EMPLOYMENT APPEALS TRIBUNAL
APPEALS OF: CASE NO.
Maybin Support Services (Ire) T/A Momentum Support UD873-UD874/2013
-appellant TU27/2013
TU28/2013
against the recommendation of the Rights Commissioner in the case of:
Patricia Kelleher -respondent 1
Martina Kelleher -respondent 2
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS REGULATIONS 2003
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms D. Donovan B.L.
Members: Mr D. Hegarty
Mr D. McEvoy
heard this appeal at Cork on 5th November 2014
Representation:
_______________
Appellant: Mr Bill Austin, IBEC, 84-86 Lower Baggot Street, Dublin 2.
Respondent: Mr Cian Cotter B.L. instructed by,
C W Ashe & Co, Solicitors, South Square, Macroom, Cork
This case came before the Tribunal by way of an employer appeal of the Rights Commissioner Recommendation ref: r-124484-ud-12JOC, r-126966-ud-12JOC, r-124490-ud-12JOC, r-127440-ud-12JOC, r-129874-tu-13JOC, r-129880-tu-13JOC under the Unfair Dismissals Acts, 1977 to 2007 and the Protection of Employees on Transfer of Undertakings Regulations 2003.
Summary of Evidence
The employer is a contract cleaning and security company. They held the cleaning contract for site A. They provided 3 employees to that site including both respondent employees as cleaners. On the 30th of March 2012 the employer wrote to both employees informing them that the contract had been lost but their employment would be transferred to the incoming contractor (BKR) as per TUPE regulations. The employer also wrote to the incoming contractor to confirm this position; the incoming contractor declined their TUPE obligations and refused to employ both employees. The employer wrote again to the incoming contactor on the 12th of April 2012 advising them that TUPE did apply and that the employees would be advised to take legal advice on the matter and the recourse available to them.
On the 12th of April 2012 the employer wrote to the employees informing them that the incoming contactor would not be employing them and to seek legal advice on the matter. Their employment would cease with the employer as of the 18th of May 2012.
The respondent employees gave evidence of their duties with the company and all communication in relation to the termination of their employment. They gave evidence of their loss and attempts to mitigate their loss.
Determination on the Preliminary Application
The first respondent made an application to join BKR who were named in the application to the Rights Commissioner as the second respondent. The first respondent relied on s.39 of the Organisation of Working Time Act, 1997 as giving the Tribunal jurisdiction to so join.
The Tribunal finds that s.39 has no relevance in the within application.
The Tribunal further finds that in circumstances where no appeal was lodged against the second respondent in accordance with section 9(2) of the Unfair Dismissals Acts 1977-2007 or at all, the Tribunal has no jurisdiction to join the second respondent. The correct procedure would have been for either party to lodge an appeal in accordance with section 9(2) against the determination of the Rights Commissioner as regards the second respondent.
Determination
Having considered the evidence adduced at the hearing and the legal submissions of the parties the Tribunal finds as follows:-
On the company’s own evidence that the main asset in the site A cleaning contract was the workforce; that there were no tangible assets of any significant value and that there was in any event no transfer of any assets.
That the employees were capable of being an economic entity for the purposes of the European Communities (Protection of Employees on the Transfer of Undertakings) Regulations 2003 – Statutory Instrument 131/2003 - as they formed an organised group of wage earners who were specifically and permanently assigned to a common task, being the site A cleaning contract. (see Suzen v Zehnacker Gebaudereingigung GmbH Krankenhausservuce (Case C-13/95) reaffirmed by the ECJ in Sánchez Hildago and Others (Joined Cases C-173/96 and C-247/96, ECJ 10th December 1998) where the ECJ so interpreted economic entity for the purposes of Council Directive 77/187/EEC of 14th February 1977.
That BKR Cleaning did not form part of any economic entity with the employees as the BKR owners were not wage earners but on the company’s own evidence were sub-contractors of the company prior to the site A cleaning contract being awarded to BKR Cleaning.
That the employees had previously been doing the work sub-contracted or transferred to BKR Cleaning by the respondent and that this sub-contracting or transfer resulted in a diminution in the hours worked by the employees. The company clearly did not consider the sub-contracting by them of part of the site A cleaning contract to BKR to be a transfer within the meaning of TUPE or the effect of same on the employees’ employment at that time.
That the economic entity, consisting of the two employees plus one other worker did not transfer because neither the majority or any of the employees of the economic entity were taken over by BKR Cleaning. See paragraph 32 of the judgement in Sanchez Hildago which states as follows:- il
“Since, in certain labour-intensive sectors, a group of workers engaged in a joint activity on a permanent basis may constitute an economic entity, it must be recognised that such an entity is capable of maintaining its identity after it has been transferred where the new employer does not merely pursue the activity in question but also takes over a major part, in terms of their numbers and skills, of the employees specially assigned by his predecessor to that task….”.
It should be noted that in Sanchez Hildago the new employer had engaged or taken over Mrs Sanchez Hildago and her four colleagues but did not recognise their period of service with the previous undertaking unlike the instant case where the employees were not taken over by the BKR.
In Suzen v Zehnacker Gebaudereingigung GmbH Krankenhausservuce (Case C-13/95) the ECJ held that the Directive “does not apply to a situation in which a person who had entrusted the cleaning of his premises to a first undertaking terminates his contract with the latter and, for the performance of similar work, enters into a new contract with a second undertaking, if there is no concomitant transfer from one undertaking to the other of significant tangible or intangible assets or taking over by the new employer of a major part of the workforce, in terms of their numbers and skills, assigned by his predecessor to the performance of the contract.” In the instant case, as already noted, there was no transfer of assets or any of the workforce of the company. This holding by the ECJ in Suzen has been consistently applied by the EAT. In the instant case the company has conflated what they deemed to be an entitlement to transfer with an actual transfer.
In summary the Tribunal finds that there was no transfer of undertakings within the meaning of the European Communities (Protection of Employees on the Transfer of Undertakings) Regulations 2003 – Statutory Instrument 131/2003 between the company and BKR because there was no transfer of workers or assets but merely the pursuance of the activity in question (the cleaning of site A) by BKR and as per paragraph 34 of the judgement in Sanches Hildago the “mere fact that the service successively provided by the old and new undertaking to which the service is contracted out or the contract is awarded is similar does not justify the conclusion that a transfer of such an entity has occurred.”
Accordingly, the Tribunal upholds the recommendation of the Rights Commissioner dated 21st June 2013 that a redundancy situation arose as against the appellant company but because of the failure of the company to afford any procedures in effecting the redundancy, fair or otherwise, the Tribunal finds that claim under the Unfair Dismissals Act 1977-2007 succeeds and the Tribunal awards respondent 2 compensation in the amount of €3,600.
Accordingly, the Tribunal upholds the recommendation of the Rights Commissioner dated 21st June 2013 that a redundancy situation arose as against the appellant company but because of the failure of the company to afford any procedures in effecting the redundancy, fair or otherwise, the Tribunal finds that claim under the Unfair Dismissals Act 1977-2007 succeeds and the Tribunal awards respondent 1 compensation in the amount of €3,033.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)