ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00015992
A Cleaning Company
Martina Weir Siptu - Works Rights Centre
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)
Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973
Date of Adjudication Hearing: 06/032019 and 18/06/2019
Workplace Relations Commission Adjudication Officer: Ray Flaherty
In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 39 of the Redundancy Payments Acts 1967 - 2014 andfollowing the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
The Complainant was employed, as a cleaning operative, by a cleaning company (Company A), from 8 August 2005 to 18 June 2018. The Complainant worked an evening shift, from 6:00 pm to 8:30 pm in a Health Centre, run by the HSE.
On 5 June 2018, the Complainant was notified by management personnel from Company A that a new company (the Respondent in the within case) was taking over the cleaning contract at the Health Centre, commencing 18 June 2018. At this meeting, the Complainant was presented with a written document which offered her the choice of (1) transferring her employment to the Respondent (the transferee) or (2) objecting to the transfer, thereby resigning from her position. The Complainant chose to transfer to the Respondent.
On 13 June 2018, the Complainant received a further letter from Company A informing her that her employment details had been passed to the Respondent and advising her to report for work as normal on 18 June 2018.
On 18 June 2018, the Complainant attended for work as normal and was met by a representative of the Respondent, who informed her that they were not taking her on as they had their own staff. The Complainant was required to leave the site.
When the Complainant and her Trade Union on her behalf contacted Company A, they were both informed that the Complainant had transferred to the Respondent.
The Complainant has not worked or been paid since 18 June 2018 and has not received a redundancy payment, despite representations being made on her behalf, by her Trade Union, to both the Respondent and to Company A.
The Complainant submitted three complaints to the Workplace Relations Commission on 13 July 2018, as follows:
(1) a complaint under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003/S.I. No. 131 of 2003 (Complaint reference: CA-00020526-001),
(2) a complaint under the Redundancy Payments Act, 1967, (Complaint reference:CA-00020526-002) and
(3) a complaint under the Minimum Notice & Terms of Employment Act, 1973, (Complaint reference: CA-00020526-003)
These complaints are the subject of this adjudication.
The Respondent was duly notified of the complaints, as received by the WRC on 13 July 2018. The Respondent attended a hearing in this regard on 6 March 2019. However, due to an oversight, the complaints received by the WRC on 13 July 2018, were only registered against the Respondent. Company A (the transferor) were not put on notice of the complaint when it was originally received. However, following the hearing on 6 March 2019, which was not attended by Company A, they were notified, by way of correspondence dated 25 March 2019, of the complaints.
Both the Respondent and Company A duly attended a reconvened hearing on 18 June 2019.
Summary of Complainant’s Case:
Submission made on behalf of the Complainant, by her Trade Union, contends that the responsibility for the situation rests with one or other of the two companies involved (i.e. Company A, being the transferor or the Respondent, being the transferee).
According to the Complainant’s submission, Company A informed the Complainant that she had been transferred and that her employment details had been passed to the Respondent. With regard to the Respondent, it was submitted that they have informed the Complainant’s Trade Union that they have no responsibility under law for the Complainant.
It was submitted on behalf of the Complainant that the business carried on as normal after the Respondent took it over, with the cleaning operation still taking place in the same location as before. Therefore, it was submitted, on behalf of the Complainant, that the business has retained its identity, which is one of the factors that is relevant under the TUPE regulations.
According to the Complainant’s submission, while it appears that no transfer of assets took place as this would be considered a labour-intensive business, such a scenario would be the norm for contract cleaning.
It was further submitted that, while the Complainant is keen to have a remedy in her situation, she is also quite concerned at the prospect of being placed with the Respondent, who has clearly, albeit for their own reasons and not based on any shortcomings of the Complainant, indicated their unwillingness to employ her.
In conclusion, it was submitted that, on the premise that both employers cannot shirk their responsibilities to her and, under law, one of them must be liable, the Complainant is seeking to be paid her redundancy and minimum notice entitlements or to transfer to the Respondent on terms and conditions that are no less favourable that she enjoyed with Company A.
