TUD177

Ms Henrietta Pitrick (“the Complainant”) commenced employment with Allpro Security Services Ireland Limited T/A Allpro (“Allpro”) on 9 January 2015 as a part-time cleaner at Waterford Institute of Technology (“WIT”). The Complainant worked an average of 23.8 hours per week and was paid the then national minimum wage rate of €8.65 per hour. Allpro subsequently lost the cleaning contract at WIT to the Respondent following a competitive tendering process that concluded in May 2015. Allpro notified the Complainant by letter dated 29 May 2015 that it had lost the cleaning contract at WIT and that, as a consequence, her employment would transfer on 30 June 2015 to “an as yet unnamed company in accordance with the [Regulations]”. The letter also confirmed to the Complainant that that her terms and conditions of employment would be safeguarded and guaranteed that her “continuity of employment for statutory and contractual purposes [would be] preserved.” However, she was also advised in the letter that “after the transfer the new company will give you an amended contract”. The Respondent simultaneously informed the Complainant and her colleagues that there would not be a transfer of undertaking from Allpro to it. The Respondent communicated this during the course of a series of collective and individual meetings attended by Allpro employees on: 11 June 2015; 16 June 2015; and 23 June 2015. At the latter meeting, representatives from the Respondent company advised the Complainant and her colleagues individually “that they would need to resign their positions with Allpro to take up employment with AFM Ireland”. Also, in the course of those individual meetings, according to the Respondent’s written submission to the Court, “each employee was offered a letter setting out the offer of employment [from AFM] and asking for agreement to the terms offered.” Those employees – including the Complainant – who purported to accept the terms offered by AFM were employed by AFM with effect from 1 July 2015, albeit on reduced hours.

The Complainant, with the assistance of her Trade Union, subsequently referred a number of complaints against the Respondent under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (“the Regulations”) to the Workplace Relations Commission on 11 December 2015. The Complainant identified the Respondent as a Transferee within the meaning of the Regulations and complained that the Respondent had failed to ensure that her terms and conditions of employment were no less favourable following the transfer than they had been previously; that her accrued annual leave entitlements had not transferred; that she had been dismissed from her previous employment contrary to the Regulations; her accrued service with the Transferor had not been carried over; that her right to representation by her Union had not carried over; and that the Transferee had not engaged with her representatives for the purposes of information and consultation.

The Adjudication Officer held a hearing into the above complaints on 23 March 2016. Although notified in advance of the hearing, the Respondent herein failed to attend it. The Adjudication Officer found that the change of contractor in this instance from Allpro to the Respondent gave rise to a transfer of undertaking within the meaning of the Regulations and he found that the Respondent had failed to fully discharge its information and consultation obligations to the Complainant under Regulation 8 of the Regulations. The Adjudication Officer awarded compensation of €500.00 to the Complainant as against the Respondent Transferee. He also found that the Respondent had breached Regulation 4 by requiring the Complainant to sign a new contract of employment that did not preserve her continuity of employment but purported to engage her on a Day 1 basis with effect from 1 July 2015. In respect of this breach, the Adjudication Officer directed the Respondent “to issue confirmation to the Complainant that her employment contract (with its rights and obligations including accrued annual leave) transferred to them and that her commencement date is 9^thJanuary 2015.” Finally, he awarded the Complainant compensation of €1,500.00 for the breach of Regulation 4.

The Respondent disputed that a transfer of undertaking occurred in the circumstances outlined above and has appealed the Adjudication Officer’s decision in full to this Court.

Discussion and Decision

(a) Did a transfer of undertaking within the meaning of the Regulations occur as between Allpro and the Respondent in June/July 2015?

The issue of when a change of cleaning contractor in a so-called second-generation outsourcing scenario gives rise to a transfer of undertaking has been settled law since the European Court of Justice handed down its judgment in the case ofAyse S�zen v Zehnacker Geb�udereinigung GmbH KrankenhausserviceCase C-13/95. Although the ECJ held in that case that the mere loss of a service contract to a competitor cannot by itself indicate the existence of a transfer of an undertaking within the meaning of the Acquired Rights Directive , nevertheless, it went on to find that in certain sectors in which the business is based essentially on the workforce, there can be a transfer within the meaning of the Directive where the group continues to exist after the taking over of an essential part of the workforce by the new awardee of the contract. This is precisely what happened here, as outlined by the Respondent in its written submission to the Court and confirmed verbally by its representative at the hearing: i.e. the Respondent took over the majority of the workforce deployed by its predecessor (Allpro) to service the cleaning operation at WIT. The employees commenced employment with the Respondent on 1 July 2015. That date is, therefore, to be regarded as the effective date of the transfer.

