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In a recent High Court case[1], Mr Justice O’Connor considered an appeal brought by Domino’s of a decision by a Tax Appeals Commissioner (the Commissioner) who determined that pizza delivery drivers engaged by Domino’s were working under contracts 'of' service resulting in Domino’s being liable for the drivers’ PAYE and national insurance deductions.

The Judge upheld the Commissioners’ interpretation of the following concepts in reaching her decision:

  • Mutuality of obligations

  • Freedom to provide a substitute

  • Integration

  • Terms of the contract

The Court further supported the Commissioner’s reliance on the UK case Weight Watchers (UK) Ltd v Revenue and Customs Commissioners[2] where it was similarly found that ‘leaders’ engaged by Weight Watchers were subject to PAYE and a similar contribution to PRSI.

Mutuality of obligation

The employment relationship is mutual in that there is an obligation on the employer to give work and there is an obligation on the employee to carry out work for the employer. If there is no mutuality of obligation, the Courts have adopted the approach that it is not necessary to investigate any further, as the relationship cannot amount to a contract of service.

In the Domino’s Pizza case, the Court found that an ‘umbrella’ contract existed. This meant that there was an overarching contract between Domino’s and the drivers, which required the driver to initiate an agreement with Domino’s regarding their availability to work. The umbrella contract was supplemented by discrete contracts for each period of work i.e. once Domino’s rostered a driver for a shift of work, there was a contract in place, in respect of which both parties had mutual obligations.

The Court agreed with the Commissioner’s assessment that mutuality of obligations can occur under an umbrella contract which is modified by the operation of on-going relationships that carry obligations for both sides of the contract of employment. For the purposes of determining PAYE and PRSI liability it was considered that it would be sufficient for either the overarching contract or the discrete contract(s) to be considered as a contract of employment.

A material point in the assessment of mutuality of obligation was the requirement for a driver when cancelling a shift to:

  • Provide Domino’s with advance notice

  • To source a substitute approved by Domino’s

  • To work out the remainder of the shifts agreed

The Judge pointed out that these obligations distinguished the drivers from other self-employed tradesmen who have ‘inherently tremendous latitude’[3] in their tasks.

Freedom to substitute

The Court agreed with the Commissioner’s reasoning that the drivers were working under a contract ‘of’ services as they did not have a genuine ability to sub contract. It was not possible for the drivers to pay a substitute directly. Rather, if the drivers could not do a job, a substitute was sourced from the approved roster of Domino’s drivers and the substitute was paid by Domino’s.


In assessing the relationship status in contract ‘of’ services versus contract ‘for’ services disputes, it has been long held by the Courts that it must be considered whether the individuals’ work is an integral part of the business.

Domino’s argued that the Commissioner erroneously applied the ‘integration test’ in that she implied that the sole issue to be determined was whether the kind of work being carried out by the drivers was integral to their business. Domino’s argued that on the application of a broader test i.e. did the drivers form part of their organisation, the drivers would be regarded as merely an accessory to their business rather than being an integral part.

The Court concluded that the Commissioner did have regard to the integration of the drivers into Domino’s business and pointed out that the Commissioner had looked into many factors including the requirement for drivers to:

  • Wear uniforms and place logos on their cars

  • Reassure customers that they were dealing with personnel of the appellant

  • Maintain a coherent operation under the care of the appellant

  • Take telephone orders from Domino’s rather than customers of Domino’s

Written terms

The Court highlighted the piecemeal nature of an umbrella agreement and how these agreements are implemented in such a way to ‘suit the practicalities of those who engage and those who work.’ It was noted that the Commissioner had interpreted the relevant terms ‘with an eye on the reality of the relationship...’.

The Court cited the Mr Justice Geoghegan’s judgment in Castle Island Cattle Breeding v Minister for Social Welfare[4] where he stated ‘mere wording cannot determine its nature’ in reference to interpreting the terms of a contract.

The Court found ‘no real merit’ in Domino’s submission that the Commissioner did not give proper weight to the actual terms and conditions of the contract.


The age old question of whether a person is an employee or a contractor has been further complicated in this modern era where ad hoc and/or flexible arrangements are much more commonplace particularly due to developments in technology.

The Judge was of the view that in reaching her decision, the Commissioner recognised ‘the necessity to adapt to modern means of engaging workers’.

With the number of independent contract workers in Ireland and globally on the rise, much care will need to be taken in the drafting of contract for services agreements and the way that the relationship between the parties operates on a day-to-day basis to withstand an assertion that the relationship should be characterised as a contract ‘of’ service.

Employers need to be aware that, as is evident from the analysis above, comprehensive wording in a contract for services agreement is just not enough to prove that a relation is not a contract ‘of’ services. A Court will also examine the practical implementation of contract for services agreements.

For expert assistance in establishing robust contacts ‘for’ services, contact a member of our Employment & Benefits team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Karshan (Midlands) Limited t/a as Domino’s Pizza v Revenue Commissions [2019 No.31 R]

[2] [2011] UKUT 433 (TCC), [2011] All ER (D) 229 (Nov)

[3] Judgment page 18

[4] [2004] IR 450

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