Complainant

Respondent

Parties

Robert Kowcz

Derry Court Company Limited

Representatives

Terry Gorry & Co Solicitors

Management Support Services (Ireland) Ltd

Act

Complaint Reference No.

Date of Receipt

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

CA-00054970-001

10/02/2023

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

CA-00054970-002

10/02/2023

The Complainant has referred a complaint under the Unfair Dismissals Act 1977 alleging that he was forced to leave his employment due to the conduct of the employer.  The Complainant has also referred a complaint under the Redundancy Payments Act 1967 alleging that his existing role was made redundant and that the alternative offers of employment were not reasonable or comparable.

The Respondent rejects the complaints on the basis that the Complainant was never an employee of the Respondent and, therefore, is not covered by either the Redundancy Payments Act 1967 or the Unfair Dismissals Act 1977 for the purpose of this referral. 

In 2022 a transfer of undertakings took place between the incumbent cleaning contractor (the Transferor) and the Respondent for the contract to provide cleaning services to the Central Mental Hospital. This transfer involved, inter alia, the transfer of various roles from Dundrum to Portrane. 

The Complainant worked as a cleaner supply driver with the Transferor for 17 years, 15 of which were at the Central Mental Hospital in Dundrum as a cleaner supply driver. The Complainant submits that the Respondent did not allow him to transfer to Portrane and continue in his job as cleaner supply driver.

It is acknowledged that offers of employment were made by the Respondent to the Complainant but, in the Complainant’s view, none of the offers was reasonable. The Complainant was unable to accept what was offered and contends, therefore, that he is entitled to a redundancy payment by reason of the Respondent’s removal of the Complainant’s job at the Central Mental Hospital, Dundrum.

Legal Submissions

The Complainant submits that he is entitled to a redundancy payment pursuant to section 7 of the Redundancy Payments Act 1967.

The Complainant relies on the Labour Court determination in Mr Garrett Browne and Ms Isabella di Simo RPD1914 where, in assessing the suitability of an offer and the reasonableness or otherwise of a refusal to accept an offer, the Labour Court was guided by the decision of the English EAT in Cambridge & District Co-operative Society Ltd v Ruse [1993] I.R.L.R. 156, which stated that that the question of “the suitability of the employment is an objective matter, whereas the reasonableness of the employee’s refusal depends on factors personal to him and is a subjective matter to be considered from the employee’s point of view”.

The Complainant also relies on the following precedents: ADJ-00029643; ADJ-00032579; Cosy Tots & Co and Bernadette Conn RPD219; and Ethel Ryan v Tesco Ireland Retailers ADJ-00032597

The Complainant submits that Symantec Limited v Leddy, which is cited by the Respondent, is not relevant as the Complainant did not refuse to transfer. He wanted to transfer and confirmed this in writing by email of 17 November 2022 where he wrote that he was looking for the same terms and conditions "as he had for last years of work."

It is the Complainant's position that as his job was eliminated, then the Respondent was obliged to offer reasonable alternative employment.  

While the Complainant accepts that an employee may become disentitled to a redundancy payment if he unreasonably refuses an offer of alternative employment, the Complainant submits that he was not offered a reasonable and comparable position to the one that was eliminated at the Central Mental Hospital, Dundrum.  The Complainant submits that a written contract dated 11 November 2022 for an industrial cleaning role, offered significantly inferior terms and conditions and would have involved the imposition of significant additional costs in terms of time and travel.  Some of the less favourable terms included:

·         Number of working hours per week (40 hours were promised and 37.5 were written in the contract)

·         Location of work (3 hospitals in Dublin were promised, and the entire area of Ireland was included in the contract)

·         Work duties (typically industrial duties were promised i.e., polishing floors but the contract included normal cleaning as a cleaner operative)

·         The rate per hour (it was supposed to be €14 per hour but in the contract it was €14 only in the case of industrial cleaning work and €11.55 for regular cleaning.)

