Complainant

Respondent

Parties

Beverly McLoughlin

Lisa O’Connor T/A Hair Flair

Representatives

Michelle Bolger ESA Consulting Associates Ltd.

Mark Scanlon J. D Scanlon & Company Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00039380-001

26/08/2020

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012

CA-00039380-002

26/08/2020

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

CA-00039380-003

26/08/2020

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

CA-00039380-004

26/08/2020

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

CA-00039380-005

26/08/2020

Complaint seeking adjudication by the Workplace Relations Commission under Section 12 of the Minimum Notice & Terms of Employment Act, 1973

CA-00039380-006

26/08/2020

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-00039380-007

26/08/2020

The complainant has presented seven complaints against the respondent, named as Hair Flair on 26 August 2020:

Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003),

Complaint under section 27 of the Organisation of Working Time Act, 1997,

Complaint under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012

Complaint under Section 8 of the Unfair Dismissals Act, 1977

Two complaints under Section 39 of the Redundancy Payments Act, 1967.

Complaint under Section 12 of the Minimum Notice & Terms of Employment Act, 1997.

The complainant worked as a hair stylist with Ms. Evelyn Lambe and Ms. Lily Leavy, t/a Hair Flair from 2015 until she was dismissed on 19 June 2020.

The complainant worked on average 20.2 hours a week over 3 days and earned a basic rate of  €10.10 an hour.

The complaint was lodged with the WRC on 26/8/2020.

Written submissions were received by the representatives for the complainant and the respondent.

After the hearing, the complainant submitted details of loss incurred which were exchanged with the respondent.

Incorrect Respondent.

The respondent states that there is no legal entity named Hair Flair. 

The respondent will not consent to the request for a name change. The complainant had legal advice. A trading name is not a legal entity. The CRO should have been searched.

It is submitted that Ms Lisa O’Connor is a stranger at law to all of the referenced registered business names cited by the complainant’s representative.

The complainant has incorrectly provided the respondent as being Hair Flair in circumstances where she is seeking to argue that Ms Lisa O’Connor is in fact responsible for alleged losses and breaches of Statute.

 It is submitted that the complainant is not entitled to recover as against Ms Lisa O’Connor as the complaint is not made as against Ms Lisa O’Connor.

The respondent relies on the Labour Court decision of Auto Depot Limited -v- Vasile Mateiu, UDD1954 which held that the impleading of an incorrect respondent was a technical error. In the instant complaint, the incorrect constitution of the complaint cannot be deemed to be “no more than a technical error” and therefore the complaint should fail.

 Incorrect Respondent.

The complainant’s representative, Ms Bolger (ESA), asked that the name be changed.

The complainant had asked the respondent to confirm the correct name of the respondent without success.

The respondent engaged with them as Hair Flair. The complainant’s request for employee records and pay slips was ignored.

She received a p60 from the respondent solicitor which said Hair flair.

Incorrectly named respondent.

I must decide if I can substitute the actual employer for the entity impleaded in this complaint.

The substitution of the actual employer for the entity impleaded in a originating complaint form has been addressed in a number of authorities. The respondent argues that as the complaint has been brought against an entity that does not exist, the complaint must be dismissed.

McGovern J in the High Court case of County Louth VEC -v- Equality Tribunal [2009] IEHC 370 addressed the question of when proceedings before a statutory Tribunal can be amended. He set out the following principle of law: “If it is permissible in court proceedings to amend pleadings where the justice of the case requires it, then, a fortiori, it should also be permissible to amend a claim as set out in a form such as an originating document before a statutory tribunal, so long as the general nature of the complaint remains the same.”

In the instant complaint the business name was used rather than that of a natural person or legal entity who trades under that business name. Relevant to the complainant’s mistaken use of the respondent’s business name is that the Rules of the Superior Courts allow for proceedings to be initiated against a firm in its business name. Order 14, Rule 11 of RSC, provides as follows: -

 “Any person carrying on business within the jurisdiction in a name or style other than his own name, may be sued in such name or style as if it were a firm name; and, so far as the nature of the case will permit, all rules relating to proceedings against firms shall apply.” 

The Labour Court in Ballarat Clothing Ltd v Aziz, EDA151 agreed to amend the respondent’s title in the light of authorities and adopted the reasoning of Hogan J in O’Higgins v University College Dublin & The Labour Court [2013] IEHC 431 wherein Mr Justice Hogan held

“Even if the wrong party was, in fact, so named, no prejudice whatever was caused by reason of that error (if, indeed, error it be)” ….

