Complainant

Respondent

Parties

Clive  Jones

Cork County Council

Representatives

Claire Bruton, B.L., instructed by  Ronan Daly Jermyn Solicitors

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-00036516-001

22/04/2020

This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and S.I. No. 359/2020 which designates the WRC as a body empowered to hold remote hearings.

Witnesses for both parties gave their evidence under affirmation and both parties were permitted to cross examine witnesses for the other party.

The complainant was employed by a third-party company who operated parking enforcement services under an outsourced fixed term contract from the respondent.

The complainant submitted that he was an employee of a third-party employer who operated an outsourced parking enforcement service for the respondent.

The complainant submitted that when the respondent decided to take the service back in-house it should also have taken the employees back as this constituted a transfer of undertakings under the regulations.  The complainant submitted that he was not informed that the transfer was taking place.

The complainant submitted that when the positions as parking warden were announced, he applied but was unsuccessful in obtaining a position.

The complainant submitted that his former employer told the respondent that this matter was a transfer of undertakings and should be dealt with as such.

The respondent submitted that it had outsourced is parking enforcement services to a third party under a time limited service level agreement.  When the contract expired, the respondent decided to amalgamate the parking and litter warden and to provide the service from within its own resources. 

The respondent submitted that the complainant was never its employee and accordingly, it rested with his employer to inform him about any changes to his employment.

The respondent conducted interviews to employ additional staff needed to provide the service.  The complainant applied for a position but was ultimately unsuccessful at interview.

The respondent submitted that no transfer took place, outlining how there was no transfer of an economic entity and that assets were transferred.  All assets – uniforms, machines and vehicles had been provided by the contract holder and all training was provided by the contract holder.  None of this transferred to the respondent when the contract ceased.  The respondent submitted that what occurred was that the third-party company lost the contract.

The respondent submitted that at no time did the former contract holder claim that end of the contract constituted a transfer of undertaking for the purposes of the Transfer Regulations.

The respondent submitted that the complainant accepted his redundancy from his former employer and did not seek a transfer to the respondent.  The complainant applied for the traffic/litter warden which was not the same as his previous position.

The respondent, in support of its contention that no transfer took places, cited the Transfer Regulations and some pertinent caselaw for the Adjudicators consideration, including the following:  Spijkers (Josef Maria Antonium Spijkers v Gebroeders Benedic Abattori CV and Alfred Benedik en Zonen BV [1988] 2 C.M.L.R. 296 ), Suzen (Suzen v Zehnacker Gebaudereingigung GmbH Krankenhausservuce [1997] I.R.L.R. 255), Overpass Ltd T/A Ocean Property Management v Clancy (TUD 1713), Case E-2/04, Rasmussen and Others – v- Total E & P Norge AS, Bligh v Stabart Ireland Services Limited (TU29/2011, TU30/2011, TU31/2011), Keymore Construction Limited v Keogh, (TUD201), Cannon v Noonan Cleaning Ltd [1998] ELR 153, Clece SA v Valor C-463/09, [2011] IRLR 251

This complaint revolves around the existence or otherwise of a transfer of undertaking as outlined in the Regulations.  Section 3(1) of the Regulations states that

These Regulations shall apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger.

Section 3(2) of the regulations outlines that  

"transfer" means the transfer of an economic entity which retains its identity; and

"economic entity" means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity

In the case of Spijkers cited by the respondent, the Court of Justice of the European Union (CJEU) held at point 13 of its decision that  

It is necessary to consider all the facts characterising the transaction in question, including the type of undertaking or business, whether or not the business’s tangible assets, such as buildings and movable property, are transferred, the value of its intangible assets at the time of the transfer, whether or not the majority of its employees are taken over by the new employer, whether or not its customers are transferred and the degree of similarity between the activities carried on before and after the transfer and the period, if any, for which those activities were suspended.  It should be noted, however, that all those circumstances are merely single factors in the overall assessment which must be made and cannot therefore be considered in isolation.

In the Labour Court case of Overpass Ltd T/A Ocean Property Management v Clancy cited by the respondent, the Court considered the decision of Spijkers in light of the CJEU decision in Suzen wherein it noted that the CJEU “looked at the elements set out in Spijkers, applied them and found that no transfer of tangible assets had taken place”. It then cited the following:

“The mere fact that the service provided by the old and the new awardees of a contract is similar does not therefore support the conclusion that an economic entity has transferred. An entity cannot be reduced to an activity entrusted to it. Its identity also emerges from other factors such as its work force, management staff, the way in which its work is organised, operational methods or where appropriate the operational resources available to it”.

The Labour court then considered the following:

In the judgment, the ECJ drew a distinction between businesses that are asset-reliant, on the one hand, and those that are labour-intensive, on the other. It found that in certain sectors in which the business is based essentially on the workforce, as in the present case, there can be a transfer within the meaning of the Directive where the group continues to exist after the taking over of an essential part of the workforce by the new awardee of the contract.

However, the Labour Court continued it deliberations and noted that “No property or tangible assets transferred; There was no transfer of goodwill or other intangible assets; No employees transferred.”. Arising from this the Court concluded the following:

Applying the law, as set out by the aforementioned judgements of the ECJ, to the facts of this case, the Court must come to the conclusion that the economic entity as operated by Gleann Na Rí did not retain its identity within the Respondent organisation. Accordingly, there was no transfer of an undertaking and the Regulations do not apply.

Having considered the deliberations of the Labour Court in light of the CJEU (ECJ) caselaw, I find that similar circumstances apply in the instant case in that no property or tangible assets transferred, there was not transfer of goodwill or other intangible assets and no employees transferred.  Applying similar reasoning to that of the Labour Court, I find that there was no transfer of undertaking and the Regulations do not apply. 

Arising from all the written and oral evidence submitted in relation to this matter, I find that this complaint is not well founded.

My decision is that this complaint is not well founded.

Transfer of Undertaking Regulations, not well founded