ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00033181

Parties:

	Complainant	Respondent
Parties	Natasha Comerford	Wedding List Solutions Limited (in voluntary liquidation)

Representatives

Robert McNamara, Mandate Trade Union

Declan Hanly on behalf of Liquidators.

Complaint(s):

Act	Complaint/Dispute Reference No.	Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)	CA-00041066-001	16/11/2020
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977	CA-00043476-001	09/04/2021

Date of Adjudication Hearing: 23/03/2022

Workplace Relations Commission Adjudication Officer: Jim Dolan

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015, following the referral of the complaint(s) to me by the Director General, I inquired into the complaint(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s).

Background:

This complaint was received by the Workplace Relations Commission on 9th April 2021.

The hearing of this complaint was conducted remotely on 23rd March 2022.

Summary of Complainant’s Case:

Background

The claimant commenced employment as a sales assistant with the transferor (name redacted) on July 3rd, 2000.

Mandate Trade Union andthe the transferor (name redacted) business had a longstanding collectivelyagreedredundancy package,of fiveweekspayperyearofservice.Infact, shortly after the Complainant commenced employment with the transferor, Mandate and the Company agreed another iteration byconcludingcollective agreement vis-a-vis redundancies inJuly 2003. the aforesaid agreement contained a provision for enhanced redundancy of five weeks pay per year of service.

Againin2005thecollectivelyagreedtermsof5weeksperyearsofservicewas implemented.

The Complainant’s employment remained uneventful until April 22nd, 2008, when the complainant’s then employer corresponded with the claimant and advised them that they intended to transfer her to the employment of the respondent via transfer of undertakings.

The Complainant was advised by the transferor that all of her terms and conditions and collective agreements would be honoured by the respondent upon transfer and thereafter.

Subsequent to the transfer to the respondent's company, the Complainant’s employment continued in an affable and productive manner.

At the time of the transfer the respondent operated on the basis of concession agreement to operate within the transferor’s business. The concession agreement made provision for a number of different eventualities including a provision at section 8.1 which states,

“The Wedding Shop shall employ and pay the salaries and commission of suitable qualified staff for the concession and be responsible for all such matters as PRSI, PAYE and other payroll taxes. Such staff shall remain the employees of The Wedding Shop for all purposes and The Wedding Shop shall be responsible for compliance with all statutory requirements relating to such employees, together with such ex-gratia termination payments as would normally be paid by the transferor (name redacted)to its own staff in accordance with the formula used in the most recent severance package paid by the transferor (name redacted) to its employees”.

In or about, December 2011 the Respondent offered the Complainant and her colleague, the terms of the Mandate Trade Union/Name Redacted collectively agreed redundancy agreement, equalling 5 weeks per year of service. The claimant contends that the forgoing clearly demonstrates that the terms of the collective agreement vis-a-vis redundancy had clearly and unambiguously transferred from the transferor (name redacted) to the respondent.

In November 2020 the respondent commenced redundancy consultations with the Complainant.

The Complainant ‘representative corresponded with the respondent on November 16th, 2020 outlining:

"Furthermore, we note your comments with regard to Redundancy pay and wish to advise that our members are in dispute with the company in this regard. Our members believe that the company's position with regard to redundancy pay is disingenuous to say the least. It is an incontrovertible fact that a 5 Week collectively agreed severance agreement was in place with the previous employer before the aforementioned members transferred to your business by virtue of TUPE. In addition the company's obligations in this regard is clearly set out in section 8.1 of your agreement with (name redacted) whereby it states; ""The Wedding Shop shall be responsible for compliance with all statutory requirements relating to such employees, together with such ex-gratia termination payments as would normally be paid by (name redacted) to its own staff in accordance with the formula used in the most recent severance package paid by (name redacted) to its employees""

1. The company ignored the forgoing correspondence and on November 19th corresponded with the Complainant by way of letter advising that she had been made redundant on statutory terms.

2. The Complainant appealed the matter, the appeal meeting was held on December 4th, on December 15th, 2020, the Company advised the Complainant that her appeal was not upheld.