 “In these circumstances, for this Court to hold that the appeal was rendered void by reason of such a technical error would amount to a grossly disproportionate response and deprive the appellant of the substance of her constitutional right of access to the courts.”

The respondent asks me to accept that the incorrect title in the instant case is more than a technical error and the determination of the Labour court in Auto Direct Ltd v Vasile Mateui DWT1922 is of no avail to this complainant in the instant case whose error, the respondent contends, was more than technical. That determination concluded that the erroneous naming of ‘Auto Depot Tyres Ltd’ on the WRC complaint form to be no more than a technical error. But of relevance to the instant complaint are the Court’s conclusions in that determination:

“The Court is further fully satisfied that the respondent party that appeared before the Court was the Complainant’s employer. That party was fully aware of the Complainant’s complaints to the WRC. He knew precisely from whom the complaints were and to what the complaints referred. The respondent party has had a full opportunity to be heard and to answer those complaints. The Court is therefore equally satisfied that the employer will suffer no prejudice or injustice by its decision on this preliminary matter…….”

The facts of this case are that

1). Until the Friday before the hearing scheduled for the following Monday the 28 February, the respondent held themselves out as Hair Flair by failing to correct this mistake.

2). The complainant’s representative sought clarification from the respondent on employee matters. Her requests were ignored.

3). The named respondent is not a completely different entity in a different location.

4). I find that the complaint form submitted to the WRC contained the trading name of the respondent company. I consider this error to be technical in nature.

I am satisfied that the actual respondent was fully aware at all material times of the instant proceedings.

Considering the facts of this case and taking note of the above decisions, I find that amending the name of the respondent does not result in an injustice or prejudice to the proposed respondent.

For the reasons cited above, I agree to amend the name of the respondent to reflect its correct legal title, that of Lisa O’Connor T/A Hair Flair.  This is reflected in this decision.

I decide that I do have jurisdiction to hear these complaints.

CA-00039380-007.  Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003).

Ms. Bolger stated that the despite the respondent’s denials, a transfer occurred within the meaning of the Regulations and that the transferee, the respondent is liable.

A meeting occurred on 19 June 2020 where the respondent transferred the business to the transferee, Ms O Connor. The transferee started organising the complainant on the next working day, 22 June.  It was expected that Ms O’Connor would retain all clients. Some staff were transferred.

The salon continued to be called Hair Flair.

Clients did transfer from the transferor’s business into the transferee’s business. The lease for the property housing the business was signed on the 30 June 2020. There was a transfer of assets.

The entire premises continued as it had. Ms Bolger states that the complainant’s contractual rights passed from the respondent transferor to the transferee.

By Monday 22 June, the transferee had discretion to decide who could access the premises of Hair Flair and who could access the client list as that data had transferred from the transferor to the transferee.

The respondent failed to provide the complainant with any information concerning the transfer as required under Regulation 8 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003). In addition, the respondent failed to comply with Regulation 5.

Witness 1: the complainant gave evidence under affirmation.

On the 18 June the complainant received a call from the respondent co-owner who asked her to come to a meeting to discuss a return to work and changes therein. Both owners attended the meeting. The respondent co-owner, Ms. EL, told the complainant and colleague x that they would be made redundant and that Ms O’Connor, a fellow employee until then, would be taking over the business.

On Fri 19 June, Ms O Connor telephoned the complainant and apologised for not attending the meeting on 19 June. She made a vague reference to the respondent’s suggestion that she should continue with the business on her own, stated that she wanted to think about it and would ring the complainant after the weekend.

The complainant had always had her own set of clients in the salon. They attended when it was convenient for her.

It didn’t dawn on the complainant to ask if she would be working with Ms O’Connor. She presumed that she would as they had enjoyed a good working relationship.

The complainant rang the respondent and told her she was worried about the future. The respondent replied that that was a matter between the complainant and Ms O’Connor. She told the respondent co-owner that she wanted to retrieve equipment from the salon. Ms L told her that the locks had been changed.

The complainant rang Ms O’Connor who agreed that the complainant should come in the following Monday so as to get the client lists and tools. On the Monday, Ms O’Connor telephoned her and told her that GDPR prevented her from allowing the complainant to access the lists. She did return on 22 June to retrieve her hairdressing equipment. The respondent co-owner told her that her clients were their clients now.

