RPD245

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00037317 (CA-00048693-001)

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 22 August 2023 in accordance with Section 44 of the Workplace Relations Act, 2015. A Labour Court hearing took place on 30 April 2024.

The following is the Decision of the Court:

DECISION:

The matter before the Court is an appeal by JD Kearns Limited against a decision of an Adjudication Officer in a complaint made by Aaron O’Sullivan under the Redundancy Payments Act, 1967 (the Act). The Adjudication Officer found that Aaron O’Sullivan was entitled to a statutory redundancy payment.

A Notice of Appeal was received by the Court on 22 August 2023 and a hearing of the Labour Court held in Cork on 30 April 2024. 

The parties are referred to in this Determination as they were at first instance. Hence, Mr O’Sullivan is referred to as “the Complainant” and JD Kearns Ltd is referred to as “the Respondent”.

Position of the Complainant

The Complainant’s employment was terminated by reason of redundancy on 17 September 2021, after he was informed that work was “drying up” and he would finish up that week. Other workers were “let go” at the same time.  He secured alternative employment with another employer.

The normal practice in the industry is that workers are recalled to work after a period of lay-off when the employer secures a new contract. He heard nothing back from the employer, so submitted a claim for redundancy.

Position of the Respondent

The Complainant was employed as a plumber from 2015 until September 2021, when he left to take up employment with another plumbing company.

In September 2021, the Respondent’s director Danny Kearns flagged to several employees that work was scarce, and that the company might consider temporarily laying off some employees. As the Complainant did not wish to be in the precarious position of a possible temporary layoff, he secured alternative work with another plumbing company. No temporary layoffs were ever implemented, and the Complainant was never laid off from his employment.

Sections 11, 12 and 13 of the Redundancy Payment Act 1967 as amended sets out the statutory right to temporarily lay off employees and when that temporary layoff becomes or can be deemed a redundancy. It is quite clear that merely advising an employee of a potential lay off situation, or even being put on lay off, does not entitle an employee to a redundancy payment. A minimum period of 4 weeks lay off must arise before a redundancy situation can be contemplated. Even if it were to be accepted that the Complainant was temporarily laid off, the Complainant immediately procured another full-time position and left the Respondent’s employment before a redundancy situation arose or could arise.

The Respondent relies on the case of Daryl McDonald v Joseph Murphy & Sons Waterford Limited RP125/2008 where the EAT found there was no dismissal on the basis of redundancy where an employee left his employment having been notified of a potential layoff and redundancy situation. It is submitted the facts in McDonald are similar to the within case, and that it is implicit that commencing alternative employment should be considered a resignation from a previous employment.

Testimony of Aaron O’Sullivan – the Complainant

The Complainant commenced employment as an apprentice plumber on 9 February 2015, and worked as a qualified plumber with the Respondent after his four-year apprenticeship.

On Monday 13 September 2021 he was approached by Danny Kearns who told him, along with four other employees, that work was “drying up” and that they would all finish up that Friday. It didn't make sense to him and there was as there was work remaining on site. A coworker contacted another employer about alternative work, and he secured work with that employer also. On the Thursday of that week, he told Danny Kearns that he'd secured another job, who seemed to be relieved. He was let go on the Friday. All five employees left on the same day.

The Complainant considered that his employment was terminated by reason of redundancy. He did not resign his position. If he had resigned, he would have to give notice to his employer. There was no conversation about notice. He was told that he had to finish up on Friday. He was not told that the layoff was temporary. He sent an application for redundancy to the respondent but heard nothing in reply. When asked why he delayed submitting a complaint to the Workplace Relations Commission, the Complainant said that he went about it the wrong way and waited 8 weeks, as he understood that he had to wait for a period before he could claim the redundancy.

Testimony of Danny Kearns

Mr Kearns is a shareholder director with a 50 percent stake in the company. The company was engaged on a job in Fermoy with six or seven plumbers working on site.

On Monday 13 September he advised the workers in the boiler house that work was a little slack and there may be temporary layoffs. He did not mention any date for the layoffs. He then had a quiet word with three of them to tell them that they would not be put on temporary layoff.

The Complainant approached him on the Tuesday or Wednesday to say that he was finishing up on the Friday as he had got a job with another employer.  Mr Kearn understood that the Complainant was resigning his employment, and he did not ask him to stay.  Other employees also indicated that they had secured a job with a competitor. In total, five employees left on the Friday.

The company had two contracts at the time. There was at least another month’s work remaining on the contract in Fermoy, and it did not suit the business to be left with one employee on site. Jerome Kearns and another employee had to come in from the other site on the following Monday to help get the work done. They had to work longer hours to get that job done.

Mr Kearns said that he had no intention of laying off employees but was fed up with them as the work rate had slowed down. His intention was to buck them up. He told them that work was drying up to motivate them and get the work done. 

