Complainant

Respondent

Anonymised Parties

Mr. Y

An Airline Company

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973

CA-00011520-001

22/05/2017

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00011520-002

22/05/2017

The Complainant was employed, as a mechanic in the Respondent's ground equipment maintenance garage at Shannon Airport. The Complainant has been in the Respondent’s employment since June 1997.

On 9 November 2016, the Complainant was called to a meeting with management, at which it was announced that the garage was close, with effect from 31 December 2016, after which date the work was being transferred to a third-party supplier under a Transfer of Undertaking. For operational reasons, the closure date was subsequently extended to 31 January 2017. The Complainant worked up to 31 January 2017 and received full salary for that period.

Arising from the Respondent's decision to close the garage, the Complainant was presented with two options: (1) transfer to the new employer under TUPE Regulations 2003 or (2) participate in a voluntary redundancy plan being offered by the Respondent.

The Complainant was represented by his Trade Union, who advised that, as a result of correspondence received from the Respondent, they met with the Respondent's representatives on 23 November 2016 to discuss issues arising from the transfer of the Respondent's business to a new supplier.

The Complainant’s Trade Union representative stated that they sought to establish all options open to their members. According to the Trade Union representative, the Respondent's preferred option was for the impacted staff to redeploy to the new supplier under TUPE. According to the representative, the Trade Union requested that redeployment to the Respondent’s Maintenance Division in Dublin be explored. Upskilling was also sought on behalf of the impacted staff.

At a reconvened meeting on 19 December 2016, the Respondent advised that redeployment to Dublin was not an option at that time. At this meeting, the Respondent put a voluntary service option to the Trade Union. This offer was found to be unsatisfactory and the Trade Union sought an enhanced package similar to that implemented by the Respondent in 2012.

According to the Trade Union, the Respondent’s representatives stated that they were not in a position to improve the severance terms and, as a result, their position was that the Complainant and his two colleagues would transfer to the new supplier under TUPE. It was further stated that the Respondent's representatives advised that the new supplier only required two of the three employees being transferred. Consequently, the Complainant and his colleagues were informed that all three would transfer and that the new supplier would then select two for continued employment, with the remaining employee being made redundant.

The Trade Union stated that, as a result of the differences that existed between the parties, the issue was referred to the Workplace Relations Commission. The Trade Union further stated that the Complainant and his two colleagues were made redundant of 31 January 2017. However, it was stated, on behalf of the Complainant, that the final payments did not include 8 weeks’ pay in lieu of notice of redundancy.

Consequently, the Complainant is now seeking a payment of €9,908.00, which figure represents eight weeks’ notice, under the Minimum Notice and Terms of Employment Act, 1973 – 2001.

Background:

The Respondent stated that the background to this claim was the transfer of their ground equipment maintenance garage at Shannon airport to a new supplier, with effect from 31 January 2017.

The Respondent stated that the Complainant accepted voluntary severance terms with effect from that date, having declined the offer of transfer to the new supplier under TUPE Regulations.

The Respondent referred to the fact that the Complainant had taken the case under both Section 6 of the Payment of Wages Act, 1991, and Section 11 of the Minimum Notice Terms of Employment Act 1973.

The Respondent made submission in relation to both elements of the complaint, as follows:

CA-00011520-001 (Payment of Wages Act, 1991):

The Respondent contends that the Complainants’ claim in respect of Section 6 of the Payment of Wages Act is not properly before the Adjudication Officer, as the employer did not make any unlawful deduction from the wages of the Complainant.

The Respondent stated that all monies due, including remuneration for unused annual leave, was made to the Complainant as part of his final payment after he left the company. According to the Respondent this was in line with standard company procedures in this regard.

CA-00011520-002 (Minimum Notice and Terms of Employment Act 1973):

The Respondent contends that the Complainant worked and was paid for his notice in the intervening period between the first announcement, on 9 November 2016, of the company’s intent to transfer the business and the actual date of transfer, 31 January 2017, which was the Complainant’s last day at work.

According to the Respondent, throughout the period between the first announcement and final closure, there was a process of engagement between the Respondent and the Trade Unions representing the Complainant and his colleagues. In this regard, the Respondent pointed to meetings which took place on 23 November/5 December 2016 and 13 January 2017.

The Respondent stated that when details of the severance plan were agreed, the Complainant received written notification of his individual terms, in a letter dated 13 January 2017.

According to the Respondent, when severance terms exceed the statutory minimum figures, the combined sum of statutory redundancy and the ex-gratia element, as well as additional benefits, are presented as one voluntary severance figure.

In support of their contention in this regard, the Respondent submitted, in evidence, a Compromise Agreement, which places conditions on the payment of the terms as set out in the Voluntary Severance Letter. In particular, the Respondent drew attention to the following term contained in the Compromise Agreement:

“In consideration of the voluntary severance terms and conditions set out in the Voluntary Severance Letter, including the ex-gratia payment, I hereby irrevocably and unconditionally agree to accept those terms and agree that same are in full and final settlement of all claims of whatsoever nature…”

In relation to the above extract from the Compromise Agreement, the Respondent stated that there was a clear intention behind the placing of the words "voluntary severance letter including ex-gratia payment" in the same sentence as "agreeing to accept the terms in full and final settlement". The Respondent stated that the purpose in this is to alert the signatory to the importance of the form they must sign.

