RPD223

FULL RECOMMENDATION

REDUNDANCY PAYMENTS ACTS, 1967 TO 2014

PARTIES :

BALLYLEAGUE MUSHROOMS LIMITED
(REPRESENTED BY PENINSULA BUSINESS SERVICES)

- AND -

MR LIMARS BERZABINDS
(REPRESENTED BY JOHN CURRAN B.L., INSTRUCTED RICHARD STAPLETON SOLICITORS)

DIVISION :

SUBJECT:

1.Appeal of Adjudication Officer Decision No. ADJ-00027644, CA-00035597-001

BACKGROUND:

2.The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 8 September 2021 in accordance with the Redundancy Payments Acts 1967 to 2014. A Labour Court hearing took place on 13 January 2022. The following is the Determination of the Court:

DETERMINATION:

This is an appeal by Ballyleague Mushrooms Limited against the decision of an Adjudication Officer ADJ-00027644 dated 13 August 2021, given under the Redundancy Payments Act 1967 (‘the Act’), on foot of a claim made by Mr Llmars Berzabind. The Adjudication Officer held that Mr Llmars Berzabinds’s claim for a redundancy payment was well-founded.

A Notice of Appeal was received by the Labour Court on 08 September 2021 and a remote hearing of the Court held on 13 January 2022.

On the same day the Court heard an appeal by the same Respondent against the decision of an Adjudication Officer in relation to another employee, Mr Martin Biedre, RPA/21/16 (Determiniation no.RPD222) under the Redundancy Payments Acts, 1967.

The parties confirmed to the Court that, aside from a different start date and rate of pay, the same key facts and evidence will be relied upon by both parties in Mr Berzabind’s appeal.

In those circumstances, the Court proposed that it rely on the submissions and evidence already tendered in RPA/21/16 and both parties confirmed their agreement with this approach. Both parties confirmed Mr Berzabind’s start as 15 November 2011 and that his rate of pay as €572.40.

The parties are referred to in this Determination below as they were at first instance. Hence, Mr Berzabind is referred to as the Complainant and Ballyleague Mushrooms Limited is referred to as the Respondent.

Background

The Complainant submits that he is entitled to a declaration of redundancy in the amount of €10,028.44. The Respondent rejects that claim and submits that the Complainant is not entitled to a statutory redundancy payment by operation of Section 7(2A) of the Act.

The key facts of this case are not disputed. The Complainant commenced employment as a Mushroom Harvester in January 2007. The Respondent was a mushroom producer, producing mushrooms primarily for the United Kingdom retail market.

It suffered a significant reduction in trade following Brexit and the departure of the United Kingdom from the European Union.

On 6 January 2020 the Respondent commenced an information and consultation process with employees to inform them of the challenging economic circumstances affecting the company. On the same date, the Respondent issued the Complainant with notice of termination of his employment by way of redundancy with a termination date of 14 February 2020.

On 14 February 2020 the Complainant was informed by letter that he was “no longer employed by Ballyleague Mushrooms limited due to the reorganisation of the company making his position redundant. The company is at present calculating all redundancy entitlements”.

The Complainant was issued with an RP50 form stating that his employment ended on 14 February 2020. 57 employees of the respondent were made redundant on the same date.

The Complainant submitted a claim under the Act to the Workplace Relations Commission (WRC) on 6 April 2020.

Following an upturn in the market, the Respondent wrote to employees on 27 May 2020 informing them that production would recommence in June 2020 and that their previous role was available to them. The Complainant did not take up the invitation to return to work. The Respondent ceased trading in January 2021.

Summary of Complainant’s Case:

Mr John Curran B.L. on behalf of the Complainant submits that the Respondent is seeking to rely on a technical argument to defeat the Complainant’s entitlement to a statutory redundancy payment and that such a defence is entirely misconceived.

