RPD203

1. Appeal of Adjudication Officer Decision No:ADJ-00017489 CA-00022550-001

BACKGROUND:

2. The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 9 January 2020 in accordance with the Redundancy Payments Acts 1967 to 2014. A Labour Court hearing took place on 27 July 2020. The following is the Determination of the Court:

DETERMINATION :

Background

This is an appeal of a decision by an Adjudication Officer under the terms of the Redundancy Payments Acts 1967 to 2014, ‘the Acts’.

Ms. O’ Reilly, ‘the Complainant’ was employed by Tarossa Frehill, trading as ‘Spar’, ‘the Respondent’ from October 2008. The store ceased trading on 17 November 2017.

The Complainant brought a claim to the Workplace Relations Commission for payment of statutory redundancy in October 2018. The Adjudication Officer upheld the claim and decided that the Complainant was paid €400 gross per week and, as a result, was entitled to statutory redundancy of €7648.

The Respondent appealed this decision to the Court.

Summary of Respondent arguments

Prior to the business being closed, the Complainant was made aware of the store’s financial difficulties and the negotiations underway to secure a new owner. She was assured that all remaining staff would retain their positions. She was told that she would be re-instated as soon as the new owner had signed the lease contract.

This contract was drawn up in January 2018 and the Complainant confirmed to Mr. Dermot Frehill, the owner of the Respondent company, by e-mail that she wished to return to work for the new owner. The new owner contacted her in June 2018 shortly before he commenced trading and he has confirmed that she worked two days for him in July 2018 before she advised that she could not continue to work for him for personal reasons.

The Respondent received a complaint from the Workplace Relations Commission, (WRC), in October 2018, followed by a request for redundancy payment in December 2018. No request had been received prior to this.

The Complainant’s contract made provision for lay-off. While it is acknowledged that no written notice of lay-off was provided, verbal notification was given.

Unknown to Mr. Frehill, a Mr. Patrick Kennedy, who had worked in a part-time role for the Respondent, wrote a letter allegedly on behalf of the company to assist the Complainant in her welfare application. This letter was factually incorrect in stating that the Complainant was made redundant and that the company had gone into receivership, neither of which was accurate. This was not a formal offer of redundancy to the Complainant. This letter stated that ‘all staff are now redundant’. However, subsequently on 15 January 2018, Mr. Kennedy submitted a letter of resignation in response to a request that was designed to facilitate the finalisation of staff numbers to be included in the transfer of undertakings agreement with the new owner.

At no stage prior to October 2018 was any intention to claim redundancy by the Complainant notified to the Respondent. Therefore, counter notice could not be given by the Respondent. Apart from the notification of WRC proceedings, the first such statement of intention was received in December 2018, thirteen months after the shop closure and five months after the offer of re-instatement. Section 24 of the Acts requires that for an employee to receive a redundancy lump sum, payment must either be agreed and paid or a claim by notice in writing must be made within 52 weeks of the date of dismissal.

The Adjudication Officer’s calculation of the Complainant’s weekly pay at €400 per week is incorrect. Her weekly hours varied and s. 20 of Schedule 3 of the Acts is applicable to the calculations required. These add up to €306.73 per week.

The Complainant was laid off temporarily pending completion of transfer of the business and she was aware of the new owner’s intention to re-employ her.

Summary of Complainant’s arguments

The Complainant was dismissed by reason of redundancy as per the definition in s. 7(2) of the Acts. On 17 November 2017, the shutters were pulled down on the premises.

The Complainant never received any notice whatsoever in respect of any purported lay-off period and the Respondent has failed to produce any evidence of same. S. 11 of the Acts requires that such notice must be provided.

The fact of redundancy was admitted by the Respondent in the letter from the Respondent to the Complainant some weeks after the business closed which confirmed that the company was going into receivership and that all staff are now redundant. A reference provided to the Complainant confirmed these facts further.

The Complainant had sought the letter from Mr. Kennedy, whom she believed to be the shop manager, for social welfare purposes but she believed at that time that she would be working for the new employer in a matter of weeks.

There was no notice given to the Complainant of a transfer of undertakings and the purported transfer took place approximately 8 months following the termination of the Complainant’s contract. The Complainant was not employed by the Respondent at that point and, as such, her employment could not have transferred.

Despite the Respondent’s statement to the contrary, the Complainant requested a redundancy payment by letter dated 7 December 2017, in which she notified the Respondent that she was entitled to a redundancy payment and she requested an RP50 form to be received within 14 days. This was never furnished to her.

The Respondent argues that the Complainant is not entitled to a redundancy payment because she was offered a job by the new owner. However, this is only applicable in accordance with s. 9(3) (a) of the Acts if the re-engagement took place immediately on the termination of the previous employment.

The Complainant was never employed by the new owner. She helped him to set up by attending for two days in the shop, for which she was never paid.

Witness evidence

Ms. Mary O’ Reilly

Ms. O’ Reilly is the Complainant.

The witness gave evidence that she had hand delivered the letter to Mr. Frehill’s private residence that was produced to the Court dated 7 December 2017. She had been advised by her local T.D. that this was necessary to claim a redundancy payment. When asked why this letter was not signed, the witness said that she ‘did not think of it’.

Under cross examination, the witness accepted that she had no proof of postage.

When asked why she made no reference to this letter in e-mail correspondence with the Respondent in January 2018, the witness said that she had stopped dealing with Mr. Frehill by telephone and she had not thought to include such reference in her e-mail correspondence.

The witness said that she understood that Mr. Kennedy was the shop manager and she understood from him that the proposed sale had fallen through when she had written seeking redundancy.

