Couriers: The Untold Story Of The Biggest Heist In Irish Tax History


By Martin McMahon

Gigification is State-approved misclassification of employees as self-employed in order for some employers to evade PRSI obligations.

Gigification is always bogus self-employment, but bogus self-employment is not always Gigification. The difference is the approval and assistance of the State in creating bogus self-employed workers.

At a meeting between vested interests in the Workplace Relations Commission(WRC), the Gigification of punitive employees was renamed as ‘Contingent Employment’, but don’t let that fool you, Gigification has one purpose and one purpose only – to save ‘selected’ employers circa 30% on labour costs as an enticement to ‘create’ jobs.

Gigification grants illegal state aid, in the form of a secret PRSI exemption, to ‘selected’ employers. It is a secret tax break which puts compliant employers at a distinct economic disadvantage.

The employment status of workers and the rate of PRSI to be paid is entirely the responsibility of the Department of Social Protection to be made in accordance with the law, at least on paper it is.

In practice, the Revenue Commissioners make blanket decisions on the employment status of thousands of workers not in accordance with the law, but instead in accordance with a political imperative to reduce the numbers on the unemployment register by any means.

Unless a punitive employee forced into one of these ‘Special Tax Agreements’ writes to the SCOPE Section of the Department of Social Protection and specifically requests an ‘Insurability of Employment’ decision, the legal sustainability of these politically motivated ‘Special Tax Agreements’ between the Revenue Commissioners and ‘selected’ employers never faces scrutiny.

A Potted History

In 1979, PAYE workers began a series of protests against the PAYE tax system. At that time, PAYE workers were employees, and the burden of income tax, they felt, was unfairly targeted at these employees. Self employed workers paid tax through a self assessment scheme.

​In the years that followed, along with changes to the income tax system, an increased focus was put on those working outside the tax net, particularly those working ‘On The Lump’.

The Lump worker is paid cash ‘off the books’ by the employer. No tax or PRSI is deducted at source. The employer pays a lump sum of money for the work the worker does each day or week, hence “working on the lump”. The employer claims that the worker is self-employed.

Working on the lump is the most basic form of bogus self-employment. Working on the lump is also known as working in the ‘Black Economy’.

Following the introduction of Selective Employment Tax (SET) in the UK in 1966, construction industry employers offloaded thousands of directly employed workers and then re-employed them in a “self-employed” capacity.

Many of these workers were Irish and the practice of off-loading employees and rehiring them as self-employed followed them home to Ireland.

In order to combat these workers working on the lump and claiming social welfare at the same time, Governments in the UK and Ireland introduced various forms of tax certificates for these workers and labeled them ‘sub-contractors’.

The social welfare and tax systems in both countries gave generous allowances for travel, clothes, lodgings, tools, etc. The worker then paid income tax on a much smaller amount than a directly employed worker and the employer avoided all responsibility.

Many employers refused to take on direct labour, as they knew that many of them would be trade unionists who would use collective bargaining to improve pay and conditions. Employers blacklisted union and activist workers.

This practice of ad hoc, specifically tailored tax agreements for the construction industry was duplicated in other industries.

The Revenue Commissioners met and negotiated several of these deals with individual employers and industry-wide representatives.

​The Denny Case

In February 1992, the SCOPE Section of the Department of Social Welfare opened an ‘Insurability of Employment’ decision making process into the employment status of a young woman called Sandra who worked as a demonstrator in various supermarkets. Sandra was labeled as self-employed by her employer as were all supermarket demonstrators.

​Less than 3 months later, on May 6, 1992, the SCOPE Section Deciding Officer, applying all of the available evidence and also the legal principles handed down in various court judgments over the years, issued a decision that Sandra was not self-employed as claimed by her employer. Sandra was an ordinary employee.

Employment status is never just a matter of choice.

Before 1992, SCOPE decisions were legally binding decisions. A notice would be issued to the employer and all PRSI arrears would be demanded. The employer could appeal directly to the minister to reverse the decision or appeal it directly to the courts. In both instances, the department would be required to defend it’s own decision.

This SCOPE decision however, wasn’t appealed to the minister or the courts, it was appealed to the then newly formed Social Welfare Appeals Office (SWAO).

