Complainant

Respondent

Parties

Grace  Shanley

SJA Horizons Limited

Representatives

Breda Stanley Pickford / Christine Guilfoyle, Citizens Information Services

Michael O'Loughlin, M D O'Loughlin & Company Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00043232-001

24/03/2021

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00043232-002

24/03/2021

The complainant commenced employment in the bar / restaurant operated by the respondent in January 2009.  Her position initially was that of waitress and by 2019 she had been appointed Head Waitress / Floor Manager.  The complainant’s position was part-time and normally within the band of 21 – 26 hours per week but she worked extra hours as required.  The business was affected by the restrictions imposed as a result of the Covid-19 pandemic.  The premises re-opened in July 2020.  Prior to the re-opening the staff were informed of the possibility of the food service part of the business transferring to a new employer.  The date of the transfer would likely occur later in that year.  The complainant believed that following the re-opening she was not being rostered for sufficient hours and that her position of manager was being eroded. The complainant was dissatisfied with the manner in which these concerns were dealt with by both her current employer and her proposed new employer.  The complainant requested that she be made redundant but received no reply at that time.  The complainant resigned from her employment on 4 October 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.

The complainant’s working hours were in the region of 32 hours per week.

The complainant as manager had responsibility for rosters, liaised with the kitchen and attended monthly management meetings.

In June 2020 the complainant became aware that the food section was potentially to be franchised to a third party later that year and that the staff concerned would then transfer to a new employer.

The business re-opened in July but the complainant was only rostered for 19 hours.  The complainant queried this and was informed that all staff had had their hours cut due to the Covid-19 issue.  The complainant noted other staff getting extra hours.

Much of the complainant’s duties were being done by the potential franchisee.

The complainant sought clarification on the changes to her terms and conditions but did not receive a satisfactory response.  The complainant requested that she be made redundant but did not get a reply.

The complainant felt that she had no option but to resign on 4 October 2020.

The complainant had a meeting with the respondent in February 2021 in which it was stated that the complainant was still employed and that her hours would be re-instated at some stage in the future.

The complainant was employed on a contract that provided for flexibility in work duties and a variation in working hours.

During the lockdown in 2020 the respondent decided to reorganise the business and introduced a caterer on a trial basis.

In July 2020 the premises re-opened but because of restrictions in opening hours staff were put on reduced hours.  The claimant’s hours reduced from an average of approx. 25.6 hours to approx. 20.4 hours per week.

The trial with the caterer for the takeover of the food business was satisfactory and a date of 5 October 2020 was set for the transfer of that part of the business.

The complainant informed the respondent that she considered her position to be redundant and forwarded a form in this regard.

The respondent subsequently met with the claimant and indicated that her position was not redundant but merely affected by the Covid-19 restrictions and that her position remained available to her.

The clamant never returned to work.

At the commencement of the hearing the complainant’s representative stated that the complaint under the Redundancy Payments Acts (Complaint No. CA-00043232-001) was being withdrawn.

The respondent operates a licensed premises with restaurant business and the complainant had been employed as a waitress since 2009.  The complainant was appointed as restaurant manager / head waitress in 2019 with responsibility for staff rostering as part of her expanded duties.

The business was affected by the restrictions imposed because of the Covid-19 pandemic resulting in the closure of the business in March 2020.  According to the complainant she had worked flexible hours prior to the closure and had sometimes worked extra hours up to 40 hours per week.  Prior to the business re-opening the complainant was informed that the operation of the food part of the business would be taken over by a third party and in June 2020 the complainant had a meeting with the new franchisee at which details of the staffing of the restaurant and the various roles and duties were discussed.

According to the complainant, when the premises re-opened in July employees from the franchisee’s other business were included in the staffing of the restaurant.  In the initial weeks the complainant stated that she was rostered for only 19 hours work.  At this time the roster was being done up by the franchisee even though the formal transfer of the business had not yet taken place.  The complainant stated that she spoke to her line manager who promised to speak to the owner about this.  The complainant also advised management that she was willing to do other duties as long as her normal hours were restored.  The complainant further stated in evidence that the reduction in working hours had affected her financially. 