·         No Bank Holiday (06.02.2023)

Notwithstanding the less favourable conditions, the Complainant attended training for the alternative role on 11 November 2022 and was to be paid for his time but did not receive any payment. At the end of the training that the Complainant was given a contract to sign.  When the contract was translated into Polish (the Complainant’s first language), the Complainant recognised that the terms were less favourable than those of his existing contract.

The Complainant commenced employment with a different cleaning company on 22 December 2022 on an hourly rate of €13.45 at a location near his home.

Conclusion

It is the Complainant’s case that he is entitled to a redundancy payment in respect of his employment with the Transferor and the Respondent arising from the transfer of undertakings which occurred in 2022 on the basis that his existing role was effectively made redundant and the alternative offers of employment were not reasonable or comparable.

The Complainant submits that his decision to refuse the industrial cleaner role was reasonable given the inferior terms and conditions on offer as set out above.

The Respondent submits that the Complainant made the decision not to transfer his employment to the Respondent in full knowledge of the consequences of his actions and as such, voluntarily resigned his employment with the Transferor, and at no time became an employee of the Respondent.

It is, therefore, the position of the Respondent that the claims before the Adjudicator are not well founded, as the Complainant was at no time an employee of the Respondent and, accordingly, was never covered by either the Redundancy Payments Act 1967, or the Unfair Dismissals Act 1977.

Background

In 2022, the services provided by the Central Mental Hospital (CMH) Dundrum were relocated to the National Forensic Mental Health Service (NFMHS) in Portrane.

In 2021, the Respondent was awarded the contract for cleaning services at the NFMHS. The contract partially commenced in April 2021.

In July 2021, the Respondent wrote to the Transferor who had the contract for cleaning services in the CMH Dundrum, to request TUPE information.  The Transferor responded to advise that TUPE would apply and indicated that they would engage once they had an end date for the site in Dundrum.  The Transferor provided details advising that the Complainant held a cleaner position.

The opening of the NFMHS site was pushed back until November 2022. On 21 September 2022, the Respondent re-engaged with the Transferor for updated TUPE details. These were received on 13 October 2022. The TUPE details reiterated that the Complainant held a cleaner position.

On 4 October 2022, a meeting was held with all affected employees in CMH Dundrum to explain the TUPE process.  The Complainant was present at this meeting. The Healthcare Regional Manager chaired the meeting and was assisted by the Assistant Healthcare Regional Manager. The Healthcare Regional Manager explained that the Respondent had been awarded the contract for cleaning services at the NFMHS. He explained the TUPE process, highlighting that the employees would have the option to transfer their employment to the Respondent under their same terms and conditions. He advised they could remain with the Transferor if the Transferor had an alternative role to offer them. He also advised that if the Transferor did not have any alternative role to offer them, and if they decided not to transfer to the Respondent, it would mean that they were choosing to resign from their current position. Some employees asked about moving to alternative locations within the Respondent organisation.  The Healthcare Regional Manager advised they could apply to the Respondent for any vacancies, but it would be a separate process to the TUPE process currently being discussed and it would mean they would be issued with a new contract of employment and would not retain their current terms and conditions of employment as they would under the TUPE process if they moved to Portrane.  A supervisor from the Transferor joined this meeting to assist with translation for Polish speaking staff.

On 20 October 2022, a one-to-one meeting was held with the Complainant, where he was given a letter to confirm that the Respondent had been awarded the contract for cleaning services at the NFMHS. In this letter, it was clearly stated that failure to transfer his employment to the Respondent would indicate his resignation and would not attract a redundancy payment.

The Healthcare Manager, a bilingual speaker of English and Polish, also attended this meeting. The Complainant advised that he would not be transferring to the Respondent in Portrane as the site was too far away for him. However, the Complainant enquired if the Respondent had any industrial cleaning roles available, as he would be interested in same.  The Complainant showed the Respondent some photos and videos of previous jobs that he had carried out as a cleaner for the Transferor. He mentioned that his preference was for a city centre location. The Complainant was advised that any role, other than the role of cleaner in Portrane, would be a new role with new terms and conditions of employment.

