TUD183

This Ms Collins’s (‘the Complainant’) appeal against a decision of an Adjudication Officer (bearing reference number ADJ-00007813) under the European Communities (Protection of Employees on the Transfer of Undertakings) Regulations 2003 (SI No. 131 of 2003) (‘the Regulations’). The Adjudication Officer’s decision is dated 30 August 2017. The Notice of Appeal was received by the Court on 25 September 2017. The Court heard this appeal – along with two other related appeals: TU/17/26 and TU/17/27) – in Wexford on 15 February 2018.

At first instance, the Adjudication Officer held that he did not have jurisdiction to determine the complaints referred to him against J Donohoe Beverages Limited (In Receivership) (‘the Respondent’) under the Regulations. In so finding, he relied, in particular, on Regulation 4(1) of the Regulations. In those circumstances, the Adjudication Officer did not consider it necessary to determine the Complainant’s substantive complaint that her former employer - the Respondent – had failed in its obligations pursuant to Regulation 8 of the Regulations to engage in a 30-day process of information and consultation with her chosen representatives prior to the transfer of her employment on 4 November 2015 to Knockton Limited T/A East Coast Suppliers Limited (‘the Transferee’). The Court, with the agreement of the Parties, proceeded in like manner on the appeal.

There is no dispute between the Parties as to the facts that are relevant to the sole issue before the Court. It is accepted that a transfer of undertakings within the meaning of the Regulations occurred on 4 November 2015, the effect of which was to transfer the Complainant’s employment (along with that of her colleagues) which had hitherto been with the Respondent to the Transferee, by operation of law. It is also accepted that a Receiver was appointed over the Respondent’s assets and undertakings on the date of the transfer.

The Law

It is appropriate at this stage to set out in full the text of Regulation 4 and Regulation 8 of the Regulations.

Regulation 4 provides:

• “4. Rights and obligations

  (1) The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.

  (2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.

  (3) Subject to paragraph (4), this Regulation shall not apply in relation to employees' rights to old-age, invalidity or survivors' benefits under supplementary company or inter-company pension schemes that do not fall within the Social Welfare Acts.

  (4)(a) The interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under a supplementary company pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to 2012 are protected under those Acts.

  (b) The transferee shall ensure that the interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under a supplementary company pension scheme, other than a supplementary pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to 2012, are protected.”

8. Information and consultation

• (1) The transferor and transferee concerned in a transfer shall inform their respective employees' representatives affected by the transfer of—
  • (a) the date or proposed date of the transfer;
    (b) the reasons for the transfer;
    (c) the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them,
    and
    (d) any measures envisaged in relation to the employees.
  (1A) The transferor and transferee concerned shall include, with the information being provided under paragraph (1), information as respects—
  • (a) the number of agency workers temporarily engaged in the undertaking concerned,
    (b) those parts of the undertaking in which those agency workers are, for the time being, working, and
    (c) the type of work that those agency workers are engaged to do.
  (2) The transferor shall give the information in paragraph (1) to the employees' representatives, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out.
  (3) The transferee shall give the information in paragraph (1) to the employees' representatives, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the employees are directly affected by the transfer as regards their conditions of work and employment.
  (4) Where the transferor or the transferee envisages any measures in relation to employees, he or she shall consult the representatives of the employees, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out, in relation to any such measures with a view to reaching an agreement.
  (5) Where there are no employees' representatives in the undertaking or business of the transferor or, as the case may be, in the undertaking or business of the transferee, the transferor or the transferee, as may be appropriate, shall put in place a procedure whereby the employees may choose from among their number a person or persons to represent them (including by means of an election) for the purposes of this Regulation.
  (6) Where, notwithstanding paragraph (5), there are still no representatives of the employees in an undertaking or business concerned (through no fault of the employees), each of the employees concerned must be informed in writing, where reasonably practicable, not later than 30 days before the transfer and, in any event, in good time before the transfer, of the following:
  • (a) the date or proposed date of the transfer;
    (b) the reasons for the transfer;
    (c) the legal implications of the transfer for the employee and a summary of any relevant economic and social implications for that employee;
    and
    (d) any measures envisaged in relation to the employees.
  (7) The obligations specified in this Regulation shall apply irrespective of whether the decision resulting in the transfer is taken by the employer or an undertaking controlling the employer and the fact that the information concerned was not provided to the employer by the undertaking controlling the employer shall not release the employer from those obligations.

