RPD1713

This is an appeal brought on behalf of Ardcolum Motor Factors Limited (‘the Respondent’) against a decision of an Adjudication Officer (ADJ-00001106, dated 30 June 2017) under the Redundancy Payments Act 1967 (‘the 1967 Act’). The Adjudication Officer held that Mr Gildea’s (‘the Complainant’) claim for statutory redundancy was well-founded. The Notice of Appeal was received by the Court on 8 August 2017. The Court heard the appeal in Sligo on 10 October 2017 (in conjunction with three other related appeals.) As of the date of hearing, the Respondent company had ceased trading but retains a status of ‘normal’ on the website of the Companies’ Registration Office.

The Complainant was employed by the Respondent from 30 September 2015 as a stores assistant in its motor factors business. At all material times the Respondent operated from - and had its registered address at - Ardcolum, Drumshanbo, Co Leitrim. The Respondent supplied car parts and parts for agricultural machinery to the public.

In early 2015, the Complainant became aware of rumours circulating amongst customers that the Respondent’s business was to be relocated to Carrick-on-Shannon. This proposed move was confirmed to the Complainant by the Respondent’s directors sometime in August 2015. However, the Complainant was subsequently advised by letter dated 1 September 2015 from the directors that the Respondent would cease to trade on 31 October 2015 and would be subject to a voluntary liquidation. The Court was informed that this change in position resulted from a breakdown in discussions between the Respondent’s directors and Mr Joe McLoughlin, the owner of the premises from which the Respondent had been operating. The Respondent’s directors had purchased premises in Carrick-on-Shannon and had incorporated a new company, Premier Multiparts Limited. It was their intention to sell the Respondent company’s business and stock to Mr McLoughlin with a view to commencing a new business at the new premises.

Mr McLoughlin did not appear as a witness before the Court. However, his initial intention to commence trading as a motor factors in his own name with effect from 1 November 2015 is evidenced in a letter apparently sent by him to various suppliers of the Respondent and dated 1 September 2015 in which he stated:

• “I wish to inform you that in light of Ardcolum Motor Factors Ltd’s intention to cease trading from 31^stOctober 2015, I will be commencing business in my own right again at Ardcolum, Drumshanbo, Co Leitrim from 01^stNovember 2015.”

The Complainant told the Court that he first thought of opening his own business in or around late September 2015. Also, his friend – Mr Philip Murphy – let him know at much the same time that he was considering leaving his then employment. Together, the Complainant and Mr Murphy came up with the concept of establishing a combined motor factors/agri-parts and engineering business in one location. They approached Mr Joe McLoughlin to enquire if they could take out a lease on the Ardcolum premises. They also approached the bank to seek funding. They were advised to establish a limited company which they did when they incorporated Ardcolum Agri Stores Limited on 14 October 2015. This company commenced trading on 7 December 2015 from the premises previously occupied by the Respondent.

The witness confirmed that Ardcolum Agri Stores Limited’s customer base is made up largely of the former customers previously serviced by the Respondent. Likewise, he also told the Court that both companies shared many of the same suppliers and that generally there was a significant degree of commonality between both businesses. He placed some emphasis in his evidence on the engineering/manufacturing side of the business operation being conducted by Ardcolum Agri Stores Limited which was not part of the Respondent’s business.

Discussion

The within appeal was heard by the Court in tandem with the appeals under the 1967 Act against awards made in favour of three other former employees of the Respondent. Having regard to the totality of the evidence adduced across all four appeals in relation to the similarity of the business run from the same premises in Ardcolum – that of the Respondent up until September 2015 and that of Ardcolum Agri Stores Limited from 7 December 2015 – the Court determines, for the reasons set out below, that a transfer of undertaking within the meaning of the European Communities (Protection of Employees on theTransfer of Undertaking) Regulations 2003, occurred on 7 December 2015.

It is not disputed that Ardcolum Agri-Stores Limited is serving the same catchment area and the same customer base as had been served by the Respondent until it ceased trading in Ardcolum. Both businesses are in the motor factors trade, supplying auto parts and parts for agricultural machinery. The Agri Stores business is operating from the same premises as that which the Respondent operated from. Three of the four employees who had worked for the Respondent are working for the new business in Ardcolum. A number of key machines that were in situ on the premises and available to the Respondent remain in situ and are used by the staff of Ardcolum Agri Stores Limited. It is accepted that the new business engages in the provision of additional engineering type services in a building and yard not previously used by the Respondent. Nevertheless, it is apparent to the Court that the core business previously conducted by the Respondent from the premises in Ardcolum is now being continued by a new employer (i.e. Ardcolum Agri-Stores Limited) from that same premises and that the former employees of the Respondent who wished to do so have continued in the employment of the new business on terms and conditions of employment that are no less favourable than those which they had enjoyed whilst in the employment of the Respondent.

InSymantec Limited v Leddy and Lyons[2009] IEHC 256, Edwards J determined that when a transfer of undertakings within the meaning of the Regulations occurs, an employee who refuses to transfer does not thereby become entitled to a redundancy payment under the 1967 Act.Ipse forte, an employee who does transfer has no entitlement to a statutory redundancy payment from the transferor employer. In both situations, the employee’s job is deemed to continue to in being.

It follows that the Complainant’s claim under the 1967 Act is not well-founded and the decision of the Adjudication Officer is set aside.

The Court so determines.

Signed on behalf of the Labour Court



Alan Haugh
8 November, 2017______________________
CCDeputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Ceola Cronin, Court Secretary.