On 7 September 2020 the respondent wrote to the complainant giving her formal notification of the intention to transfer her employment to the new franchisee with effect from 5 October 2020 and advising her that her continuity of service and present terms and conditions of employment would be transferred to the new employer.  On 14 September the complainant emailed the owner asking if there was a position for her that would allow her to retain her 32 hours per week or alternatively requesting that she be made redundant.  The owner did not respond to that email.  At the same time there was an exchange of emails with the franchisee which commenced with the complainant enquiring why her hours had been cut.  The franchisee responded stating that hours had been reduced across the board due to the current economic situation and asking for more details.  The complainant replied that her average hours were normally 32 hours per week and that she disputed the claim that all staff hours had been cut as some staff were working in excess of 30 hours.

The complainant was notified by the franchisee on 19 September that she would be required to work a back week when she commenced employment.  The complainant again asked the owner if her hours would be increased or if she would be made redundant but failed to get an answer.  The complainant informed the franchisee that she would not be working for him and her last day of working was 4 October 2020.  She subsequently forwarded a RP50 form to the owner with a request that she be made redundant.  On 12 November the owner returned the form to the complainant unsigned stating that he could not make her redundant and that she had resigned from her position.  The complainant replied to this by email on 17 November in which she stated that her understanding was that when the franchisee took over the running of the kitchen he would take over her contract but that the terms of her contract had not been met and that her hours were greatly reduced.  The complainant further stated that she could not afford to continue like that and had no option but to cease.  The complainant ended the email by again requesting that she be made redundant as the respondent could not facilitate her employment as it was.  Subsequent to this, further restrictions on pubs and restaurants came into place. 

The owner in evidence stated that this was an extremely difficult time for the business.  The business had been put into receivership before and the owner was trying to ensure that that did not happen again.  When the lockdown happened the chef had resigned and there was a question mark over the operation of the kitchen.  Food had to be provided if the pub was to re-open.  The franchisee offered to take over the kitchen and he agreed to this subject to a trial period.  That trial was successful and it was agreed that the franchisee would take over the running of the food section of the business and that the staff concerned would be transferred accordingly.  The respondent gave formal notice to the staff that this would occur on 5 October 2020 further stating that the continuity of service and present terms and conditions of employment of employees would be transferred to the new employer.  During this period the owner claimed that he was attempting to keep everyone employed and being paid.  The owner in evidence said that he was not aware of some staff getting extra hours but accepted that some new staff would have been in training.  The owner accepted that there had been a reduction in the complainant’s working hours but that this was temporary pending the return of normal opening.  The complainant’s position was not made redundant.

A meeting took place between the owner and the complainant on 9 February 2021 at which the owner reiterated that her position was not redundant and remained open to her.  Following that meeting the complainant emailed the owner and set out the position as she saw it.  The complainant stated that her situation had not changed, that there was no firm proposal as regards her hours in the future or her employment or her employer.  The owner responded with an email stating that her position with the respondent had not changed and that her hours as per her contract would be guaranteed.  He went on to state in the email that because of Covid-19 he could not say when they would be available as he did not know when pubs could re-open.  At the hearing the owner advised that the franchisee was now no longer involved in the business, a new manager had been appointed and that it was difficult to get staff.  The complainant lodged her complaint form with the WRC on 24 March 2021.  The complaint under the Unfair Dismissals Act, 1977, alleges constructive dismissal.

Section 1 of the Act defines dismissal and includes the following definition:

(b)  the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer…

Constructive dismissal occurs where the actions of the employer are such as to leave the employee with no option but to resign.  This matter has been considered on many occasions by the relevant courts and tribunals.  The legal test in respect of constructive dismissal was set out by the UK Court of Appeal in Western Excavating (ECC) Ltd v Sharp (1978), 1 All E.R.713.  The test has two strands, one of which is referred to as the “reasonableness” test and the other as the “contract” test.  The application of the “contract” test is set out as follows:

“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as being discharged from any other performance.”

The “reasonableness” test determines whether the employer “conducts himself or his affairs so unreasonably that the employee cannot be expected to put up with it any longer, if so the employee is justified in leaving.”

The above tests have been adopted by the Labour Court as in Paris Bakery & Pastry Ltd v Mrzljak, DWT1468.  The onus of proof therefore falls on the employee to show that the resignation was justified in all the circumstances.

