The Court of Appeal has dismissed an appeal by Karshan (Midlands) Ltd, which trades as Domino’s Pizza, over the tax status of its delivery drivers in 2010 and 2011. The court upheld the High Court’s answers to questions referred by the Tax Appeals Commissioner, finding that the evidence entitled the Commissioner to conclude that drivers worked under contracts of service for their rostered assignments.
The dispute concerned whether the drivers were employees, whose pay was subject to tax deductions, or independent contractors. The Commissioner had decided in 2018 that the drivers were engaged under contracts of service. The High Court, considering a case stated by the Commissioner, answered the relevant questions in her favour in January 2020. Karshan appealed those answers.
In a judgment delivered on 31 May 2022, Ms Justice Máire Whelan said the Commissioner had found that drivers signed an open-ended overarching agreement and, in practice, supplied weekly availability details. Store managers used those details to prepare rosters. The Court of Appeal agreed that each roster could create a separate contract for the shifts assigned. Once the roster was circulated, both sides had obligations: Karshan was to provide and pay for the work, and the driver was to perform it, subject to limited circumstances such as becoming unavailable at short notice.
The court considered the contractual terms alongside how the work operated. Drivers received an hourly payment for wearing branded clothing, as well as a per-delivery rate. Evidence also showed that managers could direct drivers waiting for deliveries to make pizza boxes, and could send a driver home for refusing. The court regarded the limits on substitution, the company’s control over aspects of the work and the drivers’ role in the delivery business as relevant to employment status.
The judgment corrected parts of the reasoning below on substitution. It said the agreement gave a driver a limited right to propose a substitute when unavailable; it did not require the driver to find one. The court considered that error immaterial to the overall conclusion.
The Commissioner had not needed to decide whether the overarching agreement, on its own, created a contract of service. The appeal therefore did not establish that drivers were employees during periods between rostered assignments. The Court of Appeal’s conclusion concerned the individual contracts for work actually rostered and performed, and whether the Commissioner had evidence and law to support her determination. It dismissed the appeal on all grounds.