Complainant

Respondent

Anonymised Parties

Post Office Worker

Post Office Operator

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00030676-001

05/09/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00030676-002

05/09/2019

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00030676-003

05/09/2019

The Complainant was employed at the same location working as a post office worker from 1 December 1997 and continued until the employment was terminated following the retirement of Respondent A as Postmistress on April 12th2019. The Complainant worked two days per week at €175 per week. The core of the issue to be determined in this case and a case brought by the Complainant against another Respondent is whether there was a transfer of undertaking as defined under the regulations known as TUPE from the Respondent in this case, Respondent A to the Respondent in that other case, Respondent B.   Once the matter of whether there was a TUPE is determined, the claims against Respondent A under the Unfair Dismissals and Organisation of Working Time Act can be decided.

This Decision can be read in conjunction with ADJ-00023574 which involves the same Complainant with a different Respondent-B in this case.

Respondent A retired from providing a post office service on April 12th, 2019. The Complainant was out sick in April 2019 and was in fact out on sick leave from June 2018. She continues to be out sick following a separate incident when she was well on the way to recovery from the original cause of her absence. Prior to her retirement, Respondent A had informed both of her employees that when the transfer of undertakings took place her employment would transfer to the Postmaster, Respondent B in ADJ 23574 with the benefit of the same terms and conditions with the applicable statutory provisions (solicitors letter of 25 April 2019 refers). There was no confirmation of the arrangements suggested by Respondent A from B who called to the Complainant’s house on April 12th, 2019 with a letter. In that letter he informed her that TUPE did not apply, that he would not be employing any employees and no assets of the business were transferring from Respondent A to B.

The Complainant found herself dismissed on grounds of redundancy by A if there was no TUPE, as in that case the work for which she was employed by A no longer existed and her workplace was closed. In addition, if her employment was terminated on grounds of redundancy she believed she would be entitled to outstanding holiday pay calculated by application of the Organisation of Working Time Act.

The position of the Respondent A is that there was a transfer of undertakings to Respondent B as defined by the Regulations. Respondent A had operated the post office since 1993 and her mother before that. A had applied for a severance package from An Post and was successful. A new postmaster was appointed-B. Respondent A approached B and informed him about TUPE. She later told her two employees that as this was a TUPE they would be transferring to the employment of B. On the closure of the post office at her premises, equipment, customers, stamps, cash, tv licences, rule book documentation were transferred to B together with all of the software required to conduct the business. The solicitor for A stated that both An Post and the Postmasters Union were agreed that there was a transfer of undertakings.

A stated that on March 9th after she had approached him on the matter, B said that he was not transferring under TUPE, that he had to protect his assets. A was taken aback and then put in place the notification to her own employees that they would be transferring after she had found out what she was required to do under TUPE and gave them 30 days’ notice of the transfer. She had read up on TUPE and consulted the Irish Postmasters Union.

Regarding holiday pay, while the detail of claim was not disputed at the hearing, it was contended that, under a TUPE any liability for unpaid holiday pay passed to the transferee and was not the responsibility of the Respondent in this case.

In consideration of the case made by the Respondent in this case and in ADJ-00023574 and those made by the Complainant, it is found that there was a transfer of undertakings for the purpose of the Regulations of 2003 as between the Respondent in this case and the Respondent in ADJ-00023574. The reasoning behind the finding is set out here.

‘The extent and detail of the submissions on behalf of the Respondent are commendable and have provided much to consider in terms of whether this was in fact a TUPE. Ultimately as reflected in the conclusion to the second submission at paragraph 141 in reference to paragraph 77 of the initial submission, the Respondent hangs their hat on two elements which are commonly considered as part of the examination of the factors in determining whether a TUPE has occurred. Those two factors at paragraph 77 are: a denial of a transfer of assets or any significant assets and no transfer of employees. These two factors require examination. However, these are not the only factors which require exploration, relying on the very extract from Spijkers cited by the Respondent at paragraph 56 of the submission at the hearing:

‘Each claim that a TUPE has not occurred is to be examined not by reference to a factors or factors chosen by one party or the other but by reference to the Regulations which are largely a mirror of the originating EU Legislation and the segmentation of the factors which were developed in that same Spijkers Decision provide a readily accessible set of issues to be considered as part of ‘an overall assessment’ and not in ‘isolation’.

