Complainant

Respondent

Parties

Michael  Murphy

Fastnet Recruitment Ltd

Representatives

  Appeared In Person

 Human Resource Manager

Act

Complaint Reference No.

Date of Receipt

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

CA-00044384-001

27/05/2021

This matter was heard by way of Remote Hearing pursuant to Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and SI 359/2020, which designates the WRC as a body empowered to hold remote hearings.

On May 27, 2021, the Complainant, a Lay Litigant submitted a claim which declared that he had not received a lump sum redundancy payment on conclusion of his employment on 21 June 2020.

The claim is denied by the Respondent.

Both parties made written and oral presentations. The Complainant gave evidence in his own case. The Managing Director of the Respondent business gave evidence.

At the conclusion of the hearing. I requested that the complainant furnish me with a copy of the contract of employment he received on commencing with the new company on June 22, 2020. I received this and shared it with the Respondent for comment.

The Respondent furnished their response which was received on 25 August 2021.

Both parties considered their positions regarding the Supreme Court case of Zalewski v Adjudication Officer [2021] IESC   24 and confirmed they wished to press ahead with the case.

The Complainant outlined that he had worked continuously with the Respondent Employment Agency from 11 February 2016 to 21 June 2020. He had enjoyed positive employee relations during this time.

On March 19, 2020, he informed that he was to be made redundant on June 23, 2020, in response to a diminution of shifts.

On 23 June 2020, you will be entitled to a redundancy payment ………You will receive a breakdown of your redundancy calculations closer to your end date

This was followed by a further communication dated 12 June ,2020 which informed him that he would not receive a lump sum redundancy payment.

As you know, your contract with X will commence from June 22, 2020, therefore your contract with the Respondent will come to an end officially as of the week ending June 21. As your role will remain in existence, and you will be continuing in employment with X, you will not be entitled to a redundancy payment.

The Respondent committed to support the complainant on transfer.

The Complainant is seeking a lump sum redundancy payment, which he understood would flow on the conclusion of his employment with the Respondent.  He does not accept that the circumstances of the case mirror a transfer.

The Complainant commenced new work on 22 June 2020 with the base company, where he had previously worked.

Evidence of the Complainant

The Complainant outlined that he had been one of 5 workers who had been successful at interview for permanent positions in the company in which the Respondent had previously placed him as an Agency Operative.

He submitted that a number of this cohort had successfully lodged claims for redundancy before the WRC. He argued that his case was identical to these. He cited ADJ 28844.

The Complainant outlined that in March 2020, he had received notice of redundancy, resulting from diminution of shifts to occur on 23 June 2020.

During April 2020, he attended an interview for an advertised permanent position in the company where he had been placed. Interviews were hosted by the base company Human Resource Dept. He was one of 5 successful candidates at interview. The remaining 8 workers were made redundant due to the reduction of shifts from 4 to 3.

Thirteen of the Respondent staff had been interviewed in anticipation of the shift cycle changing for 4:3 in a 24-hour period.

The Complainant argued that the respondent was on record as committing to a redundancy payment on the cessation of his employment. He submitted that his commencement in direct employment should not interrupt this commitment to pay redundancy.

The complainant confirmed that he had interviewed for direct employment at a company which was separate and distinct that that of the Respondent. He had made a seamless transition, receiving cesser annual leave. The position was a new start on June 22.

He confirmed that he had spoken with the Respondent Human Resource Manager within a week of receiving the June 12 communication.

The Respondent did not avail of the opportunity to cross examine.

The Respondent operates an Employment Agency. On June 11, 2021, the Respondent filed some documentation in respect of the claim for Redundancy.

1         December 2018. Specific purpose contract letter

2         December 2019 Extension

3         March 2020 Letter to the Complainant on anticipated conclusion of his employment on 23 June 2020.

4         June 2020     Communication to the Complainant, which withdrew notification of redundancy.

The Respondent Human Resource Manager gave evidence by affirmation and accepted the chronological background outlined by the Complainant, at hearing. The Respondent had placed several workers at a base company over a 4-shift system. This system was set to be reduced to 3 shifts in June 2020. There were no opportunities foreseeable at that time.

