Complainant

Respondent

Parties

James  Gaule

H.A. O'Neill Limited

Representatives

Michael Kinsley B.L. instructed by  Bruce St. John Blake & Co. Solicitors

Byrne Wallace Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00038457-001

25/06/2020

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-00038458-002

25/06/2020

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-00038458-003

25/06/2020

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-00038458-004

25/06/2020

The complainant was employed as a maintenance technician from on or about 4th August 2009 until 3rd January 2020. The complaint relates to an alleged unfair dismissal.

The respondent contends that the complainant was not unfairly dismissed. The respondent’s position is that the complainant was fairly dismissed by reason of redundancy in circumstance where the role that he carried out was taken in house at Waterford Institute of Technology (W.I.T.), where the complainant worked.

The respondent stated that the tender for the maintenance contract at W.I.T in September 2019 did not provide for the transfer of the complainant into the role as previous tenders had done and that there were significant changes to the requirements of the role going forward. The respondent stated that alternatives employment options were explored with the complainant, but none were deemed suitable by him. In those circumstances, the complainant enquired as to his redundancy entitlements. The respondent stated that the complainant did not object to the redundancy and accepted his redundancy payment when the maintenance contract expired at W.I.T. in January 2020.

Evidence

The Maintenance Division General Manager gave evidence by affirmation at the adjudication hearing. The witness stated that the requirements of the role had changed significantly in the September 2019 tender and a number of the complainant’s tasks were no longer required as well as additional tasks being introduced in other areas.

The witness confirmed that there were a number of alternative options discussed with the complainant in October and November 2019. Specifically, the witness stated that a role involving mobile work, part time employment as a Diesel fitter in a sister company and another prospective role in Dublin were all discussed but were deemed unsuitable by the complainant. On that basis, the issue of redundancy was discussed, and this was the option that the complainant chose. The witness stated that there was no indication of any dissatisfaction on the complainant’s part and there was no suggestion of a subsequent challenge to the redundancy.

In cross examination, the complainant’s representative put it to the witness that there were no alternative roles offered to the complainant at all and that there was a complete lack of procedures used by the respondent in relation to the situation that led to the redundancy of the complainant.

The complainant’s representative stated that where the fact of dismissal is not in dispute, it is for the respondent to prove that the dismissal was not unfair. The complainant’s representative also outlined the responsibility of the respondent in ensuring that the complainant was entitled to fair procedures in relation to establishing that his role was to be made redundant. The complaint’s representative further stated that the complainant was not consulted in relation to the redundancy and was not offered the opportunity to discuss alternatives to redundancy.

Evidence

The complainant gave evidence under oath. The complainant stated that the changes to the tender came about when he was on annual leave and that most of the subsequent phone calls/conversations were about the tender. The complainant’s evidence was that there was no redundancy policy in place and no alternatives were offered to him in October and November 2019.

In cross examination, the respondent’s representative put it to the complainant hat there was no obligation on its client to have a redundancy policy. The respondent further stated that there was a good working relationship with the complainant and that it was the Institute that had changed the requirements of the role in the September 219 tender. The respondent representative re-iterated its position that the evidence of the Maintenance Division General Manager had been honest in respect of the options put to the complainant and the complainant’s ultimate decision to choose the redundancy option.

The complainant asserts that he was unfairly dismissed. The respondent contends that the complainant was dismissed fairly by reason of redundancy in circumstances where the expanded maintenance technician role was taken in house by Waterford Institute of Technology and where the respondent in this case, H A O’Neill Ltd had no alternative roles that were suitable to the complainant.

The Applicable Law

Section 6(4) of the Unfair Dismissals Act, 1977 provides as follows:

6(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.

Section 7(2) of the Redundancy Payments Act, 1967 provides as follows:

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,

I have given careful consideration to the submissions of the parties, the evidence given at the adjudication hearing and the case law referred to by both parties.

The dismissal of the worker is not an unfair dismissal if it results wholly or mainly from the redundancy of the complainant. Both sides to the within complaint gave evidence at the adjudication hearing. The complainant’s evidence was that it was not a valid redundancy situation, that he was not consulted in relation to the possibility of redundancy nor offered suitable alternative roles within the organisation. The respondent’s position is that the complainant’s role became redundant when it was insourced at W.I.T and was to be carried out differently than it had been in the past. The respondent was clear in its evidence that there were alternative options put to the complainant in respect of other roles in the organisation and in the context of these options being unsuitable to the complainant, the issue of redundancy arose and that was the option that the complainant chose. In my view, the respondent’s evidence on this point is to be preferred, that the complainant enquired what his redundancy entitlements would be having decided that the alternative employment options that were explored with him were unsuitable. Despite the complainant’s evidence on this point, I find on the balance of probabilities that the alternatives options were at least outlined to the complainant and the redundancy discussions arose out of the unsuitability to the complainant of these alternatives.