By Monday 22 June, the respondent had authority to decide who could access the salon and the client data base.

Ms Bolger asks that full redress be provided for breaches of the Regulations.

CA-00039380-001. Complaint under section 27 of the Organisation of Working Time Act, 1997 Ca 39380-008.

This complaint concerns breaches of section 12,19 and 20 of the Act of 1997.

Section 19 and 20 breaches.

This complaint concerns the failure of the respondent to reckon the complainant’s non -recorded hours for the purposes of annual leave accrual for the period 1 April 209 – August 2020.

The shortfall is 10 hours a month and this contravenes section 19 and 20 of the Organisation of working time Act.

Her normal working week amounted to 18 hours spread over Wednesday, Fri and Sat for which she did get leave. The complainant’s representative states the transferor’s handwritten records show that she was only paid for her recorded hours.

Section 12 Breach

More often than not the complainant did not receive breaks in accordance with section 12 of the act of 1997.

Complainant’s evidence given under affirmation.

The complainant stated that clients were packed into the salon and waiting so it was not possible to take a break. The transferor, though asked, failed to provide details of breaks taken. The complainant states that sometimes she could get breaks but for example in February 2020 she got very few breaks. Oftentimes she was posting material on social media sites during her break.

CA-00042516-002. Complaint under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012.

This complaint was withdrawn.

CA-00042516-003. Complaint under Section 8 of the Unfair Dismissals Act, 1977

This complaint is based on unfair selection for redundancy.

Ms Bolger states that if the respondent is deemed to be the employer for the purposes of this complaint, there was a complete absence of fair procedures. The process was devoid of notification, no written documentation, no criteria as to why the complainant was selected for redundancy, no appeal.

Neither the respondent nor the previous owners chose to identify who the employer was and against whom the complainant should bring this complaint.

Complainant gave evidence under affirmation.

On the 18 June the complainant received a call from the transferor asking her to come to a meeting to discuss a return to work and changes therein. The then co-owners attended the meeting. They advised the complainant that the complainant and colleague x would be named redundant, and that Ms O’Connor would be taking over the business.

The complainant had always had her own set of clients in the salon. They attended when it was convenient for her.

It didn’t dawn on the complainant to ask if she would be working with Ms O’Connor. She presumed that she would as they had enjoyed a good working relationship.

Cross Examination of witness.

The complainant accepted that Redundancy was offered to her on 19 June.

She accepted that the lease was signed between the parties on 30 June.

The complainant accepted that Ms Bolger wrote to the respondent and the former owners on 31 July 2020, and that the respondent passed on all of this correspondence to the transferor and advised the complainant of this.

Mitigation of loss.

The complainant maintains that she was hampered in her attempts to mitigate her loss due to the failure of the respondent to provide her with her client lists and details. In addition, the two-metre distance rule in operation during the pandemic severely limited the opportunities to work in a salon.

The complainant stated that during lockdown period, she was doing family members’ hair. She made many efforts to get work. She applied to three salons immediately after losing her job in Hair Flair.

CA-00039380-004. Complaint under Section 39 of the Redundancy Payments Act, 1967

The respondent failed pay the complaint redundancy monies.

CA-00039380-005. Complaint under Section 39 of the Redundancy Payments Act, 1967.

The respondent failed pay the complaint redundancy monies and failed to explain why she would or could not make the payments.

CA – 00039380 -006. Complaint under Section 12 of the Minimum Notice & Terms of Employment Act, 1973.

The complainant was not paid her two weeks’ notice nor was she allowed to work the period which was the 19 June to 3 July 2020.

CA-00039380-007.  Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

It is the respondent’s position that TUPE does not apply to this transfer as there has been no transfer of an economic entity. Without prejudice to that position, the applicability of Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I No. 131 of 2003) (“TUPE”) should be determined prior to all other matters. If it is determined that TUPE does not apply, Ms Lisa O’Connor has no case to answer with respect to any other claims which have been brought against her as the complainant’s employment would not be deemed to have transferred under TUPE.

The respondent’s representative stated that Ms. O’Connor was caught in the crossfire between the complainant and the previous owners.

Witness 2. Direct evidence of Ms O’Connor given under affirmation.

