Complainant

Respondent

Anonymised Parties

General Operative

Fireplace Manufacturer

Representatives

 Self

Jim Kelly Butlers Grove Stone

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00038868-001

23/07/2020

The complainant was employed as a general operative from 1985 to 10 July 2020.  He worked a 39 hour week and was paid €514.02 gross per week.  He claims he was made redundant and is entitled to a redundancy payment.  The respondent contends that the complainant disentitled himself to a redundancy payment by refusing an offer of alternative employment.  The complainant submitted his complainant to the Workplace Relations Commission on 24 July 2020.

The complainant stated that he commenced employment with the respondent in 1985.  The company changed name in 1994 and the employees were told nothing changed for them.  The complainant continued working for the respondent until March 2020.  Due to the government health restrictions arising from the COVID-19 pandemic the company was closed, and the employees were in receipt of the Pandemic Unemployment Payment.

The complainant stated he returned to work on 18 May 2020 and he and the other employees were told they were being made redundant.  He was offered another job in a company owned by the directors of the respondent.  In his view the job offered was totally different and did not suit him for health reasons.  The complainant stated that he suffers with back pain and asthma.  He refused the job offered to him.  He requested a RP50 from the respondent.  The form he received was not correctly filled out as the start date was shown as 1994 instead of 1985.

The complainant stated he has not received a redundancy payment and has not received the correct RP50 form from the respondent.

The respondent is a family owned business which was formed in 1994.  The main business was the manufacture and installation of premium quality stone fireplaces.  The fireplaces produced by the respondent were handmade, mainly of marble.

In 1997 the directors of the respondent formed another company (Company X) that engaged in making limestone kerbs, pier caps and wall caps.  Company X is located at the same site and premises as the respondent company.  Since 2018 the Company X has been operated and run by the son of the directors of the respondent.

The financial position of the respondent was adversely affected by the collapse of the building industry in 2007/2008.  Since that time the respondent was either barely breaking even or was running at a loss.  Changes in legislation regarding new build houses and the exclusion of chimneys on many new construction projects meant the demand for fireplaces was much reduced.  Consequently, the financial position of the respondent declined further.  The COVID-19 lockdown brought production and installation of fireplaces to a standstill.  The respondent company had no money to continue trading and it was not able to borrow.  The directors reluctantly decided to cease trading.  The directors had taken steps to avoid this, even cashing in a private pension. 

The directors of the respondent are Mr A and his wife.  Having taken the decision to cease trading Mr A called the employees to a meeting to notify them that the company would cease trading in the near future but, there would be plenty of work for all employees in Company X and there would be no change regarding pay or conditions.  Mr A and his wife are the directors of Company X.  There were four employees and two indicated that they were happy to accept employment with Company X.  The complainant did not accept the offer of employment and indicated he was entitled to a redundancy payment.

On 26 May 2020 Mr A wrote to the four employees of the respondent setting out the reasons why the company was ceasing trading.  All employees were offered work in Company X on the same pay and conditions.  The complainant continued to refuse the offer of employment with Company X.  He went to Mr A on several occasions insisting that he should sign the RP50 form and provide him with a letter from an accountant stating that the company did not have the funds to cover the redundancy payments.  Mr A’s position was that as the complainant had been offered a job in Company X without a break in service no redundancy situation had occurred.

The complainant did persuade Mr A to sign an RP50 form when he informed him that without it the Department of Social Protection would not pay him unemployment benefits.  Mr A did not wish to see the complainant without benefits.  However, when the complainant sought a statement from the company accountant that the respondent had no money the request was refused.

The respondent contends that the complainant was not dismissed by reason of redundancy as he was offered employment of a similar nature in Company X on the same pay and conditions.  The respondent company and Company X are located on the same site and the two companies share the same yard and work sheds.  The respondents contends that the complainant disentitled himself to redundancy payment by his refusal to accept alternative employment.

Section 15 of the Act deals with disentitlement to redundancy payment for refusal to accept alternative employment.  The respondent submits that the offer of employment fulfils all the requirements of Section 15 supporting the contention that the complainant disentitled himself of a redundancy payment.  The complainant was offered, in writing, employment with Company X by Mr A who was a director of both the respondent company and Company X.  The rate of pay would remain the same.  The two companies are located at the same site.  Due to the Government restrictions most of the employees of both companies were unable to work during the lockdown and were receiving Pandemic Unemployment Payment.  Upon the full re-opening of Company X two of the respondent’s employees transferred seamlessly to Company X. 