The Respondent had worked with the base company in the background to support the eventual process of interviews for direct employment, which unfolded.

 Five of the cohort were hired and 8 made redundant.

The Respondent submitted that the complainant’s acceptance of the new position negated any claim for redundancy.

The Respondent denied that a dismissal occurred or that the complainant had been made redundant.

The Complainant had brought his years of service with him to the new position. He resigned voluntarily from his position at the respondent company.

The Respondent argued that the complainant had no economic loss on consensual transfer.

The Respondent argued application of section 9(3) and 10 of the Redundancy Payments Act and re-affirmed that the Complainant had agreed to transfer.

Evidence of Managing Director by affirmation  

This was the first appearance by the Company at WRC in 21 years of trading. The Respondent had not dismissed the complainant as he had left prior to the intended dismissal. This had been a good news story, where the complainant had been spared dismissal through collaboration with the base company.

During cross examination, the Managing Director outlined that the complainant was distinguished from the staff paid redundancy through his break in service. 

The Respondent concluded that an amicable employment relationship had ended in a difference of opinion. It was clear that the Respondent had collaborated with the base company which resulted in offers of direct employment, where redundancy had no application.

I have been asked to make a decision on this claim for a lump sum redundancy payment in accordance with the Redundancy Payments Act, 1967. In reaching my decision, I have taken account of all written and oral submissions. I have also had regard for the evidence adduced.

I fully accept that the parties approached this case on foot of a successful employment relationship over a 4-year period. However, the complainant has now presented a claim for redundancy, which has been disputed by the Respondent. The Complainant has asked that I consider his entitlement to the lump sum payment on the growing cohort of successful claims already heard at WRC. He named ADJ -00028844, which it appears had not been appealed through the Higher Courts. I explained that I was obliged to make a decision on the unique facts as presented in each individual case.

Redundancy is based on “impersonality and change”.  St. Ledger v Frontline Distributor UD 56/1994. The EC Directive on Collective Redundancies records that Redundancy should be marked by “one or more reasons not related to the individual worker concerned. “

To succeed in a claim for Redundancy, a complainant must prove dismissal.

Section 7, Redundancy Payments Act, 1967 provides:

7. General right to redundancy payment

(1) An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided—

(a) he has been employed for the requisite period, and

(b) he was an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts […], immediately before the date of the termination of his employment or had ceased to be ordinarily employed in employment which was so insurable in the period of [four] years ending on that date.

In Keenan v Gresham Hotel, UD 478/1988, the EAT stressed the bond between circumstances outlined in S. 7(2) of the Act and Redundancy and stressed that the diminution of work arising

“Must be expected to occur at or within a very short time after the time of the alleged redundancy, as otherwise an employer who merely expects that his requirements for employees to do work of a particular kind may diminish at some distant time in the future could greatly reduce the redundancy entitlements of such employees by serving R21 forms on them prematurely”.

Section 7 (2) provides that:

2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if [for one or more reasons not related to the employee concerned] the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

[(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

In the instant case, the complainant received an extension of a specific purpose contract on 20 December 2019. This extension was presented as a “reason for not offering a contract of indefinite duration “and was due to “the specific purpose of the respondent providing temporary resourcing to the base company, 4 shifts, 24-hour pattern) “.

This was followed by a notification of redundancy dated 19 March 2020. The Complainant recorded that he had read, understood and accepted the letter which stated that he would be entitled to a redundancy payment on 23 June 2020.

Both parties accept that the complainant went on to secure direct employment at the base company with a start date of June 22, 2020, one day short of the flagged date of redundancy. The parties differ on the role each played in this new employment. The Respondent argued that they were influential in the complainant’s appointment by a behind the scenes collaboration. The Complainant argued that he attended an interview and was selected outside the presence of the respondent.