 Ms. O’Connor met the then co-owners of Hair Flair, Ms Lambe and Ms Leavy on 17 June 2020 and was given two weeks’ notice of redundancy. At this meeting, they asked if she had any interest in leasing the premises. They reminded her that she had her own clientele. The witness asked them if she had any obligations, legal or otherwise, to any employees at this time to which they replied that she did not. The witness knew that the complainant had been offered redundancy and understood, therefore, that it was not a TUPE.  She was not in receipt of any legal advice at this time.

She spoke with the complainant on the telephone. She told the complainant on 22 June that she could not afford to take on a second employee; she had taken on her colleague, Ms. X, because she had trained her in. She told the complainant that it was not cost effective to take her back at that time as nothing was certain.

She agreed to take a lease of the premises. The lease was signed on the 30 June.

The name Hair Flair was retained, left over the door of the salon as it was embedded in marble and was engraved on mirrors and therefore would have been very costly to replace.

The chairs and sinks transferred from Hair Flair.

She closed the business in December 2020.

Cross examination of the witness.

The witness confirmed that her redundancy was processed in March 2021; she did not know why it took so long. She confirmed that the complainant’s clients’ details remained on Hair Flair’s data base, and that she had access to that data. None of the complainant’s clients came back to the witness. When they rang looking for the complainant to do their hair, she advised them to contact the complainant via Facebook. Also, the witness had her own clients. She did not offer the complainant a chair to rent so as to continue working in Hair flair.

She understood that she was taking over the premises of Hair Flair. She confirmed that the vouchers purchased pre-Covid -19 would be honoured.

Legal Arguments.

The respondent refers to his legal submission and asks that the points contained in it be addressed.

The respondent submits in the first instance that there was no legal entity which was capable of being transferred under TUPE as all staff members were made redundant for what Ms O’Connor understands were legitimate redundancy reasons prior to the transfer. Ms O’Connor is not privy to all details regarding same.

The respondent submits that it is necessary, in the first instance, to determine whether there has been any transfer of an economic entity which retains its identity as asserted by the complainant and contested by the respondent. In order to answer that question, he posits decisions of the European Court of Justice in support of his contention. Specifically, he relies on Suzen v Zehnacker Gebaudereinigung Krankenhausservice(C-13/95) where the CJEU at paragraph 13 stated:

. “For the directive to be applicable, however, the transfer must relate to a stable economic

entity whose activity is not limited to performing one specific works contract (Case C-48/94 Rygaard [1995] ECR I-2745 paragraph 20). The term entity thus refers to an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific objective.”

He builds on his contention that Hair Flair could not be viewed as an economic entity merely because the service operated by the successor business is the same and, in this regard, draws on the joined cases Francisca Sanchez Hidalgo and others C-173/96 and C-247/96 where the CJEU,

referencing ‘entity’, as set out in the Suzen case noted at paragraph 30 as follows:

 “The mere fact that the service provided by the old and new undertaking providing a

contracted-out service or the old and new contract holder is similar does not justify the

conclusion that there has been a transfer of an economic entity between the successor undertakings. Such 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 the

work is organised, its operating methods or indeed, where appropriate, the operational

resources available to it (Suzen)”

But the continuity of the service or activity entrusted to Ms O’Connor is not the only feature of the transaction which must be examined.

Whilethe respondent accepts a business called Hair Flair survived beyond the 29 June (The Government permitted reopening day), it is submitted that Hair Flair cannot be considered to be an economic entity for the purpose of TUPE because it was a business operated by a sole individual, Ms O’Connor. Prior to Ms O’Connor taking over the business of Hair Flair on 22 June 2020, the other two employees, including the complainant, had been made redundant on 19 June 2020.

The respondent submits that If it is ultimately determined that Hair Flair was an economic entity on 21st June 2020, although same is not admitted by Ms O’Connor, TUPE does not apply in any event as the conditions denoting a transfer and set out in the much relied -upon decision of Jozef Maria Antonius Spijkers v Gebroeders Benedik Abattoir CV and Alfred Benedik en Zonen BV C-24/85 (1986) are not matched in the instant case. The respondent applies the checklist and criteria set out in Spijkers to the facts of the instant complaint to support his case that Hair Flair was not a stable economic entity.

Spijkers criteria.

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

The respondent disputes this. It was the height of the pandemic. Her colleague was employed there for 7 weeks only.