The Complainant’s RP50 form and the letter issued to him on 14 February 2020 provide irrefutable proof of the fact that his position was made redundant. The Complainant waited several weeks after 14 February 2020 for his statutory redundancy entitlement. When he made enquiries about his payment, it became clear to him that the company were seeking to avoid their legal responsibility.

As a result, he submitted a complaint to the WRC on 6 April 2020.

It is submitted that the Respondent is acting in a cavalier manner in relation to the rights of the Complainant and other workers.

It was only after a complaint was submitted to the WRC that the Respondent sought to rely on Section 7(2A) of the 1967 Act and to construe the termination of the Complainant’s employment as part of a wider exceptional collective redundancy. The Respondent did not treat the situation as a collective redundancy or as an exceptional collective redundancy in January 2020 when consulting with employees.

It is submitted that collective redundancies, as provided for under theProtection of Employment Act 1977,and exceptional collective redundancies,as provided for under theProtection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 have no application in this case. The Respondent did not notify the relevant Minister or follow other procedural steps as required under those Acts.

The Complainant’s redundancy cannot be considered to be part of a collective redundancy or part of an exceptional collective redundancy and the Respondent cannot rely on Section 7(2A) of the Act to avoid its obligations under the Act.

It is submitted that Section 7(2A) of the Act must be strictly construed, and the Complainant was not dismissed for the purposes of facilitating the employment of others, as provided for in that section.

The Complainant’s employment terminated by reason of redundancy on 14 February 2020. He was not laid off. The fact that the Complainant’s role was made redundant cannot be changed by subsequent events which did not emerge until some three and a half months later after a redundancy was implemented. In such circumstances, the Complainant is entitled to a statutory redundancy payment in the amount of €10,028.44.

Summary of Respondent’s Case:

The Respondent submits that the Claimant is excluded from the protection of the 1967 Act by operation of section 7(2A) of the 1967 Act (as amended) and so is not entitled to a statutory redundancy payment.

The termination of the Complainant’s employment satisfies Section 7(2A) of the Act which sets out circumstances where an employee who is dismissed shall be taken not to be dismissed by reason of redundancy.
The Respondent outlined how the requirements set out in Section 7(2A) were satisfied as follows:

All 57 employees of the Respondent were made redundant in February 2020. This satisfies the requirement of Section 7(2A)(a) of the Act.

On the 12 June 2020 the Respondent made an offer of suitable employment to the Complainant, which was not accepted by him, which satisfies the requirement of Section 7(2A)(a) of the Act.

The complainant was one of a number of employees made redundant on a collective basis in February 2020 and those dismissals were implemented on a compulsory basis, satisfying the requirements of Section 7(2A)(b) of the Act.

The dismissed employees were replaced by other persons whose services were provided to that Respondent in pursuance of other arrangements that satisfy Section 7(2A)(c)(ii) of the Act.

Those workers who replaced the dismissed employees performed essentially the same tasks as the Respondent in satisfaction of Section 7(2A)(d) of the Act.

Finally, the terms of employment of the workers who replaced the dismissed employees were materially inferior to those of the Respondent in that they were not engaged as employees by the Respondent. This satisfies the requirement of Section 7(2A)(e) of the Act.

Accordingly, the Respondent submits that Complainant is not a person to whom section 7(1) of the Act applies and his claim for pay pursuant to section 39 of the Act should be dismissed.

Witness Evidence - Eugene Kiernan

The Court heard evidence from Mr Eugene Kiernan on behalf of the Respondent in relation to the consultation process.

Mr Kiernan outlined the difficulties that the Respondent company encountered with a significant reduction in trade following Brexit. He gave evidence that he met with employees in January 2020 to outline how sales had gone through the floor.

In February 2020 he issued the Complainant with a letter that confirmed his redundancy and that he was no longer an employee.

Mr Kiernan told the Court that in March 2020 the retail market improved drastically and that he could foresee a situation where the Respondent could employee all employees.

In May 2020 the Respondent wrote to all employees, including the Complainant, informing them that production would recommence in June 2020.

