ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00005427
Anonymised Parties
A Waitress
A Catering Franchise
Representatives
None
An Accountant & Did Not Attend
Complaint for Resolution:
Act
Complaint Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act 1967
CA-00007475-001
06/10/2016
Date of Adjudication Hearing: 27/02/2017
Workplace Relations Commission Adjudication Officer: Aideen Collard
Location of Hearing: Lansdowne House, Ballsbridge, Dublin 4
Procedure:
Pursuant to Section 39 of the Redundancy Payments Act 1967, the Director General of the Workplace Relations Commission (hereinafter ‘WRC’) referred the aforesaid complaint received on 6th October 2016, to me for adjudication. This matter was initially listed for hearing on 19th January 2017. The Complainant was in attendance but as I was not reasonably satisfied that the Respondent was properly notified, I adjourned the matter. I subsequently became aware of an email dated 18th January 2017 to the WRC from an Accountant confirming that he represented the Respondent and had received short notice of the hearing date. It also suggested the possibility of dealing with this matter by way of written submissions only. Accordingly, the Respondent’s details were updated. As I was satisfied that an oral hearing was required to properly and fairly adjudicate on this complaint, by letter dated 23rd January 2017, the Parties were notified of a new hearing date on 27th February 2017. I proceeded to hearing on that date and gave the Parties an opportunity to be heard and to present any relevant evidence. The Complainant attended and represented herself. There was no appearance on behalf of the Respondent. Before proceeding to hearing, I satisfied myself that the notification of the hearing date and details had issued to the correct address and that the Respondent’s Representative had not contacted the WRC to seek an adjournment or indicate any difficulty attending. I also made enquiries as to the Respondent’s whereabouts with reception and remained in the hearing room for the scheduled duration. All evidence presented along with any relevant legal provisions have been taken into consideration in this decision.
Background:
This is a claim by the Complainant under Section 39 of the Redundancy Payments Act 1967, seeking redress for the non-payment of statutory redundancy by her former employer, the Respondent herein, if necessary for the purposes of seeking payment of same from the Redundancy Payments Scheme.
Complainant’s Submission and Presentation:
The Complainant gave evidence confirming that she had worked for over 25 years from at least 21st August 1992 until 29th July 2016 as a waitress in a Public House. At all material times, she was employed by a catering franchise based in the Public House in question for the purposes of providing a food service. During the course of that period of time, her employment was transferred between five different limited companies and/or legal entities (as confirmed by Department of Social Protection records furnished). She was employed by Companies 1 & 2 which she believes were under the same directorship/management from 21/08/1992 until 05/10/2003 when the food service was taken over by Company 3 from 06/10/2003. It was subsequently transferred to Company 4 and then onto Company 5 (the Respondent and her employer at the time of termination of her employment). She believes that Companies 3, 4 & 5 were all set up under the same directorship with the same two Directors remaining throughout. She stated that she can be certain of this as the two Directors concerned had taken an active role in the running of the food service, with one of them being the Chef. Additionally it is noted that the names for Companies 3, 4 & 5 comprised of different combinations of the Directors’ surnames. The Complainant also confirmed that at all material times, she was doing the same job using the same equipment in the same Public House premises which did not close on any occasion prior to 29th July 2016. Although she was never furnished with a contract of employment (in respect of which she would have been entitled and could have pursued a claim under Section 7 of the Terms of Employment (Information) Act 1994 had she been so minded), she had been verbally assured by all the employers concerned that her continuity of service was recognised and protected upon each transfer. She is not aware of any break in service and/or non-reckonable period during the course of her employment. She also obtained a record of her PRSI contributions for the period in question, which subject to the satisfaction of the Department of Social Protection, appear to confirm that she was in insurable employment for the full period. Any shortcomings in her PRSI contribution record can only be explained by the failure of the employer in question to make the necessary contributions on her behalf.
