Complainant

Respondent

Parties

Karolina  Warszewska

Luxury Reservations Ltd T/A Marriott International

Representatives

Noel Murphy Independent Workers Union

Shane Crossan  O'Flynn Exhams LLP 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-00039715-001

09/09/2020

The Complainant commenced employment with Starwood Reservations Limited (hereinafter “the Transferor”) on 20 January 2014 as a customer services representative. She earns a gross monthly salary of €2832; net €2107.  The business of the company was to facilitate all aspects of foreign holidays being booked by its clients. On 1 April 2020 there was a Transfer of Undertakings when the Respondent company took over the existing business. The Complainant submits that her terms and conditions of employment were adversely affected by the Transfer, particularly regarding the manner by which she was compensated for working a public holiday and the insertion of a clause in the sick pay policy that significantly changed the nature of the policy. The Complainant contends that these changes were in breach of Regulation 4 the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. 131 of 2003) - hereinafter “the Regulations”.

The Respondent submits that it complied with its obligations under the Regulations. It was accepted by both sides that a Transfer of Undertakings had taken place 0n 1 April 2020.  The Complainant accepted that the complaint was solely regarding a breach of Regulation 4 dealing with Rights and Obligations after a transfer.

Prior to the Transfer of Undertakings, the Respondent advised the workforce to set up a representative group. The Respondent engaged with this workers’ group on a number of occasions in February 2020.

The Respondent decided that they would make four changes in the terms and conditions of the Transferee’s employees as follows:

1. The Sunday Premium which attracted a premium payment of 25% would be

increased to paying a premium of 50%.

2. The 10 days of sick leave would be increased to 15 days on the basis of the new company’s rules being applicable to the policy

3. A Public Holiday worked would be paid at double time. A public holiday not worked

would attract a paid day off.

4. The Option of an additional day of annual leave for working a public holiday was to be abolished.

The Complainant said she did not sign her new contract.  The Complainant accepts that there were improvements in the rate for Sunday premium and in the sick day allocation. While she stated, in evidence, that she welcomes any improvements, she is not willing to trade such improvements for deterioration in conditions in other areas.

Sick Pay:

The Complainant is unwilling to accept the new company’s rules pertaining to the sick pay

policy. She submits that the new policy implies that medically certified illness may not be genuine and therefore can be subject to the company disciplinary policy. The Complainant has an issue specifically with the following wording:

“For the avoidance of any doubt, we want to again confirm to you

that where there are genuine cases of absence due to illness, an

Associate will not be disciplined under the disciplinary procedure”

The Complainant believes that this clause might see her being disciplined, having submitted medical certification of illness, should somebody within the company believe that her illness might not be genuine. The Complainant asserts that the sick pay arrangement under the Transferor contained no such clause.

Public Holidays:

The Complainant submits that the majority of the non - Irish workers with the Transferor were given the option of taking an extra day of Annual Leave in lieu of a worked public holiday. The Complainant welcomed this as she used to extend annual leave when returning to her native country. The Respondent changed this so that a double day payment for working the public holiday, or a day’s pay when the public holiday occurs and was not worked, were the only options.

 The Complainant asserts that on 1 June 2020, this issue came to the fore, when the Transferor’s workers who worked a public holiday, had an extra day’s pay put into their bank account by way of credit transfer. The Complainant claims that the recipient of such a payment cannot return this in the same manner. However, she claims some have forwarded Postal Orders / Cheques for the same value back to the company.

The Complainant argues that the Regulations are designed to protect (and possibly improve) workers terms and conditions when a transfer of undertakings takes place. The Complainant sees changes in her terms of employment being imposed on her and she believes that this is in breach of the Regulations.

She asks that the Transferor’s terms and conditions of employment, specifically in relation to the sick pay scheme and the public holiday arrangements, would be restored to her.

Over the past five years, a significant amount of work was undertaken prior to the Transfer to integrate and align two sites.  This included aligning operations through undertaking a harmonisation project to align pay, benefits and work practices. During this time harmonisation period, hourly wages were increased, resources were pooled, the operation of both sites were streamlined, employment policies were aligned, the Respondent introduced a defined contribution pension scheme, paid maternity leave and death- in- service benefits. The harmonisation process is still ongoing.