The Social Welfare Appeals Office was established by legislation in 1991. It is an office of the Department of Social Protection responsible for determining appeals against decisions on social welfare entitlement and insurability of employment issues. The Social Welfare Appeals Office is a quasi-judicial tribunal and can, if it so chooses, consider a case ‘de novo’ or afresh.

The Department of Social Protection is required to implement the decision of an Appeals Officer which is deemed to be “final and conclusive” unless a review by the Chief Appeals Officer is requested on a point of law or fact or unless statutory appeal is taken to the High Court on a point of law.

The appeals mechanism is not independent.

The Appeals Office must adjudicate on decisions of the Department of Social Protection, of which it is a part. Appeals Officers are employees of the department, appointed by the Minister for Social Protection, and may return to another department section after working in the Appeals Office.

Furthermore, the fact that decisions on social welfare appeals are not published routinely, means that people appealing decisions are also forced to work in an information vacuum and are unclear how cases are decided. It is worth remembering that people cannot access state legal aid to advise and assist them in what can be a very complicated process.

It was into this new Office of the Department that the contentious decision of SCOPE, another Office of Department, was appealed.

The SCOPE decision was contentious because it challenged the authority of the Revenue Commissioners, so much so, that on December 15, 1992, a letter issued from the Inspector of Taxes, Tralee, indicating his intention not to pursue the question of requiring Kerry Group PLC to deduct income tax under the PAYE system from merchandisers/demonstrators/promoters.

This letter from the Revenue Commissioners exposes that the Revenue Commissioners were operating an industry wide ‘Special Tax Agreement’ to label all merchandisers, demonstrators and promoters as self-employed and were refusing to bound by insurability of employment decisions made by the SCOPE Section.

This letter was submitted to the SWAO appeal of the SCOPE decision as a ‘matter’ for the Appeals Officer’s attention. The Revenue Commissioners were clearly applying pressure to the SWAO to overturn the SCOPE decision in Sandra’s case under threat of totally ignoring any decision that would affect their industry wide ‘special tax agreement’.

An obscure, unreported Civil Court case, Cronin v Kerry Co-operative (24 June 1990), was also submitted to the SWAO appeal to justify the Revenue Commissioner’s refusal to be bound by either SCOPE or SWAO decisions on merchandisers/demonstrators/promoters.

Despite this intense pressure from the Revenue Commissioners, the newly formed SWAO held its ground and fully supported the original SCOPE decision.

The decision was further appealed to the higher courts by the appellant company. Eventually, following a six-year battle, the higher courts ruled that Sandra was an employee.

The original SCOPE decision was strong enough to survive every level of the quasi-judicial and judicial process and became one of the definitive rulings on insurability of employment widely known as Henry Denny & Sons (Ireland) LTD, trading as Kerry Foods v. The Minister for Social Welfare [1998] 1 IR 34.

It is worth noting that the details related here would never have become public had the SWAO ruled against SCOPE. The SWAO is a secret quasi-judicial tribunal, all hearings are secret and none of it’s rulings are open to public scrutiny.

This was the first and last time that the Social Welfare Appeals Office supported a SCOPE decision which challenged a pre-existing Revenue ‘Special Tax Agreement’.

The Fix

In 1993, less than a year after the SCOPE decision that Sandra was not self-employed, the SCOPE Section made an Insurability Of Employment decision that an individual courier was not self-employed as his employer claimed. This decision was immediately appealed to the Social Welfare Appeals Office by the employer.

Unlike the previous SCOPE Section decision, the SWAO overturned this decision and sided with the employer. This information has never been made public and no details of the case are available as to why the SCOPE decision was overturned.

Although the Social Welfare Appeals Office claims that there is no searchable database of decisions, this case is cited in a legal submission by Courier Company legal representatives in a separate SWAO appeal some years later. The case was Thunder v Roadrunner Couriers (Claim No. SC 2443/1993).

This case is described as Thunder v Roadrunner Couriers, not Social Welfare v Roadrunner Couriers, marking a significant change in how insurability of employment appeals are described. It is no longer the department who defends their own decision, but instead the onus is on the individual worker to defend the SCOPE Section decision.

​Public Accounts Committee

In July 2000, the Chairman of the Public Accounts Committee wrote to the Chairman of the Revenue Commissioners and asked why all couriers were being treated as self-employed by the Revenue Commissioners.

