ADJ-00003891

ADJUDICATION OFFICER DECISION 

Adjudication Decision Reference: ADJ-00003891

Complaints for Resolution:  

Date of Adjudication Hearing: 11/01/2017

Workplace Relations Commission Adjudication Officer: Patsy Doyle 

Procedure: 

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 39 of the Redundancy Payments Act, 1967, following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints. 

Complainant’s Submission and Presentation:

The complainant commenced employment as a Lorry Driver on a Milk Collection run with the respondent company   on January 1, 2009. He received a variable pay of 500-600 euro per week. He worked without incident until the end of February 2016, when the respondent informed him that he was not continuing with the business. His employment ceased on March 27^th, 2016.

He applied for Redundancy and this was refused by the respondent, who told him that a transfer of undertakings had occurred and therefore, his terms and conditions of employment were transferring also to the new employer. The complainant commenced work with the new employer on March 28^th, 2016. When approached by the complainant, the new employer denied a transfer of undertakings had occurred.

The complainant gave evidence at the hearing that he was shocked to discover that his job was coming to an end. He confirmed that he was taken on by the new employer without an application process, but his pay differed by 20 euro per week. In addition, the job was different as it incorporated fertilisers rather than just a Milk Round.

He submitted a copy of a letter dated May 17, where he wrote to the respondent confirming that he had received confirmation from his new employer that TUPE had not occurred .He requested a copy of the transfer of undertakings. He did not receive a response to this letter. He sought a lump sum redundancy payment for his seven year work history with the respondent.

The complainant submitted a letter dated 13 May from his subsequent employer which stated:

“X Company was successful in tender issued by Y, to transport milk. This contract was issued to us by Y Co Op and not by (the respondent) “ 

Respondent’s Submission and Presentation:

The respondent disputed the claim for redundancy, contending that a transfer of undertakings had occurred within the meaning of the Transfer of Undertakings regulations.

The respondent submitted that the company had secured the contract for the Milk run through an open tender offered by Y Co –op .In early 2016, it became apparent that the company was in financial difficulty and would be unable to fulfil the contracts. The Co op was notified and re-tendered the contract.

The tender was awarded to the complainant’s subsequent employer and there was a lead in period where the respondent’s drivers shared their knowledge with the new company.

The respondent gave evidence at the hearing that three Drivers had gone to work for the new company. One truck was transferred. One mechanic on a 1 day a week contract had been made redundant by the respondent .All work ceased at the company on March 27. The respondent told the hearing that the company is neither trading nor insolvent, but had insufficient means to cover the complainants claim for redundancy.

The respondent contended that a Transfer of Undertakings had occurred in circumstances where

1 The assets were sold to the new company undertaking the Milk run.

2 Y Co –op serviced the same customers.

3 The contract was unchanged and there was no change in the work undertaken by the complainant.

The respondent submitted that they had not notified the employees of the transfer but that this was an oversight rather than a deliberative act .This was attributed by them to a parallel period of uncertainty on whether the subsequent company undertaking the Milk Run would be fulfilling the tender themselves or taking on the economic entity of the respondent?.

The respondent contended that they were not liable for the complainant’s claim which they contended was best directed at the subsequent (new) employer.

Decision:

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act. Section 39 of the Redundancy Payments Acts 1967 requires me to decide this claim. I have considered the oral and written submissions of both parties in this case and I am struck by the mutual respect demonstrated by them.

This is a single claim for Redundancy Claim No.CA-00005710-001

The complainant submitted his understanding of the circumstances surrounding his termination of employment.

He submitted a copy of his P45

He confirmed that he had not been party to any official transfer of employment from the respondent to the subsequent employer.

He explained that his weekly rate of pay differed and the material content of the position had altered at the new employment.

The respondent referred to a Transfer of Undertakings having occurred between the respondent and the subsequent (new) employer, yet no evidence was submitted of the occurrence.

