Complainant

Respondent

Parties

Michael  Rynn

M & N Nolan Motor Company Limited Nolan Motors

Representatives

Rosalynn McVeigh, BL instructed by Delaney Quinn Solicitors

The Society of the Irish Motor Industry

Act

Complaint Reference No.

Date of Receipt

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

CA-00049427-001

30/03/2022

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

CA-00049427-002

30/03/2022

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

CA-00049427-003

30/03/2022

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

CA-00049427-004

30/03/2022

The complainant was dismissed on 3 November 2021 when his fixed term contract expired and was not renewed. He alleges that his dismissal was unfair and that he was not given the correct notice period due to him under the Minimum Notice and Terms of Employment Information Act 1973. The complainant also contends that he is entitled to a statutory redundancy payment. The respondent submits that the complainant was not unfairly dismissed. Rather his employment ended when his fixed term contract expired and that the complainant received all notice due to him. The respondent further submits that a redundancy situation did not exist at the time of dismissal and therefore the complainant is not entitled to a statutory redundancy payment.

Evidence of the Complainant

On 13 July 2021 the complainant was invited to a meeting with Mr Michael Nolan and Mr Niall Nolan. The complainant was informed that his one-year fixed term contract was coming to an end, but that the respondent would renew it for a further 3 months. There would be no further renewals thereafter as business was quiet and the respondent was unsure if it would secure further tenders for work. Tenders had been submitted for work and if things improved, the complainant would be taken back. However, the respondent told the complainant that he should start to look for an alternative job in case the situation did not improve. The complainant submitted that he could see himself that business was quiet.

At the complainant’s request, the respondent wrote to the complainant on 12 October 2021 to confirm that his contract would expire on 3 November 2021 and would not be renewed. The complainant enquired about a statutory redundancy payment and was advised in writing on 3 November 2021 that he was not entitled to a statutory redundancy payment.

The complainant looked for alternative work and secured a permanent position with another employer. The complainant started employment with this employer on 8 November 2021, earning an average fortnightly wage of €2,696.58.

On 15 November 2021 the respondent sent an advertisement to the complainant detailing that a fully qualified and experience motor mechanic was required on a permanent basis. The complainant submits that the respondent terminated his contract even though they required a full-time permanent motor mechanic and that his dismissal was accordingly unfair. He did not apply for the full-time role with the respondent as he had already commenced employment with the new employer. The complainant further argued that he was entitled to a redundancy payment on the termination of his employment.

In cross examination, it was put to the complainant that he was given notice in July and again in September that his contract would not be renewed. Furthermore, a fixed term contract by its very nature gives notice of termination from the outset. Accordingly, the complainant was not due any further notice. The complainant stated in response that the notice was not certain. He was told in July business was quiet and he should look for other work. He asked for written notice as he was not certain if his employment would end.  

It was put to the complainant that his weekly salary in his new job was on average €1,147 per week, a 125% increase on his previous position. The complainant agreed that sounded correct but added that because he had to change jobs, he was now incurring rent of €450 per week, and significant fuel costs as he must commute regularly between his rental accommodation and his home, as his elderly father needs assistance on the farm. When asked what reason the respondent gave him for the termination of his employment, the complainant confirmed that he was told business was quiet and that there were no concerns regarding his performance.

Closing Arguments

Counsel for the complainant argued that there were factors other than the expiry of the fixed-term contract that led to the complainant’s dismissal and that ‘other’ factor was the respondent’s desire to circumvent the Unfair Dismissals Acts 1977-2015. The employer only sent the advertisement of the permanent position on 15 November 2021 to conceal their true intent. No proper and formal notice was given to the complainant. It was submitted that is a contravention of the EU Directive on Fixed Term Work to use successive fixed term contracts in the way deployed by the respondent. It was submitted that the respondent was well versed in the law and used same to avoid the application of the Unfair Dismissals Acts. Several cases including Limerick City County Council v Moran (UD17/46) and Fitzgerald v St Patrick’s College Maynooth (UD244/1978) were cited in support of the complainant’s arguments.

