The Irish Court of Appeal ("COA") has overturned a High Court ruling in respect of the status of pizza delivery drivers for a Domino’s Pizza franchise in Ireland. In January 2020, the High Court had upheld a Tax Appeals Commissioner’s decision determining that pizza delivery drivers engaged by Domino’s were employees for tax purposes and, as such, were subject to PAYE and PRSI. According to the published unapproved judgements, the COA has now allowed the appeal in a 2 to 1 majority decision, and the drivers were found to be contractors and not employees.


The written agreements between Domino’s and each driver described the later as independent contractors, did not guarantee a minimum number of deliveries, and provided for a right of substitution. In addition to the payments made for deliveries completed, the drivers received a brand payment for wearing a Domino’s uniform and placing a Domino’s signage on their vehicles regardless of the number of deliveries completed.

Central to determining the issue were the concepts of mutuality of obligation, freedom to provide a substitute, integration, and the written terms of the contract. The High Court considered that, while it was accepted fact that there was no mutuality of obligation in the overarching agreement, such mutuality arose every time a driver was rostered after signalling their availability to work. It was asserted that mutuality of obligation does not always require an obligation to provide work and to complete that work on an ongoing basis. Factors such as the impossibility to directly engage a substitute and the level of integration of the drivers to the business supported a finding that they were employees and not contractors.

Court of Appeal

In overturning the decision of the High Court, the COA reaffirmed that mutuality of obligation is the irreducible minimum necessary to create a contract of service. Once mutuality is found, then tests such as the degree of control over the worker, the level of integration of the work undertaken or the contractor’s ability to make profit on their own can be applied to determine if the contract is of service (employment) or for service (contractor). Where the mutuality does not exist, it is not necessary to apply further criterion, and the contract is one for service.

The COA decision considered the High Court’s assessment of mutuality of obligation erroneous. It has been stated that the “Irish authorities on mutuality of obligation are unambiguous in requiring an ongoing reciprocal commitment to provide and perform work on the part of the employer and the employee respectively”.

The COA held that the requirement of mutuality of obligation is absent from the arrangements/discrete contracts under which drivers undertook delivery shift work. As such, it is not necessary to consider whether further evidence of a contract of employment are satisfied. This was based on the view that the originally rostered driver remained free to not turn up for work and they had the right to engage a substitute, but not the obligation to do so.

Another relevant aspect of the decision is that the COA was critical of the overuse of UK case law by the tax authorities. While it was recognised that the test of mutuality of obligation has undergone some refinement in the tribunals and courts of England and Wales, the court refused to base the appeal decision on the modified test as the arguments were not pursued on the High Court or before the COA.

Key takeaways:

  • Robust contractor agreements are essential- whilst not definitive of status on their own, they should be kept up to date and reflect the practical realities of the relationship.
  • An obligation to perform work once offered is indicative of employment status.
  • Contractors should have the ability to work for others. The ability to appoint a substitute to perform the work is an important factor.
  • Contractors should not be integrated within the business. Ideally, they should not be provided with uniform, company email addresses, business cards and will provide their own equipment.

This development provides welcome comfort for businesses in Ireland, as the Domino’s case had cast some uncertainty in the engagement of contractors in short term arrangements. This decision does not, however, means that mere wording can determine the nature of a contract. Business are reminded that misclassification is a live issue, and the contractual arrangements must reflect the reality of the relationships.