RPD248

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00039307 (CA-00049880-001)

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 23 January 2024 in accordance with the Redundancy Payments Acts 1967 to 2014. A Labour Court hearing took place on 01 May 2024.   

The following is the Decision of the Court.

DECISION:

Background to the Appeal

This is an appeal on behalf of Ballymun Regional Youth Resource (‘the Respondent’) from a decision of an Adjudication Officer (ADJ-000393307/CA-00049880-001, dated 13 December 2023 under the Redundancy Payments Act 1967 (‘the Act’). The Adjudication Officer held that Mr Mark Davis’s (‘the Complainant’) employment with the Respondent had terminated by reason of redundancy on 31 December 2021 and that he was, accordingly, entitled to a lump sum payment under the Act. Notice of Appeal was received in the Court on 23 January 2024. The Court heard the appeal in Dublin on 1 May 2024. Sworn evidence was given by the Complainant himself. Ms Angie Birch and Ms Katy McAndrew were called as witnesses for the Complainant. The Respondent did not call any witness.

The Factual Matrix

The Complainant was employed by the Respondent as a youth outreach worker between 1 April 2002 and 31 December 2021. His annual gross salary as of the date of termination was €48,775.00. The Complainant’s position with the Respondent was funded at all material times by the HSE.

The Complainant worked as a member of an outreach team comprised – at the material time – of six staff. The team leader was Ms Anjie Birch. Ms Birch’s position was funded by the City of Dublin Youth Training Board (‘CDYTB’). Funding for the positions of three of the four other team members was sourced from the HSE. One other position (in addition to Ms Birch’s) was funded by CDYTB. It is common case that between mid-May and late November 2021 the issue of whether the outreach team should be retained within the Respondent organisation or located elsewhere, either as a standalone service or within another larger organisation, was actively under consideration by the Respondent’s management and its board.

It appears that the HSE was strongly in favour of a refocusing of the work being undertaken by the outreach team and a transfer of the team to an alternative organisation by means of a transfer of undertaking. The following is an extract from a letter dated 30 September 2021 from Mr Hugh Greaves of the HSE to Ms Comerford setting out the views of the HSE in this regard:

“Therefore, we are recommending that the Outreach/Easy Street Team (including the Youth Drugs Support Worker) should be re-organised as a stand-alone team. This team would work out of its own premises and the staff would be employed by a separate employer (following a Transfer of Undertaking agreement with BRYR and the staff involved). HSE has committed to providing the resources for the premises required and continuing its support of the four staff identified as Ballymun DATF funded (including Youth Drugs Worker which, up to this year, funding has been channelled for through the CDYSB).

…..

To sum up, what we are recommending to the BRYR Board of Management is:

• The four Team members currently funded through the DATF budget (3 outreach team and youth-drugs support worker) be reassigned through a Transfer of Undertaking agreement to a new specialised team with a new employer.
• The two remaining Team members (including the Team Leader) who are employed through mainstream CDYSB UBU funding are transferred or seconded to the Team also for an initial pilot period of one year which would be renewable for a further three years, following a review by all stakeholders. UBU objectives can be maintained by these Team members in the context of the high needs groups targeted.
• The new Team would continue to link in and support the work of BRYR and have access to BRYR resources (such as room/hall facilities, mini-buses, sports/arts equipment, etc).
• BRYR continues to participate as a valued member of our structures and in particular, the Ballymun Network.

…….”

There appears to have been a degree of vacillation on the part of the Respondent as to whether a decision to move the outreach team to another organisation would give rise to a transfer of undertaking within the meaning of the EC (Protection of Employees on Transfer of Undertakings) Regulations 2003 (‘the Regulations’). Ultimately, the Respondent took the view that such a transfer of undertaking would not occur and proceeded to give notice of dismissal to the four members of the team whose positions were funded by the HSE by letter dated 26 November 2021, the dismissals to take effect on 31 December 2021. The four team members – including the Complainant - who had received letters of dismissal, along with Ms Birch and Ms Duncan, were contacted by Ms Katy McAndrew, the Manager of the Star Project in Ballymun, in or around mid-December and offered employment with Star commencing 1 January 2022. They were advised by Ms McAndrew that their employment with Star would be on a ‘Day 1’ basis and it would not be regarded as giving rise to a transfer of undertaking. All six members of the former outreach team, including the Complainant, commenced employment on that basis with Star and at the salary that he had been in receipt of from the Respondent.