A careful reading of the 12 June communication between the parties, allows me to conclude that the respondent placed the complainant on notice of his termination of employment. I did not have sight of a standalone resignation by the complainant; however, resignation was not disputed.

The Respondent added that “as your role will remain in existence, and you will be continuing in employment with the base company, you will not be entitled to a redundancy payment “

The Respondent prepared the complainant for what they believed to be a straightforward transfer and offered to discuss any queries the complainant may have.

I established that the parties engaged one week after this email, but the decision to change the pathway of redundancy was not contested at that time. I would have preferred to have seen a direct engagement at that time. It would have been a fair and timely approach to a disagreement. This claim came before the WRC almost a year after the employment had concluded and was not prefaced by local engagement.

A dismissal for the purposes of the Redundancy Payments Act is outlined in Section 9.

Section 9, Dismissal by employer

(1) For the purposes of this Part an employee shall, subject to this Part, be taken to be dismissed by his employer if but only if–

(a) the contract under which he is employed by the employer is terminated by the employer, whether by or without notice, or

[(b) where, under the contract under which the employee is employed by the employer the employee is employed for a fixed term or for a specified purpose (being a purpose of such a kind that the duration of that contract was limited but was, at the time of its making, incapable of precise ascertainment), that term expires or that purpose ceases without being renewed under the same or similar contract, or]

(c) the employee terminates the contract under which he is employed by the employer [ …] in circumstances (not falling within subsection (5)) such that he is entitled so to terminate it by reason of the employer's conduct.

(2) An employee shall not be taken for the purposes of this Part to be dismissed by his employer if his contract of employment is renewed, or he is re-engaged by the same employer under a new contract of employment, and—

(a) in a case where the provisions of the contract as renewed or of the new contract as to the capacity and place in which he is employed, and as to the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract, the renewal or reengagement takes effect immediately on the ending of his employment under the previous contract, or

(b) in any other case, the renewal or re-engagement is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract and takes effect either immediately on the ending of that employment or after an interval of not more than four weeks thereafter.

(3)

(a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if–

(i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment,

(ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer,

(iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which–

(A) sets out the terms and conditions of the employee's contract of employment with the new employer,

(B) specifies that the employee's period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer,

(C) contains particulars of the services mentioned in clause (B), and

(D) the employee notifies in writing the new employer that the employee accepts the statement required by this sub-paragraph.

(b) Where in accordance with this subsection an employee is re-engaged by the new employer, the service of that employee [with the previous employer] shall for the purposes of this Act be deemed to be service with the new employer.

(4) For the purposes of the application of subsection (2) to a contract under which the employment ends on a Friday, Saturday or Sunday—

(a) the renewal or re-engagement shall be treated as taking effect immediately on the ending of the employment under the previous contract if it takes effect on or before the next Monday after that Friday, Saturday or Sunday, and

(b) the interval of four weeks mentioned in subsection (2)(b) shall be calculated as if the employment has ended on that Monday.

In the instant case, the Respondent submitted   that the complainant had taken his service with him for incremental credit   reasons on moving to the direct employment. However, they applied cesser pay in terms of annual leave. Therein lies a certain ambiguity.

I can appreciate that the respondent was influential in securing the opportunity of direct employment for the complainant and that it was indeed, “a good news story “However, I am also satisfied that the respondent did not comply with the exacting requirements provided for in Section 9(2) and S. 9(3) on constructing a multi-party consensus to new employment.

 I have reviewed the contract pertaining to the new employment and accept that it is a separate and distinct document to the fixed term contracts issued by the respondent business. I am also mindful of the application of cesser pay as provided for in Section 23 of the Organisation of Working Time Act, 1997 as a clear indication that the employment relationship had concluded. The complainant was informed that annual leave to the new employment was not portable.

I find that the respondent cannot rely on the terms of Section 9(2) to defeat the claim for redundancy in this case. I did not establish a mutually agreed transfer or continuity of employment in this instance.

This brings me to consider the provisions of Section 10 of the Act.

