ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00005031

Parties:

Complaint:

Dates of Adjudication Hearing: 09/12/2016 & 17/07/2017

Workplace Relations Commission Adjudication Officer (AO): Aideen Collard

Background & Procedure:

This complaint was referred to the Workplace Relations Commission (hereinafter ‘WRC’) on 27th July 2016. This is an appeal against a decision of the Respondent (A Government Minister) to disallow a claim for payment from the Social Insurance Fund in respect of an award of €7,550 made by the Employment Appeals Tribunal (hereinafter ‘EAT’) on 28th March 2013 under the Redundancy Payments Acts, in favour of the Complainant against his former employer, a bankrupt Builder (hereinafter also ‘Former Employer’). Following referral to me by the Director General, I inquired into this complaint and gave the Parties an opportunity to be heard and to present any relevant evidence as set out hereunder. I heard this complaint on 9th December 2016 (the Complainant attended with his Solicitor but there was no attendance on behalf of the Respondent) and on 17th July 2017 (the Complainant’s Solicitor attended and representatives for the Respondent attended unrepresented). The Office of the Chief State Solicitor (CSSO) has since come on record for the Respondent and seeks a further hearing whilst the Complainant’s Solicitor objects and seeks a decision. All submissions, documentation and evidence proffered by both Parties have been fully considered. For the purposes of determining whether a further hearing is required, and if not, determining the complaint, it is firstly necessary to set out a protracted procedural history:

Exchange of Documentation & Correspondence Preceding First Hearing

On 27th July 2016, the Complainant’s Solicitor referred a complaint on his behalf to the WRC under Section 9 of the Protection of Employees (Employers’ Insolvency) Act 1994, appealing against a decision of the Respondent to disallow payment in respect of the aforementioned EAT award.

On 27th September 2016, the WRC issued correspondence acknowledging receipt of the complaint and copied the complaint form to the Respondent at the Head Office address provided on the complaint form. Amongst other matters, the letter to the Respondent advised that the complaint would be considered for adjudication, that an Adjudication Officer would be assigned to hear it and all documentation or submissions which the Parties wished to rely upon should be forwarded to the WRC within 21 days of the date thereof. It further drew attention to the WRC’s ‘Procedures in the Investigation and Adjudication of Employment and Equality Complaints’ on the WRC’s website, the Information and Customer Services line for queries and email address for further information.

On 30th September 2016, the WRC received a letter dated 28th September 2016 acknowledging receipt from the Respondent using the same Head Office address given on the complaint form.

On 1st November 2016, letters from the WRC issued to the Parties at the same addresses giving notification of the hearing scheduled for 9th December 2016 at 11.30am in Lansdowne House.

First Hearing on 9th December 2016

On 9th December 2016, the Complainant appeared along with his Solicitor but there was no attendance on behalf of the Respondent. Upon being satisfied that the Respondent had been properly notified of the hearing (the aforesaid notification letter of 1st November 2016 not having been returned undelivered), and had not indicated any difficulty attending or sought any adjournment, I proceeded to hear the Complainant’s evidence and submissions on his behalf.

By way of background, the Complainant confirmed that he had been employed as a Construction Operative by his Former Employer, a Builder from 1st June 2004 until 17th June 2011. His employment was terminated upon his Former Employer becoming subject to bankruptcy proceedings and was ultimately declared a bankrupt. He confirmed that he had not received payslips or P60’s in accordance with his statutory entitlements. His Former Employer had provided an incomplete P45 under threat from the Office overseeing the bankruptcy. It had also materialised that his Former Employer had not been making the requisite PRSI contributions on his behalf for portions of this employment, with contributions only paid for the years of 2007 and 2008.

