TUD207

1.Appeal of Adjudication Officer Decision Nos: ADJ-00021194 CA-00027819-001/002/003/004/005/006.

BACKGROUND:

2.The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 17 October 2019. A Labour Court hearing took place on 27 November 2020. The following is the Determination of the Court:

DETERMINATION:

Determination

This is an appeal by Kenmare Brewhouse Ltd against an Adjudication Officer’s Decision given under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I.131 of 2003). The Adjudication Officer found that the Regulations had been breached and awarded a total of €8,320. In line with the normal practice of the Court, the parties are referred to in this Determination as they were at first instance. Hence, Ms O’Leary is referred to as the Complainant and Kenmare Brewhouse Ltd is referred to as the Respondent.

Background

The Complainant was employed by a company called Ruskin Concept Ltd from May 2008. On the 20th December 2018 her employment was transferred to the Respondent. The Respondent places the Complainant on temporary redundancy with immediate effect. It is the Complainant’s case that the Respondent did not comply with the requirements of the Regulations and that she was dismissed.

Complainants submission

On the 20^thNovember 2018 the Complainant received a letter from her then Employer Ruskin Concepts Ltd. The letter was addressed to all staff and advised that the premises were in the process of being sold and that the closing date for the sale would be 19^thDecember 2018. The letter went on to say that under the Transfer of Undertakings Regulations the new employer was obliged to take on all the staff . The staff were advised that all holidays due up to the date of transfer would be calculated and paid, and the employees P45 would be given to the new employer. In an around the 20^thDecember the Complainant received a telephone call from the Respondent advising her that she was being made redundant . She had no previous communication from the Respondent in respect of the transfer of her employment.

On the 20^thJanuary 2019 the Complainant submitted an RP77 claim form to progress her redundancy application. The Respondent replied by text message advising that she had been advised that she was on temporary redundancy due to renovations and that when they were completed, she could return to work. The Complainant responded by letter of 25^thJanuary 2019 setting out that she had been advised by one of the Directors of the Company on the 20^thDecember that she was being made redundant and that she should approach Social Welfare. It is the Complainant’s submission neither the Respondent nor her previous employer complied with the requirements of the Regulations. In particular the Respondent did not comply with Regulation 4 in terms of her terms and conditions of employment and regulation 8 in terms of the provision of information and measures that would impact on the Complainant. Contrary to Regulation 5 the Complainant was effectively dismissed with effect from the 20^thDecember 2018. The Complainant commenced in a new employment in April 2019.

Respondents submission

When the Respondent took over the business on the 20^thDecember 2018 it closed the business as it needed to carry out renovations and wanted to relaunch the business as a restaurant and a bar. The Respondent did not dispute that a transfer of an entity as defined under the Regulations had occurred. The Respondent in its submission to the Court stated that the transfer was touch and go until the last minute and therefore they did not have the opportunity to engage with the staff in advance of the transfer. It was their intention to offer all the existing staff a job in the relaunched venture albeit in the case of the Complainant a different role as the role would entail both bar-work and waitressing. The Respondent confirmed to the Court that they did contact the Complainant by phone on the 20^thDecember 2018 to advise her that she was being made temporarily redundant. In the course of the hearing the Respondent clarified that when they said temporarily redundant, they in fact meant short term lay-off. In response to a question from the Court the Respondent confirmed that they had not issued the Complainant with a RP9 form in respect of that lay-off or set out the nature of the lay-off in any written format at the time of the transfer .

On receipt of the Complainants RP77 the Respondent sent a text message to re assure her that she was only temporarily redundant. On the 1^stMarch 2019 the Respondent wrote to all employees that had transferred setting out that they were on a short lay-off, clarifying the nature of the business going forward and asking that the employees let them know if they would be taking up employment with them. The Complainant did not reply.

It is the Respondent’s submission that the Complainant in the course of a casual conversation was offered other work during the lay off period in another establishment but declined same thus failing to mitigate her loss.

The applicable law

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I.131 of 2003) provides as follows:

4. Rights and obligations

• (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.
  (2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.
  (3) Subject to paragraph (4), this Regulation shall not apply in relation to employees' rights to old-age, invalidity or survivors' benefits under supplementary company or inter-company pension schemes that do not fall within the Social Welfare Acts.
  (4)
  (a) The interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under a supplementary company pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to [2018] are protected under those Acts.
  (b) The transferee shall ensure that the interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under a supplementary company pension scheme, other than a supplementary pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to [2018], are protected

5. Dismissals and termination of employment

• (1) The transfer of an undertaking, business or part of an undertaking or business shall not in itself constitute grounds for dismissal by the transferor or the transferee and such a dismissal, the grounds for which are such a transfer, by a transferor or a transferee is prohibited.
  (2) Nothing in this Regulation shall be construed as prohibiting dismissals for economic, technical or organisational reasons which entail changes in the workforce.
  (3) If a contract of employment is terminated because the transfer involves a substantial change in working conditions to the detriment of the employee concerned, the employer concerned shall be regarded as having been responsible for the termination of the contract of employment.
  (4) If a dismissal of an employee, in contravention of paragraph (1), constitutes a dismissal of the employee within the meaning of the Unfair Dismissals Acts 1977 to [2015], relief may not be granted to the employee in respect of that dismissal both under these Regulations and under those Acts.

