Supreme Court Explores Tripartite Contracts of Employment
Supreme Court explores tripartite contracts of employment, examining who is in fact the correct employer.

Intro

Earlier this month, the Supreme Court  considered the legal characterisation of tripartite contracts of employment, examining who is in fact the employer in these arrangements, and in doing so, acknowledging how the issues arising have the potential to impact on a variety of employment arrangements.  

Background 

Ms Boyle was the sole teacher at Hillside Park (the "School"), a segregated pre-school for children from the travelling community. She was employed in that role from 1989 until the School closed in 2011. The School was managed by a committee (the "Management Committee") which was in charge of specifying Ms Boyle's duties within the School (and which, the Court noted, was not a Board of Management as recognised by the Education Act, 1998). 

Funding for the School was provided by the Minister for Education and Skills ("the Minister") by means of a grant. However, Ms Boyle was not paid directly by the Minister. Rather, an arrangement was come to between the Minister and the School whereby the Minister would pay a grant equating to 98% of the salary of a national school teacher (the "Grant"). The Grant was used to discharge 98% of Ms Boyle's salary, the rest of which was funded by monies raised by the Management Committee. Ms Boyle's entitlements (such as annual leave and sick leave) were, in effect, determined by the Department of Education (the "Department"). For the majority of her time at the School, Ms Boyle's salary was set in accordance with a scale set by the Department from time to time. 

In 2009, Ms Boyle was refused access to the National School Teachers' Superannuation Scheme (the "Pension Scheme") on the basis that she was a qualified secondary school teacher working in a pre-school (as opposed to a qualified national school teacher). In March 2009, Ms Boyle took a case to the Rights Commissioner against both the chair of the Management Committee and the Department of Education and Science (as it then was) seeking that the terms and conditions of the Pension Scheme be applied to her, arguing that she had been treated less favourably than a full-time comparator (namely, a national school teacher in an "Early Start" unit in a primary school), contrary to section 9 of the Protection of Employees (Part-Time Work) Act 2001 (the "Act"). 

The Road to Supreme Court Appeal

The Rights Commissioner rejected Ms Boyle's claim on the basis that Ms Boyle and her alleged comparator did not have the same, or an associated, employer within the meaning of the Act. 

Ms Boyle appealed this decision to the Labour Court, who found in favour of Ms Boyle and held that the decision to exclude her from the Pension Scheme should be reversed. The Labour Court directed that the Minister should admit Ms Boyle to the Pension Scheme and should pay her €10,000 in compensation. The Minister sought to challenge that decision by way of judicial review in the High Court. However, the High Court upheld the finding of the Labour Court, to the effect that Ms Boyle was employed on the same basis as a national school teacher, finding that she had been treated less favourably and was therefore entitled to redress under the Act. Notwithstanding this, the High Court found that the Labour Court was not empowered to order that Ms Boyle be admitted to the Pension Scheme. 

The Minister appealed the High Court's decision to the Court of Appeal, who agreed with the findings of the High Court. The Minister subsequently sought (and was granted) leave to appeal to the Supreme Court on the question of whether the Minister could be said to be Ms Boyle's employer for the purposes of the Act. Ms Boyle did not seek leave to cross-appeal on the question of admittance to the Pension Scheme and accordingly, only the classification of Ms Boyle's employer came before the Supreme Court.

Decision of the Supreme Court

The Supreme Court was cognisant of the fact that the issues arising in this case have the potential to affect a much wider category of employment arrangements (for example, charities and not-for-profit organisations whose staff salaries are funded, or part-funded, by donations). Whilst mindful of the fact that Ms Boyle's salary was fixed by the Department and the fact that the system of payment to the School (as opposed to Ms Boyle) was to be phased out, the Court also noted that the Minister did not have substantial control over the financial terms and conditions of Ms Boyle's contract of an employment. The Court referred to the hypothetical example mentioned by Hogan J. when this case was before the High Court, wherein the Minister sought to impose unlawful terms of employment concerning the pay and financial conditions of Ms Boyle. The Supreme Court was of the view that the School would not have been obliged to impose those conditions. 

The Court also took account of how another traveller pre-school teacher was admitted to that institution's pension scheme, making the point not as a criticism of the School in the present case, but to draw a distinction between the autonomy recipients of funding had in connection with the resources available to them. 

In having regard to the fact that, in this case, the Minister had no entitlement to direct the type of work that Ms Boyle was employed to do and the limited control held in connection with the financial terms and conditions of her contract of employment, the Court was of the view that "…it would be stretching things much too far to suggest that there is a contract of service involving the Minister". 

In his reasoning, Clarke C.J. cited the decision in O'Keefe v Hickey [2008] IESC 72 where it was held that the "contract of the wrongdoer in question was with the management of the relevant school rather than with the Minister". Although the facts of O'Keefe are not applicable in this case, Clarke C.J. found there was no reason to depart from this rationale. He concluded by stating that to find the Minister to be party to Ms Boyle's employment contract would be to stretch the law of contract "beyond any known boundaries". 

Summary

The case is limited to a very particular set of facts. However, as noted by the Supreme Court, the outcome has the potential to "…affect a much wider category of employment arrangements". Numerous other employment arrangements exist whereby the funding for a role is provided by a third party who may not have the final decision in the terms and conditions of the employee's contract, or any direction over the work that is done, for example, in the health sector or in charitable organisations. It would appear that the level of control exercised by the parties (including control over financial terms and conditions) will be a deciding factor in the determination of who is in fact the employer in a tripartite employment arrangement. 

Contributed by Aoife Gallagher-Watson

 

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