Following the termination of his employment, the Complainant brought a number of complaints against his Former Employer in relation to breaches of his statutory entitlements before the requisite employment Fora. On 24th February 2012, he obtained an award from the Labour Court for €5,000 in respect of various breaches under the Organisation of Working Time Act 1997, and an award of €2,000 from a Rights Commissioner under the Terms of Employment (Information) Act 1994. On 28th March 2013, the Complainant obtained a further award of €7,550 under the Redundancy Payments Acts from the EAT. As his Former Employer did not attend at the various hearings to defend these complaints, they were all uncontested and the various Fora accepted at face value the Complainant’s evidence that he had been in this employment from 1st June 2004 until 17th June 2011. The EAT decision subject to the instant complaint set out the same dates of commencement and termination of employment, but included the following proviso: “This award is made subject to the appellant having been in insurable employment under the Social Welfare Acts during the relevant period.” It is common-case that this is a standard reference included within decisions under the Redundancy Payments Act 1967, acknowledging the Respondent’s remit under Section 39(15) which provides (underlining added): “Any employer who is dissatisfied with a decision given by the Minister in relation to a rebate or with any decision given by a deciding officer in relation to any question specified in section 38 (1)(e) or 38 (1)(f), or any employee who is dissatisfied with a decision given by a deciding officer under section 38 or with any decision of an employer under this Act may appeal to the Director General against the decision; provided however, that the Director General shall not be competent to decide whether or not an employee is or was at the material time in employment which is or was insurable for all benefits under the Social Welfare Acts.”

The Complainant’s Solicitor confirmed that the Respondent’s Department had paid out in respect of the first two awards from its Insolvency Payments Scheme as confirmed in a remittance advice submitted. However, it subsequently refused to pay out from the Redundancy Payments Scheme in respect of the latter award after a protracted exchange of correspondence between Department officials and the Complainant’s Solicitor, the following being most relevant (underlining added):

By letter dated 19th July 2016, an official in the Respondent’s Department wrote to the Complainant’s Solicitor stating: “As indicated to you previously, information available to the Department via the Office of (another Department) indicates your client had a date of commencement of employment of 04/12/2006 and a date of termination of employment of 27/02/2009 with (a Former Employer)… In light of the above, your client cannot be deemed to have been in insurable employment for the period of employment specified on the EAT determination.”

Following further correspondence from the Complainant’s Solicitor seeking a definitive answer as to whether the claim was being refused, a letter dated 5th August 2016 from an Assistant Principal on behalf of the Respondent confirmed: “As was explained in an email issued on 19 November, 2013 and in a subsequent letter issued to your office in April 2015, to qualify for a payment from the Redundancy Payments Scheme an employee must meet all the qualifying conditions, including being in continuous employment for a minimum of two years and being in employment which is insurable under the Social Welfare Acts. The records of (the Respondent’s Department) show the following PRSI contributions for your client with this employer during the period in question:

Year                       Contributions

2006                       0A

2007                       51A

2008                       52A

2009                       0A

The Records Section of (the Respondent’s Department) is responsible for managing PRSI contribution records. If (the Complainant) was in insurable employment during the period covered by the EAT determination, he should contact the Records Section in order to have his PRSI record updated. Documentation to substantiate (the Complainant‘s) employment with (the Former Employer) and PRSI payments made, such as payslips, P60’s, etc. should be submitted for their consideration. If necessary, the Records Section may refer the matter to the Social Welfare Inspector to investigate the case and make a decision as to whether your client’s social insurance record should be updated in respect of his employment with (the Former Employer). The Redundancy Payments Section has disallowed your client’s claim. If your client’s social insurance record is updated for the period of employment covered by the EAT determination, the claim for payment from the Social Insurance Fund will be reviewed.” The complaint herein has been brought on foot of this refusal to pay out.

Essentially, the Complainant’s Solicitor submitted that in so finding, the Respondent (or Department officials acting on his/her behalf) was exceeding their remit under Section 39(15) of the Redundancy Payments Act 1967 as cited above. It was submitted that based upon the wording, the Respondent’s remit was limited to considering whether the Complainant had been “in insurable employment”, and not whether he was insured for the period in question i.e. had an unbroken PRSI record for this employment. This would be an injustice in circumstances where the Complainant was unable to provide documentation proving that he should have been insured for the period in question, given that his Former Employer had been in default of his statutory obligations to provide payslips and P60’s, etc. and had not been making PRSI contributions on his behalf. He referred to Section 2 of the Social Welfare Consolidation Act and also relied upon the High Court Judgement in Kenny -v- Minister for Trade and Employment 1IR (2000) 249, wherein it was held that insurable employment was to be defined by reference to the qualifying characteristics of the employment and not by reference to the status of the employee. The Complainant’s Solicitor also confirmed that much of his dealings in relation to these matters had been through the Office responsible for dealing with bankruptcy matters. He said that he had made a phone-call to the Respondent’s Records Section and did not pursue the matter further as he only had some building-related receipts to substantiate the employment. He further submitted that the Respondent was estopped from declining to pay out on the instant claim in circumstances where his Department had paid out on the two prior claims from the Insolvency Payments Scheme and this had been brought to his/her attention. The Complainant sought a decision directing the Respondent to pay out on foot of the EAT decision.

