The Irish Supreme Court is to hear an 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 ruling will be of significance for all who work as “independent contractors” across the 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.
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. It 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 which Karshan objected.
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.
Meanwhile, the President of Ireland, Michael D Higgins has encouraged all workers to join a trade union. In the foreword of Connect trade union’s centenary book launched last week, he criticises those who fail to acknowledge unions’ contributions “over the decades”. He says: “Join the union, and in protecting and redefining the world of work, we build a decent, fulfilling world.”