Complainant

Respondent

Anonymised Parties

A Worker

A Gym

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00030868-001

12/09/2019

The Complainant had worked for the Respondent on a part time basis between 8/1/2017 and 26/6/2019. The Respondent stated that it ran into serious trading difficulties and the Landlord of the premises changed the locks on the 26th June, 2019 thereby denying the Respondent access to the premises. The Respondent ceased trading on 26/6/2019. The premises is now occupied by another service provider operating the same type of business.

This complaint was heard in conjunction with another complaint lodged by the Complainant which issued in a separate decision – ADJ-00025097.

This complaint was also heard in conjunction with the complaints filed under reference number ADJ-00023394.In that regard, the Complainant had first lodged complaints pursuant to the Payment of Wages Act [1991-2019] on the 26th July, 2019. These were allocated reference number ADJ-00023394 by the WRC. Arising from correspondence received from the Respondent related to the address and contact details of the Respondent, the Complainant submitted a second complaint form to the WRC on the 12th September, 2019 and this was allocated a new reference number ADJ-00024149. Both this ADJ-00024149 and ADJ-00023394 relate to the Complainant’s complaints under the Payment of Wages Act [1991-2019].

The Complainant stated she received an email on the 28th June, 2019 which advised that the business had ceased trading on the 27th June 2019, as it had been locked out by the Landlord. The Complainant considered this highly unreasonable and unprofessional and stated that she was only seeking what she was entitled to.

The Complainant stated that she had submitted a separate complaint to the WRC in respect of redundancy and confirmed at the hearing, that she had received this payment. The Respondent stated that it supported the Complainant’s redundancy application.

In respect of her complaints pursuant to the Payment of Wages Act [1991-2019], the Complainant stated that her gross weekly wages were €155.00 for twelve and half hours/week. She stated that her net pay was €154.23. The Complainant claimed the following:

1.       A week’s wages in respect of the week ending the 5th July, 2019 on the basis that she always worked one week in hand. The Complainant confirmed that she received her last wages on the 28th June, 2019;

2.       Statutory notice period which the Complainant estimated to be €308.46;

3.       Holiday pay amounting to twelve hours which leave the Complainant stated she was keeping so that she could commence maternity leave early.

The Complainant stated that the new occupiers of the gym had informed her that she could only continue working in the gym on a self employed basis. In this regard, the Complainant explained that she also had private clients attending the gym who had paid her directly and in advance and that she continued to fulfil her obligations to these clients after the Respondent closed and up until the commencement of her maternity leave on the 12th July, 2019.

The Respondent stated that it had outstanding debts owed to Revenue and to the Landlord. The Director of the Respondent who attended the hearing stated that the company had ceased trading on the 26th June, 2019 as it had been locked out by the Landlord of the premises. The Respondent stated that the business had no cash to pay any outstanding debts and that it could not access any of its equipment or assets due to the lock out situation which pertained. The Respondent stated that it does not have any funds to initiate legal proceedings to regain its assets – which are now in the control of the Landlord – and that in any event, the assets would not discharge the liabilities owed.

The Respondent did not dispute that the Complainant was owed wages and holiday pay but did not accept that she was owed notice payment. The Respondent stated that the last of the company cash was used to pay employees up to the week preceding the business closure and that a further payment necessary to pay the last of the wages had been withheld, due to an issue with the company’s tax clearance certificate. As a result the Respondent stated, it did not have the means to pay the wages sought by the Complainant.

The Respondent also stated that this was a transfer of undertakings, that the premises, staff and equipment were taken over as a going concern and that the Complainant’s complaints should be referred to the new operators of the gym. The Respondent stated that the new owners had a meeting with the staff and had notified the Complainant of her redundancy.

There is no dispute as to the fact of the closure of the business. However, the Respondent has submitted that a transfer of undertakings situation pertained. The law on transfer of undertakings is governed by Statutory Instrument 131 of 2003 - European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 which provide, inter alia, that:

“2(1) “transferee” means any natural or legal person who, by reason of a transfer within the meaning of these Regulations, becomes the employer in respect of the undertaking, business or part of the undertaking or business;

“transferor” means any natural or legal person who, by reason of a transfer within the meaning of these Regulations, ceases to be the employer in respect of the undertaking business or part of the undertaking or business;

3.(1) These Regulations 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 …..

(2) Subject to this Regulation, in these Regulations –

“transfer” means the transfer of an economic entity which retains its identity……

4.(1) The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee…

8. (1)       The transferor and transferee concerned in a transfer shall inform their respective employees' representatives affected by the transfer of –

(a)     the date or proposed date of the transfer;

(b)     the reasons for the transfer;

(c)       the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them…….

(3)       The transferee shall give the information in paragraph (1) to the employees’ representatives, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the employees are directly affected by the transfer as regards their conditions of work and employment……..

(5)       Where there are no employees' 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 employees 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 ……”

The matter of whether or not there was a transfer of assets has been considered an important factor by the European Court of Justice. In Oy Liikenne Ab v Liskojärvi [C-172/99 - 2001 -IRLR 171], a case which concerned a transfer involving a bus transport company, the ECJ ruled there had not been a transfer of undertakings as the assets of the business – the buses and garages - had not transferred. 

Having considered this matter carefully, I find that a transfer of undertakings within the meaning of the regulations contained in the European Communities (Protection of Employees on Transfer of Undertakings) Regulations, 2003 (S.I. No. 131 of 2003) did not occur in this case. In this regard I find that:

a)       There was no change of employer. The Complainant sought and was supported by the Respondent in obtaining statutory redundancy. The new business which occupied the premises advised the Complainant that they would not take her on as a contracted employee;

b)      There was no transfer of assets between the Respondent and the new occupier of the premises. The evidence at the adjudication hearing was that both the Respondent and the new occupier of the premises were involved in the gym business which I consider to be asset reliant. The Respondent’s evidence at the adjudication hearing was that the Landlord of the premises had taken control of the assets in lieu of rent and that “the company does not have any funds to pay for a judicial application to regain control of the assets…”;

c)       There was no prior consultation with the Complainant about a transfer of undertakings – on the contrary the picture presented at the adjudication hearing was that the changing of the locks by the Landlord of the premises was sudden and without   notice. In the circumstances, I am satisfied that it was this development coupled with the Respondent’s financial difficulties which precipitated the closure of the business and that this was not a transfer of undertakings situation.

The Respondent has accepted that the Complainant is owed a weeks wages and holiday pay but has disputed her claim for notice payment. Section 1 of the Payment of Wages Act, [1991-2019] defines wages as:

a)      “any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment……

b)      any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice”

Having considered all the evidence adduced at the oral hearing and the submissions, it is my decision that the Complainant’s claims for outstanding wages, holiday pay and notice payment are well founded.

CA – 00030868 – 001

This complaint is a duplicate of CA-00029896-001 on which I have already issued a decision in ADJ-00023394. Accordingly, this complaint falls.

A Worker V A Gym