Complainant

Respondent

Anonymised Parties

A Bar Manager

A Public House

Representatives

Cathy McGrady, BL

Dave Doran, Human Resources Advisor

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-00033726-001

11/01/2020

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

CA-00033726-002

11/01/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00033726-003

11/01/2020

The complainant commenced employment as a manager in the respondent’s public house on December 1st 1999.   His employment was terminated on November 20th 2018, when his previous employer leased the premises to the respondent. However, in early December 2018, the complainant decided to come back to work. He was dismissed by the respondent on January 7th 2020.

Following differences regarding what he considered to be a staff shortage at Christmas 2019, the complainant threatened to resign. In the end, on January 3rd 2020, he was given notice of the termination of his employment and he finished up on January 7th 2020. His case is that his dismissal was unfair or, in the alternative, that his job was made redundant and he is entitled to a redundancy lump sum. The respondent’s case is that the complainant resigned.

On behalf of the complainant, Ms McGrady argued that his employment is continuous from December 1st 1999 and that he transferred to the respondent’s business in accordance with the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (TUPE). On this basis, she claims that he has 20 years of continuous service.   The respondent’s position is that the complainant left his job on November 20th 2018 and that his employment with the new entity commenced on December 3rd 2018.   If this position is correct, then, when the complainant’s employment was terminated, he had just over one year of service.

The complainant claims that he was unfairly dismissed, and he is seeking redress under the Unfair Dismissals Act 1977. In the alternative, he claims an entitlement to a redundancy lump sum, in accordance with the provisions of the Redundancy Payments Act 1967, taking account of his service since December 1999. To address all of the issues raised in these complaints, I will proceed in the following sequence:

1.              The evidence of the respondent;

2.              The evidence of the complainant;

3.              The application of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (TUPE);

4.              Summary of the respondent’s position regarding the claims under the Unfair Dismissals Act and the Redundancy Payments Act;

5.              Summary of the complainant’s position;

6.              Findings and decision concerning the complaint under the Unfair Dismissals Act 1977;

7.              Findings and decision concerning the complaint under the Redundancy Payments Acts 1967;

8.              Findings and decision concerning the complaint under the Terms of Employment (Information) Act 1994.

The proprietor did not provide a written submission and his case that the dismissal of the complainant was not unfair is grounded on his direct evidence. For convenience, I will refer to the proprietor as “Mr P.”

Following his retirement from the hotel business, Mr P was approached by the owner of the pub who asked him to consider taking a lease on the premises with a view to purchasing it in the future. Before he commenced trading, he said that the previous owner told him that the assistant manager was leaving and that he would come to an agreement with the manager, the complainant in this case.

On November 20th 2018, Mr P was introduced to the complainant by the previous owner who told the complainant that he had agreed to lease the pub to Mr P. He said that the complainant had a long discussion with the previous owner’s accountant and he finished up that day. Mr P understood that he had a job lined up in another premises.

About two weeks later, Mr P said that he was contacted by the previous owner who informed him that the complainant hadn’t got another job and that he wanted to come back to work.   Mr P agreed that the complainant would return to his job as a manager on the same terms and conditions as he enjoyed with his previous employer. He went back on the same weekly pay of €1,206 per week. In an email from Mr Doran following the hearing, he said that the complainant returned to work in the pub on December 3rd 2018, but that there was no continuation of employment from his job with the previous owner.

During the course of 2019, Mr P said that he questioned the complainant about the wage bill in the pub, which he said was out of line with expected costs. When he challenged the complainant, Mr P said that he responded by threatening to leave, but that he generally changed his mind and remained working. He said that this occurred at least twice during 2019.

Mr P said that he went to the pub on the evening of Friday, December 20th 2019, which he expected to be one of the busiest nights of the year. He found that a bingo tournament was in progress, which, in his view, was not the kind of event he expected to see on the Friday before Christmas. He said that the complainant’s wife ran the bingo, which was normally held on Tuesdays.   When he arrived in the pub, Mr P said that the complainant approached him shouting, “disaster! disaster!” He complained that the bingo players couldn’t hear the numbers being called out because there were too many people in the bar. He said that he announced that he was leaving and that he would finish up at Christmas.

