Complainant

Respondent

Anonymised Parties

A Healthcare Assistant

A Healthcare Provider

Representatives

Barnaba Dorda, SIPTU

Rory Treanor, Peninsula Group Limited

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977.     (This complaint was withdrawn).

CA-00017586-001

22/02/2018

Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973

CA-00017586-002

22/02/2018

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00017586-003

22/02/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997. (This complaint was withdrawn).

CA-00017586-004

22/02/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00017586-005

22/02/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00017586-006

22/02/2018

May 2006

The complainant was employed by “Company A,” an agency providing healthcare assistants to public and private sector hospitals and healthcare facilities. From May 2006, she worked in a hospital run by the Health Services Executive (HSE) in west Dublin. In August 2017, Company A lost the principal, or “tier 1” HSE contract to provide healthcare assistants to a defined number of hospitals and healthcare facilities in a geographical region and it was awarded to Company B, the respondent in this complaint.

Up to August 2017, the complainant worked an average of 48 hours every week, mostly on nights.   The hourly rate for night work for healthcare assistants was €20.83.

2014

Because of a reduction in the hours of work available with Company A, the complainant also commenced work with the respondent and she worked shifts for them when she was available. From April 2014 until the end of December, she worked for one or more shifts on 29 weeks. In 2015, in 13 weeks, she worked one or more shifts. She did no work for the respondent in 2016 and she started working for them again in October 2017.

July 2017

The complainant and her colleagues in the hospital were informed that their employer, Company A had lost the contract and that the respondent had won the contract to provide healthcare staff.

August 16th 2017

Representatives of the respondent’s company visited the hospital and set up a stand in the reception area to encourage employees to work for them. The complainant was on holidays on the day of this visit.   When she came back on August 18th, she contacted the respondent because she said that she understood that she would not be given any hours by Company A after the end of August 2017. She was advised that she needed to submit certain documents to the respondent, which she did. She was then informed that she had to submit evidence of Garda clearance to work with children and vulnerable adults. She submitted an updated Garda vetting document and she was rostered to work at the beginning of October 2017 in the hospital where she had worked from 2006.

The complainant argues that she worked in the same role in the same hospital from 2006 and that her employment transferred to the respondent in September 2017. On her contract of employment submitted in evidence, the complainant’s start date is stated to be “09/10/2017;” however, the signing date is given as “11/15/2017.” From this, I have assumed that the dates are in the American format of month/day/year and, that the respondent’s case is that the complainant commenced employment on September 10th 2017.

November 2017

The complainant was assigned to work in a new location, A HSE unit for people with disabilities in Stillorgan, County Dublin.

December 20th 2017

The complainant’s shifts in Stillorgan were cancelled unexpectedly and two days later, she got a call from the respondent’s healthcare manager who informed her that they had received a complaint about an incident that had occurred on December 18th.

December 23rd 2017

The complainant provided a written explanation about her version of what had happened on December 18th and a copy of this report was submitted in evidence at the hearing. It appears that shortly after she started work in Stillorgan on December 18th, she discovered that a service user had eaten a melon that she brought with her. The service user had cut the melon with a large knife and the complainant asked her for the knife. The complainant said that the service user handed over the knife and she apologised for eating her melon. On December 19th, the service user reported that the complainant had slapped her on her back with the knife.

The complainant was not rostered for any shifts over Christmas and new year 2017 / 2018 and there was no communication from the company until January 2nd 2018.   Despite the complainant’s efforts to find out why she was not rostered for work, she had no communication of any consequence with the company until the intervention of her SIPTU representative on January 18th.

January 18th 2018

The complainant received a copy of the complaint from the Stillorgan unit. In an e mail response on the same day, she said that she did not slap the service user. The Stillorgan unit reported the incident to the service user’s family and to the Health Information and Quality Authority and the organisation’s safeguarding team. They requested that the complainant would not be rostered for any more shifts.

January 19th 2018

The complainant had a conversation on Skype and then by telephone with the respondent’s healthcare manager. The respondent’s submission states that this was a probation review meeting.