Exchange of Documentation & Correspondence Following First Hearing

On 5th April 2017, this AO wrote to the Parties at the addresses provided confirming that having considered the matter, the complaint appeared to more properly fall under Section 39(15) of the Redundancy Payments Act 1967, being an appeal in respect of a decision of the Respondent made on redundancy under Section 38 and proposed to amend accordingly, unless hearing otherwise.

On 13th April 2017, the WRC received a letter dated 12th April 2017 from the Redundancy and Insolvency Payments Section of the Respondent’s Department confirming that it had not received notification of the hearing date as it had not been transmitted internally and that it had notified the WRC that all future correspondence regarding complaints were to be referred directly to its office. It confirmed agreement that this complaint more properly fell under Section 39(15) of the Redundancy Payments Act 1967 subject to the proviso “…that the Director Generalshall not be competent to decide whether or not an employee is or was at the material time in employment which is or was insurable for all benefits under the Social Welfare Acts.” It also confirmed that the Complainant’s claim for statutory redundancy was disallowed as he did not satisfy the employment contribution conditions necessary to qualify for same and the information available to the Department via another Department does not correspond with the period of employment upon which he is basing his claim (as set out in the decision of the EAT). It reiterated that the Complainant’s Solicitor had been advised to contact the Records Section (which has responsibility for maintaining customers’ PRSI records) if he has “documentation” to substantiate his client’s claim and “should his client’s PRSI record be updated we would review his claim for statutory redundancy.” The letter also stated: “Payment made under the Insolvency payment scheme in respect of the award under the Terms of Employment (Information) Act 1994 and 2001 was made based on his being employed by (his Former Employer), not on any specified period of his employment. Payment of the award under the Organisation of Working Time Act under the Insolvency payment scheme, should not have been paid and will now be reviewed.” It requested the WRC to take the contents of the letter into account and further confirmed that a representative would attend on notification of any reconvened hearing.

By letter dated 9th May 2017, this AO responded to the Respondent noting the change of address and contents and stating: “...it is of some concern to me that the Respondent has not been heard in this matter given the important issues raised in your letter. It is of paramount importance to me as an Adjudication Officer of the WRC that I run a fair hearing which affords both sides the opportunity to be heard. In the circumstances and whilst acknowledging the inconvenience caused to the Complainant and his Solicitors, I am of the view that the fairest way of dealing with this complaint is by reconvening the hearing on any Monday in July 2017, to be confirmed in writing to the Parties…”

The letter also invited optional submissions on two issues raised being: (1) the Respondent’s powers to review the decision to pay out in respect of the other awards and (2) what allowance is made for employees who are unable to provide documentation to substantiate their claims and/or period of service owing to the fact that the employer concerned has failed in their legal obligations to pay PRSI on their behalf and provide records of proof including wage slips, P60’s and P45’s. Regarding amendment of the complaint, this AO confirmed: “Finally, I propose dealing with this complaint under Section 39(15) of the Redundancy Payments Acts 1967-2014 in the absence of any objection from either Party to date.” This letter was copied to the Complainant’s Solicitor on the same date along with a covering letter explaining the reasons for fixing a further hearing date and apologising for the inconvenience caused. He confirmed agreement to this course by letter dated 11th May 2017. No further submissions were received from the Parties and by letters dated 8th June 2017, they were notified of a further hearing date, being 17th July 2017 at 10.30am in Lansdowne House.