The seven tests set out by Spijkers are as follows and conclusions are set in respect of the application of each one to the current case.

1.      Was the undertaking a stable undertaking, with an ongoing life of its own?

An Post is a State company operating among other services a network of retail outlets through which several of its services and the core purpose of its business are provided. The Company provides services for others such as banking, the collection of fees for TV and dog licences and the distribution of certain social welfare payments. The retail outlets operate the commercial aspect of the core business of An Post, the provision of a postal service. It is understood that each retail outlet operates on a standalone basis. Some of the outlets are operated directly by An Post, the remainder and majority are operated by individuals with whom An Post enters into a contract to provide the service such as the Respondent in this case and the Respondent in the related case. Each person with whom An Post enters into a contract takes on the title of Postmaster of Postmistress as the case may be. Each contracted operator is required to provide their own premises and their own staff.

It is public knowledge that An Post will decide from time to time to reduce the number of their retail operations, that such services have diminished in terms of the number of locations and the volume of transactions in the postal service. It is common knowledge that the Company has engaged with a number of other commercial entities to enable the use the network of post offices to provide their services to ensure the future of the overall economic entity through expanding the range of services provided in post offices.

The conclusion in this case is that the Respondent has all of the characteristics of a franchisee, in this case enabled by and in contract with, An Post. One definition of a franchise is that it is a type of licence that a franchisee acquires to allow them to have access to a business’s proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business’s name. Once this definition is applied to the business operated by the Respondent, then the stability of the undertaking must be seen in the context of the decision of An Post to offer the contract for the franchise to another operator in the same town notwithstanding the retirement of the previous franchisee. And the Respondent who is a business owner took over the franchise in order to operate two very different businesses on the one premises as a business proposition. Essentially, the Respondent is operating a part of a business in his capacity as a franchisee. Accepting that the franchisee does not entirely control the stability of the undertaking the concept of the franchise as part of the business of An Post does have a life of its own and has a stability stemming from a large corporate business. The franchisee, as in franchise operations, does not have the authority or capacity to operate independently of An Post and to this extent does not meet the definition set in the Spikers case where it is required that it would have an ongoing life of its own. However, it is can be viewed as a stable undertaking within the context of the current contract and given the decision of An Post to reissue that contract as recently as 2019 when it is a matter of public knowledge that many of the contracts for operating post offices were not renewed on the retirement or redundancy of thefranchisee in other locations on commercial grounds where the operation was no longer viable on the basis of footfall.

2.      Has the entity retained its identity?

Unequivocally what was post office continues to be a post office and what is understood by a post office and the services provided by a post office under the previous operator continue with Respondent B.

3.      Have some or all of the staff been taken over by the new employer?

 No. From the information available to the hearing one of the employees was offered a position by the Respondent on reduced and different terms and conditions of employment. The Respondent in this case was not offered any employment and therefore could not be taken over by the new employer. If it is decided that there was a transfer of undertakings, then it follows that the Complainant was dismissed by the Respondent. He specifically refused to take her into his employment, and it would be wholly disproportionate to allow for his refusal to take on the Complainant to defeat the purpose of the transfer of undertakings. It is important to stress that this Respondent was on notice from the previous franchisee or employer of his obligations under the transfer of undertakings, yet he made a conscious decision that those Regulations did not apply to him and equally consciously decided not to take on the Complainant. In the context of the overall set of facts allied the facts as they apply to the case, the absence of applicability of this element of the Spikers decision cannot be justifiably used to defeat the Complaint. 