The salon was closed for a period of nearly four months (March – June 2020) during the Covid-19 pandemic. During this period, the business was supported by the Irish Government by way of Covid-19 supports. In June 2020, the decision was made by Ms. Evelyn Lambe and Ms. Lily Leavy to make all of their staff redundant as they could not afford the costs of supporting them. Over the coming 6 months, the business operated for a total of 19 weeks and ultimately had to close as it was not economically viable.

The retention of the entity’s identity.

While Ms Lisa O’Connor continued to trade under the name “Hair Flair”, the respondent submits that the previous business was a different business as it was synonymous with its previous owners Evelyn Lambe and Lily Leavy. Its identity was not retained in its entirety.

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

Of the three staff employed in Hair Flair, Ms O’Connor and Ms. X transferred, with Ms. X leaving after 7 weeks, as it was not deemed economically viable to retain her.

Transfer of the customer base.

The respondent submits that the customer base was no longer significant following on from the Covid-19 pandemic.

Similarity of activities pre- and post- transfer.

The respondent accepts that they are.

Has there been an interruption of the activity?

The activity of hair dressing was interrupted due to Covid-19. The complainant had not worked as a hairdresser with Hair Flair since March 2020 and was employed on the pandemic unemployment payment during that period.

Did a transfer of assets occur?

Ms. O’Connor leased the premises on a short-term lease which expired in December 2020.

Based on the above characteristics of this transfer, the respondent maintains that the Regulations do not apply.

CA-00039380-001. Complaint under section 27 of the Organisation of Working Time Act, 1997.

Alleged breach of section 19 and 20 of the Act of 1997.

As the respondent maintains thatan entity did not transfer to Ms O’Connor, she is therefore not responsible for any non-payment of monies in respect of alleged unpaid annual leave entitlements. Without prejudice to the aforementioned point, the complainant did not make this specific complaint in her WRC complaint form, and it should therefore be deemed inadmissible.

Alleged breach of section 12 of the Act of 1997.

As the respondent maintains thatan entity did not transfer to Ms O’Connor, she is not therefore responsible for any failure to provide the complainant with breaks in accordance with section 12 of the Act of 1997.

Without prejudice to the aforementioned point, the complainant did nor particularise her complaint and it should therefore be deemed inadmissible.

CA-00042516-002. Complaint under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012.

Noted that this complaint has been withdrawn.

CA-00039380-003.Complaint under Section 8 of the Unfair Dismissals Act, 1977

The respondent’s position is that as the Regulations do not apply, the respondent is not her employer, and her complaint must fail.

The complainant was made redundant by the previous owners of Hair Flair and her complaint, therefore, cannot succeed.

In the event that that it is determined that the complainant was unfairly dismissed, the efforts of the complainant to mitigate her loss must be examined.

Mr Scanlon stated that the complainant has furnished no evidence of any effort to mitigate any such loss pursuant to Section 7(2)(c) of the Acts, and the complainant is, therefore, ineligible for any award of compensation.

In terms of the stated impediments to mitigating her loss, the respondent did not refuse access to the building to retrieve her client lists contrary to what is claimed. The respondent informed her that this was decision for the previous owners.

The respondent was caught in the crossfire between the complainant and previous owners of Hair Flair.

Cross examination of the witness.

The witness stated that she did not refuse to give the complainant her client data list but advised her to ask Ms Leavy, the previous owner, about same. She did advise the complainant about GDPR constraints.

CA-00039380 – 004 / 005. Complaints under Section 39 of the Redundancy Payments Act, 1967.

The respondent states that any redundancy that took place occurred prior to 29th June 2020, the date on which the respondent reopened Hair flair. The respondent is not privy to details of any redundancy payments offered or made to the complainant. She knew redundancy had been offered to the complainant. The complainant failed to cooperate with the process and return the necessary forms to secure payment which the previous owner had sent to her.

The witness stated in evidence that she received redundancy payments as did her colleague Ms X.

CA – 00039380 -006. Complaint under Section 12 of the Minimum Notice & Terms of Employment Act, 1973.

Concerning the complaint that the complainant was not paid her statutory notice, the respondent submits that as an entity did not transfer to Ms O’Connor, she is therefore not responsible for any non-payment of monies in lieu of termination payments.

Furthermore, the respondent submits that if it is not accepted that TUPE does not apply, it is their position that this claim should fail as the complainant was in receipt of pandemic unemployment payments from 19th June 2020 to 3rd July 2020 and beyond.

The complainant was provided with two weeks’ notice of the impending redundancy.

