Complainant

Respondent

Parties

Richard  Lee

 Klairgrove Ltd (In Liquidation)

Representatives

  Self

John Barry Management Support Services (Ireland) Ltd

Act

Complaint Reference No.

Date of Receipt

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

CA-00045120-001

29/06/2021

The complainant was employed as a warehouse operative with the respondent.  He commenced employment on 03/08/2004.  He was paid €465.85 gross per week (€409.87nett) and worked a 40-hour week.  In October 2020 the respondent advised all employees that because of problems associated with Brexit and Covid-19 the company was facing serious difficulties and unless a buyer was found the company would have to close. 

In November 2020 the respondent concluded discussions with a buyer and employees were informed that the business was being sold and that a transfer of undertaking would take place with effect from 01/01/2021.  The complainant did not wish to transfer and appealed the decision and requested a redundancy payment.  The complainant did not take up the offer of a transfer and did not attend for work after 20/12/2020.  The complainant has not worked since that time and is in receipt of the COVID-19 Pandemic Unemployment Payment (PUP) since March 2021.

The complainant worked for the respondent for just over 16 years.  On 02/10/2020 the complainant and the other employees were advised that their employment was at risk due to the effects of Brexit and Covid-19.  The complainant submits that at this meeting he was informed that a redundancy payment would be paid in two stages.  At a further meeting the employees were told that the respondent would try and save their jobs.  On 23/11/2020 the employees, including the complainant, were informed that the company was being sold and that its business would now be taken over by Company X.  They were advised that this was a transfer of undertakings (TUPE) arrangement.  At a subsequent meeting with representatives of Company X the complainant was informed that they would not be changing anything in relation to the business and that they would continue to work out of the same location (Location A) for a period of up to six months and after that a relocation to another location (Location B) was possible.

The complainant felt that he was being pressurised to move and he was not happy with the prospect of having to commute to Location B which he submitted would add an additional three hours travel time in the morning and evening as he would use public transport.

The complainant submitted that he refused to sign any form in relation to this transfer.  He requested a copy of his terms and conditions and a reference.  He also submitted a letter to the respondent requesting that the redundancy option would be reconsidered but he did not receive any reply to this.

The complainant took serious issue with the reference he received.  The employment dates were wrong and there were just two lines of text.  He felt that this would impact on him getting any other employment.  This entire matter had a significant impact on him and his family life.  He had only two options: sign the TUPE agreement or resign from the respondent.

The complainant provided a witness Mr A who confirmed that he was present at the meeting on 02/10/2020 when the offer of redundancy was made.

Under cross examination the complainant confirmed that he was informed by the respondent that the business was to be sold and that his employment would transfer.  He said that this occurred after there was an initial offer of redundancy.  The complainant also confirmed that at the second meeting he attended he was told that the respondent would try and save the jobs.

The complainant said that he got to work using public transport.  It was put to him that he also used a car and he confirmed that he had use of a car which was borrowed.  He confirmed that he intended to purchase this car, but he was unable to do so as he was not working as did not continue with the proposed transfer.  The complainant also confirmed that Company X representatives had confirmed that they intended to use Location A for a period of three to six months.

The complainant also confirmed that he was told that nothing in his job would not change apart from having to move to Location B.

The complainant outlined that his objection to moving to Company X was linked to a previous incident (approximately 10 years previously) with this company (Company X) whereby they proposed to reduce the working week and cut wages.  It was put to the complainant that no such proposal formed part of the 2020 move and he agreed that it was never mentioned.

The complainant outlined that it took approximately 20-30 minutes to drive from his home to Location A and he was unsure about how much longer it would take to drive to Location B.

The complainant confirmed at the hearing that he has not obtained work since 20/12/2020 and did not provide any evidence of the attempts made to mitigate is loss. He was sick for some of this time.   He has signed up to some work-related social media platforms.  The complainant confirmed that he is in receipt of COVID-19 Pandemic Unemployment Payment (PUP) since March 2021.

The respondent was in the business of providing a logistics service to clients throughout Europe and were specialists in hanging garments.  The respondent agrees with the dates of the complainant’s employment and also his rate of pay.  The respondent denies that he was dismissed.

The respondent representative submitted that the sequence of events was that on 09/10/2020 the respondent met with employees to advise that due to the problems caused by Brexit and Covid-19 the company was facing serious difficulties and unless a buyer was found for the business the company may have to close and in such a scenario the employees would be facing a redundancy situations.

Following discussions with a number of potential purchasers and on 19/11/2020 the employees were advised that a buyer was found and that the business would be sold to Company X and that the European Communities (Protection of Employees on Transfer of Undertakings) Regulations, 2003 (the TUPE Regulations) would apply as the complete business was transferring to the Transferee.

Representatives of Company X attended the premises at Location A to consult with staff and to confirm that it was their intention to remain at this location for a period of two to six months so that they could avail of the respondent’s IT system, understand the business and other requirements as they did not have a facility similar to the one in Location A in any of their current locations.  The representatives of Company X also explained to employees that they were willing to look at rosters to facilitate any staff who could avail of car sharing options.

