RPD211

1.An appeal of an Adjudication Officer's Decision No(s)ADJ-00020568 CA-00027130-001

BACKGROUND:

2.The Employer appealed the Decision of the Adjudication Officer to the Labour Court in accordance with the Redundancy Payments Acts 1967 to 2014. A Labour Court hearing took place in a virtual setting on 25 November 2020. The following is the Determination of the Court:-

DETERMINATION:

This is an appeal by Summeridge Ltd against an Adjudication Officer’s Decision given under the Redundancy Payments Act 1967(the Act). The Adjudication Officer held that the claim by the Complainant for redundancy under the Act was well founded. In line with the normal practice of the Court, the parties are referred to in this Determination as they were at first instance. Hence, Mr Derek Byrne is referred to as the Complainant and Summeridge Ltd is referred to as the Respondent.

Background

The Complainant commenced employment on the 27^thJanuary 2015 as a bartender with the Towey Hotel & Bar Group in what was then ‘The Arc Bar & Restaurant’ in Liffey Valley, Dublin 22. In 2017 the Complainant’s employment was transferred to the Respondent under a transfer of undertakings. He continued working in the role of bartender in the venue which operated under the name ‘The Elms’.

Parties Submissions.

On the 27^thDecember 2018 the Complainant received a letter from the Respondent advising that from Sunday the 30^thDecember 2018 they were closing the premises on a temporary basis. The need to close arose because the Respondent was experiencing difficulty in getting insurance for the premises and could not operate without same.

The Complainant was informed that he would be placed on temporary layoff for four months with effect from 31/12/2018 and that the period might be extended. Enclosed with the letter, was an RP9 form which indicated that the temporary lay of was effective from 31/12/2018. At the time of the Labour Court hearing 25th November 2020 the venue remained closed.

The Complainant by email dated 28th January 2019 was offered a position in the Harbour Master Bar Dublin 1 commencing on the 4^thFebruary 2019. The email stated that he was being offered the position on his existing terms and conditions but there would be an amendment to his contract which would now show his normal place of work as being the Harbour Masters Bar.

The email went on to say that the transfer would be until such time as the Elms reopened and that it was hoped it would reopen in three months. The Complainant responded by email of the 8^thFebruary 2019 declining the job in the Harbour Masters on the basis, that such a transfer would cause him to incur additional travel expense and an increase in his travel time.

The Complainant in that email raised with the Respondent the fact that he was aware the ‘Elms’ premises was up for letting and that appeared to contradict what was set out on the RP9 form. The Complainant advised the Respondent that he now intended to claim redundancy as it was clear to him that his role in the Elms was now gone.

On the 11^thFebruary 2019 the Respondent sent a letter to all staff setting out that they were still seeking to secure public liability insurance. The letter indicated that they were also looking at other alternatives such as transferring the lease to a body that could obtain the required insurance.

The letter went on to inform the employees that the temporary closure might extend beyond the original four months envisaged. The letter indicated that the Respondent was also looking at temporary and or permanent transfers to enable the employees return to work.

On the 13^thFebruary 2019 the Complainant received a response to his email of 8^thFebruary 2019 noting his concerns in respect of the proposed transfer to the Harbour Master Bar. The letter stated that the Respondent was looking at possible solutions to the issues the Complainant had raised.

Later the same day 13^thFebruary 2019 the Respondent wrote to the Complainant in respect of the proposed transfer to the Harbour Master Bar offering a permanent move. The letter indicated that if he was to accept a permanent transfer to the Harbour Master Bar a distance of 12.6 km from his previous employment then the Respondent was prepared to make a single payment of €500 gross and to give him aone-4-allgift voucher to the value of €500.The Complainant by email of the same date 13^thFebruary 2019 advised the Respondent that he had completed RP9 section B and was claiming statutory redundancy with effect from 22^ndFebruary 2019.

The Respondent by email and registered post on the 19^thFebruary 2019 wrote to the Complainant acknowledging that RP9 part B had been served on the company on 14 February 2019. The Respondent returned the RP9 form with part C completed on the 18^thFebruary 2019.