Counsel for the complainant submitted that for the purposes of the Redundancy Payment Act 1967, the complainant’s employment was continuous since September 2014. The complainant was told his final fixed term contract not being renewed as business was quiet. This is the very essence of a redundancy situation, and the complainant is entitled to a statutory redundancy payment. Counsel cited A Liquidity Manager v A Retail Bank (ADJ-00028801) in support of its arguments regarding the complainant’s entitlement to a statutory redundancy payment.

Evidence of Mr Niall Nolan

The respondent submitted that it was normal business practice to take on one or two apprentices. When an apprentice completes their apprenticeships, they are “released” from employment within one month of completion of the apprenticeship. The respondent would then usually offer a fixed term contract for 6 months. At the end of the 6 months, the contract is either not renewed or the person is made permanent.

The only reason the complainant was offered a further one-year fixed term contract was because he suffered a bereavement in his family at this time. The respondent was concerned for the complainant’s mental health and wanted to give him some stability. That contract was then extended by a further 3 months to allow the complainant time to find employment elsewhere. The respondent put the complainant on notice in July 2021 that the final fixed term contract would not be renewed so he could start looking for another job. The respondent even arranged an interview for him with another garage. At a meeting in September 2021, the respondent reminded the complainant that the job with the other garage was still open if he was interested in it.

In cross examination, the respondent confirmed it did not give a reason for issuing the second post apprenticeship fixed term contract. The respondent denied that he told the complainant that business was quiet. The respondent submitted that the business was far from quiet and in fact they had a bumper year in 2021. The respondent stated he was very fond of the complainant and would have been delighted to have him continue to work for them. They advertised for a permanent full-time person to see what skills were out there and the complainant could have applied. The respondent stated he did not know the law on issuing successive fixed term contracts and denied that his moral concerns for the complainant was only being said now to hide his true intent to circumvent the law. The respondent confirmed that it was normal practice in the business to “release” an apprentice within one month of completion of an apprenticeship and then to rehire on a 6-month fixed term contract.

Closing Arguments

Representative for the respondent stated that the respondent had no intention to circumvent the law. He was only doing what was normal practice in the industry and that it is not possible for the respondent to retain all apprentices it trains. The circumstances of this case were not normal insofar as the respondent would not normally issue a second or third fixed term contract after an apprenticeship. The respondent only did it in this case out of a concern for the complainant. Otherwise his employment would have ended at the end of the first 6-month contract. It was submitted that the final fixed term contract came to a natural end and that the complainant was not dismissed, unfairly or otherwise. The complainant was a highly regarded employee. There was no redundancy situation as the respondent was extremely busy at the time of the complainant’s dismissal and therefore the complainant is not entitled to a statutory redundancy payment. The respondent cited the case of Graduate Employee v Local Authority (ADJ-00016408) in support of its case. Further, the complainant received ample notice of non-renewal of contract, and he was only out of work for two days and secured employment on a 125% increase.

CA-00049427-001 (Unfair Dismissal)

The primary facts in relation to this case are not in dispute. It was agreed that complainant was first employed by the respondent in September 2014. He commenced an apprenticeship as a motor mechanic with the respondent in December 2015. The complainant completed this apprenticeship in January 2020. Thereafter he was employed by the respondent as a qualified motor mechanic on three successive fixed term contracts.  The first fixed term contract was for a duration of 6 months. The second fixed term contract was for a duration of 1 year, and the third and final fixed term contract was for a duration of 3 months.

The respondent submitted that the normal respondent practice once an apprenticeship is completed is to offer one fixed term contract for 6 months. Then the person is offered a permanent contract or dismissed. The complainant was offered two further fixed term contracts which was not normal company practice. The respondent gave evidence that it wanted to see the complainant right. This was the only reason it gave the complainant two further fixed term contracts after he completed the first post apprenticeship fixed term contract. It is common case that the final contract for a 3-month period was given for the purpose of allowing the complainant time to secure employment elsewhere. The complainant submitted that he was told that the reason he should look for work elsewhere was because business was quiet. The complainant stated this was also the reason given to him for his dismissal. This is denied by the respondent who submitted that 2021 was a bumper year.

