ADJ-00007118

Complainant

Respondent

Parties

A Pest Control Technician

A Environmental Services 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-00009569-001

06/02/2017

The Complainant was employed by the Respondent (i.e. the Transferor) as a Pest Control Technician from 10^th May, 2006 until 18^th January, 2017 the date that the transfer of undertakings occurred. The Complainant’s employment transferred to the Transferee with effect from 18^th January, 2017. The Complainant claims that the Respondent contravened Regulation 8 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 by not consulting with him 30 days before the transfer took place.

The Complainant submits that he was informed by the Respondent at a meeting on 18^th January, 2017 that his employment was being transferred to the Transferee with immediate effect. The Complainant submits that neither he nor the other employees affected by the transfer received any prior notice from the Respondent in relation to the transfer.

The Complainant claims that the Respondent was in beach of its obligations under Regulation 8 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 by not consulting with him 30 days before the transfer took place.

The Complainant refutes the Respondent’s contention that he did not suffer any detriment as a result of the transfer. The Complainant contends that the Transferee was not a Company that he would have chosen to work for and that he would have used the 30-day consultation period to try and obtain alternative employment if he had been made aware of the transfer in advance of it taking effect.

The Complainant submits that he subsequent left his employment with the Transferee of his own volition on 16^th June, 2016.

The Respondent submits that in late October, 2016 it began discussions with another entity (the Transferee) about selling a specific division of its operations to them. The acquisition was deemed extremely volatile and sensitive so discussions and negotiations were carried on with the utmost secrecy and confidentiality in order to protect the interests of the parties and the shareholders and creditors. The Respondent submits that as the Transferee is a publicly listed company it could not legally share any information with employees and non-disclosure documents had to be signed by all parties concerned.

The Respondent submits that on 17^th January, 2017 at 11 pm after months of lengthy and confidential discussions and negotiations, the Transferee acquired the specific division of its operations with immediate effect. On 18^th January, 2017, at the earliest available opportunity, the Respondent invited the affected employees, one of whom was the Complainant, to a meeting to discuss the situation. The meeting occurred at 1:30 pm when all employees were available to attend. The Respondent submits that it informed and consulted with its employees at the first available opportunity and the transfer took effect immediately. As of 18^th January, 2017, 10 employees transferred from the Respondent to the Transferee.

The Respondent submits that it was not reasonably practicable to consult with the effected employees 30 days in advance of the transfer occurring. This was due to the confidential nature of the transfer. Management from the Respondent were bound by non-disclosure agreements to protect the acquisition by ensuring commercial confidentiality was not breached. The Respondent submits that such necessary confidentiality and secrecy will usually preclude the giving of advance notice of proposals to employees as was the case with this situation.

The Respondent submits that the obligation is on both the transferor and the transferee prior to the transfer in respect of any measures envisaged in relation to the employees. No measures were envisaged and nothing changed for the employees after the transfer had taken effect. The Respondent submits that the Complainant did not suffer any detriment as a result of the transfer. In fact, the transferee noted the Complainant’s favourable terms and conditions and undertook to accept and honour them as part of the transfer. The Respondent submits that the present complaint is frivolous and vexatious.

In summary, the Respondent submits that it was left with no alternative but to waive the 30-day consultation, which it contends is a guideline set out by the Regulations, due to confidentiality reasons and the risk of the acquisition falling through. The Respondent further submits that the concept of natural justice requires that employees have the right to be heard before a decision is made affecting their interests but that has been limited to situations where their employment is in jeopardy. However, those general obligations have not been extended to the making of commercial decisions.

The Law

Regulation 8(6) of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 states:

“(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.”

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. Regulation 8(6) provides that where there are no representatives of the employees in an undertaking or business through no fault of their own, the employees concerned must be informed in writing in advance of the transfer of certain specified matters relating to the transfer.

It was not in dispute between the parties that a transfer of undertakings occurred within the meaning of the Regulations in the circumstances of the present case. It was common case that there was no employee representative acting on behalf of the employees in terms of the exchange of information between the transferor/transferee in relation to the transfer of undertakings.

It was also common case between the parties that the Complainant was not notified about the transfer of undertakings in advance of the date that the transfer came into effect on 18^th January, 2017.

It was not in dispute that the Complainant and the other employees affected by the transfer were called to a meeting by the Respondent on 18^th January, 2017 during the course of which they were informed about the transfer. The Complainant accepts that the Respondent provided him with written notification about the transfer on this date. I have examined this letter and the accompanying information sheet provided to the Complainant on this date and I am satisfied that the information contained therein complies with the Respondent’s obligations under Regulation 8(6). In particular, I am satisfied that the Complainant’s terms and conditions of employment were protected following the transfer of undertakings.

Regulation 8(6) places an obligation on the employer to inform the employee about the transfer in writing, where reasonably practicable, not later than 30 days before the transfer, and in any event, in good time before the transfer. I accept the Respondent’s evidence that the reason why it failed to notify the Complainant in writing prior to the date of the transfer occurring was due to the confidential and commercially sensitive nature of the transfer.

Having regard to the totality of the evidence adduced, I find that there was a technical breach of Regulation 8(6) by the Respondent. However, I have not been presented with any evidence from which I could reasonably conclude that the Complainant suffered any material detriment in consequence of the Respondent’s failure to comply with its obligations under Regulation 8(6).

I find that the complaint is well founded and that the Respondent did contravene Regulation 8(6) of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003. However, I find that it was a technical breach of the Regulations and that an award of compensation would not be fair and equitable.

European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 - Regulation 8(6) – Provision of information - Technical breach – No compensation awarded