In most cases it is clear whether or not an individual is an employee; simply down to their contract of work and what that contract implies. But sometimes this isn’t always the case, which in turn can lead to misconceptions regarding employment status of individuals. It is important that the job an individual is carrying out is looked at from the perspectives of their working conditions and the relationship the individual has with the organisation. If in doubt the following questions are helpful should in identifying whether or not an individual is an employee:
- Is the individual taking directions to carry out the work and are they under the control of the employer?
- Does the individual work for one business or person?
- Does the individual work set hours?
- Does the individual receive a fixed payment hourly/weekly/ monthly wage?
- Does the individual receive expenses to cover travel and subsistence?
- Is the Individual entitled to extra pay for overtime or time off?
- Can the individual subcontract that work that has been passed down to them to another individual and if so the employer/employee relationship may simply be transferred on?
- Is the individual exposed to personal financial risk in carrying out the work?
- Does the individual carrying out the work assume any responsibility for investment in the organisation?
- Does the individual profit from the work they carry out?
Depending on the answers given above will determine an employee’s employment status. An additional aspect that can be factored in, if there is doubt as to whether an individual is an employee, self-employed or a subcontractor, is the question of how they pay income tax. If the individual pays tax under the PAYE system, they are an employee. Self-employed and subcontractors pay tax under the self-assessment system.
The Minister for Social Protection Leo Varadkar announced the abolition of the JobBridge Programme from 21st October 2016, to be replaced by a new group scheme from next summer. However, the JobBridge scheme is a good example in considering whether an individual is employed by the host organisation or the job Scheme itself (Intreo), or if they are self-employed.
The scheme states that they will serve a length of service of 6 to 9 months on the internship and this coincides with a probation period for most organisations. If both the employer and employee come to an agreement to terminate the internship they must give one week’s notice to either party, and then both again need to notify Intreo.
The intern is entitled to public holidays and 1.75 days’ annual leave per month, which complies with the Organisation of Working Time Act 1997. If the intern is absent from work due to illness, provided they meet the requirements of the company sick leave policy, they will continue to get social welfare payments. The maximum sick leave allowed is 10 working days and if the individual exceeds this their internship will be terminated. Also if the intern becomes pregnant they can suspend the internship to take maternity leave and then return to complete the internship.
These few points that are in the terms and conditions of the JobBridge scheme reflect the terms and conditions that may be outlined in a probation period in an employment contract of any organisation, which could deem the person to be an employee of the organisation. However, as the organisation is not making payments to the intern directly and the intern is receiving payments from the Department of Social Protection the intern is not an employee of the organisation. It will be interesting to see how this will operate with a new scheme being introduced next summer. The proposal is that organisations will need to make a contribution to the new scheme in order for those on the scheme to be in receipt of the equivalent of the minimum wage. The current scheme falls significantly short of this and given the current job market, it is now not fit for purpose. The proposal for the new scheme is that the employer contribution may be a blunt contribution or a programme registration fee on behalf of the employer. The method of contribution by the employer will need to be carefully considered as the introduction of a direct payment to the Intern may cause issues for employers in relation to their employment status.