Mr Kiernan met with a group of workers in June 2020 and advised them that their previous role was available to them. A contractor was subsequently engaged to address staffing needs. The Complainant did not accept that offer. Mr Kiernan told the Court that the Respondent had not manipulated a situation to avoid paying a redundancy payment.


The Relevant Law

Section 7 of the Redundancy Payment Act, 1967, sets out a general right to a redundancy payment as follows:

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,

Section 7(2A) of theRedundancy Payments Act 1967(as amended) was inserted by section 16 of theProtection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007.This subsection sets out certain circumstances where an employee who is dismissed shall be taken not to be dismissed by reason of redundancy.

Section 7(2A) provides:

For the purposes of subsection (1), an employee who is dismissed shall be taken not to be dismissed by reason of redundancy if—

(a)the dismissal is one of a number of dismissals that, together, constitute collective redundancies as defined insection 6of theProtection of Employment Act 1977,

(b)the dismissals concerned were effected on a compulsory basis,

(c)the dismissed employees were, or are to be, replaced, at the same location or elsewhere in the State, (except where the employer has an existing operation with established terms and conditions) by—

(i)other persons who are, or are to be, directly employed by the employer, or

(ii) other persons whose services are, or are to be, provided to that employer in pursuance of other arrangements,

(d) those other persons perform, or are to perform, essentially the same functions as the dismissed employees, and

(e) the terms and conditions of employment of those other persons are, or are to be, materially inferior to those of the dismissed employees.

Collective redundancies are defined insection 6of theProtection of Employment Act 1977which provides:

(1) For the purpose of this Act, ‘collective redundancies’ means dismissals effected by an employer for one or more reasons not related to the individual concerned where in any period of 30 consecutive days the number of such dismissals is —

(a) at least 5 in an establishment normally employing more than 20 and less than 50 employees,

(b) at least 10 in an establishment normally employing at least 50 but less than 100 employees,

(c) at least ten per cent. of the number of employees in an establishment normally employing at least 100 but less than 300 employees, and

(d) at least 30 in an establishment normally employing 300 or more employees.

Deliberation and findings

The matter for the Court to decide is whether or not the Complainant is entitled to a statutory redundancy payment in accordance with Section 19 of the Redundancy Payments Act 1967.

The key facts are not disputed. On 6 January 2020 the Complainant was issued with a notice of termination of his employment by way of redundancy.

The Complainant was issued with an RP50 form stating that his employment terminated on 14 February 2020 by reason of redundancy. He was given a letter of the same date advising him that the Respondent was in the process of calculating all redundancy entitlements. The Complainant was one of 57 employees made redundant on that date.

The Respondent submits that the termination of the Complainant’s employment in February 2020 satisfies the criteria contained in Section 7(2A) of the Redundancy Payments Act 1967. As a result, the Respondent submits that the Complainant has no entitlement to a statutory redundancy payment.

Section 7(2A) sets out certain circumstances where an employee who is dismissed can be deemed not to be dismissed by reason of redundancy. Section 7(2A) was enacted as an amendment to the 1977 Act with the implementation of theProtection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007.

That Act provided a legal framework for addressing collective redundancies where a group of employees who are made redundant on a compulsory basis are replaced with another group of persons, at the same location or elsewhere, to essentially perform the same duties but on materially inferior terms and conditions of employment. The Respondent says that is what happened in this case and that, as a result, the Complainant is excluded from the protections of the Act.

Section 7(2A)(a) of the Act requires that the dismissal of an employee is one of a number of dismissals that, together, constitute collective redundancies as defined insection 6of theProtection of Employment Act 1977.

In this regard, the Respondent submits that all 57 employees of the Respondent were made redundant in February 2020 and that this satisfies the requirement of Section 7(2A)(a) of the Act.

