EMPLOYMENT APEALS TRIBUNAL
APPEALS OF : CASE NOS.
David Mythen TU31/14
- Appellant no. 1
Thomas Sadlier TU32/14
- Appellant No. 2
Bartosz Baziuk TU33/14
- Appellant No. 3
John Nicholson TU34/14
- Appellant No. 4
Paddy Dowling TU35/14
- Appellant No. 5
against the Decisions of the Rights Commissioner in the case of :
Top Security Limited
- Respondent
under
PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS REGULATIONS 2003
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr. C. Corcoran B.L.
Members: Mr. D. Peakin.
Mr. F. Keoghan
heard these appeals at Dublin on the 8th of September 2015 and 26th of January 2016.
Representation:
Appellant: Mr. Hugh Hegarty, SIPTU, Liberty Hall, Eden Quay, Dublin 1.
Respondent: Mr. John Barry, Management Support Services, The Courtyard, Hill Street,
Dublin 1
The decision of the Tribunal was as follows-
These appeals came by of way of the appellants (employees) appealing against the decisions of the Rights Commissioner ref. r-138387-tu-13, r-138388-tu-13, r-138389-tu-13, r-138391-tu-13, r-138612-tu-13.
DETERMINATION:
The Appellants were employed as security officers at the CSSO Office, (CSSO) with company M at two different locations. Subsequently at a later stage this entity was taken over by the respondent. On the 19th of July the Appellants were notified by letter that the contract with the client would be terminated on the 25th of August 2013, and that the respondent had been awarded the contract. The letter further stated that the client (CSSO) had confirmed that the Regulations surrounding the Transfer of Undertakings for the Protection of Employees (TUPE) would apply and the Appellants were requested to sign an attached form and return same to their offices before the 26th of July 2013. Further correspondence on this matter was sent to GD, General Manager of the respondent company invoking the TUPE Regulations were unanswered. It was stated by the Appellants that attempts to contact the respondent were unsuccessful and they were replaced on the above-mentioned termination date. In the absence of engagement the Appellants maintained that they were caught between two employers, and in a limbo situation.
Appellant No. 1 secured alternative employment six weeks after the termination of his employment.
Appellant No 2 secured alternative employment two weeks after the termination of his employment.
Appellant No. 3 secured alternative employment ten weeks after the termination of his employment.
Appellant No. 4 secured alternative employment nine weeks after the termination of his employment.
Appellant No. 5 secured alternative employment eight weeks after the termination of his employment.
The Respondent on the other hand denied that there was any arrangement that TUPE Regulations would apply in this case. They stated that even though the number involved was small, vis-à-vis the number employed by their company, and the work carried on was practically the same as they had been doing over the years, they were always reluctant to take on new employees in a situation such as this, since their own existing employees were specially trained by their own company. Nevertheless when asked (given the small number of employees involved) whether a re-training or a training course could be conducted, they responded that this was not an option. They did agree in evidence that a workforce and/or goodwill could amount to intangible assets, and by implication amount to a transfer of intangible assets.
The law in this area is largely governed by the relevant provisions of Directive 77/187/EEC and Statutory Instrument Number 131/2003 –European Communities (Protection of Employees on Transfer of Undertaking) Regulations 2003 together with (as already stated) diverse, varied unwieldly and at times contradictory case law. At the outset it seems clear to the Tribunal that while the case law is diverse, varied, unwieldly, and at times contradictory,(as already stated), it follows as a matter of course that one overriding principle is very clear namely that each case is more or less decided on its own unique facts. This case is no exception.
The pertinent relevant sections in S.I. 131 are as follows:
Regulation 3/
“(1) These Regulations shall apply to any transfer of undertaking, business,
or part of anundertaking or business from one employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger.
(2) Subject to this Regulation, in these Regulations – “transfer” means the transfer of an economic entity which retains its identity;
“economic entity” means an organised group of resources which has the objective of pursuing an economic activity whether or not that activity is for a profit or whether it is central or ancillary to another economic or administrative entity.”
(3) These Regulations shall apply to public and private undertakings engaged in economic activities whether or not they are operating for gain.” (Italics inserted)
“Regulation 4/
(1) The transferor’s rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.
(2)Following a transfer, the transferee shall continue to observe the terms and conditions agreed under in any collective agreement on the same terms applicable to the transferor that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.” (Italics inserted).
