In the news recently the Supreme Court ruled that delivery drivers for a pizza company should be treated as employees and not contractors. The case related to delivery drivers working for Karshan (Midlands) Ltd, trading as Domino’s Pizza. The drivers argued they were employees for tax purposes, but Karshan said they were independent contractors under “contracts for service”.

Karshan had appealed a 2018 decision of a Tax Appeals Commissioner that the drivers should be treated as PAYE workers. The High Court rejected that appeal, but the Court of Appeal overturned the decision.

The Revenue Commissioners appealed that ruling to the Supreme Court and it overturned the Court of Appeal decision. The Supreme Court found that the Tax Appeals Commissioner was entitled to conclude, as she did, that the drivers were employees of Karshan for the purposes of the relevant provisions of the Taxes Consolidation Act.

The Code of Practice determining employment status was first prepared in 2001 by the Employment Status Group under the Programme for Prosperity and Fairness. The group was set up because of a growing concern that there may have been increasing numbers of individuals categorised as being ‘self-employed’ when ‘employee’ status would have been more appropriate.

It was updated in 2007 and again in 2021. It is intended to be a ‘living document’ which will continue to be updated to reflect future, relevant changes in the labour market, relevant legislation and caselaw. The Code aims to be of benefit to employers, employees, independent contractors and legal, financial and HR professionals. The purpose of this document is to provide a clear understanding of employment status, taking into account current labour market practices and developments in legislation and caselaw.

In most cases it will be clear whether a worker is employed or self-employed. However, it may not always be so, and this can lead to confusion in relation to their employment status. There is no single, clear legal definition of the terms ‘employed’ or ‘self-employed’ in Irish or EU law.

While the terms of a contract might be quite clear in saying that a person is engaged as a self-employed contractor, courts and statutory bodies may still conclude that they are, in fact, an employee.

There are different statutory bodies in place that make determinations on the employment status of a person for the purpose of PRSI, tax and employment rights. These bodies are:

  • Scope Section in the Department of Social Protection, which determines employment status with a view to deciding the appropriate class of PRSI for an individual,
  • The Office of the Revenue Commissioners, where employment status determines tax treatment,
  • The adjudication service of the WRC, which determines employment status as a preliminary issue when adjudicating on employment rights complaints.

Where a contractor is misclassified, this gives rise to considerable risks, including potential tax liabilities, potential social welfare liabilities and potential employment law claims.

NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff LLP, whose numbers can be found on our website, or email