In recent years we have seen the rapid global emergence of the "gig economy". This change in the labour market has led to a flurry of judgments from the UK Courts who have had to grapple with the concept of "employment status" in cases brought against businesses such as Uber, Deliveroo, CitySprint and Weight Watchers.

As momentum on this continued to build in the UK, the spotlight started to shine on the possibility that there could be a similar shift in Ireland. In recent years there have been a growing number of individuals engaging in work on a more casual and flexible basis.

The Irish Employment Appeals Tribunal (as previously known) and the Workplace Relations Commission (WRC) in decisions such as Brosnan v Courier Post Limited T/A Fastway Couriers and A Plasterer v A Plastering & Construction Company considered some of these issues. These cases are discussed in more detail in previous alert in November 2016, January 2017, November 2017 and March 2018.

On 20 December 2019, the High Court for the first time addressed this issue in the case of Karshan (Midlands) Llimited trading as Domino's Pizza v Revenue Commissioners. The High Court decided against the company operating a Domino's franchise (Domino's/the Appellant) in respect of its appeal over the employment status of its delivery drivers.


The Revenue Commissioners (Revenue) contended that the Appellant's delivery drivers were PAYE workers and they should be treated as employees under "contracts of services" (employment contract). Domino's claimed that its delivery drivers operated under "contracts for services" (independent contractor) and were self-employed and responsible for their own tax deductions.

The Tax Appeals Commissioner (the Commissioner) agreed with Revenue in the 2018 Determination that the pizza delivery drivers worked during the relevant tax years (2010 and 2011) under contracts of services. Domino's appealed the Commissioner's Determination to the High Court by way of case stated.

What did the High Court decide?

Domino's contended that the Commissioner erred in interpretation of the law in respect of the following four concepts.

1. Mutuality of obligation

In essence, the concept of mutuality of obligation exists where an employer is obliged to provide work for the employee and the employee is obliged to perform that work.

The Commissioner found that there was an overarching umbrella contract supplemented by multiple individual contracts in respect of the time the delivery driver was rostered or assigned work.

Domino's submitted to the High Court that the drivers had the freedom to work when they choose. It argued that the Commissioner was wrong to rely on English case law and failed to follow Irish law in relation to "ongoing reciprocal commitment" between employer and employee to perform work. Revenue referred to the fact that a roster was drawn up by a store manager based on the driver availability sheets. The Commissioner found that once a driver was rostered for one or more shifts, there was a contract containing mutual obligations.

The High Court was not persuaded by Domino's argument that mutuality of obligations always requires an obligation to provide work and to complete that work on an ongoing basis. The Court held that mutuality of obligation can occur under an umbrella contract which is modified by the operation of ongoing relationships that carry obligations for both parties to the contract of employment.

2. Integration

Domino's submitted that the drivers must be regarded as accessory only to the business and that the drivers were not integral to the business. Revenue disagreed and submitted that the drivers play a vital role and are essential components of the business. The High Court was not persuaded by Domino's argument. The Court preferred the Commissioner's conclusion and found that there were a number of factors that supported the drivers' integration into the business such as the drivers wearing the brand's uniform and logo.

3. Substitution

Revenue claimed that the drivers did not have freedom to sub-contract but could nominate a replacement approved by and paid directly by Domino's. The Court noted the importance of the fact that Domino's paid for the substitute and the fact that the driver and the substitute left it to Domino's to prepare the invoices for them. The Court found in favour of Revenue on this ground.

4. Terms of the contract

Domino's submitted that a number of the terms of the contracts between the business and the drivers were not given enough weight by the Commissioner. Domino's argued that the Commissioner gave little or no attention to the wording in the umbrella contract. The Court disagreed and found that the Commissioner had to keep "an eye on the reality of the relationships between drivers and the appellant."

Application of English law

Domino's submitted that the Commissioner was wrong in relying on English law and should have applied the law in Ireland. The High Court commented that the Commissioner in relying on the UK decisions did not go against Irish law but instead "recognised the necessity to adapt to modern means of engaging workers."

What does this mean for employers in Ireland?

Hefty income tax bills and penalties could result on the part of Irish employers if they are not treating individuals with the correct employment status. We await to see if this decision will be appealed.

In Ireland, an individual is either an employee (with all the protections that flow from that status) or not. In the UK there is the middle ground concept of "worker". A lot of the UK decisions contend with this concept of "worker" which is not directly relevant to Ireland. Based on this decision, employers should be alert to the fact that the UK case-law will be particularly influential in the Irish Courts.

Employers should be alert to the following:

  • No matter what label is put on a business/contractor relationship, the Courts will look at the reality of the relationship and not just the written terms and conditions of employment.
  • Businesses would be prudent to review the contractor relationships they currently have in place and stress test whether those individuals could potentially be classified as an employee.
  • Businesses should familiarise themselves with the existing guidelines and tests that are being adopted in determining whether an individual is engaged as an employee or an independent contractor.