It is the complainant’s case that the fixed term contracts were entered into wholly or partly for, or connected with, avoidance of liability under the Acts. Counsel for complainant highlighted the provisions of s 2(2)(b) of the Act and the proviso to s 2(2)(b) at 2A. It was submitted by Counsel on behalf of the complainant that there was a factor other than the expiry of the fixed term contract that led to the complainant’s dismissal and that ‘other’ factor was the respondent’s desire to circumvent the Unfair Dismissals Acts 1977-2015. Counsel for the complainant further submitted that it is a contravention of the EU Directive on Fixed Term Work to use successive fixed term contracts in the way deployed by the respondent and that the respondent was well versed in the law and used same to avoid the application of the Unfair Dismissals Acts 1977-2015.

Section 1 of the Unfair Dismissals Act 1977 - 2015 (“the Acts”) defines dismissal, which includes at (c): “where a contract of employment for a fixed term expires without its being renewed under the same contract . . . .”  

In this case term expiry and non-renewal of a fixed term contract exists.

Section 6(1) of the Acts provides that the dismissal of an employee shall be deemed for the purposes of the Acts, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.

Section 2(2)(b) of the Acts makes it possible to exclude the application of the Acts to a dismissal on the expiry of a fixed term contract without the contract being renewed. Section 2(2)(b) provides:

“Subject to subsection 2A, this Act shall not apply in relation to – (b) dismissal where the employment was under a contract of employment for a fixed term . . . and the dismissal consisted only of the expiry of the term without its being renewed under the said contract . . . and the contract is in writing, was signed by or on behalf of the employer and by the employee and provides that this Act shall not apply to a dismissal consisting only of the expiry . . . .” (Emphasis added).

I note that each of the three signed fixed term contracts issued to the complainant included a waiver which complied with the requirements of s 2(2)(b) of the Acts.

Section 2(2)(b) is strictly construed. The Acts do not apply to a dismissal occurring before or after the expiry of the contract or where termination of employment was related to factors other than the expiry of the term of that contract.  Section 2(2)(b) of the Acts is subject to a proviso at subsection 2A. Subsection 2A was introduced under the Unfair Dismissals (Amendment) Act 1993 and it can impact on whether an employer can rely on the waiver provided for under s 2(2)(b). Subsection 2(A) provides:

“Where, following dismissal consisting only of the expiry of the term of a contract of employment of a kind mentioned in subsection (2) (‘the prior contract’) without the term being renewed under the contract or the cesser of the purpose of the contract—

(a) the employee concerned is re-employed by the employer concerned within 3 months of the dismissal under a contract of employment of that kind made between the employer and the employee (‘the subsequent contract’) and the nature of the employment is the same as or similar to that of the employment under the prior contract,

(b) the employee is dismissed from the employment,

(c) the dismissal consisted only of the expiry of the term of the subsequent contract without the term being renewed under the contract or the cesser of the purpose of the contract, and

(d) in the opinion of the adjudication officer . . . entry by the employer into the subsequent contract was wholly or partly for, or was connected with, the purpose of the avoidance of liability under this Act,

then—

(i) this Act shall, subject to its other provisions, apply to the dismissal, and

(ii) the term of the prior contract and of any antecedent contracts shall be added to that of the subsequent contract for the purpose of the ascertainment under this Act of the period of service of the employee with the employer and the period so ascertained shall be deemed for those purposes to be one of continuous service”. (Emphasis added).

Subsection 2A is an anti-abuse provision which provides that if an Adjudication Officer forms the opinion that the entry into a second or subsequent contract was for the purpose of avoiding liability under the Acts, the Acts will apply to the dismissal and the employer cannot rely on a waiver in the final fixed term contract issued. However, ss 2(A) applies to a particular type of abuse scenario: where the employer has dismissed the employee on the expiry of a prior contract and not renewed the fixed-term contract and then subsequently re-employs the employee within 3 months of the prior contract. In this case, the complainant was not dismissed on the expiry of either of the prior contracts. Rather the complainant’s prior contracts were all renewed.

