ADJUDICATION OFFICER DECISIONS
Adjudication Reference: ADJ-00016570
Parties:
| Complainant | Respondent |
Anonymised Parties | A Hotel manager | The receiver manager of a hotel |
Complaints:
Act | Complaint Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00021392-001 | 28/08/2018 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00021392-002 | 28/08/2018 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967 | CA-00021392-003 | 28/08/2018 |
Date of Adjudication Hearing: 09/11/2018
Workplace Relations Commission Adjudication Officer: Kevin Baneham
Procedure:
On the 3rd September 2018, the complainant referred complaints pursuant to the Payment of Wages Act, the Unfair Dismissals Act and the Redundancy Payments Act. The complaints were scheduled for adjudication on the 30th November 2018.
Complaints were made against both this respondent and another respondent (subject to a report in ADJ 16571). One respondent is the receiver appointed by NAMA to manage the hotel where the complainant worked; this respondent is entitled the ‘receiver’ in both reports. The second respondent is the liquidator appointed following the liquidation of the hotel group that operated the hotel; this respondent is entitled ‘the liquidator’. This report relates to the receiver respondent.
Both sets of complaints were heard at the same time. The complainant was represented by Emma Cassidy BL instructed by Amorys Solicitors. The receiver attended to meet the claims against it. It was represented by Tom Mallon, BL instructed by Ivor Fitzpatrick & Co Solicitors. There was no appearance by or on behalf of the liquidator. I verified that the liquidator was properly on notice of the time, date and venue of the adjudication. Having been satisfied of service, I proceeded with the hearing in the absence of the liquidator.
In accordance with Section 41 of the Workplace Relations Act, 2015, Section 8 of the Unfair Dismissals Acts, 1977 – 2015 and Section 39 of the Redundancy Payments Acts 1967 - 2014 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.
Summary of Complainant’s Case:
The complainant said that he started as operations director in April 2013, where he looked after the nightclub and the restaurant. The nightclub closed in January 2018, to be refurbished and re-opened by February 2018. The complainant continued to manage the restaurant after the nightclub closed. The hotel was then managed by the receiver, following the appointment by NAMA.
On the 10th May 2018, the hotel group notified the complainant of a transfer of undertaking, which took place on the 23rd May 2018. On the 25th May 2018, a named manager phoned the complainant to say that he was now managing the hotel. The complainant was told that there was no role for him and was asked to handover keys, codes and passwords. The complainant replied that he had worked at the hotel for five years and challenged his dismissal. The manager said he would check with the receiver and later confirmed the instruction that the complainant was being dismissed. The complainant received the email of the 7th June 2018 to say that a new entity would manage the hotel but would not employ existing staff.
The complainant sought compensation as redress. He could not say what was the date of dismissal and he had not received a P45. The complainant said that, following his dismissal, he earned €3,000 between May and November and had since started his own business. He was now paid an annual salary of €65,000. The complainant said that he had previously obtained redress from the Workplace Relations Commission for unpaid wages of €17,000 between January and May 2018. Through this complaint, he seeks redress for unpaid wages after May 2018.
In questioning, the complainant said that he started working for the hotel group in April 2013. Prior to this, he was self-employed for about a year. He was the operations director of the hotel group, managing the entertainment venue and restaurant. He reported to a named director and was paid by the hotel group. He was aware that the hotel group was a tenant and did not own the building. The landlord was NAMA under an asset receivership. The entertainment venue closed in January 2018 and reopened in May 2018. He was paid for one week in January and brought the case to the WRC for unpaid wages. It was put to the complainant that the WRC decision refers to the complainant’s employment ending on the 23rd May when the hotel company went into liquidation; he could not remember saying this at the previous adjudication. He had claimed 17 weeks’ pay from the period of January to May 2018.
The complainant said he asked the receiver for a P45 and none was forthcoming. He attended work every day between January and May as the restaurant was still trading. They also prepared for the reopening of the nightclub. He did not accept that he was not involved in the restaurant after 2014. He accepted that he had never attended work for the company that took over the hotel. |
Summary of Respondent’s Case:
The receiver submitted that the liquidator is the correct respondent to these claims. The receiver was appointed over the asset in 2010 and traded the asset until 2013. It then let the property to the hotel group and all staff transferred to the hotel group. The hotel group went into liquidation on the 23rd May 2018. The receiver submitted that the employment contracts came to an end by operation of law on the appointment of the liquidator. The complainant’s employment with the hotel group came to an end on the 23rd May 2018 and this is what the complainant told the WRC adjudicator at the previous hearing. The receiver was the landlord and engaged a named company as agent after the 23rd May 2018 to run the hotel. There was no transfer of undertaking and while the company took on some hotel staff, it did not take on the complainant. The receiver submitted that it was is not a transferor. The complainant’s employment had terminated by operation of law. The respondent referred to the decision in Donnelly v Gleeson (11th July 1978 Hamilton J.). The receiver was never the complainant’s employer. |
Findings and Conclusions:
The complainant submitted complaints pursuant to the Payment of Wages Act, the Unfair Dismissals Act and the Redundancy Payments Act. As set out above, the complainant took the same complaints against the hotel group in liquidation / the liquidator (subject to my report in ADJ 16571).
