PED242

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00041248 (CA-00037837-001)

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer ADJ-00041248 to the Labour Court on 19 June 2023, in accordance with Section 9 of the Protection of Employment Act, 1977. A Labour Court hearing took place on 14 and 15 February 2022. The following is the Decision of the Court.

DECISION:

Background

This is an appeal by Debenham Retail (Ireland) in liquidation (the Respondent) against Adjudication Officer’s Decision ADJ-00041248 CA-00037837-001 given under the Protection of Employment Act 1977(the Act). The Adjudication Officer held that the claim by the Complainant under the Act was not well founded. The Complainant commenced work on 14th October 1996 as a shop assistant with the Respondent.   The parties agree that the Complainant worked 20 hours a week, and that her gross weekly pay was €285.

 On or about the 8th April 2020 the parent company informed the Respondent that it could no longer provide funding. The Board of the Irish company held an emergency meeting and recommended to their shareholder to take immediate steps to petition the Irish High Court to wind up the Company and to have a liquidator appointed.

The Complainant alleges that the requirements of section 9 of the Act have not been complied with. There are three linked complaints PE/23/1, PE/23/2 and PE/23/4.

Summary of Complainant’s case

Mr Kirwan SC on behalf of the Complainant submitted that there are four complaints properly before the Court, two complaints against Debenham Retail (Ireland) Ltd (DRIL) in respect of a breach of ss 9 and 10 of the Act, and two against Debenham Retail (Ireland) Ltd in liquidation, in respect of breaches of ss9 and 10 of the Act. 

In respect of the number of the complaints before the Court, it is the Complainant’s submission that they are entitled to take cases against Debenham Retail (Ireland) Ltd (DRIL) and Debenham Retail (Ireland) Ltd in liquidation. Both parties were in existence during the cognisable period and had responsibilities towards the Complainant. In support of that position Mr Kirwan SC opened to the Court the judgment of the CJEU in the case of Claes v Landsbanki Luxembourg SA Case C -235/10 which held as follows as paragraphs 53 to 55.

“In an insolvency, the legal personality of the establishment whose dissolution and winding up have been ordered by a judicial decision exists for limited purposes only, in particular for the requirements of that procedure and until publication of the accounts for the closure of the liquidation procedure. Nevertheless, such an establishment has a duty, up until the moment when its legal personality definitely ceases to exist, to fulfil the obligations incumbent on employers under Articles 2 and 3 of Directive 98/59.

 As long as the management of the establishment in question remains in place, even with limited powers of management, it must fulfil the obligations of employers under Articles 2 and 3 of Directive 98/59.

 If, however, the management of the establishment in question is taken over in its entirety by a liquidator, it is the liquidator that must fulfil the obligations arising under Directive 98/59”

Mr Kirwan SC submitted that that case supported his contention that there are two sets of obligations, the obligation of the Management, and the obligation of the liquidator. He confirmed that the Complainant accepts that there was only ever one legal entity in being during the relevant period.  However, they are claiming a breach of s9 by DRIL and a separate breach of s9 by DRIL in liquidation.  The legislation does not prevent two breaches by an employer and employment law cannot be set aside at the altar of company law.

Summary of Respondent’s submission

Ms Smith SC on behalf of the Respondent submitted that there is only one legal entity and that the second set of complaints are duplicate claims. Section 595 of the Companies Act 2014, supports her position that there is only one entity, and that once the company enter into liquidation, they are obliged to include the words “in liquidation” at the end of its name in all communications with third parties.  Any claims made by the Complainant as against the Company when it was known as Debenhams Retail Ireland are continuous and are against the same entity regardless of any legal requirement to append (In Liquidation) to the Company’s name. Complaints are against the same entity, in the same time period, therefore there can only be two complaints.

Discussion

 The Court decided to firstly consider the number of cases properly before it.  In coming to its decision on this issue, the Court took into account the submissions of the parties, the acceptance by the Complainant that at all material times there was only one legal entity, the relevant section of the Company’s Act 2014, and the caselaw opened to it.  The Court noted that the liquidators when appointed replace the Directors/ management team and assume the responsibilities that previously rested with them. The responsibilities start with the management of the Respondent and continue for the liquidator. The CJEU case of “Claes v Landsbanki Luxembourg SA Case C-235/10” states as follows

“In an insolvency, the legal personality of the establishment whose dissolution and winding up has been ordered by a judicial decision exists for limited purposes only, in particular for the requirements of that procedure and until publication of the accounts for the closure of the liquidation procedure. Nevertheless, such an establishment has a duty, up until the moment when its legal personality definitely ceases to exist, to fulfil the obligations incumbent on employers under Articles 2 and 3 of Directive 98/59.”  

 This supports the contention that the legal identity of the Company continues and must fulfil its legal obligations. It is not disputed that DRIL did not cease to exist at the point the liquidators were appointed, and that the adding of the words ‘in liquidation’ to DRIL’s name is a requirement of Company Law and in particular s595 of that Act.

 Decision

Taking all of the above into account the decision of the Court as set out in PE/23/1, is that there are only two cases properly before the Court, and therefore this case against the liquidator is a duplicate case.

 The decision of the Adjudication Officer is upheld.

 The Court so decides.

	Signed on behalf of the Labour Court
	Louise O'Donnell
AR	______________________
10 April 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Aidan Ralph, Court Secretary.