ADJ-00006176

Complainant

Respondent

Parties

A Car Park Operative

A Car Park Operator

Representatives

Dorothy Donovan, B.L., instructed by McDonald Solicitors

Elizabeth Ryan, Mason Hayes & Curran

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-00008259-001

18/11/2016

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-00008259-004

18/11/2016

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-00008259-005

18/11/2016

The complainant was working for Company A since 2007 and was assigned to work in the car park at this particular location when his employer secured a contract to operate same.   Company B (the respondent) subsequently became the owner of the car park but contracted Company A to continue to operate the car park. In October 2016 Company A was informed that their contract to run the car park was being terminated in one month’s time and that the operation of the car park was from then on the responsibility of Company B. Company A maintained that there was a Transfer of Undertaking and that the complainant’s contract should transfer accordingly. Company B stated that the legislation did not apply in these particular circumstances and that the complainant’s employment was the responsibility of Company A. The complainant was left without employment with effect from 14 November 2016.

The complainant was dismissed and this dismissal was an unfair dismissal within the meaning of the Unfair Dismissal Acts, 1977 – 2007, pursuant to Regulation 5(4) 0f S.I. 131/2003 which governs Transfers of Undertakings (TUPE).

If there was a Transfer of Undertakings to the respondent then they are responsible under the regulations for that dismissal.

A dismissal under such circumstances is only permitted if the respondent can demonstrate that the termination was due to “economical, technical or organisational reasons which entail changes in the workforce.” In that case the complainant would qualify for a redundancy payment under the Redundancy Payment Acts, 1967 – 2007.

The TUPE regulations do not apply to the termination of a commercial contract for a service such as that between the respondent and Company A in circumstances where at no point were Company A in possession of an asset (undertaking, business or part of a business).

In circumstances where there was no transfer of an asset an essential pre-condition of the TUPE Regulations has not been satisfied. The Regulations do not apply to the termination of the commercial contract between Company A and the respondent.

The complainant’s claims must therefore fail.

These complaints were heard in conjunction with the complaints contained in the following complaint forms all of which have the same common background:

ADJ-00006016, ADJ-00006180, ADJ-00008007, ADJ-6190, ADJ-00006189, ADJ-00006014 and ADJ-00008161.

There is no dispute in relation to the background giving rise to these complaints. The car park in question was in receivership and in the possession of NAMA. In 2015 Company A was awarded a contract to operate the car park. The complainant had been in the employment of Company A since October 2007 on a full-time basis earning €2048.00 gross monthly.   He and a colleague were transferred to work in the car park in question. In January 2016 Company B purchased the car park from NAMA and entered into a contract with Company A to manage, operate and run the car park.   In October 2016 Company B activated a clause in that contract and gave Company A one month’s notice of termination of that contract. Company A advised their two employees that their employment would transfer under TUPE Regulations. There was no contact with the employees from Company B. There were discussions between Company A and Company B regarding the status of the complainant and his colleague. Company B insisted that the TUPE Regulations did not apply in this particular case and that they would not be responsible for the employment of the existing employees. Company A, for their part, refused to train employees of the respondent in the operation of the car park. On 14 November 2016 Company B took over the running of the car park. The complainant and his colleague were informed that there was no work for them and that they should go home and get legal advice. Their employment terminated at that point. The car park continued in operation under the control of Company B and operated by staff employed by that company.

It should be noted that both Company A and Company B were acting on foot of legal advice that supported their respective positions. In addition two senior managers of Company A, both with long service in the sector, gave evidence that in their experience TUPE Regulations always applied in these situations. The Managing Director of Company A also stated that he felt that the employees were treated unfairly. Because of this and without prejudice to the company’s position on TUPE he sought to relocate the employees but could not do so locally as there were no positions available. Offers of employment in Dublin were not acceptable. The management of Company B stated that they now employed three workers on the site and that servicing the car park formed only a part of their duties as Company B had taken over the entire building. These vacancies had been advertised openly but no consideration had been given to asking the complainant and his colleague if they would be interested in these positions.

The first question to be considered therefore is was there a Transfer of Undertaking within the provisions of S.I. No. 131/2003 – European Communities (Protection of Employees on Transfer Of Undertakings) Regulations 2003. It is accepted that each such transaction must be examined in its entirety in order to determine if a Transfer of Undertaking has occurred.   The respondent to these particular complaints is Company B and their defence is that TUPE does not apply in this case. The European Court of Justice has considered this matter particularly in the case of Ayse Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservice, Case C-13/95. In that judgement the term entity is defined as “an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific object.” Company A in its submission accepts that no tangible assets were transferred in the transaction. The respondent, both in correspondence and in direct meetings, did not accept that an obligation under TUPE existed and consequently refused to accept the two members of staff employed by Company A.   No staff therefore transferred.

All parties cited legal precedents supporting their respective positions. I have carefully considered these cases. I believe that the finding of the EAT in Cannon v Noonan Cleaning (UD 200/97) is pertinent to this case in that the employee in that case, having been advised by their former employer that they were transferring with the change of contract, was then sent home by the transferee on the grounds that the new operator had no responsibility as regards her employment. In particular reference was made to the determination of the ECJ in Suzen which stated:

“the directive does not apply to a situation in which a person who had entrusted the cleaning of his premises to a first undertaking terminates his contract with the latter and, for the performance of similar work, enters into a new contract with a second undertaking, if there is no concomitant transfer from one undertaking to the other of significant tangible or intangible assets or taking over by the new employer of a major part of the workforce, in terms of their numbers and skills, assigned by his predecessor to the performance of the contract.”

The EAT in Cannon applied this finding to the case before them and decided that because there was no transfer of tangible assets or of staff the circumstances did not constitute a transfer of undertaking.  I have also considered the EAT decision in Case No. TU29 – TU36/2013 (Cavan Industrial Cleaning Services Limited) which stated:

“The Tribunal are satisfied that no assets, tangible or intangible, transferred and the service undertaking previously entrusted with the contract did not, on losing the contract, cease to fully exist and it cannot be considered that a business or part of a business belonging to it has been transferred to the appellant.”

The EAT went on to rule that consequently a transfer of undertakings had not taken place.

Applying all of the above to the complaints before me I find that

(a)    it is accepted that no transfer of any assets occurred

(b)   no staff transferred, and

(c)    the previous holder of the contract did not cease to fully exist nor was a business or part of a business belonging to it transferred

I therefore am satisfied that a transfer of undertakings within the meaning of Article 1(1) of the Transfer of Undertaking Regulations did not occur.

Complaint No. CA-00008259-001:

Based on my decision that the Transfer of Undertakings Regulations do not apply I find this complaint not to be well founded.

Complaint No. CA-00008259-004:

Based on my decision that the Transfer of Undertakings Regulations do not apply I find this complaint not to be well founded.

Complaint No. CA-00008259-005:

Based on my decision that the Transfer of Undertakings Regulations do not apply I find this complaint not to be well founded.