FULL RECOMMENDATION
SECTION 8A, UNFAIR DISMISSAL ACTS, 1977 TO 2015 PARTIES : COLD MOVE DUBLIN LIMITED (IN LIQUIDATION) (REPRESENTED BY BEAUCHAMPS SOLICITORS) - AND - MR ALAN MULVEY (REPRESENTED BY FRANCIS DRUMM B.L., INSTRUCTED BY MARTIN FARRELLY HR CONSULTING LIMITED) DIVISION :
SUBJECT: 1.Appeal Of Adjudication Officer Decision No ADJ-00025200. This is an appeal by Mr Alan Mulvey (‘the Complainant’) from a decision of an Adjudication Officer (ADJ-00025200/CA-00032063-001, dated 20 October 2020) under the Unfair Dismissals Act 1977 (‘the Act’). The Complainant’s Notice of Appeal was received on 29 November 2020. The Court heard the appeal in Dublin on 13 July 2022, in conjunction with the Complainant’s related appeals under the Minimum Notice and Terms of Employment Act 1973 (MN/20/9); the Organisation of Working Time Act 1997 (WTC/20/65); the Payment of Wages Act 1991 PW/20/66 and under the Industrial Relations Act 1969 (CD/20/328). The Factual Matrix: Cold Move (Dublin) Limited (In Liquidation) (‘the Respondent’) provided a supply chain management service for businesses involved in retail, the food service industry and manufacturing. It is fully owned by Malonvale Limited (In Liquidation) (‘Malonvale’). Mr Jason Mallon owns 100% of the shares in Malonvale. A Liquidator was appointed to both companies on 6 March 2020. It is necessary to say something about the prior history of the Respondent’s ownership in order to give context to the events that are material to the within appeal. The Respondent company was incorporated in January 2006. Mr Mallon was employed in a management position by the Respondent from 2006. In 2015, he led a management buy-out of the company. Mr John Casey joined the Respondent’s board in or around this time. A company controlled by Mr Casey – Donworth Capital Limited (‘Donworth’) simultaneously obtained a shareholding in Malonvale which had acquired 100% ownership of the Respondent as part of the management buy-out of the latter. Mr Casey resigned as a director of the Respondent on 14 July 2019 and Mr Mallon acquired Donworth’s shareholding in Malonvale. The Respondent was experiencing cashflow difficulties at this time and underwent significant restructuring in an attempt to trade its way back to profitability. It sought the protection of the High Court and was placed in Interim Examinership. However, this was not successful and Mr Aiden Murphy of Crowe Ireland was appointed Liquidator over the Respondent. Preliminary Issue: There is a dispute between the Parties in relation to the Complainant’slocus standiunder the Act. It is common case that Mr Mallon summarily dismissed the Complainant in the course of a brief telephone call on 11 October 2019. However, the Parties disagree in relation to the date on which the Complainant’s employment with the Respondent commenced. The Complainant’s case is that he commenced his employment with the Respondent “in May or June” 2018. It is submitted on the Respondent’s behalf, however, that prior to Mr Casey’s resignation as a director of the Respondent, the Complainant had been employed by Donworth and had provided management support services in a part-time consultative capacity only to the Respondent from mid-2018 up until August 2019. The Parties agree that a different company – Galmere Foods Limited – also controlled by Mr Casey – invoiced the Respondent on a monthly basis between August 2018 and July 2019 for the Complainant’s services (and those of Ms Fiona Kelly, a Data Analyst). It is also common case that the question of the Complainant’s future employment following Mr Casey’s resignation formed part of the discussions between Mr Mallon and Mr Casey in the lead-up to Mr Casey and Donworth’s exit from the Respondent’s business. On Mr Casey’s instructions, Ms Kelly forwarded an employment contract for the Complainant, by way of an attachment to an email dated 28 May 2019. Mr Mallon told the Court that he accepts that the email was sent but he did not personally open it or download the attached contract on that date or at all as he relied on his personal assistant to handle correspondence. However, he accepts that the Complainant – and Mr Casey on his behalf – was anxious to achieve some certainty about his future employment. According to Mr Mallon, discussions about exiting Mr Casey and Donworth from the Respondent’s business had been ongoing since mid-2018 and were difficult and many issues unrelated to the Complainant had priority in that context for Mr Mallon with the result that he deferred giving any attention to Mr Casey’s employment issues until the exit deal with Mr Casey was almost concluded. A letter of offer of employment to Mr Mulvey and an associated contract of employment (paginated as one continuous thirteen-page document) were exhibited before the Court. It appears to the Court that the Complainant’s case in relation to his standing to pursue a complaint under the Act rests entirely on the construction he seeks to place on the letter of offer and associated contract. In the Court’s judgment, there are several unusual things about the aforementioned document that must be noted. The document is purported to be that which was appended to Ms Kelly’s email of 28 May 2019 to Mr Mallon. However, the letter of offer is dated 7 June 2019. It is signed