ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00009845

Complaint(s):

Date of Adjudication Hearing: 15/06/2018

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977 - 2015, following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:

The Complainant submitted she was employed with the Respondent from 18th January 2016 until 3rd July 2017. The complaints refer to alleged breaches of the Respondent’s obligations under a transfer of undertaking; alleged non-payment for wages; and of unfair dismissal.

The Complainant was seeking compensation for the alleged breaches. The Respondent, a HR and Recruitment Consultancy refuted the complaints.

Summary of Complainant’s Case:

CA-00012628-001Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)            

The Complainant submitted that she was initially hired as a receptionist on 18th January 2016 at a rate €9.50 per hour. Shortly thereafter, on completion of a 2-week trial on the 1st February 2016, she was hired as a Trainee Recruitment Consultant, at the rate of €21,000 per annum plus commission.

The Complainant maintained that on 31st March 2017 the business transferred ownership to the Respondent which is an entity owned by the Director of the original entity. The Complainant alleged she was never advised of this occurrence. She advised she was surprised to learn that the respondent, as a new entity with a similar name, was assuming the business of her former employer; however, she was assured her role would remain. She advised she did not receive a P 45 from her former employer, and where the Respondent also has the same Company Director as in the previous company.

The Complainant submitted that on 29th May 2017 she met with a Director of the Respondent, who as stated was a common party for both her former and her new employer and was offered a contract of employment in relation to a new role with the Respondent whom she maintains was a transferee under TUPE regulations. She advised she was assured this was merely a rebranding exercise and that no material detriment would occur to her in relation to the transfer. She was issued with a fresh contract by the Respondent which was identical in every way to that of her former contract. The only change related to a performance structure was being put in place, and that a probation clause was also inserted.

The Complainant referred to S.I. 131/2003-European Communities (Protection of Employees and Transfer Of Undertakings) Regulation 2003 (the Regulations). The Complainant maintained that in accordance with Regulation 4(1) her contract of employment transferred from her former employer the transferor, to the Respondent who became the transferee. She further submitted that contrary to Regulation 8 she was not informed of the transfer 30 days before the transfer was carried out, or in good time before the transfer was carried out. She also maintained that the transferee failed to provide her with information regarding the transfer. The Complainant stated she was not advised of the proposed date of the transfer, the reasons for the transfer, or the legal implications of the transfer. She therefore maintained she should have been consulted with in accordance with Regulation 8.   Specifically, the Complainant submitted that there was no consultation at all after the transfer. She advised she was provided with a new contract that changed her targets, and where a probation clause and was applied. She contended as these were material changes she should have been consulted. Therefore, the Complainant was seeking compensation payment of four weeks for the failure of the transferee to consult with her. She therefore contended that contrary to Regulation 4 (1) of the Regulations the Respondent failed in its obligations which require 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.

The Complainant argued that there was no break in her contractual service between the transferor and the transferee; that she worked in an identical role; that the contract of employment issued by the Respondent was identical terms to the former employer’s contract other than relating to her commission and performance management; and that the Respondent had an identical employee handbook to that of the transferor. The Complainant also advised that her previous holiday leave entitlement was honoured by the Respondent.

CA-00012628-002 Complaint under section 6 of the Payment of Wages Act, 1991             

The Complainant submitted that when she was appointed as a Trainee Recruitment Consultant on 1st February 2016 she was to be trained by an experienced colleague; however, this colleague left the employment shortly after the Complainant had started her role. The Complainant submitted she received no formal training in relation to her recruitment role, nor was she sent on any professional courses. The Complainant maintained that she repeatedly asked the Directors for training, but she did not receive same.

The Complainant maintained that when she was transferred to the new entity the targets that were imposed on her were unachievable in light of the geographical territory she was given, that she had not received required training, and that her sales fees would have been frequently undercut by the Director, in some cases unbeknown to her. The Complainant maintained such reduction in sales fees impacted on the bottom line and reduced her commission considerably. She argued that this unilateral reduction was never accounted for and thus her targets could not be achieved even with the best of her efforts.

The Complainant also submitted that the Respondent undermined her capability of reaching her targets where, for instance, she could not get consent or authorisation to pay the necessary recruitment websites, and there was a falloff in applications as the recruitment search engines were not paid.

The Complainant presented that she was owed commission for a number of successful recruitment placements she had made, and these figures were discussed at the hearing within.

