ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00009722
A General Operative/Maintenance Person
A Shopping Centre
A Citizens Information Representative
Complaint/Dispute 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)
Date of Adjudication Hearing: 10/01/2018
Workplace Relations Commission Adjudication Officer: Peter O'Brien
In accordance with Section 41 of the Workplace Relations Act,2015 of the following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
The Complainants employment was the subject of a number of Transfers of Undertaking and when he went out on long term illness the Income Continuance Plan he had with previous companies was found to be not in place and he was seeking that it be restored or he be compensated for the Schemes withdrawal as a condition of his employment and for his loss.
Summary of Complainant’s Case:
If a business is taken over by another employer as a result of a legal merger or transfer the rights of the employees are protected by legislation. The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.
The Complainant commenced work with the respondent on the 19th October 2001 as a maintenance and General Operative. In 2009 the Company introduced a Group Pension Plan which included Income Protection Benefits. It is not clear from the documents I have whether it was which previous owner who introduced the Income Protection Plan in 2009. The Complainant does not have any documentation regarding a transfer of undertakings that might have taken place between owners prior to 2009.
In 2010 the Complainant benefited from the Income Protection Plan when he was out of work sick. He received full pay during this period and he also handed his Social Welfare cheques in to the company at this time with sick notes from his GP. On the 28th April 2015 the Complainant received a letter from a previous employer which stated that the business was going to be transferred to a company named as A and that B Company would soon be operating as C Company Limited and that a transfer of undertakings would apply.
The regulations provide that the rights and obligations of the original employer (the transferor) arising from an employment contract existing at the date of a transfer shall, by reason of such transfer, be transferred to the new employer (“the transferee”). These regulations shall apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another as a result of a legal transfer (including the assignment or forfeiture of a lease) or a merger.
According to S.I. No. 131/2003-European Communities (Protection of Employees on transfer of Undertakings) Regulation 2003. “Rights and Obligations 4. (2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transfer or under the agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement”. The effective date of the transfer was to be 30th April 2015.
On the 22nd April 2016 the Complainant received a letter from C Company Limited which stated that from the 1st May 2016 he would be working for X Shopping Centre Management Limited ( The Respondent in this case) and that again the transfer of his employment would be covered by a transfer of undertakings. On the 10th March 2017 the Complainant wrote a letter to his employer stating that he was out of work sick more than the required time to start getting his income protection benefits and that he was now requesting his employer to set this up for him. On the 20th March 2017 the Complainant received a letter from his employer stating that he was not aware that the company were obliged to make a claim for income protection on his behalf.
A meeting was arranged with the employer, the Complainant and his Representative on the 4th July 2017. At the meeting the employer insisted that he is not obligated to pay income protection cover to any employee during absences through certified sick leave. The Representative pointed out to the employer that one of the client’s previous employers had introduced the cover and that there is no documentary evidence that the client was informed at any stage of his employment that there had been any changes regarding the Income Protection Cover. The Representative also pointed out to the employer that there is a document that the Complainant has that indicates the removal of a paragraph in his original terms and conditions of employment which stated that he would only be paid for the first two days of certified illness and that this change had only happened when the Income Protection Cover Plan was introduced by one of his previous employers. The Representative also informed the employer that there is no evidence to show that the Income Protection Cover Plan was to be discontinued. The employer then request that we leave the documentation with him and that he would look over them and get back to the Representative within two to three days on the matter. As the client did not mind and the fact that they were only copies it was decided that we would give the employer the documents.
After several phone calls to the employer since the meeting the Representative has not been able to make contact with him as he does not answer his phone. As the Complainant has never received any documentation that the Income protection benefit was withdrawn he had a reasonable expectation that the employer would honour his entitlement to said benefit. It is not clear that any of the Companies involved in the Transfers of Undertakings that took place had conducted due diligence. If they had they would have been aware that the Income Protection Plan was in place for this employee .The Complainant is seeking his entitlement to Income Protection which he believes is his right under fair procedures and natural justice.
At the initial hearing on 7th November 2017 the Representative was asked by the Adjudicator to contact Irish Life to see if the Income Protection Scheme was still in place. When contacted Irish Life informed the Representative that this scheme was no longer in place.
Since the first hearing on the 7th November 2017 the complainant has discovered that there is a link between all the companies in the transfer process and the directors. . It appears that a transfer of undertakings occurred between the original company and the individuals who took over the business.
The scheme was originally introduced the Income Protection Plan in 2011.The transfer of undertakings from A Limited to B Limited took place on the 30/4/2015.The transfer of undertakings from B Limited to C Limited took place on the 1/5/2016.The last documentation the Complainant received from Irish Life Corporate Business was on the 29/5/2014 while he was employed by B Limited.
The Representative claims that there is a direct link between all companies.
Summary of Respondent’s Case:
The “Respondent acquired the Shopping Centre in April 2016. In effect the property was acquired from Nama.
It is the Respondent’s understanding that prior to the Respondent’s acquisition of the business that the Claimant’s employment had transferred between a number of employers during his time working at the centre.
From the correspondence provided by the Complainant it appears that on 28th April 2015 the Claimant’s then employer informed the Complainant that his employment would transfer to a new employer.
This company subsequently traded as D and on 22nd April 2016 they wrote to their employees, including the Claimant, to inform them that their employment would transfer to the new owners on 30th April 2016.
