Date
31 May 2023

Tag

Active

Country
Ireland Ireland
Geographical scope
National
Type
  • Type

    Employment contract

    Legal
View Court ruling

Description

The court case concerns the contract between Karshan (Midlands) Limited Trading as Domino’s Pizza (Dominos) and the delivery drivers. The contract identified delivery drivers as ‘independent contractors’, stipulating among others that:

  • Drivers were paid according to the number of deliveries successfully undertaken
  • Clothing and logos were provided by the appellant to the drivers
  • Drivers had to use their own cars and motor insurance
  • Drivers assumed financial risks and rewards ‘in keeping with all self-employed individuals’.

Furthermore, all drivers were required to sign a document to confirm that the appellant ‘has no responsibility or liability whatsoever for deducting and/or paying PRSI or tax’ on monies which the appellant paid for their work.

In 2020, the Supreme Court found that the delivery drivers should be treated as employees for tax purposes. In a further decision published in May 2022, the Court of Appeal overturned the High Court decision, noting, amongst others, that there was no requirement on the part of the driver to make himself available for work.


Updates (2)

The following recent changes to this court ruling have been recorded.

23 October 2023

In October 2023, the Supreme Court ruled that the delivery drivers should be treated as employees. In its argument, it stated that 'The evidence disclosed close control by Karshan over the drivers when at work, and while there were some features of their activities that were consistent with their being independent contractors engaged in business on their own account, the Commissioner was entitled to conclude that the preponderance of the evidence pointed to the drivers carrying on Karshan’s business rather than their own.'

The Supreme Court's ruling of October 2023 is based on five guiding questions to determine contractual relationships with workers.

  • Does the contract involve the exchange of wages or other remuneration for work?
  • If so, is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party, to the employer?
  • If so, does the employer exercise sufficient control over the worker to render the agreement one that is capable of being an employment agreement?
  • If these three requirements are met, the decision maker must determine whether the terms of the contract between the employer and worker, interpreted in the light of the admissible factual matrix, are consistent with a contract of employment, or with some other form of contract having regard to whether the arrangements point to the putative employee working for themselves or the putative employer.
  • It should be determined whether there is anything in the particular legislative regime under consideration that requires the court to adjust or supplement any of the foregoing.

The Court concluded that the factors pointing to an employment relationship clearly outweighed the arguments against this provided by Karshan.

29 May 2024

In May 2024, the Irish Revenue Commissioners published a new guidance note on determining someone's employment status for taxation purposes. This guidance also has implications for the employment context and the platform economy.

More specifically, the guidance note interprets the previous court ruling of October 2023 and urges businesses which currently engage individuals under the status of self-employed to review these arrangements and determine whether they are still valid. The five guiding questions which resulted out of the court ruling, see the update from 23/10/2023, are laid out and reiterated in the document as the framework to decide on an individual's employment status.

Additional metadata

Keywords
autonomy and control, taxation, employment status
Actors
Individual worker, Other, Court
Sector
Transportation and storage

Sources

Citation

Eurofound (2023), Karshan v Revenue Commissioners (Court ruling), Record number 4323, Platform Economy Database, Dublin, https://apps.eurofound.europa.eu/platformeconomydb/karshan-v-revenue-commissioners-110086.