CA-00012628-003 Complaint under Section 8 of the Unfair Dismissals Act, 1977

The Complainant submitted that 3rd July 2017 she was summoned to a meeting by the directors of the transferor and was summarily dismissed without the right to appeal on the alleged grounds of poor performance. She submitted that she was upset at the turn of events and disagreed fundamentally with the assessment. She advised that on 3rd July 2017 she was furnished with a letter of dismissal. The letter of dismissal provided her with one week’s notice where it was stated her termination was result of not achieving her performance targets. The letter also referred to the fact that her employment began on 3rd April 2017 and that the termination was as result of the ongoing review of her performance during the first three months of employment.

The Complainant maintained that she was in continuous service since 18th January 2016 and as her employment transferred she was protected under the Unfair Dismissals Act as she had over 12 months continuous service.

The Complainant did not accept that she was performing below target. She maintained that there was no corroboration to the suggestions that she was resisting direction or that she often challenged the director. The Complainant maintained there were no notes or records of any such meetings, or records of any warnings of where a sanction was provided to her before her dismissal. She also maintained that no performance management process or improvement plan was initiated to address her alleged under performance. The Complainant argued that the lack of any fair process, and the decision to dismiss her unilaterally being conducted by a reputable HR and recruitment consultancy beggared belief. She maintained there simply was no ground for her dismissal. Moreover the Complainant argued that before the Respondent could proceeded to dismiss her for competency it was obliged to exhaust all efforts to train/coach/mentor her, and it must record those efforts. She argued only then if she was not coming up to a standard the Respondent was obliged to proceed to a disciplinary phase, and she was entitled to a right to appeal. She maintained none of these procedures or a right to appeal were afforded to her before she was summarily dismissed.

Referring to jurisprudence, the Complainant referenced McGrath And Reistrick V The Fisher Field Construction & Farm Machines Ltd UD 927 and 928/1982, where the Employment Appeals Tribunal emphasised there are important stages to go through before invoking disciplinary procedures when competence becomes an issue. In this regard the Complainant contended that the Respondent failed to establish a reasonable performance standard prior to the issue becoming a disciplinary one, and the Respondent also failed to communicate this to the her. The Complainant also referred to Berthold V Google Ireland Ltd were the EAT upheld dismissal as being unfair on performance/competency grounds where in a short timeframe an employee went from no disciplinary record to underachieving.

On that basis the Complainant maintained that she was unfairly dismissed as she was not afforded fair procedures before a decision to dismiss her was actioned. The Complainant was seeking compensation for the unfair dismissal. In this regard she submitted that she was out of work for a short period of time from July to August, and she is now in a role where she was earning slightly more than the salary she was on before being dismissed.

Summary of Respondent’s Case:

CA-00012628-001Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)            

The Respondent advised it was a reputable HR and Recruitment Consultancy and it strongly disputed the claims that the Complainant was entitled to the protections afforded under a transfer of undertaking.

It advised the business was run by two partners who were directors and shareholders of the company that went into liquidation in May 2017. The Respondent submitted that the Complainant started her employment with that company on 16th January 2016 and where the Complainant commenced employment as a Recruitment Consultant with the company on 1st February 2016 and her contract was terminated on 31st March 2017. The Complainant then commenced employment on 3rd April 2017 with the Respondent which was owned by the Director of the former company, and this change was by mutual consent.

The Respondent submitted that in the first quarter of 2017 the former company was having severe financial issues and it recognised that the business would not survive. The Directions took it in hand to put a plan in place that would create as smooth and controlled end the business.

The Respondent submitted that that company employed two Directors and four staff including the Complainant. It also had a large number of industrial workers on the payroll and it negotiated with another agency to TUPE these agency workers to ensure minimum disruption for the agency workers. The Respondent submitted that all the agency workers were correctly advised that a TUPE was to take place, and all regulations are followed to ensure their transition. The Respondent maintained that as part of the transfer a new agency employed one direct employee of the former organisation where the employee applied for and received employment on the recommendation of one of its Directors.

The Respondent contended that the Complainant’s situation was not a TUPE. It advised that throughout this period the Complainant continued to work as a Recruitment Consultant. The Respondent maintained that no direct employees of the former business were transferred under TUPE to the new business. The Complainant was offered a new contract of employment with the new consultancy business. The Respondent maintained that none of the business from the former consultancy was transferred to the new consultancy. It advised that no legal transfer, assignment or forfeiture of the lease, or merger occurred.