On 21 October 2022, the Healthcare Manager called the Complainant to discuss an industrial cleaner role that was available within the Respondent organisation. The Complainant asked about the hourly rate of pay for the role.  It was confirmed that it was €14 per hour. The Complainant advised that he would think about it.

On 24 October 2022, the Healthcare Manager attended the CMH, Dundrum in person to collect TUPE documentation.  The Healthcare Manager also met the Complainant to explain the industrial cleaning role and confirmed that it would be a 40 hour per week contract, on a permanent, full-time basis. The Healthcare Manager explained that initially the Complainant would be assigned to a 6-week project in a named hospital in Dublin. Following that assignment, he would be assigned to work across other hospital locations in Dublin as per business needs. The Healthcare Manager asked the Complainant if he had decided to take this role.  She also asked if the Transferor had offered him any alternative roles.  The Complainant advised that they had not. During this conversation, the Healthcare Manager explained to the Complainant that if he did not transfer his employment to the Respondent, he was effectively resigning from his role. The Complainant responded that he understood the consequences of him not transferring and that he wanted some time to think about the new role on offer. This was the third occasion that it was explained to the Complainant, that should he not transfer his employment to the Respondent, it would mean that he was resigning from his role.

On 2 November 2022, the Complainant called the Healthcare Manager to confirm that he would take the industrial cleaner role. He also sent a text message to the Healthcare Manager to confirm same.

On 7 November 2022, the Healthcare Manager texted the Complainant asking him to attend induction training on Wednesday 9 November 2022 in the Respondent's head office. There was no response from the Complainant. The Healthcare Manager tried to contact the Complainant again several times on Tuesday 8 November. The Complainant responded to the Healthcare Manager at the end of day on Tuesday 8 November to advise that he was unable to answer his phone due to the Transferor being on site in CMH all day. It was agreed that the Complainant would attend induction training on Friday 11 November.

On 11 November 2022, the Complainant attended an induction and manual handling training course in the Respondent's head office.  After the induction, the Complainant called the Healthcare Manager to thank her for the job.

On 12 November 2022, the Complainant called the Healthcare Manager and queried some details of the contract that was issued to him. He advised he was unhappy that the contract stated 37.5 hours per week, at a rate of €11.55 per hour; the location was noted as "across the whole of Ireland" and the new public holiday was not included. The Healthcare Manager confirmed that the contract was incorrect due to an administration error. She advised that the matter would be rectified by having the correct contract issued to the Complainant from Head Office, as she had agreed the rate on offer was €14 per hour for a 40-hour week.  She confirmed that it was a Dublin-based role. She further confirmed that the new public holiday would also be included. During this phone call, the Complainant advised that he is no longer happy to take the role and advised that he was staying with the Transferor.  It is the Respondent’s understanding that the Complainant had since secured a preferable role with the Transferor.

On 14 November 2022, the service of the CMH Dundrum moved to the new site in Portrane and the TUPE took place.

On 17 November 2022 at 9:44, a HR Generalist with the Respondent organisation, sent an email to the Transferor advising that only six employees from CMH had decided to transfer and he requested the annual leave accrual balances for these six employees. The Complainant was not on the list as he had declined to transfer.

On 17 November 2022 at 9:55, the Complainant sent an email to HR stating that he was due to attend industrial cleaning training but that it was cancelled. He claimed that he did not get a new contract. He also mentioned that he had verbally accepted the industrial cleaner role but there were errors in the contract which was given to him. The Complainant requested an offer with the same terms and conditions as he held in CMH.

