Complainant

Respondent

Anonymised Parties

A senior manager

A public transport organisation

Representatives

Breiffni O'Neill,Human Resources Services Limited

McCann Fitzgerald Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00012382-001

10/07/2017

Outline Chronology

Four organisations, which I will refer to as “T1,” “T2,” “T3” and “T4,” each involved in public transport, are referred to in this decision and, for ease of understanding, a brief chronology of the events that form the context of the complaint is required.

In April 2010, the complainant commenced employment with T1.  In August 2015, T1 merged with T2 to form a new public transport authority, T3, and the employees of T1 and T2 transferred to T3 under the Transfer of Undertakings Regulations.  From August 2015 therefore, the complainant was an employee of T3, the respondent to this complaint.

A complication arises due to the fact that in September 2010, five months after the complainant joined T1, statutory responsibility for the project to which he was assigned was transferred to another organisation, T4.  As a result, from September 2010, the complainant was assigned to T4, but was employed by T1 until August 2015, when he transferred to the merged organisation, T3.

In July 2015, having been assigned to T4 for almost five years, the complainant was offered the opportunity to transfer formally to T4, but did not accept this offer.  In March 2016, he was successful in his application for a more senior role in T4, and in July 2016, he resigned from T3 to take up his new position.

The project to which the complainant was assigned forms the backdrop to the events that occurred from 2010 to 2016 and will be referred to as “Project P.”

The Complainant Joined T1

In April 2010, the complainant joined T1 in as Project P Financial Controller.  The project team comprised seven people.  Having commenced under the remit of T1, the implementation of legislation in September 2010 meant that statutory responsibility for Project P transferred from T1 to T4.  However, although legal responsibility transferred to T4, operational responsibility was delegated immediately back to T1.

Project P  is Transferred from T1 to T4

In the first quarter of 2011, operational responsibility for Project P began transferring to T4 on a phased basis and of the seven T1 employees on the project, four transferred to T4 in 2011.  Due to the moratorium on public sector recruitment, it was not feasible to transfer the full team and the complainant and two others did not transfer at the same time as their colleagues.  Despite this, in May 2011, the complainant relocated to the T4 offices and continued working on Project P.  He and his two non-transferred colleagues were referred to in T1 as “Project P assignees.” 

T1 is Merged with T2 to form T3

In early 2014, there was an increase in activity surrounding the planned merger of T1 and T2 and on August 1st 2015, T1 was dissolved and all of its functions were transferred to T3.

The Complainant was an Employee of T1, Assigned to T4

It is important to note that while Project P had transferred to T4 in September 2010, the complainant remained an employee of T1.  On August 1st 2015, when T1 merged with T2 to become T3, he became an employee of T3.  However, from 2011, as a key member of the Project P team, he was assigned to T4, but not as a direct employee.

Alignment of T1 Terms and Conditions with those of the Public Sector

As a non-commercial state body, it was intended that T3 employees would be assigned to public sector pay scales.  T1 had not used public sector scales and work was required to ensure alignment of T1 staff in the public sector.  An internal process that started in February 2014 was abandoned and a new process commenced in April 2015.  The complainant and his two Project P assignee colleagues were excluded from the two grading exercises during 2014 and 2015 on the basis that they would eventually transfer to T4 and would not remain in the merged organisation. 

In June 2015, T1 employees were informed that they had two options with regard to changes to their terms and conditions of employment; the first option was to move to public sector terms and conditions, or, they could retain their T1 pay and terms and conditions.  Project P assignees were excluded from this communication and the complainant says that this resulted in a disadvantage for him, as he did not have the information about his new terms and conditions which could have contributed to him being able to make a decision about applying for voluntary severance.

Voluntary Severance Schemes (VSS) in T1

In June 2011, as part of the re-organisation and in preparation for the merger, T1 initiated a voluntary severance scheme (VSS), the first of five opportunities to leave on the grounds of redundancy.  The fifth VSS scheme announced on May 1st 2015 had a closing date for applications of July 3rd 2015.  While employees were considering their options, they were advised that every effort would be made to clarify issues arising from the change to public sector terms and conditions before they had to confirm acceptance of severance terms.  In any event, acceptance had to be confirmed before the dissolution date of T1 of July 31st 2015.  

On June 12th 2015, the complainant sent an e mail to the Director of Corporate Services at T1, asking for some action with regard to the grading of Project P assignees.  He was advised to wait for a grading process to commence in T4, the organisation to which he was assigned.  When he made enquiries with T4, he was told that an exercise had started and that he would be updated in due course.  On July 20th, two weeks after the official closing date to apply for VSS, he received information about the grade at which he would transfer to T4 and offered the opportunity to transfer.  He did not accept the offer and on August 1st 2015, his employment transferred to T3 as Financial Controller of Project P, continuing as a Project P assignee to T4. 

The complainant said that if he had been included in the earlier grading process, he could have considered the option of VSS before the closing date of July 3rd 2015.  He said also that he knew there would be a vacancy in T4 for the Head of Finance role, and that he intended to apply. 