Accordingly, the matter was referred to the Workplace Relations Commission for Adjudication.

Union Argument.

Remuneration is a central part of any employment contract, and it is a well established jurisprudence that severance or redundancy comes within the ambit of the definition of "remuneration". The Labour Court considered the question of whether ex gratia pay constitutes remuneration in Sunday World Newspapers Ltd v Kinsella {2006} E.L.R. 325, quoting the authority of Barber v Guardian Royal Exchange Assurance Group Case C-262/88 {1990} E.C.R. 1-1889 the Chairman Mr. Kevin Duffy held interalia;

"The definition of "remuneration" at s.2 of the Act of 2003 is identical for present purposes with the definition of that term contained at s.2 of the Employment Equality Acts 1998 and 2004. That latter definition was adopted from Article 141 of the EC Treaty. It is well settled that words and expressions used in one Act should be given the same meaning as was judicially ascribed to them in earlier Acts which are in in parimaterial (that is their context is similar) (see McArdle v State Laboratory Labour Court Determination ( April 41 2006}. By application of this principle the term "remuneration" should be given the same meaning as it has been held to bear in employment equality law."

Mr Duffy went on to state;

"In a line of authorities the ECJ has ascribed a wide ambit to the concept of remuneration for the purpose of Article 141 of the Treaty and Directive 75/117 (the Equal Pay Directive). These authorities are binding and have been consistently followed in construing the term "remuneration” in cases under the Employment Equality Acts 1998 and 2004. It follows that the term "remuneration” should be similarly construed in cases under the Act of 2003.In Garland v BREL Case 12/81 {1982} E.C.R. 359 the Court of Justice considered if an ex gratia travel facility offered as a concession after retirement constituted pay. In answering that question in the affirmative the court formulated the now familiar definition of the term "pay” which is largely repeated in the definition of “remuneration” contained at s.2 of the Act of 2003. The court said:

“ It is important to note in this regard that in para.6 of its judgment of May 25, 1971 in Defrenne Case 80/70 {1971} E.C.R. 445at 451, the court stated that the concept of pay contained in the second paragraph of Article 119 comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer. 11

Later1 in concluding that the concessionary or ex gratia nature of the payment was irrelevant1 the court said the following:

""It follows that where an employer (although not bound to do so by contract) provides special travel facilities for former male employees to enjoy after their retirement this constitutes discrimination within the meaning of Article 119 against former female employees who do not receive the same facilities.""

The Court in Sunday World Newspapers Ltd v Kinsella also considered the question of whether redundancy payments as distinct from ex gratia payments constitutes remuneration for the purpose of s.6, in this regard Mr. Duffy held that;

"The question of whether redundancy payments come within the definition

of pay was directly considered by the court in Barber v Guardian Royal Exchange Assurance Case C-262/88 {1990} E.C.R. 1-1889. The court said the following: ""As the court has held, the concept of pay, within the meaning of the second paragraph of Article 119, comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer (see, in particular, the judgment of February 9, 1982 in Garland v British Rail Engineering Case 12/81 {1982} E.C.R. 359, paragraph 5).

Accordingly, the fact that certain benefits are paid after the termination of the employment relationship does not prevent them from being in the nature of pay, within the meaning of Article 119 of the Treaty

Perhaps the most instructive jurisprudence which may assist in the instant case, is that of Billy Bligh and others (claimants) v Stobart Ireland Driver Services Limited (respondent) whereby in almost identical circumstances to the instant case a number of workers were transferred from a supermarket to a distribution company via a transfer of undertakings, when shortly after the move the respondent in that case altered the terms and conditions of employment of the claimants. The Employment Appeals Tribunal held the company had breached regulation 4(2) in not honouring the terms and conditions of employment of the claimants both expressed and implied and stated;

Therespondentisherewithrequiredtohonouralltheconditionsof employment and the terms of the agreement made between the transferor and the representatives of the appellants prior to the transfer and compensate each of the appellants for all and any financial loss suffered by them by the non-adherence of the respondent to the terms and conditions of their employment and the said agreement from the date of the transfer, October 22, 2010, to the date of this determination.