Second Hearing on 17th July 2017

On 17th July 2017, representatives from the Respondent’s Department attended the hearing and confirmed that they were happy to proceed without legal representation. The Solicitor for the Complainant attended without the Complainant and given that it was common case that the issues were purely legal, I excused him and there was no objection to this course from the Respondent’s representatives. They did not seek to adduce any evidence and read through a written submission setting out the Respondent’s position. The submission firstly outlined the position in relation to the Redundancy Payments Scheme (as provided for by the various Redundancy & Social Welfare Acts) operated by the Respondent’s Department. It was explained that in the first instance, it is the responsibility of the employer to pay statutory redundancy to all its eligible employees. Where an employer can prove to the satisfaction of the Department that it is unable to pay such statutory redundancy, it will make redundancy lump sum payments directly to those employees and will seek to recover the debt from the employer. In cases where an employer refuses to pay the statutory lump sum or if there is a dispute about the redundancy payable, an employee can bring a claim to the WRC (previously EAT) and if an award is made, it can be paid from the Redundancy Payments Scheme, subject to the conditions and limits of the Scheme. Under the Redundancy Payments Scheme, an eligible employee is entitled to two weeks’ statutory redundancy for every year of service, plus a bonus week. Compensation is based upon the employee’s length of reckonable service and reckonable weekly remuneration subject to a ceiling of €600 per week. In order to qualify for a statutory redundancy payment, an employee must (1) have at least two years’ continuous service, (2) be in employment which is insurable under the Social Welfare Acts, (3) be over the age of 16 and (4) have been made redundant as a result of a genuine redundancy situation.It was also confirmed that the Respondent uses an employee’s PRSI contribution history as a baseline for making various social welfare payments including those from the Insolvency and Redundancy Payments Schemes in respect of employment-related claims, as underpinned by Social Welfare legislation. Where there is a gap in an employee’s contributory record, the Respondent’s Records Section has a procedure in place for awarding contributions for those periods once satisfied that the customer (employee) was in employment which is insurable for the period claimed.

The Respondent’s submissions also set out its position in relation to the instant complaint, reiterating that outlined above and in the lengthy exchange of correspondence with the Complainant’s Solicitor since 2013. The Complainant’s claim was disallowed “…as according to the Department’s records system, he did not satisfy the condition of the Redundancy Payments Scheme whereby a person must have been in continuous insurable employment for the period in question.” The RP50 Form submitted (for claiming payment from the Redundancy Payments Scheme) sought payment for the period from 1st June 2004 until 17th June 2011 whilst the Respondent’s records show that the Complainant was employed from 4th December 2006 until 27th February 2009 with 51 A PRSI contributions for 2007 and 52 A PRSI contributions for 2008. In addition to the disparity in the length of service, the Complainant did not meet the minimum requirement of 104 weeks’ continuous insurable service at the appropriate PRSI class. Reference was made to letters dated 17th April 2015, 8th May 2015 and 5th August 2016 to the Complainant’s Solicitor advising him to contact the Respondent’s Records Section to review his claim and noting that no such review had been sought to date. It also reiterated the WRC’s limited remit under Section 39(15) of the Redundancy Act 1967. When I enquired of the representatives as to why the Respondent had paid out in respect of the other two claims, it was contended that this had been in error but repayment of same was not being sought at this time. It was unclear as to how that error had occurred as no evidence was proffered to explain same, and no specific statutory powers to seek such repayment were identified. The representatives were unable to comment on its interplay with the decision-making process of the WRC (former EAT) and reliance given to any findings but it was clear that regardless of same, the Respondent undertakes its own assessment of eligibility based upon PRSI contributory record.

The Complainant’s Solicitor confirmed that other than a phone-call, he had not engaged with the Respondent’s Records Section and felt that he should not be obliged to do so in the circumstances. He was of the view that it would be pointless as he only had a few building receipts to offer by way of proof of employment and documentary evidence had been required. The Respondent was acting beyond its remit in seeking proof that the Complainant was insured by way of PRSI contributions for the period in question. Furthermore, by paying out on the other two claims, it had already accepted that he had been in insurable employment and was not entitled to resile from that position.