In the attached letter the Respondent set out that they were in a position to offer him employment with effect from week starting 4^thMarch 2019 for a period of no less than thirteen consecutive weeks on his existing terms and conditions of employment. The only change would be his place of work which would change from The Elms in Liffey Valley, to the Harbour Master Bar in Dublin 1.

The letter stated that his temporary layoff which commenced on Monday 31^stDecember 2018 would end with the last day of layoff being the 3^rdMarch 2019. The letter also noted that in line with section three of his contract which he had signed on 1^stJune 2017 his normal place of work was being transferred to the Harbour Master Bar with effect from 4^thMarch 2019.

On the 20^thFebruary 2019 by email the Complainant advised that for reasons previously stated he was not in a position to transfer his employment to the Harbour Master Bar and that he now firmly believed that the lay-off was not temporary in nature .The Complainant informed the Respondent that he intended to submit an RP50 form to advance his claim for redundancy payment.

On the 22^ndFebruary 2019 the Respondent issued a letter to all staff giving an update in respect of the Elms, including the fact that there had been a sewage leak which had caused significant damage to fixture and fittings on the premises. The impact of this meant that the temporary closure would now need to be extended by at least a further two months with a targeted opening date of sometime in July 2019.

On the 23^rdFebruary 2019 the Respondent acknowledged receipt of the Complainants email of 20^thFebruary 2019. In their response they set out the steps the Respondent had and were taking to resolve the situation. The Respondent re-affirmed that a redundancy situation did not exist and confirmed that there was a post in the Harbour Masters Bar available for him. The letter went on to say”the company requires confirmation within 7 days and no later than 18.00 on Saturday 2^ndMarch 2019 that you either;

Accept the offer of re-deployment made on 13^thFebruary 2019(including once off payments and returning a signed and dates copy of the amendment supplied with the offer),or

Accept the offer of continued employment made on the 19^thFebruary 2019 as set out in your existing terms and conditions of employment on the return of your RP9 part c or,

Decline both offers of continued employment and remain on temporary layoff”

On the 25^thFebruary 2019 the complainant sent a letter confirming his claim for redundancy and enclosing a form RP77. By registered post the Respondent sent a letter on the 1st March 2019 returning the form RP77 and advising that a post was available for the Complainant in the Harbour Master Bar and if he did not take up that post he would remain on temporary layoff until the Elms reopened.

The above factual matrix was accepted by both parties. The parties also agreed that the Complainant met the requirements set out in section 4 of the Act in that he had the requisite service and was employed in an employment which is insurable for all benefits under the Social Welfare (Consolidation) Act 2005.

In addition to relying on the provisions of the Act the Respondent also sought to rely on a clause in the employment contract which stated “Your normal place of work will be The Elms. You might be required to work at other Sean Doyle Group locations or temporary venues as temporary transfers or as part of normal duties. You may be transferred ,through instruction, without amendment to your terms of employment.”The Respondent confirmed to the Court that it had two venues in Dublin and three outside Dublin.

It was the Respondent’s submission that the contract contained a term that said if a Worker was transferred to another location or venue they could after four weeks in the new location request to be transferred back. The Court could not locate such a term in the contract provided to the Court by the Respondent. It was the Respondent’s submission that the clause in a general way was enforceable, but they accepted it could fall foul of the general legal principles around mobility clauses.

The Complainant submitted that the clause was too vague and to wide and therefore could not be relied on. If the clause was found to be valid it would mean that an employee could be transferred on instruction to work in another county without any engagement with the employee or consideration of the impact of such a move on the employee.

Both parties sought to rely on theKellog Brown &Root (UK) LTD v (1)Fitton and (2)Ewer (Appeal no. UKEAT/0206/16/BAcase where the employer had sought to rely on a mobility clause when deciding to close one of its office. In that case the tribunal deemed the instruction to move to be unreasonable and held that the mobility clause was overly broad and lacked certainty. The Tribunal set out a number of considerations that should be taken into account by an Employer seeking to rely on a mobility clause in the contract.