Unfortunately the Complainant became ill and has been absent from work due to ill health since in or around the end of 2016.
The Complainant wrote to the Respondent on 27th January 2017 enclosing his weekly medical certificate and informing them that he would apply for Income Protection Benefit from Irish Life.
He subsequently asked the Respondent to make the application on his behalf and they explained that they had been provided with details of his terms and conditions of employment from his previous employer but that there had no mention of illness benefit at that time.
The Complainant and his representative have provided a number of statements from Irish Life addressed to the Complainant at his home address relating to the “XYZ” Retirement Plus Plan”.
However no documents have been furnished which indicate that this Plan was transferred to the prior companies when the Claimant’s employment was transferred from prior companies to these companies. Unless the Complainant can show otherwise it would appear that his membership of the Plan ceased when his employment transferred to the prior company and never transferred across to his new employer.
It is submitted that the Respondent was provided with the Claimant’s terms and conditions of employment at the time of the transfer and that this Plan was not part of his terms at that time. Consequently at the time that the Complainant transferred to the Respondent this Plan was no longer part of his terms and conditions of employment and therefore the Respondent is not in breach of Regulation 4.
Under Regulation 4 of the Regulations the rights and obligations arising from a contract of employment transfer to the transferee. However there is an exception to this in subsection 3 which provides that the Regulation does not apply to employee’s rights to old-age, invalidity or survivor’s benefits. It is submitted that as this benefit was included in a company pension scheme that it falls outside of the scope of the Regulation.
Regulation 10 (6) states that
“A rights commissioner shall not entertain a complaint under this Regulation unless it is presented to the commissioner within the period of 6 months beginning on the date of the alleged contravention to which the complaint relates, or where the rights commissioner is satisfied that exceptional circumstances prevented the presentation of the complaint within that period, such further period, not exceeding 6 months from the expiration of the first-mentioned period, as the rights commissioner considers reasonable.”
In the absence of any evidence that the Plan transferred to the previous employer then it would appear to have lapsed long before the employee became an employee of the Respondent.
Under the Pensions Acts, the trustees of Pension Schemes are obliged to write to the members of the scheme to provide them with an annual valuation of their contributions and it is surprising therefore that this is all of the information that was made available to the Complainant by Irish Life.
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
The facts of this claim are as follows;
The Complainant submitted his claim to the WRC on July 25th 2017.
The Complainant wrote to the Respondent on March 20th 2017 basically advising the Complainant they were unaware of the Income Protection plan.
The evidence provided by the Complainant to the Hearings was as follows;
A contract of employment dated October 19th 2001 with the Respondent as the employer plus terms and conditions of employment. These documents are unsigned.
A letter from “A” Company dated April 28th 2015 stating that his employment will move to “S” Company on April 30th 2015 and that the Company will operate “soon” as “B” Company and that both transfers are covered by the Transfer of Undertaking regulations and ”this change will not affect any of the above rights or terms and conditions of employment”. The Complainant received a letter from “B” company on April 22nd 2016 stating “the new owners “C” company will be employing you directly from the 1st May 2016. The Transfer of your employment will be covered by the Transfer of Regulations under which your employment would continue with no loss of seniority, entitlement or security which you currently have with this company…In order that the new company can correctly observe your terms and conditions of employment, we have forwarded to them sufficient information of your employment such as contractual details relating to relevant dates of employment,. Pay details, copies of your contract, etc”.
The Complainant also submitted statements from Irish Life dated Dec 2011, June 2012, Nov 2013 and May 2014 outlining his membership of the “Income Continuance Plan” with benefits up to 9,744 Euros per year after the first 26 weeks of continuous disablement. The named employer holding the scheme on the last Irish Life form is “A”.
The Complainant transferred from “A” to “B” on April 30th 2015. The Complainant transferred to “C” on May 1st 2016, In both cases the Complainants the existing terms and conditions of employment of the Complainant were guaranteed and when the transfer from “B” to “C” happened “B” stated it had provided all relevant employment data to do with the Complainants transfer.
Therefore as the Complainant was covered by an Income Protection plan in 2012, 2013 and 2014, as a minimum.
With regard as to when the infringement begun, it may well have been during the Complainants employment with “B”. But that’s not the Complainants issue because he only became aware of the breach when he wrote to the Respondent on March 15th 2017 and was informed on March 20th 2017 b the Respondent stating “this is something I have not come across before” but also willing to support the Complainant with his application.
In this case the Complainant only became aware on March 20th 2017 that his entitlement/membership of the Income Protection Plan was not available to him. This is that date that has to be considered as the “date of contravention”. Therefore the Complainant is not out of time as he submitted his claim on July 25th 2017.
The Respondent argued that Section 3 of the Act prohibits a claim for invalidity under an Occupational pension scheme. Section 3 of the Act states” Subject to paragraph(4), this Regulation shall not apply in relation to employees rights to old age, invalidity or survivors benefits under supplementary company or inter company pension schemes that do not fall within the Social Welfare Acts.”
As the benefit claimed by the Complainant was provided under a “ Retirement Plus Plan” the Complainants claim fails as an Adjudicator is not allowed give a substantive decision in cases involving pension schemes and invalidity benefits.
Dated: 27th April 2018
Workplace Relations Commission Adjudication Officer: Peter O'Brien