FTD1317

Claims alleging contraventions of a number of provisions of the Act were presented to the Rights Commissioner in the Claimant’s originating application. However, the only matter dealt with by the Rights Commissioner concerned the question of whether the Claimant’s fixed-term employment with the Respondent was transmuted to employment of indefinite duration by operation of s.9 of the Act. That was the only matter pursued in the appeal.

The facts
There is no material difference between the parties on the factual matrix against which this case must be decided. It is as follows: -

The Claimant is a Civil Engineer. He was employed by Fingal County Council in or about April 2001 as Assistant Resident Engineer to undertake work in connection with the construction of the M1 motorway. He was employed pursuant to a fixed-term contract which came to an end on or about 10^thMay 2004. He then entered into a fixed-term contract with Louth County Council. That contract commenced immediately following the expiry of the earlier contract and was expressed to be for the specific purpose of undertaking work on the Dundalk Western Bypass scheme. The Claimant was again employed as an Assistant Resident Engineer. The expected duration of the scheme was stated to be 18 months.

The contract with Louth County Council came to an end on 5^thDecember 2005. On 6^thDecember 2005 the Claimant entered into a fixed-term contract with Monaghan County Council. The purpose of that contract was to undertake work, as Assistant Resident Engineer, on the N2 upgrade and Castleblaney bypass. The contract was expressed to be for a specified purpose associated with the road works to which it related. It was expected to last for one year. During the currency of this contract the Claimant was promoted to the grade of resident engineer and continued to work on the same project.

It appears that this project extended beyond the period of one year stated in the contract as being its expected duration. While still in the employment of Monaghan County Council the Claimant applied for an advertised position of Resident Engineer with Meath County Council, the Respondent herein. The Claimant was successful in his application and was appointed to the post with effect from 28^thJune 2007. This appointment was pursuant to a fixed-term contract for four years.

Prior to taking up this post the Claimant wrote to the Human Resources Department of Monaghan Country Council, by letter dated 20^thJune 2007, in the following terms: -

• “I wish to give notice from my post as resident engineer on the Castleblayney bypass project. I intend to resign from my position on the close of business on 2^ndJuly 2007.”

• “Dear Adrian,

  I wish to acknowledge receipt of your letter informing us that you are resigning from your position as Resident Engineer with effect from 29^thJune 2007. It is with regret that your resignation is accepted. Copy of Managers Order HR278/07 is enclosed herewith.

  I would like to take this opportunity to thank you for your service to Monaghan County Council and I wish you well in your future career”

All of the projects on which the Claimant was employed by the various Local Authorities for which he worked were financed and directed by the National Roads Authority. The National Roads Authority (NRA) is a statutory body established by s.16 of the Roads Act 1993 to carry out the functions assigned to it by the Act.

The Issues arising
Against that factual background the Claimant contends that he was employed from 2001 until the termination of his employment on 28^thJune 2011 on successive fixed-term contracts by associated employers. He contends that the successive renewal of his fixed-term contracts contravened s.9 of the Act in consequence of which his fixed-term employment was transmuted to employment of indefinite duration by operation of law.

In effect his claim is grounded in s.9(1) of the Act which provides: -

• 9.—(1) Subject to subsection (4), where on or after the passing of this Act a fixed-term employee completes or has completed his or her third year of continuous employment with his or her employer or associated employer, his or her fixed-term contract may be renewed by that employer on only one occasion and any such renewal shall be for a fixed term of no longer than one year.

• (2) Employers are deemed to be associated if—
  • (a) one is a body corporate of which the other (whether directly or indirectly) has control, or

    (b) both are bodies corporate of which a third person (whether directly or indirectly) has control.

The Claimant also contends that notwithstanding the terms of the letter that he sent to Monaghan County Council dated 20^thJune 2007, he did not break the continuity of his employment by resignation. Rather, he contends, the terms of the letter should be construed as notification of a transfer between associated employers. It was further submitted by Counsel for the Claimant that, as between associated employers, a resignation does not result in a break in the continuity of employment. In advancing that submission Counsel relied upon the decision of the Employment Appeals Tribunal for Great Britain inSJ Binns v Versil Limited[1975] IRLR 273.