by both Mr Casey and Mr Mallon. It refers to the commencement of the Complainant’s full-time contract on 11 June 2018 (sic) and continues: “between the date of this letter and then, you will be expected to make yourself available 2 days per week, based in Bond Road to support the existing team and commence the process of taking control of transport operations”. This appears to be totally at odds with the Complainant’s evidence to the Court that he was working up to seven days a week in the Respondent’s business from “May or June” 2018. (See below.) The commencement date of the contract is reiterated as 11 June 2018 in Clause 6 thereof, headed ‘Commencement’. Clause 8 provides for an annual salary of €85,000.00. Provision is made for a contribution of up to €15,000.00 to an approved pension scheme in Clause 10. The Complainant told the Court on a number of occasions that it had been his idea to state a commencement date of 11 June 2018 in the contract as a form of protection should anything go wrong with his employment with the Respondent following Mr Casey’s departure. The contract as exhibited is signed only by the Complainant and his signature is dated 29 May 2019 i.e. the day after Ms Kelly sent the email (which Mr Mallon says he never opened) and some nine days before the date on the letter of offer (7 June 2019). It is common case that the letter of offer and contract of employment, although on the Respondent’s headed paper, was not prepared by the Respondent’s human resources department or advisors but by an external party on Mr Casey’s instructions. The Complainant’s Evidence: The Complainant told the Court that he had previously worked for Mr Mallon and the Respondent but that that period of employment had ended in January 2017 and had not been a happy experience for him. He said that he was approached in early 2018 by Mr Casey to take on the position of Transport Manager with the Respondent. He had been working in the United Kingdom immediately before that. He said he was reluctant, based on his previous experience, to accept Mr Casey’s offer. Having considered the offer, however, he did accept it but on the basis that he would be employed by one of Mr Casey’s companies. His evidence was that he was employed on a contract of service by Donworth which company made PAYE, PRSI and USC returns on his behalf. Dunworth in turn, he said, invoiced the Respondent for his services. According to the Complainant, Mr Casey wanted him to be his “eyes and ears” on the ground in the Respondent company. He said he worked exclusively for the Respondent from “May or June” 2018 onwards. When Mr Casey was preparing to exit the Respondent’s business, according to the Complainant, he indicated to him that he wanted the Complainant to continue on working for the Respondent. Hence Mr Casey came to cause the letter of offer and contract of employment referred to earlier to be drafted and forwarded to Mr Mallon. The Complainant’s evidence is that terms of this contract mirrored those of his contract of employment with Donworth. Following Mr Casey’s resignation as a director of the Respondent company, the Complainant said, the Respondent lost a significant client that comprised, in his estimation, twenty-five per cent of its overall business. This, he said, led to increased pressure from suppliers who were insisting on being paid in advance. He discussed his concerns with Mr Mallon who, he said, told him he wanted the Complainant to continue working for the business and even offered him a ten per cent stake in it. The Complainant says he agreed to remain working for the Respondent and committed to assist with restructuring the business. He then told the Court that he was driving to work on the morning of 11 October 2019 when he received a phone call from Mr Mallon during which Mr Mallon terminated his employment and alleged that he had been working for Mr Casey while on the Respondent’s payroll. The Complainant said he received a second brief telephone call from Mr Mallon later that evening in which Mr Mallon advised him that a detective would be present at the Respondent’s premises in Bond Street if the Complainant wished to make a statement to him. The Complainant told the Court that he had done some work for Mr Casey but that this had been done on his own time. He said he had dismantled a large desk for him in Bond Street on a Sunday and, on another occasion, he had supervised the loading of a truck with scrap metal in Dundalk. Under cross-examination, the Complainant confirmed that he had had a contract of employment with Donworth from May or June 2018 up until he was placed on the Respondent’s payroll in August 2019. He further confirmed that invoices were issued from Galmere to the Respondent in respect of his professional services to the Respondent whilst in Donworth’s employment. The Solicitor for the Liquidator put it to the Complainant that his evidence in relation to the alleged offer of a ten per cent stake in the Respondent’s business was incorrect and that Mr Mallon’s evidence would be that he offered the Complainant a ten per cent stake in a proposed new company that he intended to incorporate for the purpose of handling a completely new line of business. It was also put to the Complainant that he had been provided with a company