​On August 9, the Chairman of the Revenue Commissioners replied –

“The issue of Couriers, and particularly Motorcycle Couriers, was the subject of protracted discussions between Revenue and Representatives of the Courier Industry. I enclose copies of our letters of 7 March 1997 and 3 April 1997 to (Solicitors Company) which represented Courier Companies at the discussions. The letters outline the agreement reached for tax purposes”

Prior to the inquiry from the Chairman of the PAC, this ‘Special Agreement’ between the Revenue Commissioners and Courier Company representatives was unknown. Only a handful of people yet know about it.

The Chairman of the Revenue Commissioners went on to explain the Revenue Commissioners rationalisation for reaching a ‘Special Tax Agreement’ with Courier Company owners –

“For the purpose of Insurability under Social Welfare Law a motorcycle courier was found to be self-employed by a Department of Social, Community and Family Affairs Tribunal some years ago. The decision was not challenged further through the High Court on a point of law and consequently would stand for social insurance purposes”

Except that it doesn’t work like that.

Each case must be taken on it’s own merits, occupations which appear the same may differ in the actual terms and conditions. It is not legally sustainable to label all workers in an industry as self-employed based on one decision alone.

A fact the Chairman of the Revenue Commissioners was fully aware of.

The Revenue Chairman’s position was immediately contradicted in the ‘Special Tax Agreement’ (Section 2.2) attached by the Revenue Chairman:

It is no wonder this dirty deal was kept secret by the Revenue Commissioners and Courier Companies.

So here are the indisputable facts –

1) Courier companies were not compliant with their most basic of tax obligations

2) There was always an obligation on courier companies to make a return of all persons who were paid in excess of 3,000 punt (€3,810).

3) The non-compliance of courier companies spanned at least a decade.

4) Courier companies were operating entirely in the black economy.

5) Courier companies were paying all their couriers ‘on the lump’.

6) No individual couriers participated in negotiations to make them self-employed PAYE employees.

7) The Revenue Commissioners absolved courier companies of all past non-compliance based on a hitherto unheard of Social Welfare Appeals Office overturning of a SCOPE Section decision.

8) The Revenue Commissioners indemnified courier companies from all future insurability of employment responsibilities.

This is a PAYE arrangement, its very existence is an overriding indication that couriers cannot offer their services concurrently to others, that they are not in business of their own account, that they are ordinary employees and not self employed.

A Law Unto Themselves​

In September 2000, the Chairman of the Public Accounts Committee wrote to the Secretary General of the Department of Social, Community and Family Affairs and asked for his observations on why all couriers were being treated as self-employed by the Department of Social Community and Family Affairs.

In October 2000 the Secretary General of the Department of Social Community and Family Affairs replied –

“The employment status of couriers has under review for some time. Some couriers consider that they are self-employed while other regard themselves as employees. This has implications for PRSI purposes, as there are different statutory provisions for employees and self employed persons.

Similar provisions exist in relation to employment law and safety legislation. In order to resolve the matter a number of representative test cases were selected in 1993/94 for detailed investigation and formal insurability decision under Social Welfare legislation.

The process resulted in a decision by an Appeals Officer of the Social Welfare Appeal Office on 12 June 1995 who decided that a courier was self-employed if he –

1) Provided his own vehicle and equipment
2) Was responsible for all expenses including tax, insurance, maintenance etc, and
3) Payment was made on the basis of rate per job plus mileage allowance.

The Appeals Officer’s decision established the criteria in relation to the employment status of couriers that has, since then, been generally accepted throughout the industry and also by the Office of The Revenue Commissioners for Income Tax purposes”.

This reply from the Secretary General in Oct. 2000 is staggering in its deception. The employment status of couriers was not under review, the ‘Special Tax Arrangement’ had pigeon-holed all couriers as self-employed three years previously.

This was just the beginning.

Following the SWAO overturning of the SCOPE decision in the Thunder v Roadrunner Couriers case, representatives of courier employers engaged in discussions with the Revenue Commissioners to have all couriers labeled as self-employed in order to retrospectively avoid their statutory obligations even though the Revenue Commissioners accepted and acknowledged that courier companies had failed to comply with their statutory obligations for over a decade.

The Special Tax Agreement would have gone ahead then had it not been for the protests of individual SCOPE Section Deciding Officers who objected to the blanket classification of couriers as self-employed.

