Complainant

Respondent

Anonymised Parties

A General Operative (3)

A Beverage Company

Representatives

SIPTU

Tiernan Lowey B.L instructed by Matheson Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003958-002

20/04/2016

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003958-006

20/04/2016

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003958-008

20/04/2016

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003989-002

21/04/2016

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003989-006

21/04/2016

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00003989-008

21/04/2016

The case arises under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (hereafter ‘The 2003 Regulations’). A large number of complaints were presented (over sixty) against various respondents (transferors and transferees).

This is one of three cases against the transferor/respondent and the complaints all relate to the failure of the respondent to comply with the consultation requirements of the TUPE.

However, a preliminary matter arose as to whether the current respondent had a continuing legal responsibility and was properly a respondent in respect of the complaints.

In view of the significance of the preliminary matter it was heard on its own, although the normal practise of the WRC is to hear preliminary matters, reserve a decision on them and move to hear the substantive case in the same hearing. Where subsequently the preliminary matter is decided in the complainant’s favour, this allows a decision on the substantive complaint to be issued without the need for a resumed hearing.

The transferee was on notice of the hearing and the nature of the preliminary objection and made a submission.

The parties were also facilitated with the opportunity to make (and share) further submissions after the hearing and did so.

The respondent went first.

The specific background in relation to the events leading up to the case is as follows.

Receivers were appointed to the respondent company (the transferor) on November 4^th 2015. Part of its business transferred to the transferee on that date; including twenty four members of staff.

The respondent says that it is not a proper party to these proceedings.

Article 3(1) of Directive 2001/23 of 12 March 2001 provides that at the date of transfer all rights and obligations of the transferor to an employee automatically transfer by operation of law to the transferee.

The Directive goes on to provide that member states may create a continuing liability on the transferor post- transfer however Ireland has not done so. The 2003 Regulations, and in particular Regulation 4 make it clear that the State chose not to depart from the basic principle in Article 3 of the Directive that liability passes from the transferor to the transferee.

The respondent further relies on Regulation 10(5) which empowers an Adjudication Officer to award compensation against ‘an employer’. The Regulation is as follows;

‘reference in this paragraph to an employer shall be construed, in a case where ownership of the relevant undertaking or business, or the part concerned of that undertaking or business, of the employer changes after the contravention to which the complaint relates occurred, as a reference to the person who, by virtue of the change, becomes entitled to such ownership.

In this case this means that, with effect from 4^th November 2015 the party having liability (if any) is the transferee.

The jurisprudence of the Court of Justice of the European (CJEU) is clear in this regard; underpinning the position that, absent specific provision for liability on the part of the transferor, it passes to the transferee.

The respondent relied on the decision of the CJEU in Berg v Besselsen [1989] I.R.L.R 447 where it was held;

10; It should be observed that according to the first sub paragraph of Article3(1) of Directive 77/187/EEC ‘the transferor’s’ rights and obligations arising from a contract of employment or from an employment relationship existing on the date of the transfer….shall, by reason of such transfer ..be transferred to the transferee…’

The Court went on the refer to the provision enabling a member state to enact legislation to include the transferor but otherwise noted that, where this has not happened;

‘It follows that, unless the Member States avail themselves of this possibility, the transferor is released from his obligations as an employer solely by reason of the transfer…’

The respondent made other legal submissions including Allan and Others v Stirling District Council (Court of Sessions) 1995 which followed the Berg decision and an article by Deakin and Morris in “Labour Law’ 2012 page 253 where the authors say;

‘This reinforces the point that it is not just contractual obligations which ay be transferred; liabilities arising out of other acts done by the transferor in relation to the employee, such as (for example) conduct amounting to sex discrimination and liabilities in tort, may also be carried over. The same principle applies to liabilities which an employer may incur for failure to comply with statutory information and consultation requirement.

The complainant asserted that the current respondent is properly a party to these proceedings.

It is accepted that an obligation falls on both the transferor and the transferee to undertake a consultation process with its employees per Article 7 of the Directive as transposed by Regulation 8 of The 2003 Regulations.

So Regulation 8 places an obligation on both parties to engage with, and consult the transferring employees. It is not in dispute that no consultation took place and therefore the respondent has a liability.

The complainant also relied on a decision of the Labour Court in Allpro Services t/a Allpro Security Services Ireland Ltd and Henrietta Pitrik, Determination No TUD176

In that case, the respondent, a transferor was found by the Labour Court to have engaged ‘in a very minimalistic and token fashion’ with the complainant in respect of its obligations under Regulation 8 and it varies the award made by an Adjudication Officer to provide for the maximum permissible four weeks’ pay.

The transferee also attended the hearing. He was critical of the proceedings which, after all, saved the jobs of the employees concerned and submitted that the various complaints were disproportionate to any benefit which would accrue to any of the complainants, including the current one.

He repeated the point made by the complainant that the Regulations placed an obligation to engage in consultation on both the transferor and the transferee, and it is on that point that the assessment of the merits of the case begins.

Because this is not in doubt on any reading of the 2013 Regulations.

But that is not the central question which is, what happens when that has not been complied with? (It is not in dispute that no consultation took place in this case).

Both the complainant (and the transferee who was heard as an interested party in the case) have sought to fix the respondent with liability because he failed in the obligation to do so.

However, the weight of the Regulations (on any plain reading of them) and the case law submitted by the respondent is overwhelmingly against this proposition.

While the decision in the Allpro case referred to above causes some difficulty given my subordinate jurisdiction the respondent noted that the legal authorities opened here were not before the Labour Court.

It was also submitted that the jurisprudence of the CJEU must trump that of the Labour Court where there is a conflict and I must, with due respect to the Labour Court apply the principles as laid down by the European Court.

These point decisively in favour of the respondent’s case and I find that a complaint against the transferor may not be pursued under the 2003 Regulations and I must uphold their case on the preliminary point of jurisdiction.

Accordingly, I find that the complaint against the respondent in this case is not within my jurisdiction for the reasons set out above. I therefore do not uphold complaints CA-00003958-002, 006 and 008 or complaints CA-00003989-002, 006 and 008.

TUPE, preliminary matter, liability of transferor.