laptop by Donworth and that he had limited access to the Respondent’s systems while in Donworth’s employment. The Complainant agreed that his access was limited to the Respondent’s transport systems only. The Complainant was also asked about his claim for outstanding expenses from the Respondent. He told the Court in reply that these had been incurred in the course of visiting the Respondent’s customers. The Complainant’s booklet of papers contained a summary of expenses he submitted remained due to him for the period June 2018 to September 2019. (This matter is dealt with in the Court’s Decision under the Industrial Relations Act 1969, CD/20/328). The Complainant accepted that the expenses detailed in his summary statement had been submitted to Donworth. In response to questions from the Court, the Complainant accepted that whilst employed by Donworth he had been working in a consultative capacity for the Respondent and did not become an employee of the Respondent until mid-August 2019. He confirmed for a second time that Donworth had deducted and remitted PAYE, PRSI and USC on his behalf during the period of his employment with that company. He then told the Court that his contract of employment with Donworth ended in August 2019 by mutual consent and/or by means of an ‘informal resignation’ and that he commenced employment with the Respondent on 17 August 2019. The Complainant confirmed that the seven payslips exhibited in the papers before the Court accurately reflected the salary payments he received from the Respondent between August and October 2019. Evidence of Mr Jason Mallon: Mr Mallon confirmed that he had been the Managing Director of the Respondent up until the date of the appointment of the Liquidator. He said that the Respondent, at its height, had employed between 170 and 190 employees and had an internal human resources department, supported by an external consultancy, and a payroll function. Mr Mallon told the Court that Mr Casey had wanted the Complainant in the Respondent’s business, managing its transport and logistics functions, as his [Mr Casey’s] eyes and ears on the ground. He said it was his belief that the Complainant also did extensive work for Mr Casey’s suite of companies during the period throughout which the Respondent was invoiced on a monthly basis by Galmere for the Complainant’s services. The witness said that the Respondent discharged most of those invoices (other than the last one or two) because it was obliged to do so but he was not happy about the arrangement. He had accepted the imposition of the Complainant on the Respondent’s business in the context of trying to negotiate Mr Casey’s and Donworth’s exit from the Respondent’s operations. According to the witness, this process had been underway since mid-2018 and it was intended that it would be concluded by 11 June 2019 but in fact was not concluded until 13 August 2019. He said he purchased Donworth’s shareholding in Malonvale with a view to restructuring the Respondent’s business which was struggling by this time. He then told the Court that Mr Casey had made it a condition of his exiting the business that the Complainant’s future employment with the Respondent would be secured. The witness told the Court in his direct evidence that he was familiar with the letter of offer and that he had accepted he signed it. He said he was not familiar with the contract of employment, however. His evidence was that he had noticed the reference to a commencement date of 11 June 2018 in the letter of offer but had assumed it to be a typo. He said that one of the problems with the Respondent’s business that led to his decision to attempt to restructure it was that all of its business lines were conducted through one legal entity. He said his intention was to set up a number of distinct entities through which he would run individual elements of the business. According to the witness, the offer he had made to the Complainant was of a ten per cent equity stake in one such entity as opposed to a ten per cent stake in the Respondent. The witness gave evidence in relation to the state of the Respondent’s business in the period immediately prior to the Complainant’s termination. He said this a particularly challenging period for the business. While the business had achieved profitability, cashflow remained a problem. He told the Court that shortly before dismissing the Complainant he had received a telephone call from a large haulage company in the midlands that the Respondent did business with. He travelled to meet a representative of that company. At the meeting he was shown text messages, he said, on the phone of an employee of the haulage company who had regular dealings with the Complainant. The import of the text messages from the Complainant was that the haulage company should retain any stock it held on the Respondent’s behalf until such time as the Respondent had paid for the haulage services. According to the witness, this was exacerbating the Respondent’s cashflow problems and was putting it in severe jeopardy. The witness gave evidence in relation to his office in Bond Street. He told the Court that while he primarily worked from Galway he retained a dedicated office space in Bond Street for his exclusive use. He said that Mr Casey had unilaterally