It appears that the Respondent changed its position yet again by March 2022 and advised by email dated 11 March 2022 to the SIPTU official who had been supporting the Complainant and his colleagues that the Respondent had now accepted that a transfer of undertaking within the meaning of the Regulations had occurred on 1 January 2022. The position of Star appears not to have altered, however. This was confirmed by Ms McAndrew to the Court.

Ms Birch’s Evidence

The witness first outlined the history of her employment with the Respondent, including her work as an outreach worker, commencing in 2000. She gave a detailed description of the Respondent’s mission, its activities in the community and the resources available to it. Her evidence then moved to her interaction as Team Leader with the Respondent’s management from May 2021 onwards in relation to the future of the outreach team. The witness said that Ms Geraldine Comerford, her line manager, had first suggested in May 2021 that the team may be better placed elsewhere other than in the Respondent’s organisation and that such a move would give the team an opportunity to rebrand itself and find new ways of fulfilling its work. The witness referred to a second meeting which she attended in July 2021 with a number of members of management at which the new UBU framework adopted by the Respondent was discussed and the possibility of the outreach team moving out of the Respondent’s premises was again raised. In the alternative, she said, it was suggested that they could be seconded to another organisation. The witness described this meeting as having been ‘very mixed up’ but nevertheless, she said, following the meeting she believed that the team would be transferred elsewhere, the members’ terms and conditions of employment would be preserved and good relations could be maintained between the team and the Respondent.

The witness told the Court that she met again with Ms Comerford on 4 October 2021 and that Ms Comerford expressed her annoyance at that meeting in response to the HSE’s request that the funding for the outreach team members would be transferred from the Respondent elsewhere (as outlined in Mr Greaves’ letter of 30 September 2021, and quoted from above). The witness said that Ms Comerford raised a number of questions about the HSE proposal which she (the witness) had no answers for.

The witness said she had a one-to-one meeting with Ms Fiona Gallagher, the chair of the Respondent’s board, on 26 October 2021 during which she was asked whether she would be happy to transfer to a new employer. Her evidence is that she replied that she would be happy to do so and that her understanding on leaving the meeting was that there would be a further meeting with a sub-group of the Board to facilitate a transfer of the outreach team to a new (as yet, unidentified) employer.

The next event that the witness’s evidence turned to was a meeting that took place between the witness and Ms Comerford in the latter’s office on 26 November 2021 during the course of which the witness was handed a letter of dismissal for each of the HSE-funded members of her team and was told that there would be no transfer of undertakings and no secondment. The witness told the Court that Ms Comerford advised her that both she and Ms Duncan would have to resign their employment with the Respondent if they wished to remain part of the outreach team. The witness spoke individually with the members of her team over the weekend, she said, but did not pass their dismissal letters to them but, on the advice of her trade union representative, returned the letters to Ms Comerford.

The witness’s evidence is that she subsequently – on 16 December 2021 – received a call from Ms Katy McAndrew, manager of Star, to advise that Star would take on the outreach team with effect from 1 January 2022. The witness then gave a detailed account of the nature of the work undertaken by Star. She placed some emphasis on how that work differs from the work that had been undertaken by the outreach team while part of the Respondent’s organisation.

Evidence of Katy McAndrews

The witness said that she is the manager of Star which offers a drug rehabilitation service in the Ballymun area. She confirmed to the Court that the Complainant (along with her five colleagues) had commenced employment with Star on 1 January 2022 on a Day 1 basis although Star had been open to acquiring them under a transfer of undertaking but had been advised that an agreement between the Respondent, the employees and Star was a prerequisite to there being a transfer of undertaking . According to the witness, the first contact she had with the Complainant and her colleagues regarding their future employment with Star took place on 16 December 2021 when she telephoned each of them, commencing with Ms Birch. The witness told the Court that one member of the outreach team, Mr Davis (who also initiated a claim under the Act, the subject of a separate appeal before the Court), was a member of Star’s board of directors but had been asked to step out whenever the issue of the potential employment of the then BRYR outreach team came up for discussion. The witness said that she met each of the team members following the commencement of their employment with Star, over the course of January and February 2022, to discuss their contract of employment and the employee handbook.

