EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
Tom Vaughan -claimant UD312/2013
MN161/2013
against
Cappoquin Poultry Limited (In Receivership) -respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms D. Donovan B.L.
Members: Mr J. Browne
Mr F. Dorgan
heard this claim at Waterford on 30th July 2014
Representation:
Claimant: In person
Respondent: Mr. Liam Reddy and Mr. Derek Reddy were present on behalf of the receiver.
Summary of evidence:
It was the claimant’s case that he was an employee from 1st October 2008 to 23rd August 2012 in the role of Financial Controller. At the beginning of the employment the claimant did not draw wages. However, when a shareholder departed the company the claimant felt his position was vulnerable and he requested a specific contract. The claimant opened to the Tribunal a copy of his terms and conditions of employment dated 6th April 2009 but with a commencement date of 4th October 2008. These said terms and conditions of employment recited that the claimant’s job title was Financial Controller and contained the usual terms and conditions of a contract of employment save for a clause reciting the advancement by the claimant of a loan of €300,000 to the respondent company and a term that “in the event of the company being in a difficult financial position” the claimant “may be asked to defer salary or bank loan repayments (but not both).” From this time the claimant received a salary and re-payments of a loan he had provided to the respondent company. The claimant’s salary and PRSI contributions were paid for 2008/2009.
The claimant gave evidence that his salary had been deferred from October 2010 until 17th August 2012 when he was paid €1,269.88.
He understood the reason for this due to his role as Financial Controller. However, pension contributions to the value of €12,697 were paid on his behalf and the re-payments of the loan continued. He also received a number of weeks’ pay in 2012 when the examiner was appointed. The claimant submitted a copy of a payslip dated 17th August 2012 and showing gross wages of €1,269.88 paid to him at that time.
An examiner was appointed to the company in August 2012. A few weeks later the examiner applied for executive powers in the High Court. The claimant stated he was present at that hearing with the directors of the company. Later that day when the claimant attended at the company premises he was informed by a representative for the examiner that he should leave. The claimant was shocked and protested that he was an employee. He was told if that was the case then he should return the following day. When the claimant returned the next day on 23rd August 2012 a representative on behalf of the examiner sent the claimant home and told him not to return to the premises again. It was the claimant’s case that he was the only employee let go on that day. Since the dismissal the claimant has drawn a pension payment since his 65th birthday and he has also undertaken accounting work.
In cross-examination he accepted that he was an investor in the respondent company but said he was also an employee. The claimant did not really think about the fact that he remained as company secretary, a position he has held since the company was formed. In reply to questions from the Tribunal, the claimant accepted that the examiner had the authority to dismiss him from his employment but he stated that he was dismissed summarily and without procedures.
Mr. R, the representative for the receiver informed the Tribunal that the receiver was appointed in August 2013 by which time the company was insolvent. Nothing in the company records indicates that executive powers were sought by the examiner. It was the receiver’s case that the claimant was not in fact an employee of the company. It would be highly unusual for an employee to remain working for a number of months without pay. It was submitted that the contract of employment opened by the claimant related to an earlier period of employment. Mr. R stated that the claimant’s case was somewhat unusual as he was the company secretary and a substantial investor to the company. Even if the claimant had been let go by the examiner, as company secretary he was entitled to attend all board meetings up until the time of December 2012 when he was asked by the examiner to resign as company secretary.
Mr. R was unaware of the number of staff let go at the time the examiner was appointed in August 2012. While the directors are still in situ it is the role of examiner to put together a scheme of arrangement and as part of this it may be necessary to “slim down” the company. The company had 100 employees at that time and it was Mr. R’s understanding that others were let go the same as the claimant including two directors and possibly some employees. All remaining employees were made redundant on 15th August 2013 when the factory closed. As this was also the date the receiver was appointed the representative was unsure if earlier redundancies had occurred.
Determination:
The Tribunal finds that the claimant’s evidence was uncontested in so far as there was no witness from the respondent who had any involvement in the hiring or firing of the claimant.
Having considered the evidence the Tribunal finds that the claimant was an employee of the respondent, inter alia, because he had a contract of employment, paid PAYE and PRSI on the basis of employee status, was under the control of the respondent and integrated into the business of the respondent.
The Tribunal finds that the claimant was dismissed as a result of a scheme of arrangement entered into by the Examiner in order to reduce costs. However, the Tribunal finds that the dismissal was a dismissal by reason of redundancy and accordingly the respondent should have made the claimant redundant entitling him to his statutory redundancy lump sum.
The Tribunal further finds that whereas the Examiner was entitled to dismiss the claimant, and the claimant himself acknowledged this to the Tribunal, the claimant was entitled to fair procedures and to the statutory notice period or pay in lieu of notice.
Accordingly, the claim under the Unfair Dismissals Acts 1977-2007 succeeds and the Tribunal awards the claimant compensation in the amount of €11,400. In calculating the level of compensation the Tribunal took into account the amount that the claimant earned during the relevant period doing private work. The Tribunal also took into account the amount received in respect of a retirement pension policy as the claimant had to retire in order to claim on this policy. Whereas the Tribunal accepts that it may have been difficult for the claimant to secure a new position this does not of itself relieve him from the obligation to seek to mitigate his losses.
The claim under the Minimum Notice and Terms of Employment Acts 1973-2005 succeeds and the Tribunal awards the claimant an amount of €1,923.06 (being the equivalent of two weeks’ gross pay in lieu of notice.)
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)