Complainant

Respondent

Parties

Aidan  Mc Donogh

Comhlacht Forbartha, An Spideal

Representatives

  Self-represented

Alastair Purdy, Alastair Purdy & Co. Solicitors

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-00054281-001

23/12/2022

The complainant commenced employment as a Development Officer with the respondent on 01 January 2006.  His employment was terminated by reason of redundancy on 31 January 2022.  On 23 December 2022 the complainant submitted a complainant to the WRC pursuant to section 39 of the Redundancy Payments Act, 1967, claiming he had not received his correct redundancy payment.

The respondent asserts that the complainant was paid his statutory redundancy entitlement, he entered into and signed a Settlement Agreement, having received independent legal advice. The respondent submits that the Adjudication Officer does not have jurisdiction to adjudicate on this complaint.

The complainant commenced employment as a Development Officer with the respondent on 01 January 2006.  In mid-January 2022 two Directors of the respondent company met with the complainant to discuss his post being made redundant. 

The complainant asserts that he was devastated to lose his job but that he accepted and respected the right of the employer to carry out its business as a voluntary body instead of employing a Development Officer/Manager. 

The complainant agreed to accept a redundancy offer of €36,500 to be paid to him in February or March 2022.  A handwritten agreement was signed by the complainant and the two Directors and was to be fully reflected in a legal document at a later date.  The complainant trusted that the payment would be made in full.  The complainant did a full hand over of files to the respondent.

In March 2022 the complainant signed an official agreement confirming the settlement.  The settlement included a provision for payment of his legal expenses of €900. Some weeks later the complainant received a payment to his bank account in the amount of €35,600.  The payment was €900 less than the agreed settlement amount.  The complainant brought the underpayment to the attention of one of the Directors by text message.  He received a curt response telling him to contact his solicitor and to return the keys of the office.  The complainant became ill when he received this response.

The complainant had to employ another solicitor to pursue the underpayment of €900.  The cost of the second solicitor was €150.  There were also some items belonging to the complainant that were not returned.  The complainant seeks payment of €900 arising from the underpayment of the original settlement, plus €150 for legal fees and €100 for unreturned items.  In total the claim is for payment of €1,150.

The respondent terminated the complainant’s employment by reason of redundancy on 31 January 2022.  The parties entered into a Settlement Agreement on 11 February 2022.

The Agreement sets out that “the company shall pay the employee the sum of €35,600 (inclusive of statutory redundancy in the amount of €21,096.00) on or before the closing date in the most tax efficient manner possible”.  The complainant was paid and accepted his full statutory entitlement. A copy of the Agreement was provided at Appendix 1 of the submission.

The Agreement further sets out that the complainant acknowledged that he had taken legal advice from his solicitor (named in the agreement) on the terms of the Agreement and that he understood the effects and implications of the Agreement.  The respondent paid a contribution of €900 towards the complainant’s legal fees.  A copy of the solicitor’s invoice and the respondent’s banks statement confirming the payment were provided at Appendix 2 of the submission.

The complainant wrote to the Committee of Management of the respondent on 10 June 2022 alleging there was a breach of contract and seeking payment of €900 to close the matter.  The respondent, through its solicitor, replied by letter dated 22 June 2022, stating that the complainant was not entitled to the monies as alleged as he had entered into a Settlement Agreement for €35,600.  The Agreement, of which the complainant had independent legal advice, specifically stated that the complainant had waived his rights against the respondent for €35,600 and provided for payment to his solicitor of €900.

The complainant engaged a new solicitor in June 2022 and there followed an exchange of correspondence between that solicitor and the respondent’s solicitor.  Letters were exchanged during the period June to August 2022.  It was alleged that the settlement figure was to be €36,500 exclusive of legal costs.  The respondent asserted that the Settlement Agreement was clear and there was no basis to claim the complainant was owed additional monies over the payment made.

It is the respondent’s position that the complainant received independent legal advice before signing the Settlement Agreement.  The WRC has no jurisdiction to hear a claim in circumstances where a Settlement Agreement was signed and agreed between the parties.  The respondent cited the decisions in Hurley v Royal Yacht Club [1997] E.L.R. 225 and Sunday Newspapers Limited v Kinsella and Bradley [2008] 19 E.L.R. 53 in support of its position.

The respondent submits that although it contends that the WRC has no jurisdiction to hear the case, as set out above, even if the €900 which is disputed was deducted then it would have been deducted from the complainant’s ex-gratia amount and not for his statutory redundancy amount.  Therefore, no valid claim exists for wrong payment of a statutory redundancy amount.