The complainant cited a decision of the Employment Appeals Tribunal in Fitzgerald v St Patrick’s College, Maynooth (UD244/1978) and I note the comments of the Tribunal as follows:

“If the mere expiry of a fixed-term contract of employment were to be regarded as a substantial ground for the non-renewal of the employment, the Unfair Dismissals Act could be rendered abortive in many cases. An employer could side-step its provisions by employing employees on fixed-term contracts only. Then to get rid of an employee on whatever grounds, be they trivial or substantial, fanciful or solid, fair or unfair, he need only wait until that employee’s fixed-term contract expired and then refuse to renew it”.

However, this case predates the Unfair Dismissal (Amendment) Act 1993 (“the 1993 Act”). The 1993 Act provides for a particular type of ‘abuse’ scenario. The legislature had the option of providing for other ‘abuse’ scenarios, but it did not.

Subsequently, the EU Directive on Fixed Term Work 1999/70/EC required member states to introduce measures to prevent abuse arising from the use of successive fixed term contracts by legislating for a maximum total duration of successive fixed term contracts. Member States could exclude periods of apprenticeship. The Protection of Employees (Fixed-Term Work) Act 2003 (No 29. of 2003), which came into operation on 14 July 2003, implemented Directive 1999/70/EC and provides where an employee is employed by his or her employer or associated employer on two or more continuous fixed term contracts, the aggregate duration of those contracts cannot exceed 4 years. Where a term of an employment contract purports to limit the term of the employment contract, in contravention of the above rules, that term shall be void and of no effect and the contract concerned shall be deemed to be one of indefinite duration – a permanent contract. However, this does not apply where there are objective grounds justifying the renewal of a contract of employment for a fixed term only.

In relation to this complaint, which is a complaint under the Unfair Dismissal Acts, I am mindful that s 2(2)(b) was enacted to provide a means for no liability regarding the use of fixed term contracts. I am also mindful that the anti-abuse provision at ss 2A is restricted to a particular type of abuse scenario. Further, EU Directive on Fixed Term Work 1999/70/EC permits the use of successive fixed term contracts subject to the provisions mentioned above.

I find that there was nothing to preclude the respondent from issuing fixed term contracts in the manner it did i.e., issuing three successive fixed term contracts without dismissing at the end of any prior contract and allowing the final contract to expire without renewing same. Further, issuing a second or subsequent contract is not contrary to the provisions of the EU Directive on Fixed Term Work 1999/70/EC. Therefore, I conclude that the respondent was entitled to rely on the exclusion clause within the final fixed term contract of employment and accordingly, the Unfair Dismissal Acts do not apply to the non-renewal of the complainant’s fixed-term contract/dismissal.

CA-00049427-002 (Redundancy Payment)

Section 7(2) of the Redundancy Payments Act 1967 (as amended) (“the 1967 Act”) provides:

“ . . .  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 . . . .” (Emphasis added).

As noted by the Labour Court in Smorgs ROI Management Ltd v Buckley (RPD1812) successive fixed term contracts do not disqualify an employee from qualifying for a statutory redundancy payment under the 1967 Act. A fixed term employee may be redundant within the meaning of Acts where his or her fixed term contract expires and is not renewed but the circumstances giving rise to the expiry and non-renewal of the contract must fall within the definition of redundancy at s 7(2) outlined above. If the reason for the non-renewal of the fixed-term contract is individual to the employee, non-renewal does not amount to a redundancy situation.

The complainant contended that he was told by the respondent that his final fixed term contract was not being renewed because business was quiet. This, counsel for the complainant argued, is the very essence of a redundancy situation, and the complainant is entitled to a statutory redundancy payment. Counsel for the complainant cited A Liquidity Manager v A Retail Bank (ADJ-00028801) in support of the argument regarding the complainant’s entitlement to a statutory redundancy payment. In that case, it was held that an employee who was employed on three successive fixed term contracts was entitled to a statutory redundancy payment on the non-renewal of the third and final fixed term contract. I note in this case that the work the employee was required to do (“Project A”) was postponed and the complainant’s contract was not renewed as a result.