Mr P said that he decided that he would take on the manager’s job himself and he met the complainant in a different pub on Sunday, December 29th and informed him of this decision. He met him again on Friday, January 3rd, to discuss a handover. On Saturday, January 4th however, when he went to the pub, the complainant asked to speak to him and told him that he wasn’t happy and that he wanted to be made redundant. Mr P said that he responded that redundancy was a matter for the previous owner.

A final meeting took place on Tuesday, January 7th 2020. The complainant was accompanied by his daughter, who works as a payroll officer in another company. The complainant again asked for a redundancy payment. Mr P said that he told him that he had broken his service in November 2018 and that redundancy was a matter for the previous owner.

Cross-examining of the Proprietor

Mr P said that he didn’t consult with the staff in the pub before he took over in November 2018.   He accepted that the complainant returned to work in December and that, in the following months, he regularly complained of being short-staffed. Mr P agreed and that he had constant discussions with the complainant about the rosters.

On the night of Friday, December 20th, Mr P said that, as a result of the crowds in the pub interrupting the bingo, the complainant said, “I’ve had enough, I’m finishing up at Christmas.”

Mr P said that he met the complainant on Sunday, December 29th to talk about him finishing up and holiday pay. He said that the complainant said, “I’ll finish on Friday week, January 10th. Make sure you have my money ready.”

Mr P agreed with Ms McGrady when she said that, on January 3rd 2020, he informed the complainant that he would take on the job of manager and run the pub himself.   In his evidence, Mr P recalled that the complainant asked about holiday money and he also looked for redundancy pay. Mr P disagreed with Ms McGrady’s assertion that a redundancy situation existed and he said that the complainant resigned on December 20th.

Ms McGrady referred to the meeting on January 7th with Mr P and his accountant, and the complainant and his daughter. Ms McGrady asked Mr P if he accepted that the complainant intended to go to work after the meeting, but Mr P replied that the whole focus of the meeting was on redundancy.

Mr P said that when the complainant left, he took over as manager of the pub.

At the opening of the hearing, in response to questions from me, the complainant said that, when the pub was leased to Mr P, he got a P45 from the previous owner. This shows that his last day of work with his former employer was November 20th 2018. He said that the previous owner gave him €10,000 in two separate cheques of €5,000 each in November 2018 and February 2019.

The complainant said that he got a phone call from Mr P in December 2018, and he asked him to come back to work. It is the complainant’s case that he transferred to the employment of the respondent under the TUPE Regulations, in the same role that he had with his previous employer. If he was asked where he was from November 20th, the complainant said that Mr P advised him to say that he had been on holidays. The pub was described as a busy venue and the complainant frequently complained to Mr P that it wasn’t feasible for him to manage it on his own.

In his direct evidence, the complainant recalled the night of the Friday before Christmas, December 20th which he said was a traditional night for the “monster bingo.”   He said that Mr P arrived around 10.00pm. He said that he called Mr P out into the hall and told him that if the staff shortage problem wasn’t resolved that he would leave after Christmas. He said that the business consisted of a bar, a lounge, an off-licence and a smoking area and he managed four employees. He said that it was too much for one person to manage.

The complainant recalled that, at the meeting with Mr P on January 3rd, Mr P said that he couldn’t afford to employ him and that he would take over the management of the pub himself. The complainant said that he asked him when this change would occur. The complainant said that Mr P made a phone call and then came back and said that he should finish up on January 10th. He also said that he would get rid of the bingo and the security officer.

On Saturday, January 4th, when he was at work, the complainant said that he spoke to Mr P and told him that he wanted a redundancy lump sum and eight weeks’ notice.   He said that Mr P said, “did you not say that you were leaving?” He also said that Mr P responded to his request by saying, “leave it with me.”

At the meeting on January 7th, when the complainant was accompanied by his daughter, the complainant said that Mr P insisted that he had handed in his notice on December 20th. Following a discussion with his accountant, Mr P told him that he was finishing that day.   The accountant said that he had broken his service and that he wasn’t entitled to redundancy.

