Ireland: How to decide if a worker is self-employed?

Following the Irish Supreme Court’s unanimous decision in The Revenue Commissioners v Karshan (Midlands) Limited t/a Domino’s Pizza (the “Karshan Case”) in October 2023, which held that pizza delivery workers were employees and not self-employed, the Revenue Commissioners have recently published their ‘ Guidelines for Determining Employment Status for Taxation Purposes’, to reflect the principles set out in the Supreme Court judgment in the Karshan Case.

Five-step Framework: In the Karshan Case, the Supreme Court found that the delivery drivers of Karshan (t/a Domino's Pizza) should be classed as employees, rather than independent contractors. In reaching this decision, the Supreme Court extensively analysed the numerous tests that have been developed in English and Irish case law in considering whether an employment relationship exists.  In this regard, the Supreme Court set out a five-step framework to be followed in determining an individual’s employment status: 

1. Does the contract involve the exchange of a wage or other remuneration for the work provided?
2. 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?
3. If so, does the employer exercise sufficient control over the putative employee to render the agreement one that is capable of being an employment agreement?
4. If (i) – (iii) are satisfied, the decision maker must then determine whether the terms of the contract between employer and worker and the related working arrangements are consistent with an employment contract, or with some other form of contract.
5. Finally, 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.

ADDITIONAL INFORMATION:

See Revenue Commissioners Guide 

See also this briefing note from the team at Matheson LLP