Having listened to the evidence both written and oral from both parties and having observed the demeanour of the witnesses, and having regard to the wide, varied, unwieldy and at times contradictory nature of the law in this area (as stated) the Tribunal
is of the view that the service involved was an “economic entity” and not a mere activity as it involved a service provided for a profit by groups of workers/ wage earners, in competition with other like services rendered and was rendered in two different locations, and as such comes within the definition as outlined in S.I. 131.
That their identity was retained in that they would continue to carry out the same work for the same customer/client i.e. C.S.S.O. in the same two locations as outlined and that the same customer/client would also be transferring.
That the majority of the workforce pertaining to the locations which involved the transfer of five employees of a total of eight employees in the said entity would be transferred.
That the entity involved two different locations which amounted to a part of business or undertaking, pursuant to S.I. 131.
That the words and phrases “economic entity” and “undertaking” and “business” are used interchangeably.
That the Respondent agreed in evidence that a workforce and/or goodwill could amount to intangible assets and by implication amount to a transfer of intangible assets.
That in a transfer involving a service or services, that in such transfers, assets include intangible assets such as its work-force and goodwill, either solely or in addition to the transfer of tangible assets.
That the absence of a transfer of assets does not necessarily preclude the existence of a transfer of undertakings.
That the transfer would involve a change of employer.
That having regard to the letter from company M dated the 19th of July 2013 stating that the client had confirmed that the TUPE Regulations would apply and requesting them to sign forms containing their details for the attention of the Respondent.
That arising from this and other undertakings given which were relied on by the appellants, that on balance it was envisaged that TUPE were part of the negotiations between the parties and that the Respondent knew or ought to have known that it was intended that TUPE Regulations would apply to this situation.
Accordingly, the Tribunal is of the view that in the special and unique circumstances of this particular case that the TUPE Regulations would apply and that it would be appropriate that the remedy of compensation should be awarded.
That the Respondent by the refusal to engage in any way or meaningful way was determined to avoid any possibility of liability and/or responsibility under the TUPE Regulations.
That no attempt or proper attempt was made by the Respondent, its servants or agents to adhere to the provisions of Section 8 of S.I. 131 in relation to proper information and consultation with the Appellants.
The Tribunal in making their decision are mindful of the sentiments expressed in the following cases:
Hernandes Vidal v Others, 1999 IRLR 132 and Sanchez Hidalgo IRLR 1999 136. “Indeed in certain sectors such as cleaning these assets are often reduced to their most basic and the activity is essentially based in manpower. Thus an organised grouping of wage earners who are specifically and permanently assigned to a common task may in the absence of other factors of production, amount to an economic activity.”
Spijkers Case- 1986 ECR 1199 – “It is necessary to consider all the facts characterising the transaction question, including the type of undertaking or business, whether or not the business’s tangible assets, such as the buildings and moveable property, are transferred, the value of its intangible assets at the time of the transfer, whether or not the majority of its employees are taken over by the new employer, whether or not its customers are
transferred and the degree of similarity between the activities carried on before and after the transfer and the period, if any, for which those activities were suspended.
Nonetheless all these circumstances-
“are merely single factors in the overall assessment which must be made and cannot therefore be carried out in isolation”. (Italics inserted).
The Tribunal regards these words as quoted, together with Sections 3/ and 4/ of S.I. 131, and the relevant rules of statutory interpretation, (given that the overriding purpose of S.I. 131, is to protect employees), taken in conjunction with the diverse and additional case law, together with the evidence as adduced, that on analysis and given the unwieldly nature of the law in this area, in their entirety or in particular are capable of application to the facts of this case, and to the principles as outlined and enunciated above and that it does so in that TUPE Regulations can be applied to the unique and specific circumstances of the present case.
In Hemat v Medical Council 2006 IEHC 187 where it was commented by Mc Kechnie J. that unfortunately it was not possible to date for the European Court of Justice to lay down a general set of rules by which the difficult question as to what constitutes an undertaking can be resolved. That the court has a tendency to determine the issue on a case by case basis, which perhaps is not surprising given the widely varying nature of circumstances which present themselves.
In Hofner and Elser V Macrotron, Case – 41/90 1991 ECR 1-1979. The Court stated as follows “the concept of an undertaking encompasses every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed”.
In the joined cases of Nurten Guney-Gorres C-232/04 and Gul Demir C-233/04 the following decision- Article 1 of Council Directive 2001/23/EC OF 12 OF March 2001 on the approximation of laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings or businesses, or parts of undertakings or businesses must be interpreted as meaning that in examining whether there is a transfer of an undertaking of business within the meaning of that article, in the context of a fresh award of a contract and having regard to all the facts, the transfer of the assets for independent commercial use is not an essential criterion for a finding that there was a transfer of those assets from the original contractor to the new contractor.