It is the complainant’s case that he did not give notice of his intention to resign on December 20th and that he did not resign at all.

Regarding his claim that he did not receive a statement of the terms and conditions of his employment, the complainant said that he did not receive any such statement from his previous employer or from the respondent.

Evidence of the Complainant’s Daughter

The complainant’s daughter said that her father came home from a meeting with Mr P on January 3rd at which he said that he was told that Mr P could no longer afford to employ him. She said that Mr P had told her father that he was sorry to see him go but that he couldn’t afford to keep him. She gave evidence regarding the meeting she attended on January 7th, which concurs with the information provided by the complainant.

Evidence of a Former Barman

At the end of the hearing, one of the pub’s former employees also gave evidence for the complainant.   He was at work in November 2018 when he was informed, after he returned from lunch one day, that the pub had been taken over by a new owner. He said that, in his view, the pub was under-staffed.   He recalled the night of December 20th 2019, when Mr P informed him that the complainant was upset.   He said that there was no mention by Mr P of the complainant resigning.

The Complainant’s Position

On behalf of the complainant, Ms McGrady sent a supplemental submission to the WRC on September 10th 2020. While there is no specific complaint before me concerning a breach of the TUPE Regulations, the complainant argues that, in accordance with these Regulations, his job transferred to the respondent in November 2018. In support of this position, Ms McGrady referred to the following precedents:

Cloghan Liath Pub Limited v Margaret Doyle, UDD1943

Here, the Labour Court considered the law in relation to the transfer of an undertaking and noted:

“Applying these principles, it would seem that the Regulations apply to the granting, terminating, surrendering or assigning of a lease where the business is intrinsically linked to the property and where the business changes hands but continues to be run essentially as the same business.”

Further in this decision, the Chairman, Ms Jenkinson, referred to the case at the Court of Justice of the European Union (CJEU) of Schmidt Spar und Leibkasse der Fruheren amter Bordersholm Case C – 392192. Here,

“…the Court identified the decisive criterion for establishing whether there is a transfer:-

“…is whether the business in question retains its identity…the retention of that identity is indicated inter alia by the actual continuation or resumption by the new employer of the same or similar activity.”

Ms McGrady submitted that the Clochán Liath case has direct application to the case under consideration here because a lease was assigned to the respondent who continued to trade in the same property, as the same business under the same name. The former barman gave evidence that, one day in November 2018, when he returned from his lunch, he was informed that the pub had a new owner and he simply went back to work. Although at that time, the complainant was informed by the previous owner that there was no job for him, Ms McGrady said that “this was manifestly not the case, evidenced by his return to his position within two weeks thereof, and the agreement, undisputed at the hearing, that this period would be treated as holidays.”

In Clochán Liath, the pub was closed for six weeks and the complainant, Ms Doyle was out of work for that period; however, the Labour Court was satisfied that the respondent became her employer following the transfer of the lease. In the case we are considering here, the complainant received a payment from the transferor, which Ms McGrady described “…as an expression of gratitude, it was in the nature of a gift and was too small to be considered as a redundancy payment.” Ms McGrady submitted that this payment and the complainant’s absence of two weeks did not break his service. The continuity of the complainant’s employment is specifically provided for at schedule 3(6) of the Redundancy Payments Act (as amended):

“Where a trade or business or an undertaking (whether or not it be an undertaking established by or under an Act of the Oireachtas), or part of a trade or business or of such an undertaking, was or is transferred from one person to another, the period of employment of an employee in the trade, business or undertaking (or in the part of the trade, business or undertaking) at the time of the transfer shall count as a period of employment with the transferee, and the transfer shall not break the continuity of the period of employment.”

While there is no claim to be adjudicated upon here regarding the complainant’s entitlements under the TUPE Regulations, the issue of continuous service from the date of his commencement with the owner of the pub in 1999 is significant, particularly from a redundancy perspective. For this reason, I must consider if the TUPE Regulations apply to the transfer of the complainant’s employment to the respondent in December 2018.