The hotel group entered a creditor’s voluntary winding up on the 23rd May 2018 (by ordinary resolution). A liquidator was duly appointed, and notification placed in Iris Oifigúil (25th May 2018).
The receiver submits that the event of the company going into liquidation terminated the complainant’s employment. It relies on Donnelly v Gleeson (11th July 1978 Hamilton J.). In this judgment, the Court held “An order for the winding up of a Company is notice of discharge to all persons in the employment of the Company. An order for the appointment of a Provisional Liquidator who has been given liberty to carry on business cannot amount to notice of discharge to all the persons in the employment of the Company.”
I note that, at 10.12, the authors Forde and Byrne (‘Employment Law’ 2009) state “A creditor’s voluntary liquidation commences when the members of the company pass a resolution that it be wound up because it cannot pay its debts. But the passing or indeed the publication of such a resolution does not invariably operate as a notice of dismissal. In particular circumstances, depending on the terms of the contract, the resolution might constitute notice of termination. The test is whether in all the circumstances the employee is justified in regarding the winding up as an indication of an intention by the company to repudiate its obligations under the contract. If employees are retained by the liquidator or are re-hired shortly after the resolution was passed, they are deemed to be still employed by the company.”
I note that the events in this case took place in the context of the hotel group’s letter of the 10th May 2018. This states that the complainant’s employment would transfer to the new hotel group on the 23rd May 2018. The complainant’s evidence was that he was informed by a manager from the new hotel group that his employment was terminated. This is confirmed in the new hotel group’s email to the complainant’s solicitors of the 7th June 2018. This email refers to the receiver being the employer. I note that the complainant obtained redress for unpaid wages against the hotel group now in liquidation in ADJ 15026.
I find that the complainant’s employment did not end with the resolution to voluntarily wind up the company. In reaching this finding, it is significant that this was a voluntary liquidation and not one where the Court ordered the company’s winding up. I find that the complainant’s employment continued, as set out in the letter of the 10th May 2018 and the email of the 7th June 2018. I find that the complainant transferred to the employment of the receiver and his employment was terminated by the manager in the phone call of the 25th May 2018. The manager was an employee of the second hotel group and was engaged by the receiver to manage the hotel. I find that this manager was the receiver’s agent and was explicit in the email of the 7th June 2018 that the receiver was the employer.
For completeness, this is not a situation where Regulation 6 of the TUPE Regulations applies, i.e. there are no insolvency proceedings in being. This is a situation where a receiver was appointed several years ago, and the business transferred in 2010 to the first hotel group. I have found that it transferred back to the receiver on the 23rd May 2018, who appointed the second hotel group to operate the hotel.
CA-00021526-001 This is a complaint pursuant to the Payment of Wages Act. I find that the complainant’s employment came to an end on the 25th May 2018. The complainant’s entitlement to wages is captured in his well-founded, earlier claim (subject to ADJ 15026 against the hotel group). As the complainant has already obtained redress pursuant to the Payment of Wages Act, I formally deem the instant complaint to be not well founded.
CA-00021526-002 This is a complaint pursuant to the Unfair Dismissals Act. As set out above, I find that the complainant became an employee of the receiver on the 23rd May 2018 and his employment was terminated by the manager in the phone call of the 25th May 2018. The manager was appointed by the receiver to manage the asset. The statutory presumption is that the dismissal is unfair. I find that the respondent has not rebutted this presumption and therefore, the complaint of unfair dismissal is well founded.
In assessing redress, I note the complainant’s efforts to find alternative employment, eventually securing alternative employment at the same rate of pay. In the circumstances, I award redress that is just and equitable of €15,000.
CA-00021526-003 Given the finding of unfair dismissal and the award of redress under the Unfair Dismissals Act, I find that the complaint pursuant to the Redundancy Payments Act is not well founded.
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Decisions:
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 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.
Section 39 of the Redundancy Payments Acts 1967 – 2014 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.
CA-00021932-001 I find that the complaint pursuant to the Payment of Wages Act is not well founded.
CA-00021932-002 For the reasons set out above, I find that the complaint pursuant to the Unfair Dismissals Act is well founded and I award redress of €15,000.
CA-00021932-003 I find that the complaint pursuant to the Redundancy Payments Act is not well founded.
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Dated: 23/07/19
Workplace Relations Commission Adjudication Officer: Kevin Baneham
Key Words:
Transfer / effect of winding up resolution Unfair Dismissals Act |