FULL RECOMMENDATION
SECTION 11 (1), EUROPEAN COMMUNITIES (PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS) REGULATION, 2003 PARTIES : MELCORPO COMMERCIAL PROPERTIES UNLIMITED COMPANY (REPRESENTED BY SHEEHAN & COMPANY SOLS) - AND - ELIZABETH EGAN (REPRESENTED BY PAUL EGAN) DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Marie Worker Member: Mr Hall |
1. Appeal of Adjudication Officer decision No. ADJ-00013212
BACKGROUND:
2. This is an appeal by the Complainant against an Adjudication Officer's decision made pursuant to Section 11(1) of the European Communities (Protection of Employees on Transfer of Undertakings) Regulation, 2003.A Labour Court hearing took place on the29th May 2019. The following is the decision of the Court.
DETERMINATION:
Ms Elizabeth Egan brought a complaint before an Adjudication Officer pursuant to Regulation 10(1) of theEuropean Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 S.I. No. 131/2003 (“the Regulations”)alleging a breach by her employer Melcorpo Commercial Properties Unlimited Company of Regulations 4 of the Regulations when her employment was transferred from, Diamond Cinema Limited to Melcorpo Commercial Properties Unlimited Company.The Adjudication Officer’s Decision ADJ-00013212 held that her complaint was not well- founded. Ms Egan appealed that Decision.
For ease of reference the parties are referred to as they were at first instance. Hence Ms Elizabeth Egan is referred to as "the Complainant" and Melcorpo Commercial Properties Unlimited Company is referred to as "the Respondent".
The Complainant submitted a claim under the Regulations to the Workplace Relations Commission on 13thFebruary 2018.
Background
The Complainant has been employed by Diamond Cinema Limited in Navan since January 1999 initially as Merchandiser and was promoted to Manager in 2004 and she continues in that role. On 1stSeptember 2017, the Cinema was bought over by the Respondent and her employment transferred to the Transferee in accordance with the Regulations.
The Complainant complained that her terms and conditions of employment deteriorated after the transfer and accordingly alleged that the Respondent was in breach of Regulation 4 of the Regulations.
Summary of the Complainant’s Case
The Complainant was represented by Mr Paul Egan. He submitted that following the transfer the Complainant’s duties and responsibilities had diminished; her hours of work increased, and she no longer had the flexibility to work from home.
He maintained that prior to the transfer the Complainant had overall responsibility for all aspects of running the Cinema and was a very committed and conscientious Manager. Mr Egan said that as her role evolved over the years she became more and more involved in all aspects of the job, including dealing with staff, suppliers, breakdowns, new technology, and litigation issues, etc. He said that she was the only full-time employee employed and she was employed initially to work five days per week, this was reduced to four days in lieu of a pay increase, however, Mr Egan said that she worked unpaid increased hours without complaint. After the transfer, as an indication of her commitment to the new owners, she bought a laptop computer which was cleared by a Director to link in to the company network from her home. “Admit One” was installed on her personal computer on 18thOctober 2017. He said that the Director, Mr Brian Gilligan emailed and phoned the Complainant regularly when she was at home.
The Complainant was advised to report to Mr Shane Faulkner, Regional Manager.
Mr Egan said that when the new owners decided to run extra shows from Friday 15thSeptember 2017 on week nights, this caused difficulties for staff as they were unprepared for the extra hours work.
He said that the Complainant felt intimidated at her first meeting with the new management which was held on 9thOctober 2017. At this meeting she was told that she would only have to work on site and not from home. Despite this instruction, Mr Egan said that staff and clients continued to contact her when she was off duty. At the meeting she was informed that the Cinema would be opening even more hours, however, the Complainant was of the view that the staff roster would not accommodate this change and it upset the staff, who while welcoming extra hours, needed more notice of the proposed change.
Mr Egan listed 23 areas where the Complainant alleged that her duties and responsibilities as Manager had been undermined, including hiring staff, supervising and monitoring staff, selecting and setting prices for stock, film selection, advertising and promotion duties, maintenance, overseeing and installing technology, managing budgets and booking/pricing private functions, etc.
Mr Egan said that the Complainant spent four months requesting new staff from the Respondent to cover the extra hours, this was agreed to by the new Regional Manager and the jobs were advertised. However, he said that no one was hired, and this led to difficulties with her staff who regarded her as having been demoted which led to frustration on both sides.