The witness gave evidence in relation to the differences in the work currently undertaken by the Complainant and her colleagues compared to work they had been doing. She said that Star takes a ‘health-led approach’ whereas the approach of the Respondent is ‘youth-based’. Also, it is now the case that all six members of the team are involved in drug rehabilitation work whereas when employed by the Respondent only one member of the team was focused on that type of work. Finally, the witness confirmed that all six members of the group are now funded by the HSE.

The Complainant’s Evidence

The Complainant told the Court that he started working with the Respondent on a full-time temporary basis on 1 April 2002 and was subsequently made permanent with effect from 3 March 2003. He also told the Court that Ms Birch informed him on 26 November 2021 that she had received a letter of termination of employment addressed to him and that the fact of his impending termination (to take effect on 31 December 2021) was confirmed by Ms Comerford the following Monday, 29 November 2021, at a meeting in the latter’s office. Ms Comerford, he said, told him that the reason for the termination of his employment was that ‘funding had been pulled’. The Complainant’s evidence then was that he was contacted by Ms McAndrew on or around 16 December 2021 and that she made an offer of employment with Star to him, commencing on 1 January 2022 which he was ‘delighted’ to accept. The Complainant briefly referred to a meeting he had attended in May 2021 at which the possibility of the transfer of his employment (and that of his fellow team members) to an alternative service had been discussed. Finally, in direct examination, the Complainant stated that the Chair of the Respondent’s board had promised in the course of a meeting that took place in October 2021 that the Respondent would ensure that any transition would be as smooth as possible for the team.

Under cross-examination, the Complainant confirmed that he had acted as Secretary to the board of Star throughout 2021 and in that capacity was aware that there had been some conversations about a possible transfer of staff from the Respondent to Star ongoing during the course of 2021. He said he had not been present for any part of the board meetings where the issue had been discussed, for obvious reasons. He told the Court that he did not know he would have a job to go to on 1 January 2022 until he was contacted by Ms McAndrew on 16 November 2021. He also confirmed that the funding that the Respondent had been in receipt of from the HSE and that supported his role with the Respondent transferred to Star.

Submission on behalf of the Complainant

Counsel submits that the termination of the Complainant’s employment constitutes a dismissal by reason of redundancy within the meaning of the Act having regard to the uncontroverted evidence of the Complainant and Ms Birch to the effect that he was issued with a letter of termination on 26 November 2021 which was followed by a meeting with Ms Comerford on 29 November 2021 wherein the termination of his employment to take effect on 31 December 2021 was confirmed. Counsel also emphasised that at no stage did the Respondent (or indeed Star) engage in a consultation process with the Complainant (or with his colleagues) regarding a potential transfer of undertaking and nor was there any reference to such a transfer in the letter of termination received by the Complainant. Counsel said that the Complainant’s evidence was that Ms Comerford had told the Complainant that the reason for the termination of his employment was a lack of funding; at no stage had Ms Comerford signalled that the HSE funding was being redirected to Star.

Notwithstanding all of the above, Counsel said, the Respondent appears to have done a U-turn in March 2022 and sought to advance the position that what had occurred on 1 January 2022 constituted a transfer of undertaking from it to Star of the Complainant’s outreach team. According to Counsel, this change of heart on the Respondent’s part was a retrospective attempt to recategorize a redundancy situation as a transfer of undertaking for purely financial reasons. In support of this submission, Counsel referred to the fact that the Respondent had not appealed the related decisions made by the Adjudication Officer under the Regulations. In Counsel’s submission, no transfer within the meaning of the Regulations had taken place because there had not been the transfer of an economic entity that retained its identity. Counsel sought to emphasis the difference in the work carried out by the Respondent and that carried out by Star, having regard to the evidence of Ms Birch and Ms McAndrew in particular. Furthermore, according to Counsel, no assets transferred between the Respondent and Star.

According to Counsel, the Complainant and his colleagues had been ready and willing to transfer in accordance with the Regulations. He urged the Court to consider the Complainant’s dismissal (and that of his colleagues) through the prism of what had been taking place in the Respondent's organisation from mid-May 2021 onwards whereby the Complainant (and his colleagues) had been given assurances that their employment would be transferred to another (unnamed) organisation and that there would be future meetings with management to clarify the details of the proposed transfer but no such meetings had taken place.