On 17 November at 12:06, the Healthcare Regional Manager responded to the Complainant stating that the Complainant had confirmed that he did not wish to transfer across to the Respondent at NFMHS in Portrane.  The Healthcare Regional Manager pointed out that the Complainant had expressed an interest in the healthcare industrial cleaning team as a new employee and that a contract offer was made to him, but the Complainant did not accept this offer and the offer had subsequently been withdrawn. In his email, the Healthcare Regional Manager alluded to the fact that there may have been some confusion on the Complainant's part and as such, extended the offer to the Complainant to take a position in NFMHS in Portrane under his existing terms and conditions, in line with the TUPE regulations.  The Healthcare Regional Manager highlighted the fact that the transfer had already taken place on Monday 14 November 2022 and that he would need a decision from the Complainant by close of business the same day as to whether he wished to transfer or not.

On 17 November 2022 at 14:58, the Healthcare Regional Manager replied to the Transferor to advise that all offers had been made and that the Complainant refused to transfer to Portrane. The Healthcare Regional Manager noted that the Complainant did express an interest in a different role in the Respondent organisation but as he did not accept the alternative offer, the offer was withdrawn. The Healthcare Regional Manager advised that he emailed the Complainant again that day to state that if he wished to transfer to Portrane under the same terms and conditions as per TUPE, he was happy to extend the offer again but would need confirmation from the Complainant by close of business that day. He asked for the Transferor's assistance in following up with the Complainant on their end.

On the same day, a Director of the Transferor replied to the Healthcare Regional Manager thanking him for the information and advising that she would pass it to the operatives concerned.

On 18 November 2022, HR received an email from an information officer at Dublin South Citizens Information Service with a letter on behalf of the Complainant, seeking clarification of the Complainant's position and clarification regarding the TUPE. The information officer asked if the Respondent could give the Complainant more time to consider the Healthcare Regional Manager’s offer of the role in Portrane. On the same day, the Respondent replied to the information officer explaining the entire circumstances and also extending the timeframe of the offer until 1 December 2022. On 21 November 2022, the information officer responded to thank the Respondent for the clarification.

On 24 January 2023, the Respondent received correspondence from the Complainant’s solicitor stating that the Complainant is "entitled to claim his position was made redundant and he was not offered a suitable alternative position due to the new place of work."

On 30 January 2023, the Respondent replied, advising that it understood that the Complainant left his position voluntarily after he refused to transfer his employment to the Respondent. It was noted that due diligence provided by the Transferor, stated that the Complainant held a cleaning operative role.

Legal Position

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, S.I. 131 of 2003 ("TUPE") provides that where a business or undertaking is transferred, its employees are entitled to transfer to the Transferee. TUPE provides that the transfer of the employment relationship is automatic therefore no dismissal occurs.

While an employee is entitled to transfer to the Transferee, the European Court of Justice has held that an employee is not obliged to do so. In Katsikas -v- Konstantinidis I and Merckx & Neuhuys -v- Ford Motor Co of Belgium, the ECJ held that an employee has the right to object to becoming employed by a Transferee. However, the fate of the employment relationship on such an objection is an issue for the Member States to determine.

The High Court in Ireland clarified the position regarding the refusal of an employee to transfer in the case of Symantec Limited v Leddy and Lyons [2009] IEHC 256. The Court held while an employee is not obliged to transfer, it does not follow that a redundancy situation automatically arises in relation to the Transferor.

The Labour Court in Rapier Contract Services and Adina Predut UD/17/23 set out the position from Leddy as "she would be considered to have resigned from her position, given that she was to transfer with no significant change to her terms and conditions of employment and she was being transferred on the same basis as she had been employed with the Respondent."

It is the position of the Respondent that the Complainant refused to transfer his employment and as such resigned his employment in line with the jurisprudence outlined above.

Unfair Dismissals Act

Section 6 of the Unfair Dismissals Act 1977 states:

“6. (1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

The Respondent submits that the question that must now be determined is whether the Complainant was dismissed or did he resign his position.

The Respondent submits that in his meeting with the Healthcare Regional Manager, the Complainant clearly stated that he would not be transferring to the Respondent at the NFMHS as per the transfer regulations. The Complainant was advised at this meeting of the consequences of not transferring; if he did not transfer then he would be resigning his position.