The Legal Framework

The relevant law is Statutory Instrument 131/2003 – the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003. This transposes the European Directive 2001/23 “on the approximation of the laws of the member states relating to the safeguarding of employees’ rights in the event of transfers of undertakings or businesses or parts of undertakings or businesses.”   Article 3(1) of the directive provides that,

“The transferor’s rights and obligations arising from a contract of employment or an employment relationship, existing on the date of a transfer, shall, by reason of such transfer, be transferred to the transferee.”

Liability in this Case

From the evidence of the complainant, it appears that, although he was informed on November 20th 2018 that the owner was about to lease the pub to the respondent, no consultation of any substance took place and he was never informed of his rights at the time of the transfer of the business. With a promise of a “gift” of €10,000, the complainant decided not to continue working with the new leaseholder. The evidence of both sides is that two weeks later, he changed his mind and resumed working in the same job that he had with his previous employer.

I have considered the intention of the legislation and the jurisprudence of the CJEU cited by Ms McGrady. I note the decision of the Labour Court in the Clochán Liath case, that “the Regulations apply to the granting, terminating, surrendering or assigning of a lease where the business is intrinsically linked to the property and where the business changes hands but continues to be run essentially as the same business.” It is my view that what occurred on November 20th 2018 when the owner of the pub leased it to the respondent, is as near to a textbook example of a transfer of an undertaking as it is possible to get.

I accept that there was some prevarication at first, when the complainant decided that he wouldn’t continue in employment, and that he changed his mind two weeks later. The important fact is, that, when the pub was leased by the owner, the complainant (with the other employees) was entitled to transfer to the employment of the respondent. In the end, two weeks after the transfer took place, with the respondent’s agreement, this is precisely what he did.   The effect is that, at the termination of his employment on January 7th 2020, his employment was continuous from December 1st 1999.

The 2003 Directive provides that member states may create a continuing liability on the Transferor, post-transfer; however, this has not been transposed into Irish law in SI 131/2003. As a result, the basic principle in Article 3 of the Directive that liability passes from the Transferor to the Transferee is the applicable law in Ireland.

In the decision of the Court of Justice of the European Union (CJEU) in Berg v Besselsen IRLR 447, the Court referred to the option of member states to enact legislation to include the Transferor in ongoing liabilities under a contract of employment; but, where this has not happened, the Court stated:

“It follows that, unless the Member States avail themselves of this possibility, the transferor is released from his obligations as an employer solely by reason of the transfer…”

Having considered the effect of this of the legislation, I find that, on the date of the transfer, November 20th 2018, all liabilities under the complainant’s contract of employment passed to the Transferee, who is the respondent in this case.

The respondent’s position is that the complainant was not dismissed, but that he resigned on the evening of December 20th 2019, when Mr P arrived in the pub when the Christmas “monster bingo” event was in progress. Mr P recalled that the complainant said, “I’m leaving.   I’ll work up ‘til Christmas because you were decent to me.”

From the time that he took over the pub, Mr P said that the cost of labour was too high and he was unhappy with the rostering arrangements. He claims that the complainant’s claim for a redundancy payment was a matter for his previous employer. His position is that the complainant’s service commenced when he returned to work on December 3rd 2018. On this basis, as an employee with less than two years of service, the respondent’s case is that he has no entitlement to a redundancy lump sum.

The complainant’s submission states that on the night of December 20th, the pub was very busy during the “monster bingo” event. The complainant was concerned and frustrated about the staffing levels and he complained to Mr P that “this is far too much for one man.” He claims that he said that if the situation wasn’t sorted out, he would be “out of here after Christmas.” The complainant denies that those words constituted a resignation. In accordance with the unrebutted evidence of the former barman, following this conversation, Mr P made no reference to the complainant resigning, but told the barman that he was upset.

At the meeting with Mr P on January 3rd, the complainant recalls that Mr P told him that he would run the pub himself, because he could no longer afford to employ him. He also mentioned cost-saving measures such as ceasing the bingo nights and cancelling the security on the door. The complainant said that he was shocked and upset at this news. In light of this, the following day, the complainant said that he asked Mr P about redundancy pay and eight weeks’ pay in lieu of notice. Mr P responded that it was his understanding that the complainant resigned on December 20th, but the complainant disagreed, saying he didn’t give notice of his resignation.