The respondent argued that 2021 was a bumper year and that it advertised for the permanent position of qualified motor mechanic on 15 November 2021. The respondent submitted that the reason for the complainant’s dismissal was the natural expiry of the fixed term contract and that the dismissal of the complainant does not meet any of the definitions of redundancy within s 7(2) of the 1967 Act. The respondent cited the case of a Graduate Employee v Local Authority (ADJ-00016408) where it was held that the termination of the employee’s fixed term contract did not amount to a redundancy situation as the expiry of the contract was personal to the employee and the work continued after the employee’s fixed term contract expired.

I prefer the evidence of the complainant that the respondent told him in July and October 2021 that business was quiet and that the same reason was given for the non-renewal of the final fixed term contract and the complainant’s dismissal. I accept the complainant’s evidence that he could see himself that business was quiet. I find that this is why the complainant acted upon the respondent’s advice to find alternative work. The respondent contended that the company would have been delighted to retain the complainant in employment, and that there were no performance issues or other concerns. The respondent had encouraged the complainant to interview for a position with another garage. I cannot see why the respondent would do that if work was available at the respondent’s garage, especially given the high regard the respondent had for the complainant. There was no mention of a permanent position for a qualified motor mechanic being available until two things happened: (1) the complainant had found employment elsewhere; and (2) the complainant requested a redundancy payment. The respondent waited until the complainant’s last day of employment to tell the complainant that a redundancy situation did not exist.  The respondent stated in evidence that the position of permanent motor mechanic was never filled. For all the foregoing reasons, I find that a redundancy situation existed within the meaning of s 7(2)(b) and/or s 7(2)(c) of the Redundancy Payment Act 1967 at the time of the non-renewal of the complainant’s final fixed term contract.

CA-00049427-003 – Minimum Notice

Computation of continuous services is contained within Schedule One of the Minimum Notice and Terms of Employment Information Act 1973 (“the 1973 Act”). The complainant commenced employment with the respondent in 2014. Section 4(1)(c) of the 1973 Act provides that if the employee has been in the continuous service of his employer for five years or more, but less than ten years, they are entitled to four weeks’ notice.

It is the complainant’s case that he did not receive his statutory minimum notice entitlement. It is the respondent’s case that the very nature of a fixed term contract is such that the employee is on notice of termination from the outset of the contract and accordingly notice does not need to be issued again. The respondent states that the complainant received more than his statutory notice entitlement by virtue of the issuing of the final fixed term contract on 4 August 2021 which stated that the contract would expire on 3 November 2021. It is common case that on 21 October 2021, on foot of a request from the employee, the respondent confirmed in writing that the contract would end on 3 November 2021.

The 1973 Act is silent on the form of notice. In Boland v Ward [1988] ILRM, the Supreme Court held  “ . . . it matters not what form the notice takes so long as it conveys to the employee that it is proposed that he will lose his employment at the end of the period which is expressed . . . .” In Boland extended notice was held to comply with the 1973 Act.

I find that the respondent did not contravene s 4(1)(c) of the 1973 Act.

CA-00049427-001 – Unfair Dismissal

I decide that this complaint is not well founded.

CA-00049427-002 – Redundancy Payment

I allow the complainant’s appeal. I decide that the complainant is entitled to a redundancy lump sum payment under the Redundancy Payments Act 1967, in accordance with the following criteria:

Employment start date: 01 September 2014.

Employment end date: 03 November 2021.

Gross weekly remuneration: €580.

This award is made subject to the complainant having been in insurable employment under the Social Welfare Acts during the relevant period.

CA-00049427-003 – Minimum Notice

I decide that there was no contravention of the Minimum Notice and Terms and Employment Information Act 1973 in respect of s 4(1)(c).

CA-00049427-004 - OWTA

This complaint was withdrawn.

Unfair dismissal. Redundancy payment. Minimum notice.