TUD2410

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00033852 (CA-00044721-001).

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer to the Labour Court under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (‘the Regulations’) on 15 December 2023. A Labour Court hearing took place on 20 June 2024. 

The following is the Decision of the Court:

DECISION:

This is an appeal by Trinity Motors Wicklow Limited (the Respondent) against decision ADJ-00033852 CA 0004472- 001 of an Adjudication Officer of a complaint by Tony Breslin (the Complainant). The complaint was made pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I.131 of 2003).  The Adjudication Officer found that the complaint was well founded and awarded compensation of €35,840.

Background

The Complainant transferred to the Respondent’s employment under a transfer of undertakings on 4th January 2021. He had been employed with the previous employer since June 1996.  The Complainant’s complaint as stated on his form submitted to the WRC is “My new employer did not observe the terms and conditions transferred from my previous employment”.

The complaint was lodged with the WRC on 22nd June 2021. This case is linked to TU/23/16.

At the commencement of the hearing representatives for both parties agreed the following sequence of advents:

18th June 1996 Mr Breslin commenced employment with the transferor.

1st May 2018 Mr Breslin was furnished with a short statement of terms and conditions of employment by the transferor.

2019 - Mr Breslin was furnished with a staff Handbook by the transferor.

11th November 2020 Trinity Motors Wicklow Limited trading as Trinity Volkswagen (transferee) was incorporated.

14th December 2020 the transferor confirmed in writing to the Complainant that his employment would transfer to “the Trinity Motor group” the transferee, on 4 January 2021 and that there would be no change to his employment terms.

16th December 2020 the transferee received information from the transferor in respect of the employees who were to transfer.

18th December 2020 The Respondent met with staff of the transferor who were to transfer to the Respondent.

4th January 2021 the Complainant along with other employees transferred employment to the Respondent.

13th January 2021 the Complainant was provided with a copy of the transferee’s employment Handbook.

February 2021 the Complainant met with Mr Brennan COO of the transferee.

Jan – March 2020 there were some differences between the manner in which the old Volkswagen franchisee (transferor) and the new franchisee the Respondent caried on their business.

19th March 2021 a number of sales staffs approached management asking that opening hours be changed in order to increase their chances of selling more vehicles and earning more commission. Following on from this conversation staff were given the option of changing their working hours to reflect the new opening hours or to remain on their existing hours.

 21st April 2021 the Complainant and another worker Mr G Murphy looked for a meeting with Mr Brennan COO of the Respondent. At the meeting they raised a number of issues and in particular how busy the sales department was.

26th April 2021 the Complainant went out on certified sick leave.

29th April 2021 the Complainant submitted a written grievance stating that there had been an unlawful variation in his terms and conditions of employment post transfer.

24th May 2021 the Complainant resigned from his employment

3rd August 2021 the Complainant commenced a new job.

Summary of Complainant’s case and evidence.

Mr O’ Sullivan BL on behalf of the Complainant submitted that his terms and conditions of employment had been changed in the following manner following the transfer of undertakings.

 i) His job title was changed from “Brand Manager and |Head of sales” to Sales Manager /ID.3 specialist.

ii) There was no mobility clause in his original contract, but mobility is referred to in the Respondents handbook.

iii) There was no probation clause in old contract but there is in the Respondents handbook

iv) The Complainants hours of work were changed.

v) The Complainants annual leave entitlement was changed.

vi) The Complainant post transfer had less flexibility in relation to when he might take annual leave.

The Complainant in his sworn evidence to the Court submitted that he sold Volkswagen vehicles, and that his title was Brand Manager and Head of sales. He had 3-4 sales staff working to him and he reported to the dealer principle who was Mr P Sinnott one of the owners of the garage.  He confirmed he received a letter from the transferor advising of the transfer, and that Mr P Sinnott had spoken to him informally about the possibility of the garage being sold.

He confirmed he attended a meeting on the 18th of December 2020 with Mr Murphy one of the Respondent’s Directors, but there was no mention at that meeting of terms and conditions of employment.  The Complainant confirmed that he was given a new contract by Mr Brennan the Respondents COO and that he signed it on the day it was given to him, as the dealership required same. He confirmed he was given a staff handbook in January 2021.

