Complainant

Respondent

Anonymised Parties

A Sales Assistant

A Shop

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-00017146-001

30/01/2018

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 the 1 March 2007 and continued to work there until her employment ended on 15 July 2017. There was no break in her employment during that 10-year period.

She claims that for nearly nine years up to 18 July 2016 she had worked for the respondent and on the 18 July 2016, she transferred to work for Company Y who had taken over the business from the respondent. She said that she was informed by the respondent’s owner, Mr. A, in March 2016 that he was going to lease the shop and she subsequently met with Mr. B, Director of Company Y. She said she was happy enough as nothing out of the ordinary would change. She said that all her terms and conditions remained the same. She said she received a contract of employment from Company Y which set out that “under the EU Transfer of Undertaking Directive, this contract does not affect your existing acquired legal/statutory rights in relation to your terms and conditions of employment.”

She said that she received a text from Mr. B in Company Y in June 2017 to say that he would not be continuing with the shop after July 2017. She said that she was aware that someone was in the shop having a look around the premises to possibly take it over, but she was not involved in those discussion and it never became a reality.

She said that in the lead up to the closure of the business all the stock was removed from the premises and taken to another shop belonging to Mr. B of Company Y and the property was vacated on 15 July 2017. The complainant asserts that her employment was accordingly terminated by Company Y and that she received her P45 from Company Y. 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 Company Y after 15 July 2017.

The complainant said that she was fully advised and informed of the transfer of undertakings in July 2016 from the respondent to Company Y. She said that Company Y maintains that she has transferred back to the respondent and it is the respondent that it responsible for her redundancy payment. Although she claims that she was not informed of a transfer back to the respondent and she does not believe that she transferred back to the respondent. She said that she has not been paid her redundancy entitlement after 10 years work and that was the reason she has taken this case against the respondent.

The complainant submits that her employment commenced on 1 March 2007 and came to an end on 15 July 2017. She worked 33/35 hours per week and was paid €350 gross per week and €325 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 to Company Y in July 2016. The owner of the respondent’s business, Mr. A, who attended the hearing, said that he had the business for 10 years but he had to retire due to ill health. He said that he transferred the business to Company Y and no one was in any doubt that he was opting out of business and retiring in July 2016. He said that a lease agreement was drawn up and all staff were informed of the transfer of undertaking. He said that both he and Company Y ensured everything was done correctly so that there was no confusion. He said after which the respondent deregistered for VAT with Revenue.

Mr. A said that he heard very little from Company Y after this point – only once or twice when he went to the shop for one reason or another. He claims that the transfer of undertaking at the time including that all staff would be the responsibility of Company Y. The lease agreement included a break clause after 12 months if the respondent decided that it was not going to remain in the business it could opt out. However, it was never the respondent’s contention to retake control of the business and start operating again should Company Y opt out, as it was made clear to everyone in July 2016 that he had retired.

The respondent said that it was Company Y that was looking for a new tenant to take over the business in the summer of 2017 and Mr. B was the person arranging the viewings of the business not the respondent but nothing ever materialised.

Mr. A’s daughter also attended the hearing, she said that she looked after much of the dealings with Company Y on behalf of her father during this time. She said she looked after the transfer in July 2016 where procedures for the transfer of undertaking were carefully followed. She said that there was no undertaking that the business would ever transfer back to the respondent in July 2017. She provided me with an exchange of text messages that she claims she had with Mr. B of Company Y, where he appears to admit that should no other undertaking come forward to continue with the business, Company Y would be responsible for staff redundancies.  

The respondent said that this is a simple issue that at the date of the termination of the complainant’s employment she was employed by Company Y and not the respondent. There was no transfer of undertaking in play here and accordingly, the responsibility for redundancy rests with Company Y and not the respondent.

The complainant asserts that she is entitled to a redundancy lump sum payment in accordance with Redundancy Payments Act. The respondent denies the claim that it is responsible for the complainant’s redundancy payment and asserts that her employment ceased while she was employed by Company Y and not it, and the business never transferred back to the respondent thereafter.

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.”

The respondent asserts that there was a lease agreement in place and after one-year Company Y chose not to proceed with the business, it handed the keys of the premises back but it never transferred the business back. The respondent, Mr. A, said it was clear he had retired and he was not looking to take control of the business in July 2017. There was no agreement in place to do so and no communications between it and Company Y on such matters or indeed the staff accordingly.

Having considered the evidence of the parties, I find that a transfer of undertaking arrangement simply was not in place in July 2017, and there was no re-engagement from the respondent in the business after Company Y handed back the keys.

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 Company Y after 15 July 2017. I find that the complainant’s employment came to an end on the 15 July 2017, the last day Company Y’s business was in operation and as noted above I am satisfied that the business did not transfer back to the respondent. Taking these findings together, I conclude that the complainant was not made redundant by the respondent at the time of the closure of the business. Consequently, the complainant is not entitled to a redundancy lump sum payment pursuant to the Redundancy Payments Acts from the named respondent, as the respondent was not the complainant’s employer on the date of her dismissal/redundancy as she had previously been transferred to Company Y in July 2016.

The complaint is not well founded and therefore fails.

Redundancy Payments Acts - - TUPE Regulations – incorrect respondent