Complainant

Respondent

Anonymised Parties

A Legal Secretary

A Solicitor’s Firm

Representatives

Alastair Purdy & Co. Solicitors

Gilvarry & Associates

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-00020801-001

26/07/2018

The Complainant commenced employment with the Respondent, a firm of solicitors, on 2 October 1978, in the role of legal secretary.

The Complainant ceased working on a full-time basis with the Respondent on 15 July 2016. In April 2017, the Complainant resumed work, for which she was paid on an hourly basis.

On 16 December 2017, the principal in the Respondent’s firm died suddenly and the practice was officially closed on 31 May 2018 when the Complainant’s employment was terminated. A solicitor from another firm of solicitors was appointed as a Practice Manager, for the purpose of winding up the Respondent firm.

Similar to other employees, whose employment was terminated on the closure of the practice, the Complainant applied to the Practice Manager for redundancy. The Practice Manager rejected the Complainant’s application for redundancy on the basis that she did not have an entitlement to statutory redundancy, as she only had a period of 13 months service at the time the business closed.

The Complainant submitted a complaint, under Section 39 of the Redundancy Payments Act, 1967, to the Workplace Relations Commission, on 27 July 2018.

Background:

According to submission, made on her behalf by her legal representative, the Complainant commenced employment in 1978, as a legal secretary. It was submitted that, throughout the period of the Complainant’s employment with the Respondent, the practice went through many types of mergers. However, it was further submitted that the Complainant remained a constant and always worked with the late principal (Mr A).

It is submitted that, from correspondence between the Complainant’s legal advisers and the firm of solicitors acting on behalf of the Respondent, it is asserted that, in December 2013, the Complainant had resigned from the entity known as the Respondent and continued to work for Mr A. According to submission made on behalf of the Complainant, this assertion is untrue. It was submitted on behalf of the Complainant that at no stage did she resign and the contention that she did was a shock to her when she was made aware of it.

According to submissions on behalf of the Complainant, while it is clear that certain commercial decisions were being undertaken by the practice where she worked, she continued to be employed by Mr A and there was no break in her service. It was further submitted, on behalf of the Complainant, that she refutes the assertion that, on reaching her 65th birthday, she sought consent from Mr A to stay employed until she reached 66 years of age. According to the Complainant’s evidence, she was not approached, nor did she make such an approach at that time.

In her evidence, the Complainant submitted that when Mr A became aware that she had reached the age of 66, he approached her about retiring. It was further submitted on the Complainant’s behalf that she had never been furnished with a contract of employment and, therefore, there was no retirement policy.

According to the Complainant’s evidence, she wished to remain working. However, it was further submitted that she was instructed that there was not sufficient work available for her at that time. According to the Complainant’s submission, she was consoled by the confirmation that when work picked up she would be called upon to resume work. It was further submitted that, while the Complainant stopped working on 15 July 2016, she was not issued with a P45 at the time.

It was further submitted on behalf of the Complainant, that, in line with the above agreement with Mr A, when work picked up again, in April 2017, she resumed her employment and was paid the sum of €250 net per week for hours worked. Accordingly, it is submitted, on the Complainant’s behalf, that the break in her employment, which occurred between 15 July 2016 and April 2017, represented a period of lay off.

According to the submissions on behalf of the Complainant, the Respondent’s principal (Mr A) suddenly passed away on 16 December 2017. It was further submitted that the practice was officially closed on 31 May 2018, at which point in time the Complainant and all employees had their employment terminated.

It was submitted on behalf of the Complainant that she has been denied her redundancy payment and has still not been furnished with her P45.

Legal Argument:

The Complainant’s legal representatives made the following legal argument on her behalf:

Reference was made to Section 7 of the Redundancy Payment Act, 1967 (as amended by the 1971 Acts) and, in particular, the criteria that must be met for an employee to be entitled to redundancy payment. That criteria was set out as follows:

1.      They must have at least 104 weeks continuous service.

2.      There must be in employment, which is insurable for all benefits under the Social Welfare Consolidation Act, 1993.

3.      There must be over the age of 16.

4.      They must have been made redundant as a result of a genuine redundancy situation.

According to submissions being made on behalf of the Complainant, it is assumed that it is only the first category, i.e. that of continuous service, that the Respondent is disputing.   With regard to the matter of continuous service, the Complainant’s legal representative made reference to the following legislation: the Redundancy Payment Act, 1967, Schedule 3, paragraph 3, as amended by Redundancy Payment Act, 1971, Section 19 and the Redundancy Payments Act, 1979, subsections 17 and 23.