The final meeting between the complainant and Mr P took place on Friday, January 7th 2020.   The complainant was accompanied by his daughter and Mr P brought his accountant with him. The complainant said that he was ready to go to work after the meeting. Mr P repeated his belief that the complainant had given him notice of his resignation on December 20th and the complainant repeated that he hadn’t resigned.

In this regard, the complainant’s supplemental submission refers to the Labour Court decision in the case of Charles Shinkwin v Donna Millett, EED044, where, considering the law applicable to resignations, the Court noted that,

“A resignation is a unilateral act, which, if expressed in unambiguous and unconditional terms, brings a contract of employment to an end.”

Ms McGrady said that the words spoken by the complainant on the evening of December 20th 2020, were ambiguous and conditional and did not constitute a resignation. Her submission refers to paragraph 22.22 of “Redmond on Dismissal Law” by Dr Desmond Ryan, (© Bloomsbury 2017), which notes that, in relation to resignation,

“… context is everything. A resignation should not be taken at face value where, in the circumstances, there were heated exchanges or where the employee was unwell at the time.”

Accordingly, the complainant submits that he did not resign, but that he was dismissed.

On January 7th 2020, following a discussion between Mr P and his accountant, the complainant was informed that he was “finished immediately” and that he would receive four weeks’ pay. In his final payslip, the complainant received a payment for holidays not taken, one week’s wages, a week’s wages in arrears and payment for public holidays.

The complainant’s case is that, if his dismissal was not an unfair dismissal, his employment was terminated by reason of redundancy. He makes this argument because, at a meeting with him on January 3rd 2020, the respondent said that he couldn’t afford to keep him on and he would take over the manager’s job himself.

It is clear from the complainant’s evidence that he was fed up trying to manage the pub in the absence of an assistant manager, and that he felt that it was “too much for one man.” On the evening of December 20th 2019, he said that, unless things changed, he would be “out of here after Christmas.”

The evidence of the respondent is that the complainant threatened to leave a couple of times over the previous year, particularly following discussions about labour costs and rosters. I find it difficult to accept therefore, that his statement on December 20th, that he would be “out of here after Christmas,” which was delivered when he was upset, could be considered any more definitive than his previous threats. The complainant’s “I’ll be out of here after Christmas,” spoken in frustration and never committed to writing, cannot, in my view, be considered as notice of his intention to resign. I further find that, If Mr P had been certain that the complainant resigned on December 20th, then, on January 3rd, there would have been no need to tell him that he couldn’t afford to keep him on.

At section 22.13 of “Redmond on Dismissal Law,” a text referred to by Ms Grady in relation to resignation, the author, Dr Ryan, refers to the general understanding of dismissal:

“In general a person is dismissed when the employer informs him clearly and unequivocally that the contract is at an end or if the circumstances leave no doubt dismissal was intended or that it may be reasonably inferred.”

By telling him that he couldn’t afford to keep him on and that he would take on the job of managing the pub himself, the respondent “clearly and unequivocally” informed the complainant that his employment was at an end. It is my view that the reason that the complainant was dismissed was because of the fact that the cost of labour in the pub was out of line with what the respondent expected to pay and what he thought he could afford.   The complainant’s dismissal was not in response to any action or conduct on his part, but was associated with the fact that his job was eliminated. All of the facts point to the respondent having terminated the employment of the complainant due to redundancy.

I have decided that the complainant’s employment was terminated due to redundancy and, in the next section of this document, I have reached a finding on his complaint under the Redundancy Payments Act 1967. I decide therefore, that his complaint under the Unfair Dismissals Act does not succeed.

The circumstances in which an employee may claim a redundancy lump sum are set out at section 7 of the Redundancy Payments Act 1967 (amended) and can be summarised as follows:

(a)The business has closed or the place where the business was carried out has changed;

(b)There is a requirement for fewer employees in the business or at the place where the business was carried out;

(c)The employer has decided that the work that that was done by the employee could be done by fewer or no employees;

(d)The job will be done in future by a person who is more qualified or trained than the employee;

(e) The job will be done by a person who is also capable of other work that the employee is not qualified or trained to do.

