Complainant

Respondent

Parties

Olive  Dalton

Mugshot Cafe Ayrfield Limited

Representatives

Self

Bill Canning, Sentric Solutions

Act

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)

CA-00061264-001

29/01/2024

The Complainant commenced employment with the Respondent on 01/04/2023.  She was paid €1,150 per fortnight and worked 45 hours per week.  The Respondent sold the business in December 2023 and the new owners took over on 08/01/2024.   The Complainant was not happy that she did not have written terms and conditions and an employment contract.  She approached the new owner in relation to this and when it was not forthcoming, she resigned on 22/01/2024.  She submitted her complaint to the WRC on 29/01/2024.  The Respondent submits that the Complainant resigned of her own accord she was treated correctly and respectfully during the transfer of ownership.

The Complainant gave evidence on affirmation.  She  outlined that she started working for the Respondent on 01/04/2023 although she had previously worked there.  She was the only employee. Sometime before Christmas 2023 she was informed that the business had been sold.  She was not given any information in relation to the sale of the business, and she submits that this is a contravention of the Transfer of Undertakings legislation.  The Complainant gave evidence that she was not provided with a contract of employment by the previous owner, and she did not have any written terms and conditions.

The Complainant gave evidence that she met the new owners on 02/01/2024 and she followed this up with a detailed e mail requesting clarifications in relation to the hours she had accrued and carried forward and the number of holidays that were carried over.  She also outlined her hours of employment and indicated her availability.  The Complainant also noted that the minimum wage was now €12.70 since 01/01/2024 and as “I do the work of two people while working in Mugshot, which would work out at over €25.00 per hour, I think I am worth €18.00 per hour”.  The Complainant noted that she was due a pay review at the end of January 2024.

The Complainant outlined in her letter that she did not have a contract of employment while working for the previous owner and she requested that this be in place before she resumed work on 08/01/2024.

The Complainant provided the hearing with a detailed written chronology and timeline of her dealings with the Respondent.  On 20/01/2024 she requested that her contract of employment would be issued that day as she had a job offer from another shop and she needed to make a decision by 5.00pm. She was informed that she would have this on Monday (23/01/24).  On 22/01/2024 the Complainant submitted her resignation to the Respondent and confirmed that her last working day would be 26/01/2023 at 3.00pm.

The Complainant gave evidence that her complaint is that the Respondent did not follow the rules in relation to the transfer of the business.

The Complainant was cross examined by Mr Bill Canning on behalf of the Respondent.  The Complainant confirmed that she was aware that there was a change of directors on 18/12/2023 and that was the date of the transfer.  The Complainant stated that she met Mr Thomas on 22/12/2023.  She stated that she has  discovered that the Repondent has hired two people to replace her and issued them with contracts of employment.

It was put to the Complainant that there was no evidence that she would have been required to have a three-month probation as Mr Thomas needed her to stay on.  The Complainant stated that she got that impression from Mr Thomas and understood that he was told this by his solicitor. 

The Complainant confirmed that she had never had a contract from the previous owner and that her start date was 01/04/2023.  The Complainant was asked why she did not ask the previous owner for a contract, and she said that she did on one occasion.  The Complainant was asked why she wanted a contract when Mr Thomas took over the business given that she was happy working without one prior to that.  The Complainant stated that as she “was working my butt off”  she needed a contract so she knew what her conditions were so that her working conditions would be sorted.

It was put to the Complainant that when the business opened after Christmas she worked closely with Mr Thomas.  She confirmed that she did as it was her job, and she gives 100% to her job.  The Complainant was asked how the offer of a new job came about.  She explained that she was aware the previous owner was trying to sell the business and she did not know if the business would reopen so she started looking for a job.  The Complainant stated that when she was offered the job the person needed to know if she was interested in taking it up.

It was put to the Complainant that she sent a message from Mr Thomas saying that he was waiting on his solicitor to sort out the contract for him.  The Complainant stated that she was asking for a contract for three weeks and the Respondent had no interest in sorting it out.  The Complainant stated that all she needed to know was the hours she was expected to work and the pay she would receive.  It was put to the Complainant that she was told that the contract would be available on the next working day, and she stated that she did not receive it. It was put to the Complainant that that it made no sense that the Respondent did not want her to stay on given that she was the only person who had the most knowledge about how it was run.  She stated that she was expected to do the work of two people and she had hoped that this would be sorted in a contract.

In a closing submission the Complainant stated that she was working for the company and had no contract of employment.  When the company changed hands, she still had no contract and all she wanted to know was what was going on.

When she handed in her notice on 22/01/2024 she met another man, and she did not know him, and he stated that he owned the company.  The Complainant stated that she had to contact her husband to come to the Respondent’s premises to stop the Respondent from getting her to change her mind and harassing her to remain on.  Her issue was that the business changed owners and she was not provided with any details in relation to having more predictable and secure working conditions.

The Respondent submits that the Complainant transferred to the new company on 08/01/2022 and decided to resign on 22/01/2024 despite the expressed wishes and objections from the new directors.

The negotiations in relation to buying the business commenced on 19/11/2023 and this was done through an agent.  The business was to be purchased as a “going concern”.  A holding deposit was paid on 13/12/2023.  The Respondent met with the Complainant on 22/12/2023 and introduced himself.  Later that day the purchase was finalised with the option to take over the running of the business on 08/01/2024.  The Christmas holidays began on 22/12/2023 and the reopening date was scheduled for 08/01/2024.

