Complainant

Respondent

Parties

Nilton De Morais

The Minister for Social Protection

Complainant

Respondent

Anonymised Parties

Representatives

Ms. Caoimhne Ruigrok BL, instructed by  Free Legal Advice Centres

Mr. Niall Fahy BL, instructed by the Office of the Chief State Solicitors  

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-00057776-001

18/07/2023

The Complainant commenced employment with his former employer on 5th February 2012. The Complainant was a permanent, full-time employee, in receipt of an average weekly payment of €687.80 for 39 hours of work. It is common case that the Complainant’s case terminated on the grounds of redundancy, as defined by the impleaded Act, on 1st October 2021. As the Complainant’s redundancy arose by virtue of the insolvency of his former employer, he sought payment of his statutory redundancy entitlement from the Respondent on 22nd October 2021. Following a lengthy internal review, a decision from the relevant deciding officer issued on 23rd January 2023. This correspondence stated that the Complainant was not entitled to payment from the Respondent under the terms of the impleaded Act.

On 18th July 2023, the Complainant referred the present complaint to the Commission. Herein, he alleged that the Respondent’s refusal to pay the statutory entitlement was incorrect as a matter of law and failed to have regard to the requirements of EU law. In denying the Complainant’s application, the Respondent submitted that the decision of the deciding officer was correct in law and was consistent with all national and European requirements.

A hearing in relation to this matter was convened for, and finalised on, 1st December 2012. This hearing was conducted by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and SI 359/20206, which designates the WRC as a body empowered to hold remote hearings. No technical issues were experienced by either side during the hearing.

Both issued extensive legal submissions in advance of the hearing. These submissions were expanded upon and contested by the opposing side in the course of the hearing. On the request of the Adjudicator, further submissions were invited in relation to a series of authorities identified as relevant to the factual matrix presented by the parties. Both parties issued submissions following the hearing in this regard, with the final submission being exchanged in February 2024. As there was no material dispute of the factual basis of the submission, and it was common case that the Complainant’s employment was terminated on the grounds of redundancy, no sworn evidence was deemed necessary by the representatives or the Adjudicator.

Various preliminary objections as to jurisdiction were raised during the proceedings. These will be discussed individually below. 

The Complainant commenced employment with his former employer on 5th February 2012. It is common case that this employment terminated on 1st October 2021. In this regard, the Complainant submitted that his former employer ceased trading on that date, and that as a consequence of the same, this employment terminated on the grounds of redundancy as defined by the impleaded Act.

Shortly thereafter, the Complainant was informed that his former employer was insolvent and was unable to fulfil their obligations under the Act. Having regard to the same, the Complainant made an application to the social insurance fund, operated by the Respondent, and completed the required declarations and forms. As part of the process, the Respondent sought confirmation of the Complainant’s legal status regarding residency. By response, the Complainant confirmed that his legal status was not in order for the duration of his employment. By correspondence dated 23rd January 2023, the relevant deciding officer within the Respondent confirmed that as the Complainant was not in insurable employment under the Social Welfare Acts, he was not entitled to payment of statutory redundancy from the scheme operated by the Respondent.

By submission, the Complainant, via his representative, stated that the Complainant was clearly and unambiguously made redundant by his former employer. He stated that throughout his employment he made all relevant PRSI contributions and was an “employed contributor” for the purposes of the Social Welfare Consolidation Act 2005. In this regard, the Complainant submitted that as such an “employed contributor”, he was entitled to payment from the Social Insurance Fund, operated by the Respondent, and provided for by Section 27 of the Act, as amended by Section 39 of the Social Welfare Act 1991.

Regarding the Complainant’s employment status, he accepted that his residency status was not in order for the duration of his employment. In this regard, it was further recognised that Section 4 of the Employment Permits (Amendment) Act 2014 provides that payments to a “foreign national…shall not be treated as reckonable emoluments within the meaning of the Social Welfare Consolidation Act 2005”.

Notwithstanding the foregoing, the Complainant submitted that The Protection of Employees (Employer’s) Insolvency Act 1984 serves to transpose Ireland’s obligations under Directive 2008/94/EC of the European Parliament. In the matter of Tumer v Raas van Bestuur van Het Uitvoeringsinstituut Werknemsersverzekeringen Case C-311/13 (hereafter referred to as “Tumer”), the purpose of the Directive was said to ensure that member states,

“…take measures necessary to ensure that institutions guarantee, subject to Article 4, payment of employee’s outstanding claims resulting from contracts of employment relationships, including, where provided for by national law, severance pay on termination of employment relationships”.