It is also clear to me that the role previously undertaken by the complainant became redundant when the role was insourced at W.I.T. with significant changes to how the role would be carried out going forward. The changes to the role were clearly outlined and I note that in respect of the advertised positions, the complainant missed the application deadline on one and “ruled himself out” of applying for the other role.

Mitigation of loss

I note the complainant’s position that he had intended to stay in the employment of the respondent until his retirement in April 2020 but that this had proved impossible when the maintenance technician role was taken in house by W.I.T. in January 2020.

In the 2.5 years since the complainant’s redundancy in January 2020 to the date of the adjudication hearing, the complainant stated that he had applied for approximately six jobs.

The respondent representative contends that the complainant has failed to make adequate efforts to mitigate his losses as he is required to do in a complaint of unfair dismissal.

Conclusion

In all of the circumstances of the complaint, I find that the complainant’s role in the organisation ended by reason of redundancy and he was not unfairly dismissed.

Having considered the evidence and submissions of the parties, I find that the complainant was fairly dismissed by reason of redundancy. Accordingly, the complaint of unfair dismissal is not well founded.

The complainant asserts that the insourcing of the maintenance function at W.I.T was a transfer of undertaking within the meaning of the “TUPE” regulations. The complainant’s position is that the respondent to this complaint (H. A. O’Neill Ltd) as transferor did not ensure that his terms and conditions of employment transferred to the new employer (CA-00038458-002) and that he was unfairly dismissed by H A O’Neill Ltd as a result of the transfer (CA-00038458-003 and CA-00038458-004).

The respondent representative stated that, as its client has not been named as respondent in any complaints in relation to Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003), the WRC has no jurisdiction to hear such complaints in relation to its client. Notwithstanding the preliminary objection, the respondent contends that the regulations did not apply to the circumstances of the insourcing of the maintenance function at W.I.T.

The respondent in the within complaint (ADJ-00028907) is H A O’Neill Ltd. Apart from the complaint of unfair dismissal against this respondent, further complaints were also submitted by the complainant against Waterford Institute of Technology (W.I.T) in related complaint number ADJ-00029002.

In the complaints against W.I.T. (ADJ-00029002) the complainant alleges breaches of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) “TUPE” in respect of his employment. The complainant alleges that his employment was the subject of a transfer within the meaning of the 2003 regulations and both H.A. O’Neill as transferor and W.I.T. as transferee breached those regulations in relation to him.

Specifically, the complainant alleges that the respondent in the within complaint, H.A. O’Neill Limited breached the regulations by not ensuring his terms and conditions transferred to the new employer (W.I.T.) and that he was dismissed by H.A. O’Neill by virtue of the transfer of undertaking.

WRC procedure in TUPE complaints

In addressing the respondent’s preliminary point, I note that the WRC complaint form is not a statutory form. In respect of complaints regarding alleged breaches of the “TUPE” regulations and as a matter of procedure, complaints against the transferor and transferee are separated with each individual complaint given a separate adjudication number and requiring a separate adjudication decision. In the within adjudication reference, there were three separate complaints relating to the transferor in the purported transfer. Complaint application CA-00038458-002 relates to an allegation that the transferor did not ensure that the complainant’s terms and conditions of employment transferred to the new employer. Complaint applications CA-00038458-003 and CA-00038458-004 appear to be duplicate complaints and relate to the allegation that the complainant was dismissed by the transferor by virtue of the transfer.

On the basis of the procedure outlined above, I am satisfied that the complainants relating to the transferor are properly before me for adjudication. As clarified to the parties in ADJ-00029002, for the TUPE complaints to succeed, it must first be decided if the regulationsapplied to the insourcing of the maintenance function at W.I.T.