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) apply to any transfer of an undertaking, business or part of a business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger and accompanied by notification of

1 A Consultation Period

2 Date of proposed transfer

3 Notification of Legal Implications of the transfer

4 Notification of any relevant economic and social implications of the transfer.

In the instant case, the respondent confirmed that the Y Co Op accepted the tender of the subsequent employer in this case in late February 2016. They contested the claim for Redundancy on the basis that a TUPE situation had prevailed.

I accept that the core business conducted between the respondent and the Co-op was in the form of a Milk Run until the end of March, 2016. The respondent was replaced by means of a successful tender from the “new employer” at that time.

The Employment Appeals Tribunal considered an analogous scenario in Electric Skyline ltd V Mullen TU 67-70/2012, where it determined that a TUPE situation had not unfolded following a scenario whereby a Company B had succeeded in their tender application to the Local Authorities for the work previously carried out by Company A. No assets had transferred and ten employees lost their jobs .The Tribunal observed that:

The case which dealt directly with the change of services providers and is the foundation on which all such similar cases followed is the Suzen Case (Suzen V Zehnacker Gebaudereinigung Gmbh Krankenhausservice 1997 IRLR 255) This case clearly established that the mere loss of a service contract to a competitor cannot by itself indicate the existence of a transfer within the meaning of the Directive. In such circumstances, the economic entity previously entrusted does not, on losing a customer, cease fully to exist, and, a business, or part of a business belonging to it, cannot be considered to have been transferred to the new awardee.

I have found considerable overlaps in the instant case. I cannot establish on the evidence adduced that a transfer of undertaking occurred .Instead, I must find that the respondent surrendered his contract with the Y Co Op

Section 7 of the Redundancy Payments Act 1967 defines a Redundancy situation as dismissal resulting wholly or mainly from a number of situations.
S.7 (a) of the Act refers to where an employer has ceased, or intends to cease, to carry on the business for the purposes for which the employee was employed by him, or has ceased or intends to cease to carry on the business where the employee was so employed.

I am satisfied that a Redundancy situation prevailed in the complainants case as described in Section 7(a) in this case.

I am , however, obliged to examine the circumstances of the complainant’s access to new employment one day post completion with the respondent albeit with a new employer .

The Law

Section 9 ((2) of the Redundancy Payments Acts 1967,provides:

An employee shall not be taken for the purposes of this Part to be dismissed by his employer if his contract of employment is renewed, or he is re-engaged by the same employer under a new contract of employment, and—

(a) in a case where the provisions of the contract as renewed or of the new contract as to the capacity and place in which he is employed, and as to the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract, the renewal or re-engagement takes effect immediately on the ending of his employment under the previous contract, or

(b) in any other case, the renewal or re-engagement is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract, and takes effect either immediately on the ending of that employment or after an interval of not more than four weeks thereafter.

(3) (a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if—

(i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment,

(ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer,

(iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which—

(A) sets out the terms and conditions of the employee’s contract of employment with the new employer,

(B) specifies that the employee’s period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer,

(C) contains particulars of the service mentioned in clause (B), and

(D) the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph.

(b) Where in accordance with this subsection an employee is re-engaged by the new employer, the service of that employee F27[with the previous employer] shall for the purposes of this Act be deemed to be service with the new employer.  

Section 9(3) of the Act sets down provisions where a dismissal could be ruled out in circumstances where a tri-partite agreement had come into being on the re-engagement of the complainant by another employer immediately on termination of his previous employment.

I am satisfied that the respondent experienced a period of uncertainty and had not actioned the provisions of Section 9 at any time. I am further satisfied by the letter of the new employer, dated 13 May 2016, which stated that the complainant was a new hire to this company .This was uncontroverted evidence.

I find that Section 9(3) has no application to this case.

I am satisfied that the complainant is entitled to a lump sum payment under the Redundancy Payments Acts 1967-2007 based on the following criteria . 

Date of Commencement:   1 January, 2009 

Date of Termination:         27 March, 2016 

Gross Weekly Pay:             600.00 euro per week 

This award is made subject to the complainant having been in insurable employment under the Social Welfare Act s during the relevant period. 

Dated:   26 April 2017