EMPLOYMENT APPEALS TRIBUNAL
APPEAL(S) OF: CASE NO.
Joan Healy RP493/2012
and
Michael Healy RP494/2012
against
Bia Ganbreise Teoranta,
under
REDUNDANCY PAYMENTS ACTS, 1967 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. K.T. O'Mahony BL
Members: Mr. D. Hegarty
Mr. J. Flavin
heard this case in Cork on 27 September 2013
Representation:
_______________
Appellant(s):
Mr. Patrick Goold. Goold Solicitors.
South Square, Macroom, Co. Cork
Respondent(s):
Ms. Amy Murphy. Racheal O'Toole Solicitors.
City Park House, 20/21 Sullivans Quay, Cork
The decision of the Tribunal was as follows:-
Preliminary Issue
The respondent contended that the Tribunal has no jurisdiction to hear the appeals under the Redundancy Payments Acts 1967 to 2007 by virtue of the clause 7 of a settlement agreement.
Summary of Evidence
The first appellant and second appellant (hereinafter the appellants), the original owners of Co. A, sold it in its entiretyto Co. F in July 2008
Both appellants commenced employment as joint production managers with Co. F on a fixed term contract basis, to run from 8 July 2008 to 7 July 2011.
In September 2010 the appellants issued Circuit Court proceedings against Co. F claiming damages for breach of contract for failure to pay each of the appellants certain wages.
On 7 April 2011 an order was made amending the Circuit Court proceedings to include Co. A,as a defendant.
In May 2011, by way of a share purchase agreement between Co. F and Co X (the respondent herein) the respondent purchased the entire share capital of Co A (a wholly owned subsidiary of Co F).
The appellants’ fixed term contracts expired on 7 July 2011. The respondent’s position was that there was a break in their employment at that stage and they commenced employment with the respondent on 16 July 2011. The sworn evidence of the appellants was that on some date either in late May or early June 2011, the accountant for Co. F visited the workplace and informed the employees, including the appellants, that their employment was being continued. Within a few days the two directors of Co. X visited the workplace and both appellants agreed with them, due to the company’s financial position, to continue in the employment at a reduced salary. The appellants wanted to remain in the locality.
On or around 16 July 2011, the appellants compromised their claims against Co F and Co A.
The settlement contained “a full and final settlement clause”. The settlement sum in each case was for €31, 750.00, which was the precise amount of the unpaid wages owing to the appellants over 2009 - 2011. Payslips to this effect were issued by the respondent and the usual statutory deductions were made from the total amount in the case of each appellant.
On or around 7 February 2012, the respondent placed the appellants on temporary lay-off. Over four weeks later, in early March 2012 the appellants served an RP9 on the respondent claiming redundancy payments. By letter of 21March 2012, a director of respondent (Co. X) informed the appellants that their respective positions in the respondent company were redundant and no suitable alternative positions were available.
In July 2012 the appellants initiated appeals under the Redundancy Payments Acts with the Tribunal, each appellant seeking a redundancy lump sum payment from the respondent.
The respondent contended that the Tribunal has no jurisdiction to hear the appeals under the Redundancy Payments Acts 1967 to 2007 by virtue of the aforementioned settlement agreements, in particular by virtue of clauses 7 &13 thereof.
On the substantive issue the respondent contended that, in any event, the appellants did not have the requisite two years’ service to entitle them to a redundancy lump sum payment.
Determination on Preliminary Issue and Substantive Issue
Before dealing with the waiver clause in the settlement agreement, theTribunal will firstly deal with section 51 of the Redundancy Payments Acts 1967 to 2007, which was raised in the course of argument between the parties.
Section 51 provides:
“Any provision in an agreement (whether a contract of employment or not) shall be void insofar purports to exclude or limit the operation of any provision of this Act.”
It is well established that statutory provisions in employment protection legislation prohibiting the contracting out of the statutory protections, such as section 51 of the Redundancy Payments Acts, do not preclude severance agreements or compromises of claims. Talbot v Minister for Labour unreported, H.C, Barron J., 12 December 1984, Sunday Newspapers Ltd v Kinsella and Brady [2008] ELR 53 and Minister for Labour v O’Connor unreported HC. Kenny J., 6 March 1973.