The Respondent advised that its two partners/directors met with the Complainant and explained that the former business was going into liquidation and there was no longer a role for her. It maintained that no employees from the former company were transferred to the new consultancy business. It maintained that redundancy would have been the simplest process, however the Complainant was not entitled to redundancy payment and due to having a strong sense of loyalty they offered the Complainant a new role in the new business. This occurred on 3rd April 2017 where a former director to the old business became the Complainant’s line manager in the new business, and where he set out to provide a continuous assessment and support the Complainant to achieve her sales targets.

The Respondent argued that as there were five companies in the group the same staff handbook applied, that it did not transfer the holiday entitlements as maintained by the Complainant. It submitted that the Complainant had taken all her leave entitlement in the previous company, and she availed of annual leave in the new company. It was in good faith they paid her two days holiday on the termination of her contract of employment in July 2017, where they argued this was not a bakance of he leave from the former company.

CA-0001 2628-002 Complaint under section 6 of the Payment of Wages Act, 1991            

The Respondent submitted that the Complainant maintained she was due €3,185 for unpaid commission. The Respondent maintained that the Complainant is not entitled to receive commissions until the client has paid the invoice and the guarantee period has paused is passed. It advised that that basis the Complainant was entitled to payment of € 1,350.94.

CA-00012628-003 Complaint under Section 8 of the Unfair Dismissals Act, 1977

The Respondent submitted that there were performance issues with the Complainant throughout 2016 and in early 2017 she was given a targets for each quarter, commencing from February to April. The Respondent argued that these targets were much lower than the industry. It argued that the Complainant underachieved with shortfalls of over 50% of her expected targets during 2016, and where the Complainant acknowledged that her figures were poor, but showed no determination to improve matters in 2017. The Respondent met with her on a number of occasions to discuss her performance, especially in light of the ongoing developments. It maintained that the Complainant did not achieve her targets and where her performance was below expectations.

The Respondent advised that the Complainant refused to fully engage with the Respondent in regard to her performance, and where the Complainant consistently and over an extended period of time did not adopt the plan to improve her sales performance. This left the Respondent with no alternative but to dismiss the Complainant. It maintained the Complainant was on probation at that time, had consistently resisted direction, and was therefore dismissed for her poor performance of duties.

Findings and Conclusions:

CA-00012628-001Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)            

The Complainant submitted that contrary to Regulation 4 of SI 13/2003 her terms and conditions of employment were deteriorated as a consequence of the transfer of her employment, and that the Respondent failed to meet its obligations to protect these terms and conditions. The Complainant also maintained that contrary to Regulation 8 of SI 13/2003 she was not consulted by the Respondent, as a transferee, when her role was transferred. The Respondent denied that the Complainant was transferred, but instead by mutual agreement her job was terminated in a company that was going into liquidation and she accepted a new role in another company under the ownership of the Director.

Regulation 3(1) of the Regulations apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger.

Regulation 3(2) of the Regulations defines a “transfer” as the transfer of an economic entity which retains its identity; and where an “economic entity” means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity.

Regulation 4(1) of the Regulations 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. I am satisfied that based on the evidence provided, material changes were made in the Complainant’s contract of employment by the Respondent after the transfer occurred, and where these changes related to the Complainant’s commission and also placed the Complainant on probation, and this probationary period was used as a basis to dismiss the Complainant within four months of the transfer and to avoid the Complainant’s rights under the Unfair Dismissal Acts, a right she was entitled to have under Regulation 4 of the regulations where the Respondent is obliged to maintain the Complainant contract of employment.

In accordance with Section 8 of the Regulations, the transferor and transferee concerned in a transfer shall inform their respective employees' 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. Furthermore Regulation 8 requires that 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.

Evidence presented by the Complainant corroborates that her former employer was experiencing financial difficulty and was facing liquidation. As a consequence, it transferred some of its economic activities, namely that part of it business relating to its agency workers, to another business entity. It also made two staff redundant. In addition, the Complainant was offered a role in the Respondent’s business where, in effect, her activities as a recruitment consultant were continued by the Respondent, and where it appears this work was practically identical to her former work. In addition, a Director of the former business became the Complainant’s direct line management in the Respondent’s business.

