I have a question in relation to Employee vs. Contractor. The individual in this case is an electrician. This person originally acted as a sole trader with many clients but 25 years ago carried out a job for a large organisation and has worked for them solely ever since. There is no written contract for services and the individual supplies an invoice every month for their time. The company provides equipment and supplies if and when required. The individual is required to be onsite full time, is not afforded a pension, is not paid for sick or annual leave but must request and have annual leave approved by the company and is in all other ways treated as an employee (invited to company events etc) but in the eyes of the company they are an external contractor. The individual is approximately 60 years old and by normal company standards would be retiring at 65. The company approached this individual a number of months ago saying they were “getting their house in order” and offered the individual a 5 year fixed term contract as an employee (on the company’s payroll, entitled to sick leave, annual leave etc). The individual has raised the question with me as to whether or not they have always been an employee and should have been treated as such. Could this be the case and if so what would be the best course of action for this individual?Posted in : First Tuesday Q&A ROI on 4 August 2011
Depending on the circumstances, the distinction between an independent contractor and an employee can be a difficult one to draw and a court, tribunal or the Revenue Commissioners will scrutinise the reality of the workings of the relationship in order to determine the reality of an individual’s status. The essential test is whether or not the person can be said to be in business on his own account. The absence of a written contract for services in this case is not fatal, although it would be preferable to have a contract in place which could provide a degree of protection in the form of indemnities. The factors which would assist in establising that this individual is an independent
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Back to Q&A's This article is correct at 02/09/2015
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