Summary of Respondent’s Case:

Specific Complaint CA-00041066-001. Transfer of Undertaking

1. The claimant states that Wedding List Solutions Limited (in voluntary liquation) (the “Company”) did not observe the terms and conditions transferred from her previous employer in relation to redundancy payments.

2. The claimant transferred to the Company in May 2008 from her previous employer and the transfer was subject to Transfer of Undertakings (Protection of Employment) Regulations. As part the transfer the Company confirmed that the Complainant’s terms and conditions of employment (save for a pension scheme membership which was not covered to Transfer of Undertakings legislation) would remain unchanged.

3. The claimant maintains that a voluntary redundancy package offered to employees of her former employer in July 2003 forms part of the terms and conditions of her employment. There is no evidence provided to indicate any entitlement to enhanced redundancy pay forms part of the terms and conditions of her employment or that it ever did. The claimant was paid statutory redundancy in line with all other employees made redundant by the Company.

4. We note that the claimant is relying on the existence of a collective agreement which entitles her to enhanced redundancy entitlements over and above statutory redundancy. No evidence of any collective agreement which binds the Company has been provided by the claimant.

5. We have been provided with a copy of an announcement issued to employees of the transferor in July 2003 which relates to a voluntary redundancy package. We do not see how this evidences any amendment to the Complainant’s terms and conditions, or how a voluntary redundancy package offered by the previous employer, 17 years prior to the

Complainant’s redundancy could be binding on the Company.

6. We have also been provided with a concession agreement between the Company and the transferor which sets out at section 8.1 that, while operating in the transferor’s business as a concession:

“…The Wedding Shop shall be responsible for compliance with all statutory requirements relating to such employees, together with such ex-gratia termination payments as would normally be paid by the transferor (name redacted) to its own staff in accordance with the formula used in the most recent severance package paid by the transferor (name redacted) to its employees”

As set out at section 1 of the concession agreement, the agreement expired on 1 March 2008. Furthermore, this agreement does not establish a commitment by the Company to employees, nor a term of employment (which would be protected under the TUPE Regulations). This agreement is between the transferor (name redacted) and the Company and bound the Company to these terms whilst it operated as a concession within the transferor’s department store. The Company vacated the transferor’s department store in 2015 and, as set out above, the concession agreement has been terminated.

7. The Company ceased to trade in March 2021 and was liquidated by way of creditors voluntary liquidation on 8 October 2021. The last financial statements produced by the Company was as at 31 December 2019 and indicated a deficit on the balance sheet of €850,820 as at that date. As at the date of liquidation this deficit had increased to €962,141. On this basis the Company was insolvent as at the date of the redundancy of the claimant.

8. At the time of the redundancy, had it chosen to do so, the Company would have been entitled to apply to the Department of Employment Affairs & Social Protection under the Redundancy Payment Scheme, which would have entitled the claimant to statutory redundancy only.

Findings and Conclusions:

Prior to any transfer of employment taking place the Complainant received a letter from the transferor informing her that her employment would transfer to the Respondent with effect from 23rd May 2008.

A clause in the Concession Agreement made between the transferee and transferor (the Respondent) outlines the following at section 8.1:

TUPE regulations provide for the protection of rights and obligations as follows:

4(1) The transferor’s rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.

(2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.

In the instant case there was no expiry period of the agreement on redundancy and no effort made by the transferee to amend or change such agreement.

In or about December 2011 the Respondent offered the Complainant and her colleague the terms of the Mandate / Transferor collectively agreed redundancy agreement equaling 5 weeks per year of service. The Complainant’s representative contends that this clearly and unambiguously demonstrates that the collective agreement had transferred to the Respondent.

I have considered the written and verbal submissions from both parties and now conclude that the complaint as presented is well founded. The Collective agreement entered into by the transferor transferred to the transferee (the Respondent) and was still in place at the time of her redundancy.

I now order the Respondent to pay compensation to the Complainant in the sum of €32,000.

Such sum should be paid to the Complainant within 42 days from the date of this decision.

Complaint reference CA-00043476-001 is not well founded.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.