People obliged by employers to sign contracts saying they are self-employed in order to obtain work may be entitled to be treated as employees, according to a Supreme Court decision which could provide job security for thousands of casual workers.
The case was brought by a food demonstrator with Henry Denny & Sons (Ireland) Ltd, a wholly-owned subsidiary of Kerry Foods. Ms Sandra Mahon, one of 70 food demonstrators with the company, prepares free food samples for shoppers in supermarkets.
Her contract, which is renewed annually, says: "You will not be an employee of Kerry Foods, you will be providing it with your services as an independent contractor, as and when they are required, during the term of the contract". She was responsible for her own tax affairs and was not covered for damage to her health or damage she might sustain or cause while providing a service to Kerry Foods.
She was effectively under 24 hours' notice to demonstrate and merchandise Kerry Food products in various supermarkets.
Like other food demonstrators with the company, Ms Mahon is paid £28.32 a day for her services, plus travel expenses of 27p a mile. Kerry Foods provide all her equipment, food and uniform. If she arrives at a supermarket and finds the demonstration has been cancelled, she has to make herself available for other work on behalf of Kerry Foods. If none is available she receives only her mileage.
Ms Mahon won her initial case against Kerry Foods before a deciding officer in the Department of Social Welfare in May 1992. Kerry Foods appealed the case to an appeals officer in the Department. When it was unsuccessful there, the company appealed the case all the way to the Supreme Court.
In a Supreme Court ruling last week, Mr Justice Ronan Keane said Kerry Foods had drafted Ms Mahon's contract with a view to ensuring that she would be regarded as an independent contractor. However, he said that, when account was taken of all the circumstances of Ms Mahon's employment, the appeals officer at the Department of Social Welfare was perfectly entitled to regard her as an employee of the company.
Among the factors Mr Justice Keane cited in reaching his decision was that Ms Mahon did not provide any independent input into the job from her own premises, from providing equipment or investment. Nor could she alter the level of profit she derived from the work through improving her own efficiency or management of people or resources. The amount she earned was determined exclusively by the company.
The Minister for Social, Community and Family Affairs, Mr Ahern, yesterday welcomed the decision. "It supports social insurance protection for those working in the industry as demonstrators and merchandisers, who are mainly women, working casually or part-time." Kerry Foods said it would not comment until it had had time to study the judgment.