The hair salon was closed due to the Covid-19 pandemic until 29th June 2020.

Conclusion

The respondent submits that all claims should fail.

CA-00039380-007.  Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 200

Do the Transfer of Undertakings Regulations Apply to this Transfer?

The essential question for determination is whether a transfer occurred within the meaning of the EC (Protection of Employees on Transfer of Undertakings) Regulations 2003, (“Tupe Regulations”), when Ms. Lisa O’Connor, took over the hair salon of Evelyn Lambe and Lily Leavy t/a Hair Flair, such that the complainant was entitled to the protections afforded by the Regulations.

Relevant Law

Regulation 3 of the EC (Protection of Employees on Transfer of Undertakings) Regulations 2003 states        

(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 respondent submits that there has been no transfer of an economic entity. The business of Evelyn Lambe and Lily Leavy had ceased, and on 19 June, redundancy was offered to three employees and subsequently paid to two of the three employees.

Legal Authorities.

In examining if a transfer of an undertaking occurred, and bound by Regulation 3(2), the Labour Court , in Euro Car Parks (Ireland) Limited v Dermot Kelly, TUD1810, had to determine if a transfer of ownership of Euro Car Parks to Oyster Lane Ltd took place such that the complainant , previously employed by Euro Car Parks, would be entitled to transfer from Euro Car Parks (Ireland) Limited into  Oyster Lane Ltd, on no less favourable conditions.

In considering whether the appellant’s business was a stable economic entity and whether its essential characteristics survived into its next iteration, the Labour Court considered the criteria used by the CJEU in Case 24/85Spijkers v Gebroeders Benedik Abbatoir CV, to be decisive.

The Labour Court, in coming to their decision drew on paragraphs 12, 13 and 15 in Spijkers, which held as follows:

“12 ….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.

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.”

Applying Spijkers to the facts before them, the Labour Court found that:

“The transfer of ownership of the Car Park to Oyster Lane Limited on 14 January 2016 did not alter the identity of the Car Park – the Car Park continued to operate on the same terms as prior to 14 January 2016, which were then formalised on 26 January 2016. 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 its operation is actually continued or resumed.”

The Labour Court found that both operators provide a service (i.e., operating the service of providing carparking facilities to the paying public), utilising that same substantial and fixed essential asset (i.e., the carpark building, ticket payment machines, barriers etc).

The court found that a transfer had occurred.

Applying the checklist enunciated in Spijkers, the conclusions of the Labour Court in Euro Car Parks (Ireland) Limited and the questions posed by the respondent to the circumstances of the instant complaint, the following matters need to be addressed.

Was the business transferred as a going concern.?

Aside from the vicissitudes of Covid-1, no evidence was presented to uphold the respondent’s contention that the hair salon was not disposed of as a going concern or that it was a loss-making business.

In applying Spijkers to the factors that may indicate that the entity was a going concern, the following conclusion found in par. 15, though not conclusive, is of note:

” 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.”

Hair Flair was actually continued or resumed by Ms O’Connor, with the same or similar activities.

The advent of Covid -19 and its impact on businesses did not result in the suspension of any obligations contained in the TUPE Regulations, unlike the suspension of certain rights contained in Redundancy Legislation which came about as a result of the Emergency Measures in the Public Interest (COVID-19) Bill and removed the right to redundancy payments when employees were laid off or put on short-time work as a result of the COVID-19 pandemic. To accept the respondent’s argument that Covid -19 deprived Hair flair of its status as a stable economic entity would be to render the Regulations defunct.

Transfer of an economic entity?

The respondent submits that there has been no transfer of an economic entity. The business of Evelyn Lambe and Lily Leavy had ceased, and on 19 June, redundancy was offered to three employees and subsequently paid to two of the three employees.

The new entity trading as Hair Flair was not a stable entity; it ceased to trade in December 2020.

The respondent in building on his case that a transfer did not occur refers to Francisca Sanchez Hidalgo and others C-173/96 and C-247/96 where the CJEU building on Suzen v Zehnacker Gebaudereingigung GmbH Krankenhausservuce (Case C-13/95) held  that the mere continuation of the same activity does not, of itself, mean that that there has been a transfer of an economic entity.

So, it will be necessary to look at what other factors if any characterised this transaction.

