Domino’s Pizza spared costs despite losing appeal

Court said it would make no order as judgment would assist to Revenue

A Domino’s Pizza franchise in Ireland lost a recent High Court appeal on the employment status of its delivery drivers

A Domino’s Pizza franchise in Ireland lost a recent High Court appeal on the employment status of its delivery drivers

 

A company in the Domino’s Pizza franchise, obliged by a recent High Court appeal to treat its delivery drivers as PAYE workers rather than as self-employed contractors, will not have to pay all costs of the case.

Mr Justice Tony O’Connor said he would make no order as to costs, meaning both parties pay their own costs, because his judgment last month would be of assistance both to Revenue and others in interpreting the law.

The judge last month rejected an appeal by Karshan (Midlands), trading as Domino’s Pizza, against Revenue Appeals Commissioner’s findings that drivers working in 2010/11 under contracts “of” services were taxable workers paying PAYE and national insurance.

Karshan claimed they operated under contracts “for” services, were therefore self-employed and responsible for their own tax deductions.

The judge dismissed the company’s appeal brought against an October 2018 appeals commissioner’s finding.

He found the appeals commissioner, in relying on English law on mutual obligations between worker and employer, did not go against Irish law but “rather recognised the necessity to adapt to modern means of engaging workers.”

When the case returned on Tuesday, the judge made formal orders in relation to his findings.

Conor Power SC, for Karshan, urged the judge to make no order on costs given it was the first judgment in this jurisdiction on the “gig economy”, although his client did not necessarily see it that way and saw the workers as self-employed.

His side lost the case but this was the first Irish decision to engage with similar decisions in the UK on these business models. The normal rule of costs being paid by the loser does not necessarily apply where new issues are raised, he said.

Anthony Aston SC, for Revenue, said this was “not a public interest case in any way shape or form” but a case involving a commercial organisation looking out for its own interests. He sought costs.

Mr Justice O’Connor said it was a case in which a number of issues including mutuality of obligations and terms of contract had been brought together. “I hope, and say this with modesty, this will the assist the defendant Revenue Commissioners in interpreting the law.”

He also gave Karshan liberty to apply to the court in the event it gives instructions to its lawyers to appeal his decision.