The Complainant in his evidence, confirmed that he signed the agreement to change his working hours.  He stated that he was asked on several occasions to change his hours and that staff in the other garages had agreed to the change.  It was his position that he signed it to fit in. The impact of the change to hours was that he never had two days off in a row. He worked longer hours and his days off were restricted.

In response to a question from his counsel Mr O’ Sullivan BL, the Complainant stated that there were differences between the old and the new staff handbook that he received, in that the new staff handbook referenced a mobility clause and probation.  Neither were mentioned in the old handbook.

It was his evidence that he also got 10 days additional leave with the transferor and the system for taking annual leave pretransfer was more favourable. He confirmed that he was told his terms and conditions would stay the same and confirmed that nobody mentioned taking away the 10 days additional leave that he had. It was his evidence that his job changed from week one and that he no longer reported to the principal dealer who post transfer was Mr B Murphy a director.

A position of Head of sales across both dealerships was advertised on 8th February 2021 and subsequently filled on the 19th March 2021. The Complainant was told at that time that he was to report to that person.  This was a new level of management between him and the Director/ Principal Dealer who he previously reported to directly.

It was the Complainant’s evidence that the following duties were taken from him, he was no longer part of the senior management team, he no longer arranged car finance for clients as this was now centralised and one person dealt with it. He was not included in management meetings after the transfer and prior to the transfer he was in charge of vehicle valuation but not after the transfer.

The Complainant in support of his complaint that his terms and conditions changed, referenced a text message, he received on the 14th April 2021 asking him to move cars. He felt this was demeaning and not something a sales manager should be asked to do, but he accepted that he could have asked another member of staff to do it.

The Complainant stated that there was a reduction in salespeople, before the transfer there were four people, post transfer in March 2021 there were only 2 people including himself in sales. This led to an increased workload and pressure to get more cars out, registered, and cleaned. Pretransfer he had sole authority in pricing trade ins. However, post transfer he was informed that Mr Barry Murphy was to be included in pricing trade ins.

He was told his pay scale would stay the same but was asked if he would consider going on to a commission basis. He was asked to give his car back and told he could buy a car at a discounted price.

On 21st February 2021 he had a meeting with Mr Brennan which lasted five minutes. Mr Brennan stated that he had invested a lot of money in the new venture and needed to sell 300 cars a year but did not see that happening with the current sales team.

The Complainant stated that he looked for more sales staff but was told the business needed to be streamlined and to look at what the Wexford garage was doing.  The Complaint accepted that this all occurred during a level 4 Covid lockdown.  He stated that it was his belief that the stats would show that despite Covid lockdown sales were not down by that much. He was asked to do a business plan for more sales staff. At the end of the meeting, he spoke to Mr Brennan on his own and told him he was having difficulty with his role as he felt he was only selling cars now. He was advised to speak to Mr Collier who was appointed head of sales on the 19th March 2021 about it. He was later told there would be no more sales staff until the 3rd quarter of that year. 

On the 26th April 2021 he rang Mr Collier and told him he would not be in work as he was on certified sick leave. He submitted his grievance on 29th April 2021 stating that there had been changes to his terms and conditions of employment, and on the 10th May 2021 he enclosed a doctor’s certificate confirming he was fit to engage with the grievance process. On the 18th May he was asked by the Respondent to attend occupational health. He did not agree to attend.  On 24 May 2021 he resigned as he believed his role was diminished and the writing was on the wall.

Under cross examination by Mr Adrian Twomey solicitor for the Respondent the Complainant confirmed that his complaint was that his terms and conditions of employment had changed. He identified the changes as, hours of work, holiday period, when he could take holidays and changes to his role.  He also raised issue about probation and mobility but confirmed that he never claimed he was forced to do a probation period or that he was forced to move location.  The Complainant accepted that his previous employer had never given him a written job description or a list of duties.

In terms of the number of staff that reported to him it was put to him that two members of staff left before the transfer so that while the number of staff changed his role did not, he was still responsible for managing the remaining member of staff. The Complainant accepted that, he also accepted that he was consulted post transfer about what should go on his business card, and he indicated that he wanted the title Sales Manager on the card.