Three ‘couriers’ were selected by the courier company representative and put forward for insurability of employment decisions. The Deciding Officers in the SCOPE Section were not informed that they were to be considered test cases.

Deciding Officers are legally obliged to assess each case on its own merits in accordance with the general precedents of Irish Law because operations which may seem to be the same may differ in the actual terms and conditions in any given case. Deciding Officers cannot legally consider any case to be a test case, nor can the Secretary General (The futility of doing so will become apparent later in this piece).

Following due consideration, the SCOPE Section issued decisions that all three couriers were ordinary employees and not self-employed. Inexplicably, these decisions were appealed to the SWAO by not just the courier companies representative but by the couriers themselves. An anonymised account of this appeal is contained in the Annual Report of The Social Welfare Appeal Office 1995, although the SWAO, unlike the Secretary General,  avoids calling the case(s) ‘Test Cases’ –

Motorcycle Business Couriers.

A Deciding Officer gave a decision that a motorcycle business courier was employed under a contract of service (as an employee) while engaged by a business courier firm. Both parties appealed the decision. The case was understood to be of wider significance to the trade.

The Appeals Officer held an oral hearing. Both appellants were present and the courier firm was legally represented. The Deciding Officer and Social Welfare Inspector were also present. Payment to the courier was ordinarily made by the firm on the basis of a basic engagement rate plus a mileage travel allowance. Individual jobs were allocated (generally by radio) by the employer on the basis of availability and the location of the courier.

The firm supplied the radio and the carrier bag. The bag bore the firm’s logo, which also appeared on the delivery dockets carried by the courier. The courier supplied the motorcycle and paid all related expenses such as tax, insurance and maintenance, as well as the outdoor clothing

In presenting her case, the Deciding Officer stated that application of standard tests for determining the nature of an employment engagement showed the existence of a contract of service (employee).

She held that the firm possessed the right to direct, control and dismiss the courier (control test). The courier’s job was so closely tied into the firm’s activities that they could be regarded as inseparable (integration). The courier was not an independent business unit (entrepreneurial).

Counsel for the firm submitted that the courier was fully free on how he did a job assigned, being at liberty as to the form of transport and route used. He was free to work for other employers. He did not have to provide personal service. He could refuse work. If he were off the road for any reason he would not be paid.

On motorcycle couriers being an integral part of the firm’s operations, the fact that only about 50% of the business was related to motorcycle couriers, the rest being done through the bus and rail networks (and so, it was submitted, the firm could carry out its integral courier activities without motor-cycle couriers as such).

As to the free-standing nature of a courier’s job, it was not unlike that of a taxi driver – the profit margin could be increased by greater activity. Counsel referred to case law to support these contentions.

The courier appellant’s evidence did not conflict with the submission on behalf of the appellant firm. specifically the courier confirmed the flexibility for jobs, the possibility of getting another courier to take his place and instanced occasions on which he had declined to accept jobs offered (fifteen refused in the previous week because they did no suit him for different reasons).

​The Appeals Officer allowed the appeal. In commenting on the case the Appeal’s Officer acknowledged that there were features of the courier’s engagement which were more consistent with a contract of service rather than a contract for services.

However, in his view, the factors supportive of the existence of self employment outweighed such features. These critical factors included the want of control, acceptability of a substitute, freedom to refuse jobs and the flexibility in hours of availability. Consequently, the nature of contractual engagement was that of a self-employed person and not that of an employee’.


So what really happened?

Well, firstly, these were not ‘test cases’. This ‘test case’ claim is like a mutating virus, it started out with Scope in 93/94 with no way there were test cases, it mutated in ‘95 with the SWAO claiming that the decision was of ‘wider significance to the trade’.

Skip forward to 1997 and it mutates again, this time the Revenue’s Special Tax Agreement claims it’s a ‘non binding decision that does not override the statutory rights of couriers’ and then in 2000 the Secretary General of the Department of Social Protection, under pressure to reply to the PAC Chairman’s inquiry, performs the final mutation and outright calls them test cases.

The Secretary General’s ‘Test Case’ claim was refuted by the Courier Company Representative some years later in the Employment Appeals Tribunal where he described the cases as ‘Inconclusive’.

Only one case is described in the SWAO report. The SCOPE Section Employee determinations on the ‘number of representative cases’ previously described by the Secretary General, unless appealed, still stand and are still valid to this day.

