The Revenue Commissioners have acknowledged for the first time that they will have to address the employment status of postmasters in light of a marquee Supreme Court decision regarding bogus self employment.
The tax agency said the status for the postmaster profession will be “updated shortly” to confirm that the tax treatment of postmasters “must be determined in line with the five-step framework as set out in the Karshan case”, which found in that pizza delivery riders were in fact employees rather than self employed.
Revenue’s statement comes at a time when some postmasters are questioning whether or not they should be classified as self-employed workers.
Last year, 10 postmasters approached the department of social protection’s employment status section, Scope, querying their social insurance status and were informed that their work is typical of an employer-employee relationship.
Ireland’s 850-plus postmasters function as self-employed workers under a contract with An Post for the operation of each individual post office, according to a 1979 agreement between the Department, An Post, and the Post Masters Union.
The 10 postmasters argued they should not be considered as self-employed given they have no control over their hours, place of work or salary, and given they are not allowed to sub-contract their own employment.
Bogus self employment is the issue of contractors doing the same work as full employees, but receiving none of the benefits of direct employment such as holiday and sick leave entitlements and pension contributions.
The 10 postmasters believe their aspirant status as employees is vindicated by the Supreme Court’s Karshan judgement of October 2023, which found that Dominos Pizza delivery riders were de facto employees rather than contractors.
Now, in response to a parliamentary question from Sinn Féin TD Mairead Farrell regarding whether or not the Karshan judgement should impact on postmasters, Revenue acknowledged that it is for a business — in this case An Post — to “make the determination whether the individual is employed or self-employed for tax purposes based on the facts and circumstances of each relationship and payment”.
“It is not a matter of choice,” the response stated, adding that its current position, which states that postmasters are self-employed for tax purposes, “predates the Karshan ruling”.
Karshan’s five questions include tests as to the extent to which workers can sub-contract their own roles or have control over how they perform their jobs — the less autonomy they have the more likely they are to be deemed as employees.
While the Karshan ruling was handed down more than 18 months ago, its rate of adaptation by State bodies has been slow.
However, a comprehensive Workplace Relations Commission (WRC) decision in favour of fiddle player Matt McGranaghan last summer, which relied wholly upon Karshan, saw the Supreme Court’s ruling firmly enter the mainstream.
“We should be clear the Supreme Court is the legal basis for all,” Ms Farrell said.
“If employers are allowed to skirt their tax and legal obligations by deliberately misclassifying workers, then those workers are deprived of their employment rights and certain social insurance entitlements,” she said.