The Schmidt Case – C-392/92 1994 IRLR 302,
In this case the European Court of Justice held that the cleaning operations of a branch of an undertaking can be treated as “part of a business” within the meaning of Article 1 (1) of Directive 77/187/ EEC, in a situation where the work was performed by a single employee before being contracted out to an outside body.
In Suzen Case IRLR 255 1997- The absence of a transfer of assets does not necessarily preclude the existence of a transfer of an undertaking.
In Momentum Support Services (Ireland) Limited T/A Momentum Support, Textile House, Steeven’s Lane, Dublin 8 against the decision of the Rights Commissioner in the case of Maureen Lewis, 54 Ennel Court, Ballybrack, Co. Dublin. Case Number TU23/11. Employment Appeals Tribunal, heard on the 14th of March 2013.
The Tribunal held in that case that TUPE Regulations did apply to the circumstances of that case, and that the Suzen Case 1997 IRLR 255 did apply in the sense that a transfer of an undertaking although there had been no transfer of assets, and there may too be a transfer where there is no contractual link between the transferor and transferee.
The Tribunal quotes with approval Mr. Justice Morrison in the case of ECM V Cox 1998 IRLR 255: “It can be said with confidence that neither the presence nor the absence of any one factor will demonstrate that a transfer of undertaking has or has not occurred. It is a question of looking at the facts and keeping an eye on the purpose and protection
given by the Directive”.
David Gray, Robert Mc Cahill, and Derek Steward V Irish Society for the Prevention of Cruelty to Animals, David J. Prenderville and Dublin Corporation-Cases UD 509/94 UD 510/94, UD 511/94 1994 ELR 225 Dublin Corporation had a statutory obligation to provide a dog warden service. They arranged that the ISPCA should provide the service and the three Appellants were employed. Dublin Corporation subsequently put the contract up for tender and the Second-Named Respondent was successful. Each of the three Respondents claimed that the three Appellants were not their responsibility. Applicants were sought for the post of dog warden and three new people employed for the posts. The Tribunal determined that under the Unfair Dismissals Acts 1977 to 1993 and the European Communities (Safeguarding of Employees’ Rights on Transfer of Undertakings) Regulations 1980 there had been an unfair dismissal of the three Appellants by the Second- Named Respondent.
Moses Walsh and Patrick Cotter v Denford Taverns Ltd. and John Bowler – Case UD 436/97, 437/97, 1998 ELR 315.
The First Respondent’s business was a public house with a late night bar three nights a week, together with seasonal restaurant work. The Claimant’s worked for the First Respondent as barmen. When the premises was sold to the Second Respondent, the Appellants reported for work and were told that there were jobs if they wished to apply for them. The Second Respondent was under the impression that the First Respondent had “taken care” of the employees. The Second Respondent closed the premises for renovation, and then opened as a public house and serving food on the premises. The Tribunal determined that there had been a transfer of undertakings in that the business resumed by the Second Respondent was the same or a similar activity to that carried out by the First Respondent. The fact that the Second Respondent carried out the business in a more modern manner, or refurbished the premises, did not relieve him of his obligations under the European Communities (Safeguarding of Employees Rights on Transfer of Under taking) Regulations 1980. Accordingly, it found that the Appellants had been unfairly dismissed.
Accordingly the appeal of the appellants succeeds and the Tribunal awards the appellants as follows:
Appellant No. 1 – €3,600 plus 1 week’s remuneration amounting to €600 under Regulation 10 of S.I.131 for breach of Regulation 8 of S.I. 131. Total award €4,200.
Appellant No. 2 – €1,200 plus 1 week’s remuneration amounting to €600 under Regulation 10 of S.I.131 for breach of Regulation 8 of S.I. 131. Total award €1,800.
Appellant No. 3 – €6,000 plus 1 week’s remuneration amounting to €600 under Regulation 10 of S.I 131 for breach of Regulation 8 of S.I. 131. Total award €6,600.
Appellant No. 4 – €5,400 plus 1 week’s remuneration amounting to €600, under Regulation 10 of S.I. 131 for breach of Regulation 8 of S.I. 131. Total award
€6,000.
Appellant No. 5 – €4,800 plus 1 week’s remuneration amounting to €600 under Regulation 10 of S.I. 131 for breach of Regulation 8 of S.I. 131.Total award €5,400.
Sealed with the Seal of the
Employment Appeals Tribunal
This __________________________
(Sgd.) _________________________
(CHAIRMAN)