Complainant

Respondent

Parties

Assumpta Helen Campbell

  Sheep with Five Legs ltd             (amended on consent)

Representatives

  Appeared In Person

Act

Complaint Reference No.

Date of Receipt

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

CA-00044736-001

22/06/2021

On 22 June 2021, the Complainant raised a complaint under the Redundancy Payments Act, 1967. She submitted that she had received a lump sum Redundancy Payment based on 18.51 years and she submitted that this payment did not recognize her entire service. The period outstanding was identified as 1991-2002.

The Respondent was initially notified of the claim on 8 July 2021, but the notification was returned as “gone away “On 4 October 2021, the Complainant provided an alternative contact address. The Respondent was placed on full notice of the claim on 17 November 2021.  He filed a defence in the claim on 17 December 2021.

The Hearing took place on a face-to-face basis on July 1,2022 in Carlow, as connectivity issues arose on the initial remote hearing on 19 April 2022.

Both Parties presented as Litigants in Person in their own case.

I made two requests for follow on documentation at hearing

1 Contract of employment. Neither party was able to provide this.

2 Notifications of redundancy This was received from the complainant and dated June 24, 2020.

On the Complaint form lodged on 22 June 2021, the Complainant outlined that she had worked continuously at a café from 14 October 1991 to the date of her dismissal by means of redundancy on 5 August 2020. The business had changed hands on may occasions during this period.

The Complainant exhibited a record of notification of her redundancy dated 24 June 2020 .

The Complainant outlined that she understood that she was bound by an upper limit of 20 years in terms of claiming a redundancy payment. This caused her to sustain a shortfall in her redundancy payment for the years 1991 to 2001. She has since realised her error.

She submitted that Revenue instructed her to return to claim for these years. The Respondent refused to sign the supplementary claim. The Complainant was concerned that her ultimate access to old age pension would be compromised, if this matter remained unresolved. She enumerated her service cumulatively as 28 years and 10 months.

I requested the Complainant provide a record of her paid prsi history. This was provided on 23 April 2022 and reflected some gaps in the PRSI paid contributions.

1 1992   7 weeks

2 1994   2 weeks

3 1996 15 weeks

4 1997 52 weeks

5 2001 14 weeks

The Complainant forwarded a number of testimonials attributed to previous owners of the business in addition to the documentation surrounding her initial claim for redundancy.

On the day of the hearing, the Complainant gave the following outline in her case:

The Complainant explained how she had been under the misapprehension that an upper limit of 20 years applied in the case of a Lump sum payment in redundancy. she acknowledged that she picked up this information by mistake and sought to amend her application form submitted to the Respondent but was refused.

She submitted that her position had been made redundant on 5 August 2020, following which she received job seekers benefit and PUP payment.

The Complainant was seeking an augmentation to the redundancy received, which covered the time frame of 18 .51 years.

And was seeking to incorporate 1991 to 2000, a shortfall

Complainant Evidence:

The complainant confirmed that she had received a redundancy lump sum payment for 18.51 years at a weekly wage of €242.40

The complainant outlined her record of service

14 October 1991 to 2 May 1992   Part time 3 to 4 days a week

Two transfers took place in 1992. The complainant was one of two staff kept on and the business continued to 1998. during this period, there was no holiday pay or pay slips made available.

Another transfer occurred in 1998-2002, where the Complainant continued to work until the Respondent took over the ownership of the business in 2011. The Complainant recalled staff receiving redundancy in 2011, but she worked on at the business, which she always functioned as a café.

In addressing the record of paid PRSI payments, the complainant said she had no idea regarding the highlighted gaps in service but did not query this back to Welfare as yet .

The Complainant expressed a strong view that she wished to close the matter but the service 1991 to 2002 had gone unrecognised in the lump sum redundancy payment she had received, and the Respondent had refused to augment the lump sum. The period claimed is 14 October 1991 to 31 December 2001. During cross examination, the complainant was unable to shed any light on the gaps in service on the PRSI record. It was her case that she worked continuously at the business and had no recollection of lay off or resignation. She referred to her exhibited letters where her service was described as continuous over that time.