Mr Egan said that the Complainant and her trade union representatives sought to address the grievances she had with the Respondent and sought the protection provided under the Regulations. The Respondent furnished her with a draft contract of employment on 11thDecember 2017, which she had difficulties with and did not sign. He said that all correspondence from the Respondent were replied to and that details of grievances were supplied, commented upon and often ignored. He said that when the Respondent failed to provide her with satisfactory answers she proceeded to refer the claim to the Workplace Relations Commission. He said that due to the stress of the situation the Complainant went on sick leave on 22ndJanuary 2018 and continues on sick leave.
Summary of the Respondent’s Position
Ms Emma Cassidy, B.L., instructed by Sheehan & Co. Solicitors, on behalf of the Respondent, denied that the Respondent had not observed the terms and conditions of the Complainant’s employment with her previous employer and accordingly denied there was a breach of the Regulations. She said that the Respondent had carried out a due diligence process when completing the sale of the business prior to takeover. The Transferor had informed the Respondent that contracts of employment had been issued to all staff a number of years previously. He said that the Complainant was in possession of the only copy of her contract. However, it transpired that that copy was not available.
Ms Cassidy said the Respondent drew up new contracts based on information supplied to it by the previous owner. These were issued to all staff including the Complainant. When the new draft contract was issued to the Complainant she was asked to identify any inaccuracies so that they could be addressed and corrected, however, she failed to do so. Ms Cassidy contended that the Complainant and her representatives had failed and refuse to identify any issues of concern to the Complainant and to engage with the Respondent in any meaningful way.
Counsel stated that at the meeting held on 9thOctober 2017 between three members of management and the Complainant, the Respondent informed her that it wanted to increase the number of shows per day as, uniquely in the cinema business, the previous owners only had one showing at 8pm each day rather than a number of screenings each day. She said that the Respondent’s preference was to offer senior/managerial staff these extra hours. When the two Assistant Managers joined the meeting the extra trading hours were discussed and a number of issues were raised. It was agreed that the Complainant would discuss the proposed changes with them and would produce a draft roster.
Ms Cassidy stated that the first time the issue of working from home and alleged changes to the Complainant’s conditions of employment came about was when SIPTU raised it on her behalf in a letter to the Respondent dated 11thDecember 2017. This was responded to by a Director who invited her to discuss any aspect of the draft contract with her. However, no response was received. When the Director received another letter from SIPTU dated 20th February 2018, he again requested a response from SIPTU seeking details of the alleged complaints and clarity on what changes were made to her terms and conditions of employment. He offered her an opportunity to try and resolve the matter upon receipt of the requested information. No response was received to the letter.
Ms Cassidy said that it was not until 1stAugust 2018, prior to the Adjudication Officer’s hearing on 3rdSeptember 2018, that SIPTU provided a detailed list of the alleged withdrawn duties and responsibilities. The Respondent gave detailed responses to each of the items on the list which essentially confirmed that the list of duties and responsibilities remained the Complainant’s duties or resulted as part of the Respondent’s business strategy which she was informed of and agreed to.
Witness Testimony
The Complainant declined to give evidence to the Court, instead her representative presented her case in a comprehensive submission and replying submission (summarised above). Her submissions contained a detailed account of her alleged changes to her duties and responsibilities as Manager of the Cinema.
On behalf of the Respondent, Mr Shane Faulkner, Regional Manager and Mr Brian Gilligan, Director gave evidence to the Court.
Mr Shane Faulkner, Regional Manager
The evidence of Mr Shane Faulkner, Regional Manager, can be summarised as follows:-
Mr Faulkner stated that he has responsibility for three sites, the ARC Cinemas in Navan, Drogheda and Wexford. He said that he has a very hands-on roll and deals directly with Managers and staff in each of the three sites. His Managers report on such issues as staff rosters and stock levels once per week.
Mr Faulkner said that the Complainant’s role involved the hiring of staff and that when it was decided to increase the number of shows per week following the takeover of the business it advertised for staff. He said that it was intended that both he and the Complainant would carry out the interviews, however, the Complainant said that she wished to offer the extra hours to the existing staff. He said he was fine with that and agreed with her suggestions. He denied that the hiring of staff was no longer the Complainant’s responsibility. He said that the monitoring and supervision of staff was still her responsibility. In fact, he said as a result of the introduction of HACAP her responsibilities in that regard had increased.