Parties Evidence to the Court

 In order to place staff on lay-off section 11 of the Act requires that “it is reasonable in the circumstances for the Employer to believe that the cessation of work will not be permanent.”
The Complainant submits that it was not reasonable in this case for the Respondent to believe that the closure would not be permanent.

The Complainant submitted that prior to the closure the heating system had broken down and not been replaced this led to a drop off in customers. It was also submitted that the crockery was not replaced and security on the door was ceased. The Complainant also pointed out that Google maps at the time showed that the ‘Elms’ was permanently closed. The Complainant submitted that this all pointed to an intention on the Respondent’s part to run the business down and then close it.

 The Respondent submitted that the closure arose from the difficulty in acquiring public liability insurance at that point in time . Their broker advised them that a number of possible claims that had been identified would be statute barred over the next few months and that should resolve the issue for them . These were not actual claims that were in being but potential claims. Mr Doyle one of the Directors of the Respondent in his evidence to the Court advised that they had taken over the business in 2017, at that time some but not all outstanding claims had been disclosed.

While they had managed to get insurance in 2018 it became an issue for 2019. They had tried a number of insurance companies including some based in England but without success. Mr Doyle drew the Courts attention to a letter from their broker dated 21^stDecember 2018 which advised that “we approached all our Domestic and London Markets with the Risk and unfortunately due to the historical claims experience we have been unable to obtain a quotation”.Mr Doyle submitted that in respect of the crockery he was not aware of any decision not to replace same, that would be at the discretion of the manager.

He acknowledged that the heating system had failed in October 2018 and that they had installed temporary heaters, but it was his evidence that this did not impact on their customer numbers and there was no reduction in takings during that period. In respect of the removal of the security guard from the door it was his evidence that they were changing the nature of the business away from being bar oriented to a family bar and restaurant and therefore, security was not required. Mr Doyle is his evidence informed the Court that the Respondent had made substantial investment in the property since it had acquired it .

 Mr Kelliher the Group Safety Advisor for the Respondent, in his evidence submitted that the Security Officer was no longer required. Having a security presence, it was only ever a temporary arrangement that had been put in place arising from a specific incident. In respect of the heating system it was his evidence that repairing the heating system would be a big job.

The Respondent had been advised that there was difficulty getting parts because the system was old and that they would be better getting a new system. The work on the heating needed to be done on the roof and it was felt that it would be more appropriate to do it in the New Year. In respect of the social media concerns the ‘Elms’ website did not say it was closed and the Respondent had not engaged with Google in respect of what was on Google maps.

 It is not disputed that the Complainant was offered a transfer to the Harbour Masters Bar Dublin 1 on his existing terms and conditions. The Complainant in his evidence to the Court informed the Court that he lived about two km from the Elms Pub and that he could walk or drive to work in a matter of minutes. There was also free carparking available. His normal shifts were 10am to 6pm or 6pm to 12 or 2.30am if there was late opening. He worked 5/7 days and earned between €320 and €340 a week.

If he moved to the Harbour Master Bar it could take up to 50 min to drive in and carparking would cost €15 a day. The other option he looked at was driving to Bluebell in Inchicore and getting the Luas. The Luas takes 45 to 50 minutes plus the time to drive from where he lives to Bluebell. It was his evidence that either way he was looking at an additional two hours a day commute and either parking or Luas charges. On the days he was on late shift the Luas would not be an option so he would have to drive and pay carparking charges.

It was the Complainant’s evidence when he weighted everything up it was not practical or cost effective for him to avail of the transfer particularly with the low wage he was on. He accepted that the Respondent had made an offer of €500 plus a €500 voucher. However, if he made the move, he would sustain the cost of the commute in time and money on an ongoing basis this would have a direct impact on his disposable income and on his low income he could not afford it.

