Complainant

Respondent

Parties

Emma  Martin

Ajpc Retail Limited T/A  Costcutter(now in liquidation)

Complainant

Respondent

Anonymised Parties

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Representatives

  Self

Barry Donohue O'Connor Pyne & Co Limited(Liquidator).

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-00055476-001

09/03/2023

The following is a summary of the evidence and other information provided to the hearing which describe the background to the appeals. Such differences as there were  between the Respondent and the Complainants/ are insignificant in determining the substance of the appeals.

This is an appeal by the Complainant against the decision of the Respondent not to pay her redundancy when the employment with the Respondent in January 2023. On the complaint form, the date of 13 January 2023 was given as the date of dismissal by each Complainant.

In the ADJ-44646, the appeal was rejected. The successor employer was not a party to these proceedings but at the request of the Complainant in the earlier decision, did provide a statement setting out the dates of commencement of employment with them and  no transfer of undertakings took place. A is used to denote the successor employer and C is used to denote the employer prior to the Respondent. All but one of the Complainants were employed by C prior to A and as their service transferred from C to A ,that service forms part of the continuous service for the purposes of this appeal.

The Respondent, C and A operated a refuelling service and a shop/deli from the premises. Fuel was supplied to the Respondent by A. At a unspecified point in 2022,the Respondent was experiencing financial difficulties which included arrears of payments to A(it was Revenue who was the main creditor for the purposes of the liquidation). There was a meeting in December 2022 with the  Complainant and A present at which different options for future trading were discussed but nothing was agreed.

On Wednesday 11 January 2023,the Respondent called the Complainant and others into an office where he told them that he would be closing at the end of January. They understood they were to work until that date. The hearing was told that  rent on the lease was paid up until the end of January. Difficulties with paying out on fuel vouchers occurred on that Friday and over the weekend. On Monday January 16th  some of the complainants in these cases were sick and/or unable to attend for work. As a result, the shop could not be opened. The manager, Ms Martin, gave evidence of going into  work on the Monday, to do the wages for the previous week. She described those wages as a lying week, due to be paid out  later the same week. Having completed the wages, when she came down and was leaving the premises there was a locksmith there to change the locks. It was understood that the locksmiths were organised to change the locks by the landlord who was named at the hearing. As they could not access the premises after the locks were changed, the manager  stated in evidence that  from January 17th they were out of a job. It would appear that the Respondent learned of the change of the locks from one of the employees and not the landlord. The Complainants received word that they could go and meet A on January 19th about working for A. That information appears to have come via the landlord in the first instance. Within the week, the Complainant had signed a contract with A. There was some difference at the hearing as to when the employment with A actually commenced. The Complainant maintains that her employment commenced on Monday January 23rd - having signed a contract on January 20th . In a letter to the Complainant in ADJ-00044646, A gave the starting date as(Friday) January 20th. The Respondent maintains the employment with A commenced earlier than January 20th or 23rd  as when he went to the premises on 17/18 January , some of the complainants were conducting a stock check for A.

The following are the  details of the Complainants employment history provided for the purposes of this appeal:

Commenced with C : 24.05.2016

Transferred to the Respondent  : 02.11.20

Notice of termination of employment by Respondent: 11.01.23

Employment with Respondent terminated : 13.01.23

Rate of Pay on date of termination: €490 per week.

RP 77 sent to Respondent: Yes. Response: None

The following a summary of the basis of the claim that the Respondent is liable to pay statutory redundancy  to the Complainant.

The Complainant believes that her employment was terminated by the Respondent. The contract of employment with A was on a day one basis with no transfer of service. This is the position of A also i.e., that there was no transfer of undertakings or continuity of employment between the Respondent and A. On the basis that there was no transfer of employment from the Respondent to A, the complainant is seeking statutory redundancy based on full service.

Mr Johnston gave evidence that when he took over the business from C it was a straightforward transfer and all employee service with C transferred to his employment with no break in service. Mr x confirmed that he had told employees that he expected they would be finishing in February, but nothing was confirmed before he learned that the landlord had changed the locks. He was told about the change of the locks on the Monday or the Tuesday-16 or 17 January. He went up to the store himself on either the 17th or the 18th. Some of the Complainants were working for A at that stage-doing a stocktake. The business was not in liquidation at that time. In his view A are liable for any redundancy payments.

Mr Donoghue(liquidator) that from what he had heard, the information provided to the employees on 11 January was that the Respondent was likely to continue trading until February. There were no arrears of rent at that time. The Respondent was not in liquidation. The transfer of the lease from the landlord to A resulted in a lockout by one or other third party who were not at the hearing. He questioned whether the actions of the landlord or indeed A were intended to force a break in the service of the Complainant to avoid a transfer of service to A. Others in another named store were in a similar situation to the Complainants in this case.

It is important to state at the outset that a decision on the appeals by the former employees of AJPC has the effect  that either they are entitled to statutory redundancy which would most likely become payable through the Insolvency Fund as Ajpc Retail Ltd  are in liquidation, or, alternatively, their total service as set out at the hearing transfers with them to the successor employer. This point is made at the outset because of a belief expressed by one of the Complainants at the hearing, that if they do not receive statutory redundancy, their previous service(and entitlements) would be ‘lost’ and my response that this was not the case. The Complainants are caught between two competing opinions as expressed by the Respondent and their current employer, A. One suggesting there was a transfer to the other and the other saying the exact opposite ,with no legal entity willing to take liability for the prior service of the Complainants.