The Complainant raised issues in respect of the organisational charts, and it was put to him that the organisational charts showed his role as being the same as pretransfer, the only difference being a management layer between him and the Owners. He confirmed that he expected to report to the principal dealer and or owner post transfer. He confirmed that his terms and conditions of employment do not say that he reports to the ultimate owner and or owner of the business.

 It was put to the Complainant that he had daily interactions with Mr Brennan and with the Murphys who owned the business. The Complainant did not accept that. In respect of the impact of Covid on the business he accepted that it impacted on walk ins.  It was put to the Complainant that the meeting on the 18th December 2020 in the canteen was attended by Mr Brennan and Mr J and Mr B Murphy. The Complainant stated he could not recall them being there and it was his evidence that he considered that to be an unofficial meeting as he did not get a written invitation to it.

It was put to the Complainant that he was disappointed that he was not made redundant and that his complaint was about extracting money from the Respondent. The Complainant refuted that suggestion 100%. It was further put to the Complainant that staff were not compelled to change their hours, that they could remain on their existing hours and that this was evidenced by the fact that Mr G Murphy who worked to him did not change his hours, and he was not compelled to do so. The Complainant did not dispute that, and he accepted that he signed the document agreeing to the changes.

The Complainant was taken through the hours he had previously worked and the new hours. He accepted that under the new arrangement he worked less hours for the same rate of pay. When asked how his hours disimproved, he stated that he did not get two days of in a row, but he accepted that in less busy times he got every second Saturday and every Sunday off.  The Complainant accepted that he was never refused annual leave and that he was never asked to move location. He confirmed that when he applied for leave, he was granted it. He accepted that the Respondent is a bigger company and that efficiencies can come with a bigger company. There was no change to his role in terms of selling cars and managing staff. He accepted that the finance was done centrally for both Skoda and Volkswagen which in effect took some paperwork away from him.  He did not dispute that this was done at a time when he was complaining that he had a heavy workload and had been complaining that he had too much paperwork to do.

The Complainant stated that he believed Mr Collier took over his role. He accepted that Mr Collier was operating at group level across dealerships which he was not, and that Mr Collier was only appointed in March 2021, so they only overlapped for a couple of weeks as he went out sick the 26th April 2021. The Complainant was asked if he ever put together the business case in respect of getting more sales staff and he confirmed that he had not. He also accepted that when he was asked to arrange to have the cars lined up, he could have asked Mr Graham Murphy who reported to him to do it. He accepted that he was being asked to organise the work and not necessarily do it himself.

The next witness for the Complainant was Mr Graham Murphy who commenced work with the transferor in early 2004 and reported to the Complainant.  If the Complainant was not in work, he reported to Mr P Sinnott.  His role involved sales and ordering vehicles. His titles were Sales executive, brand specialist and product genius.  It was his evidence that following the transfer of undertakings that he reported to Mr Murphy, and then Mr Collier about valuations and Ms Healy in respect of finance. He stated that he did not report to Mr Breslin after the transfer. However, under cross examination he accepted that the fact he reported to different people for those two tasks did not stop Mr Breslin from being his manager, and he confirmed that he would take an instruction from Mr Breslin. 

It was his evidence that he was asked to change his working hours but did not want to do so and his hours were not changed. It was his recollection he was asked two or three times, but his answer was always the same and his hours were not changed. He also confirmed under cross examination that his job title did not change, his hours did not change, his holiday entitlement did not change, and his notice period did not change.

Mr O Sullivan BL stated that the Respondent had originally denied that a transfer of undertakings had occurred and noted that they were no longer disputing that fact.  It is the Complainants submission as set out above and as given in his oral evidence that the Respondent did not comply with Regulation 4 (1) of S.I. No. 131/2003 in that there were changes to the Complainant’s rights and obligations arising from his original contract of employment that was in being immediately prior to the transfer. Mr O Sullivan submitted that as was clear from the sworn evidence of the Complainant he had suffered a real diminution in status and terms and conditions. That distinguished this case from the Labour Court decision in Bidvest Noonan v Eleonor Rabonsa TUD221. Mr O Sullivan BL opened to the Court Dundalk Town Council v Davis Teather PTD113 which he submitted held that for the purpose of the Protection of Employees( Part time Work) Act 2001, conditions of employment are not limited to conditions in respect of pay and pensions but could include a contractual term related to the status of the Employee and that the Court should apply the same interpretation in this case. It was accepted that there was no collective agreement in place and therefore regulation 4.2 did not apply in this case.

