FULL RECOMMENDATION
PARTIES : NHC CONSTRUCTION LIMITED DIVISION :
SUBJECT:
This is an appeal by NHC Construction Ltd., ‘the Respondent’ of a decision by an Adjudication Officer, ‘AO’, under the Redundancy Payments Act 1967-2014. Mr. Mathews, ‘the Complainant’, started to work for NHC Construction Ltd. in 2014, initially on a part-time basis. He left the employment for a few months and resumed working part-time for the Respondent in January 2015. In May 2015 the Complainant travelled to the United States on a J1 visa. It is common case that he worked for the Respondent from September 2015 until he was made redundant in March 2020, at which time he was paid statutory redundancy based on his service from September 2015. The Complainant lodged a complaint under the Act with the Workplace Relations Commission on the basis that he states that he remained an employee of the Respondent while in the U. S. in 2015 and that the payment made to him should have reckoned his service from January 2015. The AO upheld the complaint. The Respondent appealed to this Court. SUMMARY OF RESPONDENT'S ARGUMENTS: There was no discussion between the parties about the Complainant resuming his employment prior to his departure to the U.S. That discussion took place on his return. It is accepted that a P45 issued when he left in 2014 and that none issued in May 2015. However, that does not mean the employment relationship continued. It did not. The Complainant left his employment without any right to return. It is common case that the Complainant commenced full-time work for the Respondent on 23 May 2016 until his redundancy on 23 March 2020. The period from May to September 2015 should be discounted for the purposes of the Act as that gap arose from a voluntary termination of employment by the Complainant. The Complainant’s period of continuous service commenced on 14 September 2015 and continued to 23 March 2020, a period of 4 years and 6 months and not 5 years and 2 months as claimed by the Complainant. The difference between redundancy payment paid and that due is a difference of €6036 for 4 years and 6 months compared to €6800 as claimed for 5 years and 2 months. The only difference between the two voluntary terminations of service by the Complainant was that on the second occasion the Respondent did not issue a P45. That is not determinative. There is no evidence of any agreement between the parties that the period of four months from May to September 2015 would count as service. If the period concerned is not continuous service then, as per Schedule 3 of the Act, it cannot be considered as reckonable service. SUMMARY OF COMPLAINANT ARGUMENTS: The Complainant is entitled to a statutory redundancy payment based on service since January 2015. This is an entitlement to €6800. The employment summary from the Revenue On-Line Service provided to the Court confirms the start date of 23 January 2015. A bank statement provided to the Court details a payment from the Respondent on 6 February 2015. This confirms the start date and service in the employment totals 5 years and 2 months. The trip to the U.S. was a holiday. It was always the intention to return and this was accepted by Mr. Healy, the owner of the respondent company. No P45 was given to the Complainant when he went to the U.S., by contrast with the situation in 2014 when the Complainant left the employment. The Respondent did not terminate the employment relationship, which resumed in September 2015. WITNESS EVIDENCE: Mr. Niall Healy: Mr. Healy is the owner of the respondent company. The witness outlined how he had set up a business while in his 20s and how he had taken on the Complainant, whose brother was a friend of his, to do part-time work for the company, while the Complainant was in college. The witness said that when the Complainant left to go to the U.S. in 2015 there was no discussion about him returning to the company, that it was all a bit ‘ad hoc’ and that there had not been any bad blood. He said that, at the time, they were friends. While he had not been given any choice about the Complainant’s departure, it was not for him to seek to stop him. The witness said that the Complainant had requested a P45 for tax purposes when he left the company in 2014 but made no such request when leaving in 2015. The witness said that there was not a job awaiting the Complainant’s return from the U.S. The witness said that he made a ‘leap of faith’ in providing the Complainant with a full-time job after the Complainant completed college. The witness said that the Complainant was the only employee to receive a profit share. The witness said that he saw this as a means of tying the Complainant to the company from year to year. It had never been paid weekly or monthly and was only paid after the profits were identified in the annual accounts. Those accounts up to end May 2020 showed much lower profits than the previous year due to Covid and to the fact that the witness had down sized the business, shut the Dublin office and had just retained some good customers. The witness said that he had paid an additional €12000 to the Complainant at the end of 2019 somewhat ‘under duress’. Under cross examination, the witness denied that he knew that the Complainant would be returning to the business before he left for the U.S. In response to questions from the Court, the witness accepted that there was no employment contract in place for the Complainant, there was no letter of resignation and that there was nothing in writing to assist the Court. The witness said that he believed he would have paid the Complainant for any outstanding annual leave before he left for the U.S. He stated that the Complainant left of his own accord. The witness said that he had agreed to pay the bonus to the Complainant on the basis of a full year’s service, that he had to be in employment at the end of the year to qualify and that if the Complainant left the employment in the course of the year, no bonus was payable. Mr. Shane Mathews: Mr. Mathews is the Complainant. The witness confirmed that the contents of his submission were the truth to the best of his knowledge. The witness emphasised that when he left to go to the U.S. in 2015 he did seek permission to do so and it was known by the Respondent that he would be returning to the employment. He stated that the Respondent had long-term plans that involved him and that he had discussed these with Mr. Healy. The witness noted that it was not true to say that the bonus terms had never deviated as in 2016 he had received a bonus of 10% of profits for the whole year although he had only worked for 6 months of the year. Under cross examination, the witness accepted that he had no evidence in writing to support his claim for a pro-rated bonus. It was put to the witness that he was now asserting that he had discussed his departure in 2015 with Mr. Healy but that Mr. Healy had said in evidence that this was not the case and the witness had not questioned him on the matter at that time. The witness said that he was not well versed in these matters. He said that he did not exactly ask Mr. Healy if he could go on holidays but he said that it was false to claim that there were no plans for his return. It is put to the witness that he assumed he had a right to return but that there was no such arrangement. The witness said that he had a visa for only 90 days and that his return was not an assumption but was definite. In response to questions from the court, the witness referred to his submission in which he said that in 2015 it was always his intention to return and that Mr. Healy had accepted his absence. He noted that he needed to return to college and that he resumed work shortly after his return. The witness said that nobody had done his job in his absence. The witness confirmed that his P45 was given to him in 2014 at his request as he needed it to avoid emergency tax when he took up new employment but that he had not made any request in 2015. THE APPLICABLE LAW: Redundancy Payments Act: General right to redundancy payment. 