Complainant

Respondent

Anonymised Parties

Sales Assistant (2)

A Retailer

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00014670-001

29/09/2017

The complainant seeks her entitlement to a redundancy lump sum payment. The respondent claims that it is not responsible for the payment of the redundancy lump sum.

The complainant started working in the retail store as a sales assistant on 1 October 2007 and continued to work there until her employment ended on 15 July 2017. There was no break in her employment during that period.

She claims that for nearly nine years up to 18 July 2016 she had worked for Mr. X and on the 18 July 2016, she transferred to work for the respondent who had taken over the business from Mr. X. She said that she was informed by Mr. X in March 2016 that he was going to lease the shop and she subsequently met with Mr. A, Director with the respondent and was happy enough as nothing out of the ordinary would change. She said that all her terms and conditions remained the same.

She said that she received a text from Mr. A in June 2017 to say that he would not be continuing with the shop as of July 2017. She said that she was aware that someone was in having a look around the shop premises with interest to maybe take over but she was not involved in that discussion and it never became a reality.

She said that in the lead up to the close of the business all the stock was removed from the premises and taken to another shop belonging to the respondent and the property was vacated on 15 July 2017. She claims that she was told that the respondent was not taking the lease beyond one year and her job with the respondent was coming to an end. The complainant asserts that her employment was accordingly terminated by the respondent and that she received her P45 from the respondent. The complainant said that the shop closed and remains closed to this day. She said that she never went back to work with the respondent or Mr. X after 15 July 2017.

The complainant said that she was fully advised and informed of the transfer of undertakings in 2016 from Mr. X to the respondent. However, she claims that she was not informed of a transfer of undertakings back to Mr. X and contrary to the respondent’s position, she claims that there was no such transfer from the respondent back to Mr. X.

The complainant submits that her employment commenced on 1 March 2007 and came to an end on 15 July 2017. She worked 20 hours per week and was paid €215 gross per week and €210 net pay per week.

The respondent denied the claim that it is responsible for the complainant’s redundancy and submitted that the complainant’s employment had transferred back to Mr. X, the landlord, following the termination of the respondent’s business interest in the retail shop. The respondent claims that he took over the business on a lease from 14 July 2016. The lease agreement included a break clause after 12 months if the respondent decided that it was not going to remain in the business. Mr. A, a Director with the respondent, attended the hearing and set out the business trajectory from the middle of 2016 until July 2017, he said that having make some good progress initially, the business never reached the necessary levels for it to make sense to keep the business beyond one year and it invoked the break clause and returned the business to Mr. X, the landlord. Mr. A said that accordingly any responsibility to the complainant’s redundancy lump sum payment rests with the landlord and not with the respondent.

Mr. A claims that he had informed the employees that business was not going well and that the respondent was not going to take up the business outside of the one year. He said that efforts were made by the landlord to get someone else to take over the lease but that never materialised. Mr. A. said that he supplied the relevant information regarding the respondent not taking over the lease and the staff were well aware of what was happening at all times.  

The respondent outlined its position that once it had opted to invoke the break clause that the business was handed back to the landlord. Mr. A said that he removed all the stock from the premises as it belonged to the respondent and it removed the equipment that belonged to it and left the landlord’s equipment in the premises and handed back the keys. Mr. A said that the respondent paid the complainant what was owed to her including holiday pay to settle its affairs prior to her retuning with the business back to the landlord.  

The respondent asked me to consider the relevant case law here, in particular the Spijkers case [CJEC, 18 March 1986, Case 24/85] and Daddy’s Dance Hall case [CJEC, 10 February, Case 324/86], which it claims stands in its favour.

The complainant asserts that she is entitled to a redundancy lump sum payment in accordance with the Redundancy Payments Act. The respondent denies the claim and asserts that her employment transferred back to the landlord after it decided not to proceed with a lease of the business and invoke a break clause in the agreement.

Section 9 of the Redundancy Payments Acts addresses the situation where an employee is immediately re-engaged by another employer:

“9.— (1) For the purposes of this Part an employee shall, subject to this Part, be taken to be dismissed by his employer if but only if— ( a) the contract under which he is employed by the employer is terminated by the employer, whether by or without notice, or ... (3) (a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if— (i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment, (ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer, (iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which— (A) sets out the terms and conditions of the employee’s contract of employment with the new employer, (B) specifies that the employee’s period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer, (C) contains particulars of the service mentioned in clause (B), and (D) the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph. (b) Where in accordance with this subsection an employee is re-engaged by the new employer, the service of that employee with the previous employer shall for the purposes of this Act be deemed to be service with the new employer.”

I considered all the evidence of the parties and the relevant case law. I am satisfied that the respondent is not entitled to rely on Section 9(3) of the Redundancy Payments Acts as, in the first instance, it did not provide the complainant with the necessary statement required by this section. It is also evident that there was no offer of re-engagement from the landlord at the time, or subsequently, as it is clear that the landlord never re-engaged in the business after the respondent handed back the keys.

The respondent asserts that there was an agreement in place, which allowed for a review and break clause in the agreement after one year. I note that the proper transfer of undertaking procedures were followed in July 2016. I note that nothing like those procedures were in place in July 2017 when the respondent decided not to take up the lease option beyond one year and, as it suggested, transferred the business back to the landlord. I am struck by the uncertainty of some of the “facts” presented to me in evidence at the hearing including the lease agreement itself. Notwithstanding, it is clear the future of the business at the end of the one-year lease period was not clear at that time. What is clear and certain is that the respondent’s lease came to an end and the business closed never to open again. I cannot say that there is any evidence to suggest that the business continuing with the same staff in place was ever a reality. I do not think that the interaction between the respondent and staff, including the complainant, can be described as information and consultation in line with Regulation 8 of the E.C. (Protection of Employees on Transfer of Undertakings) Regulations. I also accept the evidence of the complainant that she did not work, nor was offered to work, for anyone in the premises or in any other business associated with the respondent or Mr. X after 15 July 2017.

I find that the complainant’s employment came to an end on the 15 July 2017, the last day the respondent’s business was in operation and I am not satisfied that the business transferred back to the landlord. Finally, I am satisfied that there was no economic activity in relation to this business beyond 15 July 2017. Therefore, I find that it is the respondent’s responsibly to provide for the complainant’s redundancy in this instance. I note that the P45 issued to the complainant states that her gross pay from the 1 January 2017 to the 16 July 2017 was €6,126.10 and from that I extrapolate that her annual salary is €11,309.72 and that her gross weekly wage is €217.49.

Taking these findings together, I conclude that the complainant was made redundant by the respondent at the time of the closure of its business. Consequently, the complainant is entitled to a redundancy lump sum payment pursuant to the Redundancy Payments Acts on the following criteria:

Date of commencement of employment: 1 October 2007

Date of end of employment: 15 July 2017

Weekly gross pay: €217.49 per week

I decide that, pursuant to the Redundancy Payment Acts, the complainant is entitled to a redundancy lump sum calculated according to the following criteria:

Date of commencement of employment: 1 October 2007

Date of end of employment: 15 July 2017

Weekly gross pay: €217.49 per week

This award is made subject to the complainant having been in insurable employment under the Social Welfare Acts during the respective period of employment.

Redundancy Payments Acts - Re-engagement by a new employer - TUPE Regulations