low bar’

Whelan noted several important points in the High Court judgment – including that a worker needed only to have a ‘reasonable belief’ that wrongdoing had occurred, rather than showing that wrongdoing had been committed.

The most important point, he stressed, was the test the court applied for relief to be granted, which was that the worker needed to show ‘substantial’ or ‘arguable’ grounds that he had been penalised, rather than the normal standard of proof applicable in employment claims.

That test involves a relatively low bar for an interim relief application and there may be an increase in interim-relief applications as a result of the publication of further decisions (such as Breban) and increased waiting times before the WRC.

‘Unnecessary burdens’

Pauline O’Hare (senior legal director, IBEC) gave the webinar the business group’s perspective on the transposition into Irish law of the EU’s Pay Transparency Directive.

The directive was due to be fully transposed into member states’ national laws by 7 June, but Ireland has missed this deadline, and the publication of the Pay Transparency Bill is awaited.

O’Hare told the event that the Government should not ‘gold-plate’ the directive nor impose unnecessary burdens on employers.

She referred to the European EIGE toolkit that had been published to help employers to put employees into categories determined by those who do the same work or work of equal value.

‘Voluntarist’ framework

She said that the Government would have to adapt this toolkit to Irish legislation and practice, adding that it must not go any further than the minimum requirements of the directive and must respect Ireland’s voluntarist industrial-relations framework, particularly on the “unprecedented” role of workers’ representatives.

O’Hare said that IBEC was awaiting the publication of the national toolkit, which was expected to be followed by workshops to help employers to carry out what she called the “onerous undertaking” of the categorisation of workers.

On completion of those workshops, IBEC has been lobbying for employers to then be given at least six months to carry out this categorisation exercise.

Salary levels

O’Hare added that IBEC did not want to see any legislation, beyond the pre-employment obligations, to be commenced before June 2027 “at the earliest”.

She told the event that the business group was also concerned that the pre-employment obligations proposed  in the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024, which require a disclosure of  salary levels or ranges in a job advertisement, went beyond the requirements of the EU directive.

O’Hare argued that this could be done, for example, ahead of an interview, as permitted by the directive, without advertising to the wider public “what are commercially sensitive pay rates within private companies”.