Was this single case described in the SWAO representative of all couriers, van, motorcycle and pushbike?

Three motorcycle couriers were ‘selected’ by the courier company representative. One of these couriers claims to have emigrated shortly after the SCOPE decision that he was an employee. He returned to Ireland after the SWAO appeal had concluded and took up a managerial position with the courier company he previously worked with as a courier.

He had continued involvement with courier insurability of employment decisions. A subsequent Social Welfare Inspector’s report on a separate case four years later named him as a representative for the company opposing a SCOPE decision that a courier was an employee in the company in which he was now a manager.

It is unknown which of the other two couriers is the case described in the SWAO report. What is known, is that in the intervening period between the SCOPE Section decisions in 93/94 and the SWAO hearing in 95, both men were registered as directors of a courier company in documents available in the Companies Office.

After the SWAO decision in ’95, both men opened their courier business and operated one of the largest Courier Companies in Dublin for many years. Is it any wonder ‘The courier appellant’s evidence did not conflict with the submission on behalf of the appellant firm’?

Groundhog Day

In July 2000, an individual courier wrote to the SCOPE Section and requested an insurability of employment decision. This courier was not ‘selected’ by anybody. In his letter, the courier explained why he believed he was an employee and not self employed.

The courier had no knowledge of the (secret) Special Tax Agreement between Revenue and courier companies which labeled him self-employed. Nor did he know that the general manager of the company he was working for was also the representative of the courier companies who had negotiated the Special Tax Deal in the Burlington three years earlier. Nor did he know that his direct manager was one of the Secretary General’s ‘Test Cases’ from ’95.

As is the procedure, a SCOPE Deciding Officer wrote to a Social Welfare Inspector on July 27, 2000 requesting that he complete SCOPE’s standard ‘Insurability of Employment’ (INS1) form with a Company representative. The Deciding Officer also enclosed a list of 14 separate specific questions to be answered by the Company’s representative and requested that a report of this interview be returned to SCOPE.

The SCOPE Section does not have it’s own dedicated investigators.

Upon being notified that an insurability of employment investigation was underway, the courier claims he was put under verbal harassment and abuse from company managers and from one of the owners of another Courier Company, the one that had been set up by two of the Secretary General’s ‘test cases’.

This is not unusual, of 13 cases in three separate industries this author knows of, all have lost their jobs, 12 have been blacklisted by their respective industries, all have been harassed, all have been abused.

Workers (not ringers, ringers do quite well) who request insurability of employment decisions are whistleblowers. They are exposing fraud. Not only are they targeted for abuse from their employers, the State gives them a damn good kicking too.

​Representatives of the courier company immediately sought and were refused an ‘off the record” meeting with SCOPE Section representatives.

It was then the Kangaroo Court was convened.

The Kangaroo Court

It was the Chairman of The Revenue Commissioners who first revealed that a group of powerful people had already met up to ‘rule’ on the individual courier’s request to SCOPE.

In his August 9, 2000 letter to the Chairman of the Public Accounts Committee (previously mentioned), the Revenue Chairman wrote –

“I understand that (NAMED) has formally taken up the question of his insurability status with the Dept. Social, Community and Family Affairs. The issue of couriers was also raised at the inaugural meeting of an ’employment status group’ under the auspices of the Programme for Prosperity and Fairness. The group consist of representatives of ICTU, CWU, IBEC, Revenue and the Departments of Finance and Social, Community and Family Affairs. It is envisaged that representatives of the Department of Enterprise, Trade and Employment will be invited to the next meeting”.

This court was formed in the time between the SCOPE Deciding Offier’s request to the Social Welfare Inspector dated July 27, 2000 and the Revenue Chairman’s letter to the PAC Chairman dated 9 August 2000.

That it was convened specifically in response to the individual courier’s request to SCOPE is confirmed in a letter dated 12 April 2001 from the Secretary to the Chairman of the PAC to the individual courier.

It unequivocally shows that a group of powerful vested interests met and discussed the individual courier’s case while the case was under legally binding determination by the SCOPE Section :

“I enclose, for your information, a copy of an article from the Revenue Commissioners’ publication ‘Tax Briefing, issue 43, April 2001’. The article relates to the Report of the Employment Status Group set up under the auspices of the Programme for Prosperity and Fairness.