In or around July 2016, the Public House in question closed down quite suddenly. Approximately a month beforehand, a meeting had been held wherein the Respondent’s directors were informed of the impending closure. The Complainant received a letter dated 28th June 2016 addressed to all of the Respondent’s staff from one of its Directors confirming the position as being out of their control and giving “two weeks statutory notice”. Given her period of service, the Complainant would have been entitled to 8 weeks’ statutory notice but confirmed that she is not pursuing payment in lieu of same within this complaint (which may be payable upon application to the Insolvency Payments Scheme). The letter also stated: “We shall also support any staff member seeking alternative employment in whatever way we can.” A further letter dated 21st July 2016 from the Directors to the staff confirmed termination of employment on 29th July 2016 and stated: “P.45’s and any other appropriate documentation shall be available after that date. Holiday pay and Redundancy as applicable shall be calculated as at that time.” The Public House duly closed down and the Complainant’s employment was terminated on that date. She remains unemployed with little prospect of further work. At the material time, the Complainant was working 10.5 hours per week @ €10.47 per hour and earned €109.94 gross.
The Complainant received a further letter dated 31st August 2016 from the Respondent’s Directors, again addressed to its staff, confirming that it was unable to continue providing employment through no fault of their own given the short notice of the Public House closure. It also confirmed that it had been hoped to resume its service at the Public House once there was a new owner but that had not happened and the employment of its entire staff remained terminated. Whilst confirming that all staff should have received their wages and holiday pay at that stage, the position regarding redundancy was outlined as follows: “As you are aware we have requested our accountant to examine the redundancy situation and arrange for whatever forms that are required to be issued. Some staff are entitled to redundancy and others are not. There are a number of issues which we have to address. These include:
1. (Company 5) was incorporated on 14th December 2011 and commenced trading on 1st January 2012. All staff from (Company 4)were taken on along with the responsibilities for redundancy generated during the lifetime of (Company 4).
2. Statutory redundancy is a preferential creditor of the company but it is unclear if redundancy taken over ranks as preferential. We are awaiting a legal opinion on this.
3. We are assessing the total liability for redundancy and what affect, if any it may have on the solvency of the company. We shall make a formal declaration once the accounts for the year ended 31 August 2016 are prepared. This may not be completed until October.
4. Whilst we can present the forms RP50 we are not in a position to make any payments against this liability until the situation is clarified. If the company is not in a position to discharge its debts (therefore insolvent) there are legal constraints on us against giving one creditor preferential treatment over another who may rank pari passu (equally) in an insolvent situation.
5. Because of the uncertainty noted above, we are not in a position to discharge the company’s liabilities for redundancy in a manner which we are confident would be fair & equitable. Consequently, we cannot make any payments to redundancy at this time.
6. We are prepared to refer this situation to the appropriate government department who shall make these payments in lieu of the company. In which case all claimants should apply to the department. This is not a choice we would have made had events worked out differently. We shall support all our former staff in these claims.” The letter directed all future correspondence to the Accountant now on record.
Upon hearing nothing further, by letter dated 14th September 2016, the Complainant wrote to the Respondent’s Accountant confirming a shortfall in holiday pay, the shortfall of 6 weeks pay in respect of her statutory entitlement to 8 weeks notice or pay in lieu and the awaited information on the issue of redundancy payments as promised. Again and upon receiving no response, she rang one of the Directors directly to ascertain the position. She followed up with a letter to that Director dated 28th September 2016 attaching a completed RP77 and stating that as advised and as per copy letter enclosed, she had written to the Accountant but had heard nothing back and that: “The arrears of Holiday pay and Statutory Notice are not, so far as I’m aware, covered under any Social Insurance Fund and remain your direct responsibility. I do not wish to be difficult with you but, unless these payments are made without further delay, I will be forced to pursue the matter through legal channels.” She again contacted one of the Directors who advised her that they had no money to pay her, the Respondent had gone into liquidation and she should go to the Department of Social Protection in respect of her redundancy. She also confirmed that after the closure of the Public House in question, she was made aware that the Respondent continued to provide a catering service for at least one other public house and had corresponded at that address. Eventually the Complainant received her outstanding holiday pay but not her statutory notice & redundancy and referred the redundancy matter to the WRC.