 The final stage of the integration process comprised of the transfer of the business and employees from the Transferor to the Respondent on 1 April 2020. The Respondent fully complied with the notification, information and consultation obligations under Regulation 8 of the Regulations as well as organising elections, training and accommodation for representative clinics on-site. The Respondent notes that the Complainant has acknowledged that there is no formal complaint before the Workplace Relations Commission regarding a breach of Regulation 7 or 8 of the Regulations.

The Respondent cites Regulation 8 (3) which provides:

8(3) “Where the transferor or the transferee envisages any measures in relation to employees, he or she shall consult the representatives of the employees, where reasonably practicable, not later than 30 days before the transfer is carried out and, in any event, in good time before the transfer is carried out, in relation to any such measures with a view to reaching an agreement”.  

The Respondent further cites Regulation 9 (2) which provides as follows:

9(2) “A provision in any agreement which is or becomes less favourable in relation to an employee than a similar or corresponding entitlement conferred on the employee by these Regulations shall be deemed to be modified so as not to be less favourable”.

Prior to the Transfer date, overtime was compensated differently at both sites. After the Transfer date the Respondent proposed that all employees overtime rates would be aligned. Accordingly, legacy Transferor employees would be compensated at time-and-a-half for any overtime hours worked, as opposed to time-and-a-quarter. Some, but not all Transferor employees were in receipt of this prior to the transfer.

 The second measure to take effect on the Transfer date was an increase in sick pay. Prior to the Transfer date, Transferor employees were eligible for 10 paid sick days per year. After the Transfer Date, this entitlement increased sick pay to 15 days.

 The third measure introduced on the Transfer date was the introduction of a new disciplinary policy. The Respondent submits that the revised procedure reflects recent changes in HR best practice and Irish employment law. The Respondent sought to engage with transferring employees on the new disciplinary procedure.

 The final measure introduced on the Transfer date was the change in compensation for working public holidays. Effective from the Transfer date, the Respondent proposed that an employee (non-management) who is required to work on a Public Holiday would automatically be compensated with double pay. Employees not scheduled to work on a public holiday would continue to receive a paid day off. Additionally, a manager who is required to work on a Public Holiday to provide cover and support would be compensated with a lieu day to be taken within the 30 days following the Public Holiday.

 The Respondent submits the cumulative effect of the measures which took effect on the Transfer date is that those changes provided an overall improvement to transferring employees’ terms and conditions of employment and the Respondent acted in compliance with Regulation 8 and Regulation 9.  

The Respondent refutes the submissions made by the Complainant that the Respondent and/or the Transferor did not ensure that her terms and conditions were transferred to the Respondent, or that the Complainant’s previous terms and conditions of employment were not transferred to the Respondent on the Transfer date.

 The Respondent submits that all terms and conditions of employment of the Complainant were transferred appropriately. The Respondent submits that, in accordance with Regulation 8 and 9, the Respondent was permitted to introduce changes to the Complainant’s terms and conditions of employment, which are no less favourable or are an enhancement to her previous terms and conditions of employment. This can be done provided the Respondent complies with its obligations under the Regulation 8 of the Regulations, to inform and consult with the Employee Representatives, on behalf of the Complainant, “in good time, but no less than 30 days prior to the transfer date”. The Respondent submits they notified the impacted employees of the proposed changes to their terms and conditions of employment and consulted with the Employee Representatives on those proposed changes.

The Respondent submits that the measures introduced on the Transfer Date are an enhancement to the terms and conditions of the Complainant’s previous terms of employment. The Respondent submits that these changes introduced to the Complainant’s terms and conditions are no less favourable to her terms and conditions of employment. The Respondent further submits that they sought feedback from the Employee Representatives on the proposed changes, which would take effect on the transfer date and, in response to feedback received, modified three out of the four measures. There were significant improvements to the Sunday premium, from time and a quarter to time and a half, and also uncertified sick day benefits from 10 to 15 days.