The ECJ went on to state that,

“…illegally staying third-country nationals (that) do not have the right to work in the Netherlands does not invalidate that conclusion”.

Having regard to the foregoing, the Complainant submitted that the exclusion of certain employees from the scope of the social fund serves to undermine the social objective of the Directive.

In this regard, it was submitted that the Complainant made in excess of eight years of payments to the social fund and now finds himself in a position whereby he cannot avail of the protections arising from said payments. Having regard to the authorities listed above, the Complainant submitted that the position adopted by the Respondent is incorrect in law and does not abide by the terms or the spirit of the Directive quoted above.

Regarding the issue of jurisdiction to bring the present case, the Complainant accepted that Section 39(15) of the Redundancy Payments Act 1967 provides that,

“…the Director General shall not be competent to decide whether or not an employee is or was at the material time in employment which is or was insurable for all benefits under the Social Welfare Acts”.

Having regard to the foregoing, the Complainant submitted that as the Respondent was in contravention of EU Law, and the that Complainant had no other form of recourse in respect of his rights arising from the an EU Directive, this provision should be disapplied and that jurisdiction should be accepted in relation to the present matter.

At the outset, the Respondent agreed that no material dispute existed as the relevant factual matrix presented by the Complainant. They accepted that the Complainant was made redundant following the closure of his former place of employment. In this regard, they further accepted that the Complainant would, ordinarily, be entitled to a statutory redundancy payment by virtue of the impleaded Act, and by extension, the social scheme operated by the Respondent.

Notwithstanding the foregoing, the Respondent further noted that it was also common case that the Complainant was a Brazilian national who did not have a valid work permit for the duration of his employment. In such circumstances, the relevant deciding officer within the Respondent organisation, issued correspondence dated 23rd January 2023 stating that,

“A person who does not have a valid work, as required under the Employment Permits Act 2003, is not in insurable employment for the purposes of the Social Welfare Consolidation Act 2005.”

On foot of the same, the deciding officer advised that the Complainant was not entitled to a payment under the fund operated by the Respondent.

By submission, the Respondent stated that Section 4(1) of the Redundancy Payments Act 1967 provides that the Act applies to those “in employment which is insurable for all benefits under the Social Welfare Consolidation Act 2005”.

In this regard, the Respondent opened the Supreme Court decision of Sharda Soby -v- The Chief Appeals Officer, Minister for Employment Affairs and Social Protection [2021] IESC 81. Here, Baker J held that a contract of employment entered into without a work permit by a person unlawfully in the state is illegal for all practical purposes. Having regard to the foregoing, Baker J determined that such an applicant cannot obtain social welfare payments, in that case maternity benefit, without complying with the national requirements regarding work permits. Having regard to the foregoing, the Respondent submitted that the same principal holds true for the present case, in that a worker without a valid work permit cannot avail of payment from a fund operated by the Respondent.

In addition to the foregoing, the Respondent submitted that the Complainant does not have jurisdiction to bring the present complaint to the Commission. In this regard, they submitted that Section 39(15) provides that,

“…the Director General shall not be competent to decide whether or not an employee is or was at all material times in employment which is or was insurable for all benefits under the Social Welfare Acts.”

In this regard, the Respondent referred to a decision of this forum whereby jurisdiction was declined on these grounds.

Regarding the Complainant’s position regarding compliance with European law, the Respondent submitted that no such breach occurred. In this regard, while it was accepted that Tumer (quoted above) does permit benefits to accrue to non-national worker who meet the definition of “employee” for the purposes of the relevant national legislation. In this regard, it was submitted that such persons are not considered to be employees by virtue of our domestic legislation, and as a consequence, the relevant protections do not apply. In this regard, the Respondent again referred to the judgement in Sobhy (referenced above), and in particular the finding that persons engaged in illegal employment are not engaged under a contract of employment as defined by statute. Having regard to the foregoing, the Respondent submitted that the Complainant falls outside the domestic definition of “employee” and does not enjoy protection of Regulation Directive 2008/94/EC.

