Who is an Employee? – The Gig Economy*

By February 12, 2020Employment Law

Who is an Employee? – The Gig Economy*

This issue arose in case ADJ00020358 involving a trainer and a training agency. The Trainer is a Doctor.

The Adjudication Officer pointed out the leading UK case of Market Investigations Limited –v- Minister of Social Security 1969 2QB173 where a number of tests were formulated;

  1. Does the person performing the services supply his / her own equipment?
  2. Can he/she hire his/her own helpers.
  3. Does he/she carry out any financial risk and to what extent?
  4. What opportunity do they have to make a profit.
  5. To what extent does he/she carry out the responsibility for investment / management?

The Adjudication Officer pointed out that the Revenue Commissioners in Ireland have outlined similar tests in their Code of Practice for determining employment or self-employment. The Adjudication Officer pointed out that these relate to whether the employee;

  1. Is under the control of another person who directs as to how, when and where the work is to be carried out.
  2. Supplies labour only.
  3. Receives a fixed wage.
  4. Cannot subcontract the work.
  5. Does not supply materials for the job.
  6. Does not provide equipment other than small tools of the trade.
  7. Is not exposed to personal financial risk in carrying out the work.
  8. Works set hours or a given number of hours.
  9. The Adjudication Officer in this case pointed out that in relation to the so called “gig economy” it is obvious from the Revenue Commissioner indicators that the employee met each of the criteria required for a contract of service.

The Adjudication Officer held that they did not accept that the payment of locum allowance, whatever the recipient chose to do with it effects or alters the substance of the employment relationship between the employee and an employer which must be considered by reference to the tests above.

The Adjudication Officer quoted the case of Hall (Inspector of Taxes) –v- Lauramore 1994 IRLR where it was held;

“In order to decide whether a person carries on business on her own account it is necessary to consider many different aspects of that persons work activity. This is not a mechanical exercise running through items on a check list to see whether they are present in, or absent from a given situation. The object of the exercise is to paint a picture from the accumulation of details. The overall effect can only be appreciated by standing back from a detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessary the same as a sum total of the individual details”.

The Adjudication Officer in this case held that the individual was an employee and directed that they would receive a contract which complied with the Terms of Employment (Information) Act 1994.

Richard Grogan

Author Richard Grogan

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