In his evidence, the respondent said that he was concerned throughout 2019 about the high cost of labour in his pub. It seems that he decided that the most effective way of addressing this problem was by terminating the employment of the most expensive employee, the manager.

It is my view that the termination of the complainant’s employment falls within the parameters of the circumstances set out at (b) and (c) above, where the employer decided that there was a requirement for fewer employees and that the work that was done by the complainant should be done by no employee, and by him taking on the role of manager himself.   The effect is that the job of the complainant was eliminated, or became redundant. I am satisfied that the complainant’s employment was terminated by reason of redundancy and that, in accordance with the provisions of the TUPE regulations, liability for his redundancy lump sum falls on the transferee, the respondent in this case.

I have concluded that the complainant’s employment was terminated due to redundancy. Subject to his PRSI contribution status, I have decided that, in accordance with section 7 of the Redundancy Payments Act, he is entitled to a statutory redundancy payment, based on his service from December 1st 1999 until January 7th 2020.

The complainant said that he never received any document in writing setting out the details of his terms and conditions of employment. The respondent did not dispute this evidence. It is apparent therefore, that no statement concerning his terms and conditions of employment was issued to the complainant by the respondent. I accept that the complainant never requested such a statement.

Section 3 of the Terms of Employment (Information) Act was amended by the Employment (Miscellaneous Provisions) Act 2018, resulting in a new obligation on employers to provide a written statement of certain terms and conditions of employment within five days of an employee’s start date. The amendment came into effect with Statutory Instrument 69 of 2019 on March 4th 2019. In the case of this complainant, he commenced work with the respondent in December 2018. Therefore, the un-amended provisions of section 3 of the Act apply and he was entitled to a written statement of his terms and conditions within two months of his start date. Generally written up in the form of a contract, these statements are to include the following:

(a) The name of the employer and the employee;

(b) The address of the employer;

(c) The place of work, or, where there is no fixed place of work, the statement must specify that the employee is required to work at various places;

(d) The job title or the nature of the work that the employee is required to carry out;

(e) The date that the employee commences in the job;

(f) If the contract is temporary, the expected duration, or if the contract is for a fixed-term, then the end date of the fixed-term;

(g) The rate or method of calculation of the employee’s pay;

(h) The frequency of pay;

(i) Any terms or conditions relating to hours of work (including overtime);

(j) Any conditions relating to paid leave (other than paid sick leave);

(k) Any terms or conditions relating to –

       (i) Incapacity for work due to sickness or injury and paid sick leave;

       (ii) pensions and pension schemes;

(l) The notice that the employee is required to give and the notice that he or she is entitled to receive at the termination of their employment;

(m) Details of any collective agreement which affects the employee’s terms and conditions of employment.

The respondent in his case availed of the assistance of a human resources specialist and it is unlikely that he was unaware of his legal responsibilities to this employee regarding his entitlement to a written statement setting out his terms and conditions of employment. The effect of not providing such a statement means that the employment relationship is tarnished with uncertainty and it is difficult for the employee to assert his rights during, and at the termination of his employment.  

I refer to the Labour Court decision in the case of Megan Hayes Kelly and Beechfield Private Homecare, DWT 1919, where Ms Hayes Kelly claimed that her employer was in breach of the Terms of Employment (Information) Act because there were omissions and errors in her contract of employment. In his determination on the case, the Chairman of the Court, Mr Haugh, considered the errors and omissions to be “at the serious end of the spectrum” and awarded the maximum of four weeks’ pay in redress. As the failure to issue any statement of terms and conditions of employment must be considered to be more serious than issuing an imperfect statement, I must follow the authority of the Labour Court and make the maximum award in the case under consideration here.

The complaint under the Terms of Employment (Information) Act 1994 is upheld and I therefore decide that the respondent is to pay the complainant €4,825 in compensation, equivalent to four weeks’ pay. This award is by way of compensation for a breach of a statutory entitlement and is not taxable.

Unfair dismissal, redundancy, alternative to unfair dismissal, statement of terms and conditions of employment