Complainant

Respondent

Anonymised Parties

Legal Executive

Solicitors’ Partnership.

Representatives

 Solicitors.

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00023212-001

14/11/2018

The complainant is seeking statutory redundancy payments.

The complainant commenced employment as a legal executive with the respondent, a legal partnership, on 1/7/2015.There were 3 three partners in the company.  One partner Ms. D dissolved the company. The managing partner, Ms. H1 informed the complainant on Friday the 20/4/2015 that she was being made redundant. Ms. H1 advised that she was starting her own company the following Monday 23 /4/2018 and she invited the complainant to work with the new company, Firm B. The complainant accepted the offer.

She worked 40 hours a week, earning €3385 gross per month.

She submitted her complaint to the WRC on 14/11/2018.

The complainant worked as a legal executive with the company, a legal partnership, from 1/7/2015 until its dissolution on the 20/4/2108.

The complainant gave evidence that on 20/4/18 the managing partner, Ms. H 1, stated to her that the company, Firm A, was being dissolved. Ms. H 1 advised the complainant that she was being made redundant. She was invited and accepted the managing partner’s offer of employment with the re- constituted company, Firm B, on the following Monday, the23/4/ 2018.

Ms. H1 told her repeatedly that she was entitled to a redundancy payment but that Ms. D, the solicitor whom the complainant states dissolved the company was blocking the payment of same.

In October2018 the complainant asked Ms. H1 why she had not been paid her redundancy and Ms. H1 told the complainant that the company had gone to Arbitration. Ms. H declined to sign the RP 50 form as she was unwilling with her other partner Mr. W to pay when the third solicitor, Ms. D, now an ex-partner, refused to contribute to the costs.

The complainant rang Ms D on the 6 November 2018 asking her to sign the redundancy form. She advised the complainant that she was not entitled to redundancy payments.

The complainant’s legal representative states that the partnership ceased to exist at 3pm on 20/4/2018. On the 23 April the new firm, Firm B was formed.

In relation to the respondent’s contention that it is a TUPE, TUPE does not apply because it is a partnership and not a company. The partnership ceased to exist for 2 hours.

 The complainant has no written contract of employment. An oral contract cannot transfer.

The complainant received no notice of any proposed Transfer of Undertakings contrary to S.I. 131. Therefore, TUPE cannot apply. The absence of notice means that the transfer does not come into effect.

In relation to the respondent’s evidence (a copy of the complainant’s website profile with Firm B) that her service commenced in July 2015, which is her start date in Firm A, the complainant states that she did not put up any notice on Firm B’s website to the effect that her service with firm B extended back to September 2015 when she was employed with Firm A.

 The respondent denies that an entitlement to a statutory redundancy exists as there was no redundancy. The respondent argues that what occurred was a transfer of an undertaking and that the complainant accepted re-engagement with the transferee on the same terms and conditions as she had enjoyed with the respondent. The respondent was a legal partnership.

The respondent was represented by a former partner Ms. D and her legal representative. Ms. D established her own company, Firm C, following the dissolution of Firm A. The other 2 partners of Firm A, the respondent, now dissolved, and currently partners in Firm B, Ms. H1 and Mr. W did not attend the hearing.

The respondent understands that Ms H1, partner of Firm A told the complainant and all staff that it was business as usual as usual on 20/4/2018 and that staff were invited to continue with Firm B on the following Monday 23/4/18. Staff were advised by the two remaining partners (Ms. H1 and Mr. W) that nothing would change. The two former partners communicated to the Law Society that the new Firm B was succeeding the old firm, Firm A. Firm B’s letter head states this.

Ms. H2, witness 1 for the respondent and a former solicitor with Firm A, advised that Ms H1 returned to the office at 4pm on 20 /4/2018 and advised staff that Ms. D had dissolved the company and that their jobs were safe.  It would be business as normal the following Monday the 23 rd. April. The only change would be a name change for the company.

The witness transferred into Firm C. three weeks later. Ms. D (former partner with Firm A) recognised her service with Firm A. The start date on her contract of employment with Firm C is the start date of her employment with Firm A.  Therefore, there was no break in service. There was no break in the terms or conditions of employment.

Ms N, legal secretary, witness 2 for respondent, states that she got no indication that her job was being terminated. After she returned from holidays, she was advised by Ms. H1 that Ms. D and herself had dissolved the business and that she could continue with Firm B. It was business as usual, there was no change. She received no notice of redundancy or TUPE.

 The respondent states that it was a TUPE and not a redundancy. It meets the definition of a TUPE. There was a change in the person (either an individual or a company) responsible for running the undertaking /business or (part thereof). The previous economic activity continued under the new employer. The undertaking transferred as a going concern. Much of the customer base of Firm A transferred to Firm B. Insofar as these elements apply to the complainant’s employment, the respondent submits that no entitlement to a statutory redundancy payment arises as it was a transfer of an undertaking.  

The complainant’s profile on Firm B’s website states that she worked with Firm B since July 2015 her start date with Firm A.