It was further submitted on behalf of the Complainant that Schedule 3 of the Act has been greatly strengthened by Section 12 of the Redundancy Payment Act 2003. It is submitted that a lay off is one of the “interruptions” set out in this Section as not constituting a break in continuity of service.

According to further submissions made on behalf of the Complainant, under the Act, it is held that while layoff does not interrupt the continuity of service, absence by reason of lay-off by the employer is non reckonable service.

In conclusion, it was submitted on behalf of the Complainant, that she never had her employment terminated by the Respondent 2016. It was further submitted that, at that time, she was told that the work was not present in sufficient quantities but was given the reassurance that on work picking up, she would be re-employed.

According to the Complainant’s submission, this duly occurred in April 2017 and the Complainant remained so employed until the practice closed in May 2018. It was submitted that it is the Complainant’s contention that as her employment never terminated prior to the practice closure in May 2018 and, therefore, as per the legislation, she is entitled to her redundancy payment.

The Complainant requested a finding in her favour in this regard.

Introduction and background:

It was submitted that the Respondent in this case, a solicitor (Mr A) of many years standing, passed away on 16 December 2017, while still practising under the style and title of the Respondent. It was submitted that Mr A died intestate. It was further submitted that following Mr A’s death, a solicitor from another firm (Mr B) was appointed by Order of the High Court on 23 March 2018 to act as Practice Manager and was permitted to extract the Grant of the Estate of the late Mr A to enable the orderly conduct of the deceased’s affairs and ultimately, to wind down and close the practice.

According to the Respondent’s evidence, the Complainant worked for the late Mr A for many years. It was submitted that she originally commenced employment with a different firm in about October 1978. It was further submitted that Mr A set up his own practice and the Complainant’s employment continued.

According to the submissions made, over a period from March 2018 up to 31 May 2018 Mr B managed the affairs of the practice to conclusion and the firm closed down 31 May 2018. It was further submitted that several employees were entitled to redundancy and those claims were processed in the normal way. It was submitted that Mr B made it clear to the Complainant that he did not consider that she was entitled to redundancy payment as she did not have the relevant minimum two years’ service, as of 31 May 2018, in order to claim same.

Chronological sequence of events:

According to the submissions made, the Complainant had stated that her date of birth was 10 April 1950 and then, as a result, she turned 65 on10 April 2015 staff it was submitted that evidence from former colleagues confirm that the Complainant was due to retire at that point. However, it was further submitted that arising from the fact that she would not be entitled to receive the Old Age Pension until she attained the age of 66 years, it was agreed with the late Mr A that the Complainant would remain on for another year until she became eligible to draw the state pension.

It was submitted that the Complainant continued working but was due to retire in April 2016, on her 66th birthday. According to the submissions made, it transpired that the date came and went without Mr A realising that the Complainant had reached the age of 66 and, when this became apparent, the Complainant retired with effect from 15 July 2016.

According to the submissions, at that point in time, the late Mr A paid all accrued holiday entitlements in the sum of €2,102.64 to the Complainant. It was further submitted that an ex gratia gift of €2,000 was paid to the Complainant. Consequently, it is submitted on behalf of the Respondent that the Complainant clearly retired.

In addition, it was submitted that, clearly, no redundancy payment arose in circumstances where a retirement had occurred. It was further submitted that no P45 issue to the Complainant. According to the submissions on behalf of the Respondent, a P45 is rarely, if ever, furnished to a retiree, as they are ordinarily required for those who take up new employment. It was submitted that it is the understanding of the Respondent that the Complainant was not seeking new employment and drew her state pension, as was her entitlement.

It was further submitted on behalf of the Respondent that, in addition to the payments made, the Complainant was given flowers and gifts, the money for which was taken from the Office Petty Cash account. According to the evidence submitted, a number of the Complainant’s colleagues were aware of the position and attended a retirement lunch for her on 21 July 2016. It was further submitted that none of these colleagues believed that the Complainant was going on a “career break”, as she was now claiming, it was submitted that it was clear to all concerned and to the Complainant that she had retired.