I believe its contents may be of interest to you in light of the case you are making (In fact, I believe your case was the one which gave rise to the Group’s formation and I know it was certainly discussed at some of the Group’s meetings!)”.

There are two reports of this meeting. The first is the official story contained in the Revenue Commissioners’ publication ‘Tax Briefing, issue 43, April 2001’. The second is an internal report from the Communications Workers Union who were present at the inaugural meeting of this court:

“There is an ongoing case involving one of the CWU members (NAMED) with Social Welfare. In this case (NAMED) claimed to be employed and not self employed and took an appeal to SCOPE Section against his alleged employer (NAMED).

The view of IBEC, Revenue & Finance was that the status quo should remain.

Where a worker has a disagreement over his/her employee status they can take a case to the high court and seek a legal definition”

Forever more, Insurability of Employment cases were to be decided by policy directions from this court and not on the applicable law and the individual circumstances of the case. The Kangaroo Court demonstrably set out to overrule the precedents set by the Denny Supreme Court case just a few years earlier.

The Department of Social, Community and Family Affairs representative on this court had deeply embedded himself with the individual courier case with SCOPE and served, at the Minister’s pleasure, at the highest levels in the Social Welfare Appeals Office until his retirement almost a decade later.

As the Minister’s representative, he was duty bound to ensure that the court’s policy direction superseded applicable law and individual circumstances in the SWAO’s decisions.

A Meeting in The Courier Base

As was shown in the refusal to have an ‘off the record’ meeting and indeed in the refusal to bow to Revenue pressure in the Denny case, the integrity of individual SCOPE Deciding Officers was known to be above reproach.

This presented a problem for the special court who clearly wanted SCOPE to rule according to it’s secret edict in the ongoing case of the individual courier, an instruction which was made known by the courts’ Social Welfare representative to both SCOPE and the SWAO.

Eventually, on August 17, 2000, the Social Welfare Inspector who had been instructed by SCOPE to complete the Insurability of Employment Form (INS1), and ask the 14 additional questions, met with representatives of the courier company. The ‘Official’ investigation had begun, a week after the special court had ruled.

Three people were present at this meeting. The Social Welfare Inspector, the General Manager who was also the courier companies representative in the Burlington Hotel who negotiated the ‘Special Tax Agreement’ in 1997, and the Office Manager who had previously been one of the Secretary General’s ‘Test Cases’ in 1995.

The Social Welfare Inspector and the General Manager drove from their respective offices in west Dublin to meet together with the Office Manager in a dank courier base in Dublin 2.

​The ‘Insurability of Employment’ (INS1) form was completed and signed by the General Manager and witnessed by the Social Welfare Inspector. The INS1 form was previously praised by Mr Justice Ronan Keane for its incisive clarity in the Denny Case. It is practically impossible to ‘game’ the INS1 form.

The 14 additional questions were not asked by the Social Welfare Inspector. Instead the Social Welfare Inspector wrote a report of this meeting but he claimed that he met both the Office Manager and another Manager of the Company, not the General Manager, even though it is the General Manager’s signature on the INS1 form which was completed at this meeting.

This several page report attributes evidence to a manager he never met or spoke to. This ‘report’ directly contradicts the signed and witnessed evidence given by the General Manager on the INS1 Form.

Several years later, the individual courier summonsed the Social Welfare Inspector to the Circuit Court where the Social Welfare Investigator was forced, under oath, to admit that he had never met or spoken to the man he attributed evidence to in his extensive report.

The Department of Social Welfare was informed at the time by the Circuit Court Judge that this matter should require another day in court but the department has ignored the judge’s comments ever since and has refused, numerous times, including this year, to act upon this evidence of deliberate deception.

Both the completed INS1 form and the falsified Social Inspector’s Report were returned to the SCOPE Section. ​

The Futility of Fake ‘Test Cases’

On September 6, 2000, the SCOPE Section Deciding Officer issued his decision on the insurability of employment of the individual courier:

“Having considered all the available evidence on file in this case and the Social Welfare Inspector’s Report, I am satisfied that (NAMED) is employed under a contract of service (Employee) by the company. He is an integral part of the business, has to render personal service and is subject to control, direction and dismissal by the company”

The decision was backdated to the beginning of the couriers employment with the company on 2 August 1997, exactly 4 months after the industry wide ‘Special Tax Agreement’ had been signed off on in the Burlington Hotel.