Summary of Respondent’s Case:
The Respondent made the following submission in response to the Complainant’s complaints:
(1) The Respondent was awarded the cleaning contract in respect of the Health Centre by the HSE. Therefore, it was not correct to contend that they had taken over the contract for the premises.
(2) The Respondent did not acquire any interest in Company A, who are the Complainant’s employer. Consequently, any rights or entitlements held by the Complainant can only relate to her employer, Company A.
(3) The Respondent has not purchased or otherwise acquired any interest in any contract as between Company A and the HSE. Consequently, the Transfer of Undertakings (Protection of Employment) regulation does not apply in this case.
(4) It is a complete misrepresentation of fact and law for Company A to contend that they transferred the Complainant’s employment to the Respondent with whom they have no legal relationship whatsoever.
(5) The Respondent has never employed the Complainant nor had any legal relationship whatsoever with her and, on that basis, the issue of dismissal cannot and does not arise.
(6) The Respondent denies categorically that the Complainant’s employment was transferred to them. The Respondent has no legal or other relationship whatsoever with Company A and, as a result, it is neither credible nor correct to claim that the Complainant’s employment had transferred to the Respondent.
(7) Any rights or entitlements that the Complainant may have can only exist as against her employer, Company A.
In conclusion, it was submitted by the Respondent that joining them in a complaint arising from grievances that are clearly a matter for Company A, as the Complainant’s employer are completely unacceptable as a means of addressing issues that have nothing to do with the Respondent.
Findings and Conclusions:
Before considering the merits of the Complainant’s complaints, it is first necessary to consider the legislation applicable in this regard, which is the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131/2003), more commonly referred to as the TUPE Regulations.
Having carefully reviewed the submissions made on behalf of the Complainant, it appears from the evidence that her view and that of her Trade Union, has from the outset, been that the Regulations do apply and that the obligations contained therein are the responsibility of the Respondent, who are the transferee in this regard. However, in a context where neither the transferor nor the transferee have accepted responsibility for the Complainant’s situation, it is perhaps not unreasonable that separate complaints have been made against both employers.
The views expressed by Company A in their submission, mirror those held by the Complainant and her Trade Union. Company A was strong in their contention that the regulations apply and, therefore, the responsibility for the Complainant’s situation rests with the Respondent, who are the transferee.
An equally strong and contradictory submission was made by the Respondent, the central premise of which is the contention that they have no obligations under the Regulations, as the contract is with the HSE and they have no legal relationship, contractual or otherwise with the Respondent.
Against that background, the key issue is whether or not the provisions of the TUPE Regulations apply in the within case. Regulation 3 of S.I. No. 131/2003 sets out the circumstances in which the Regulations apply. It states as follows:
“(1) 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.
(2) Subject to this Regulation, in these Regulations -
“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.
(3) These Regulations shall apply to public and private undertakings engaged in economic activities whether or not they are operating for gain.
(4) An administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities is not a transfer for the purposes of these Regulations.
(5) These Regulations shall not apply to sea-going vessels”.
The central purpose of the Regulation is to protect the rights of employees in circumstances where the business, or part of the business, in which they are employed is transferred from one employer to another. In circumstances where the Regulations apply the key objective is that the rights and obligations in respect of contracts of employment in the transferring business are transferred to the new owners.
It is clear from Regulation 4 above that there must be a “transfer of undertaking” in order for TUPE to apply and where such a transfer exists, it triggers the rights and obligations of the Regulations. The 1986 European Court of Justice (ECJ) case Spijkers v Gebroe Benedik Abbatoir CV gave rise to a set of criteria which provide guidance when it comes to deciding whether or not a transfer of undertaking 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 ?
It is clear from the Spijkers’ ruling that the overriding objective is to protect workers in a business which is transferred. Consequently, it is necessary, when deciding whether or not a transfer is taking place, to consider all of the relevant circumstances and factors.