The Applicable Law

Regulation 3 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) provides as follows:

3(1) – These regulations shall apply to any transfer of an undertaking, business or part of an undertaking or from one employer to another employer as a result of a legal transfer (including the forfeiture of a lease) or merger”

In respect of transfers of undertakings, the regulations define transfers as

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

An economic entity is defined as:

“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 Spijkers Criteria

The 1986 European Court of Justice (ECJ) case Spijkers v Gebroe Benedik Abbatoir CV gave rise to a set of criteria which provide guidance when it comes to deciding whether or not a transfer of undertaking has occurred. The criteria, known as the “Spijkers Criteria” are as follows:

1.       Was the undertaking a stable undertaking, with an ongoing life of its own?

2.       Has the entity retained its identity?

3.       Have some or all of the staff been taken over by the new employer?

4.       Has the customer base transferred?

5.       Are the activities post-transfer similar to those carried out before transfer?

6.       Has there been an interruption of the activity?

7.       Has there been a transfer of assets?

It is clear from the Spijkers’ ruling that the overriding objective is to protect workers in a business which is transferred. Consequently, it is necessary, when deciding whether or not a transfer is taking place, to consider all of the relevant circumstances and factors.

The Suzen case

Another case of relevance in establishing the existence of a transfer within the meanings of the regulations is the case of Ayes Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservices (1997)] “Suzen”. In this case, the ECJ (now CJEU) held as follows:

“The directive is to be interpreted as meaning that the directive does not apply to a situation in which a person who had entrusted the cleaning of his premises to a first undertaking terminates his contract with the latter and, for the performance of similar work, enters into a new contract with a second undertaking, if there is no concomitant transfer from one undertaking to the other of significant tangible or intangible assets or taking over by the new employer of a major part of the workforce, in terms of their numbers and skills, assigned by his predecessor to the performance of the contract”.

In Labour Court Determination TUD1713, Overpass Limited trading as Ocean Property Management and Susan Clancy, the Labour Court outlines the necessary criteria in respect of a transfer as follows:

“the type of undertaking or business in question, the transfer or otherwise of tangible assets such as buildings and stocks, the value of intangible assets at the date of transfer, whether the majority of the staff are taken over by the new employer, the transfer or otherwise of the circle of customers and the degree of similarity between activities before and after the transfer, and the duration of any interruption in those activities.”

I further note the EAT decision of Cannon v Noonan Cleaning Company Ltd and CPS Cleaning Services Limited [1998 9 ELR 153] which states as follows:

“The Tribunal must consider all the factors characterising the undertaking in question. The nature of this undertaking is that of cleaning. The equipment used by Noonans was not transferred to the new contractor. The same premises had to be cleaned by both contractors and each were under the control of the Department of Justice. The staff did not transfer when the contract was withdrawn and given to the new contractor. There was no goodwill as such to be transferred. The undertaking could be said to have retained its identity. While there was no apparent transfer of tangible assets however it could be said that there was a transfer of intangible assets, i.e. the likely profit to be made from the contract. This must have existed, otherwise why was there competition for the contract?… Also the possible transfer of the intangible profit margin is not of sufficient significance of itself to be a major factor in the transfer. It follows then that this transfer is not caught by the directive as it does not constitute a transfer of undertaking.

Conclusions

I have considered the submissions of the parties on the insourcing of the maintenance function at W.I.T.  and whether this amounted to a transfer within the meaning of the regulations.

I am satisfied, on the basis of the definitions within the regulations that the maintenance function provided by H. A. O’Neill Limited was an economic entity which retained its identity when it was insourced at the Institute albeit with significant changes to how the maintenance role was to be carried out. In respect of the “Spijkers” criteria, while some of the criteria is met, I note that there was no transfer of tangible assets such as plant, tools and equipment and the workforce of one did not transfer.

I have also considered the “Suzen” case as well as the relevant case law cited above and conclude that as no tangible or intangible assets transferred, the directive does not apply and the insourcing of the maintenance function at W.I.T. was not a transfer within the meaning of the regulations.

Having considered the submissions and evidence of both parties, I am satisfied that the insourcing of the maintenance function at Waterford Institute of Technology did not constitute a transfer within the meaning of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003). Accordingly, I find that complaint applications CA-00038458-002 and CA-00038458-003 are not well founded. Complaint application CA-00038458-004 is dismissed as a duplicate complaint.

Transfer of Undertakings, TUPE regulations

Cases cited by the Respondent:

McGeehan v Park Developments UD950/2008

JVC Europe Limited v Jerome Panisi [2012] E.L.R. 70

St Ledger v Frontline Distribution Ireland Ltd [1995] E.L.R. 160

Cases cited by complainant:

Glover v BLN [1973] I.R. 388

Kilsaran International Ltd v Vitalie Vet [2016] 27 E.L.R. 237

Boucher v Ors Irish Productivity Centre 1994 EAT E.L.R. 205

Cusack v Dejay Royale Alarms Ltd [2006] 17 E.L.R. 51

Sheehan & O’Brien v Vitners Federation of Ireland Limited [2009] E.L.R. 155

Walshe v Stauntons Intersports UD/441/1999.