FULL RECOMMENDATION
SECTION 11 (1), EUROPEAN COMMUNITIES (PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS) REGULATION, 2003 PARTIES : BIDVEST NOONAN (ROI) LIMITED (REPRESENTED BY MANAGEMENT SUPPORT SERVICES (IRELAND) LIMITED) - AND - AIJA LAPSA (REPRESENTED BY MR. DONAL O'RIORDAN BL INSTRUCTED BY W & E BRADSHAW, SOLICITORS) DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer Decision No(s). ADJ-00014764 CA-00018935-005. Ms. Lapsa, ‘the Complainant’, was an employee of ISS Facilities Ltd. in 2010 when a transfer of undertakings arose and, as a result, she became an employee of Bidvest Noonan Ltd., ‘the Respondent’. At the time of transfer, the Complainant was in receipt of an hourly rate of pay in excess of the rate provided for in the industry Employment Regulation Order, (ERO). The Complainant contends that her rights under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 have been breached by the failure of the Respondent to increase her pay in line with increases in the ERO rate since the transfer of undertakings. This complaint was upheld by an Adjudication Officer, (AO), who directed that the Respondent pay €6500 in compensation to the Complainant. The Respondent appealed to this Court. Summary of Respondent arguments. The facts of this case are identical to a number of cases heard by the Court already. In Determination No. TUD211 the Court determined, on identical facts, that the Complainant’s rights had not been breached and an identical outcome is sought. The Complainant transferred to the employment in 2010 while in receipt of an hourly rate of €10.98 per hour, which was in excess of the ERO rate of €9.50 per hour. The rate of pay was not linked to the ERO rate and there is no contractual entitlement for the Complainant’s rate of pay to be increased in line with the ERO rate. Her pay was maintained above the ERO rate until such time as that rate applied to her, at which time she became entitled to have ERO rate increases applied to her pay. She had no entitlement to the ERO increases prior to that. In the alternative, if there ever was a contractual link to ERO rates, which is not accepted, this was severed when Joint Labour Committees were declared to be unconstitutional . The fact that twice, in a period of employment in which there have been six EROs, the previous employer increased rates in line with the ERO increases, does not create a contractual entitlement. Memos sent by payroll administration and a site manager do not constitute agreement to increases the Complainant’s rate of pay in line with ERO increases. The employment is unionised and, if it was intended that this would be agreed, this agreement would have been effected through collective bargaining. The claim under the Regulations is out of time. The transfer of undertakings took place in 2010. There was an ERO in 2015. If the Complainant is correct, then the breach alleged occurred in October 2015. The complaint was not made until November 2017. S. 4(2) of the Regulations provides that a transferee shall continue to observe any collective agreement on the same applicable terms until the date of termination or expiry of the agreement. This occurred when the Joint Labour Council was declared to be unconstitutional. In TUD211, the Court held, on identical facts, that there was no entitlement by virtue of the Complainant’s contract for pay to be increased in line with ERO increases and that there was not a valid claim for breach of the Regulations. The facts of this case are identical, the claim forms submitted are identical and the law must apply in the same manner. Summary of Complainant arguments. S.I. 131/2003 provides that a transferor’s rights arising from an employment relationship are transferred to a transferee when there is a transfer of undertakings. The Respondent made unlawful deductions from the Complainant’s pay in failing to pay what she was owed in the application of ERO increases in 2015 and 2016 and, in so doing, breached her rights under the Regulations. Her claim was submitted on 4 May 2018 and the cognisable period is 5 November 2017 to 4 May 2018. In accordance with HSE v John McDermott (2014) IEHC 331, the complaint relates to every distinct and separate breach in this period. Unlawful deductions were made on or about 1 December 2017. Therefore, the complaint was submitted in time. In 2004 and 2007, the then employer wrote to staff to advise that their rates of pay were being increased in line with increases in ERO rates. There is, therefore, a relativity and contractual nexus between increases in the Complainant’s pay and ERO increases, notwithstanding that her rate was above the base ERO rate. Further, the custom and practice established by ISS amounts to the creation of an implied contractual term. In Albion Automotive Ltd. v. Walker (2002) EWCA Civ 946, the Court of appeal of England and Wales listed the relevant factors for determining if a term is an implied term, as follows; a) Whether the policy was drawn to the attention of the employees b) Whether it was followed without exception for a substantial period c) The number of occasions on which it was followed d) Whether payments were made automatically e) Whether the nature of communication of the policy supported the inference that the employers intended to be contractually bound f) Whether the policy was adopted by agreement g) Whether the employees had a reasonable expectation that the enhanced payment would be made h) Whether terms were incorporated in a written agreement i) Whether the terms were consistently applied. The previous employer adopted a policy of applying ERO increases, this policy was drawn to the Complainant’s attention, was followed without exception for a period, was communicated to the Complainant in a manner that suggested an intention to be bound and the policy was applied consistently. The payment of ERO increases was an implied term of the Complainant’s contract and, in failing to honour this, the Respondent deprived the Complainant of her rights under the Regulations, in particular her rights under Regulation 4 of S.I. 131/2000. Witness Evidence Ms. Aija Lapsa. Ms. Lapsa is the Complainant. The witness gave evidence that she commenced working for ISS Facilities Ltd in 2005. Between then and 2010, her pay was increased a number of times, reaching €10.98 per hour. Increases were applied to all her colleagues and herself. At the end of April 2010, at a general meeting, staff were promised that, when ownership of the company changed, their terms and conditions would not be affected. However, the Respondent had not applied increases to her or to some other colleagues, as a result of which her pay did not increase for 10 years, despite increases in the cost of living. Other colleagues who joined the employment later received pay increases. The witness told the Court that she believed this to be unfair and this had prompted her to make the complaint. In cross examination, it was clarified that the meeting concerned had been with the previous employer. S.4 of S.I. 131/2003 4. (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. (2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement. (3) Subject to paragraph (4), this Regulation shall not apply in relation to employees' rights to old-age, invalidity or survivors’ benefits under supplementary company or inter-company pension schemes that do not fall within the Social Welfare Acts. (4) (a) The interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under a supplementary company pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to 2003 are protected under those Acts. (b) The transferee shall ensure that the interests of employees and of persons no longer employed in the transferor's business at the time of the transfer in respect of rights conferring on them immediate or prospective entitlement to old-age benefits, including survivors’ benefits, under a supplementary company pension scheme, other than a supplementary pension scheme that is an occupational pension scheme within the meaning of the Pensions Acts 1990 to 2003, are protected. Deliberation. In a parallel case involving the same parties regarding an alleged breach of the Complainant’s rights under the Payment of Wages Act, 1991, the Court has determined that there was no term of contract, implied or otherwise, that entitled the Complainant to have her pay increased in line with increases in ERO rates. It follows, therefore, that, as no such entitlement exists, there can be no basis for a claim that the Complainant’s rights under the Regulations have been breached. This conclusion is consistent with the Court’s view in TUD211 and in a number of cases taken by individuals in respect of the same set of facts. In the parallel Payment of Wages case, the Court has considered new arguments made to it and these arguments and the Court’s view of them are set out in that Determination. The Respondent’s appeal is upheld. Determination The Decision of the Adjudication Officer is overturned.
NOTE Enquiries concerning this Determination should be addressed to Therese Hickey, Court Secretary. |