In the within case, having carefully reviewed all of the evidence adduced, I am satisfied that the undertaking in question, i.e. the cleaning services for the Health Centre, had and has an ongoing life of its own. I am further satisfied that, post the change of contractor, the entity has retained its identity and that the activities being carried on post transfer are identical to those carried out under the previous contractor. It is also clear from the evidence that there was no break or interruption in the activity as a result of the transfer to the new contractor.
However, notwithstanding the above assessment, which is made in the light of the “ Spijkers Criteria”, it is necessary to consider the impact of further case law which has significant relevance to the claims under review. Probably the most significant of the post Spijkers cases is that referred to as the “Suzen Case”[Ayes Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservices (1997)]. In this case the ECJ held as follows:
“The directive is to be interpreted as meaning that the directive does not apply to a situation in which a person who had entrusted the cleaning of his premises to a first undertaking terminates his contract with the latter and, for the performance of similar work, enters into a new contract with a second undertaking, if there is no concomitant transfer from one undertaking to the other of significant tangible or intangible assets or taking over by the new employer of a major part of the workforce, in terms of their numbers and skills, assigned by his predecessor to the performance of the contract”.
The impact of the ECJ’s findings in the Suzen Case is that a contract for a service provided by a previous contractor being transferred to a new contractor does not necessarily mean that an economic entity has been transferred. The findings in the Suzen Case have generally been applied by the various statutory bodies in this country when considering claims under the Regulations. Having carefully reviewed the relevant case law, in this regard, I find the Employment Appeals Tribunal (EAT) determination in the case of Cannon v Noonan Cleaning Company Ltd and CPS Cleaning Services Ltd [1998 9 ELR 153] to be the most relevant and instructive in this regard, due to its similarity with the details of the within case.
In the Cannon case the EAT found as follows:
“The Tribunal must consider all the factors characterising the undertaking in question. The nature of this undertaking is that of cleaning. The equipment used by Noonans was not transferred to the new contractor. The same premises had to be cleaned by both contractors and each were under the control of the Department of Justice. The staff did not transfer when the contract was withdrawn and given to the new contractor. There was no goodwill as such to be transferred. The undertaking could be said to have retained its identity. While there was no apparent transfer of tangible assets however it could be said that there was a transfer of intangible assets, i.e. the likely profit to be made from the contract. This must have existed, otherwise why was there competition for the contract?
….Also the possible transfer of the intangible profit margin is not of sufficient significance of itself to be a major factor in the transfer. It follows then that this transfer is not caught by the directive as it does not constitute a transfer of undertaking. “
Similar outcomes to that in the Cannon case can be found in Shiels and Others v Noonan and ISS Contract Cleaners [UD461/97]and Dignan v Sheehan Security Corporation. [2005 16 E.L.R. 22]
The common determining factor in each of these cases appears to be the lack of transfer of significant tangible or intangible assets leading to the conclusion that no transfer of undertaking has taken place.
Taking all of the above into consideration and having carefully considered all of the evidence adduced and submissions made, I find that, given the similarities between the Cannon case and the within case and viewed in the context of the Suzen Case, the transfer of the contract from Company A to the Respondent does not constitute a transfer of undertaking.
Therefore, I find that the obligations in relation to the Complainant’s contract of employment remains with Company A. Consequently, it follows that the Complainant claims against the Respondent are not well-founded and must fail.
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.
Section 39 of the Redundancy Payments Acts 1967 – 2012 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.
Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I set out below my findings in relation to the Complainant’s complaints as follows:
CA-00020526-001 - Transfer of Undertakings claim
I find that the transfer of the contract, under which the Complainant was employed by Company A does not constitute a transfer of undertaking under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003/S.I. No. 131 of 2003. Consequently, the obligations in relation to the Complainant’s contract of employment and terms of conditions of employment remain the responsibility of Company A and do not transfer to the Respondent.
CA-00020526-002 - Redundancy Payments claim
The Complainant’s claim against the Respondent for redundancy is not well founded and is, therefore, rejected.
CA-00020526-003 - Minimum Notice
The Complainant’s claim for minimum notice is not well founded and is, therefore, rejected.
Dated: 16th December 2019
Workplace Relations Commission Adjudication Officer: Ray Flaherty
Transfer of Undertaking