7.— (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 theSocial Welfare Acts, 1952to 1966, 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. (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, Appeal to Labour Court from decision of adjudication officer 39A. Section 44 of the Act of 2015 shall apply to a decision of an adjudication officer given in relation to an appeal under subsection (15), or a question referred to the Director General under subsection (16), of section 39 of this Act as it applies to a decision of an adjudication officer under section 41 of that Act, subject to the following modifications: (a) the substitution of the following subsection for subsection (1): ‘ (1) (a) A party to an appeal under subsection (15), or proceedings in relation to a question referred to the Director General under subsection (16), of section 39 of the Act of 1967 may appeal a decision of an adjudication officer given in that appeal or those proceedings to the Labour Court and, where the party does so, the Labour Court shall — (i) give the parties to the second-mentioned appeal an opportunity to be heard by it and to present to it any evidence relevant to the appeal, (ii) make a decision in relation to the appeal affirming, varying or setting aside the decision of the adjudication officer to which the appeal relates, and (iii) give the parties to the appeal a copy of that decision in writing. (b) The Labour Court shall have power to make any decision in an appeal under this paragraph that an adjudication officer has power to make on the hearing of an appeal under subsection (15), or a question referred to the Director General under subsection (16), of section 39 of the Act of 1967. ’ and (b) any other necessary modifications.
Amount of Lump Sum SECTION 19: 1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following: (a) the product of two weeks of the employee ’ s normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and (b) a sum equivalent to the employee ’ s normal weekly remuneration. (2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4(2) ofthe Redundancy Payments Act 1979at the time the employee is declared redundant. 2. If the total amount of reckonable service is not an exact number of years, the “ excess ” days shall be credited as a proportion of a year. 3. (a) For the purpose of ascertaining, for the purposes of paragraph 1, the number of years of continuous employment, the number of weeks in the period of continuous employment shall be ascertained in accordance with this Schedule and the result shall be divided by 52. (b) In ascertaining the number of weeks in the period of continuous employment, a week which under this Schedule is not allowable as reckonable service shall be disregarded.
4. For the purposes of this Schedule employment shall be taken to be continuous unless terminated by dismissal or by the employee’s voluntarily leaving the employment , but for the purposes of this paragraph ‘dismissal’ does not include a dismissal within the meaning of theUnfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7 (1) (a) or 7 (1) (b) of that Act .
7. For the purposes of this Schedule, a week falling within a period of continuous employment and during which (or during any part of which) the employee concerned either was actually at work, or was absent therefrom by reason of sickness, a dismissal within the meaning of theUnfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7 (1) (a) or 7 (1) (b) of that Act, holidays or any other arrangement with his employer shall, subject to paragraph 8, be allowable as reckonable service. DELIBERATION: The issue in this case for the Court is to determine if a period in 2015 when the Complainant travelled to the U.S. was, as he asserts, a period of leave or whether, as the Respondent asserts, the employment relationship was concluded when the Complainant left and that when he returned he joined the Respondent again in a new employment relationship. The significance of this is in determining the period of continuous service for the purposes of calculations under the Act. If the Respondent’s argument is accepted then the Complainant’s continuous service was 4 years and 6 months, entitling him to a redundancy payment of €6036 when his employment was terminated. This is the amount provided to him. On the other hand, if the argument of the Complainant is accepted, his continuous service was 5 years and 2 months, entitling him to a payment of €6800. There is a direct contradiction between the parties as to whether or not it was understood in 2015 that the Complainant was simply leaving on a 90 day visa, with the intention of returning to the employment after that period and with a clear understanding and agreement on the part of the Respondent that he would be doing so. There is no documentary evidence available to the Court. The one and only fact that is of any possible assistance to the Court is that when the Complainant left the employment in 2014 he requested, and was given, a P45 and that when he left in 2015 he neither requested nor was given a P45. As the Court finds it difficult to determine from the evidence given as to which version reflects the truth, it is to this fact that the Court gave its consideration. The Court acknowledges that a P45 would not have been an immediate requirement for the Complainant in 2015 as he was leaving the country for a period and that it could be argued that for this reason he neither requested that document nor was there any pressure on the Respondent to provide it. However, on balance, the Court, noting that there is a legal requirement on employers to provide a P45 to an employee when they leave their employment, feels that it cannot ignore the fact that this was provided in 2014 in clear recognition by both parties of the termination of the employment but was not provided in 2015 when the Complainant left for the U.S. This suggests, on the balance of probabilities, that the parties understood that the employment relationship was not being severed and that the Complainant was free to resume his employment on return from the U.S. On that basis, the Court concludes that the appeal must fail. The Court determines that the correct amount payable to the Complainant in respect of his redundancy, in accordance with the Act, is €6800 and the Respondent is directed to pay this amount to the Complainant less any redundancy payment made to him already. FINAL DETERMINATION: The Decision of the Adjudication Officer is upheld.
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