This section outlines a mandatory pathway to follow as employment notice expires in interface   with the provisions of the Redundancy Payments Act.

10. Employee anticipating expiry of employer's notice

(1) This section shall have effect where—

(a) an employer gives notice to an employee to terminate his contract of employment, and

(b) at a time within the obligatory period of that notice, the employee gives notice in writing to the employer to terminate the contract of employment on a date earlier than the date on which the employer's notice is due to expire.

(2) Subject to subsection (3), in the circumstances specified in subsection (1) the employee shall, for the purposes of this Part, be taken to be dismissed by his employer, and the date of dismissal in relation to that dismissal shall be the date on which the employee's notice expires.

(3) If, before the employee's notice is due to expire, the employer gives him notice in writing—

(a) requiring him to withdraw his notice terminating the contract of employment as mentioned in subsection (1)(b) and to continue in the employment until the date on which the employer's notice expires, and

(b) stating that, unless he does so, the employer will contest any liability to pay to him a redundancy payment in respect of the termination of his contract of employment, but the employee unreasonably refuses to comply with the requirements of that notice, the employee shall not be entitled to a redundancy payment by virtue of subsection (2).

[(3A) Where an employer agrees in writing with an employee to alter the date of dismissal mentioned in a notice under subsection (1)(a) given by him to that employee so as to ensure that the employee's notice under subsection (1)(b) will be within the obligatory period in relation to the notice under subsection (1)(a), the employee's entitlement to redundancy payment shall be unaffected and the employee shall, for the purposes of this Part, be taken to be dismissed by his employer, the date of dismissal in relation to that dismissal being the date on which the employee's notice expires.

In the instant case, the Respondent first placed the complainant on notice of a June 23 redundancy   in March 2020. The Complainant subsequently received a start date of June 22, 2020, to commence new   work and indicated that he intended to avail of this offer. I have interpreted this as his notice to leave.

On June 12, 2020, on commending the complainant on his securing new work, the Respondent clarified their position on the anticipated redundancy payment and recognised the new employment as a “transfer “which did not attract a redundancy payment.

I find that the provisions of Section 10(2) of the Act prevailed at that point.

Crucially, the Respondent did not then request the complainant to withdraw his notice and continue in employment until June 23, which is incorporated in Section 10 (3) of the Act.

I have found that the omission to engage in this obligatory communication in writing is fatal to the Respondent case. The June 12 communication did not incorporate the measures deemed necessary in accordance with Section 10(3) of the Act. I did not identify any further inter party correspondence.

I have taken on board the respondent’s dissatisfaction that an employee can be seen to benefit from a Redundancy Payment, despite virtual automatic re-employment. I note the technical nature of Redundancy Payments Act and suggest that the Respondent gives some consideration to including a Redundancy Policy in the terms and conditions of employment, going forward.

 In Smorgs Roi Management Ltd v Buckley RPD 12/2018, the Labour Court confirmed that it was “settled law” that the combined effect of ss.7(2)(b) and 9(1)(a) made it clear that termination of a fixed-term contract of employment constituted a redundancy that entitled the complainant to receive a redundancy payment.

I find that the complainant was dismissed in accordance with Section 9(1)(a) of the Redundancy Payments Act, 1967 when he concluded employment on June 21, 2020. I am strengthened in this finding by my observations on the Respondent omissions under Section 10(2) and 10(3) of the Act.

I find the claim for a lump sum Redundancy is well founded.

Section 39 of the Redundancy Payments Acts 1967 – 2012 requires that I decide in relation to the complaint in accordance with the relevant redress provisions under that Act.

I have found that this employment concluded by means of redundancy through application of Section 7(2)(b) and Section 9(1) of the Act. The complaint is well founded.

The Complainant is entitled to recover a lump sum payment in redundancy based on:

Dates of Employment: 11 February 2016 – 21 June 2020

Break in service:            None

Gross Weekly Pay:         €1,258.62

This award is contingent on the complainant having been in insurable employment in accordance with the Social Welfare Acts.

Redundancy Lump Sum