The representative states that though the complainant was notified of the dissolution, Firm A functioned until 5pm,

The complainant does not meet the qualifying criteria for the award of a redundancy payment as she was not dismissed.

The respondent relies on the case of of Symantec Limited V Lyons and Leddy, an appeal to the High Court from a decision of the EAT. The complainant in that case had accepted a transfer on the same terms and conditions and only later sought redundancy. The High court found that the complainant had not been made redundant.

In identifying that it was a transfer of undertakings, the respondent’s representative states that the facts of the instant case match those set out in the seminal case of Spijkers v Gebr Benedik Abbatoir CV (ECJ Case 24/85). Thebusiness was the same before and after the transfer. The intellectual property and goodwill transferred. Much of the customer base transferred from Firm A to Firm B.

The representative refers to the UK decision of Robert Graham HYND v (1) David Armstrong and 24 Others,2007] CSIH 16 XA158/04 as authority for their contention that a partnership comes within the reach of the European Communities (Protection of Employees on Transfer of Undertaking) Regulations, 2003, contrary to what the complainant maintains. In that case a solicitor successfully challenged his dismissal due to redundancy on the dissolution of the partnership in which he was employed and argued that he was entitled to the protection of Regulation 4 when the partners established a new firm.

The court accepted that the complainant, employed in a partnership   could draw on the Regulations to contest his dismissal- reportedly due to redundancy -and asset his right to transfer into the new company. The court accepted that there was a transfer of undertakings.

 The respondent’s legal representative observed that the other 2 partners did no appear at the hearing and only one former partner was present.

I am obliged to establish if the complainant has met the case for payment of a statutory redundancy payment. Alternatively, the respondent asks that I accept that what occurred was a transfer of undertakings.

Section 9 of the Act of 1967 states

 (3) (a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if—

(i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment,

(ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer,

(iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which—

(A) sets out the terms and conditions of the employee's contract of employment with the new employer,

(B) specifies that the employee's period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer,

(C) contains particulars of the service mentioned in clause (B), and

(D) the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph.

(b) Where in accordance with this subsection an employee is re-engaged by the new employer, the service of that employee mentioned in paragraph (a) (ii) shall for the purposes of this Act be deemed to be service with the new employer.

(4) For the purposes of the application of subsection (2) to a contract under which the employment ends on a Friday, Saturday or Sunday—

(a) the renewal or re-engagement shall be treated as taking effect immediately on the ending of the employment under the previous contract if it takes effect on or before the next Monday after that Friday, Saturday or Sunday, and

(b) the interval of four weeks mentioned in subsection (2) (b) shall be calculated as if the employment had ended on that Monday……….

(6) Where by virtue of subsection (2) an employee is treated as not having been dismissed by reason of a renewal or re-engagement taking effect after an interval, then, in determining for the purposes of section 7 (1) whether he has been continuously employed for the requisite period, the period of that interval shall count as a period of employment.

It is accepted that the partnership, Firm A, was dissolved on Friday 20 April 2018. It is accepted that the complainant was offered and accepted employment with Firm B, a partnership which included 2 of the 3 partners constituting Firm A the following Monday the 23 April 2018.

The evidence is that there was no advance notice of redundancy provided to the complainant. Her contract with firm A was informally terminated while she was simultaneously offered employment with Firm B for the following Monday in the same place, and on improved terms.

I find that while there was a change in the partners which led to the dissolution of the partnership, the complainant was re-engaged within the time limits necessary to meet the definition of re engagement as set out in section 9 (4)( a) of the Act of 1967 and, thus, avoid the definition of dismissal. I note the web page which counts her service with Firm B extending back to her start dated with Firm A.

The complainant’s representative argues that TUPE does not apply to the dissolution of a partnership. But  Article 1(a) of the Acquired Rights Directive states

“This Directive shall apply to a transfer of an Undertaking, business or part of an undertaking or business to another employer as a result of a legal transfer or merger”. Undertaking is not defined in the Directive or Regulations. However, transfer is set out in Regulation 3(2) 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 ancillary to another economic activity or administrative entity”

There is nothing to suggest that a partnership does not come within that definition.

The case of 2018 Robert Graham HYND v (1) David Armstrong and 24 Others,2007] CSIH 16 XA158/04 also suggests that staff being dismissed or transferred on the dissolution of a partnership are not beyond the reach of then Regulations.

I find that what occurred on 20-23 April 2018 corresponds with the elements set out in Spijkers v Gebr Benedik Abbatoir CV (ECJ Case 24/85), a frequently relied- upon authority for determining if a transfer of undertakings occurred; the business was the same before and after the transfer, the intellectual property and goodwill transferred. Much of the customer base transferred from Firm A to Firm B and staff transferred.

I find that the complainant’s employment was continuing. I find that she is not entitled to a statutory redundancy payment.

For the reasons cited above and based on the evidence and the law, I  do not find this complaint to be well founded.

I do not find this complaint to be well founded.

Redundancy; dissolution of a partnership