The Respondent’s position is that that Local Authorities are not under the control of the NRA and are not associated employers within the meaning of s.2(2) of the Act. The Respondent further contends that even if Local Authorities could be regarded as associated employers (which is denied) the Claimant broke the continuity of his employment by voluntarily leaving his employment with Monaghan County Council prior to taking up employment with the Respondent. On this construction of the facts the Respondent submitted that the Claimant was employed by the Respondent on a single fixed-term contract which was not renewed in consequence of which s.9 of the Act has no application.

Conclusion of the Court
The submissions advanced in the course of this appeal concerning the continuity of the Claimant’s employment are predicated on the proposition that the four Local Authorities for which he worked are associated employers. It was submitted that a resignation from the employment of one associated employer in order to work for another associated employer does not break the continuity of his employment.

Subsection (5) of s.9 of the Act imports the provision of the First Schedule of the Minimum Notice and Terms of Employment Act 1973 for the purpose of determining if service is to be regarded as continuous. In relevant part the First Schedule of that Act provides: -

• • ( a ) the dismissal of the employee by his employer or

    ( b ) the employee voluntarily leaving his employment.

  2. A lock-out shall not amount to a dismissal of the employee by his employer.

  3. A lay-off shall not amount to the termination by an employer of his employee's service.

  4. A strike by an employee shall not amount to that employee's voluntarily leaving his employment.

  5. An employee who gives notice of intention to claim redundancy payment in respect of lay-off or short-time shall be deemed to have voluntarily left his employment.

  6. The continuous of an employee in his employment shall not be broken by the dismissal of the employee by his employer followed by the immediate re-employment of the employee.

  7. If a trade or business is transferred from one person to another (whether or not such transfer took place before or after the commencement of this Act) the continuous service of an employee in that trade or business at the time of the transfer shall be reckoned as continuous service with the transferee and the transfer shall not operate to break the continuity of the service of the employee.

• The decision of the Court of Appeal for England and Wales inSothern v Franks Charlesly & Co[1981] IRLR 278is authority for the proposition that where unambiguous words of resignation are used by an employee and are so understood by the employer, the employee thereby brings his or her employment to an end. There are, however, recognised exceptions to this general rule. The circumstances in which these exceptions can apply was explained by the British EAT inKwik-Fit (GB) Ltd v Lineham[1992] IRLR 156. Here, having reviewed the authorities, the Tribunal held: -
  • Let us first look at the problem from the approach of sound management. As we have said, the industrial members take the view that the way in which this industrial tribunal have expressed themselves puts too high a burden upon employers. If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment, personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure (“being jostled into a decision”) and indeed the intellectual make-up of an employee may be relevant (see Barclay[1983] IRLR 313). These we refer to as “special circumstances”. Where “special circumstances” arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such enquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that that in the “special circumstances” the intention to resign was not the correct interpretation when the facts are judged objectively.
  That approach has been followed in many cases both in this jurisdiction and in the UK. The test is whether the words of resignation used by the employee, taken in the context in which they are used, represented his or her true and considered intention or whether they were a heat of the moment response to some occurrence. More recently, inWilloughby v CF Capital Plc[2011] IRLR 985, the Court of Appeal for England and Wales had to consider the application of this principle in deciding whether the Claimant had resigned from her employment or had been dismissed. At par 26 of the report Lord Justice Rimer said: -
  • Second, employment law is, at least in large part, a branch of contract law. The principles of contract law ordinarily require that a person's intentions are ascertained not by reference to his subjective intentions but objectively, by reference to how a reasonable man would interpret them. His intentions will therefore be ascertained by reference to a consideration of the words used, whether written or oral, in the context in which he used them...”
    