The respondent further asks me to accept that Hair Flair cannot be considered to be an economic entity for the purpose of TUPE because upon reopening on 29 June 2020, it was a business operated by a sole individual, Ms O’Connor. The EAT in t/u36/2014, a complaint which concerned the transfer of an entity to an individual, the Cork County Sheriff, stated

“For the purposes of European Communities (Protection of Employees on the Transfer of Undertakings) Regulations 2003 it matters not whether the transferor or transferee is a natural or legal entity or whether they are a private or public body.”  

The respondent also submits that Hair Flair could not be deemed to be an economic entity as of 21 June as the employees had been made redundant on 19 June 2020 and the salon did not recommence under Ms O’Connor until 29 June 2020.

The question of the applicability of the TUPE Regulations to a transfer occurring after the entity ceased to exist was addressed in a judgement of the CJEU, CASE 101/87 P. Bork International A/S, in liquidation v Foreningen af Arbejdsledere I Danmark, acting on behalf of Birger E. Petersen, and Jens E. Olsen and others v Junckers Industries. In that case, the Court in answering the proposition that

” it is impossible to speak of a going concern where the undertaking ceased to operate before the transfer”

 replied

“ it must be pointed out, as the Court has already held in its judgment of 17 December 1987 in Case 287/86 Ny Mølle Kro [1987] ECR 5465, that the fact that the undertaking in question was temporarily closed at the time of the transfer and therefore had no employees certainly constitutes one factor to be taken into account in determining whether a business was transferred as a going concern. However, the temporary closure of an undertaking and the resulting absence of staff at the time of the transfer do not of themselves preclude the possibility that there has been a transfer of an undertaking within the meaning of Article 1 (1) of the directive. That is true, in particular, in

circumstances such as those of this case, where the undertaking ceased to operate

only for a short period which coincided, moreover, with the Christmas and New

Year holidays.”

The Court found in all of the circumstances of the case, that the Article 1 (1) of Council Directive 77/187/EEC of 14 February 1977 did apply.

Retention of entity’s identity post transfer.

The respondent contends that the entity, Hair Flair, did not retain its identity, itself considered a prerequisite for a transfer to have occurred, because in its previous iteration it was synonymous with Ms. Lambe and Ms Leavy, absent from the entity after Ms O’ Connor took over the salon. But identity is not maintained merely because the same persons run the business prior to after the transfer. Identity is characterised by the transfer of the entity as a going, stable concern engaged in a continuation or resumption of the same or similar activities, provided in a similar manner using similar methods and similar resources.

Conclusion.

The decision of the ECJ in Suzen means that the transfer of the work of Hair Flair to the respondent does not in and of itself necessarily mean that there has been a relevant transfer. However, in the instant case more than the hairdressing service transferred as is set out hereunder:

The same hairdressing services were offered to clients.  Its method of operation did not change;    the same tools and facilities were used.

The building housing the hair salon transferred. Furniture such as sinks, chairs etc transferred.

Two of the three employees transferred. The skills and expertise of the staff transferred.

Clients of Evelyn Lambe and Lily Leavy t/a Hair Flair transferred. Their files and data changed hands which greatly assisted in the continuation of the business. 

Both the respondent and Ms Leavy and Ms Lambe traded under the same name in the same premises.

I find that the operation of the business of Hair Flair was maintained or resumed by the respondent. The new entity was engaged in the same activities using the same assets and with most of the employees.

I find that there was a transfer of an economic entity which was the sale of hairdressing services for a profit.

Based on the above facts and the authorities, it would be impossible to avoid the conclusion that the new entity, Lisa O’Connor trading as Hair Flair retained the identity of Evelyn Lambe and Lily Leavy t/a Hair Flair

I find that a transfer of undertakings within the meaning of the Regulations occurred as between Evelyn Lambe and Lily Leavy t/a Hair Flair and Lisa O’Connor trading as Hair Flair.

I must now consider the consequences of this finding

Regulation 8 (6) addresses the obligation on both the transferor and the transferee to consult the employee

“6)      Where, notwithstanding paragraph (5), ………each of the employees concerned must be informed in writing, where reasonably practicable, not later than 30 days before the transfer and, in any event, in good time before the transfer, of the following:

(a)     the date or proposed date of the transfer;

(b)     the reasons for the transfer;

(c)     the legal implications of the transfer for the employee and a summary of any relevant economic and social implications for that employee;

and

(d)     any measures envisaged in relation to the employees.”

It is accepted that that regulation 8 was not applied.