Pension Scheme and the Implications of Changing Employers

At the time of the discussions with employees of T1 about the merger with T2 to form T3, the complainant sought clarification about the impact on his pension entitlement of his formal appointment to T4.  He was a member of the T1 defined contribution pension (DC) scheme.  At the hearing, he said that he was informed that on joining T4, he would have to join the Single Public Service Pension Scheme.  He also said that he “always wanted to move to the defined benefit (DB) scheme.” 

 Application for an Open Competition in T4

In March 2016, the complainant applied through an open competition for the role of Head of Finance in T4.  He was offered the position in May and informed that he would have to resign from T3 to take up the new role.  He resigned on July 10th 2016 and commenced in his new role on July 11th.

Summary of the Complainant’s Claim

As a result of his status as a Project P assignee, the complainant claims that he was excluded from the two grading exercises carried out for T1 staff and that, by the time he was notified of his T4 grade and terms and conditions, the closing date to apply for VSS had passed.

He also claims that if he had known that he would have to resign from T1 before taking up his new role in T4, he would have applied for VSS and would have finished up with T3 on an agreed departure date.

The complainant’s position is that, in this treatment of him, he has been disadvantaged and treated differently to others in T3.  He is seeking a recommendation that he should be entitled to a sum equivalent to whatever redundancy payment he may have been eligible for if he had been successful in his application for VSS.

Chronology of Events Concurs with the Complainant’s Submission

At the hearing, the respondent produced a comprehensive submission which sets out in detail the chronology of events from the date that the complainant joined T1 in April 2010 until his resignation in July 2016.  Most of the facts concerning the sequence of events are not in dispute; however, the respondent submits that the complainant’s claim is based on assumptions that do not accord with those facts.  In essence, the respondent does not accept the complainant’s claim that he was prevented from applying for VSS or that he was disadvantaged as a result of his status as a Project P assignee.

Alignment of T1 Terms and Conditions with those of the Public Sector

The respondent’s position is that Project P assignees were outside the scope of the grading exercise undertaken by T1 in the context of the merger with T2 to form T3.  They point to the fact that the complainant was aware, even before he commenced employment with T1, that his role would transfer to T4.  The respondent’s position in this regard is supported by the fact that the legislation to effect the transfer of Project P to T4 was enacted in 2008, two years before the complainant joined T1.

In July 2015, the complainant’s role was reviewed by T4, who determined that, on his transfer to T4, his grade would be that of Accountant Grade 1, at the sixth point of the scale on a salary of €77,556 (higher than his T1 salary of €73,937). As I have noted in the “Summary of the Complainant’s Case,” the complainant did not transfer to T4 when he was offered his role at this grade.    

Voluntary Severance Schemes in T1       

Arising from the merger process and the pressure to reduce numbers and costs in the public sector, five VSS schemes were opened in T1 between 2011 and 2015.  The respondent’s view is that the complainant could have applied for VSS in any of the five rounds; however, he did not do so.  It is their view that there was no necessary connection between the grading exercise and the VSS offering.  They also said that there was no guarantee that the complainant would have been offered VSS if he had applied, as there was an ongoing requirement for the role of Financial Controller on Project P.  They also understand that he was replaced as Financial Controller when he moved to his new role as Head of Finance.

Pension Scheme and the Implications of Changing Employers

The Roads Act 2015 provided for the retention of T1’s two pension plans, with plan members allowed to remain in their original schemes after the establishment of T3.  A Protocol Agreement concluded in March 2015 between SIPTU, the Department of Tourism, Transport and Sport and the Department of Public Expenditure and Reform gave the members of these schemes an option to transfer to the new Public Sector Single Pension Scheme by July 31st 2018.

At the time of the merger of T1 and T2 to form T3, it was a condition of remaining in the T1 schemes that a member had to remain an employee of T3.  Shortly before the merger on August 1st 2015, the complainant and other Project P team members (and T1 staff on secondment to other organisations) indicated that they would prefer to remain in membership of the T1 DC scheme after their transfer to T4.  To facilitate this, T4 would have to become an Associated Employer of the T1 DC pension scheme.  The process would be complex, requiring secondary legislation and the co-operation of a number of government departments and the trustees of the pension scheme.   Having commenced in August 2015, a positive outcome was achieved in February 2017 with the making of a statutory instrument to give effect to the “associated employer status” for T4.  Since the making of this legal instrument, the respondent said that virtually all of the remaining Project P team members who were employed by T3 have formally transferred to T4 and have remained as members of the T1 DC pension scheme.

Confirmation of Transfer of Employment to Public Sector Terms and Conditions

On July 20th 2015, the complainant signed a document prepared by T1 setting out the terms of the transfer of his employment to T3, an “Option 1 Letter.”  Clause 1 states:

“I confirm that I am aware that my employment will transfer to T3, being the newly merged T2/T1 entity, pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (as amended) (the “Transfer Regulations”)”.

Clause 3 states:

“I am hereby voluntarily  electing to transfer my employment to T3 on the following public sector terms and conditions of employment and with continuity of service maintained, which will take effect from the Transfer Date:

 “ a)   I will have the option to join the Single Public Service Pension Scheme within 36 months of the dissolution of T1 or to remain in my existing Defined Contribution or Defined Benefit scheme.”