According to the submissions made on behalf of the Respondent, in April 2017, the late Mr A contacted the Complainant and offered her part-time work (two days per week). It was submitted that a wage of €250 net per week was agreed and the Complainant’s new role commenced on 30 April 2017 on a part-time and temporary basis. It was further submitted that this role ceased in the months following Mr A death and formally concluded on 31 May 2018.

It was submitted that a period of 13 months service had accrued on a net wage of €250 per week. It was further submitted that it was clear to the Practice Manager (Mr B) in winding up the firm and further to enquiries made by him that the requisite service had not been accrued by the Complainant and, accordingly, a claim for redundancy was not accepted. According to the evidence submitted, emails and correspondence ensued between Mr B and the Complainant, where the former made it clear that according to the information available to him the Complainant did not have an entitlement to statutory redundancy.

It was submitted that the Complainant maintained that she could get a letter from one of her colleagues (Ms C) that would confirm she was on a “career break”. It was further submitted that Mr B invited the Complainant to submit documentation in support of a position, as all the available facts at his disposal clearly pointed to a retirement in July 2016, followed by a later hiring in April 2017, on a part-time basis. It was further submitted that the Complainant advised Mr B that the “Department” told her that she had a “good case” and that “Revenue favours employees”.

With regard to the assertion, made in correspondence on the Complainant’s behalf and, indeed, by the Complainant herself, that (a) she was never furnished with a P45 and, therefore, her employment never terminated and (b) she was asked to leave the business in July 2016 due to a downturn in business and that there was an expectation and understanding that, if matters improved, she would be brought back, the Respondent stated that this was never the case.

The Respondent further submitted that, in fact, the colleagues who worked in the practice at the time of the Complainant’s retirement, all attest that the practice did not experience a downturn and that their workload was increased by the Complainant’s retirement. It was further submitted that, as the practice was busy at the time, it is clearly the case that the Complainant was not laid off or made redundant in July 2016.

It was submitted on behalf of the Respondent, that it was curious to note that the Complainant did not raise any objection, in July 2016, if, as she now claims, that “pressure was put on her at that time to go”. The Respondent queried as to why the Complainant did not seek to challenge the conclusion of her employment in those circumstances. It was submitted that, in an email to Mr B, on 1 June 2018, the Complainant claims that she “said she would go” when Mr A asked her when she was due to retire.

It was further submitted on behalf of the Respondent, that the Complainant accepts that she received a gratuity of €2,000 at the time. It was further submitted that payment of such an ex-gratia amount is not consistent with the period of lay-off. It is further submitted that the supporting evidence clearly points to retirement in July 2016 and that the Complainant’s service came to a conclusion at that point in time.

The Relevant Law:

It was submitted on behalf of the Respondent that no notice was ever given by the late Mr A in July 2016 that the departure of the Complainant from her employment was anything other than a retirement. It was further submitted that no notice was ever issued in accordance with Section 11 of the Redundancy Payments Act, 1967, that a period of layoff was taking effect, as this was never the case.

It was further submitted that the Complainant never served any notice after July 2016 seeking to either return to work or claim an entitlement to redundancy. It was submitted on behalf of the Respondent that the Act is clear that, where regular service is broken by a period of more than 26 weeks, continuity of service cannot be preserved.

It was further submitted by the Respondent, that, the Complainant voluntarily left employment by means of retirement in July 2016 and her service from 1978 came to an end. It is further submitted that the Complainant appears to have been drawing her State Pension from July 2016 and continue to do so she came back to work for Mr A in April 2017, at which point a period of 10 months had elapsed.

In support of their submissions in this regard, the Respondent referred to the case of Flannery v Mount Carmel Medical Group, in which case the employee concerned resigned in October 1991, as she wanted a career break. She was later re-employed in August 1992 and, when she was made redundant, she disputed her start date. The Respondent referred to the EAT’s findings in that case which stated:

“The respondent maintained that in the Complainant’s letter of resignation given on 1 October 1991 meant her employment had ceased, and subsequent employment did not reinstate her earlier service. The Act contemplates maintaining continuity of service where an employee has been absent but excludes from the exception where the employee has voluntarily left employment”.

According to the Respondent’s submission, even on the basis of the Complainant’s (in the within case) varying positions that she was on a “career break” or was “asked to leave”, none of the evidence bears that out. In conclusion, it was submitted that it is the Respondent’s contention that there is no entitlement to statutory redundancy as the relevant statutory period has not been accrued and any previous continuity of service had long since broken.

