Complainant

Respondent

Parties

Sophie  Hendrick Rust

Sugar Drop Limited  

Representatives

Self-Represented

Self-Represented

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003)

CA-00064756-001

13/07/2024

The Complainant commenced employment with the Respondent on 13th November 2023. On the date of referral of the complaint, the Complainant remained in the Respondent’s employment. By the date of the hearing, the employment had terminated.

On 13th July 2024, the Complainant referred the present complaint to the Commission. Herein, she alleged that the Respondent had failed to ensure that her terms and conditions had been maintained following a transfer of undertakings. By response, the Respondent stated that the Complainant was a recent entrant to their organization and as such was subject to a probationary clause.

A hearing in relation to this matter was convened for, and finalised on, 2nd December 2024. 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 during the hearing.

The Complainant issued a brief submission in advance of the hearing, while the Respondent issued a verbal response at the hearing itself. The Complainant gave evidence in support of her complaint while a manager for the Respondent gave evidence in defense.

No issues as to my jurisdiction to hear the complaint were raised at any stage of the proceedings.  

In evidence, the Complainant stated that she formerly worked as a chef in the premises now occupied by the Respondent. The Complainant stated that the new owners took over the business in late 2023, and that her employment transferred to the Respondent at this time.

Following the transfer of undertakings, the Complainant stated that the Respondent informed her that her new rate of pay was to be €15 per hour. The Complainant queried same, stating that the former rate of pay was €17 per hour, and that this had to be maintained following the transfer of undertakings. By response, the Respondent stated that the rate of pay may increase in the future but was going to be €15 for the following months. The Respondent also presented the Complainant with a contract outlining the incorrect rate of pay and subjecting the Complainant to a probationary period. The Complainant refused to accept this and stated that she wished to commence a period of absence.

By submission, the Complainant stated that the Respondent refused to ensure that her terms and conditions were maintained following a transfer of undertakings. In this regard, the Complainant opened several payslips from prior to the transfer demonstrating a rate of pay of €17 per hour. Thereafter, she forwarded a contract issued by the Respondent proposing to implement a pay rate of €15 per hour post transfer. The Complainant submitted that this represent a breach of the regulations and stated that her complaint should be deemed to the be well-founded.

In denying the Complainant’s allegations, the Respondent submitted that they had not breached the regulations.

At the hearing of the matter, the Respondent submitted that they took over the lease of the property where the Complainant worked. They accepted that the Complainant had formerly worked for the previous tenants and submitted that they were interested in giving the Complainant a chance to prove herself in the new business. In this regard, all new entrants to the Respondent’s business were expected to pass a probationary period. During this probationary period, the Complainant’s rate of pay was €15 per hour, with a proposed increase to €17 once the Complainant had successfully passed the same. The Respondent issued a draft contract to the Complainant setting out these terms in some detail, however the Complainant refused to sign the same.

By submission, the Respondent stated that the Complainant had no contractual entitlement to a rate of pay of €17 per hour prior to the purported transfer of undertakings. In this respect, she stated that the Complainant had not produced any written documentation demonstrating this rate of pay. In addition to the same, the Respondent submitted that the Complainant has the opportunity to earn a rate of pay of €17 per hour once she had completed a probationary period with her organisation.

In the present resent case, the Complaint has alleged that the Respondent reduced her rate of pay from €17 per hour to €15 per hour following a transfer of undertakings. By response, the Respondent stated that the rate of €15 per hour related to new entrants to the business and that once the Complainant established herself, she would earn a rate of pay of €17 per hour.

In this regard, the parties agreed that the Complainant worked as a chef in the former premises occupied by the Respondent. When the Respondent took over the lease of this premises she continued to work as a chef with the Respondent, albeit subject to the proposed contractual terms at issue in the present matter. While the Respondent did not concede that the Complainant’s employment was subject to a transfer of undertakings, and no submission was received in relation to this issue from either party, they did not contest the fact that the Complainant had formerly worked in the same premises, completing the much the same role.

In this regard, Regulation 3(1) of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) provides that,

“These Regulations shall apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger.”

Subsection 2 goes on to defines these terms in the following manner,

“transfer” means the transfer of an economic entity which retains its identity;

“economic entity” means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity.”

In the matter of Spijkers v Gebroe Benedik Abbatoir CV[1986] ECR 119, the ECJ outlined a set of criteria which provide guidance when it comes to deciding whether a transfer of undertakings has occurred. The criteria, known as the “Spijkers Criteria” are as follows:

1.       Was the undertaking a stable undertaking, with an ongoing life of its own?

2.       Has the entity retained its identity?

3.       Have some or all of the staff been taken over by the new employer?

4.       Has the customer base transferred?

5.       Are the activities post-transfer similar to those carried out before transfer?

6.       Has there been an interruption of the activity?

7.       Has there been a transfer of assets?

Regarding the present case, it is apparent that the Complainant was engaged as a chef with the former leaseholders of the premises. Thereafter, the Complainant continued to work as a chef with the new owners of the business. In this respect, it can be seen that the Complainant’s activities pre and post transfer remained much the same. It is further apparent that there was a minimal interruption in the activity in question and that much of the customer base transferred to the new entity. Having regard to the accumulation of the foregoing points I find that the Complainant’s employment was subject to a transfer of undertaking within the meaning of the regulations.

By submission, the Complainant issued several payslips from her former employers outlining a rate of pay of €17 per hour. From the evidence of the parties, it is apparent that the Respondent reduced this rate of pay to €15 per hour following the transfer. In this regard the Respondent submitted that this rate of pay existed from a probationary period only and that the rate of pay would return to €17 on the successful completion of the same.

In this regard, Regulation 4(1) provides that,

“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.”

This being the case, the Complainant’s rate of pay, and the obligation on the Respondent to discharge the same, transferred to the Respondent on the date of the transfer. While the Respondent has correctly submitted that no written contractual evidence of the same had been provided, a contractual term of this nature may be express or implied. In this respect, the Complainant demonstrated that she received this rate of pay in question prior to the transfer and, as a consequence of the same, the implied contractual term transfered to the new owners.

Having regard to the accumulation of the foregoing points, I find that the complaint is well-founded and the Complainant’s application succeeds.

I find that the complaint is well-founded.

Regarding redress, I award the Complainant the sum of €3,000 in compensation in respect of the breach of the Regulations.

TUPE, Spijkers, Transfer, Rate of Pay