Accordingly, I can draw no other conclusion but that the economic activity of the Recruitment Consultancy was in fact transferred. In this regard it appears for all intents and purposes that the recruitment consultancy work being performed by the Complainant continued with the Respondent, and where the performance targets from the former employment (the Transferor) had become a concern that followed to the Respondent as the Transferee. It is significant that the Respondent has relied upon the performance of the Complainant since 2016 as the rationale for her dismissal in July 2017.

I therefore find, the Complainant’s job was in reality transferred. The Complainant was provided with no notice of redundancy to support the assertion from the Respondent that her former role was in fact finished. Rather she was issued with a new contract of and where there was no break in service. She was never formally notified of the termination of her role, nor where she was issued with a P45 to support the assertion as espoused by the Respondent.

I therefore conclude that the transfer of the recruitment consultancy business took place between the two economic entities in March/April 2017. This transfer was not as a result of a compulsory liquidation of the former entity, but where the owners of the former business, who also had an interest in the Respondent’s business, decided to continue with the Recruitment Consultancy activities of the former business in the Respondent’s business. As such the Respondent became the transferee and had a responsibility to consult with the Complainant in accordance with the obligations as set down in SI 131/2003, which it failed to do.

Section 8 of the regulations requires the Transferee to provide the employee with information 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. I find the Respondent failed to comply with this obligation.

I therefore find that the Complainant’s contract of employment was not properly transferred in accordance with Regulation 4, and nor was she informed of the transfer at any time during her employment in accordance with Regulation 8.

CA-00012628-002 Complaint under Section 6 of the Payment of Wages Act, 1991            

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act. Section 6 of the Payment of Wages Act 1991 requires that I make a decision under the relevant sections of that Act.

Section 5 (1) of the Payment of Wags Act 1991 states that an employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

• the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

• the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

• in the case of a deduction, the employee has given his prior consent in writing to it.I find that the Complainant had sourced business and placed employees as part of the recruitment consultancy activities she was employed to do. The Respondent acknowledged at the hearing that the amount due to the Respondent was €1,350.94, whereas the Respondent has submitted she was due €3,185. Based on the evidence provided at the hearing I find that €3,000 would be an equitable and fair amount on which to base the Complaint’s underpayment. I am satisfied that in light of the fact the Complainant’s employment transferred from one economic entity to another, and where she continued to provide the recruitment consultancy services to the new entity, her role was subject to a transfer of undertaking. As such I find her continuity of service commenced from 18th January 2016. Therefore, I find the Complainant has more than one year’s continuous service and accordingly has protection under the Unfair Dismissals Act.S6(4) of the Act states the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if inter alia it results wholly or mainly from the capability, competence or qualifications of the employee for performing work of the kind which she was employed by the employer to do.     Decision:Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.  For breach of Regulation 8 of the Regulations, I require the Respondent to pay the complaint compensation of four weeks. This sum amounts to a total of €1,725 in compensation.