The remedy for this breach is addressed in regulation 10 which provides as follows:

“A decision of a rights commissioner under paragraph (4) shall do one or more of the following:

                             (a)     declare that the complaint is or, as the case may be, is not well founded;

                             (b)     require the employer to comply with these Regulations and, for that purpose, to take a specified course of action; or

                             (c)     require the employer to pay to the employee compensation of such amount (if any) as in the opinion of the rights commissioner, is just and equitable in the circumstances, but -

                             (i)      in the case of a contravention of Regulation 8, not exceeding 4 weeks remuneration and,

                             (ii)      in the case of a contravention of any other Regulation, not exceeding 2 years remuneration”,

Liability for a breach of Regulation 8.

The question of upon whom responsibility should rest in the case of an alleged breach of Regulation 8 is dealt with in the Labour Court determination- J Donoghue Beverages Ltd. V Elizabeth Collins, TUD183/2018 which concerned the failure to consult the complainant. The court stated that “Regulation 8 implies a term into the Complainant’s contract of employment that entitles her to a period of information and consultation through her chosen/elected representatives prior to the occurrence of a transfer within the meaning of the Regulations; Regulation 4(1) provides that any remedy for the failure of her employer as transferor to fulfil its obligations under Regulation 8 can only be sought as against the Transferee.” 

While I accept that the respondent was not in receipt of legal advice, on the basis of the evidence, I uphold the complaint against this respondent. Liability rests with the transferee.

I decide that the respondent should pay the complainant three weeks’ wages which on the basis of the uncontested evidence and  which includes the weekly commission, amounts to €924.

The complainant also alleges a breach of Regulation 5 (1). But regulation 5(4) precludes a complainant from obtaining relief under both the Unfair Dismissals Act, 1977 and the Regulations, and the complainant has submitted a complaint of unfair dismissal against the transferor based on unfair selection for redundancy. This complaint is addressed in ADJ -00031898 CA-00042516-003.

CA-00039380-001. Complaint under section 27 of the Organisation of Working Time Act, 1997.

Breaches of Section 19 and 20 of the Act of 1997.

I have found that liability rests with the transferor. This complaint is addressed in ADJ -00031898.

I do not find this complaint to be well founded.

CA-00042516-002. Complaint under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012.

This complaint was withdrawn.

CA-00039380-003.Complaint under Section 8 of the Unfair Dismissals Act, 1977

As has been stated previously, Regulation 5(4) precludes a complainant from obtaining relief under both the Unfair Dismissals Act, 1977 and the Regulations, and the complainant has submitted a complaint of unfair dismissal against the transferor based on unfair selection for redundancy. This complaint is addressed in ADJ -00031898 CA-00042516-003.

I do not find this complaint to be well founded.

CA-00039380 – 004 / 005. Complaints under Section 39 of the Redundancy Payments Act, 1967.

These complaints concerning the non- payment of redundancy monies and the failure of the complainant to cooperate with the employer’s efforts to secure redundancy for her have been addressed in ADJ -00031898, CA-00042516-004/05.

I do not find this complaint to be well founded.

CA – 00039380 -006. Complaint under Section 12 of the Minimum Notice & Terms of Employment Act, 1973.  

This complaint concerning the failure to pay the complainant her statutory notice entitlements is addressed inADJ-00031898.

I do not find this complaint to be well founded.

CA-00039380-007.  Complaint under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

I find this complaint to be well founded.

I decide that the respondent is to pay the complainant the sum of €924.

CA-00039380-001. Complaint under section 27 of the Organisation of Working Time Act, 1997 Ca 39380-008.

I do not find this complaint to be well founded.

CA-00042516-002. Complaint under Regulation 18 of the European Communities (Road Transport) (Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012.

This complaint has been withdrawn.

CA-00039380-003.Complaint under Section 8 of the Unfair Dismissals Act, 1977.

I do not find this complaint to be well founded.

CA-00039380 – 004. Complaints under Section 39 of the Redundancy Payments Act, 1967.

I do not find this complaint to be well founded.

CA-00039380 – 005. Complaints under Section 39 of the Redundancy Payments Act, 1967.

I do not find this complaint to be well founded.

CA – 00039380 -006. Complaint under Section 12 of the Minimum Notice & Terms of Employment Act, 1973.

I do not find this complaint to be well founded.

Application of TUPE regulations; transferee ; unfair dismissal and redundancy in a transfer of undertakings situation; accrual of annual leave