Testimony of Jerome Kearns

Mr Jerome Kearns is responsible for administration and contracts.  Danny Kearns complained to him about the work rate at the Fermoy site, and his plan to tell the lads there might be a temporary layoff as he felt that might motivate them to do more work.

There was no layoff or redundancy situation, as they had another two jobs on at that time and contracts were coming in. He understands that Danny approached three of the lads to say they would not be laid off.  On the Wednesday he learned that the Complainant had secured another job and would leave that week.

Danny contacted three of the five workers to see if they would stay. He did not contact the complainant. There was another month or six weeks work remaining on that job. He and another worker had to leave the job they were working on and do 10-to-12-hour days to get the Fermoy job completed.

The company had implemented layoffs in the past related to COVID. On those occasions he provided employees with headed paper stating that they were on temporary layoff.

The Relevant Law

Section 7 of the Redundancy Payment Act, 1967, sets out a general right to a redundancy payment as follows:

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.

(2) 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, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,”.

The Act at sections 11 and 12 provides in relevant part as follows:

11. Lay-off and short-time

(1) Where an employee's employment ceases by reason of his employer's being unable to provide the work for which the employee was employed to do, and—           

(a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and

(b) the employer gives notice to that effect to the employee prior to the cessation, that cessation of employment shall be regarded for the purposes of this Act as lay-off.

12. Right to redundancy payment by reason of lay-off or short-time

(1) An employee shall not be entitled to redundancy payment by reason of having been laid off or kept on short-time unless—

(a) he has been laid off or kept on short-time for four or more consecutive weeks or, within a period of thirteen weeks, for a series of six or more weeks of which not more than three were consecutive, and

(b) after the expiry of the relevant period of lay-off or short-time mentioned in paragraph (a) and not later than four weeks after the cessation of the lay-off or short-time, he gives to his employer notice (in this Part referred to as a notice of intention to claim) in writing of his intention to claim redundancy payment in respect of lay-off or short-time.

(2) Where, after the expiry of the relevant period of lay-off or short-time mentioned in subsection (1)(a) and not later than four weeks after the cessation of the lay-off or short-time, an employee to whom that subsection applies, in lieu of giving to his employer a notice of intention to claim, terminates his contract of employment either by giving him the notice thereby required or, if none is so required, by giving him not less than one week's notice in writing of intention to terminate the contract, the notice so given shall, for the purposes of this Part and of Schedule 2, be deemed to be a notice of intention to claim given in writing to the employer by the employee on the date on which the notice is actually given.”

Deliberation and findings

The appeal before the Court concerns the Complainant’s entitlement to a statutory redundancy payment in accordance with Section 19 of the Redundancy Payments Act 1967.

The key facts asserted by the Complainant are that his employment was terminated by reason of redundancy, after he was informed that he, along with four other employees, would have to finish up work on Friday on 17 September 2021. The Respondent disputes that the Complainant was ever laid off from his employment, or that his position was made redundant.

It is accepted that on Monday 13 September 2021 the Respondent informed the Complainant that work was drying up and that a temporary lay-off might arise. It is also accepted that the Complainant secured alternative employment with another company. and ceased working for the Respondent on 17 September 2021.

The Court was faced with a conflict of evidence about whether the Complainant was put on notice that he was to be laid off from his employment on Friday 17 September 2021, or that his position was made redundant on that date.

Mr Danny Kearns’ evidence was that he had no intention of laying off employees and that he was simply trying to motivate employees to get work done on site, as the work rate had slowed down. Mr Jerome Kearns’ evidence, that he was pulled off another job to get the Fermoy job completed, supported the assertion that further work remained on the Fermoy site. The Complainant’s evidence also supported that assertion as he stated that the lay-off did not make sense to him when so much work remained on site. On balance, having regard to the above, the Court preferred the testimony of Danny Kearns and Jerome Kearns that there was no plan to lay employees off.  In the view of the Court, the Respondent’s plan to advise workers of a potential situation to motivate them to work harder clearly backfired when five employees secured alternative employment and left to work for a competitor.

Having regard to the written and oral submissions, the Court finds that no temporary layoffs were ever implemented, and the Complainant was not laid off from his employment. The Court finds that the Complainant resigned his position when he left the employment of the Respondent to take up employment with another company.

Having regard to the written and oral submissions, the Court finds that no redundancy arose within the meaning of the definition s set out at 7(2) of the Act.

Decision

The Court, having regard to the written and oral submissions of the parties, concludes that no redundancy within the meaning of the Act occurred as contended for by the Complainant on 17 September 2021.

The within appeal must therefore succeed. The decision of the Adjudication Officer is, accordingly, set aside.

The Court so decides.

	Signed on behalf of the Labour Court
	Katie Connolly
TH	______________________
15 May 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Therese Hickey, Court Secretary.