1. As I have found the Respondent has contravened Regulation 4 of the Regulations, and in so doing sought to deny the Complainant her continuity of service in order to avoid any claims under the Unfair Dismissals Act, I require the Respondent to pay the Complainant compensation of €3,000.
2. In the event that I find a complaint is well founded I can require the employer to comply with the Regulations and, for that purpose, to take a specified course of action, or I can require the employer to pay to the employee compensation of such amount (if any) as in my opinion, is just and equitable in the circumstances. In the case of a contravention of Regulation 8, such compensation must not exceed 4 weeks remuneration.
3. Section 10 of S.I. No. 131/2003 - European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 requires that I make a decision in relation to the Complaint, and declare that the complaint is or, as the case may be, is not well founded.  
4. CA-00012628-001Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)            
5. Having considered all the evidence presented, I find the Respondent failed to reasonably comply with the procedures set out in the employee handbookfor the purpose ofdismissing an employee with regard to performance issues. I therefore find the Complainant was unfairly dismissed.
6. Accordingly, the Respondent had obligations to adhere to prior to deciding to dismiss the Complainant for her poor performance. The Respondent stated it is a reputable HR and Recruitment Consultancy. As such it would be expected that it would fully understand the need to follow its own HR policies and procedures and have records to demonstrate that it adhered to such procedures. However, during the course of the hearing the Respondent failed to demonstrate that it either provided the Respondent with adequate training, or that it followed its own procedures. The only record provided regarding the management of the Complainant’s performance was its letter of dismissal. I therefore do not find that the Complainant was afforded fair procedures regarding her dismissal, or that the Respondent adhered to the procedures set out in the employee handbook. These acts, and the omission of the Respondent to follow its own procedures must therefore be considered when deciding on the reasonableness of the decision to dismiss the Complainant.
7. In considering whether the Respondent acted reasonably with regard to the dismissal of the Complainant, I refer to the employee handbook which addresses the process to be adopted regarding capability and competence. The handbook, which is a comprehensive document, advises that in issues of performance an employee will receive adequate training, that an informal process will be adopted, and if standards of performance remain a concern a formal process will be implemented which includes formal meetings, a written warning, and may include a transfer to more suitable work. At that point, where performance does not improve the next stage is a final written warning, and if an improvement is not forthcoming after an agreed period of time the employee will be dismissed.
8. Having considered the Respondent’s stated position, that it asserted the Complainant’s capability and competence (her performance) was the reason for her dismissal, I must consider the reasonableness or otherwise for the Respondent’s conduct in relation the dismissal. The Respondent has submitted that it had ongoing concerns regarding the Complainants ability to reach her performance targets, that it had spoken to her on numerous occasions since 2016. A Director of the company directly intervened from April to July 2017 in an attempt to address the performance issues, and the Respondent maintained that the Complainant failed to engage in the process. On the basis of both her poor performance and lack of engagement in a performance improvement process the Respondent dismissed the Complainant and provided her with one week’s pay in lieu of notice.
9. I must therefore consider both the substantive issues leading to the dismissal, and the fairness of the procedures adopted.
10. In addition S6(7) of the Act requires that in determining if a dismissal is an unfair dismissal, regard may be had, if the Adjudication Officer considers it appropriate to do so- (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and (b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure which the employer will observe before and for the purpose ofdismissing the employee …or with the provisions of any code of practice.
11. In accordance with Section 6(1) the Unfair Dismissals Act, 1977 “the dismissal of an employee should be deemed, for the purpose of this Act, to be an unfair dismissal unless having regard to all circumstances, the were substantial grounds for justifying the dismissal”.
12. CA-00012628-003 Complaint under Section 8 of the Unfair Dismissals Act, 1977
13.  
14.  

CA-00012628-002 Complaint under section 6 of the Payment of Wages Act, 1991             

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

In accordance with Section 6 of the Payment of Wages Act 1991, I find the complaint well founded and order the Respondent to pay the Complainant compensation of €3,000 (after the making of any lawful deduction therefrom) for the non-payment of her commission.

CA-00012628-003 Complaint under Section 8 of the Unfair Dismissals Act, 1977

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

For the aforesaid reasons, I find this complaint to be well-founded pursuant to Section 8 of the Unfair Dismissals Act 1977, and conclude that the Complainant was unfairly dismissed by the Respondent.

Section 7 of the Unfair Dismissals Act 1977 sets out the various forms of redress including reinstatement, re-engagement and financial compensation which may be awarded. Relevant to the case within, where compensation only is sought, Section 7(1)(c)(i) of the Act provides: “…if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances…”

Section 7(2) of the Act sets out the factors which should be considered when determining the amount of compensation and in such circumstances consideration has to be given to whether the loss was attributable to an act, omission or conduct by or on behalf of the employer; the extent (if any) to which the said financial loss was attributable to an action, omission or conduct by or on behalf of the employee; and the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid. I also have to consider…the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure applied to dismiss the employee… and the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.

Whilst the Respondent has maintained the basis of the dismissal was due to poor performance, I have found the Respondent failed to adhere to its own procedures regarding the stages to be followed before dismissing the Complainant for performance. On that basis I find the Respondent should pay the Complainant compensation for the losses incurred due to the dismissal.

In reviewing this matter it is noted the Complainant has found alternative employment in one month from her dismissal, and at a slightly higher rate of pay than she was earning at the time of the dismissal.

Therefore, I consider it just and equitable in all the circumstances to award the Complainant four weeks pay. The Respondent is therefore ordered to pay the Complainant a total of €1,725 in compensation (subject to any lawful deductions).

Dated:   23rd October 2018

Workplace Relations Commission Adjudication Officer: Gerry Rooney

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