Complainant

Respondent

Anonymised Parties

A Cleaning Supervisor

A Contract Cleaning Company

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-00006734-001

31/08/2016

The complainant was initially employed on February 8^th 2008 as a cleaner but in due course was offered a position a a supervisor in March 2015.

Her then employer was notified that its contract with the client would not be renewed.

The company which eventually replaced it (partially) says it did not need a supervisor and she was made redundant.

She had been working fifteen hours a week and her employment terminated on August 19^th 2016

The complainant had been employed only on supervisory duties and did not carry out any cleaning duties.

On August 12^th 2016 the complainant received a letter from her then employer, (for the sake of convenience referred to as ‘the transferor’ to the effect that she would be transferring to the transferee (the current respondent).

She agreed to this and transferred on August 22^nd, 2016.

The following day she received a mobile phone text from a co-worker saying that the respondent would not be taking staff from the transferor. Later, she was told that the transferor had not passed over details of their employees to the transferee.

The respondent stated that ‘the transferor’ (which did not attend the hearing) had been advised by its client on July 15^th 2016 that its contract would not be renewed and that the client would be seeking a new provider.

The current respondent received a list of the transferee’s employees only on August 12^th despite its efforts to secure the information earlier than this.

The respondent commenced the new cleaning contract on August 22^nd.

The respondent decided that it would treat the transfer as falling within the Transfer Regulations (TUPE) and met the employees on August 15^th.

However, the respondent had no role for a person who did not undertake some cleaning duties which had not been the complainant’s role.

The position was further complicated by the fact that there was not a full transfer of the previous contract. The ‘transferor’ had a contract to provide one hundred and twenty hours of cleaning services while the respondent was offered only seventy-five in its new contract.

The respondent says that as there was no transfer of either tangible or intangible assets a transfer within the meaning of the Regulations did not take place

In the first instance it is necessary to establish if a transfer of undertakings took place such as would bring the complainant within the protection of the regulations.

The provisions of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 only apply in circumstances where there has been a transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer or a merger.

The facts of what happened here are set out in the respondent‘s submission.

There were a number of stages in the process.

The ‘transferor’ was advised on July 15^th 2016 by the client company that its contract was being terminated.

In due course, the ‘transferee’ (i.e. the current respondent) was awarded a contract, but not the same contract which the transferor had; there were significantly fewer hours involved (approximately one third fewer).

This has been described as a ’second generation’ transfer and the view has been expressed that;

‘only where there has been a transfer of assets or of a considerable proportion of the workforce that [this] scenario (a second generation transfer) will be likely to be caught by the Directive’

‘Employment Law in Ireland’ Cox, Corbett, Ryan,

The extension of such protection was seen as ‘too expansive’ and recent judgements of the Court of Justice of the European Union (or as the ECJ) have taken a more restrictive view.

In the decision of the European Court of Justice (ECJ) in Ayse Suzen v Zehnacker Gebauderinigung Gmbb Krankenhasservice [1997] I.R.L.R 255 the question referred to the Court was whether the Directive applied to a situation where an organisation, which had entrusted the cleaning of its premises to a first undertaking, terminated that contract and entered into a new contract with a second undertaking for similar works without any significant transfer of tangible or intangible assets from one undertaking to the other, was subject to the Transfer of Undertakings Regulations 2003.

The ECJ held that owing to the fact that no transfer of tangible assets had taken place and the transferee did not take over a major part of the workforce, there was no ‘transfer’ of an undertaking.

The transfer of the contract was seen to represent, not the undertaking as a whole, but one of the assets of the transferor.

In reaching its conclusions the ECJ decided;

1) For the Directive to be applicable the transfer must relate to a stable economic entity whose activity is not limited to performing one specific works contract.

2) The fact that the service provided by the old and new holders of a contract is similar does not necessarily support the position that an economic entity has been transferred.

This means that an entity cannot be reduced just to the activity carried on by it. Its ‘identity’ also comes from other factors, such as its workforce, its management and staff, its buildings, the way in which the work is organised, its operating methods and the operational resources available to it.

In this case there was no transfer of assets and/or employees and therefore it is not material that the respondent is providing the same service which the ‘transferor’ provided, admittedly on a smaller scale.

I find that the facts in this case indicate a ‘second generation contract’, and 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 this case ‘the transferor’ did not, on losing the contract, cease to exist.

The decision of the ECJ in the Suzen Case was followed by the Employment Appeals Tribunal in the case of Mary Cannon v Noonan Cleaning Limited and CPS Limited [1998] E.L.R 153.

In that case Noonan Cleaning held a contract for the cleaning of Balbriggan Garda Station. The cleaning contract was put out to tender and CPS obtained it.

CPS then refused to employ the staff who had been previously employed by Noonan Cleaning Limited and a case for unfair dismissal was taken against both parties. In applying the decision in the Suzen Case the EAT observed;

“It appears that where the new contractor refuses to take on a major part of the workforce in circumstances of a second generation transfer where a Third Party is responsible for the transfer, the Directive does not apply, i.e. there is no transfer of an undertaking.”

I find that having considered the evidence before the hearing that a transfer of undertakings did not take place.

The fact that the respondent agreed to treat the transfer as falling within the Regulations is irrelevant in considering whether they have legal force n the facts of the case.

In any event it did not strictly do so.

I find that this was not a transfer within the meaning of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 and therefore I do not uphold CA- 00006734-001.