The complainant addressed the respondent on the social welfare payments made post conclusion of her work, where were not material to this claim.

On 17 December 2021, Mr Shouman filed a defence in the claim for enhanced lump sum redundancy payment. He said that he had taken over the business in 2010 and disputed any liability for service back to 1991.

He outlined that that his business closed at the time of the first covid 19 related lockdown. The staff were equipped with “PUP payment forms” to cover this absence.

Mr Shouman decided to close down the business some months later as losses had mounted. He delivered redundancy forms to all staff.

Mr Shouman outlined that he had bought the business for a stated sum but had no idea of a liability for earlier service of staff. The Complainant sought a lump sum for her entire tenure at the premises and he was unable to pay this.

He sought advice from a State body who confirmed that the Complainant had settled her claim and it could not be reopened. Mr Shouman expressed a desire not to be seen as “a bad employer”, but his defence rested on not being either in the country or operating a business at the time of the service claimed in the case.

Evidence of the Respondent at hearing:

The Respondent took over the Café business in 2010. He had no idea of any liability arising from his taking on the residual staff on transfer. The trading circumstances of the business on the outbreak of Covid 19 caused him to lay off the staff and eventually close the business.

The Redundancy payment made to the complainant was paid from the State fund.

He disputes any remaining liability towards the complainant as he disputed liability for her entire service at the premises. He is now involved in a new business.

During cross examination, he continued to dispute liability. He confirmed that the redundancy payment made to the complainant had been paid from the Social Insurance fund. He understood that he may have a lingering debt in that regard and had no desire to add to that debt.

I have been requested to decide on whether the complainant is entitled to a Redundancy Payment for the years 14 October 1991 to 31 December 2001. An earlier lump sum redundancy payment for 18.51 years was discharged from the Social Insurance fund in April 2021 . The Respondent has disputed liability for the supplementary claim.

In reaching my decision, I have had regard for the parties written and oral submissions in addition to evidence adduced at hearing.

Unfortunately, the Parties appeared to carry a certain tension directed at each other at hearing. This seemed to refer to the circumstances surrounding the administration of social welfare payments during the life span of the Covid Pandemic and was not material to the instant claim. However, I mention this now as I was required to navigate through this tension to explore the facts of the claim for Redundancy dating back to 14 October 1991.

Firstly, there is no dispute that a Redundancy occurred at the Respondent business in August 2020.

The dispute in this case is on the span of time or service which should be incorporated in the calculation of the lump sum redundancy payment.

I did not have sight of a contract of employment from either party.

Section 7(1) of the Redundancy Payments Act provides that:

General right to redundancy payment.

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 the Social Welfare Acts, 1952 to 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.

Section 19 of the Act refers to a lump sum payment by reason of redundancy.

19. Payment of lump sum by employer

(1) Upon the dismissal by reason of redundancy of an employee who is entitled under this Part to redundancy payment, or whereby virtue of section 12 an employee becomes entitled to redundancy payment,] his employer shall pay to him an amount which is referred to in this Act as the lump sum.

I am satisfied that the complainant was dismissed following a period of Lay off on 5 August 2020. Her claim for redundancy comes as a postscript to an earlier fragmented claim which covered 18.5 years immediately preceding this date.

The dates of the instant claim refer to October 14, 1991, to 31 December 2001. The Complainant has given evidence that she worked at the same premises, engaged in the same waitressing role from October 1991- to 5 August 2020, outside of the layoff due to covid.

 She exhibited letters attributed to either owners or family members of previous owners of the business, which at first glance, at the very least suggest a continuity of employment. I found a disparity in the paid PRSI records for this period, which suggest a number of breaks in service. However, the Complainant gave evidence that she worked continuously October 1991-August 2020. She did submit that employer records were less than optimal during this period. The Complainants evidence was uncontested on this point, as the Respondent honestly declared that he was not owner of the business at that time

When I met the Complainant initially in April 2022, she explained that her motivator for seeking the supplementary lump sum redundancy payment was a reconciliation exercise to check if her state pension records were correct and intact. I can appreciate that this was a real concern for her, which has since been addressed b y the provision of the official record of her paid PRSI records. She may wish to address the reported deficits directly with Welfare.