He said that it was the Assistant Manager’s role to organise rotas and that that would continue. His interest was limited to knowing the total hours per week. He said that Ms C, Assistant Manager completed the roster and he liaised with her.
With regard to stock, he said that the Respondent had an approved stock list which can be adjusted according to local needs. These products have set prices in all its sites. It had eliminated a lot of the low margin products which the previous owner had provided. He said that advertising is managed centrally by the Respondent’s centralised accounts department and is no longer undertaken by the Assistant Manager. Marketing and promotion which had been outsourced by the previous owner is now conducted by an external marketing programme through its central marketing function.
He said that film selection which had been conducted by an external agency in consultation with the Complainant, is now the responsibility of Mr Nick Furlong from Head Office who liaises with the Complainant in relation to the selection of films.
He said that the Complainant remains a key holder. With regard to maintenance issue, the Complainant had referred to the fact that there were significant heating difficulties in the Cinema prior to the takeover which lead to a lot of issues for her as Manager, however, the Cinema had since been refurbished. He said that the Respondent had a network of contractors to call upon regarding maintenance issues and the Complainant retained her role in that regard and it was still her responsibility to handle maintenance issues that arise. The witness said that there was no formal record keeping before the takeover, whereas they now have the “Admit One” system which automatically records admissions etc. it has also automated the website and online booking system, which he said was outdated.
He said that the Complainant still had “meet and greet customer” responsibilities, however, as there is now one box office cum shop the most opportune time to do so was at the ticket check area. He said that technology issues were the responsibility of an Assistant Manager, Mr G. and as the Complainant indicated that this was not her strong point it wasnowfully Mr G’s responsibility. He said that while the Respondent had introduced company-wide contracts of employment, the Complainant retains her duty to ensure compliance with labour laws.
Mr Faulkner said that while prior to the takeover, the Complainant liaised with the previous Director/owner of the Cinema, she would now have direct contact with him as Regional Manager with responsibility for the three Cinemas.
He disputed the Complainant’s contention that she would no longer have a role in handling private function events. He said that she would still have responsibility for pricing such events.
Mr Faulkner said that on 3rdOctober 2017 he emailed the Complainant and her Assistant Managers to inform them that himself and Mr Gilligan, Director, would have a meeting with them on 9thOctober to discuss any concerns, ideas or issues they may have. The meeting took place on 9thOctober, firstly with the Complainant as Manager to discuss issues generally and to discuss proposed changes to roster. He described the atmosphere at the meeting as fine, and then the Assistant Managers joined the meeting, and both were very positive about the proposed changes. He therefore, asked the Complainant to put rosters together with extended opening hours. A few days later he received an email from her objecting to the proposed roster changes, saying that neither she nor her Assistant Manager were available to do the proposed hours as they were a dramatic as opposed to a reasonable change. She proposed alternatives and sought one month’s notice of the changes. The email was copied to the Respondent’s Directors.
He said that in a phone call later that day with the Complainant that she enquired about being made redundant. However, the witness said that there was no question of redundancy as the Complainant had over 20 years’ experience, was a valuable employee and the Respondent needed a Manager.
The witness said that when the Respondent took over the Cinema it understood that her hours of work were 32 hours over four days per week and that situation continued. He said that he did not believe it was necessary for her to work from home as the work could be carried out from site.
The witness said that as Manager of the Cinema for many years her job was a necessary one for the business.
Mr Brian Gilligan, Director
The evidence of the Mr Brian Gilligan, Director, can be summarised as follows:-
Mr Gilligan said that having received an email which was sent to Mr Faulkner and copied to him from the Complainant dated 11thOctober 2017, the next day Mr Faulkner, Mr Furlong and himself went to Navan to have a meeting with the Complainant to discuss the rosters and her concerns. He said that they had a long conversation, she enquired about being made redundant, he assured her that she was a valued member of staff and her expertise was needed in the business. They discussed the rosters and she said that she was having difficulties with staff regarding the rosters. Mr Gilligan told her that management would support her.