Mr. Dermot Frehill

Mr. Frehill is the owner of the Respondent company.

The witness said that he had never received the letter that was before the Court to him and which was addressed to him from the Complainant dated 7 December 2017, in which she sought payment for redundancy.

The witness said that the Complainant had been made aware verbally step by step by him of what was happening regarding the take-over of the business prior to the shop closing. He said that the Complainant had been introduced to the new owner.

The witness stated that Mr. Kennedy had no authority to issue the letter to the Complainant. The witness knew nothing of that letter and Mr. Kennedy had no managerial role in the company. His duties were part-time and involved assisting with making up wages every week and driving to/from suppliers. The letter concerned was not on headed paper and did not reflect the true situation.

Under cross examination, the witness accepted that there was no record of the Complainant being put in a lay-off situation but this had been done verbally.

In response to questions from the Court, the witness said that the transfer had taken a bit longer than expected originally.

The applicable law

Redundancy Payments Acts

General right to 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—

• (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

• (3) (a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if—

  (i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment,

  (ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer,

  (iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which—

  (A) sets out the terms and conditions of the employee’s contract of employment with the new employer,

  (B) specifies that the employee’s period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer,

• (D) the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph

• 11.— (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

• that cessation of employment shall be regarded for the purposes of this Act as lay-off.

• 24.— Notwithstanding any other provision of this Act, an employee shall not be entitled to a lump sum unless before the end of the period of 52 weeks beginning on the date of dismissal or the date of termination of employment—

• (b) the employee has made a claim for the payment by notice in writing given to the employer, or

  (c) a question as to the right of the employee to the payment, or as to the amount of the payment, has been referred to the Director General under section 39.

  (2) Notwithstanding any provision of this Act, an employee shall not be entitled to a weekly payment unless he has become entitled to a lump sum.

  (2A) Where an employee who fails to make a claim for a lump sum within the period of 52 weeks mentioned in subsection (1) (as amended) makes such a claim before the end of the period of 104 weeks beginning on the date of dismissal or the date of termination of employment, the adjudication officer, if he is satisfied that the employee would have been entitled to the lump sum and that the failure was due to a reasonable cause, may declare the employee to be entitled to the lump sum and the employee shall thereupon become so entitled.

  (3) Notwithstanding subsection (2A), where an employee establishes to the satisfaction of the Director General —

  (a) that failure to make a claim for a lump sum before the end of the period of 104 weeks mentioned in that subsection was caused by his ignorance of the identity of his employer or employers or by his ignorance of a change of employer involving his dismissal and engagement under a contract with another employer, and

  (b) that such ignorance arose out of or was contributed to by a breach of a statutory duty to give the employee either notice of his proposed dismissal or a redundancy certificate,

  the period of 104 weeks shall commence from such date as the Director General at his discretion considers reasonable having regard to all the circumstances.

• 39A. Section 44 of the Act of 2015 shall apply to a decision of an adjudication officer given in relation to an appeal under subsection (15), or a question referred to the Director General under subsection (16), of section 39 of this Act as it applies to a decision of an adjudication officer under section 41 of that Act, subject to the following modifications:

• ‘ (1) (a) A party to an appeal under subsection (15), or proceedings in relation to a question referred to the Director General under subsection (16), of section 39 of the Act of 1967 may appeal a decision of an adjudication officer given in that appeal or those proceedings to the Labour Court and, where the party does so, the Labour Court shall —

  (i) give the parties to the second-mentioned appeal an opportunity to be heard by it and to present to it any evidence relevant to the appeal,

  (ii) make a decision in relation to the appeal affirming, varying or setting aside the decision of the adjudication officer to which the appeal relates, and

• (b) The Labour Court shall have power to make any decision in an appeal under this paragraph that an adjudication officer has power to make on the hearing of an appeal under subsection (15), or a question referred to the Director General under subsection (16), of section 39 of the Act of 1967. ’

(b) any other necessary modifications.

Schedule 3

• 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

• 20. For the purposes of this Schedule, in the case of an employee who has no normal working hours, his normal weekly remuneration shall be taken to be the average weekly remuneration, including any bonus, pay allowance or commission, received by the employee concerned over the period of 52 weeks during which he was actually working immediately prior to the date on which he was declared redundant.

The Court accepts the evidence of the Complainant that she hand delivered a letter dated 7 December 2017 seeking payment for redundancy and, therefore, meets the requirement as set out in s.24.

The Court notes that there was not an immediate transfer of undertakings. As a consequence, the Complainant ceased to be employed on 17 November 2017. From that time until the business re-opened in July 2018, there are only two possibilities as to the status of the Complainant. Either she was laid off or her role had been made redundant. In the absence of any proof that the required notice of lay-off had been given to her, as required by s.11, the Court can only conclude that the Complainant’s role had been made redundant, within the meaning of the Acts.

Because the working hours of the Complainant varied from week to week, the provisions of s.20 of Schedule 3 of the Act are applicable for the purposes of calculating the correct rate weekly earnings in order to then calculate the correct rate of redundancy payment. This was not disputed by the Complainant’s representative. This requires a calculation of the average earnings of the Complainant in the 52 weeks preceding the redundancy on 17 November 2017. The earnings in that period were €15950.40, divided by 52 =€306.74. That figure is the weekly earnings on which the redundancy payment must be calculated. The Complainant has service of 9 years and three weeks. The total amount due is €5858.60.

The decision of the Adjudication Officer is varied accordingly.

	Signed on behalf of the Labour Court
	Tom Geraghty
MK	______________________
19 August 2020	Deputy Chairman