Arising from the issues raised at this hearing, this AO confirmed in writing that further information was required from the Respondent for the purposes of this investigation including (1) what was understood by the meaning of ‘insurable’ under Section 39(15) of the Redundancy Payments Act 1967 and again asking (2) what allowance is made for employees who are unable to provide documentation and/or have no documentation available to them to substantiate their claim and/or period of service under the Act owing to the fact that the employer concerned has failed in their legal obligations to pay PRSI on their behalf and furnish them with records of proof. In this respect, any procedures/protocols used by the Records Section were requested.The letter also set out a timetable for the exchange of submissions between the Parties confirming: “Upon receipt of the aforesaid submissions, a decision will issue in the normal course.” It was further noted that there was no agreed protocol between the WRC and Respondent regarding the address to be used for correspondence and the WRC was bound to use the address/es given on the complaint form. The Respondent was invited to confirm the preferred address to the WRC in respect of all complaints.

Exchange of Documentation & Correspondence Following Second Hearing

Further submissions were made on behalf of the Respondent under cover of letter dated 30th August 2017, repeating its request that the Complainant contact the Records Section should he believe that contributions are missing from his record. The Respondent’s ‘Records Section Procedures’, outlining a detailed ‘Decision-Making Process Where a Customer States that They Were Employed but No Social Insurance Contributions Appear on Their Record’ and Records Section Checklist was also furnished. Opposing submissions dated 25th October 2017 were received from the Complainant’s Solicitor. The submissions did not add anything material to the Parties’ respective positions.

A letter dated 16th November 2017 was received from the CSSO confirming that it was coming on record for the Respondent and seeking time to review its submissions and make further submissions if required. By letter dated 28th November 2017, this AO pointed out the latitude already afforded to the Respondent but allowed a two-week period for further submissions with the Complainant’s Solicitor having a right of reply. No further submissions were received on behalf of the Respondent.

Instead, by letter dated 19th December 2017, and further to obtaining Counsel’s advice, the CSSO requested a further hearing date for the purposes of addressing the extent of the WRC’s jurisdiction under Section 39(15) of the Redundancy Payments Act 1967. It was further submitted that “…you have no jurisdiction to enter in the merits of the claim, then if you were to do so you would be acting ultra vires which would render your decision susceptible to being quashed by way of Judicial Review”. Reliance was placed upon the fact that the Respondent had not been legally represented and given the significance and potential liability for the State of any decision, a further hearing was urged.

In a letter dated 10th January 2018 to the Respondent, this AO confirmed that unless the Respondent wished to adduce further factual evidence, it was not proposed to reopen the hearing in circumstances where a further hearing had already been afforded at considerable inconvenience to the Complainant’s Solicitor. This AO also allowed a final two-week period for the exchange of further submissions but no further submissions were received on behalf of the Respondent. It was also confirmed that it was not this AO’s intention to exceed the WRC’s jurisdiction under Section 39(15) of the Redundancy Payments Act 1967. By email dated 9th January 2018 (which crossed with that of this AO), the Solicitor for the Complainant took issue with the threat of Judicial Review, opposed any further hearing in the strongest terms (pointing out that there had already been two hearings and the Respondent had every opportunity to be represented) and sought a decision to issue forthwith.

By letter dated 25th January 2018, the CSSO again repeated its request for a further hearing for the purposes of introducing new factual evidence with reference to not receiving notice of the first hearing date, and the fact that the Complainant had not been in attendance at the second hearing.

Findings and Conclusions

Amongst its statutory functions, the Respondent is tasked with managing the Social Insurance Fund (covering both the Insolvency and Redundancy Payments Schemes), from which employees’ statutory entitlements are discharged upon the requisite application and criteria being met when they cannot otherwise be recovered from former employers. The Respondent is further responsible for recouping such payments. Section 39(15) of the Redundancy Payments Act 1967 provides an appeals mechanism for employees (and employers) against a decision of a Deciding Officer of the Respondent (e.g. regarding a rebate as in this case) or their former employer relating to redundancy entitlements (when in issue or unpaid) at first instance to the WRC (formerly the EAT), subject to the proviso that “…the Director General shall not be competent to decide whether or not an employee is or was at the material time in employment which is or was insurable for all benefits under the Social Welfare Acts.” An appeal against a decision of the WRC (or former EAT) lies to the Labour Court.