The letter goes on to confirm details of the application of Civil Service pay scales, flexi working, annual leave and life assurance.

The complainant added a typed addendum to the letter as follows:

“On Thursday, 16th of July, in discussion with the HR Manager (named) and the CEO (named), I highlighted a significant issue around the pension arrangements associated with Option 1, which is due to the specifics of my own circumstances.  This issue remains unresolved.

“Nevertheless I have signed and submitted this document to comply with the requested timeframe.  I have selected Option 1, as based on our discussion, it was deemed most helpful in progressing T1/T2 merger process and on the understanding it was being done without prejudice to the highlighted issue on the pension arrangement.”

At the hearing of this complaint on October 2nd, 2017, the HR Manager said that, at the meeting on July 16th 2015 which is referred to above, the complainant asked if he could become a member of the T1 DB scheme.  She said that in response, the CEO informed the complainant that the DB scheme was closed.  The complainant’s recollection is that the CEO said that she would investigate his request.

Summary of the Respondent’s Position with Regard to this Complaint

In response to the complainant’s claim that he was prevented from applying for VSS between June 2011 and July 2015, the respondent’s position is follows:

Neither the complainant nor his colleagues on the Project P team who were assigned to T4 were within the scope of the grading exercise undertaken by T1 in the context of its merger with T2 to form T3.  The complainant was aware at all times that he would transfer to T4 in due course as his role was critical to Project P which, since 2011, fell within the scope of the work of T4.

The grading of the complainant’s role was the responsibility of T4 and his new grade was confirmed to him by T4 in July 2015 as “Accountant Grade 1.”  At the same time, he was offered the opportunity to formally transfer to T4, but decided against transferring at that time.

While it was open to him to apply for VSS, he did not express any interest throughout the five VSS offerings in T1 between 2011 and 2015.  Apart from this, there is no guarantee that he would have been accepted for VSS as there was an ongoing requirement on Project P for his role as Financial Controller.  This is underlined by the fact that he was replaced as Financial Controller when he took on the more senior position of Head of Finance at T4.

Finally, the respondent rejects the complainant’s assertion that he was adversely affected by what he describes as a “break in service” arising from his requirement to resign from T3 to take up his promotion in T4.  If he has been adversely affected, T3 cannot respond to this contention as his current terms and conditions are a matter for his new employer.

The claimant’s case is that he was treated differently to other T1 employees by being excluded from the grading exercises in 2014 and 2015.  He claims that these exercises were accompanied “in parallel” by an option to apply for VSS and, because he was excluded, he was not adequately informed to make a decision to apply.

I do not accept this contention.  There were two grading exercises and five rounds of VSS between 2011 and July 2015 and the complainant could have applied during any of these rounds.  It is my view that the outcome of the grading exercise would not have contributed significantly to a consideration of redundancy, as such a consideration is based more on the amount of severance pay on offer, the possibility of getting another job, family and financial circumstances and other criteria relevant to the individual.  Grade is unlikely to be an overriding factor.

I have to conclude also that, if he had applied for VSS, it is unlikely that the complainant’s application would have been accepted, as his role was not redundant.  This conclusion is supported by the fact that the vacancy created by his promotion was filled.

The complainant claims that he knew that the role of Head of Finance was coming up and he thought that he had a chance of getting it.  He said that if he had known that he would have to resign from T3 in order to take up the promotion, he would have applied for VSS earlier and agreed a mutually acceptable end date.  I note from his submission that he was offered the promotion in May 2016; however, he had the opportunity to transfer to T4 from July 2015.  If he had transferred then, he would not have had to resign from T3 in July 2016 to take up his new role.  I cannot determine what disadvantage, if any, ensued from the fact that he had to resign from T3 to take up the more senior position with T4. 

Although this case is concerned with a claim for voluntary severance, an issue with the complainant’s pension scheme was raised as having a material effect on his decision not to transfer to T4 in July 2015.  The HR Manager said that at a meeting with the CEO on July 16th 2015, the complainant’s request to be considered for membership of the DB scheme was ruled out, although the complainant has a different recollection.  No reason was put forward as grounds for considering a move from the DC to the DB scheme and such a move would be highly unusual.  It is not reasonable for the complainant to claim that he was waiting for a positive outcome to this request and that this is why he delayed his transfer to T4.

I have reached a conclusion that there was no impediment to the complainant applying for VSS.  I have also concluded that, if he had made an application, it is unlikely that it would have been accepted, as his role was not redundant.

In respect of his resignation from T1 to take up his new role in T4, it is my view that this did not result in unfair treatment.  I do not accept the complainant’s contention that, knowing that a suitable vacancy was coming up, he could have applied for VSS and left T3 on an agreed date, as it would have been entirely unreasonable to apply for VSS on such a speculative basis. 

On the basis of these conclusions, I make no recommendation in respect of this complaint.

Voluntary severance scheme, resignation, redundancy