January 22nd 2018

The complainant’s SIPTU representative sent a letter to the respondent asking them to restore the complainant’s working hours and to provide clarification with regard to the incident of December 18th. There was no response to this letter.

January 24th 2018

The complainant received a letter informing her that she was dismissed, giving her one week’s notice from January 24th. A copy of this letter was submitted in evidence and it states that the respondent “reached the conclusion that you have failed to demonstrate your suitability for your role during your probationary period.”

January 26th 2018

On behalf of the complainant, Mr Dorda wrote to the respondent to appeal against the decision to dismiss the complainant. He claimed that the company had not followed fair procedures, failed to disclose what and where the complainant had not met the expected standards, failed to recognise that her service transferred from the first employment agency to the respondent and that she had been transferred under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.

February 9th 2018

At the appeal meeting, the respondent at first refused to allow the complainant to be represented by SIPTU. Finally, Mr Dorda was permitted to set out the complainant’s response to her dismissal and to make representations on her behalf.

February 19th 2018

The complainant was informed that her dismissal was upheld because she had not passed her probation.   In the letter, the operations manager who heard the appeal stated that the complainant’s employment had commenced on September 10th 2017 and that a transfer of undertakings had not taken place.  

The complainant argues that she transferred to the respondent under the Transfer of Undertakings Regulations 2003. If this is the case, then she has more than 10 years’ service and she is entitled to six weeks’ notice. If I find that the Regulations do not apply, then the complainant’s case is that her employment with the respondent commenced in 2014, when she was recruited directly by the respondent for the first time. If this is the case, then she is entitled to two weeks’ notice.

For the respondent, Mr Treanor argued that the complainant commenced employment with the respondent only in September 2017, and, on this basis, she was entitled to one week’s notice on the date of her dismissal. He said that she was paid for one week’s pay.

When she was dismissed, the complainant was not permitted to work out her notice. In her letter of dismissal, there is no reference to pay in lieu of notice and no evidence was presented at the hearing to show that the complainant received any notice pay.

In the next section of this document, I have concluded that the complainant transferred to the respondent in September 2017 under the Transfer of Undertakings Regulations 2003. Her service is continuous from May 2006. I find therefore that, on the date of her dismissal on January 24th 2018, she was entitled to be paid for six weeks in lieu of notice.

The complainant worked mostly on nights and her hourly rate of pay was €20.83. She generally worked four 12 hour shifts each week, and I therefore calculate her weekly pay at €999.84. I decide that the respondent is to pay the complainant €6,000 in lieu of six weeks’ notice.

In August 2017, the complainant and her six colleagues employed by Company A who worked on the night shift at the west Dublin hospital were informed that Company A had lost the contract to provide the hospital with healthcare assistants.   The complainant was on holidays on the day that representatives for the respondent set up a stand in the hospital and invited anyone who was interested to come and work for them.   When she returned from her holidays on August 20th, the complainant said that she tried to contact the respondent, so that she could get her shifts from them. Due to compliance issues and the requirement for the complainant to provide up to date documents, she only started work for the respondent at the hospital on October 9th.

In support of the union’s case that a transfer of an undertaking occurred, Mr Dorda referred to several legal precedents:

Hernandez Vidal and Others [1999], IRLR 132 and Sanchez Hidalgo [1988], ECR-I8237

In these cases, it was noted that in sectors such as the contract cleaning industry,

“…assets are often reduced to their most basic and the activity is essentially based in manpower. Thus, an organised grouping of wage earners who are specifically and permanently assigned to a common task, may, in the absence of other factors of production, amount to an economic entity.”

C-24/85, Spijkers v Gebroeders Benedik Abbatoir CV [1986] ECR1119

Mr Spijkers was one of two employees not transferred to Benedik Abbatoir following the sale of the slaughterhouse where he worked. In its seminal findings, the Court determined the principles of a transfer in the following terms:

“It is necessary to consider all the facts characterising the transaction question, including the type of undertaking or business, whether or not the business’s tangible assets, such as buildings and movable property, are transferred, the value of its intangible assets at the time of the transfer, whether or not the majority of its employees are taken over by the new employer, whether or not its customers are transferred and the degree of similarity between the activities carried on before and after the transfer and the period, if any, for which those activities were suspended.   It should remain clear, however, that each of these are merely single factors in the overall assessment which must be made and cannot therefore be carried out in isolation.”

