The Supreme Court is to hear a further appeal over whether food delivery drivers should be treated as self-employed independent contractors or employees for the purpose of taxation.
The court said the appeal will provide an opportunity to clarify the law in this area and specifically in relation to the gig economy.
The case concerns delivery drivers engaged under contracts in 2010/11 by Karshan (Midlands) Ltd, trading as Domino’s Pizza.
In 2020, the High Court dismissed Karshan’s appeal brought against an October 2018 Tax Appeals Commissioner’s finding that the delivery drivers should be treated as PAYE workers.
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That court found the commissioner, in relying on English law on mutual obligations between worker and employer, did not go against Irish law but “rather recognised the necessity to adapt to modern means of engaging workers”.
Karshan appealed, and last June a 2:1 Court of Appeal (CoA) decision overturned the High Court’s finding.
The CoA found the Tax Appeal Commissioner erred in finding that there was mutuality of obligation in the contractual arrangements between Kashan and the drivers.
The High Court judge erred in upholding the commissioner’s determination and in failing to identify the commissioner’s errors in that regard, the CoA said.
The appeal court also made a declaration that pizza delivery drivers engaged by Karshan, who worked during 2010 and 2011, did so under contracts for services as self-employed independent contractors.
Revenue sought leave to bring a further appeal to the Supreme Court to have the CoA decision set aside. This was because, it said, a number of matters in the case reached the threshold of “general public importance” as required for such further appeals.
These matters include whether the principle of mutuality of obligation applies to “umbrella contract” situations and the broad applicability of any decision by the Supreme Court to other areas of employment law, including the law on unfair dismissal and the assertion of rights under the Organisation of Working Time Act 1997, Revenue said.
Karshan opposed the leave-to-appeal application. It argued, among other things, the decision of the CoA “concerns a discrete issue of tax law confined to the engagement of pizza delivery drivers over ten years ago”.
The company also said Revenue’s case was focused on alleged factual errors on the part of the majority of the CoA which, Karshan contended, is not the function of the Supreme Court.
Karshan also argued a further appeal would not clarify the legal position in relation to the gig economy or zero-hour contracts.
In a written determination granting a further appeal, the Supreme Court said a number of issues of general public importance arose for appeal.
The issues sought to be appealed by the Revenue “undoubtedly go beyond a discrete issue of tax payments from 2010 and 2011, particularly due to the apparent existence of similar umbrella contractual relationships in Ireland,” the determination states.
The Supreme Court “has not yet had an opportunity to clarify the law in this area, specifically in relation to the gig economy and workers engaged under contracts similar to those used by Karshan Ltd”, it said.
The reliance by Revenue in the original determination of the High Court on the English law/Irish law cases “points to the lack of recent consideration of this area in this jurisdiction, and the need for clarification by this court of these issues.”
The court granted leave to appeal on issues including the proper construction of contracts where individuals work under an umbrella contract but where the work done is paid for on the basis of what are apparently individual tasks that are paid for at a particular and set rate.
Another issue is the proper criteria whereby, under the Taxes Consolidation Act 1997, a worker should submit a tax return as a self-employed person or as a person engaged in an employment contract.
The Supreme Court will also have to decide what the proper order in the case should be in light of the legal analysis.
