Complainant

Respondent

Anonymised Parties

A Deli Supervisor

A Food Store

Representatives

Self-Represented

Rob Nolan Peninsula

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-00034097-001

31/01/2020

The Complainant was claiming statutory redundancy.

The Complainant was employed from May 31st, 2016 to January 31st, 2020 as a Deli Supervisor.

She was promoted to the Supervisor role after two years.

A few weeks before she left work she was told that the store was relocating across the road. She was offered the same pay, terms and position by the Owners of the current business who were opening a new business under a new name but with no continuity of employment. The existing store (a franchise) was been taken over by another owner.

She did not take up the role offered as there was no continuity of employment. The Complainant earned 240 Euros per week for a 20-hour week. She felt her position was made redundant with her employer and her employer refused to pay redundancy and she is appealing this decision.

The Respondent had traded successfully for a number of years but in December 2019 the Landlord refused to renew their lease and they were given one months notice to vacate the premises.

In early January 2020 the company wrote to all the staff outlining the position to them. In this letter it was made known to all staff that they would have alternative employment with an alternate business.

A new Company were taking over the location vacated by the Respondent and were also offering staff roles with them.

The letter issued to staff explaining the situation expressly stated that all their terms and conditions would remain the same for the business their employer was proposing to transfer them to.          

A discussion seems to have arisen regarding transferring to a new business.

The company sought legal advice for the staff to inform them of their rights and staff were provided with this.

It is also the Respondent’s understanding that the claimant had another role organised for herself with the new owner (the business that had taken over) by the time of the business closing.

Redundancy Payments Act states under Section 7 (2) For the purposes of subsection (1),

an employee who is dismissed shall be taken to be dismissed by reason of redundancy if 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 out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish.

Per s.7(2) Redundancy Payments Act 1967 as amended by s.4 Redundancy Payments Act 1971 a person is dismissed by reason of redundancy where the dismissal results “wholly or mainly” from either:

(a)    The fact that the employer has ceased or intends to cease to carry on the business for the purpose 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 out 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 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 henceforth be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e)    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 henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

However, Section 9 (2) states

An employee shall not be taken for the purposes of this Part to be dismissed by his employer if his contract of employment is renewed, or he is re-engaged by the same employer under a new contract of employment, and—

a)      in a case where the provisions of the contract as renewed or of the new contract as to the capacity and place in which he is employed, and as to the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract, the renewal or re-engagement takes effect immediately on the ending of his employment under the previous contract, or

b)      in any other case, the renewal or re-engagement is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract, and takes effect either immediately on the ending of that employment or after an interval of not more than four weeks thereafter.

Section 15 further states that:

15.—(1) An employee who has received the notice required by section 17 shall not be entitled to a redundancy payment if in the period of two weeks ending on the date of dismissal—

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would not differ from the corresponding provisions of the contract in force immediately before his dismissal,

(c) the renewal or re-engagement would take effect on or before the date of dismissal, and

(d) he has unreasonably refused the offer.

15.-(2) An employee who has received the notice required by section 17 shall not be entitled to a redundancy payment if in the period of two weeks ending on the date of dismissal—

(a) his employer has made to him in writing an offer to renew the employee's contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before his dismissal,

(c) the offer constitutes an offer of suitable employment in relation to the employee,

(d) the renewal or re-engagement would take effect not later than four weeks after the date of dismissal, and

(e) he has unreasonably refused the offer.

It is respectfully submitted that Section 9 and Section 15 specifically state re-engagement as opposed to re-instatement. Re-engagement having a very different connotation in employment law.

The company made their offer in writing, offering the relevant staff, including the claimant, their existing terms and conditions of employment. This fulfils the requirements of legislation and therefore no redundancy payment was due to the claimant for these reasons.

The Company made considerable efforts to ensure that the claimant was fully informed of their rights and their entitlements.

The claimant made their own decision to leave the business despite the offer and the company’s attempt to provide clarity on their entitlements.

If the claimant has a case, it is asking that the new owner admit to a Transfer of Undertakings and continuing her employment with all the benefits she enjoyed including service.

In the Foreningen Af Arbejdsledere i Danmark v Daddy’s Dance Hall A/S [1988] IRLR 315, ECJ case, there is a termination of a non-transferable lease and then a granting of a fresh lease to a new lessee who carries on the business without interruption and with the same staff who were dismissed on the determination of the lease. Mr. Tellerup was employed by Irma Catering which had a non-transferable lease on restaurants and bars owned by Palads Teatret. This lease was terminated, and Mr. Tellerup was dismissed. A new lease was agreed with Daddy’s Dance Hall and Mr. Tellerup was re-employed by them but on different contractual terms.