The alternative work offered to the complainant was almost identical, if not somewhat lighter and less stressful than his work with the respondent.  The offer amounted to re-engagement in the same location on the same pay and doing a job that is very similar to the job he was employed to do with the respondent.  In all the circumstance it was unreasonable for the complainant to refuse the offer of employment with Company X.  The respondent submits that the complainant by his refusal of alternative employment has disentitled himself to redundancy pay.

CA-00038868

Complaint brought under Section 39 of the Redundancy Payments Act, 1967.

The complainant was employed as a general operative with the respondent.  The company manufactured and installed premium quality stone fireplaces and hearths, primarily made using marble.  The business struggled to survive in recent years due to the combination of the 2008 downturn in the building industry, changes in legislation and reduced demand for fireplaces.  In March 2020, arising from the Government health restrictions due to the COVID-19 pandemic, production ceased.  The company was out of money and the directors decided they had to cease trading.  However, the directors of the respondent was able to offer alternative employment to all the employees.

In 1997 the directors of the respondent company set up another company, Company X, at the same premises.  Company X is engaged in the production of limestone kerbs, pier caps and wall caps.  The two companies share the same yard and work sheds. 

On 26 May 2020, Mr A, a director of both companies, wrote to all the employees of the respondent company.  I was provided with a copy of that letter.  In the letter he explained the background to the financial difficulties of the respondent.  The company had been continuously losing money since 2008.  The company now had no source of income, could not meet its commitments and therefore could not continue trading.  All the employees were offered employment in Company X at the same rate of pay and under similar conditions. 

Based on the oral and written submissions I am satisfied that the respondent company could not continue to trade.  This position was not disputed by the complainant at the hearing.

The respondent company had employed four people in March 2020 when the Government health restrictions caused production to cease.  Two of the employees accepted the offer of employment with Company X.  The complainant rejected the offer of employment with Company X.

In his evidence the complainant stated that the work offered was not similar to the work he did with the respondent.  He stated that he had been involved in making fireplaces, fitting and sales.  The job being offered was heavier work and dustier.  As he would be mainly cutting limestone, the job would be eighty per cent different, in his view.  The complainant stated that for health reasons the work in Company X would not suit him.  He suffered with back pain and asthma.  He had been taking pain killers for his back pain for about ten years and inhalers for asthma for fifteen to twenty years.

Mr A in his evidence stated that the work the complainant had been engaged was very similar to the work offered in Company X.  There is no difference between cutting marble and limestone.  Heavy lifting was not required because, for health and safety reasons, the company used lifting equipment.  He stated that the complainant was not a sales person, he may have been in the sales room from time to time, but he had mainly worked cutting stone and making fireplaces.

Company X is run by Mr B, who is the son of Mr A.  In his evidence Mr B stated that the complainant had told him that he would not be taking the job with Company X and he was due redundancy pay.  Mr B went on to explain that the work offered was similar as the complainant in recent year had mainly been engaged in cutting stone for fireplaces.  He was mainly engaged in cutting stone due to his back complaint.  While he did do some assembly work, eighty to ninety percent of his work had been cutting.  In relation to the complainant’s health issues Mr B stated that the work being offered was neither heavier or dustier.  Company X is located in the same building where the complainant worked for the respondent company.  Lifting equipment is used for lifting limestone as with marble.  Dust extractors are used in the building and water walls are installed in the sanding area.  The work offered was no heavier than the work the complainant had been doing and was possibly lighter.

The complainant did not dispute the fact that lifting equipment, dust extractors and water walls are in place in the work sheds.

Legislation

Section 15 of the Act provides:

15. Disentitlement to redundancy payment for refusal to accept alternative employment.

(1) An employee shall not be entitled to a redundancy payment if —

(a) his employer has offered to renew that employee’s contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would not differ from the corresponding provisions of the contract in force immediately before the termination

of his contract,

(c) the renewal or re-engagement would take effect on or before the date of the termination of his contract, and

(d) he has unreasonably refused the offer.