The Respondent’s Submission

Counsel for the Respondent submits that the issue the Court has to determine in the within appeal is whether or not the Complainant is entitled to a lump sum payment under the Act. He further submits that, as a matter of law, the Complainant and his fellow team members, along with the HSE funding, constitute an economic entity that retained its identity such that a transfer of undertaking for the purposes of the Regulations occurred on 1 January 2022. That being the case, Counsel contends that the Complainant’s employment was not, therefore, terminated by reason of redundancy or at all on 31 December 2021; he was employed by Star with effect from 1 January 2022 without having to submit to an interview and without any impact on his existing salary. Counsel referred the Court to the judgment of the High Court in Lyons and Leddy v Symantec [2013] 2 IR 1 where Edwards J states:

“As the [Court of Justice] said ‘the directive does not preclude an employee from deciding to object to the transfer of his contract of employment or employment relationship and hence 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. In all the circumstances the court is satisfied to allow the appeals in both cases.”

Counsel submits on the basis of the Edwards J’s judgment, that the Complainant has no entitlement to a redundancy payment under the Act, his employment having transferred to Star with effect from 1 January 2022. In further support of the Respondent’s position in this regard, Counsel directed the Court to a document entitled “Recommendations for 2022 HSE Funded Projects” (not traduced by Counsel for the Complainant) in which funding for Easy Street (i.e. the project undertaken by the outreach team of which the Complainant was a member) is reallocated to Star, with the following note: “Recommend to transfer funding from BM2-15 [BRYR] to BM2-7; STAR to become project promoter for Easy Street Project”.

Discussion and Decision

The Court finds that the Respondent generally conducted itself in a most unreasonable manner from mid-May 2021 onwards vis-à-vis the outreach team of which the Complainant was a member in so far as it first floated the idea that the team would be transferred to an alternative service provider in the Ballymun area, by way of a transfer of undertaking, to continue with its outreach work to the youth of the area as a team, and that such a transfer would be seamless, but then appeared to have altered its position, without explanation. Subsequently, the Respondent purported to terminate the Complainant’s employment along with that of three of his colleagues in the team. It is notable that that the posts held by all four employees whose letters of termination were dated 26 November 2021 were HSE-funded. The Court also notes that the Respondent engaged in neither a redundancy consultation process nor in a transfer of undertakings information and consultation process. It appears to the Court that this course of behaviour by the Respondent can only be explained by its desire to attempt to retain the HSE funding it had been in receipt of to support the Complainant’s work and that to that end it decided not to engage in any process that could be construed as affirming that a transfer of undertaking to Star was in the offing.

Nonetheless, notwithstanding the Respondent’s attempts to bury its head in the sand about the reality of the situation that was developing at the latter end of 2021 wherein it was evident that the HSE, the principal funder of the outreach project, was strongly recommending far-reaching changes in the team’s focus and objectives and that this ultimately led to a parting of the ways between the Respondent and the four HSE-funded members of the outreach team. Mr Greaves’s letter of 30 September 2021 is particularly instructive in this regard.

In short, the Court agrees with Counsel for the Respondent’s submission to that the transfer of the majority of the outreach team along with its essential funding from the HSE constitutes a transfer of undertaking within the meaning of the Regulations. The Court relies, in particular, on the judgment of the Court of Justice in Dr. Sophie Redmond Stichting v Hendrikus Bartol and others (Case C-29/9) in making this finding. The Court of Justice stated inter alia at paragraph 21 of that judgment:

“21 Accordingly, the answer to the national court' s questions or parts of questions relating to the interpretation of the expression "legal transfer" within the meaning of Article 1(1) of Directive 77/187 must be that that provision is to be interpreted as meaning that the expression covers a situation in which a public authority decides to terminate the subsidy paid to one legal person, as a result of which the activities of that legal person are fully and definitively terminated, and to transfer it to another legal person with a similar aim.”

The Court, therefore, concludes that a transfer of undertakings between the Respondent and Star occurred on 1 January 2022 and the Complainant formed part of that transfer, as a matter of law. He was not therefore dismissed by reason of redundancy by the Respondent.

The appeal, therefore, succeeds and the decision of the Adjudication Officer is set aside.

The Court so decides.

	Signed on behalf of the Labour Court
	Alan Haugh
CC	______________________
14 May 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Ceola Cronin, Court Secretary.