Regarding the Complainant’s application to the Adjudicator to disapply Section 39(15) of the Redundancy Payments Act, the Respondent submitted that there was no requirement to do so. Without prejudice to their earlier arguments in respect to the Respondent’s compliance with all European Directives, the Respondent submitted the Redundancy Payments Act do not derive from such sources. In this regard, the Respondent submitted that the relevant question is one of jurisdiction, rather than the enforcement and compliance of European legislation. While, it was accepted that the WRC does have an ability to disapply national legislation in circumstances whereby the same is in contravention with European law, this may only occur with legislation that is, itself, derived from European Law.

Regarding the instant matter, it is apparent that there is not material dispute as to the factual matrix presented by the parties. In this regard, it is accepted that the Complainant was made redundant by his former employer. It is accepted that throughout his employment the Complainant was not in possession of a valid work permit. Following confirmation of his former employer’s inability to discharge his statutory redundancy, the Complainant sought payment from the social fund operated by the Respondent. As part of their standard investigations, the Respondent sought confirmation of the Complainant’s residency status and the relevant work permits. When the Complainant could not provide the same, the Respondent stated that he was not deemed to be covered by the scheme and stated that he could refer the present complaint to this forum. At the outset of the hearing, the Respondent raised a preliminary objection to the matter proceeding, on the basis of the exclusion set out in Section 39(15) of the Act.

In this regard, Section 7(1) of the Redundancy Payments Act 1967 provides as follows,

“An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided—

(a) he has been employed for the requisite period, and

(b) he was an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts, 1952 to 1966, immediately before the date of the termination of his employment, or had ceased to be ordinarily employed in employment which was so insurable in the period of four years ending on that date.”

Subsection 2, goes on to provide that,

For the purposes of subsection (1), 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…”

Thereafter, Section 19 provides that,

“Upon the dismissal by reason of redundancy of an employee who is entitled under this Part to redundancy payment…his employer shall pay to him an amount which is referred to in this Act as the lump sum.”

Section 32 goes on to provides that,

“When an employee claims that an employer is liable to pay to him a lump sum under section 19 and that…(b) the employer is insolvent and the whole or part of the lump sum remains unpaid…the employee may apply to the Minister for a payment under this section.”

Section 37 provides that,

“The Minister may appoint such and so many persons as he thinks proper to be deciding officers for the purposes of this Act, and every person so appointed shall hold office as a deciding officer during the pleasure of the Minister.”

Section 38(1) provides that,

“…every question arising…(b) in relation to the payment from the Social Insurance Fund of…(ii) lump sums to employees under section 32, shall be decided by a deciding officer.”

Finally, Section 39(15) provides that, “

“…any employee who is dissatisfied with a decision given by a deciding officer under section 38 or with any decision of an employer under this Act may appeal to the Director General against the decision; provided however, that the Director General shall not be competent to decide whether or not an employee is or was at the material time in employment which is or was insurable for all benefits under the Social Welfare Acts.”

Regarding the statutory framework referenced above, it is accepted that that the Complainant was made redundancy in accordance with Section 7(2), that he was applied to the social fund in accordance with Section 32, that a deciding officer issued a decision as provided for in Section 38 and that the Complainant sought an appeal to this forum in accordance with Section 39(15).

In circumstances whereby the deciding officer declined the Complainant’s payment on the grounds that he was not a relevant contributor for the purposes of the Social Welfare Acts, the Respondent sought to rely on the latter part of that provision, which expressly states that decisions relation to such matters are beyond the competence of this forum and as a consequence of the same, that the employee does not have jurisdiction to bring the present complaint.

In the matter of A Redundant Employee -v- A Government Department ADJ-00025120, the Adjudicator declined jurisdiction on foot of Section 39(15), in circumstances whereby a deciding officer of the Respondent declined a payment from the social fund on the basis of the Complainant’s inability to demonstrate that they were in insurable employment for the duration of their engagement.

Having regard to the foregoing, and the legislative framework outlined above, it is apparent that the normal course in such proceedings is to decline jurisdiction of the basis of Section 39(15) and my lack of competence to adjudicate on matters relating to insurable employment.

Notwithstanding the same the Complainant submitted that the position adopted by the Respondent is incorrect in law, and that Section 39(15) should be disapplied as being incompatible with EU law. In particular, the Complainant submitted that Directive 2008/94/EC provides for protection for employees following the insolvency of their employers. In particular, Article 3 of the same provides that,

“Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees’ outstanding claims resulting from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.”

