In this month’s EY Law Insight – Deirdre Malone, Partner, and Laura Ryan, Solicitor, in the Employment Team at EY Law look at the strict rules around time limits to bring a complaint in the Workplace Relations Commission and the jurisdiction of the Adjudication Officers to expand the scope of claims before them.

The Facts

Four student counsellors of a National University (the University) issued a complaint (Case numbers ADJ-00029117, ADJ-00029116, ADJ-00024781, ADJ-00024716) against their employer in the Workplace Relations Commission to recover 17 years of unpaid holiday, public holiday, sick pay and unpaid contributions (and membership) to the pension scheme. An unusual claim, but the employees had been classified as independent contractors, engaged under contracts for service from 2001 until 2018. The reclassification as employees happened following a referral to the Department of Social Protection (DSP) for assessment. The DSP upheld the claims and held that the four counsellors were employees. The University challenged this decision and sought further advice from Revenue. Revenue also deemed the counsellors to be employees. The University was required to pay significant amounts of retrospective social insurance and tax to DSP and Revenue.

Contract for Service?

Although not critical to the WRC’s decision, it is worthwhile mentioning some of the striking features about the contractual arrangements in place for the counsellors at the point in time when they were reclassified as employees:

• Paid an hourly rate that amounted to 38% higher than the hourly rate of a directly employed counsellor. The University stated that holiday pay was essentially built-in to the hourly rate.
• No role was full time. Weekly hours varying between 8 and 20 across a 33-week academic year applied. All counsellors enjoyed the benefit of extended holidays/time off.
• Counsellors agreed between themselves who would fulfil the contracted hours – the University/Head of Counselling could not direct the counsellors to attend at any specific time.
• Where cover could not be provided by the counsellors, the University sought alternative support.
• Two of counsellors also operated a private practice.

Time Limits to bring a claim

It was not in dispute that as and from 2018 the counsellors were regarded as employees and received their full paid leave entitlements.

The claims before the WRC related to retrospective unpaid benefits for an 18-year period before the employees were classified as employees. Each counsellor’s claim exceeded €50,000, together with a claim for retrospective pension entitlements. All claims were issued under the Organisation of Working Time Act (OWTA).

The strict time limit within which to issue a complaint under the OWTA is well-established. Employees have 6 months from the date of the alleged contravention to issue a complaint for unpaid statutory holidays and public holidays. For completeness, there is no provision under the OWTA to seek relief for unpaid bereavement leave, sick leave or pension contributions, irrespective of the time limits.

It is possible to extend the 6-month time limit within which to issue a complaint to 12 months for “reasonable cause”. Nothing in the OWTA permits extension beyond a 12-month period. The counsellors did not provide any reason to the WRC to extend the time limit to 12 months.

The focus of the claim was based on a period of time that was significantly outside the 12-month time limit.

Extend time?

The genesis for the counsellors taking this claim stems from a decision of the Court of Justice of the European Union (CJEU), in the case of King -v- Sash Windows. In that case, the CJEU held that a worker, who was denied the right to annual leave as a result of being incorrectly classified as self-employed, was entitled to back-dated annual leave. The employee received 13 years of untaken holiday pay. This claim paved the way for the counsellors to argue that annual leave could be carried over indefinitely, where an employee is denied the right to such leave.

In the claim before the WRC, the counsellors said that they were prevented from receiving holiday pay because the University denied that they were employees. The counsellors asked the WRC to confirm that they were denied the right to paid annual leave and submitted that the decision of the CJEU should apply to them.

They argued that the rules of national laws should not undermine the effectiveness of EU law and the WRC was mandated to apply EU law (as highlighted in the King -v Sash Windows case).

Rejecting this submission, the University made a number of points:

• The WRC’s jurisdiction is limited by the Act. It has no inherent capacity to change or enlarge its own jurisdiction.
• The complaints were out of time.
• The objective test applied to extend the time limit from 6 months to 12 months for reasonable cause is well established.
• Member States are entitled to set their own time limits under the Directive.
• Finally, the Sash Windows case should be distinguished from these complaints as the employee in that case had been denied any opportunity to take leave, whereas the counsellors received a premium hourly rate (with built-in holiday pay) and ample flexibility to take leave.

Strict Time Limits and Jurisdiction

The WRC rejected the counsellors’ submission. It held that it was bound by the time limits set in the legislation and a recent decision of the Labour Court, which referred to and rejected the Sash Windows case.

As the counsellors were paid appropriately for their holidays and public holidays since 2018, there was no valid claim before the WRC. The OWTA does not provide for pension contributions, so that claim was also rejected. (For completeness, the complaint form had not included any details about the pension claim in any event.)

Key Learnings

It is always worthwhile to review any contractor arrangements in place within a business. Some of the key features that one would expect to find in a contract for service were found to be indicative of an employment relationship, as set out above. A hot topic for employment law, it is important to continue to audit the use of such agreements for services.

Separately, we are reminded that the WRC and its adjudication officers are bound by the strict time-limits established under each piece of legislation they implement and protect. The WRC has no scope to enlarge its jurisdiction to hear complaints not protected under the legislation before it.

Conclusion

It remains to be seen if the above decision will be appealed, and whether a further challenge to the refusal to accept the primacy of EU law will be taken. Watch this space!