Sick Pay incorporating a disciplinary issue:

The Respondent submits that the Complainant’s particular complaint regarding the Sick Pay Measure, is unrelated to the Transfer. The Complainant’s concern relates to an Attendance Policy (and its link to the Disciplinary Policy) which was in place before the Transfer. The Complainant was notified of this policy prior to its coming into effect and no concerns or objections were raised at that time. The Complainant worked under this policy for two years and did not raise an issue with this policy until the transfer. The Complainant’s specific complaint is on the basis that the Attendance Policy, which does not form part of the TUPE process, contains a provision which provides “Absence patterns, whether certified or uncertified, may result in disciplinary action as outlined in the disciplinary policy and procedure.  Despite, this complaint being unrelated to the transfer, the Respondent has engaged with the Complainant in an attempt to reassure her that where there are cases of genuine absence due to illness, an Associate will never be disciplined.

The Respondent submits, on this point, that the complaint by the Complainant regarding a change to her terms and conditions of employment is not a change made under the Regulations. The Respondent submits the change introduced under the Regulations, in relation to the Sick Pay Measure, was more favourable to her previous terms and conditions of employment.

Public Holidays:

The Respondent understands that the Complainant’s main reason for her claim is because the granting of an additional day of annual leave for those who work a public holiday is no longer an available option.

 The Respondent determined that, with effect from the Transfer Date, employees who transferred would be compensated with double pay. Whilst there is a change in the compensation method, The Respondent submits that the Complainant is being compensated in a different but equivalent way. The Respondent asserts that as per section 21 of the Organisation of Working Time Act, 1997, it is open to an employer to decide how employees will be compensated for public holidays. Therefore, it is legally permissible for an employer to change the method of compensation.  The Respondent contends that changes to terms and conditions of employment, under the Regulations, are permitted, where those changes are more favourable or are no less favourable than a similar or corresponding entitlement. It is submitted the method of compensation is equivalent to that of the Complainant’s previous employer.

 The Respondent submits that during the information and consultation phase, it engaged in extensive feedback from Employee Representatives on the introduction of the Public Holiday Measure. The Respondent modified the effective date of the measure from 1 April 2020 to 1 June 2020 so transferring employees would not have their planned holidays impacted.

The Respondent argues that the Transferor   employee handbook stated “the policies in this handbook are important guidelines. These guidelines may be changed or eliminated like any other company policies, procedures, benefits and other programmes. Please pay close attention to these updates”. Accordingly, the Respondent submits, the Transferor reserved the right to change how associates were compensated for public holidays at any time.

The Respondent contends that the Public Holiday Measure is no less favourable to the Complainant’s previous terms and conditions for the following reasons:

• The Complainant will receive double pay for working on a public holiday;

• The Complainant can also apply not to work on a public holiday and, if that request is granted, the Complainant will receive a paid day off for the public holiday on that day;

• Before the Complainant transferred to the Respondent, it is the Respondent’s understanding that associates were never guaranteed an extra day’s vacation for working on a public holiday. There were exceptions under the Complainant’s existing terms and conditions, notably at Christmas time, in which case associates were automatically paid double pay;

In conclusion the Respondent submits that under the Regulations, that changes to the Complainant’s terms and conditions unconnected and unrelated to the transfer are permitted, as is any change which improves the Complainant’s terms and conditions. It is submitted that the Respondent maintained the Complainant’s terms and conditions with her previous employer. The changes made were unrelated to the transfer and permitted where improvements were made to the Complainant’s terms and conditions. It is submitted the four measures that took effect on transfer are an enhancement to the Complaint’s terms and conditions of employment.

The Issue to be decided here is whether the Respondent breached its obligations under Regulation 4 of the Regulations, specifically with regard to two issues: (1) the addition of a claimed disciplinary clause to the sick pay scheme and (2) the denial of a pre-existing opportunity to extend her annual leave by the addition of public holidays lieu days.