Under cover of a handwritten note from the Respondent’s Directors, the Complainant received a partially completed RP50 which confirmed her date of commencement of employment as 1st January 2002 and date of termination of employment as 29th July 2016. It also confirmed her period of service as 14.5 years of service, the number of weeks due as 30 weeks and her statutory redundancy entitlement as €3,298.20. She pointed out that this does not recognise her full period of service from at least 21st August 1992. She submitted this document along with all requested documentation to the Department of Social Protection under cover of letter dated 4th November 2016, explaining that the RP50 did not reflect her full period of service and requesting the Department to investigate the matter and make appropriate payment. She subsequently received a payment of €1088.41 from the Department of Social Protection in December 2016 which she believes represented payment in respect of her period of service with Company 5 (the Respondent) only. The Complainant has since raised this shortfall with the Department and is hopeful that a decision from the WRC will assist to clarify matters.
Summary of the Respondent’s Case:
As outlined above there was no appearance on behalf of the Respondent or by its Accountant on record (presumably tasked with the role of managing its financial matters) at the hearing, and no evidence of any nature or written submissions has been proffered on behalf of the Respondent in this matter.
Findings and Conclusions:
Firstly, I note that this complaint has been brought within the requisite 12 month period. Secondly, I am satisfied based upon the unrefuted evidence of the Complainant that upon each of the Companies in question taking over her employment she had been guaranteed continuity of service and as she was doing the same job using the same equipment in the same premises at all material times, would also have been entitled to protection under the applicable TUPE legislation. Therefore and subject to any investigations deemed necessary by the Department of Social Protection under Section 39(15) of the Act, she is entitled to have her full period of service from 21st August 1992 until 29th July 2016 recognised for the purposes of calculation of her statutory redundancy. Indeed the records provided appear to confirm that she was in insurable employment for that period. Thirdly and as confirmed by the documentation furnished, I am satisfied that she was dismissed by reason of redundancy on 29th July 2016 when the Respondent’s business ceased in the Public House in question. Fourthly, I am satisfied that to date, the Respondent has not discharged its legal obligation to pay the Complainant’s statutory redundancy. Whilst acknowledging the difficulties posed by the Public House closing at short notice, the Respondent’s handling of its outstanding legal obligations towards the Complainant, a long-term loyal employee, has been wholly lacking. I construe the letter of 31st August 2016 from the Directors to its staff as no more than a fobbing-off exercise when there was no follow-up or substance provided for its failure to discharge redundancy payments at that time. The obligation rests with the employer to discharge statutory redundancy unless it provides the Department of Social Protection with documentary evidence that it is unable to pay. I further note that the Respondent remains listed as trading as ‘Normal’ on the CRO, and if it has in fact continued trading without honouring its legal obligations towards its former employees, this is also entirely unacceptable. In this respect, I note that the Department of Social Protection can pursue such employers in respect of redundancy payments.
Decision:
Section 39 of the Redundancy Payments Act 1967 requires that I make a decision in relation to this complaint in accordance with the relevant redress provisions of that Act. Based upon the aforesaid, it follows that the Complainant is entitled to a redundancy lump sum payment less the sum already paid, pursuant to the Redundancy Payments Acts 1967-2014 and in accordance with the following details:
Date of Commencement of Employment: 21st August 1992
Date of Termination of Employment: 29th July 2016
Weekly Gross Pay: €109.94
NOTE: For the purposes of applying for payment from the Redundancy Payments Scheme, a completed RP50 should be submitted to the Redundancy Payments Section along with a copy of this decision and all the supporting documentation referred to herein. An appeal against any decision of the Minister for Social Protection lies back to the WRC under Section 37 of the Redundancy Payments Act 1967.
Dated: 23rd May 2017
Workplace Relations Commission Adjudication Officer: Aideen Collard
Key Words: Redundancy – Statutory Payment – Reckonable Period of Service – Insurable Employment