The ECJ held that the directive on Transfer of Undertakings did apply in the above circumstances. The economic entity had retained its identity and this could be seen by the fact that the business was continued uninterrupted by the new lessee and was carried on by the same staff. Furthermore, the terms of the directive were mandatory and could not be waived by employees.

In short, the new Owners are the employers are this is a transfer of Undertakings and therefore no redundancy situation and consequently no redundancy payment exists.

The Complainants core case was that the Respondent ceased trading in the business they were engaged in and that another employer took over the operation of that business in that location and that while she was offered a similar role on the same pay and terms by the Owners of the Respondent business in a new entity she was not given any assurance that her service from the Respondent would transfer to the new entity and the new entity was just a Trading name and not a legal entity.

The Respondents core case was they offered the Complainant continued and suitable alternative employment with XYZ Coffee House on a re-engagement basis under a new contract of employment. Their second argument was that the Complainant should be covered by a Transfer of Undertaking situation when the new company took over the running of their franchise in the same location.

The only claim before the Adjudicator is whether or not the Complainant was made redundant by the actions of her employer. The issue of a Transfer of Undertaking was not before the Adjudicator as this was neither the claim brought by the Complainant nor were any potential other interested parties who may be involved in such a scenario been notified of that issue and no such claim existed before the WRC. No evidence was put forward that the Respondent had engaged on the issue of a Transfer with the Company who took over the running of the business at the location where the Respondent operated from and therefore it is late in the day to advance that argument as a justification for their position.

The employment facts of this case do not appear to be fundamentally in dispute. The Complainant was employed from May 31st, 2016 to January 31st, 2020 as a Deli Supervisor on 240 Euros per week for a 20-hour week. She was informed the business of the Respondent was ceasing and was offered an alternative role with a new Trading name (XYZ Coffee House but the new Legal Entity Company name was not defined in the letter to staff) with the “same terms and conditions” with XYZ Coffee House as the Respondent. The Owners of XYZ Coffee House were the same owner of the Respondent Company. However, when the Complainant sought to have a written assurance that her date of commencement would stay the same with XYZ Coffee House as the Respondent she was not given this guarantee verbally or in writing.

To take the Respondents arguments put forward, in their defence, the first issue is the generic letter from XYZ Coffee House stated “everybody will be offered alternative employment”.   This was a statement of intent to make an offer of alternative employment rather than an actual offer of employment. Therefore no offer of alternative employment was presented to the Complainant or the Hearing. Secondly, the statement of intent was from a different entity and not the “Employer” as defined in Section 15. Thirdly, it was an intent of re-engagement under a new contract. No contract was produced as evidence one was provided to the Complainant by the Respondent or XYZ Coffee House to offer continuity of employment or re-engagement but only an intent to offer one by XYZ Coffee House, a different Trading entity and there was no evidence it was the “same employer” making the offer.

The Redundancy legislation is quite clear in that Section 7.2. states an employee is made redundant if “The fact that the employer has ceased or intends to cease to carry on the business for the purpose 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”. In this case the Respondent ceased trading” in the place where the employee was so employed”. So that criteria was met. There was no clear evidence was presented that the Complainant was offered re-engagement by the same employer (the Respondent) but with

XYZ Coffee House. Even if that were the case, the absence of certainty regarding the core issue of continuity of service for the Complainant would render Section 9.2. (a) void in that there was no clear evidence that 9.2 (a) would have been adhered too by the guarantying of no difference of the same start date for the Complainant with XYZ Coffee House as the Respondent. “the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract,”. Finally, with regard to the question of Transfer of Undertakings this issue was not before the Adjudicator for decision, the possible interested parties were not notified of this defence and it may be prejudicial to interested   parties for the Adjudicator to expand on this issue in the absence of a claim from the Complainant to that effect.

For all the above reasons I find that the Complainant is entitled to a Redundancy payment providing they were an employed Contributor in employment which was insured for the relevant period under the Social Welfare Acts.

I find the appeal against the Employers decision not to pay redundancy under the Redundancy Payments Acts 1967 to 2007 succeeds and I allow the Complainants appeal. The Complainant is entitled to a redundancy lump sum based on the following;            

Date of Commencement; May 31st, 2016                         Date of Termination January31st, 2020                                                                                                                                            Rate of pay Gross per week; 240 Euros.

The Complainant is entitled to a Redundancy payment of two weeks pay per year of service (or part thereof) plus a week subject to a maximum of 600 Euro per week.

Redundancy