Submissions

Ms Ger Malone of SIPTU submits that the Respondent failed to discharge its information and consultation obligations under Regulation 8 of the Regulations. She further submits that the Complaint’s right to information and consultation under the aforementioned Regulation “does not arise from the contract of employment” and is not therefore within scope of Regulation 4 of the Regulations. On this premise, she urges the Court to find that liability for its failure to comply with Regulation 8 rests with the Respondent and does not transfer to the Transferee pursuant to Regulation 4(1). Ms Malone opened two previous determinations of this Court – TU/16/17 and TU/16/18 – which she submits support the interpretation of Regulations 4(1) for which she is contending.

Mr Lowey BL, for the Respondent, submits that Directive 2001/23/EC (‘the Directive’), transposed into domestic law by the Regulations, provides in the first paragraph of Article 3(1) thereof, that “The transferor’s rights and obligations arising from a contact of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee”. The aforementioned provision of the Directive is transposed by Regulation 4(1) of the Regulations. Mr Lowey BL further submits that the second paragraph of Article 3(1) of the Directive includes an optional provision which permits a Member State to derogate from the strict terms of the first paragraph of Article 3(1) as follows:

• “Member States may provide that, after the date of transfer, the transferor and the transferee shall be jointly and severally liable in respect of obligations which arose before the date of transfer from a contract of employment or an employment relationship existing on the date of the transfer.”

Counsel takes an opposing view to Ms Malone regarding the issue of whether or not the Complainant’s right to information and consultation which derives from Regulation 8 of the Regulations is encompassed or not by the phrase “obligations arising from a contract of employment existing on the date of transfer”. He submits that - it being a statutory right- the right to information and consultation is thereby an implied term of the Complainant’s employment contract and, for that reason, is encompassed by Regulation 4(1) such that any liability for the Respondent’s alleged failure to comply with its information and consultation obligations in the Complainant’s case can only rest, pursuant to the Regulations, with the Transferee.

Mr Lowey BL opened a number of authorities – case law and academic – in support of his submission. In particular, he referred the Court to paragraphs 10 and 11 of the judgment of the Court of Justice of the European Union in Joined cases 144 and 145/87,Berg and Busschers v Besselsen[1989] IRLR 447, wherein the CJEU provided an interpretation of Article 3(1) in the original Acquired Rights Directive (Directive 77/187/EEC), which is like for like with Article 3(1) of the Directive. Counsel also directed the Court to a learned article by Kimber and O’Doherty “Transfer of Undertakings – Perspectives from Litigation”, IELJ 2008, 5(2), 56-62 in which the authors address, inter alia, the Irish legislature’s choice not to transpose the optional provision in the Directive to make a transferor and transferee jointly and severally liable.

Discussion

The Court accepts that the submissions made on behalf of the Respondent herein represent an accurate summary of the relevant law: Regulation 8 implies a term into the Complainant’s contract of employment that entitles her to a period of information and consultation through her chosen/elected representatives prior to the occurrence of a transfer within the meaning of the Regulations; Regulation 4(1) provides that any remedy for the failure of her employer as transferor to fulfil its obligations under Regulation 8 can only be sought as against the Transferee.

Decision

For the reasons set out above, the appeal fails and the decision of the Adjudication Officer is upheld.

The Court so determines.

Signed on behalf of the Labour Court



Alan Haugh
JD______________________
20 February 2018Deputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to John Deegan, Court Secretary.