(2) An employee shall not be entitled to a redundancy payment if —

(a) his employer has made to him in writing an offer to renew the employee’s contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before the termination of his contract,

(c) the offer constitutes an offer of suitable employment in relation to the employee,

(d) the renewal or re-engagement would take effect not later than four weeks after the date of the termination of his contract, and

(e) he has unreasonably refused the offer.

(2A) Where an employee who has been offered suitable employment and has carried out, for a period of not more than four weeks, the duties of that employment, refuses the offer, the temporary acceptance of that employment shall not solely constitute an unreasonable refusal for the purposes of this section.

(2B) Where—

(a) an employee’s remuneration is reduced substantially but not to less than one-half of his normal weekly remuneration, or his hours of work are reduced substantially but not to less than one-half of his normal weekly hours, and

(b) the employee temporarily accepts the reduction in remuneration or hours of work and indicates his acceptance to his employer, such a temporary acceptance for a period not exceeding 52 weeks shall not be taken to be an acceptance by the employee of an offer of suitable employment in relation to him.

(3) Where a person who is entitled to a weekly payment has unreasonably refused suitable employment offered or approved by the National Manpower Service, that person shall be disqualified from receiving any further weekly payments.

The respondent company ceased trading.  The directors of the respondent company owned another company that was located on the same site.  When the respondent company ceased trading the directors offered all the employees’ employment with the other company.  The rate of pay, hours of work and location were the same as with the respondent company.  I have two issues to decide:

1.       The suitability of the offers of alternative employment;

2.       Whether the complainant’s refusal of the offer of employment was reasonable in all the circumstances.

The Labour Court in Cinders Limited v Byrne RPD1811 quoted with approval from the decision of the English EAT in Cambridge & District Co-operative Society Ltd v Ruse [1993] I.R.L.R. 156 when considering similarly worded provisions in the UK legislation, at page 158, that the question of “the suitability of the employment is an objective matter, whereas the reasonableness of the employee’s refusal depends on factors personal to him and is a subjective matter to be considered from the employee’s point of view”.

Mr A, who is a director of both the respondent company and Company X, was a credible witness.  In his evidence he set out the difficulties encountered by the respondent company and financial reasons why the company had to cease trading.  Mr A and his wife are directors of the respondent company and of Company X.  As Company X was trading well Mr A was able to offer all the employees of the respondent company employment with Company X.  The employees would be located in the same building and yard, have the same rate of pay and hours.  He acknowledged there would be some difference in the work as it involved kerbs, pier caps and wall caps instead of fireplaces but the cutting of stone, whether marble or limestone was very similar.  Mr A and Mr B described the health and safety measures in place, such as dust extractors, water walls and lifting equipment.  Having considered the oral and written evidence I am satisfied that from an objective perspective the respondent offered suitable alternative employment.

The complainant refused the offer of employment because he was of the view that the work was heavier and dustier.  He suffered with back pain for over ten years and with asthma for the previous fifteen to twenty years.  His health concerns are legitimate, and his medical conditions were known to the respondent.  However, despite his existing medical conditions he had worked in the same location and conditions where he was offered employment with Company X.  The main difference in the work offered was there would be no assembly of fireplaces.  The work offered was in the same premises and environment as he had worked in for the respondent.  I accept the evidence for Mr A and Mr B in relation to the health and safety equipment they have in place to protect against excessive dust and heavy lifting.  The complainant did not contest the fact that the health and safety equipment described by Mr A and Mr B is in place.  The complainant had worked in the same environment for many years.  On receiving the offer of alternative employment, the complainant immediately declined the offer and sought a redundancy payment.  He did not consider the alternative work offered.  In Browne v Di Simo RPD1914 the Labour Court noted the provision in Section 15 of the Act that there is a facility to carry out work on a trial basis while retaining the right to a possible redundancy payment.  Having carefully considered the oral and written presentation I find that the complainant’s refusal to accept or even consider the alternative work offered was unreasonable. 

CA-00038868

Complaint brought under Section 39 of the Redundancy Payments Act, 1967.

In all the circumstances I am satisfied that the offer made by the respondent amounted to suitable alternative employment within the meaning of Section 15 of the Act. 

I disallow the complainant’s appeal because I find the complainant’s refusal to accept or consider the alternative employment offered was unreasonable. 

Redundancy

Offer of alternative employment

Reasonableness of complainant’s response to alternative employment