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-00009528-001

03/02/2017

The Complainant was employed by   the Respondent from January, 2008 until 17^th August, 2016 when her   employment was terminated by reason of redundancy. The Complainant claims   that she did not receive her outstanding holiday pay entitlements as part of   the redundancy package she agreed with the Respondent when her employment was   terminated. The Respondent claims that the Complainant has compromised her right to refer a complaint to the WRC   under employment legislation on the basis of the waiver which she signed upon   the termination of her employment.

The Complainant claims that she   was not paid her statutory holiday pay entitlements when she was made   redundant by the Respondent. The Complainant submits that she was not   informed prior to her redundancy that holiday pay would be included as part   of the settlement agreement which she concluded with the Respondent prior to   the termination of her employment. She claims that the issue regarding her   holiday pay was never mentioned to her during the course of the settlement   negotiations prior to her redundancy.   The Complainant submits that all other employees made redundant, both   prior and subsequent to her, were paid their outstanding holiday entitlements   by the Respondent in their final pay packages prior to the termination of   their employment.

The Complainant submits that she had outstanding holiday   entitlements consisting of untaken holidays from 2015 and accrued holiday   entitlements up to the period that her employment was terminated in   September, 2016.  The Complainant   submits that the Respondent engaged a solicitor to oversee her redundancy   settlement and she assumed that her holiday entitlements would have been included   in the severance agreement which was concluded prior to the termination of   her employment. The Complainant claims   that she was unhappy with the terms of the redundancy package that was   initially offered, and she subsequently negotiated a better package but at no   stage was it mentioned by the Respondent’s legal representatives that her   holiday entitlements would not be included in the severance agreement.

The Complainant contends that she was the only one of the   five employees made redundant by the Respondent who did not receive their outstanding   holiday entitlements. The Complainant claims that the negotiations   surrounding the severance agreement were fraught with animosity on all   sides. The Complainant contends that   she was made sign an agreement saying that she would not “come after” the   company and assumed she had no rights but claims that it has subsequently   been brought to her attention that holiday pay was a right as its time worked   prior to redundancy.

The Complainant was initially   employed by the Respondent in or about May, 2004. A severance package in   respect of this employment was agreed in December, 2007 and the Complainant   then moved to the Respondent’s premises in a different location where she   commenced working in or around 4^th January, 2008. The Complainant   continued to work for the Respondent until 2016 when it initiated a review of   its operations in Ireland. As part of this review voluntary redundancy was   offered to staff in the Respondent’s operations in two locations in Ireland.   The Complainant entered into negotiations in relation to redundancy and the   terms thereof. The Respondent was contacted in writing in or about 23^rd   May, 2016 by a professional Human Resources consultant who advised of his   appointment by the Complainant to engage with the Respondent.

As part of the offer of redundancy the Respondent offered   the Complainant a redundancy package basis of the statutory sum required   under the Redundancy Payments Acts together with an additional ex-gratia sum   of two weeks’ salary per year worked. This commenced a prolonged period of   negotiation during time which the Complainant was on sick leave. A number of   matters relating to the Complainant’s employment were agitated in negotiation   and ultimately, it was agreed that a settlement meeting would be convened to   seek to hammer out the differences.

The Respondent’s solicitor met the Complainant and her HR   representative on 29^th July, 2016. The meeting lasted approx. two   hours and after detailed negotiations a specific sum of €52,000 gross by way   of a termination payment was agreed in full and final settlement of all   claims howsoever arising out of the employment relationship.

A Severance Agreement was drawn up setting out the amount   of the Complainant’s statutory redundancy lump sum and the amount payable by   way of an ex-gratia sum in consideration of her waiving and compromising any   claim or dispute she might have had with the Respondent. The agreement was   initially provided to the Complainant in August, 2016 and after some   correspondence a final version was furnished on 2^nd September,   2016. Clause 8 of the Severance   Agreement required the Complainant to obtain independent legal advice and on   8^th September, 2016, having attended with a solicitor to obtain   advice, the Complainant signed the Severance Agreement. The Complainant duly   signed and returned the signed Severance Agreement to the Respondent and   under cover of letter dated 12^th September, 2016 the Respondent   sent the Complainant a cheque in the amount of €44,910.20 (being the gross   sum of €52,000 less the sum of €7,089.80 being the tax payable on the said   gross amount).

The Respondent submits that the Complainant has expressly   compromised her entitlement to maintain the claim comprised in the within   proceedings. The Severance Agreement specified the Acts in respect of which   the Complainant was compromising her possible claims and lists both the Act   which she has specifically taken the present complaint (namely, the   Redundancy Payments Acts) and those other Acts under which her claim would   appear to actually fall (namely, the Payment of Wages Act 1991 and the   Organisation of Working Time Act 1997). The Respondent submits that in   addition to compromising specific actions on specific legislation, as set out   above, the severance agreement expressly provided that the Complainant was   acknowledging that she was not entitled to any other payment by way of   salary, bonus or otherwise from the employer having signed and executed the   agreement.

The Respondent submits that the severance agreement was in   excess of four times the Complainant’s statutory redundancy entitlement and   in that context it is plain that proper consideration was given in exchange   for the signing of the severance agreement. The Complainant accepted the   severance payment and cashed the cheque. The Respondent submits that   consideration has passed to and been received by the Complainant and she is,   therefore, bound by the terms of the agreement compromise in exchange for   which the said consideration was furnished.