4.      Has the customer base transferred?

The Respondent will say that a number of customers did not transfer to him and chose to do their post office business elsewhere. Nonetheless, it is well recognised that the main customer based for any post office lies within its geographical area and there is no reason to believe that the overwhelming majority of those who availed of the post office service provided by previous operator in one part of the town on a Friday did not then follow the service to the new operator from the following Monday or at some point thereafter. It is reasonable to conclude that a significant proportion of the customer base transferred and in arriving at this conclusion, it is understood that the post office operated by the Respondent is the only post office in the particular geographical location.

5.      Are the activities post-transfer similar to those carried out before the transfer?

Yes. Consistent with the transfer of the identity and the conclusion that it is a franchised operation, a post office provides the range of service dictated by the An Post. The Respondent’s contention that the emphasis on different products and the location of the service, i.e. within a supermarket distinguished his operation from that of the previous operator, does not alter the fundamental activities of a post office albeit there may be a different emphasis or a different approach by an individual operator in different towns depending on the location.

6.      Has there been any interruption of activity?

No, except to the extent that the previous operator did not open on Saturday 10th April 2019. This amounts to a difference of approximately a half day of interruption of the activity. This amounts to a negligible interruption of the activity.

7.      Has there been a transfer of assets?

 By definition a franchisee receives assets from a franchiser. In this case the franchisee was provided with access to the proprietary knowledge, processes and trademarks of the franchiser in order to enable the operation by the Respondent of the An Post service, including the logos, assets for sale in the form of stamps, licences and all of the paraphernalia which is required to provide the postal and ancillary services delivered through the An Post retail network. It is argued by the Respondent that the physical assets in the form of the premises of the previous operator or would be transferor did not transfer to the Respondent. However, the premises in individual contracted post offices does not form part of the An Post business and is not part of the asset base of that business. The operator or franchisee is required to provide the building and therefore there was no physical asset of this nature to transfer.

In contending that the decision of the Labour Court in Mary Dunne v The Minister for Employment Affairs and Social Protection did not apply by way of a precedent, the Respondent contends that the transfer of client files in that case which were deemed to be an asset, marks a significant distinction between the basis of the Labour Court Determination and a significant distinction between the facts in the two cases in defining an asset. It is accepted that hard customer files did not transfer between the previous franchise operator and the Respondent. It is accepted that the small amount of hard assets and come stamps and other documentation which did transfer to the Respondent do not represent a significant asset transferring as between the previous operator and the Respondent. However, the asset in any situation where a private operator is contracted to provide a service on behalf of An Post is access to the central server and system of An Post through which most of the services operate and without which the range of services operated by An Post cannot be provided. The equipment transferred, and any additional equipment and physical assets provided to the Respondent were provided to him by An Post, consistent with the conclusion that this was a transfer by An Post of part of its business from the previous franchisee to the new franchisee, the Respondent in this case. The conclusion is that there was a transfer of assets from one part of the business operated by An Post to the Respondent as a franchisee and the terms of the test set in question 7 of Süzen is deemed to have been met.

Regulation 3 of the Transfer of Undertakings Regulations 2003 is found to apply to this case wherein it is stated at section (2):

“Subject to this Regulation, in these Regulations - “transfer” means the transfer of an economic entity which retains its identity; “economic entity” means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity.”

While not perfectly meeting all of the tests set by Spijkers, the overwhelming conclusion is that there was a transfer of undertakings as defined by the Regulations at section 3(2) of the Regulations from the previous post office operator in the same geographical location, the transferor, to the Respondent in this case as the transferee. This was a transfer where the term second generation transfer applies.’

Based on the forgoing conclusions, it follows the Respondent in this case did not breach the TUPE Regulations, that her liabilities regarding the service and any outstanding entitlement to holiday pay under the Organisation of Working Time Act 1997 transferred to the transferee.

The appeal brought by the Complainant against the Respondent under the Redundancy Payments Act 1967 is not upheld.

The complaint brought by the Complainant against the Respondent under the Organisation of Working Time Act 1997, is not well founded.

TUPE or Eligibility for Redundancy/ Outstanding Holiday Pay