I have reflected on the Complainants evidence and find that I accept her direct evidence that she worked continuously at this location and engaged in the same work from 14 October 1991 to 5 August 2020. I accept that during this time, she worked for a series of different employers, up to including when the Respondent took the reins in 2011.

What this means is that the Respondent has accepted that the Complainant had service worthy of a redundancy payment from January 1, 2002, but not before this.

This has undermined his argument made at hearing, he disputes liability for a time when he did not operate the business, or a time when he was not present in the country.

To identify a way forward in this case, I have considered the parameters of the European Communities (Protection of Employees on Transfer of  Undertakings) Regulations, 2003 .

I would like to set out a brief chronology of this important Protection.

The Acquired Rights Directive, 1977 was adopted by the Council of the European Union on 14 February ,1977. Directive 98/50 amended Directive 77/187, however a further codification of the law on transfer of undertakings was required.

Mikkelsen V Danmols Inventar A/ S C-105/84 [1985] ECR 2639

“It follows that the protection of Directive 77/187 can only be invoked by persons who in one way or another are protected as employees under rules of law of the Member State concerned … the term employee for the purpose of Directive 77/187 should be understood to mean that it covers any person who in the Member State concerned is protected as an employee under the national legislation relating to labour law.”

Council Directive no 2001/23/EC adds to and consolidates both the 1977 and 1998 Directives. the aim of the 2001 Directive was harmonisation,

“In terms of seeking to reduce the differences then existing in Member States on the protection of employees in situations where the ownership of the undertaking in which they worked changed, resulting in them having a new employer”

Gary Byrne, chapter 23 Maeve Regan, ~Employment Law, second edition

The Irish Government adopted the wording of the 2001 Directive by means of SI 131/2003 in April, 2003.

All the rights and obligations of an employer under a contract of employment with the exception of pension rights existed on the date of transfer are transferred to the new employer on the transfer of the business or part thereof.

Article 1(a) of the Directive provides that

The Directive shall apply to any transfer of an undertaking, business or part of an undertaking or business to another employer as a result of a legal transfer or merger.

ECJ 11.3, 1997 C-13/95 Suzen

Regulation 3 provides:

The rights and obligations of the transferor arising from a contract 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.

During the hearing, I canvassed the parties’ views on the key criterion developed in the seminal case in Spijkers C-24/85

1 type of business

2 transfers of tangible assets

3 values of intangible assets

4 takeovers of the majority of the employees by the new owner #

5 transfers of customers

6 degrees of similarity between activities carried out before and after transfer

7 any period of suspension

I have considered both parties responses.

I am satisfied that the complainant engaged in a series of continuous  and  relevant transfers from 1992 -2011 in the course of her employment and that the economic entity retained its identity as a café .

Frances Meehan in her book Employment Law refers to the “decisive criterion for establishing a transfer “

The decisive criterion for establishing whether there is a transfer for the purposes of the Directive is whether the economic entity retains its identity. The transfer must relate to a stable economic activity whose activity is not related one specific works contract. The term entity refers to an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues an economic objective. Retention of that identity is indicated by the actual continuation or assumption by the new employer of the same or similar activities.

Section 39 of the Redundancy Payments Acts 1967 – 2012 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.

I find that the Complainant was made redundant on 5 August 2020.  I find that the complainant is entitled to a redundancy lump sum payment by operation of the Transfer of Undertaking Regulations, 2003, based on the following criteria:

Date of Commencement: of employment    14 October 1991

Date of Termination of employment 5 August 2020. (A sum of €9,216.05 was discharged from the Social Insurance Fund in April 2021 which encompassed 18.5 years’ service )

The cognisable period for this claim is

Date of shortfall in Redundancy lump sum Payment : 14 October 1991 - 31 December 2001

Gross Weekly Pay   €242.40

I have not confirmed  breaks in service.

This award is made subject to the complainant having been in insurable employment under the social Welfare Acts during the relevant period of 14 October 1991 to 31 December, 2001 .

The claim is well founded

Redundancy Payment following a Transfer of Undertakings