Complainant

Respondent

Anonymised Parties

A Sales Assistant

A limited Company ( In Liquidation)

Representatives

Ciaran Kirwan Margetson & Greene Solicitors

Michael Laydon Outlook Accounts

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-00028796-001

31/05/2019

The Complainant is a former sales assistant and was employed by the Respondent, having commenced his employment in or around July 2005.

The Complainant’s employment with the Respondent was terminated on 17th February 2019, purportedly because the business was not doing well. The Respondent failed to pay redundancy to the Complainant.

In or around 31st May 2019 the Complainant made a complaint via the Workplace Relations Complaint Form, to the Workplace Relations Commission (WRC), arising from a failure to pay redundancy.

The Complainant contends that he was entitled to redundancy based on his years of service with the Respondent and seeks adjudication by the WRC under section 39 of the Redundancy Payments Act, 1967.

In August 2018 the Complainant was required to reduce his normal working hours from 36, as per his previous contract of employment to 22 per week by way of a new contract of employment (Appendix 4).

RELEVANT LAW AND APPLICATION OF THE FACTS – REDUNDANCY

8.            Section 7(2) of the Redundancy Payments Act 1967 provides that:

                ‘an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned, the dismissal is attributable wholly or mainly to:

(a)          The fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b)          The fact that the requirements of that business for employees to carry on work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c)       The fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d)       The fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e)       The fact that is employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained’.

It is submitted that section 7(2)(a) is applicable to the instant case.   The Respondent verbally advised the Complainant in early 2019 that it intended to close the shop in which the Complainant worked. On 16th February 2019 the Respondent advised the Complainant that his employment would cease on the 17th February 2019. The Complainant was dismissed and did not receive a redundancy payment.

The Complainant informed the Respondent on a number of occasions of his entitlement to a redundancy payment, but this was rejected by the Respondent.

The Complainant’s solicitor wrote to the Secretary of the Respondent on 17th May 2019 requesting that the Respondent pay monies due by way of redundancy to the Complainant. No response was received.

The Complainant had in excess of the requisite period of continuous service as set out in section 7(5) of the 1967 Act and was, at all material times, an employed contributor in employment, which was insurable for all benefits under the Social Welfare Acts, immediately before the date of the termination of his employment.

Continuous Service / New Contract

The Complainant signed a number of contracts of employment with the Respondent since 2005. The most recent contract was entered into in August 2018. However, the Complainant had no break in service since commencing his employment with the Respondent in 2005. Schedule 1 of the Minimum Notice and Terms of Employment Act 1973, as amended states:

‘1. The service of an employee in his employment shall be deemed to be continuous unless that service is terminated by—

(a) the dismissal of the employee by his employer, or

(b) the employee voluntarily leaving his employment.’

The Complainant felt compelled to sign a new contract of employment which was introduced by letter dated 15th July 2018, which he signed on 3rd August 2018. The Complainant contends that in signing said contract, in circumstances where there was no break in his service and the precise legal effect of any changes in the contract were not explained to him, that he has an entitlement to all the statutory rights which he accrued based on his years of service and therefore has an entitlement to a redundancy payment.

Reduced Hours

Schedule 3 of the Redundancy Act 1967, deals with what should constitute normal weekly remuneration for the purposes of redundancy calculations:

                ‘1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following:

(a) the product of two weeks of the employee’s normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and

(b) a sum equivalent to the employee’s normal weekly remuneration.

(2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4(2) of the Redundancy Payments Act 1979 at the time the employee is declared redundant.’

Section 15 (2) of the Redundancy Payments Act sets out how a temporary reduction in hours should be treated where same has occurred in the 52-week period preceding a redundancy:

‘15.— (2B) Where —

(a) an employee’s remuneration is reduced substantially but not to less than one-half of his normal weekly remuneration, or his hours of work are reduced substantially but not to less than one-half of his normal weekly hours, and

(b) the employee temporarily accepts the reduction in remuneration or hours of work and indicates his acceptance to his employer,

such a temporary acceptance for a period not exceeding 52 weeks shall not be taken to be an acceptance by the employee of an offer of suitable employment in relation to him.’

In July of 2018 the Respondent reduced the Complainant’s hours of work from 36 per week to 22 per week. The Respondent stated by letter dated 28th May 2019 that ‘The Company has to make some changes going forward in staffing and wage costs’.

The Complainant did not seek a reduction in hours, nor did he wish the reduction to continue.   He would readily have accepted a return to his normal working hours and remained hopeful of same until the date of the termination of his employment.

In accordance with Schedule 3 of the Redundancy Act 1967 the Complainant has an entitlement to be paid his normal working week (i.e. 36 hours per week plus commission) in circumstances where he was forced to reduce his hours within 52 weeks of his dismissal – which dismissal was a redundancy.

It is submitted therefore that the Complainant is entitled to a redundancy payment in respect of his 13 years and seven and a half months’ service with the Respondent and is therefore entitled to 28.28 weeks at his normal rate of remuneration.

The Complainant’s P60 for 2017 (his last financial year of full-time work) shows total earnings of €27,560.00. Said earnings included salary and commission. Thus, the Complainant’s normal remuneration was €530.00 per week which gives rise to a statutory redundancy entitlement for the Complainant in the sum of €14,988.40.

CONCLUSION

The Complainant’s employment was terminated in circumstances where he was entitled to the benefits of the Redundancy Payments Act 1967, as amended.   Based on his continuous service over a period of 13 years and 7 months the Complainant has a redundancy entitlement in the sum of €14,988.40.

There was no appearance for or on behalf of the Respondent. Having made enquires I am satisfied that the respondent company is in liquidation and that the liquidator was on notice of the date, time and venue for the within hearing.

The complainant commenced employment with the Respondent on the 1st July, 2005. His employed ceased on the 16th February, 2019. Despite the fact that he signed new contracts from time to time, I am satisfied that there was no break in his service, and he is entitled to a redundancy payment based on a commencement date of 1st July, 2005 and a termination date 16th February, 2019.

Section 15 (2) of the Redundancy Payments Act sets out how a temporary reduction in hours should be treated where same has occurred in the 52-week period preceding a redundancy:

‘15.— (2B) Where —

(a) an employee’s remuneration is reduced substantially but not to less than one-half of his normal weekly remuneration, or his hours of work are reduced substantially but not to less than one-half of his normal weekly hours, and

(b) the employee temporarily accepts the reduction in remuneration or hours of work and indicates his acceptance to his employer,

such a temporary acceptance for a period not exceeding 52 weeks shall not be taken to be an acceptance by the employee of an offer of suitable employment in relation to him.’

In July of 2018 the Respondent reduced the Complainant’s hours of work from 36 per week to 22 per week. The Respondent stated by letter dated 28th May 2019 that ‘The Company has to make some changes going forward in staffing and wage costs’.

I accept the Complainant’s evidence that he did not seek a reduction in hours, nor did he wish the reduction to continue. He would readily have accepted a return to his normal working hours and remained hopeful of same until the date of the termination of his employment.

I accept the Complainant’s submission that he is entitled to a redundancy payment in respect of his thirteen years and seven and a half months’ service with the Respondent and is therefore entitled to 28.28 weeks at his normal rate of remuneration.

The complaint is well founded. The complaint is entitled to a Redundancy payment based on the following information:

Date of commencement: 01.07.2005

Date of Termination: 16.02.2019

Weekly Remuneration: €530.00

The complaint is well founded. The complainant is entitled to a redundancy payment as set out above.