(b) Information and Consultation

Regulation 8 provides:

• (1) The transferor and transferee concerned in a transfer shall inform their respective employees' representatives affected by the transfer of—
  (a) the date or proposed date of the transfer;
  (b) the reasons for the transfer;
  (c) the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them,
  and
  (d) any measures envisaged in relation to the employees.
  (1A) The transferor and transferee concerned shall include, with the information being provided under paragraph (1), information as respects—
  (a) the number of agency workers temporarily engaged in the undertaking concerned,
  (b) those parts of the undertaking in which those agency workers are, for the time being, working, and
  (c) the type of work that those agency workers are engaged to do.
  (2) The transferor shall give the information in paragraph (1) to the employees' representatives, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out.
  (3) The transferee shall give the information in paragraph (1) to the employees' representatives, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the employees are directly affected by the transfer as regards their conditions of work and employment.
  (4) Where the transferor or the transferee envisages any measures in relation to employees, he or she shall consult the representatives of the employees, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out, in relation to any such measures with a view to reaching an agreement.
  (5) Where there are no employees' representatives in the undertaking or business of the transferor or, as the case may be, in the undertaking or business of the transferee, the transferor or the transferee, as may be appropriate, shall put in place a procedure whereby the employees may choose from among their number a person or persons to represent them (including by means of an election) for the purposes of this Regulation.
  (6) Where, notwithstanding paragraph (5), there are still no representatives of the employees in an undertaking or business concerned (through no fault of the employees), each of the employees concerned must be informed in writing, where reasonably practicable, not later than 30 days before the transfer and, in any event, in good time before the transfer, of the following:
  (a) the date or proposed date of the transfer;
  (b) the reasons for the transfer;
  (c) the legal implications of the transfer for the employee and a summary of any relevant economic and social implications for that employee;
  and
  (d) any measures envisaged in relation to the employees.
  (7) The obligations specified in this Regulation shall apply irrespective of whether the decision resulting in the transfer is taken by the employer or an undertaking controlling the employer and the fact that the information concerned was not provided to the employer by the undertaking controlling the employer shall not release the employer from those obligations.

Regulation 8 provides for an information and (where applicable) a consultation process with employees’ representatives as opposed to any form of direct communication with individual employees on a one-to-one basis. No information or consultation process took place with the employees’ representatives in this case. The Respondent, by its own admission, told the employees collectively and individually that no transfer would take place. It follows that it did not fulfil its obligation to inform the Complainant of “the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them” as it is required to do under Regulation 8(1)(c). Furthermore it did not inform the Complainant or her representatives about any measures envisaged by the Transferee as required by Regulation 8(1)(d). It follows that the Respondent failed to engage in any consultation process regarding such measures, if any.

The Adjudication Officer awarded compensation of €500.00 in compensation for the aforementioned breaches of Regulation 8. This is the equivalent of 2.4 weeks’ gross wages for the Complainant. The maximum amount of compensation which can be awarded for a breach of Regulation 8 is capped at 4 weeks’ pay. Having regard to the Respondent’s total failure to comply with its obligations to the Complainant under Regulation 8, the Court directs that it pay the equivalent of 4 weeks’ remuneration in compensation (i.e. €823.48) to the Complainant. This is compensation for a breach of an entitlement and is, therefore, exempt from income tax.

(c) Were the Complainant’s terms and conditions and continuity of service preserved?

Again by its own admission, and because it took the view that no transfer of undertakings took place on 1 July 2015, when the Respondent hired the majority of the workforce previously deployed by the Transferor at the WIT site, the Respondent did not ensure that the Complainant was retained on no less favourable terms and conditions of employment than those she enjoyed while in the employment of the Transferor. Neither did the Respondent ensure that the Complainant’s continuity of employment was preserved. Finally, the Complainant failed to accept liability for the Complainant’s accrued annual leave. The Adjudication Officer awarded the Complainant compensation of €1,500.00 for theses breaches of Regulation 4. The Court finds that compensation of €3,000.00 is just and equitable in all the circumstances. This is compensation for a breach of an entitlement and is, therefore, exempt from income tax.

Conclusion

The decision of the Adjudication Officer is varied accordingly.

The Court so determines.

Signed on behalf of the Labour Court



Alan Haugh
19th May 2017______________________
SCDeputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Sharon Cahill, Court Secretary.