The move follows a Supreme Court judgment last year which classed Domino’s Pizza delivery drivers as employees.
The case, which related to 2010 and 2011, centred around whether the drivers were employees for tax purposes. Karshan (Midlands) Ltd, trading as Domino’s Pizza, had argued that they were independent contractors under “contracts for service”.
The judgment arose from an appeal by the Revenue Commissioners over a €215,718 tax bill they said Karshan owed for drivers working in 2010 and 2011.
In an unanimous decision last October, the seven-judge Supreme Court ruled in favour of Revenue and held that the drivers were employees of a franchise rather than independent contractors.
Revenue has now published a tax and duty manual which features a five-step decision-making framework that businesses must use to determine whether a worker is an employee or self-employed for tax purposes.
The framework consists of five question, including whether they are subject to “sufficient control” by the employer “to render the agreement one that is capable of being an employment agreement.”
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It also asks employers to consider whether the arrangement points to the “putative employee working for themselves or for the putative employer.”
It also includes some practical examples to assist businesses which hire workers on an ad-hoc basis in determining what the Supreme Court decision means for this cohort.
In a statement today, Revenue encouraged all businesses engaging contractors, sub-contractors or other workers on a self-employment basis to familiarise themselves with the Supreme Court ruling. It said businesses should ensure that the correct taxes are deducted from pay and reported through the PAYE system.
Last October, Owen Reidy, general secretary of the Irish Congress of Trade Unions, said Ireland and the European Union need clearer legislation to prevent cases of what he described as “bogus self-employment”.
“We believe the Revenue Commissioners were vindicated in taking this case,” Mr Reidy said at the time.
“It’s a good thing for those workers, and it should send a message to those companies that use bogus self-employment that there are consequences,” he added.
