Complainant

Respondent

Anonymised Parties

A Janitor (2)

A Contract Cleaning Company

Representatives

Moran & Ryan Solicitors

Management Support Services (Ireland) Ltd

Act

Complaint 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-00009125-001

17/01/2017

The complainant began work with Company A, in 2009. He transferred to Company B in 2012 by means of a transfer effected under the TUPE Regulations. There was a further change in ownership in 2014.

In 2016 his then employer the current respondent and transferor lost the contract on which he was employed and the current complaint arises from subsequent events.

(Note; the words ‘transferor’ and ‘transferee’ are used for convenience of reference and do not indicate a conclusion on the existence of a transfer under the Regulations.)

On August 12th 2016 the complainant was advised that his then employer, the respondent had lost the contract on which he had been employed.

He was told by his employer, the respondent that he would transfer under the TUPE regulations to the transferee. Specifically a letter from his employer on August 11^th stated;

‘It is our understanding that the Transfer of Undertakings Regulations 1980-2003 applies’.

He attended work with the ‘transferee’ on August 22^nd but was told the following day that there would not be a transfer and that there had been a ‘misunderstanding’.

His own supervisor had told him that a transfer would be going ahead and there was further conflicting information given to him on August 25^th but despite an offer to confirm the proposed transfer no confirmation was forthcoming.

The complainant says that, in the alternative to this complaint, he was made redundant by the transferor.

The respondent maintains that the circumstances of the case are such that a transfer under the Regulations did take place and that the transferee, which also attended the hearing and in respect of which the complainant made a separate complaint.

My decision in that case is in ADJ 5217.

This complaint is against the ‘transferor’.

Even where a transfer takes place under the TUPE regulations liability passes to the transferee once the transfer is effected.

While it will be seen that the respondent expressed its ‘understanding’ that the Transfer of Undertakings Regulations applied whether it does or not is a matter for adjudication.

Even if it did, as a matter of law the liability passes to the transferee, and the current respondent is not liable.

This matter came up in ADJ 2984; A General Operative v A Beverage Company in which I issued the decision and I set out below some of the legal submissions which were considered in reaching my decision in that case on the liability of the transferor, and on which I will again base my decision in this case.

In that case the respondent submitted that it was not a proper party to the proceedings for the following reason.

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 in ADJ 2984 further relied 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.

This means that, with effect from whenever a transfer can be established (and if a transfer can be established) 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 in ADJ 2984 relied on the decision of the CJEU in Berg v Besselsen [1989] I.R.L.R 447 where it was held;

‘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…’

That 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…’

See also 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 requirements’.

Accordingly, I find that a complaint against the transferor cannot validly be pursued on the basis of the foregoing and the complaint fails.

For the reasons set out above I do not uphold CA-00009125-001 and it is dismissed