Top Security Limited v Thomas Sadlier and Others [2017] IEHC 134

In this case, Mr Sadlier and his colleagues were employed by Manguard Plus and had worked as security guards at the office of the Chief State Solicitor. The contract to provide that security was lost by Manguard Plus and won by Top Security. The Employment Appeals Tribunal (EAT) found that the five employees were protected by Transfer of Undertakings Regulations and Top Security appealed this decision to the High Court. There, Mr Justice White agreed with the EAT and refused the appeal.

At the hearing of this complaint, Mr Dorda said that the complainant and her six colleagues were employees of Company A for many years and in July 2017, they were informed by the hospital that the contract to carry out their work was moving to the respondent. In October 2017, the complainant was assigned to work in the same place on the same terms and the same hours that she worked with Company A. The union’s case is that the respondent failed to notify the complainant about the transfer and did not consult properly with her in advance, and they seek compensation for this breach of Regulation 8 of the Directive.

Setting out the respondent’s position, Mr Treanor said that a tendering process was initiated for what he described as the “first tier” contract to provide staff to healthcare facilities. The respondent won the contract, which was “for the fulfilment of staffing obligations.”   The complainant joined the respondent in September 2017 and Company A continues to operate as an economic entity.

Mr Treanor referred to Desmond Ryan’s book, “Redmond on Dismissal Law,” where, at page 415, setting out the implications of the case at the Court of Justice of the European Union (CJEU), C-13/95, Ayse Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservice [1997], the Court found that “the mere loss of a service contract to a competitor cannot by itself indicate the existence of a transfer within the directive.” Following the authority in Spijkers, before determining if the Transfer Regulations apply, the CJEU held that it is necessary to consider all the facts.

In the Labour Court case of Overpass Limited trading as Ocean Property Management v O’Gorman, TU 17/10, it was found that, because no property or tangible asset transferred, a transfer of an undertaking had not occurred. Because the economic entity did not retain its identity within the respondent company, there was no transfer of an undertaking and the Regulations did not apply.

Mr Treanor concluded that, in the case under consideration, employees of Company A were entitled to remain with that company. A new agency – agent relationship came into existence and no property or tangible assets transferred and no goodwill or intangible assets were received by the respondent from Company A.

The Legal Framework

The objective of the Transfer of Undertakings Regulations as they are set out in Irish law (SI 131/2003) is to safeguard the rights of employees in circumstances where a business or part of a business in which they are employed is transferred from one employer to another.  

Article 3(1) of the Regulations states that they “shall 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.” The crux of the issue I must consider is the effect of what is sometimes referred to as a “second-generation transfer,” where a contract to carry out an activity such as cleaning, and in this case, the care of patients in hospitals and healthcare facilities, is ceased and awarded to another contractor. In these circumstances, is there a transfer of an undertaking?

Article 3(2) defines a “transfer” as “the transfer of an economic entity which retains its identity;” and an “economic entity” as “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.”

Case Law

In the High Court appeal of Top Security against the decision of the EAT, cited by Mr Dorda, Mr Justice White referred to the “diverse, varied, unwieldy and at times contradictory case law” that has emerged on this subject. In respect of second-generation transfers, the Courts have variously decided that the Regulations apply and in very similar conditions, that they do not apply.   For example, in the already-mentioned Top Security case and in a recent finding of the Labour Court in Euro Car Parks (Ireland) Limited and Patrick O’Hanlon, TUD 1811, the authorities found that a transfer had occurred.

In the seminal case of Suzen, referred to by Mr Treanor, the CJEU determined that the Transfer of Undertakings Regulations, “…do not apply…if there is no concomitant transfer from one undertaking to the other…or taking over by the new employer of a major part of the workforce in terms of their number and skills, assigned by his predecessor to the performance of the contract.”