Having carefully considered all of the evidence presented and the submissions made by or on behalf of the Complainant and the Respondent, I find their respective positions, with regard to the facts surrounding the termination of the Complainant’s employment, in July 2016, to be directly contradictory in nature.

According to the Complainant’s submission, having attained her 66th birthday in 2016, she was approached about retiring by the Respondent’s principal (Mr A). According to the Complainant, when she informed Mr A that she wished to remain at work, she was advised that there was not sufficient work available for her. However, the Complainant further stated that, on receiving confirmation from Mr A that she would resume work when the business picked up, she agreed to cease working on 15 July 2016.

Having resumed work in April 2017, the Complainant submits that the period of time in between July 2016 and April 2017 represents a period of lay-off. The Complainant further contends that, as a lay-off does not constitute a break in service for the purpose of establishing entitlement to redundancy, she is entitled to statutory redundancy in connection with the closure of the Respondent business in May 2018.

For their part, the Respondent contends that the Complainant retired on 15 July 2016, thereby bringing her employment to an end. The Respondent further contends that when the Complainant returned to work in April 2017, she was employed on a temporary part-time basis. The Respondent does not accept that the intervening period between July 2016 and April 2017 constitutes a period of lay-off.  

Consequently, the Respondent’s position is that the termination of the Complainant’s employment in July 2016 was by way of retirement and therefore brought her service to an end. While accepting that the Complainant had been reemployed in April 2017 and was still in employment in May 2018, when the business ceased trading, the Respondent contends that said employment was on a part-time, temporary basis and did not constitute continuation of employment, for the purposes of statutory redundancy. In this regard, the Respondent contends that, given the Complainant’s 13 months of employment under the part-time, temporary arrangement, she does not have the required service for the purposes of redundancy entitlement.

Having carefully considered all of the evidence, I am satisfied that the discussions which took place between the Complainant and Mr A in July 2016 in relation to the former’s cessation of work at that time would, in normal circumstances, provide the key to determining which of the conflicting accounts was the more accurate and/or a credible. However, given Mr A’s sudden death in December 2017, I am left with the Complainant’s uncontested evidence in relation to those discussions.

Fortunately, in addition to the Complainant’s uncontested evidence with regard to her discussions with Mr B, direct evidence was provided by a number of the Complainant’s colleagues in relation to the general circumstances that pertained at the time of her departure in July 2016.

Having carefully reviewed the witness evidence, it is that her colleagues were all clearly of the view that the Complainant retired in July 2016. It is clear from this evidence that the Complainant received a gift, on behalf of colleagues, and was also entertained to lunch on her last day at work. All of this points inexorably to a retirement rather than any other form of temporary break in employment, such as a lay-off.

In addition to the evidence provided by the witnesses, it is undisputed that in addition to the gift and the lunch organised by her colleagues, the Complainant received an ex-gratia payment of €2,000.00 from Mr A at the time of her departure.   Having carefully considered all of the evidence, I am satisfied that, on the balance of probability, it is highly unlikely that the Complainant would have received such a payment in the event of a temporary break in her employment. I find it much more likely that a payment of this nature confirms a retirement rather than a layoff as contended by the Complainant.

I also found some inconsistencies in the Complainant’s own evidence which, in my view, undermines, somewhat, the validity or credibility of that evidence. During the first hearing into her complaint, the Complainant submitted that she was approached, in or around her 66th birthday, by Mr A and queried as to when she was going to retire. The Complainant further submitted, in direct evidence, that, despite there being plenty of work available, she was pressurised to retire. According to the Complainant’s evidence, after remaining in work for a further 3/4 weeks, she approached Mr A informing him that she had had enough and wanted to leave. She further stated that she informed Mr A that she would leave at the end of that week.  

Notwithstanding the above evidence in relation to the circumstances pertaining to the termination of her employment on 15 July 2016, the Complainant contends that the termination was by way of lay-off as opposed to retirement. It is necessary therefore to consider the credibility of the Complainant’s contention in this regard.

Section 11 (1) of the Redundancy Payments Act, 1967, as amended, defines “lay-off” as follows:

“(1) Where an employee’s employment ceases by reason of his employer’s being unable to provide the work for which the employee was employed to do, and—

(a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and

(b) the employer gives notice to that effect to the employee prior to the cessation,

that cessation of employment shall be regarded for the purposes of this Act as lay-off.”