 Applicable law

The Redundancy Payments Act 1967 states as follows;
Section 11. Lay-off and short-time

 (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
(b) the employer gives notice to that effect to the employee prior to the cessation,
that cessation of employment shall be regarded for the purposes of this Act as lay-off.
[(2) Where—
(a) for any week an employee's remuneration is less than one-half of his normal weekly remuneration or his hours of work are reduced to less than one-half of his normal weekly hours,
(b) the reduction in remuneration or hours of work is caused by a diminution either in the work provided for the employee by his employer or in other work of a kind which under his contract the employee is employed to do,
(c) it is reasonable in the circumstances for the employer to believe that the diminution in work will not be permanent and he gives notice to that effect to the employee prior to the reduction in remuneration or hours of work,
the employee shall, for the purposes of this Part, be taken to be kept on short-time for that week.]
[(3) Where by reason of a diminution in the work provided for an employee by his employer (being work of a kind which under his contract the employee is employed to do) the employee's reduced hours of work for any week are less than one-half of his normal weekly hours, he shall for the purposes of this Part be taken to be kept on short-time for that week].

Section 12. Right to redundancy payment by reason of lay-off or short-time
(1) An employee shall not be entitled to redundancy payment by reason of having been laid off or kept on short-time unless—
(a) he has been laid off or kept on short-time for four or more consecutive weeks or, within a period of thirteen weeks, for a series of six or more weeks of which not more than three were consecutive, and
(b) after the expiry of the relevant period of lay-off or short-time mentioned in paragraph (a) and not later than four weeks after the cessation of the lay-off or short-time, he gives to his employer notice (in this Part referred to as a notice of intention to claim) in writing of his intention to claim redundancy payment in respect of lay-off or short-time.
(2) Where, after the expiry of the relevant period of lay-off or short-time mentioned in subsection (1)(a) and not later than four weeks after the cessation of the lay-off or short-time, an employee to whom that subsection applies, in lieu of giving to his employer a notice of intention to claim, terminates his contract of employment either by giving him the notice thereby required or, if none is so required, by giving him not less than one week's notice in writing of intention to terminate the contract, the notice so given shall, for the purposes of this Part and of Schedule 2, be deemed to be a notice of intention to claim given in writing to the employer by the employee on the date on which the notice is actually given.]

Section 13. Right of employer to give counter-notice
(1) Subject to subsection (2), an employee shall not be entitled to a redundancy payment in pursuance of a notice of intention to claim if, on the date of service of that notice, it was reasonably to be expected that the employee (if he continued to be employed by the same employer) would, not later than four weeks after that date, enter upon a period of employment of not less than thirteen weeks during which he would not be laid off or kept on short-time for any week.
(2) Subsection (1) shall not apply unless, within seven days after the service of the notice of intention to claim, the employer gives to the employee notice (in this Part referred to as a counter-notice) in writing that he will contest any liability to pay to him a redundancy payment in pursuance of the notice of intention to claim.
(3) If, in a case where an employee gives notice of intention to claim and the employer gives a counter-notice, the employee continues or has continued, during the next four weeks after the date of service of the notice of intention to claim, to be employed by the same employer, and he is or has been laid off or kept on short-time for each of those weeks, it shall be conclusively presumed that the condition specified in subsection (1) was not fulfilled.
(4) For the purposes of section 12 and for the purposes of subsection (3)—
(a) it is immaterial whether a series of weeks (whether it is four weeks, or four or more weeks, or six or more weeks) consists wholly of weeks for which the employee is laid off or wholly of weeks for which he is kept on short-time or partly of the one and partly of the other;
(b) no account shall be taken of any week for which an employee is laid off or kept on short-time where the lay-off or short-time is wholly or mainly attributable to a strike or a lock-out, whether the strike or lock-out is in the trade or industry in which the employee is employed or not and whether it is in the State or elsewhere.
Section 15. Disentitlement to redundancy payment for refusal to accept alternative employment
(1) An employee […] shall not be entitled to a redundancy payment if […]
(a) his employer has offered to renew that employee's contract of employment or to re-engage him under a new contract of employment,
(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would not differ from the corresponding provisions of the contract in force immediately before [the termination of his contract],
(c) the renewal or re-engagement would take effect on or before the date of [the termination of his contract], and
(d) he has unreasonably refused the offer.
(2) An employee […] shall not be entitled to a redundancy payment if […]
(a) his employer has made to him in writing an offer to renew the employee's contract of employment or to re-engage him under a new contract of employment,
(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before [the termination of his contract].
(c) the offer constitutes an offer of suitable employment in relation to the employee,
(d) the renewal or re-engagement would take effect not later than four weeks after the date of [the termination of his contract], and
(e) he has unreasonably refused the offer.
(2A) Where an employee who has been offered suitable employment and has carried out, for a period of not more than four weeks, the duties of that employment, refuses the offer, the temporary acceptance of that employment shall not solely constitute an unreasonable refusal for the purposes of this section.
[(2B) Where—
(a) an employee's remuneration is reduced substantially but not to less than one-half of his normal weekly remuneration, or his hours of work are reduced substantially but not to less than one-half of his normal weekly hours, and
(b) the employee temporarily accepts the reduction in remuneration or hours of work and indicates his acceptance to his employer, such a temporary acceptance for a period not exceeding 52 weeks shall not be taken to be an acceptance by the employee of an offer of suitable employment in relation to him
[(3) Where a person who is entitled to a weekly payment has unreasonably refused suitable employment offered or approved by An tSeirbhís Oideachais Lean�naigh agus Scileanna, that person shall be disqualified from receiving any further payments.