In the case of Maybin Support Services v Kelleher, TU 27/2013, the EAT found that the Regulations did not apply, despite the fact that the “transferor” wrote to the two employees concerned, informing them that their employment would be transferred.   This case concerned a second-generation contract where a contract to clean a particular site was taken up by Maybin Support Services Limited who refused to take on the first employer’s workers. Finding against the claimants, the EAT relied on the case of C-173/96 Sanchez Hidalgo [1998] ECR I-8237 and Suzen and held that“the company has conflated what they deemed to be an entitlement to transfer with an actual transfer.”  

While the findings sometimes appear contradictory and diverse, most of the authorities have relied on the outcome of the CJEU in the Spijkers case which was referred to by Mr Dorda and the admonition of the Court that, “It is necessary to consider all the facts characterising the transaction question…”

The Facts of this Case

The question of whether a transfer occurred is predicated on the question of whether “an economic entity” exists and whether it retains its identity when it is taken over by a new operator. We know from the evidence that the respondent won the principal contract to provide healthcare assistants to designated hospitals and other facilities managed by the HSE. Referred to as a “tier 1 contract,” this requires the respondent to provide healthcare staff on an agency basis to approximately 40 hospitals and other facilities in specific geographic regions. From the evidence submitted at the hearing, and, from the information available on the HSE website, it seems to me, that, to fulfil this contract, the respondent must have available at least 100 healthcare assistants and possibly significantly more. This work was previously carried out by Company A and it transferred to the respondent. For the respondent to fulfil the contract, they sought applications from as many employees as possible who previously worked for Company A.

It is my view that both tier 1 and tier 2 contracts to provide staff to the HSE are significant economic entities and that the employees constitute “an organised grouping of resources which has the objective of pursuing an economic activity.” The economic activity is the fulfilment of the HSE contract by the provision of healthcare services. The contract lost by Company A and won by the respondent is a significant economic entity in its own right with an annual payroll cost of several millions of euros plus the cost of the service.   This economic entity is unchanged from that which existed when it was managed by Company A, as its purpose was to provide staff to hospitals and healthcare facilities in a specific region. It is apparent that there was no difference between the work carried out by Company A before September 2017 and the work carried out by the respondent from September 2017 onwards.

We learned at the hearing that all Company A’s employees in the hospital where the complainant worked, went to work for the respondent. We can assume that a similar exodus from Company A to the respondent occurred in other facilities. While the respondent’s representatives claimed that this was a voluntary move from one employer to another, this depiction of the facts seems to me to blur the reality of what was in effect a transfer of a group of employees with the objective of pursuing an economic activity that they previously carried out for another employer.

While the Suzen case was cited by Mr Treanor in support of an argument that the Transfer Regulations do not apply, I am satisfied that, due to the “taking over by the new employer of a major part of the workforce in terms of their number and skills,” that the circumstances of Suzen, which affected just one employee, are not comparable with the case we are considering here.

Conclusion

At the heart of the Transfer Regulations is the protection of employees in circumstances where their employer sells or, or for whatever reason, loses a business or part of a business which is then taken up by another employer. I can find no reason to depart from the decision of the High Court in the Top Security case, where Mr Justice White held that Tribunal had not misdirected itself as to the relevance of the CJEU decisions in Vidal and Sanchez Hidalgo which were referenced by Mr Dorda. In a case involving only five employees, the judge found that the Tribunal was entitled to find that the activity carried out by the claimants amounted to a stable economic activity and that the decision that there was a transfer of an undertaking was “neither irrational nor perverse; nor was it based either on an identifiable error of law or on an unsustainable finding of fact.”

Consultation

The issue for consideration here is whether the respondent complied with Regulation 8 of Statutory Instrument 131/2003 in relation to the requirement to consult with employees about the transfer. Regulation 8 sets out the requirements of the transferor and the transferee to inform and consult the employees’ representatives. We were informed at the hearing of this complaint that the respondent does not engage with trade unions. Section 8(5) and 8(6) specifically address the circumstances where employees have no formal representation:

“(5) Where there are no employee’s 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 employee 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 of the proposed 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.”