In response to questions from the Court, the Respondent confirmed that the implementation of redundancies in February 2020 was not treated as acollective redundancy. In January 2020 the Respondent commenced an information and consultation process with employees, including the Complainant, to inform them of the challenging economic circumstances facing the company.

The Respondent confirmed to the Court that there was no mention of collective redundancies when engaging with employees and, furthermore, that the relevant Minister was not notified of any proposed collective redundancy as is required under theProtection of Employment Act 1977. The Respondent confirmed that no procedures were utilised to trigger acollective redundancyor anexceptional collective redundancy, as provided for under the statutes.

Notwithstanding that the Respondent did not treat the situation in January and February 2020 as acollective redundancy, the Court finds that the Complainant was one of a group of employees made redundant as part of a collective redundancy and that this satisfies the requirements at Section 7(2A)(a) of the Act.

Section 7(2A)(b) of the Act specifies that the dismissals concerned must be effected on a compulsory basis. In this case it is not in disputed that the redundancies in February 2020 were implemented on a compulsory basis and the Court finds that the compulsory nature of the redundancies satisfies the requirements set out at Section 7(2A)(b) of the Act.

The Act at Section 7(2A)(c) addresses the replacement of dismissed employees by other persons.

The replacement of dismissed employees can be at the same location or elsewhere and may be by persons directly employed by the employer or by other persons whose services are provided to that employer.

The language used in Section 7(2A)(c) refers to employees who‘were, or are to be, replaced...’.This wording implies that Section 7(2A)(c) can apply in circumstances where a group of dismissed employees are replacedat the same timethat a collective redundancy is implemented, or where it is envisaged that the dismissed employees will be replaced at some point laterafteracollective redundancy is implemented.Section 7(2A) of the Act is silent on a timeline for replacing a group of employeesafter acollective redundancy is implemented.

The Complainant was issued with an RP50 form on the 14 February 2020 terminating his employment. The Respondent confirmed that when the Complainant’s employment ended in February 2020 that the Respondent had no plans to recommence production.

Those plans developed in March 2020 after the Complainant’s redundancy was implemented. Mr Kiernan gave evidence to the Court that plans to recommence production only arose in March 2020 following a ‘drastic’ improvement in the retail market when the Respondent could foresee a situation where they could employee workers.

In such circumstances, the Court finds that there were no plans in being to replace dismissed employees at the time the Complainant’s employment terminated in February 2020. Where plans to recommence production and replace dismissed employees only crystallised in late May/early June after the employees who were made in redundant in February 2020 refused the offer of re-engagement, the Respondent cannot rely on the operation of Section 7(2A)(c) of the Act to deny the Complainant a statutory redundancy payment. The Court is of the view that such a defence is misconceived. The Court finds that the requirements as set out in Section 7(2A)(c) are not satisfied.

As the Court has found that the Respondent cannot rely on the operation of Section 7(2A)(c) of the Act to deny the Complainant a statutory redundancy payment by virtue of the above, it is not necessary for the Court to consider the other criteria set out at Sections 7(2A)(d) and 7(2A)(e) of the Act.

For these reasons outlined above , the Court finds that the criteria set out in Section 2A of the Act do not apply in the circumstances of this case. As a result, the Court finds that the Complainant was dismissed by reason of redundancy on 14 February 2020.

Accordingly, the Court finds that the complainant is entitled to a redundancy payment in line with the Redundancy Payments Acts in respect of his service between 15 November 2011 and 14 February 2020.

It is agreed that the complainant’s rate of pay was €572.40per week and that figure should be used when calculating the redundancy amount in accordance with Schedule 3 of the Redundancy Act 1967.

This award is made subject to the Complainant having been in insurable employment under the Social Welfare Acts during the relevant period.

The Court determines that the Complainant’s claim is well founded. The Adjudicator’s decision in relation to ADJ-00027644 is upheld accordingly.

The Court so determines.

NOTE

Enquiries concerning this Determination should be addressed to Orla Collender, Court Secretary.