The Respondent submits that the Severance Agreement was   signed in a specific context whereby the Complainant had the benefit of   professional advice and representation throughout the process. She had the   benefit of a professional HR Consultant who negotiated the deal for her and   thereafter, she had recourse to an independent solicitor in relation to the   terms of the settlement agreement. It was a requirement of the agreement that   she get the advice before signing the agreement. In relation to the process   and the obtaining of independent legal advice, it is submitted that the   approach of the Respondent is in accordance with the principles set out by   the Circuit Court decision in Hurley –v- Royal Yacht Club[1].   The Respondent submits that the   Complainant was required to obtain legal advice; she was financially   facilitated in doing so and did actually obtain the said advice in advance of   signing the agreement.

The Respondent also refers to the fact that the   Complainant’s complaint is under Section 39 of the Redundancy Payments Acts,   however the narrative on the form relates to a claim that she has not been   paid her holiday pay. The Respondent submits that had the Complainant wished   to take a claim in relation to holiday pay, in the event that she had not   already compromised such claims, the appropriate legislative basis for such a   claim would have been the Organisation of Working Time Act 1997 or possibly   the Payment of Wages Act 1991.

In summary, the Respondent submits that the Complainant is   precluded from instituting and maintaining the present proceedings by means   of legal accord and satisfaction, having signed a severance agreement, for   valuable consideration and with the benefit of both professional HR and legal   advice, which compromised all claims arising out of the employment   relationship, including the one sought to be maintained in this complaint.

The Respondent has submitted that the Director of the WRC (and by   extension the Adjudication Officer) does not have any jurisdiction to inquire   into the alleged contravention of her holiday pay entitlements in the present   case. The Respondent contends that the Complainant has compromised her right   to refer a complaint to the WRC under any employment legislation on the basis   of the waiver which she signed upon the termination of her employment.

The Respondent further submits that the present complaint under Section   39 of the Redundancy Payments Acts is misconceived on the basis that the   alleged contravention by the Complainant in relation to her statutory holiday   entitlements has been referred to the WRC under the incorrect statute. The   Respondent contends that had the Complainant wished to take a claim in   relation to holiday pay, in the event that she had not already compromised   such claims, the appropriate legislative basis for such a claim would have   been the Organisation of Working Time Act 1997 or possibly the Payment of   Wages Act 1991.

I consider it appropriate to firstly   consider the jurisdictional issue raised by the Respondent as to whether the   Complainant has compromised her   right to refer a complaint to the WRC under any employment related statute on   the basis of the waiver which she signed upon the termination of her   employment. In the event that the Respondent were to succeed on this   jurisdictional matter then the issue of whether or not the instant complaint   has been referred under the incorrect employment statute will be moot.

In considering   this case, I have taken into account the jurisprudence of the High Court   Judgment of Smyth J. in the case of Sunday Newspapers -v- Kinsella & Anor[2].   This case concerned a severance   agreement purporting to compromise entitlements under the Protection of   Employees (Fixed Terms Workers) Act 2003. Smyth J. held that the question of   whether or not statutory rights have been compromised is a matter for the   proper construction of the agreement itself and that informed consent and   appropriate advice is crucial if the compromise is to be upheld. He went on   to say that where an employee is being offered a severance package he or she   is entitled to be advised of his or her entitlements under the employment   protection legislation and any agreement should list the various applicable   statutes or at least make it clear that the same has been taken into account   by the employee.

In applying the   jurisprudence to the case in hand, I am satisfied that the Complainant was   required by the terms of the severance agreement to obtain independent legal   advice, and was financially facilitated in doing so, prior to signing the   agreement. The Complainant accepted in evidence that she had obtained this   independent legal advice prior to signing the agreement. I have taken into consideration that the solicitor   who provided this legal advice to the Complainant signed a Certificate   confirming that he had given independent legal advice to the Complainant as   to the consequences of the Severance Agreement and “in particular its effect on her ability to claim before and   Employment Tribunal or Court”.

Having examined   the course of the negotiations between the parties before signing of the   agreement, I am satisfied from the Complainant's own evidence that her   consent to the agreement was informed and that in addition to obtaining   independent legal advice prior to signing the agreement, she was also   represented during the negotiations of the settlement, by a professional HR   representative. The severance agreement which provides the Complainant with   statutory redundancy and an ex-gratia payment was signed by the Complainant   specifically provided that the termination payment was “in full and final discharge and satisfaction of any right, claim   or dispute of any kind whatsoever …… including but not limited to claims”   under various stated legislation including the Redundancy Payments Acts 1967   to 2007, the Payment of Wages Act 1991 and the Organization of Working Time   Act 1997.

Having regard to the totality of the evidence adduced, I am satisfied   when the Complainant signed the voluntary severance agreement, which provided   that in return for a statutory redundancy lump sum and an ex-gratia payment she   accepted the terms of the severance in full and final settlement of all   matters in relation to her employment with the Respondent and her consent to   such an agreement was fully informed.

I find therefore that the severance agreement as signed by the parties   compromises any claims the Complainant has arising from her employment with   the Respondent under the Redundancy Payments Acts, the Organization of   Working Time Act 1997 and/or the Payment of Wages Act 1991.

I find that the severance agreement as signed   by the parties compromises any claims the Complainant has under the   Redundancy Payments Acts, the Organization of Working Time Act 1997 and/or   the Payment of Wages Act 1991. Accordingly, I do not have any jurisdiction to   inquire into any complaint made by the Complainant under the aforementioned   legislation.

Jurisdiction – Severance Agreement – Settlement - Complaint   compromised