This consequence was confirmed to the Complainant in the Healthcare Regional Manager's email of 17 November 2022 where the Healthcare Regional Manager stated: "Just to clarify, you had confirmed you did not wish to transfer to Derrycourt at NFMHS Portrane. Separately, you expressed an interest in the Healthcare Industrial Team as a new employee."

In that same email, the Healthcare Regional Manager further offered the Complainant the opportunity to accept the position under the TUPE regulations stating: "Given the possibility there may have been some confusion on your end around this, I am happy to offer you a position in NFHMS in Portrane under your current terms in line with the TUPE regulations."

The Respondent submits that what is clear from this email is that the Complainant was offered, and refused, the transfer on three separate occasions. The Respondent asserts that it is clear that the Complainant understood the consequences of his actions i.e., if he did not transfer, then he would be resigning from his employment.

In support of its position, the Respondent relies on the decision of Symantec v Leddy as quoted in the Labour Court determination in Rapier v Predut which stated:

“With great respect to the arguments advanced on behalf of the Defendants/Respondents the court disagrees profoundly with their view of the implications for Irish labour law of the ECJ's judgments in Katsikas and Merckx respectively. The court has no doubt but that the correct view of the matter is that which has been articulated on behalf of the Plaintiff/Appellant. As the Defendants/Respondents have rightly pointed out Irish implementing legislation does not make any particular provision as to what will occur if employees decide not to transfer. However, contrary to their belief, that fact operates against them. It does not follow that if an employee decides not to transfer a situation of redundancy automatically arises vis-a-vis the transferor. It cannot do so because the fact that an employee objects to the transfer does not of itself have the effect of negativing the transfer. It is just that an employee is not obliged to continue his employment relationship with the transferee. However, the transfer still goes ahead unless a member state expressly provides for the contrary in its implementing legislation. That this is so is clear from the judgment of the ECJ in Katsikas. That Court explained that the purpose of the Directive is to allow the employee to remain in the employ of his new employer on the same conditions as were agreed with the transferor. However, he is not obliged to avail of this facility. As the Court said "the directive does not preclude an employee from deciding to object to the transfer of his contract of employment or employment relationship andhence deciding not to take advantage of the protection afforded him by the directive." However, "the purpose of the directive is not to ensure that the contract of employment or employment relationship with the transferor is continued where the undertaking's employees do not wish to remain in the transferee's employ.

In my view nothing could be clearer. If the Irish legislature had wished the employment relationship with the transferor to continue so as to facilitate the employee in making a claim for redundancy it could have enacted legislation to that effect. It has not done so. This court is completely satisfied that by virtue of regulation 4 (1) it is not possible for the Defendants/Respondents in this case to make a redundancy claim against the Plaintiff/Appellant.”

It is the position of the Respondent that the Complainant exercised his right not to transfer and knowingly resigned his employment.  The Respondent is seeking a determination from the Adjudication Officer that the Complainant was not dismissed and terminated his own employment.

Redundancy Payments Act

The Respondent submits that the Complainant resigned his position with the Transferor and did not transfer to the Respondent.  Accordingly, it is the position of the Respondent that no employment relationship ever existed between the Complainant and the Respondent.

It is the Respondent’s position that the Complainant was never made redundant. The position for which the Complainant was originally employed exists and transferred as per the transfer regulations.  The Respondent submits that the Complainant exercised his right not to transfer, and as such terminated his own employment. Therefore, he was not dismissed by reason of redundancy and as such is not entitled to payment in accordance with Redundancy Payments Act.

Conclusion

The Respondent submits that the Complainant was clearly advised that should he fail to transfer his employment to the Respondent, it would indicate his resignation and would not attract a redundancy payment. At the Complainants' request, he was offered an industrial cleaner role, but he refused this offer. The Respondent accepts that administrative errors were made in the contract issued to the Complainant containing details of the alternative role.

