Complainant

Respondent

Anonymised Parties

Counter Staff member

Take Away

Representatives

Complainant

Brian Rennick Rennick Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00030349-001

18/08/2019

On the 15th August 2019 the complainant states that she was let go by the respondent’s daughter. She alleges that she commenced work with the respondent in a Takeaway on or about February 2018. She states that she was persuaded to invest in a new Takeaway by her employer and she invested €18,000 in that venture. The complainant commenced employment according to the respondent’s evidence on the 28th January 2019 in the new takeaway. The respondent states that the complainant has no redress under the Unfair Dismissal Act 1977 as amended as she does not possess the requisite 12 months service. Her service was broken when she commenced in the new take-away. The respondent states that the complainant wasn’t dismissed rather she walked off the premises. The two takeaways are separate legal entities. The complainant states she never signed a new contract and her employment continued with the respondent. The complainant mitigated her loss and commenced a new role within a week on comparable terms.

The complainant states that the genesis of the differences between her and the respondent relates to her shareholding in the new venture. Her relationship with the owner deteriorated only when she began to ask questions about her shareholding and about the company’s affairs. Her reasonable and genuine enquiries were simply fobbed off and resisted. The respondent has contrived a disciplinary process; because she was allegedly taking too much cash from the till. The fact is this is how she was told by her manager to pay herself at the end of each shift. She also was told to pay other staff from the till. She only took what she earned for each shift. The allegations made against her by her employer are contrived and spurious. She had no alternative but to leave the shop when she was accused of deliberately interfering with the ordering online system, an allegation she refutes. She was removed from the till, was in fear for her safety and believes that she was dismissed by the respondent’s daughter.

The complainant walked off the premises. She was asked on the day in question not to work the online ordering system as valuable business was lost due to its inexplicable off-line status where no orders were being received. Staff do receive payment in cash; however, they also receive a payslip (evidence from employees affirmed this fact). The complainant had failed to register with revenue until late February 2019. The respondent has made unsubstantiated allegations about cash payments and illegal workers. The business is fully compliant with all revenue and statutory obligations (evidence was provided by the company’s accountants relating to pay records and of hours worked). The respondent did invest in a new takeaway and she also asked for the company accounts; however, both her shareholding and her request for company accounts has nothing to do with this complaint.

The genesis of this claim followed a disciplinary warning given to the complainant for continuing to take cash without authority to do so from the respondent. She was given a warning, she was not dismissed. The account given by the complainant that she was in fear of her safety on the day the ordering machine inexplicably was disconnected is exaggerated. The complainant called the Gardaí and her husband, she states she was frozen and couldn’t move. These were normal work exchanges about carrying out a legitimate task. There was no bullying or intimidation as alleged.

There is no case to answer as the complainant does not have 12 months service as required under the Act. Even if she had the requisite service she wasn’t dismissed, she walked off the job. The complainant failed to exhaust the internal grievance procedures before she walked out and has failed to show that she had no other alternative but to leave her employment.

On the facts the complainant must have known that she was investing in a new company. She invested €18,000 in the new venture. She left the takeaway knowing that she was moving into a new business. The two takeaways have two separate legal entities, they are limited companies.

The complainant became an employee in the new business as well as being a significant shareholder in that business.

The complainant is a very credible and an honest witness. The corporate or company veil that exists between the two companies at face value separates and stops the liability of the new company to the prior service of the employee in the previous company that is also a takeaway business. If that service was reckoned to be continuous it would meet the 12 months service requirement.

On evidence several employees stated they received payslips; however, one employee when cross examined by the complainant, also stated she received cash and no payslip. The complainant answered all questions candidly and even against interest during the hearing. I believe that she was told to take cash from the till for herself and for other employees and on her evidence and that of another employee that was the practice, I find that the disciplinary action commenced, and warning given to her was in fact contrived.

The same employer and manager of the new business and of the previous business, produced an unsigned contract to state that the new employment commenced in February 2019. The complainant states she never received that contract and having regard to the demeanour of the complainant and her candidness, I prefer her evidence.