As noted, the complainant was employed by the respondent since 2009 and in 2019 was promoted to restaurant manager.  She was issued with a contract in May 2019 and this was amended by a letter issued on 31 January 2020 which included a clause which stated that her weekly band of hours was “Band E (21 – 26 HRS)”.  The reason given by the complainant for her resignation was that her working hours had been reduced to such a level that she could not continue working for the respondent.  The complainant stated that she had been flexible as regards her working hours and had worked extra hours as required.  This was prior to the closure brought about by the Covid-19 restrictions.  During the closure the complainant was in receipt of the PUP payment of €350.00 per week.  What complicated matters for the complainant was that during the closure the respondent decided to franchise out the food portion of the business and to operate a trial period with the franchisee in this regard.  This meant that when the business re-opened in July the respondent was still the complainant’s employer but the franchisee was running the food operation and took over responsibility for staff rostering in the restaurant.

I have studied the documentation provided to me by the parties including staff rotas and wage slips.  I note that in the 11 weeks of 2020 before the closure the complainant worked an average of 29.2 hours per week.  In the 11 weeks that the complainant worked following the re-opening her average working week was 22 hours.  Therefore, the complainant is correct in saying that she suffered reduced hours of working and a consequent reduction in earnings.  The respondent argued that the period following re-opening was very problematic and uncertain and that turnover had been reduced.  The respondent further stated that all staff had been working reduced hours.  According to figures supplied by the respondent the complainant’s percentage of total staff hours had been maintained.

 I have to accept that the contract issued to the complainant in May 2019 (and amended in January 2020) provided for her to work in the band of hours between 21 and 26 and that her reduced hours more often than not were within that band (the average, as noted, being within the band).  I accept that the complainant in the period before the lockdown often worked in excess of the hours contained in the band.  In applying the “contract test”, however, I cannot find that the respondent is guilty of conduct which could be interpreted as a “significant breach going to the root of the contract of employment”. 

I now must examine the “reasonableness” test to determine whether the employer acted so unreasonably that the complainant had no option but to resign.  The complainant said that she had never seen a staff handbook and as no such handbook was produced at any stage by the respondent I am taking it that the respondent did not have such a handbook.  It follows that there was no specific Grievance Procedure which the complainant would be expected to invoke.  In fairness to the complainant she not only gave evidence about verbally raising her concerns with her line manager but she also expressed her concerns in writing in September to the respondent’s owner and to the franchisee.  The latter responded by stating that the cut in hours was across the board, an assertion that was disputed by the complainant.  There does not seem to be any further follow-up at that time.  The complainant also raised the issue of being made redundant and appeared to have a mistaken belief at that time that she was entitled to be made redundant. 

I also have to take into consideration the complainant’s evidence at the hearing to the effect that the trigger for her decision to terminate her employment on 4 October 2020 was the fact that her employment would transfer to the franchisee effective from 5 October  .In the case of Rapier Contract Services Limited v Predut, (UDD185, 2018) the Labour Court referenced the High Court case of Symantec Ltd v Lyons& Leddy (2010 1 ILRM 112) which dealt with a claim for redundancy payment for employees who refused to transfer to a new employer under TUPE Regulations.  The Court stated that “while the decision in Symantec refers to a claim under the Redundancy Payments Act, the Court is of the view that by parity of reasoning the same principle applies to a claim under the Unfair Dismissals Act.  As no employment relationship between the transferor and transferee survives a transfer under TUPE Regulations no claim of unfair dismissal against the transferor can be sustained by a worker who refuses to accept the transfer under the Regulations”.

I find, therefore, that whilst the complainant had expressed concerns which should, having regard to the complainant’s service and employment record, have been better addressed by the respondent, the evidence does not support the contention that the overall behaviour of the respondent was so unreasonable as to leave the complainant with no option but to resign.  The complainant opted to resign rather than transfer to the new employer, a transfer that would have been protected under TUPE Regulations.   

In summary, I find that the complainant has failed to discharge the burden of proof required to support her claim that she was constructively dismissed.

Complaint No. CA-00043232-001:

This complaint under the Redundancy Payments Acts, 1967 – 2012, was withdrawn at hearing and therefore does not require a decision.

Complaint No. CA-00043232-002:

This is a complaint alleging constructive dismissal under the Unfair Dismissal Acts, 1977 – 2015.  For the reasons set out above I find that the complainant has failed to establish that she was constructively dismissed and that consequently the complaint is not well founded.

Constructive Dismissal     Resignation     Unfair Dismissal Acts