A short, one-line letter issued from the SCOPE Section to the Social Welfare Inspector who had falsified his report. It stated –

“Please note Scope Decision in this case and deal with compliance”

The secret tax agreement lay in tatters, not worth the paper it was written on. There was no basis in law to label all couriers as self-employed. Hundreds of couriers and other miss-classified employees in dozens of companies were now in a position to claim their rightful employment status. The implications would be felt across a plethora of industries. Pandora’s box was well and truly open.

The courier wrote to the Chairman of the Public Accounts Committee –

“Thank you for your prompt reply and the enquries(sic) you have made. Further to this matter, I have received a decision from Scope, attached. This decision makes it completely apparent that the protracted discussions between Revenue and representatives of the courier industry did not represent the couriers nor in any way reflect the true conditions under which they labour. A cabal of courier companies deliberately misled and continue to mislead the Revenue, Social Welfare and the tax payer. Blatant abuse is openly available for all to see”.

The Ambush

On September  22, 2000, a firm of accountants wrote to the SWAO to appeal the SCOPE decision. They gave no grounds for appeal other than they believed the courier was hired under a contract for services and they ask to review the evidence. They claim that there is a ‘Contract’.

On November 1, 2000, the Chief Appeals Officer wrote to SCOPE and notified them that an appeal had been lodged. He quotes legislation and requests documentation. At the end of his letter he suggests that the SCOPE Deciding Officer should save them all the bother of an appeal:

“Please note that under Section 248 (1) of the Social Welfare Consolidation Act, 1993, the Deciding Officer’s decision may be revised by a Deciding Officer if this appears to be warranted in the light of new facts or evidence. Where such action is taken, you are requested to inform the Appeals Office in order that the Appeal may be recorded as closed”

Now the thing about this request for more documentation is that the Deciding Officer had already issued all the documentation he was legally required to.

Whether the Deciding Officer ever knew of this communication from the Chief Appeals Officer or not is unknown. What is known is that a lengthy letter was sent to the Chief Appeals Officer from the SCOPE Section.

This letter is a matter of serious concern. It significantly alters the Deciding Officer’s decision and the evidence and yet the Deciding Officer’s name is printed at the bottom as though it was he who had written it. This letter states that all this information was already sent to the accountancy firm.

Along with the printed name at the bottom of this letter, is a signature, a ‘PP’ signature, a ‘signed on behalf of signature’, it is the name and signature of the Department of Social, Family and Community Affairs representative on the special court.

On 16 October 2000, the Chief Appeals Officer replied to the Accountancy Firm and enclosed –

Couriers original request to Scope including attachments
Both INS1 Forms
Letter from Scope to SW Inspector
Altered Report from Social Welfare Inspector
Altered Memo from Minister’s representative on the Kangaroo Court

At the end of his letter, the Chief Appeals Officer wrote:

“Upon review of these papers please forward the grounds of Appeal to the Chief Appeals Office”

A month later the Social Welfare Appeals Office (The current Chief Appeals Officer to be more accurate) again wrote to the Accountancy Firm and pleaded for their reasons for appeal:

“With further reference to your letter of 22 September and, in particular, you request to have the opportunity to present a detailed case on review of the evidence available to the Deciding Officer, perhaps you would advise, please, if you are now in a position to furnish detailed Grounds of Appeal”

There is no other judicial or quasi judicial process where this ‘fishing’ for detailed grounds of appeal and the SWAO’s craven subservience would be tolerated.

On January  23, 2001, 128 days after the legal deadline to provide a written appeal clearly stating the Grounds of Appeal, the Social Welfare Appeals Office allowed the appeal go ahead without any grounds for an appeal whatsoever.

The Appeals Officer asked everybody to identify themselves. This was the first time the Social Welfare Inspector and the Manager named in his altered report had actually met. The Appeals Officer declared his intent to proceed and stated that he would be getting the Social Welfare Inspector to read from the report.

The accountancy firm didn’t show up (they were obliged to by the way), instead the courier company turned up with a legal team. The Appeals Officer then referred to his previous correspondence and asked if the Courier Company was going to provide written grounds of appeal.