Neither the transferor or the transferee engaged in consultation with the complainant with regard to the change of employment from Company A to the respondent.   While this complaint is against the respondent, the transferee in this case, Article 3(1) of the directive provides that,

“The transferor’s rights and obligations arising from a contract of employment or an employment relationship, existing on the date of a transfer, shall, by reason of such transfer, be transferred to the transferee.”

Findings

Having considered the evidence submitted by the complainant, I am satisfied that the change of her employer from Company A to the respondent constituted a transfer of undertakings within the meaning of Statutory Instrument 131 of 2003. I find that the respondent, as the transferee, did not consult with the complainant about the transfer and, in the absence of any employee representatives who were known to her, they did not advise her in writing about the transfer.

Based on the complainant’s evidence, I have to conclude that the respondent is in breach of Regulation 8 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.

As I have concluded that this complaint is well founded, I decide that the respondent is to pay the complainant compensation of €4,000, equivalent to four weeks’ pay.

From December 19th 2017 until she was dismissed on January 24th 2019, the complainant argues that she was not offered any shifts with the respondent.   The complainant was not suspended pending an investigation into the incident that happened on December 18th, but she was not paid any wages. As her notice expired on January 31st 2018, on behalf of the complainant, Mr Dorda argued that she is entitled to her wages from December 19th 2017 until January 31st 2018.

For the respondent, Mr Treanor argued that, following the incident on December 18th 2017, two investigations commenced into what occurred, one by the client and the second by HIQA. It was not possible to provide the complainant with work because the client had requested that she would not be assigned to the Stillorgan unit. He argued that, because the respondent is an employment agency and the complainant was an agency worker, there was no obligation on the respondent to pay the complainant during the period when the investigation was being carried out.

It is apparent that two investigations commenced following the incident in the Stillorgan unit on December 18th 2017. Having considered this matter, it is my view that the complainant should have been suspended on full pay, pending the outcome of the investigations. Alternatively, she could have been rostered to work with a different client. Because of the respondent’s failure to pay the complainant, she was at the loss of her wages over Christmas and new year. I find this decision of the respondent to be callous and unreasonable employer.

I have concluded that the complainant is entitled to be paid for the four weeks from December 19th 2017 until her dismissal on January 23rd 2018.

In accordance with section 6(1) of the Payment of Wages Act 1991, I must make an award based on the net amount of wages to which I consider that a complainant is entitled under the Act. I decide therefore, that the respondent is to pay the complainant €3,000, based on the calculation of her regular weekly wages of around €1,000 per week, less statutory deductions.

This complaint is about the fact that, when she was dismissed, the complainant was not paid for the public holidays that occurred on December 25th and 26th 2017 and on January 1st 2018. At the hearing of this complaint, it emerged that, a few days before the hearing on October 22nd 2018, the respondent paid the complainant her entitlement to pay for these three public holidays.

The respondent conceded that the complainant was entitled to be paid for the public holidays that fell over Christmas and new year 2017 / 2018.

This matter has been resolved, but only following the submission of a complaint to the WRC about the non-payment of the complainant’s entitlement to the public holiday pay.

In accordance with section 27(3)(c) of the Organisation of Working Time Act 1997, where I find that a complaint under this Act is well founded, I can make an award of compensation.   I decide therefore that the respondent is to pay the complainant compensation of €700, which I estimate to be close to the pay she received when she worked for the respondent for three 12-hour night shifts.

CA-00017586-002: €6,000       Reason: Failure to issue notice or to pay in lieu of notice

CA-00017586-003: €4,000       Reason: Failure to consult about the transfer of an undertaking

CA-00017586-005: €3,000       Reason: Failure to pay wages pending the outcome of an investigation

CA-00017586-006: €700           Reason: Failure to pay for three public holidays when the pay was due

Total award:             €13,700

Transfer of undertakings, notice, non-payment of wages during a disciplinary investigation, public holiday pay