Complainant

Respondent

Parties

Isabella  Breslin

Ajpc Retail Limited T/A Costcutter

Representatives

  Self

 No attendance

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00055477-001

09/03/2023

This case is concerned with an appeal of the failure of the named respondent to apply the terms of the Redundancy Payments Act as amended to the Complainant following the closure of the business he operated in January 2023. As that business- a shop and fuel forecourt were subsequently taken over and are now operated by another retailer and the Complainant is employed by that retailer, the question of whether there was in fact a redundancy as defined in the Act, having regard to the provisions of the Transfer of Undertakings Regulations, arise for consideration. As can be seen, this issue was discussed with the Complainant at the hearing and there is correspondence from the current employer containing their dates for the termination of the previous employment relationship, the date they took over the business and the commencement of the subsequent employment relationship. The nonattendance of the named Respondent and indeed his lack of engagement with his former employees can best be described as unhelpful and disrespectful of the employees he dismissed. Particularly unhelpful is the absence of any information of a financial nature which could affect a decision e.g., whether there was an insolvency or bankruptcy involved in his cessation of trading or when and how the change to the new operator of the successor business came about. The Complainant cannot be responsible for any lack of information on these matters. This Decision can only be taken on the available information having regard to the relevant legislation.

The Complainant commenced employment at the premises in Lifford County Donegal under the brand name of Centra. Her employment transferred to the named respondent in 2020. That was a TUPE and her service carried forward to her employment with Mr Johnston under the brand name Cost cutter. On 11 January 2023 she and three other employees were called into the cash room to be informed by Mr Johnston that he was closing down on 1 February. On Friday January 13th the doors of the premises were closed and did not re-open.

In her evidence, the Complainant said that in mid-February she commenced employment with a new employer. She and the other employees (who also have made claims for redundancy payments against the Respondent) had to re-apply for their jobs and signed contracts with new conditions of employment. This occurred in mid-February. They contacted a Citizen Information Centre and were told that as there was a break of service they were entitled to redundancy from the former employer-the named Respondent. The shop opened under the current employer in the second week in February. On 9 February she and others sent the RP 77 forms to the Respondent. There was no reply.

Asked by the undersigned if they had asked the new employer if they accepted there was transfer of their service (through a transfer of undertakings) the Complainant said no, they had not asked but undertook to do so and to seek a response in writing. This arose because the undersigned explained that there was a possible transfer of undertakings involved in this case which would have to be considered.

The Complainant subsequently provided a letter from the current employer as follows:

‘To whom it may concern:

I am formally writing to inform you that the above-mentioned Isabella Breslin started work with (current employer) on 20 January 2023 as her previous employer closed without any notice or consultation.

Isabella finished with her previous employer on 13th January, there was no transfer of undertakings between either business. (The current employer) started trading from the 20th of January 2023 in the same premises under a new lease agreement and offered Isabell a role under the same terms and conditions.’

There was no attendance and no case of any kind made by or on behalf of the Respondent.

The following is an extract from the interpretations contained in the Unfair Dismissals Act 1977 as amended.

“date of dismissal” means—

(a) where prior notice of the termination of the contract of employment is given and it complies with the provisions of that contract and of the Minimum Notice and Terms of Employment Act, 1973, the date on which that notice expires.

(b) where either prior notice of such termination is not given or the notice given does not comply with the provisions of the contract of employment or the Minimum Notice and Terms of Employment Act, 1973, the date on which such a notice would have expired, if it had been given on the date of such termination and had been expressed to expire on the later of the following dates—

(i) the earliest date that would be in compliance with the provisions of the contract of employment,

(ii) the earliest date that would be in compliance with the provisions of the Minimum Notice and Terms of Employment Act, 1973,

Redundancy is a form of dismissal. The Complainants employment was terminated by the Respondent when he gave notice of the termination first to be effective 1 February, then with no further notice on 13 January 2023. In accordance with the terms of the Unfair Dismissals Act as above, irrespective of when the notice was given to the Complainant or what notice she received, the notice she was entitled to and therefore the date of termination was four weeks’ notice in accordance with the Minimum Notice and Terms of Employment Act 1973. The four weeks is based on the employee’s length of continuous employment i.e., in excess of five years. The date of termination with the former employer could not be said to occur until the end of the four weeks i.e., 12 February 2023 at the earliest, unless the service transferred to a transferee in the meantime, in which a dismissal could not arise. As the current employer according to their own correspondence took over the former business on January 20th, the Complainant was still an employee of the former business on that date as her notice period had not expired and her date of dismissal could not predate the expiry of that notice.

At the hearing, the Complainant gave evidence that the business of the former (the transferor) and current employer(transferee) is essentially the same. Both sold retail goods, both provided a retail food service and both served fuel for vehicles. The premises and the equipment transferred to the successor retail operator. With this basic evidence, there is little doubt that what occurred within a week of the closure of one franchise on 13 January 2023 and the takeover of the operation a week later the 20th of January was a simple transfer of undertakings between two retail franchise operators in the same business. And the Complainant in this case was in the employment of the transferor on the date of the transfer. Even if it were the case that any break in service would undermine the case for a transfer of rights including service between the previous and current employers, the fact is that the complainant’s continuity of employment was not broken by the period of closure as her employment had not terminated at that time, in accordance with the Unfair Dismissal Act 1977.

Redundancy Payment Act 1967

Change of ownership of business.

20.— (1) This section shall have effect where—

(a) a change occurs (whether by virtue of a sale or other disposition or by operation of law) in the ownership of a business for the purposes of which a person is employed, or of a part of such a business, and

(b) in connection with that change the person by whom the employee is employed immediately before the change occurs (in this section referred to as the previous owner) terminates the employee’s contract of employment, whether by or without notice.

(2) If, by agreement with the employee, the person (in this section referred to as the new owner) who immediately after the change occurs is the owner of the business or of the part of the business in question as the case may be renews the employee’s contract of employment (with the substitution of the new owner for the previous owner) or re-engages him under a new contract of employment, section 9 (2) shall have effect as if the renewal or re-engagement had been a renewal or re-engagement by the previous owner (without any substitution of the new owner for the previous owner).

And

(5A) In a case mentioned in subsection (1) (a), the new owner shall be estopped from denying that an employee was in continuous employment (within the meaning of Schedule 3) unless, within 26 weeks of the change of ownership, he notifies the employee of his intention so to deny.

The Complainant did agree a new contract of employment with the new employer after the transfer of the business from one retail or franchise operator to another, there was no break and service. Based on this finding, as it is found that the Complainants service transfers with her from the previous to the current employer, the appeal for payment of redundancy pay by the Respondent is disallowed.

I appreciate that the Complainant is not at fault in any of this situation, she and others simply sought to pursue her rights based on advice from a third party who was not present at the hearing. The current employer appears to be of the view that the steps they took to distance themselves from the former employer were sufficient to avoid the implications of a transfer of service and related entitlements. However, the Complainant in this instance was still within her statutory notice period and had not reached her date of dismissal as defined under the Unfair Dismissals Act at the time of the transfer.  A decision to support  a gap of a week in the ownership of the business followed by a delay of a few weeks followed by a  requirement that previous employees, including the Complainant, must re-apply for their own jobs and sign new contracts to continue in their previous positions - as sufficient to undermine the Complainants rights on transfer could establish a precedent which if allowed could only serve to undermine the intent and purpose of the same EU Directive, a very serious step which if it were justified is not justified on the available evidence in this case.

CA-00055477 The appeal by the Complainant against the failure or refusal of the named Respondent to pay her statutory redundancy is disallowed.

Redundancy Claim where employed by successor employer