From the evidence of the manager at the hearing on 15 December 2023, it was the landlord who facilitated the closure of the business operated at his premises by Ajpc by changing the locks. Within a matter of no more than a few of days, he then facilitated the reopening of the same core business(a forecourt, shop and deli) by A, who it is reasonable to conclude became his new tenant. And finally, he seems to have assisted in facilitating the employment of the staff of the Respondent by A, informing them of interviews with A. All the while the Respondent was still the tenant of the same landlord and had paid rent on the premises to the end of January 2023. But by 31 January 2023, A was firmly installed in the premises, by arrangement with the landlord.

 A is not a party to these proceedings. Nonetheless the letter issued to the Complainant in ADJ-00044646 and considered in that Decision merits further mention and consideration here:

‘To whom it may concern

I am formally writing to inform you that the above mentioned(Complainant in ADJ-00044646) started work with(A) on 20 January 2023 as her previous employer closed without any notice or consultation.

X finished with her previous employer on 13th January 202,there was no transfer of undertakings between either business.(A) started trading from 20 January 2023 at the same premises under a new lease agreement and offered X a role under the same terms and condition.’

When the evidence available following both the earlier and this later hearing is examined it is apparent that the belief of A as set out in the correspondence above is incorrect in more than one respect.

The Complainant was placed on notice of termination of her employment by way of verbal notice on 11 January 2023. That notice was to expire no earlier and no later than 31 January.

The Complainants employment was not terminated by the Respondent on 13 January 2023. The employees were expected at work the following week and until the business closed. Two workers due in on the Monday were unavailable and it was for this reason the shop could not be opened. The manager did in fact go to work albeit for the purpose of doing up the wages for all employees, and attended to that work, as she set out in her evidence. It is in fact difficult to see how the Complainants decided their employment ended on 13 January when they received no notice of that date from the Respondent and were due in work for the following two weeks, or more. And the business traded on January 14 and 15 albeit with difficulty and they were not rostered over the weekend. As a matter of fact, the Respondent did not formally terminate the employment of the Complainant at all, which he ought to have done. He ought also to have advised each one of the status of their employment in terms of a transfer and he ought to have taken steps to protect their terms and conditions of employment including the transfer of their service to A. I am satisfied that he received RP 77 notices and chose to ignore them.

Finally in respect of the position set out by A, the same terms and conditions offered to the Complainant did not include a transfer of their previous service working at the same location providing the same core business to two successive employers without a break of service. That continuous  service formed part of their implied conditions of employment. 

There was no argument advanced by any Complainant that the business operated by A was not the same core business as that operated by the Respondent. From this aspect therefore the change of operator bears all the hallmarks of a transfer of an undertaking  as defined in legislation:

Transfer of an economic entity which retains its identity..an organised group of resources…pursuing an economic activity..whether or not that activity is central or ancillary.

In ADJ44646, I referred to the definitions section of the Unfair Dismissals Act as applying to the circumstances of that case.

“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,

It is now abundantly clear that on January  13 the Respondent gave verbal notice of termination of the Complainants employment to occur at the end of January 2023. No further or earlier notice was given by the Respondent. There is no evidence that on 13 January there was any arrangement in place or actively under consideration which could have avoided a closure of the business. The earliest possible date for the dismissal by way of redundancy to take effect in accordance with the Unfair Dismissals Act, was the 31 January or the date of the expiry of the Complainants statutory entitlement to notice, whichever was the later. The Complainant was an employee of the Respondent on the date  of the transfer of the undertaking from the Respondent to A. Based on this conclusion a key test of a transfer of employment between two entities is met in this case i.e., that the employee was in the employment of the transferor on the date of the transfer, whether that transfer took place on 19 or 20 or 23rd of January 2023. There was no break in service as between the Respondent and A.

Regarding the transfer of the lease or the assignment of a new lease to A, Section 3  of S.I.131/2003 which gave effect to the relevant EU Directive of 2001 defines a transfer for the purpose of the TUPE Regulations (as they are known) as:

‘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)…

As can be seen, the Regulations specifically provide for the reassignment of a lease to be regarded as a transfer. The fact that in this instance it was the landlord who reassigned the lease makes no difference to the key tests of the  definition of a transfer of an undertaking. I find that the transfer of the lease by the landlord also makes no difference to the conclusion that there was a transfer of the organised undertaking including the employees directly from the Respondent in this case to the successor tenant, A. 

To summarise the key points:

The employees of AJPC who have submitted appeals seeking payment of statutory redundancy were on notice of dismissal; that dismissal had not occurred; there was a transfer of an undertaking as defined under the TUPE legislation and as the Complainant was in the employment of the Respondent at the time of the transfer of the undertaking, they were not dismissed by the Respondent on grounds of redundancy.

 Based on the foregoing findings, there is no liability on the part of the Respondent Ajpc Retail Ltd to pay redundancy to the Complainant/s in this employment. For the avoidance of doubt, it follows that the service of the Complainant with the Respondent and previously with C formed part of the transfer of the undertaking to A.

In ADJ44646 I referenced section 20 of the Redundancy Payments Act as being relevant to that complaint. However as that section at (b) refers to the termination of employment by the previous employer and no such termination occurred, as has now been clearly established based on new evidence, Section 20 of the Redundancy Payments Act is not regarded as relevant to ADJ numbers 44638/40/47 or 48. 

CA-00055476-001 The appeal by the Emma Martin against the refusal of the Respondent Ajpc Retail Ltd T/A Costcutters to pay her statutory redundancy is not upheld.

Statutory Redundancy/Transfer of Undertakings