Summary of Respondent’s case and evidence.

Mr Twomey solicitor for the Respondent submitted that there was no diminution of the Complainants terms and conditions of employment. The Complainant alleges that his title was changed. It is not disputed that his contract dated 2018 states “Your employment as Brand Manager and Head of Sales” However, the business card he had in 2020 prior to the transfer described him as Sales Manager. The business card he had post transfer described him as Sales Manager.  This was following a discussion with the Complainant as to what title he wanted on the business card. This was also the tile on the job description that he signed on 13th January 2021, and he did not raise any issue about the tile Sales Manager. The recognition of his being an ID. 3 Specialist was added to acknowledge his having gained that recognition.

The next issue he raises is that his original terms and conditions of employment did not contain a mobility clause, but his new terms and conditions did. The Complainant accepted that he was never asked or required to move location. Therefore, there was no diminution of his terms and conditions of employment. The Complainant also raises as an issue the fact that the new staff handbook referenced a probation clause. However, that clause was not applied to him and did not impact on him in any way.  In respect of his complaint that his hour was changed he accepted under cross examination that he had agreed to change his hours and had signed a written statement to that effect. His witness Mr Graham Murphy confirmed in his evidence that he had chosen not to change hours, and he was allowed remain on his existing hours. It was the Complainant’s decision and his alone to change his working hours. The final two issues raised by the Complainant were that his annual leave was reduced, and he had less flexibility in relation to when he might take his annual leave. However, it was his sworn evidence that he had never been refused leave when he sought to take it, and his annual leave entitlement never changed.

 Mr Brennan in his evidence informed the Court that he was Chief Operations Officer of the Respondent group which consisted of eight companies. He confirmed that he is currently a Dealer Principle but not an owner. The group employs a 100 people, has seven franchises in four locations spread over two counties. It is a substantially bigger organisation than Sinnott autos. Each dealership has a General Manager or Principal Dealer. His role goes across all the dealerships. He does all the finance and caried out the due diligence before the transfer of undertakings occurred.

 He received information about the employees from the transferor about two days before the meeting in December 2020. Both the transferor and transferee were at the meeting with staff. It was his evidence that at the meeting he told staff they were protected under the transfer of undertakings regulations and that the takeover would take effect from 4th January 2021.

Mr Brennan confirmed that there was no change to any staff members terms and conditions following the takeover. However, as they were now part of a bigger group there was some streamlining of functions and processes. In particular they streamlined the valuation of second-hand cars as this is a vital part of the business. They also centralised the purchase finance function whereby the paperwork was no longer done by the sales staff but by a dedicated member of administration staff. 

He stated that the working hours were changed following a request from staff and in consultation with all staff.  The Complainant opted to change his hours; Mr Graham Murphy opted not to change his hours it was a matter for themselves which option they wanted.  Mr Brennan stated that there was no reduction in the Complainants annual leave, that he had never raised any grievance about annual leave, and that to the best of his knowledge, the Complainant had never applied for any annual leave prior to resigning his position. Prior to Ms Hanly being recruited Sales staff were complaining that they had too much work and the Complainant was saying that he was buried in paperwork. It was decided to employ an administrative person to carry out the paperwork linked to the purchase finance and related products.

During the initial transfer period both Mr James Murphy and Mr Barry Murphy were on the sales floor helping with test drives and talking to customers. Mr Brennan stated that his recollection of the meeting in April with the Complainant and Mr G Murphy was that no issues concerning terms and conditions of employment were raised. The main concern was the workload.

He received the Complainants grievance on 29th April 2021. He responded offering to deal with his grievances as he believed there was nothing in the letter that could not be resolved.  There was no attempt to move the Complainant from salary to commission. In respect of his company cars, the Complainant had two cars which raised some BIK issues. He was told if he wanted to give back one of the cars, he could buy a car at a discounted price.  Mr Brennan stated that he was upset that the Complainant was not staying with them as he was great with customers and had a lot of repeat customers.