The Circuit Court actions for damages for unpaid wages brought by the appellants herein concluded by way of settlement agreements on or around 16 July 2011. Each of the settlement agreements contained the following clauses:
Clause 7 The Employee agrees that the terms of the Agreement provide a full and final settlement of the proceedings and all or any claims that he/she has or may have against the company and /or the employer and/or any of their respective group of companies, officers and/or employees agents and shareholders, howsoever arising, including, without limitation, arising out of or in connection with the employment of the Employee of the company and /or the employer and /or any of their respective Group companies, and the employee hereby fully and finally releases all such entities from all or and any such claims, whether in statute or common law in tort, in equity or otherwise howsoever arising
Clause 13 This Agreement shall enure to the benefit of and be binding upon the respective parties hereto and their respective personal representatives and successors.
In Hurley v the Royal Yacht Club [1997] ELR 225 Buckley J.in the Circuit Court considered a waiver clause in an agreement in the context of the Unfair Dismissals Acts and having concluded that there must be informed consent to such a waiver later in his judgement set out what this requires:
“I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the employee. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice I find the agreement to be void”
This statement of the law was applied by Smyth J. the High Court in Sunday Newspapers Ltd v Kinsella and Brady [2008] ELR 53.
As the appellants were legally represented in the negotiations leading up to the settlements the Tribunal can assume that informed consent was present. However, Clause 7 of the settlement agreements neither lists the various Acts under which the appellants might have waived their entitlements nor does it make clear that they had been taken into account by the appellants. Thus, having considered the legal submissions and the case law on the waiver of employment entitlements and relying on the law as propounded by Smyth J, in Sunday Newspapers Ltd v Kinsella and Brady [2008] ELR 53 and by Kenny J. in Minister for Labour v O’Connorand Anor, unreported HC. 6 March 1973, the Tribunal considers that the appropriate approach at this stage in the enquiry is to examine what was discussed during the course of the negotiations leading up to the agreements of 16 July 2010The unsworn and uncontested evidence on behalf of the appellants was that the unpaid wages of the appellants was the only issue discussed in the negotiations leading to the settlement agreement. This fact is corroborated by a number of other uncontested facts: the settlement figure of €31, 750.00 was the precise amount of the unpaid wages owing to the appellants; payslips dated 30 July 2011 in this amount with the usual deduction made therefrom were issued to each of the appellants and the respondent’s letter of 23 September 2011 to the Office of the Revenue Commissioners confirming that that the payment was in respect of a number of weeks worked in 2009-2011
The Tribunal rejects the respondent’s argument that, due to the impending expiry of the appellant’s fixed term contracts on 7 July 2011, a redundancy payment must have been in the contemplation of the appellants leading up to the settlement agreements. The Tribunal bases its decision on this issue on the sworn testimony of the appellants that in late May or early June 2011, Co. F’s accountant and the two directors of Co. Xinformed the employees, including the appellants, that their employment was being continued. Thus, the Tribunal finds that there was no break in the appellants’ employment between 7 July 2011 and 16 July 2011.
On the purchase of the entire share capital of Co A by Co X in May 2011 the rights of the employees remained unaffected. Similarly, a change of company name does not affect those rights.
Accordingly, for the above reasons the Tribunal finds that the appellants did not waive their statutory entitlement to a redundancy lump sum payment, their employment has been continuous from the time they became employees on 8 July 2008 until it was terminated by reason of redundancy on or around 22 March 2012.
The first appellant is entitled to a redundancy lump sum under the Redundancy Payments Acts, 1967 to 2007, based on the following details:
Date of birth:
Date of commencement: 8 July 2008
Date of termination: 22 March 2012
Gross weekly pay: €478.75
The period 7 February 2012 to 22 March 2012 is non-reckonable due to having been on lay-off.
The second appellant is entitled to a redundancy lump sum under the Redundancy Payments Acts, 1967 to 2007, based on the following details:
Date of birth:
Date of commencement: 8 July 2008
Date of termination: 22 March 2012
Gross weekly pay: €478.75
The period 7 February 2012 to 22 March 2012 is non-reckonable due to having been on lay-off.
These awards are made subject to the appellants having been in insurable employment under the Social Welfare Acts during the relevant period.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)