Mr Gilligan explained that the takeover of the business had happened very quickly due to legal reasons. He said that he had spoken to the previous owner and had sought a copy of the Complainant’s previous contract of employment but was informed that no copy was available as it had been given to Solicitors and could not be located, so it was decided to issue new ones. He told the Court that he had clarified the Complainant’s working hours with the previous owner. When no contract of employment could be located for the Complainant and issues were being raised about her working hours, he emailed the previous owner to seek clarity on her hours, the latter responded to the effect that Mr Gilligan’s understanding of her hours was correct, i.e., she was contracted to work four days per week with hours varying according to trading hours subject to a maximum of 8 hours per shift.
Mr Gilligan said that the Complainant raised grievances regarding changes to her terms and conditions of employment following the takeover, however, despite requesting her and her trade union representatives, he did not receive specific details of her complaints, she refused to engage with him and refused to sign the draft contract drawn up. He said that he sought such clarity by letters dated 20thDecember 2017, 8thMarch 2018, 27thJuly 2018 and it was not until 1stAugust 2018 that he received a response. He said that until he had the specifics he was not in a position to have a face to face meeting with the Complainant and her representative.
When questioned as to whether or not she worked from home the witness said that the Complainant was most obliging, and it was normal for a Manager to be contactable. He said that the previous owner praised her for her ability to work and her commitment to the business. He said that he considered her interest in been linked to the “Admit One” network as a very positive move by her and showed her dedication to the business.
Mr Gilligan said that no other employee had a problem with the newly drafted contracts.
The Law
EU Directive 2001/23/EC, 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.
Regulation 4 of the Regulations 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.
Conclusions of the Court
There is no dispute that a transfer of undertakings in accordance with the Regulations took place on 1stSeptember 2017. The question before the Court is whether or not that the Complainant was retained on no less favourable terms and conditions of employment than those she held while in the employment of the previous owner. It is common case that the Complainant’s contract of employment with the Transferor was not available to the Transferee. The Transferee made efforts to secure details of her previous terms and conditions both from the previous owner and for the Complainant herself. The Transferee furnished a fresh contract of employment to the Complainant on 11thDecember 2017 giving details of its understanding of the situation.
The Court was informed that prior to the takeover, the Cinema was in very poor condition, the business had had little investment and was in need of improvement. In her submission to the Court, the Complainant stated that the lack of investment led to a gradual deterioration in the seating, front of hours appearance and décor, lack of heating and lack of comfort for customers. At the time she was the only full-time employee and was responsible for everything, she had two part-time Assistant Managers and between 10 and 15 part-time staff depending on the season. She stated that the business was kept afloat by her efforts to personalise the customer’s cinema visit. The Complainant told the Court that there were no issue with her management of the business prior to the takeover.
The Respondent told the Court that the decision to take over the Diamond Cinema was made in haste due to legal issues. There was a one-month period for the contract to be completed, during which time, it stated that a due diligence process was entered into, to include details of existing employees. Therefore, when it took over the business it intended to completely revamp the business, including a total refurbishment of the cinema and standardisation of its business product.
Witnesses for the Respondent dealt with each of the issues itemised in the Complainant’s grievance complaint and essentially said that the Complainant’s role had not changed, and that her responsibilities had not been diminished.
The Court is satisfied that while the refurbishment, rebranding and marketing of the Cinema into a new modern business entailed significant changes it did not materially alter the Complainant’s role as Manager of the Cinema in Navan. Her role continued and the duties and responsibilities she previously held were substantially the same after the transfer other than in a new improved business model. The Respondent maintained that there was no need for the Complainant to work from home any longer and her hours of work were more formalised. The Court has concluded that the only measurable change which took place concerned the fact that the Complainant reported to a Regional Manager following the takeover, as did all other Managers of Cinemas in the other sites belonging to the Group. For the Complainant, it would appear, that this was a major issue, however, the Court does not accept that it was such as to breach the terms of Regulations 4 of the Regulations.
Determination
For the reasons set out herein the Court has concluded that the Respondent was not in breach of the Regulations. The Decision of the Adjudication Officer is upheld accordingly.
The Court so Determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
FMc______________________
10th June 2019Deputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Fiona McCarthy, Court Secretary.