To further emphasise this point, the Respondent drew attention to a subsequent paragraph in the document where reference is made to “accepting the provisions of the Voluntary Severance Letter as full and final settlement of all claims and demands made". The Respondent stated that the letter then proceeds to name each act of the employment legislation on which the signatory is waiving their rights to make a claim. In this regard, the Respondent made particular reference to the inclusion of the Payment of Wages Act, 1991 and the Minimum Notice and Terms of Employment Acts, 1973 to 2005, among the list of applicable legislation.

The Respondent further stated that, as an aid to an employee gaining a deeper understanding of the terms of the Compromise Agreement, they recommended that the employee seek independent legal advice and that they offered additional time for such consultations.

Consequently, the Respondent contends that, on the basis of the foregoing, the Complainant understood that he was waiving his right to any future claim when signing the Compromise Agreement/Form of Acceptance. Therefore, the Respondent contends that having read the Form of Acceptance, taken advice on its content and implications, the Complainant, by signing the form, knowingly nullified the claim which is now been presented for adjudication.

CA-00011520-001 (Payment of Wages Act, 1991):

This is a complaint pursuant to the Payment of Wages Act which deals with contraventions made by employers in relation to wages due to, or payments required of, employees. The definition of “wages” contained in Section (1) (b) the Act makes specific reference to:

"any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

Provided however that the following payments shall not be regarded as wages for the purpose of this definition: (iii) any payment referable to the employees’ redundancy,”

It is clear from the above extract from the Act, that the inclusion of payments upon the termination of the contract of employment as "wages" is specific to circumstances where appropriate notice has not been provided by the employer and where, as a result, the payment in question is, in effect, a payment in lieu of notice.

As will be seen from the decision, which follows, in relation to the Complainant's complaint under the Minimum Notice and Terms of Employment Act, the Respondent provided the appropriate notice of redundancy in this case, which resulted in the Complainant working out his notice, rather than having to receive payment in lieu of same.

In addition, based on the evidence presented at the Hearing, I am satisfied that the Voluntary Severance payment made to the Complainant on foot of his redundancy was inclusive of any and all statutory or contractual entitlements in this regard.

Finally, as the Complainant's claim under the Act clearly relates to the termination of his contract of employment by way of redundancy, I must conclude that, based on the above definition of “wages”, the claim is not covered under the Act.

Consequently, taking all of the above into consideration, I am satisfied that the Complainant’s complaint under the Payment of Wages Act, 1991, is not well founded and is, therefore, rejected.

CA-00011520-002 (Minimum Notice and Terms of Employment Act 1973):

The Minimum Notice and Terms of Employment Act, 1973 sets out the minimum period of notice that an employer should give to an employee in circumstances where the contract of employment of that employee is being terminated.

Specifically, Section 4 (1) and (2) set out, inter alia, the requirement of an employer to provide notice and the respective amount of notice associated with relevant periods of continuous service, as follows:

4.-(1) “An employer shall, in order to terminate the contract of employment of an employee who has been in his continuous service for a period of 13 weeks or more, give to that employee a minimum period of notice calculated in accordance with the provisions of subsection (2) of this section.”

4. (2) “The minimum notice to be given by an employer to terminate the contract of employment of his employees shall be – (e) if the employee has been in the continuous service of his employer for 15 years or more, eight weeks."

With regard to the Complainant in this case, I am satisfied that he has been in the employment of the Respondent since 1997 and is, therefore, entitled to 8 weeks’ notice as set out in the above Sections of the Act.

With regard to the termination of the Complainant's employment with the Respondent, I am satisfied that the relevant date is 31 January 2017. The evidence presented clearly shows that the Complainant worked to that date and received full salary covering the period.

Based on the above date of termination of employment, the Minimum Notice and Terms of Employment Act, 1973, requires that the Complainant be provided with notice of that termination on or before 6 December 2016.

I am satisfied from the evidence presented to the Hearing that the Complainant was provided with verbal notification of termination at a meeting on 9 November 2016. The evidence also shows that the Complainant was further advised of the situation by way of a letter dated 22 November 2016 from the Respondent. This clearly establishes that the Complainant was in the paid employment of the Respondent for a period of 12 weeks from date of verbal notification and of 10 weeks from date of written notification of the termination of his employment. Both periods are in excess of the statutory requirement in this regard.

Consequently, based on the above, I am satisfied that the Respondent has complied in full with the requirements of Section 4 of the Act with regard to the provision of notice and, therefore, the Complainant's complaint in this regard is rejected.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I set out my decisions in relation to both elements of the Complainant’s complaints, as follows:

CA-00011520-001 (Payment of Wages Act, 1991):

The Complainant’s complaint under the Payment of Wages Act is not well-founded and is, therefore, rejected.

CA-00011520-002 (Minimum Notice and Terms of Employment Act 1973):

The Respondent has complied with their statutory obligations under the Minimum Notice and Terms of Employment Act. Consequently, the Complainant’s complaint in this regard is not well-founded and is, therefore, rejected.

Minimum Notice & Terms of Employment

Payment of Wages

Redundancy