Complainant

Respondent

Parties

Jean McDonagh

Castleview Community Playgroup CLG (in Voluntary Liquidation)

Representatives

Self-represented

Did not attend the hearing

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-00048137-001

13/01/2022

This is a complaint about the failure of the respondent to pay the complainant redundancy pay based on all her years of service.  On December 1st 2021, she was paid €8,586 by the Department of Social Protection, based on 9.04 years of service and her weekly pay of €450.  She worked for the respondent for 19.5 years, from January 2001 until June 2020.

The complainant is a playgroup leader and she commenced working for the respondent in January 2001.  The playgroup was initially set up as a sole trader.  The employer’s registered number was 9593874G.  In her evidence at the hearing, the complainant said that, to accept children under the newly established Early Childhood Care and Education Scheme (ECCE), on January 1st 2010, the playgroup was set up as a company limited by guarantee (CLG).  The employer’s registered number of the CLG is 9730849Q.

On June 30th 2020, the CLG was placed in voluntary liquidation by the directors.  The complainant applied for a redundancy payment, based on her service from 2001.  The liquidator prepared a redundancy form for the complainant, but he based the calculation of her redundancy payment on her service with the CLG which was established in January 2010.  The complainant claims that she is entitled to redundancy based on her start date in January 2001.  At the hearing, she produced evidence of P60s which show that she worked in the playgroup as a permanent employee from January 2001.

The liquidator did not attend the hearing; however, on June 27th 2022, he sent a letter to the WRC outlining his response to the claim.  He said that, as there are no records related to the period in which the playgroup was a sole trader, he could not stand over that period of the complainant’s service.  He said, “there will be no funds available in the liquidation for any payments to employees or creditors.”  He also said that he does not oppose any award under the Redundancy Payments Act that the Workplace Relations Commission may decide. 

Time Limit for Submitting a Claim for a Redundancy Payment

Section 19(1) of the Redundancy Payments Act 1967 – 2014 provides that an employee whose employment ceases because of redundancy, is entitled to a redundancy payment:

Upon the dismissal by reason of redundancy of an employee who is entitled under this Part to redundancy payment … his employer shall pay to him an amount which is referred to in this Act as the lump sum.

In accordance with section 24 of the Act, an employee who is made redundant may make a claim for a redundancy lump sum up to 52 weeks following the termination of their employment.  The complainant submitted a claim for a lump sum to the liquidator shortly after the playgroup closed on June 30th 2020.  The liquidator then submitted a claim to the Department of Social Protection and, on December 1st 2021, the complainant received a lump sum of €8,586, based on her service from January 1st 2010.  When she queried this with the liquidator, he informed her that he could not stand over the years that she worked for the playgroup when it was a sole trader.  I am satisfied that the complainant submitted a claim for a redundancy payment within the statutory time limit of 52 weeks and it now falls to me to consider if her entitlement to a redundancy lump sum is based on all her service with the respondent from January 14th 2001.

Reckonable Service

Section 7(1) of the Redundancy Payments Act sets out the entitlement to a redundancy lump sum:

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, 1952 to 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.

Section 7(5) of the Act provides that “the requisite period” is 104 weeks of continuous service.

The First Schedule of the Minimum Notice and Terms of Employment Act sets out the definition of continuous service:

The service of an employee in his employment shall be deemed to be continuous unless that service is terminated by—

 (a) the dismissal of the employee by his employer, or

 (b) the employee voluntarily leaving his employment.

It is apparent that, between January 14th 2001 and June 30th 2020, the complainant was not dismissed and she did not resign.  Section 7 of this First Schedule deals with the circumstances where a business transfers from one entity to another:

Where the whole or part of a trade, business or undertaking was or is transferred to another person either before or after the passing of this Act, the service of an employee before the transfer in the trade, business or undertaking, or the part thereof so transferred—

(a) shall be reckoned as part of the service of the employee with the transferee, and

(b) the transfer shall not operate to break the continuity of the service of the employee,

unless the employee received and retained redundancy payment from the transferor at the time of and by reason of the transfer.

From the evidence submitted by the complainant at the hearing of this complaint, I am satisfied that she was not made redundant in December 2009, before the establishment of the CLG to which she transferred on January 1st 2010.  I am satisfied therefore, that her service is continuous from January 14th 2001 until June 30th 2020. 

Conclusion

I find that the complainant’s service with the respondent was continuous from the date that she commenced as a direct employee of the respondent on January 1st 2001 until she was made redundant on June 30th 2020.  I find also that the calculation of her redundancy lump sum by the liquidator was not in accordance with the First Schedule of the Minimum Notice and Terms of Employment Act 1973 and was incorrect.  I find that the complainant has continuous service with the respondent of 19.47 years and not 9.04 years as submitted by the liquidator.  I find that there was a shortfall in the redundancy lump sum paid to the complainant by the Department of Social Protection on December 1st 2021 and that this shortfall relates to her service from January 14th 2001 until December 31st 2009. 

Subject to her PRSI contribution status, I have decided that the complainant is entitled to a statutory redundancy payment, based on her service from January 14th 2001 until she was made redundant on June 30th 2020.  I acknowledge that she has received a lump sum of €8,586 based on her service from January 1st 2010 until June 30th 2020 and that the shortfall in her lump sum entitlement relates to her service from January 14th 2001 until December 31st 2009.

Redundancy, liquidation