EU Directive 2001/23/EC, transposed into domestic law by the Regulations, provides in the first paragraph of Article 3(1) thereof, that “The transferor’s rights and obligations arising from a contact of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee”. The aforementioned provision of the Directive is transposed by Regulation 4(1) of the Regulation, which provides in its relevant part:

 (1) The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee…

(1) Sick Pay clause:

Uncontested, cogent evidence was given by the Respondent that the complaint on this specific issue relates to an Attendance Policy (and its link to the Disciplinary Policy) which was in place before in both the Transferor and Respondent employments prior to the Transfer. The Respondent, gave evidence, again uncontested, that the Complainant had received notification of this change by the Transferor in 2018 and that the Complainant worked under this policy for approximately two years and did not raise an issue with this policy until the transfer.  On this basis I find that the inclusion of the disputed clause was in the sick pay/attendance policy prior to the transfer and therefore not an issue to be adjudicated upon in this case. I therefore find that this specific element of the complaint is not well founded.

(2) Public Holidays:

The Complainant contended that a previous public holiday arrangement she contractually enjoyed prior to the Transfer which gave her the opportunity to extend her annual leave, thus enabling her to extend her leave when visiting her native country, was abolished after the transfer.

The Respondent contends that the Public Holiday Measure is no less favourable to the Complainant’s previous terms and conditions for the following reasons:

• The Complainant will receive double pay for working on a public holiday;

• The Complainant can also apply not to work on a public holiday and, if that request is granted, the Complainant will receive a paid day off for the public holiday on that day;

• Before the Complainant transferred to the Respondent, it is the Respondent’s understanding that associates were never guaranteed an extra day’s vacation for working on a public holiday. There were exceptions under the Complainant’s existing terms and conditions, notably at Christmas time, in which case associates were automatically paid double pay;

The Respondent further argued that the Transferor employee handbook stated “the policies in this handbook are important guidelines. These guidelines may be changed or eliminated like any other company policies, procedures, benefits and other programmes. Please pay close attention to these updates”. Accordingly, the Respondent submits, the Transferor reserved the right to change how employees were compensated for public holidays at any time.  Therefore, the Respondent submitted it had the capacity to make a change in the arrangement to taking a public holiday was within the contractual scope of the Respondent after the Transfer. I note also that there was no collective agreement in existence neither at the Transferor nor Respondent companies.

I am satisfied, based on the evidence submitted to me that the Complainant was allowed to choose the option of having an extra day added to her leave in lieu of public holiday payment with certain provisos for variation around busy times of the year.  However, I am also satisfied that the Transferor had a variation clause in the Complainant’s contract which also transferred. Such clauses should not, however, be viewed by an employer as a carte blanche to freely change an employee’s terms of employment. The thrust of case law requires that such a clause must be exercised reasonably. For example, a unilateral cut to an employee's rate of pay or working hours, either without consultation or following consultation where an employee has refused to consent to such a cut, would be to unilaterally change fundamental terms of the employment relationship and would not be considered reasonable, and would, in the context of this case be considered a breach of Regulation 4. However, there was no cut in the financial payment for taking or choosing not to work a public holiday. Instead the only measurable change which took place concerned the facility to add an extra day to the annual leave period, which heretofore was conditional on availability at peak periods.  This would more correctly be described as a change in work practice as distinct from a change to a fundamental term in the contract of employment. It was common case that the Transferor had previously put restrictions on this practice, especially around Christmastime. I am satisfied that, overall, the Transfer resulted in improved terms and conditions for the Complainant.

The public holiday change was a major issue for the Complainant, which she considered less favourable to her. Whilst there is a subjective element that must be taken into account in adjudicating upon what is “less favourable” the objective test has to take precedence. I cannot accept that the change was a breach of a fundamental term of the Complainant’s contract of employment, nor could it be considered an unreasonable exercise of the variation clause by the Respondent, when viewed against the backdrop of a discernible enhancement of overall terms and conditions of employment.  I therefore find that the Respondent did not breach the terms of Regulation 4 regarding the public holiday arrangement for the Complainant and I conclude that the Complaint was not well founded.   

CA-00039715: Regulation 10 0f the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. 131 of 2003) require that I make a decision in relation to the complaint. I find that the complaint was not well founded for the reasons outlined above.

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. 131 of 2003).