The respondent representative confirmed that the complainant was advised that all his existing terms and conditions of employment would be honoured.  This was confirmed in various correspondence to the complainant.  However, the complainant made it clear that he did not wish to transfer to Company X and sought to be declared redundant.  The respondent explained to the complainant that a redundancy situation did not arise as there was a transfer of undertaking and the transferor and the transferee were bound by the obligations under the TUPE regulations.  The complainant continued to state that he would no be transferring.  He refused to sign a letter to that effect.  The respondent Directors at all times encouraged the complainant to consider his position and particularly as he would remain on the same site which would allow him an opportunity to assess the situation and to look for alternative employment if he was not happy to work for Company X.

A final meeting took place with the complainant on 22/12/2020 and he continued to insist that he would not transfer.  He asked for a reference and was provided with a “service reference”.  The complainant did not report for duty the following day and did not report or contact Company X after the Christmas break.

The employers representative submitted that the law in relation to transfers in such situations has been the subject of many legal cases.  The case of Symantec v Leddy and Lyons [2009] IEHC 256 is particularly relevant in that the High Court found that the refusal of an employee to transfer does not result in the employee being made redundant.  Therefore, the employee was not entitled to any severance payment, statutory or otherwise.

A Labour Court decision UUD185 [UD/17/23] involving Rapier Contract Services Limited v Adina Predut stated: “While the decision in the Symantec refers to a claim under the Redundancy Payment Act, the Court is of the view that by parity of reasoning the same principle applies to a claim for unfair dismissal under the Unfair Dismissals Act.  As no employment relationship between the transferor and the transferee survives a transfer under the TUPE regulations no claim of unfair dismissal against the transferor can be sustained by a worker who refuses to accept the transfer under the regulations.  In essence it would appear the upshot of the decision in Symantec Ltd is that a worker terminates their own employment in such circumstances.”

It was submitted that it is clear that the respondent did not dismiss the complainant.  The complainant’s employment ended because he chose not to attend work after 22/12/2020 and continue to work for a new employer under the same terms and conditions of employment and in the same warehouse and for the same wages when the premises reopened after the Christmas break.

At the hearing the complainant confirmed that he is seeking compensation arising from his constructive dismissal from his employment with the respondent.

As the Adjudication Officer I am obliged to establish if Section 1(b) of the Act of 1977 operates to validate this complaint of constructive dismissal.  Section 1(b) states:

“the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate his contract of employment without giving prior notice of the termination to the employer.”

Considering the statutory definition contained in Section 1 of the Act of 1977 as amended, and the authoritative principles adopted by the relevant fora and the Courts, the onus lies with the complainant to demonstrate that his resignation was justified.

In supporting his decision to terminate his employment the complainant will have to prove that the circumstances of his dismissal met the tests as set out by Lord Denning MR in Western Excavating (ECC) v Sharp (1978) IRL 332, and described as follows:

“conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract then the employee is entitles to treat himself discharged from any further performance.”

And the reasonableness test which was expressed in the following terms:

“an employer who conducts himself or his affairs so unreasonably that the employee cannot be expected to put up with it any longer, the employee is justified in leaving.”

Both of these tests have been followed by various Irish authorities.

In relation to breach of the complainant’s contract of employment there was no evidence that any such breach occurred.  On the contrary the respondent ensured that the complainant’s contract of employment would remain intact and his terms and conditions protected.

In examining the conduct of the employer there was no evidence that the complainant had any issue with the conduct of the employer. No grievance was raised.  While the complainant took issue with what he seen as a “miserable reference”, the respondent confirmed that this was merely a service statement and at the hearing confirmed that they are happy to act as a referee in the event that the complainant requires a work-related reference in the future.

In reviewing the “reasonableness test” the Supreme Court in Berber V Dunnes Stores [2009] E.L.R. 61 in considering the reasonableness test stated:

“The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.”

There is no doubt that this was a difficult situation for the complainant.  He had worked for the respondent for just over 16 years and this was about to change.  However, the respondent had ensured that the employment situation was secured.  The complainant’s reasons for not transferring were (a) the possibility of having to move to Location B and (b) he had a negative view of the new employer based on an experience he had of them some ten years previously.

While the complainant was entitled to transfer to the transferee the European Court of Justice (ECJ) has held that an employee is not obliged to do so.  In Katsikas v Konstantinidis [1993] IRLR 179 ECJ and Merckx & Neuhus v Ford Motor Company of Belgium, [1992] ERC I 6577the ECJ held that an employee has the right to object to becoming employed by a Transferee. However, the fate of the employment relationship following such an objection was clarified in the Irish High Court and noted in the case of Symantec Limited v Leddy and Lyons, [2009] IEHC 256.  In these circumstances the complainant must accept total responsibility for the consequences arising from his decision not to transfer.  As noted above arising from the Labour Court decision UUD185 [UD/17/23] in such circumstances the complainant is deemed to have terminated his own employment.

Based on the evidence and the authorities cited, I find that the complainant has failed to meet the tests set out in Western Excavating (ECC) v Sharp 91978) IRL 332. 

I do not find that the complaint of constructive dismissal taken under the Unfair Dismissals Act to be well founded.

I do not find that the complaint of constructive dismissal taken under the Unfair Dismissals Act to be well founded.

Constructive dismissal.  Reasonableness test.