Section 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

and

(d) any measures envisaged in relation to the employees.

(2) The transferor 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 transfer is carried out.

(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.

(4) Where the transferor or the transferee envisages any measures in relation to employees, he or she shall consult the representatives of the employees, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out, in relation to any such measures with a view to reaching an agreement.

(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 and, in any event, in good time before the transfer, of the following:

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

(b) the reasons for the transfer;

(c) the legal implications of the transfer for the employee and a summary of any relevant economic and social implications for that employee;

and

(d) any measures envisaged in relation to the employees.

(7) The obligations specified in this Regulation shall apply irrespective of whether the decision resulting in the transfer is taken by the employer or an undertaking controlling the employer and the fact that the information concerned was not provided to the employer by the undertaking controlling the employer shall not release the employer from those obligations.

Discussion and Decision.

It is clear to the Court that very little interaction took place between either the transferor or the transferee with the Complainant. This view is reinforced by the lack of written documentation in respect of both the transfer and what the Respondent claims was a temporary lay-off. The initial lay-off was by phone, then a text message was sent about a month later in response to receiving a Form RP77 with a generic email to all staff on the 1st March 2019 almost ten weeks after the transfer had occurred. This appears to be the sum total of the engagement by the Transferee. It is accepted that the Transferor did issue a letter to staff on the 20th November 2018 which met some but not all of their obligations under Regulation 8 (1).

The obligations under the Regulations are clearly set out . Regulation 4 sets out that all rights and obligations arising from a contract shall transfer. This includes the right to be paid, and to be informed if there are issues that will impact on her employment status. There was no engagement before or at the time of transfer with the Complainant other than to place her without notice on what the Respondent describes as temporary redundancy. The Court finds that there was a failure by the Respondent to comply with its obligations set out in Regulation 4.

Regulation 8 requires that employees are provided with information in advance of the transfer. While the Court acknowledges that the process the Respondent was engaged in was fluid right up to the point of transfer this does not negate the requirements set out in the Regulations. Regulation 8(4) specifically address the steps to be taken where the Transferee envisages any measure in relation to the employees. The Court cannot accept that the Respondent only decided on the day of the transfer that it was going to close the business down for a period to renovate it and reopen it as a pub and restaurant. The failure to engage with the complainant in respect of the impact of this on her employment is the most serious of the breaches under Regulation 8. There was also a failure to convey the legal implications of the transfer and to provide a summary of the economic and social implications of the transfer. All of which were highly relevant in this case.

Regulation 5 sets out that a transfer of a business in and of itself does not constitute grounds for a dismissal. In this case the Respondent denies that a dismissal occurred. However, the Respondent accepts that it did not comply with statutory requirements in terms of placing the Complainant on temporary lay-off nor did it comply with the requirement to communicate with the Complainant as set out in the Regulations. Based on these facts the Court finds that the Complainant was entitled to consider herself dismissed with effect from the 20th December 2018. The Court notes that the Complainant took up new employment in April 2019.

It is clear from the submissions of both parties and the oral submissions on the day of the hearing that the Respondent did not comply with the requirements set out in the Regulation, therefore, the complaints are well founded.

In respect of the breach of Regulation 4 the Court awards compensation of €600.

The maximum amount of compensation which can be awarded for a breach of Regulation 8 is capped at 4 weeks’ pay. Having regard to the fact that the Respondent made no effort to comply with its obligations to the Complaint under Regulation 8, the Court directs that it pay the equivalent of 4 weeks’ remuneration in compensation (i.e.€168 x 4 weeks) to the Complainant.

The Court determines that the Complainant was unfairly dismissed and that in all the circumstances of this case it is just and equitable to award the Complainant compensation in the sum of €2,688 which equates to sixteen weeks average salary based on the 2018 P45 provided to the Court. For the avoidance of doubt the total sum awarded to the Complainant is €3,960.

The Court so Determines

The decision of the Adjudication Officer is varied accordingly.

	Signed on behalf of the Labour Court
	Louise O'Donnell
MK	______________________
17 December 2020	Deputy Chairman