The Court of Appeals (CoA) held that delivery drivers of a Domino’s Pizza franchise business should be treated as independent contractors.
The Court of Appeal overturned a High Court ruling in 2020 that drivers should be treated as PAYE workers rather than self-employed.
In a two-to-one majority judgment, the Court of Appeal allowed an appeal by Karshan (Midlands) Ltd, trading as Domino’s Pizza, against the findings of a tax appeals commissioner that the drivers working in 2010/11 under service contracts were taxable workers. pay PAYE and national insurance.
Karshan claimed they were operating under contracts “for” services, so they were self-employed and responsible for their own tax deductions.
In 2020 the High Court dismissed the company’s appeal against an appeals commissioner’s finding of October 2018. This court held that the appeals commissioner, relying on English contract law between worker and employer, was not contrary to Irish law, but rather “recognized the need to adapt to modern means of employing workers”.
Karshan had failed to meet the burden of establishing that the commissioner had misapplied Irish law regarding the concept of mutual obligations, the court also found.
Karshan appealed and Revenue opposed the appeal.
Two of the three judges who heard the appeal, Judge Caroline Costello and Judge Robert Haughton, allowed the appeal, while Judge Máire Whelan dismissed it.
Madam Justice Costello found that the Appeals Commissioner erred in finding that there was a mutual obligation in the contractual arrangements between Kashan and the drivers. “That being the case, it was not possible that the drivers had been engaged in a service contract and this finding should have settled the matter before it. [appeals commissioner]”, she says.
Madam Justice Costello also found that the High Court Judge erred in upholding the Commissioner’s decision and failing to identify the Commissioner’s errors in this regard.
Justice Haughton agreed with Justice Costello that the requirement of reciprocity of obligations was absent from discrete agreements/contracts under which drivers undertake delivery shift work. It was therefore not necessary to examine whether the other indicia of an employment contract were met, he said.
Madam Justice Máire Whelan, dissenting, was satisfied that, as a matter of law, the High Court Judge was entitled to conclude that the Commissioner was correct in her interpretation and application of the principle of mutuality of obligations as well as the other indicia constituting the service contract. .
The appeals court said the pizza delivery drivers hired by Karshan, who worked in 2010 and 2011, did so under service contracts as independent contractors.