TUD223

1.Appeal Of Adjudication Officer Decision No.ADJ-00028630, CA-00036516-001

BACKGROUND:

2.The Worker appealed the Decision of the Adjudication Officer to the Labour Court on 27 January 2022. A Labour Court hearing took place on 12 April 2022. The following is the Determination of the Court:

DETERMINATION:

This matter comes before the Court as an appeal by Clive Jones (the Complainant) of a decision of an Adjudication Officer given under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) (the Regulations) in his complaint made against Cork County Council (the Respondent).

Background

The Complainant was employed as a traffic warden by a third-party contractor who had been engaged by the Respondent to provide for the management of public parking by provision of traffic warden services in Mallow, County Cork.

The management of public parking was outsourced by the Respondent in 2015 and the contract with the third party expired through the effluxion of time on 31^stJanuary 2020 but was extended to end of April 2020 when it concluded. The provision of parking services for the Mallow area is since undertaken by the Respondent itself and not by a third party provider. The worker was made voluntarily redundant at the date of termination of contract between his employer and the Respondent.

Summary position of the Complainant

The Complainant was employed by the Respondent as a traffic warden from 25^thSeptember 2015 until the date of his redundancy on 30^thApril 2020.

He had carried out his role effectively and was never the subject of complaint.

On 17^thDecember 2019 he became aware through social media that his employer had lost a contract for the provision of services to the Respondent. He became aware that the Respondent was advertising for traffic / litter wardens and he applied for the vacant positions but was unsuccessful. He was informed of the outcome to the competition on 27^thFebruary 2020.

The Respondent ‘insourced’ the service which had previously been contracted to his employer and consequently the regulations applied to his situation and his contract of employment should transfer to the Respondent.

Summary position of the Respondent

The Respondent is a local authority for the purposes of local Government legislation and is responsible for local Government in Cork including the maintenance of public parking in towns within County Cork.

The management of public parking in Mallow was outsourced by the Respondent to the Complainant’s former employer in 2015. The agreement and contract to provide such services expired on 31^stJanuary 2020 and was extended temporarily until the end of April 2020. The provision of public parking services is now undertaken by the Respondent itself.

The Respondent is a stranger to the employment of the Complainant as he was never in its employment. It appears that he was employed by his former employer as a traffic warden in Mallow and that his employment came to an end by reason of redundancy.

The contract between the Respondent and the Complainant’s former employer ceased by reason of its expiry on 30^thApril 2020. The Complainants’ former employer provided all assets necessary to undertake its contract with the Respondent including employees, vans, cleaning equipment, collection of cash equipment, handheld parking ticket machines and uniforms. None of these assets transferred to the Respondent on the expiry of the contract.

At no time did the Complainant’s former employer claim that the loss of the contract with the Respondent amount to a transfer within the meaning of the Regulations.

It appears that the Complainant received statutory redundancy from his former employer at the termination of his employment. He applied for a position with the Respondent but was unsuccessful. The role that was applied for was that of traffic / litter warden which was a different role to the role previously carried out by him as a traffic warden.

The Regulations are the transposition in Ireland ofEU Council Directive 2001 / 23 / EC of 12^thMarch 2001.

Regulation 3 of those Regulations makes provision as follows:

3. (1) 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.

(2) Subject to this Regulation, in these Regulations -

“transfer” means the transfer of an economic entity which retains its identity;

“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.

The CJEU inCase 24/85 Spijkers v Gebroeders Benedik Abbatoir CVsaid that in order to determine if an entity had “retained its identity”

it is necessary to consider all the facts characterizing 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 within matter there was no transfer of a going concern, no transfer of a single employee and no transfer of a stable economic entity. The business of the Complainant’s former employer was not disposed of as a going concern to the Respondent as it continues to trade and operate outside the contract for the maintenance of parking in Mallow.

The ‘identity’ of the Complainant’s former employer was not acquired by the Respondent and this is supported by the dicta of the CJEU inCase C-13/95 Suzen v Zehnackerwhere it held that

“An entity cannot be reduced to the activity entrusted to it. Its identity also emerges from other factors such as its workforce, its management staff, the way in which is work is organised, its operating methods, where appropriate, the operational resources available to it”

The structure of the Complainant’s former employer was maintained following the expiry of its contract with the Respondent, and it continues to operate as a going concern. As a result, the mere loss of the parking maintenance contract must be seen not to constitute a transfer of an economic entity because the mere contract simpliciter does not constitute a sufficiently structured and autonomous entity capable of equating to an economic entity.

Discussion and conclusions

The Court of Justice has consistently stated that the decisive criterion for establishing the existence of a transfer within the meaning of the Directive is whether the entity in question retains its identity, as indicated by the fact that the business is actually continued or resumed.

The Complainant has made the case that the parking services provided by his employer under contract from the Respondent were thereafter provided by the Respondent. He contends that this fact alone means that his employment transferred to the Respondent upon the insourcing of the work previously caried out by his employer to the Respondent itself.

The judgment of the CJEU inCase 24/85 Spijkers v Gebroeders Benedik Abbatoir CVis generally accepted as a cornerstone of the jurisprudence arising from Council Directive No. 2001/23/EC of 12 March 2001. The Court stated the following at paragraphs 12 to 15 in that judgement:

“12 Consequently, a transfer of an undertaking, business or part of a business does not occur merely because its assets are disposed of. Instead, it is necessary to consider, in a case such as the present, whether the business was disposed of as a going concern, as would be indicated, inter alia, by the fact that its operation was actually continued or resumed by the new employer, with the same or similar activities.

13 In order to determine whether those conditions are met, it is necessary to consider all the facts characterizing 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.

14 it is for the national court to make the necessary factual appraisal, in the light of the criteria for interpretation set out above, in order to establish whether or not there is a transfer in the sense indicated above.

15 Consequently, in reply to the questions submitted it must be held that article 1(1) of Directive No 77/187 of 14 February 1977 must be interpreted as meaning that the expression ' transfer of an undertaking, business or part of a business to another employer' envisages the case in which the business in question retains its identity. In order to establish whether or not such a transfer has taken place in a case such as that before the national court, it is necessary to consider whether, having regard to all the facts characterizing the transaction, the business was disposed of as a going concern, as would be indicated inter alia by the fact that its operation was actually continued or resumed by the new employer, with the same or similar activities.”

InCase C-13/95 Suzen v Zehnackerthat Court looked at the elements set out inSpijkers, applied them and found that no transfer of tangible assets had taken place and held that: -

“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”.

In the within matter the parties are agreed that no assets of the Complainant’s employer transferred to the Respondent. The Respondent submitted that the assets employed by the Complainant’s employer to execute its contract with the Respondent included employees, vans, cleaning equipment, collection of cash equipment, handheld parking ticket machines and uniforms. It is not disputed that none of these assets transferred to the Respondent.

It is common case also that no staff of the Complainant’s employer transferred to the Respondent and that no element of the identity of the Complainant’s employer transferred to the Respondent on the termination of the contract between the two.

Applying the law as set out in the Regulations and in the aforementioned judgements of the CJEU to the facts of this case, the Court concludes that there was no transfer of an undertaking within the meaning of the Regulations as contended for by the Complainant.

Decision

The Court decides that a transfer of undertaking within the meaning of the Regulations did not occur in April 2020 when the Complainant’s employer ceased to operate a contract with the Respondent.

The within appeal fails and the decision of the Adjudication Officer is affirmed.

The Court so decides.

	Signed on behalf of the Labour Court
	Kevin Foley
OC	______________________
24 June 2022	Chairman