BEERG Newsletter - Ireland: New regulations change definition of ‘contract of employment’

In the most recent edition of IRN its editor, Andy Prendergast, highlights an important change to the definition of “contract of employment” in the recently enacted The European Union (Transparent and Predictable Working Conditions) Regulations 2022 law. 

According to Prendergast, the change in the definition of ‘contract of employment’ would capture some workers who, to now, may have been working under a ‘self-employed’ arrangement and would now hold them to be an employee. The new definition of a contract of employment can be seen in the context of Recital 8 of the Directive, on which the new Irish law is based, which states the following: 

“… domestic workers, on-demand workers, intermittent workers, voucher based-workers, platform workers, trainees and apprentices could fall within the scope of this Directive. Genuinely self-employed persons should not fall within the scope of this Directive since they do not fulfil those criteria. The abuse of the status of self-employed persons, as defined in national law, either at national level or in cross-border situations, is a form of falsely declared work that is frequently associated with undeclared work. Bogus self-employment occurs when a person is declared to be self-employed while fulfilling the conditions characteristic of an employment relationship, in order to avoid certain legal or fiscal obligations. Such persons should fall within the scope of this Directive. The determination of the existence of an employment relationship should be guided by the facts relating to the actual performance of the work and not by the parties’ description of the relationship.”

A ‘contract of employment’, under section 1 of the 1994 Act, is now defined as: (a) a contract of service or apprenticeship, or (b) any other contract whereby - (i) an individual agrees with another person personally to execute any work or service for that person, or (ii) an individual agrees with a person carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971 to do or perform personally any work or service for another person (whether or not the other person is a party to the contract), whether the contract is express or implied and, if express, whether oral or written.”

Those BEERG/HR Policy members with employees in Ireland would be well advised to take appropriate advice considering the new law.