The Respondent asserts, however, that the Complainant had been verbally advised of the correct terms and conditions.  There was an error in the contract which would have been rectified if the Complainant had allowed the Respondent the opportunity to do so.

The Respondent submits that the Complainant chose not to transfer his employment to the Respondent and advised that he wished to remain in employment with the Transferor.  Therefore, he was not considered to be an employee of the Respondent.

Relevant Legislation

Unfair Dismissals Act 1977(as amended)

Section 1 of the Unfair Dismissals Act provides the following definitions:

““employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment and, in relation to redress for a dismissal under this Act, includes, in the case of the death of the employee concerned at any time following the dismissal, his personal representative;

“employer”, in relation to an employee, means the person by whom the employee is (or, in a case where the employment has ceased, was) employed under a contract of employment and an individual in the service of a local authority for the purposes of the [Local Government Act 2001 (as amended by the Local Government Reform Act 2014)] shall be deemed to be employed by the local authority;”

Redundancy Payments Act 1967 (as amended)

Section 2 of the Redundancy Payments Act provides the following interpretations:

““employee” means a person of 16 years and upwards who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer and, for the purposes of this Act, a person holding office under, or in the service of, the State (including a civil servant within the meaning of the Civil Service Regulation Act 1956) shall be deemed to be an employee employed by the State or Government, asthe case may be, and an officer or servant of a local authority, a harbour authority, the Health Service Executive, or education and training board shall be deemed to be an employee employed by the authority, Executive or education and training board, as the case may be;

“employer” means, in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or, where the employment has ceased, entered into or worked under) a contract of employment, subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of contract of employment is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the individual's employer;”

It is clear from the above, that to come within the protections of the Unfair Dismissals Act and the Redundancy Payments Act, an individual who submits a complaint to the Adjudication Service of the WRC must be or have been an employee of the Respondent.  To fall within the definition of employee under the Unfair Dismissals Act and the Redundancy Payments Act, a complainant is required to have entered into, or worked under, a contract with the Respondent to their complaint. 

To fall within the definition of employer under the Unfair Dismissal Act and the Redundancy Payments Act, the Respondent is required to be the person by whom the Complainant is or was employed under a contract of employment.

It is common case that a transfer of undertakings (TUPE) took place when between the Transferor (the transferor) and the Respondent (the transferee), when the Respondent was awarded the contract to provide cleaning services for the NFMHS in Portrane in 2021.  A complicating factor in this TUPE was that the awarding of the cleaning contract coincided with the transfer of services from the CMH in Dundrum to the NFMHS in Portrane – two locations at a considerable distance from each other.

It is also common case that the Complainant, for whatever reason, did not transfer to the employment of the Respondent on foot of the TUPE.  In my view, it is not necessary for me to explore the reasons why this happened, it is sufficient for me to investigate the practical effect of the non-transfer of the Complainant’s employment to the Respondent.

I am satisfied by not transferring to the employment of the Respondent, regardless of the reason therefor, the Complainant did not become an employee of the Respondent pursuant to either the Unfair Dismissals Act or the Redundancy Payments Act.

I am further satisfied that by the Complainant not transferring to the employment of the Respondent, the Respondent did not become the employer of the Complainant pursuant to either the Unfair Dismissals Act or the Redundancy Payments Act.

Having regard to the foregoing, I find that the Complainant does not come within the protections of either the Unfair Dismissals Act or the Redundancy Payments Act for the purposes of this referral.  Accordingly, I find that the complaint under the Unfair Dismissals Act and the complaint under the Redundancy Payments Act are not well founded.

CA-00054970-001 – Complaint under the Redundancy Payments Acts 1967 (as amended)

In conclusion and having regard to all of the circumstances of the complaint, I declare this complaint to be not well founded.

CA-00054970-002 – Complaint under the Unfair Dismissals Act 1977 (as amended)

In conclusion and having regard to all of the circumstances of the complaint, I declare this complaint to be not well founded.

TUPE – Redundancy Payments Act 1967 – Unfair Dismissals Act 1977