The barrister for the courier company said that they would not. It immediately descended into chaos. Neither SCOPE nor the courier would agree to continue without legal representation. The Chief Appeals Officer adjourned the hearing.

After the meeting, still inside the Social Welfare Appeals Office, the Scope Section representatives and the courier were asked into a room. A man inside went on to explain that the insurability status of couriers had already been sorted out.

He said previous cases had sorted it. The courier told the man that the previous cases were ringers and the meeting abruptly ended. The man was the minister’s representative on the Kangaroo Court. A few minutes later the same man went into the same room with the Appeals Officer who was hearing the case.

Scope Lawyers Up

“It is not the practice of Scope Section to be represented by legal counsel at Appeal Hearings”
​Leo Varadkar, September 2016.

The Appeal resumed on 1 March 2001, no reasons for Appeal were provided.

​SCOPE’s legal team represented the Minister for Social Community and Family Affairs, it said so on their Legal Submission. This Legal Submission on behalf of the Minister cited Henry Denny & Sons (Ireland) LTD, trading as Kerry Foods v. The Minister for Social Welfare (1998) and concluded :

“Applying the law to the facts of the instant case, it is concluded that the Appeals Officer is bound to hold that the claimant is employed under a contract of service (employee).”

The courier company’s legal submission still did not provide grounds for appeal, it simply listed the Deciding Officer’s conclusions and said they were ‘factually incorrect’. The Courier Company Barrister cited McAuliffe –v- the Minister for Social Welfare (1995) as the relevant legislation.

Part 2 on Monday.

Martin McMahon is an employment rights campaigner, blogger, 1 half of @echochamber, author or ‘Ramshorn Republic, To Hell or the High Court’ .

Pics: Rollingnews

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14 thoughts on “Couriers: The Untold Story Of The Biggest Heist In Irish Tax History

  1. GiggidyGoo

    the thing is, RTE people are billing as if they’re companies, but their main source of income is RTE. They should be classed as employed, and pay PAYE/PRSI as such. So don’t just pick the easy occupations.

  2. Biddy

    Leo won’t go after this social welfare fraud even though it’s many times more than claimant fraud. FG hypocrites.

  3. martco

    most of the Tier1 IT services crowds operating in this country are chest deep in this, smart HR departments mask it in a number of ways, I personally know self employed professional lads (some have even had to setup as Ltd companies presumably to insulate the client) who have worked the same role for the same crowd at the same physical office desk for 5+ years on 3/6 month contracts which just happen to keep on getting renewed….they definitely absolutely are employees in every sense but on a daily rate & without any benefits & know they are literally only as good as their last day’s work or some budgetary whim….large FDI type orgs you all know who they are conveniently seem not to interest the revenue atall atall. such bs.

  4. Matt Lucozade: The Only Reader of the Village

    Great, except… So What?

    This article does NOT deal with the “gig “economy” today. It relates to 20 and 30 year old case documentation. Was this a first year TCD sociology tutorial paper for Easter?

    Contingent worker means Ryan Tubridy or Ahmed in his Just Eat bike helmet.

    The Gig Economy is Exploitation of Millennials by Mobile Phone-Owning Millennials.

    Let’s deal with that…

  5. Emah

    Didn’t know what to expect but I enjoyed that. I thought it ended a bit abruptly…..and I see now the original piece by Martin has several more paragraphs. How come its not all here?
    Very interesting nonetheless, although i can’t say I’m shocked to be honest, little of the state’s real business is open or transparent.

  6. italia'90

    Excellent article Martin. Looking forward to part 2.
    Also, your podcasts are excellent listening too.

    I wonder do people know the extent of this pretend gig economy here atm?
    Almost all of the cold callers that knock your door are hired or switched to bogus self employment contracts by their employers.
    If they can’t work for anybody else, controlled by the company as to where they can work, participate in daily/weekly training sessions and cannot bill for their services, how are they self-employed?

    I personally know of companies such as Energia, SSE Electricity, Eir, Phonewatch, Network Security, Home Secure and many more who are conducting the same social welfare fraud as mentioned in your article.
    It’s quite clearly a competitive disadvantage to good employers, who are not cowboys, and then penalized by our taxation and social protection mandarins.
    Do we have any Anti-Trust/anti-competition laws in Ireland similar to those in the US?
    Should this matter not be something for the ECJ?
    It’s clearly anti-competitive and indirect state aid.

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