Mr O Sullivan BL in cross examination put it to Mr Brennan that Mr G Murphy had been put under pressure to change his hours as he had been asked three times. Mr Brennan stated that he had only asked him once, and that Mr Murphy had explained it didn’t suit him to change and that was fine. He confirmed that as far as he was aware nobody had compared the old staff manual with the new staff manual. In his view the new manual was more up to date and more comprehensive.

Mr Brennan denied that the Complainant was ever told that he would lose 10 days annual leave. He confirmed that the only difference to the wall charts post transfer and pre transfer was that there was an additional management layer above the Complainant as this was a much bigger organisation. He confirmed that he had told staff at the meeting in December that their terms and conditions would not change. Mr Brennan confirmed that he discussed with the Complainant the fact that they were recruiting Ms Healy to do the purchase finance paperwork, and the Complainant raised no issue, in fact he offered Ms Hanly the use of his office.

The Respondent were more than happy to engage with the Complainant in respect of his grievance, however, he was on certified sick leave which was why they had referred him to occupational health to check if it was in order for him to engage with the process. The Complainant refused to go to occupational health and then resigned.

Mr Twomey solicitor on behalf of the Respondent submitted that the only change to the terms and conditions identified by the Complainant was in respect of his hours. That change came about not because of the transfer but because of a request from staff. The Complainant had the option of staying on his original hours or changing and he opted to change. Mr Twomey opened the judgment of the CJEU in the case of Collino and Chiappero v Telecom Italia SpA, Case C- 343/98 which held as follows “Directive 77/187 does not, however, preclude the transferee from altering the terms of the employment relationship where national law allows such alteration in situations other than a transfer of an undertaking”.  He submitted that this means that terms and conditions of employment may be changed after a transfer has taken place if the reason for the changes arises for reasons other than the mere fact of the transfer. In this case the change was voluntary as was evidenced by the fact that the Complainant chose to change his hours, and his colleague Mr G Murphy chose not to change his hours, and both were facilitated.

The applicable law

Rights and obligations; Article4

          (1)     The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.

Discussion and Decision

There is no dispute that a transfer of undertakings in accordance with the Regulations took place on the 4th January 2021. The question before the Court is whether or not that the Complainant was retained on no less favourable terms and conditions of employment than those he held while in the employment of the transferor.

Article 4 (1) of the Regulation citied above states that the Transferee shall observe rights and obligations arising from the contract of employment.  While the Complainant outlined six changes that he believed occurred post transfer as set out above, he accepted in the course of cross examination that he was not placed on probation, he was not asked to move location, he was never refused annual leave or told that his annual leave entitlement was being reduced. He also accepted that while his 2018 contract with the transferor described him as Brand Mannager and Head of Sales his business card pre post transfer showed his job title as Sales Manager. He did not dispute that he had not raised any issues about being described as Sales Manager /ID.3 Specialist in the new contract in January 2021 from the transferee, and that he had agreed that his business card post transfer would describe him as Sales Manager. The evidence before the Court was that he continued to carry out his core function as a sales Manager and managing staff albeit a reduced number due to staff leaving and not being immediately replaced.  It was the Complainant’s own evidence that he had a heavy workload and the streamlining of functions which could assist with that workload as set out above in respect of the valuation of trade ins and the paperwork linked to finance purchases when looked at in the round cannot in the view of the Court be considered a diminution of his rights and obligations arising from his contract that was in existence at the time of the transfer.

The only remaining issue to consider is his hours of work. The Complainant in his evidence to the Court accepted that he had signed up to the new hours. A witness on his behalf confirmed to the Court that he had not signed up to the new hours and was able to remain on his existing hours. This would support the Respondent’s position that the change to working hours was optional rather than compulsory.

Having heard the parties’ evidence and submissions the Court has concluded that the only measurable change which took place was the change to hours. However, as set out above the Complainant voluntarily signed up to that change.

For the reasons set out herein the Court does not accept that this amounted to a breach of the terms of Regulation 4 of S.I. No 131.2003.

The appeal is upheld.  The decision of the Adjudication Officer is set aside.

The Court so decides.

	Signed on behalf of the Labour Court
	Louise O'Donnell
TH	______________________
02 October 2024	Deputy Chairman

NOTE

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