decided to commandeer that office for Ms Kelly and instructed the Complainant to dismantle it which he did during the final week of August 2019 while in the Respondent’s employment. In relation to the Complainant’s expenses claim, the witness said that he declined to pay them because they had not been incurred in relation to the Respondent’s business and were connected to specific business entities with which the Respondent did not do business. He also said that the Complainant had not been employed in a customer-facing role. His role was a technical one. Under cross-examination, the witness said that he was unaware of Ms Kelly’s email of 28 May 2019 and the contract appended to it. In response to Counsel’s questions, he accepted that he agreed with Mr Casey in 2018 to have the Complainant in place as Mr Casey’s eyes and ears on the ground but that he regarded this as a negative thing and believed that Mr Casey had foisted the Complainant on the Respondent. He said he believed that Mr Casey was fully aware that he did not want either the Complainant or Ms Kelly and certainly didn’t need the additional costs they brought. He also said he believed that Mr Casey and his companies benefited from the Complainant’s labour without having to pay for it. The witness said that although the Complainant was supposed to be reporting to him, he was in fact reporting at all times to Mr Casey with the result that Mr Casey was able to tell him (the witness) what was going on “in his business”. The Complainant also did a lot of work for Mr Casey and his companies, according to the witness, in the period from mid-2018 to mid-2019 during which period he had not been working on a full-time basis for the Respondent, albeit he was in and out of the Respondent’s premises up to five days per week. Nevertheless, the witness said he had been prepared to give the Complainant the benefit of the doubt by accepting him into direct employment with the Respondent as part of the deal to exit Mr Casey and Donworth as he was aware of the Complainant’s skill set and had seen him do good work in the past. However, the witness said, it became obvious to him very quickly that the Complainant’s focus remained on Donworth and Mr Casey. This, he said, was confirmed to him when the Complainant ‘trashed’ his office on Mr Casey’s instructions and from the texts from the Complainant shown to him by the haulier’s employee. Counsel’s Submission on behalf of the Complainant: Mr Drumm BL submitted that the contract of employment of employment signed by the Complainant on 29 May 2019 is a valid and enforceable contract that recognises the Complainant’s continuous service with the Respondent from June 2018 onwards. He further submitted that both the Complainant and Mr Mallon on behalf of the Respondent freely entered into the contract and, in doing so, intended to create legal relations. The Complainant, he said, is entitled to rely on the agreement he had concluded with the Respondent that provides for his continuous service with the Respondent from 11 June 2018. Submission on behalf of the Respondent/ Liquidator: Mr Gough, Solicitor for the Liquidator, submitted that a complainant under the 1977 Act is ordinarily required (with some exceptions not applicable to the Complaint herein) by virtue of section 2 of the Act to have continuous service of one year with an employer in order to come within scope of the Act. Continuous service for the purposes of the Act is reckoned in accordance with the First Schedule to the Minimum Notice and Terms of Employment Act 1973. In his submission, the evidence before the Court does not establish that the Complainant had accrued sufficient continuous service within the terms of the First Schedule of the Act of 1973 to bring him within the protection of the Act. Mr Gough further submitted that section 13 of the 1977 Act provides that “[a] provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of this Act) shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with, any provision of this Act.” In his submission, a contract of employment – such as that relied on by the Complainant – which purports to backdate the commencement date of the contract is inconsistent with section 2 of the Act and is thus rendered void by section 13. Discussion and Decision: The Court found both the Complainant and Mr Mallon to be credible and honest witnesses. For the purposes of the within appeal under the 1977 Act, the dispute between the Complainant and the Respondent centres on the issue of whether or not the provision in the contract of employment signed by the Complainant on 29 May 2019 purporting to backdate the commencement of his service with the Respondent to the 11 June 2018 is enforceable. Clause 6 of the contract provides:
Mr Mallon’s evidence is that he signed the letter of offer to the Complainant, drafted on Mr Casey’s instructions, on some date after it had been sent to him by email on 28 May 2019. There is no date beside his signature. He said he subsequently noticed the reference in the letter of offer to the Complainant’s full-time contract commencing on 11 June 2018 but presumed this to have been a typo having regard to the context in which he agreed, on behalf of the Respondent, to employ the Complainant as part of the wider agreement he had with Mr Casey to exit Mr Casey and Donworth from the Respondent’s business. Mr Mallon told the Court that that deal was originally intended to close on 11 June 2019 and, therefore, he didn’t initially notice what he subsequently views as an error. The Court has already adverted to a number of unusual aspects of the letter of offer and the contact. It worth summarising those again here. A document was included in the Complainant’s papers and opened to the Court which, it is submitted, is a copy of the letter of offer and contract of employment appended to Ms Kelly’s email of 28 May 2019 to Mr Mallon. However, the letter of offer opened to the Court is dated 7 June 2019. No explanation was given to the Court as to how or why the letter of offer drafted on or before 28 May 2019 should bear this date. The letter is signed by both Mr Casey and Mr Mallon but no date appears beside either signature. Clearly, the letter of offer refers to the commencement date of the Complainant’s full-time contract with the Respondent as being on 11 June 2018 and continues: “between the date of this letter and then, you will be expected to make yourself available 2 days per week, based in Bond Road to support the existing team and commence the process of taking control of transport operations”. This simply makes no sense at all when one recalls the letter is dated 7 June 2019 and is inconsistent with the Complainant’s evidence that he had been working up to seven days a week in the Respondent’s business from “May or June” 2018. The contract as exhibited is signed only by the Complainant and his signature is dated 29 May 2019 i.e. the day after Ms Kelly sent the email (which Mr Mallon says he never opened) and some nine days before the date on the letter of offer (7 June 2019). It is common case that the letter of offer and contract of employment, although on the Respondent’s headed paper, was not prepared by the Respondent’s human resources department or advisors but by an external party on Mr Casey’s instructions. The Complainant told the Court that the contract of employment mirrors the terms of his employment contract he had with Donworth. Mr Mallon told the Court that is not in the Respondent’s normal format. Also of note is the letter of offer signed by Mr Casey and dated 7 June 2019, issued – according to Mr Mallon’s uncontested evidence and confirmed by the Complainant himself – at a time when Mr Casey’s involvement with the Respondent company were numbered. It begs the question why Mr Casey states in the offer letter- drawn up allegedly on his instructions -“I look forward to receiving your confirmation soonest and to working closely with you over the coming years”. Mr Mallon did accept, under cross-examination, that he had said before the Workplace Relations Commission that he had signed the employment contract issued to the Complainant on Mr Casey’s instructions. He also said, when pressed by Counsel, that he wasn’t seeking to resile from that evidence now in the course of the appeal. No copy of the contract signed by Mr Mallon was opened to the Court, however, although the signed letter of offer before the Court was presented together with the contract as a single document with continuous pagination. This is yet a further curiosity in this case. Mr Mallon said in his direct evidence that he was familiar with the letter of offer but not with the contract. He accepted that the letter of offer and the contact both identify the Complainant’s start date as 11 June 2018. In so far as the Complainant noticed this date in the letter of offer, for the reasons outlined above, he believed it be an error and he said he was occupied with more significant issues associated with transitioning Mr Casey out of the Respondent’s business and generally with the restructuring of the business moving forward. Having regard to the totality of the evidence before it, the internal inconsistences and discrepancies in the letter of offer and contract of employment and the other features of those documents that appear to make no sense, as outlined above, the Court finds that the claim that Mr Mallon - on behalf of the Respondent – knowingly entered into a contact that purported to retrospectively create a legally enforceable employment relationship with the Complainant backdated to 11 June 2018 has not been made out, on the balance of probabilities, on the Complainant’s behalf. On the basis of the evidence before it, the Court finds that the Complainant’s employment with the Respondent commenced on 17 August 2019 and ended on 11 October 2019. This finding, it appears to the Court, is supported by the Complainant’s evidence that when accepting Mr Casey’s original offer of employment, he insisted that he be employed by one of Mr Casey’s companies. In the Court’s judgment, therefore, the Complainant has not established a basis on which to demonstrate that he has sufficient continuous service as a direct employee of the Respondent to pursue a complaint under the 1977 Act against the Respondent. The Complainant, in short, does not havelocus standito maintain the within complaint. The appeal fails and the decision of the Adjudication Officer is affirmed. The Court so determines.
NOTE Enquiries concerning this Determination should be addressed to Shane Lyons, Court Secretary. |
