EMPLOYMENT APPEALS TRIBUNAL
APPEALS OF: CASE NO.
Cavan Industrial Cleaning Services Limited TU29-TU36/2013
against the recommendation of the Rights Commissioner in the case of:
PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS REGULATIONS 2003
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms N. O'Carroll-Kelly B.L.
Members: Mr M. Carr
Mr J. Moore
heard this appeal at Cavan on 6th June 2014
Appellant: Mr. Dan O'Connell, O'Connell & Associates, Management
Consultants, Castle Park, Ashbourne, Co Meath
Respondent: Ms Catherine McGuigan, McGuigan, Solicitors, Main Street,
Belturbet, Co Cavan
The decision of the Tribunal was as follows:-
This case came before the Tribunal by way of an employer appealing against the decision of the Rights Commissioner under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.
Refs: r-124578-tu-12/SR, r-124564-tu-12SR, r-124569-tu-12SR, r-124568-tu-12SR,r-124575-tu-12/SR,r-12457-tu-12/SR,r-124579-tu-12/SR, and r-124581-tu-12/SR, dated 13th Feb 2013
This case was heard simultaneously with three other cases, in order to determine the correct employer of the respondents and who is liable for any outstanding entitlements. The appellant refuted that any transfer of undertakings took place and stated that everyone was made fully aware that he was not taking on existing staff. He stated that no assets transferred and referred to the “Suzen v Zehnacker Gebaudereinigung GmbH Krankenhauaaervice ( 1997) I.I.L.R 255” case which stated:
The aim of the Directive is to ensure continuity of employment relationships within an "economic entity", irrespective of any change of ownership and irrespective of the detailed arrangements for that change. The term "entity" thus refers to an organized grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific objective. According to the Court, a transfer, within the meaning of the Directive, takes place if the economic entity maintains its identity. To determine whether the conditions for a "transfer of an entity" are met, the Court cited a number of factors which may be taken into account as individual aspects of the overall assessment required of the national court. It cited in particular the transfer of substantial tangible assets (such as buildings and movable property) or intangible assets, and the question whether or not the new employer has taken over a major part of the workforce in terms of numbers and skills.
The Court emphasizes that the mere loss of a service contract to a competitor cannot therefore, by itself, disclose the existence of a transfer within the meaning of the Directive. In those circumstances, the service undertaking previously entrusted with the contract does not, on losing a customer, thereby cease fully to exist, and it cannot be considered that a business or part of a business belonging to it has been transferred to the new awardee of the contract.
In the present circumstances the employees argued that tangible assets did transfer, i.e., the central vacuum system and the washing machines. However, evidence was adduced that the vacuum system and the washing machines belonged to a third party, Liberty Insurance and therefore were not assets that could be transferred. Furthermore, evidence was adduced that the central vacuum system was inoperative and the washing machines were in the opinion of the appellant not suitable for washing material that contained cleaning chemicals and were not used.
The Tribunal are satisfied that no assets, tangible or intangible, transferred and the service undertaking previously entrusted with the contract did not, on losing the contract, cease to fully exist and it cannot be considered that a business or part of a business belonging to it has been transferred to the appellant. From the evidence before it, in this case, the Tribunal is satisfied that a transfer of undertakings within the meaning of Article 1(1) of the Transfer of Undertakings Regulations did not occur. The Tribunal is allowing the appeal and therefore upsets the recommendation of the Rights Commissioner in this case.
Sealed with the Seal of the
Employment Appeals Tribunal