In this regard, the Complainant opened the case of O. Tümer -v-Raad van Bestuur van het Uitvoeringsinstituut Werknemersverzekeringen C-311/13 (hereafter referred to as “Tumer”).  In particular, the Complainant referred to the following passage contained within the judgement,

“Under Article 1(1) of Directive 80/987, that directive applies to employees’ claims arising from contracts of employment or employment relationships and existing against employers who are in a state of insolvency within the meaning of Article 2(1) of that directive.

Although Directive 80/987 does not itself define the term ‘employee’ and although the first subparagraph of Article 2(2) of that directive states that the directive is without prejudice to national law as regards the definition of that term, it is clear from Article 1(2) and (3) and the second subparagraph of Article 2(2) of Directive 80/987 that the discretion enjoyed by Member States under the first subparagraph of Article 2(2) for the purposes of defining the term ‘employee’ is nevertheless not wholly unfettered.

In that regard, it should be noted, first of all, that neither Article 1(1) nor the other provisions of Directive 80/987 exclude third-country nationals from the scope of the directive; nor do they expressly permit Member States to do so.”

Having regard to the foregoing, the Complainant submitted that by denying the Complainant access to the social fund by virtue of his status as a third country national, and having regard to the authority quoted above, the Respondent in is breach of the provisions of the Directive. In such circumstances, the Complainant submitted that the Commission is the national body established by law to ensure enforcement is this particular area. In circumstances whereby Section 39(15) prevents the Commission from assuming any jurisdiction in relation to the instant case, the Complainant submitted that the same should be disapplied and the matter should fall to be considered. In their submission issued in advance of the hearing, the Respondent raised numerous defences and objections to the position adopted by the Complainant, each of which will be considered in turn.

In Minister for Justice -v- Workplace Relations Commission Case C-378/17, the ECJ held as follows,

“As the Court has repeatedly held, that duty to disapply national legislation that is contrary to EU law is owed not only by national courts, but also by all organs of the State — including administrative authorities — called upon, within the exercise of their respective powers, to apply EU law.”

 The Court went on to state,

“Furthermore, in so far as the Workplace Relations Commission must be considered to be a ‘court or tribunal’ within the meaning of Article 267, it may refer to the Court, pursuant to that article, questions of interpretation of relevant provisions of EU law and, as it is bound by the judgment in which the Court gives a preliminary ruling, it must forthwith apply that judgment, disapplying, if necessary, of its own motion conflicting provisions of national legislation.”

The effect of this decision is that an Adjudication Officer has a duty to give full effect to EU Law, and as part of that obligation, to disapply national legislation that conflicts with EU law, where required.

However, notwithstanding the same, it is further noted that paragraph 35 states that,

“…the primacy of EU law means that the national courts called upon, in the exercise of their jurisdiction, to apply provisions of EU law must be under a duty to give full effect to those provisions, if necessary refusing of their own motion to apply any conflicting provision of national law, and without requesting or awaiting the prior setting aside of that provision of national law by legislative or other constitutional means”. (Emphasis added)

Later at paragraph 46,

“…it would be contradictory if an individual were able to rely upon the provisions of EU law in a particular area before a body upon which national law has conferred jurisdiction over disputes in that area but that body were under no obligation to apply those provisions by refraining from applying provisions of national law which conflict with them…” (Emphasis added)

The import of the above two provisions is that while an Adjudication Officer has a power to disapply national legislation when the same falls into conflict with EU Law, this may only occur when the matter falls within the jurisdiction of the Commission. Indeed, in paragraph 38, referenced above, the duty to disapply arises when an administrative body is called upon to apply EU law “within the exercise of their respective powers”.

Having regard to the wording of Section 39(15), it is apparent that issues in respect of whether an employment was or was not insurable for the purposes of the Social Welfare Acts is expressly outside of my jurisdiction. In such circumstances, given that the instant matter does not in the exercise of my jurisdiction, I find that the power to disapply national legislation is not applicable in this matter. In this respect, it is apparent that the Complainant’s allegation is that the legislature failed to properly transpose the Directive, and the protections contained therein, into national law. Without prejudice to the substantive arguments raised by the Complainant in this regard, such arguments do not relate to the disapplication of national legislation, and do not fall to be considered in this forum.

Having regard to the foregoing, I find that I have no jurisdiction to adjudicate on the present dispute, and as a consequence of the same, the Complainant’s appeal fails.  

I find that I have no jurisdiction to consider the present appeal.

Redundancy, Social Welfare, Disapplication