Having carefully considered this aspect of the Complainant’s submission I find some elements of her evidence to be somewhat inconsistent.   Firstly, I note the Complainant’s direct evidence to the effect that Mr A asked her if she would come back in the event of the work increasing. This evidence is somewhat inconsistent with her early evidence as to there being plenty of work available.

Secondly, I am further influenced in this regard by the evidence adduced in relation to the nature of the work carried out by the Complainant when she returned to the workplace in April 2017. The evidence provided by the witnesses clearly suggests that the Complainant was working on closing out or clearing old files. I find that work of this nature is more consistent with the hiring of somebody on a part-time/temporary basis rather than with the reversal of circumstances pertaining to a decline in business which would have resulted in the type of layoff described by the Complainant as being the reason for her departure from the business in July 2016.

Finally, in this regard, I am of the view that, if the period of time away from the workplace, between July 2016 and April 2017, was, as the Complainant contends, a period lay-off, consistent with Section 11 (1) of the 1967 Act, it is more likely that she would have returned on similar wages/salary as she   was in receipt of prior to the lay-off or in the event she was working reduced hours that payment would be pro rata to her full-time, pre-layoff wage. Instead, I find the undisputed evidence demonstrating that, on her return to the workplace in April 2017, the Complainant was paid at a rate of €250.00   net per week. In my view, such an arrangement is not consistent with the alleged temporary lay-off but rather suggests that the termination of the Complainant’s employment in July 2016 was much more consistent with that of retirement.

Consequently, taking all of the above into consideration, I find the Respondent’s contention that the Complainant retired in July 2016 to be more credible than the latter’s contention that she was merely on a temporary layoff.   In that context, I also find that the Complainant’s continuity of service with the Respondent ceased at that point in time. Therefore, based on that finding, I conclude that the Complainant’s re-hiring, in April 2017, on a part-time, temporary basis constituted the commencement of a new and separate period of employment/service.

The matter of continuous employment and/or continuity of service is referred to in two separate pieces of legislation. Firstly, Schedule 3, Sections (4) and (5) of the Redundancy Payments Act, 1967, as amended, state as follows in relation to “continuous employment”:

“4. For the purposes of this Schedule employment shall be taken to be continuous unless terminated by dismissal or by the employee’s voluntarily leaving the employment, but for the purposes of this paragraph ‘dismissal’ does not include a dismissal within the meaning of the Unfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7 (1) (a) or 7 (1) (b) of that Act.

4 (A) Notwithstanding anything in paragraph 4 (and anything in clause (b) of the definition of “date of dismissal” in section 2), the period of notice due to an employee under section 4 (2) (a) of the Minimum Notice and Terms of Employment Act, 1973, but not given by the employer, shall, where the Tribunal so orders, be allowed as continuous service for redundancy purposes where, but for the failure of the employer to comply with the provisions of that Act, the employee would have qualified for redundancy payment.

5. Where an employee’s period of service has been interrupted by any one of the following—

(a) any period by reason of—

(i) sickness,

(ii) lay-off,

(iii) holidays,

(iv) service by the employee in the Reserve Defence Forces of the State,

(v) any cause (other than the voluntary leaving of the employment concerned by the employee) not mentioned in clauses (i) to (iv) but authorised by the employer,”

Secondly, with regard to “continuity of service”, the First Schedule, Section 4 (1) of the Minimum Notice and Terms of Employment Act, 1973, states as follows:

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.”

Notwithstanding the Complainant’s contention that she felt pressurised to retire in July 2016, I am satisfied that her decision to do so was on a voluntary basis. In that context, I find that, in line with Sections 5 (a)(ii) of the 1967 Act and Section 4 (1) of the 1973 Act, the period of time between 15 July 2016 and April 2017 does not constitute a period of continuous employment/service for the Complainant, whose employment/service, I find to have ceased on 15 July 2016.

Consequently, taking all of the above into consideration and having carefully reviewed all of the evidence adduced, I find that the Complainant’s claim for statutory redundancy payment is not well founded.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I find that the Complainant’s claim under the Redundancy Payments Act, 1967, is not well founded and is, therefore, rejected.

Redundancy Payments Acts

Periods of Lay-off

Retirement

Continuous Employment

Continuity of Service