CA-00054281-001

Complaint submitted pursuant to section 39 of the Redundancy Payments Act, 1967.

The complainant on the complaint form submitted indicated that he did not receive his correct redundancy payment.  It is common case that the complainant’s employment was terminated effective 31 January 2022 by reason of redundancy.

In the narrative on the complaint form the complainant stated that he had received payment of €35,600 from the respondent following the termination of his employment.  This amount was €900 less than the amount he understood he was to receive.  The complainant understood that the respondent would contribute to his legal fees in the amount of €900.

The respondent has raised two issues concerning the jurisdiction of the Adjudication Officer to adjudicate on this complaint.  The first issue raised relates to the Settlement Agreement entered into by the parties in connection with the redundancy.  It is the respondent’s position that an Adjudication Officer has no jurisdiction to hear a complaint where the parties have agreed a full and final settlement where the complainant had the benefit of independent legal advice before signing the agreement and the agreement listed all the enactments applicable to the agreement.  The second issue is that there is no valid claim that the complainant received an incorrect statutory redundancy payment.

Legislation

The Act as section 7 provides the following concerning the general right to a redundancy payment:

7.— (1) 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.

Section 19 provides the following concerning the redundancy payment to be paid by the employer:

19.— (1) Upon the dismissal by reason of redundancy of an employee who is entitled under this Part to redundancy payment, or where by virtue of section 12 an employee becomes entitled to redundancy payment, his employer shall pay to him an amount which is referred to in this Act as the lump sum.

(2) Schedule 3 shall apply in relation to the lump sum.

Schedule 3 provides the method of calculating the amount of the lump sum to be paid:

1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following:

(a) the product of two weeks of the employee’s normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and

(b) a sum equivalent to the employee’s normal weekly remuneration.

(2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4(2) of the Redundancy Payments Act 1979 at the time the employee is declared redundant.

The maximum annual rate for the calculation of a redundancy payment lump sum is €31,200 or €600 per week.  Redundancy Payment (Lump Sum) Regulations S. I. 695 of 2004.  The respondent calculated the statutory redundancy lump sum for the complainant to be €21,096.  The complainant accepted that calculation and received the payment together with an ex-gratia payment.  The total paid to the complainant and acknowledged as received by the complainant was €35,600.  Based on the evidence of the complainant and the submissions received I am satisfied that the complainant was paid his full statutory redundancy lump sum.

The Act permits me to investigate and adjudicate on complaints concerning the statutory redundancy payment.  I am satisfied that the complainant received his statutory redundancy payment in full, therefore I disallow the complainant’s appeal. 

This complaint really concerns an amount other than the statutory redundancy payment which falls outside the terms of the Act.  As I have disallowed the complainant’s appeal, I do not need to address the issue of the binding nature of the Settlement Agreement.  However, I note it was not disputed by the complainant that he had the benefit of legal advice before he signed the final agreement and that his solicitor was paid €900 by the respondent in line with the terms of the agreement.  The cases cited by the respondent were complaints arising under the Unfair Dismissals Act and the Protection of Employees (Fixed-Term Work) Act respectively.  This complaint was submitted under the Redundancy Payments Act, 1967 but the complaint concerns the contractual agreement between the parties and not the complainant’s statutory redundancy entitlements.  I do not have jurisdiction to adjudicate on the terms of a contractual settlement agreement.

CA-00054281-001

Complaint submitted pursuant to section 39 of the Redundancy Payments Act, 1967.

The respondent calculated the statutory redundancy lump sum for the complainant to be €21,096.  The complainant accepted that calculation and received the payment together with an ex-gratia payment.  The total paid to the complainant and acknowledged as received by the complainant was €35,600.  Based on the evidence of the complainant and the submissions received I am satisfied that the complainant was paid his full statutory redundancy lump sum.

The Act permits me to investigate and adjudicate on complaints concerning the statutory redundancy payment.  I am satisfied that the complainant received his statutory redundancy payment in full, therefore I disallow the complainant’s appeal. 

This complaint was submitted under the Redundancy Payments Act, 1967 but the complaint concerns the contractual agreement between the parties and not the complainant’s statutory redundancy entitlements.  I do not have jurisdiction to adjudicate on the terms of a contractual settlement agreement.

Statutory Redundancy Payment