In the instant case, the Complainant is appealing the Respondent’s refusal to pay out from the Social Insurance Fund in respect of an EAT award for unpaid statutory redundancy as against a bankrupt Former Employer, in circumstances where it paid out on foot of two previous claims from the Insolvency Payments Scheme. The Parties are agreed that this complaint properly falls under Section 39(15) of the Redundancy Payments Act 1967 and it has been amended accordingly. Essentially, it is contended on behalf of the Complainant that in finding that he did not have the requisite PRSI contribution record, the Respondent is exceeding its remit under Section 39(15) of the Act, which was limited to considering whether the Complainant had been “in insurable employment”, and not whether he was in fact insured for the period in question. Accordingly, the Complainant seeks a decision directing the Respondent to pay out on foot of the EAT decision.

It is not in dispute that for the purposes of managing the Social Insurance Fund, the Respondent uses an employee’s PRSI contribution history as a baseline for making various social welfare payments including those from the Insolvency and Redundancy Payments Schemes in respect of employment-related claims, as underpinned by Social Welfare legislation. Where there is a gap in an employee’s contributory record, the Records Section steps into the breach and awards contributions for periods of employment where none have been made once satisfied that the customer (in this case, a former employee) was in employment for the period claimed. As outlined in the detailed ‘Records Section Procedures’ furnished, where insufficient or no evidence at all has been provided to support an award of backdated PRSI contributions such as P45, P60’s, wage-slips or bank statement/s, provision is made for a Deciding Officer or Social Welfare Inspector to investigate the matter further. Such investigation includes interviewing the customer, employer (if available) and any other relevant witnesses as well as examining the employer’s accounts where available. A report is then compiled and based upon same, a Deciding Officer decides whether the contributions should be awarded on the customer’s record under Section 300 of the Social Welfare Consolidation Act 2005. If a customer is unhappy with the decision, they are entitled to seek a review or appeal under the same Act.

Having refused to pay out on the Complainant’s latter claim in circumstances where his PRSI record did not tally with the dates given in the EAT decision, the Respondent repeatedly referred him to the Records Section to have his contributory record updated. However, to date the Complainant has not engaged and instead this complaint was referred. As confirmed by the ‘Records Section Procedures’ provided, the Respondent provides a mechanism for determining periods of insurable employment for employees such as the Complainant who are unable to substantiate their claims with documentary evidence which includes an interview and if unhappy with the outcome, a review and/or appeal. I can see nothing unduly burdensome or unfair with this process. Unfortunately, the availability of an interview in the absence of documentary proof was not clearly communicated to the Complainant and this was only confirmed by the production of the Procedures at a late stage.

I fully appreciate the Complainant and his Solicitor’s frustrations especially that he is now being required to engage with an internal process in relation to this claim, when for whatever reason, two prior claims were discharged without question. I also note the inconvenience caused by the manner in which this complaint has been met. However, taking the Complainant’s position at its height, I am unable to find any evidence that the Respondent was doing any more than determining whether or not he was in insurable employment for the minimum statutory period and/or period claimed. Until he engages with the Records Section, there is no factual basis for the legal arguments being made on his behalf. The caselaw cited does not offer any further guidance. I can see no other reason as to why I should interfere with the Respondent’s decision at this juncture. In circumstances where all the Fora who have heard the Complainant’s evidence have found as a matter of fact that his Former Employer did not adhere to his statutory obligations, thereby depriving him of his entitlements including redundancy, one would hope that a sympathetic view would be taken upon any such engagement. Should he be met with a further refusal following exhaustion of the review/appeals process, it seems that this would give rise to a new decision subject to appeal to the WRC. For the sake of completeness and in the absence of any authorities to the contrary, I am further satisfied that the Respondent is not bound by the previous payments out and each claim arises from different statutory provisions with different considerations and service requirements. For the aforesaid reasons, it is not necessary to hold a further hearing or adduce any further factual evidence for the purposes of fairly disposing of this matter. For the same reasons, I deem it unnecessary to comment further on the respective remits of the Respondent and WRC under Section 39(15) of the Act.

Decision:

Section 39(15) of the Redundancy Payments Act 1967 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions. For the aforesaid reasons, I dismiss this complaint but note that further refusal of payment upon review of this claim by the Records Section of the Respondent’s Department may give rise to a new complaint to the WRC.

Dated:   14th August 2018.

Workplace Relations Commission Adjudication Officer: Aideen Collard

Key Words: Section 39(15) of the Redundancy Payments Act 1967