  Rimer LJ then continued, at par 27: -
  • Third, the 'special circumstances' exception to which I have referred is one that finds its expression and application in several reported authorities. They are cases in which either the employee has given an oral notice of resignation or (less commonly) in which the employer has given an oral notice of dismissal. The words of the notice so given may, on the face of it, be clear and unambiguous and may take effect according to their apparent terms. Indeed, the general rule is that they will do so. The authorities recognise, however, an exception to that general rule: namely, that the circumstances in which the notice is purportedly given are sufficiently special that it will or may not take such effect. For example, the words of notice may be the outcome of an acrimonious exchange between employer and employee and may be uttered in the heat of the moment such that there may be a real question as to whether they were really intended to mean what they appeared to say. In such circumstances it will or may be appropriate for the recipient of such a notice to take time before accepting it in order to ascertain whether the notice was in fact intended to terminate the employment. If he does not do so and, for example, simply (and wrongly) accepts an employee's purported resignation at face value and treats the employment as at an end, he may find himself on the receipt of a claim for unfair or wrongful dismissal. The general rule and the 'special circumstances' exception to it have been recognised in several authorities of both the EAT and this court.

It is also of significance that par 6 of First Schedule of the Minimum Notice and Terms of Employment Act 1973 provides that a dismissal followed by immediate reemployment does not break continuity of employment. There is no corresponding provision in relation to resignation. It is an established rule of statutory interpretation that where a statute makes a specific provision in respect to one set of circumstances it is to be assumed that the legislature intended to exclude that provision in other circumstances. This rule is encapsulated in the maximexpressio unius est exclusio alterius. The Oireachtas has provided that where an employee’s employment is terminated by dismissal, and he or she is immediately reemployed, continuity of employment is preserved. It must, therefore be held that where employment is terminated by resignation immediate reemployment does not operate to preserve continuity.

In these circumstances the Court must hold that the Claimant resigned from his employment with Monaghan County Counsel and thereby severed his prior service, even if that Local Authority and the Respondent could be regarded as associated employers (and the Court makes no such finding).

In considering the submissions of Counsel concerning the decision of the EAT for Great Britain inSJ Binns v Versil Limited[1975] IRLR 273, the Court has examined with care the judgement delivered in that case. The case turned on the true construction of par 10(1) of the First Schedule of the Contracts of Employment Act 1972 (which has long since been repealed). It provided: -

• 'If an employee of a company is taken into the employment of another company which, at the time when he is taken into its employment is an associated company of the first mentioned company, his period of employment at that time shall count as a period of employment with the associated company and the change of employer shall not break the continuity of the period of employment'.

• “This application raises an interesting point which, so far as I know in nine years of experience, has not arisen before and is not covered by any higher authority. The provisions of the Contracts of Employment Act 1972 in relation to continuity of employment between 'associated companies' have been described by the Industrial Relations Court as a trap for the employee who may not realise that two companies controlled by the same person still may not be associated companies within the definition in the legislation. This is a matter which is being taken care of by a bill at present before Parliament. This case is rather the reverse, namely the legislation providing what may be a trap for employers, although we do not think that it is a trap which could frequently be set by employees.

Associated Employers
For the sake of completeness, the Court has considered the submissions of Counsel to the effect that Local Authorities are associated employers by reason of their common control by the NRA. The leading authority on what constitutes associated employers is the decision of Budd J. inBrides v Minister for Agriculture, Food and Forestry[1998] E.L.R. 125. It is clear from that decision that the crucial test is the degree to which the putative associated employers are controlled by a third person. Control in that context means an authority to direct the bodies corporate in question. While the NRA may have some authority to direct certain activities undertaken by Local Authorities that could not amount to control of the Authorities themselves. Hence the Court cannot accept the submissions made on behalf of the Claimant in contending that that Monaghan County Council and the Respondent are associated employers. For the avoidance of doubt the Court wishes to make it clear that it has reached that conclusion on the basis of the submissions advanced in the course of this case and the decision on this point has no wider implication.

Determination
The Court is satisfied that the reckonable service of the Claimant dates from the commencement of his employment with the Respondent in or about 28^thJune 2007. He was employed on a single fixed-term contract which was not renewed. Hence s.9 of the Act has no application.

For these reasons the decision of the Rights Commissioner is affirmed and the within appeal is disallowed.

Signed on behalf of the Labour Court



Kevin Duffy
CR______________________
9th July, 2013Chairman



NOTE

Enquiries concerning this Determination should be addressed to Ciaran Roche, Court Secretary.