Discussion and Decision

It is clear to the Court from the submissions made prior to and during the hearing and the exchange of letters commencing on the 19^thFebruary 2019 up to and including the 25^thFebruary 2019 that while the Respondent raised the issue of the clause in the contract, they never actually sought to enforce it. An instruction to comply with same was not issued, instead it was listed as one of three options from which the Complainant could choose as contained in the letter of the 23^rdof March 2019 and re-iterated in letter of 1^stMarch 2019. Therefore, the Court does not need to consider this issue further.

The Court having considered the submissions and the evidence of the parties in respect of section 11 of the Act finds on the balance of probabilities that at the time off the layoff it was reasonable for the Respondent to believe that the cessation of employment would not be permanent.

It was accepted by both parties that the requirements under sections 12 and 13 of the Act in respect of the serving of notice and counter notice were met. In those circumstances the issue that remains to be considered by the Court is whether in line with section 15 of the Act the refusal by the Complainant to accept the offer of alternative work in a different location was unreasonable.

In determining the final aspect of the within appeal, the Court is required to consider two issues: (i) the suitability of the offer of alternative employment made by the Respondent to the Complainant; and (ii) whether the Complainant’s decision to refuse such an offer was reasonable in all the circumstances. InCambridge & District Co-operative Society Ltd v Ruse[1993] I.R.L.R. 156 the English EAT, when considering the similarly worded provisions of the British legislation, said, at page 158, that the question of “the suitability of the employment is an objective matter, whereas the reasonableness of the employee's refusal depends on factors personal to him and is a subjective matter to be considered from the employee's point of view”.

The Court accepts that the Respondent acted at all times in a bone fide manner in their attempts to retain the Complainant in the Respondent’s employment by endeavouring to offer an element of compensation for the inconvenience of transferring to a new location. To that extent, the Court determines that the Respondent, from an objective perspective, satisfies the first leg of the test set out by the English EAT inCambridge.

However, having considered the Complainant’s evidence, the Court is equally of the view that the change involved in moving from working in Liffey Valley where the Complainant could get to and from work in a matters of minutes with no additional costs, to working in a city centre location with the additional commute times, related costs and the difficulty of getting home after his late shifts when public transport would not be available, is a change of such magnitude, when considered from the Complainant’s subjective perspective, that the Court has to find that his refusal to accept the move to the Harbour Master Bar was not unreasonable.

There was no job available for the Complainant in his established place of work. The alternative offered to him would have necessitated an unreasonable additional daily commute and costs for him. In all the circumstances, the Court, therefore, finds that the Complainant is entitled to a statutory redundancy payment based on the following criteria:

Commencement: 27^thJanuary 2015

Date of dismissal: 13^thMarch 2019 (being 4 weeks from the date that the Complainant served the RP9 form)

Gross average weekly wage: €330

The Court so determines.

	Signed on behalf of the Labour Court
	Louise O'Donnell
DC	______________________
7 January 2021	Deputy Chairman