The genesis of the differences between the employer and employee, on balance, would appear to be the shareholding and investment of €18,000 and the performance of the company and lack of transparency relating to the investment.

The disciplinary process appears to be an attempt to move the complainant out of the business and combined with the exchange on the day in question when the employee was taken away from her duties and the respondent’s daughter tells her to leave, on balance cumulatively these events create circumstances that makes any internal grievance process, (to the person allegedly initiating such oppressive actions), at face value to be compromised.

The key question therefore relates to the company veil that limits the liability of the new takeaway and its liability to service of a previous employment. The respondent when asked to address this matter, stated that while a Group structure might lift the corporate veil relating to litigation; the legal entities in this case were quite separate, had different accountants and solicitors. The shareholders were also not the same. On that basis there could be no compromising of the separate legal personality that exists between the two takeaways.

The employee never received any payslips, she didn’t receive a new contract; however, she was a significant shareholder in the new business. As a shareholder she must have known she was commencing a new employment in a new legal entity, even though the respondent was also her manager and her employer in both employments.

This raises the question of whether the closeness between the two companies creates a relationship where that separate legal personality can be disregarded. In the Law of Private Companies 2nd Edition, Courtney states at p 205:

“First, the separate legal personality of the company may be disregarded merely by looking at its controlling members in order to characterise it, i.e. to attribute to it some characteristic, such as residence, negligence, or mens rea, which cannot comfortably be associated with a purely metaphysical entity having no physical manifestation. In such cases, the legal existence of the company is not ignored, but the separateness of its existence is compromised to the extent that the characteristics of its controllers are attributed to it”.

In the first business the respondent has a 35% shareholding and her husband has a 35% shareholding. In the second business the respondent has a 40% shareholding and the complainant has a 20% shareholding. On the facts of this case, while the separate legal existence of the two companies are not ignored; however, the characteristics of the controller of the two entities are also not ignored as they affect the employment rights of the complainant. Allowing for the controlling characteristics of the respondent in both businesses as controlling manager and member; and by the the complainant moving to one takeaway to another sharing similar names and branding and in reality to the customer appear to be the same chain of takeaways , with no evidence of a new employment contract signed by the complainant and on the evidence a contrived disciplinary process commenced against her; the separate legal personality on the facts of this case are compromised. As a result, I determine that on these facts, the complainant does meet the 12 months service requirement as specified in the Act.

In reality there was no point in the complainant initiating the internal grievance procedure and appealing to the individual who had initiated the alleged oppressive acts against her. The complainant it would appear only began to attract the ire of her employer when she sought information about her investment in the business. On the evidence this appears to have been the genesis of the oppressive actions taken against the complainant. The complainant has met the burden of proof by showing that the unfounded and unreasonable actions taken against her for taking cash from the till, so she could be paid for that shift and to pay other employees as she always had done where not based on a genuine misdemeanour. Also, the unreasonable actions taken against her on the day she left, being removed from her duties allegedly relating for her disconnecting the online ordering machine, taken together, were grounds to leave her employment. On these facts I determine that the complainant’s claim is well founded, and she was unfairly dismissed.

The complainant has indicated that she does not wish to be reinstated or reengaged and has sought compensation. Compensation is to be determined by financial loss (actual and prospective up to 104 weeks) including loss of statutory redundancy, superannuation and where there is no loss an award of up to 4 weeks’ pay can be made having regard to what is just and equitable allowing for the circumstances of the complaint.

The complaint of unfair dismissal is well-founded, and the complaint is upheld. Allowing for the circumstances of this case and the complainant’s preference not to return to her former employer; I determine that an award of compensation to be the appropriate redress. The complainant has mitigated her loss and gained employment after one week. Having regard to her loss of statutory rights such as statutory redundancy and actual loss of one week’s pay I determine the award of compensation to be paid by the respondent is €1800 (eighteen hundred euro).

Constructive dismissal- 12 months service