The Respondent met with the Complainant and her husband on 03/01/2024 in relation to the large pay increase she was seeking.  She maintained that she was paid €14.00 per hour and was worth twice that and was looking for €25.00 per hour but would settle for €18.00 per hour.  The previous owner paid the Complainant a cash bonus of €110 per week and the Complainant sought a contract of employment five days before the opening.  The Respondent explained that as she was not issued with a contract by the previous owner it would take him a few weeks to arrange this but he would expedite the process.

The Complainant returned to work on 08/01/2024 and resigned on 22/01/2024 stating that she done so as she had no contract of employment and refused to work for the new owner.

The Respondent’s business partner returned from annual leave and met with the Complainant and her husband on 23/12/2024 and pleaded with her to stay in their employment.

Mr Negul Thomas gave evidence on affirmation on behalf of the Respondent.  He confirmed that he met the Complainant on 22/12/2023.  He introduced himself as the person would be taking over the running of the business and he asked her if she was happy to continue to work in the business and she confirmed that she was.

Mr Thomas also gave evidence that as part of the transfer he was aware that the Complainant was paid €14.00 per hour, and she was due to have a pay increase in January 2024.  Mr Thomas outlined that he received a letter from the Complainant seeking a pay increase €25.00 per hour but she would settle for €18.00 per hour. 

Mr Thomas stated that the main issue the Complainant had was that she did not have a contract of employment.   Mr Thomas gave evidence that the business was due to open on 08/01/2024 and it would be impossible to have a contract ready.  He had to liaise with his legal advisor, and he confirmed that he spoke with him and asked him to draft a contract.  He also spoke to his accountant in relation to payments.

The Complainant left her employment, and this had a severe impact on the Respondent’s ability to continue the business.  The Complainant’s position was filled on 29/01/2024 following a Facebook advertisement and so the Complainant’s position was not made redundant.    The Respondent also submits that at no point was the Complainant dismissed constructively or otherwise.

It was submitted on behalf of the Respondent that the Complainant was treated correctly and respectfully during the transfer of ownership.  The Complainant did not receive a contract of employment from the previous owner and her new employer, the Respondent, gave her assurances that this would be rectified as soon as practicable.   The Respondent followed the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, (S.I. of 2003) and the Complainant’s assertion that they did not do so is misconceived.

The Complainant resigned during negotiations in relation to her contract and her remuneration package.  She did not give adequate notice to the Respondent.  The Respondent also required more time to investigate the Complainant’s assertion that she was in receipt of a weekly cash payment of €110 from her previous employer as this was not included in PAYE or PRSI contributions and therefore may give rise to tax implications.

There was no deliberate delay in organising the contract.  The transfer coincided with the Christmas holiday period and the Respondent needed time to seek legal advice on the contract.  The Respondent did discuss the transfer with the Complainant on 22/12/2023 and this was within the 30-day period.

The Respondent did everything they could to keep the Complainant in employment, but she ultimately decided to resign and take up another job.

This is a 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)

The Law:

Regulation 4 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, S.I. 131/2003 (the “Regulations”) states:

“(1) The transferor’s rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.

(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 transferor under that agreement until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.”

The issue before me is whether the Complainant was retained on less favourable terms and conditions of employment, to those she held while in the employment of her previous employer, following the transfer of her employment to the Respondent.

While there is a subjective element that must be considered when adjudicating upon what is “less favourable”, the objective test takes precedence. The Complainant must therefore demonstrate how a change could be considered a breach of a fundamental term of her contract of employment.

I am satisfied that a Transfer of Undertaking took place and there is no dispute in relation to his fact.  

In investigating this complaint, I must decide if the Transferor honoured the terms of S.I. No. 131/2003 which state at Regulation 4 (1) “The transferor’s rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.”  

Regulation 8 also places an obligation on the transferor to inform employees of the date of proposed date of the transfer, the reasons for the transfer, the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them.

At the hearing the Respondent confirmed that the transfer took place on 23/12/2023.  The Respondent also confirmed that the Complainant was a permanent member of staff.  The Complainant confirmed that she was made aware by the previous owner that the business was up for sale.  The Complainant’s evidence was that because of the uncertainty about this she commenced looking for alternative employment.

When the transfer took place, she immediately sought written confirmation of her conditions of employment in the form of a contract of employment.  I accept the Respondent’s evidence that they were in the process of organising this and the delay was because it was the post-Christmas period, and they were waiting on their solicitor to finalise this. 

I consider it unreasonable for the Complainant to have resigned without giving the Respondent a reasonable period of time to finalise matters.  I am satisfied that the Respondent indicated that they did want the Complainant to remain on in their employment and that the matters she sought were in the process of being sorted.  This did not constitute less favourable treatment or a diminution of any implied terms and conditions of employment.  On the contrary, if the complainant waited until she received the contract this would have removed any uncertainty she had in relation to her hours and pay and in circumstances where it was not disputed that the lack of clarity was a feature of her employment with the previous owner of the business.

Having considered the evidence adduced, I am satisfied that the Complainant’s role continued after the transfer and that her duties and role were substantially the same.  I find that the Complainant has not demonstrated that she was retained on any less favourable terms and conditions of employment.  The Complainant was waiting for confirmation of what those were given that she was not issued with these by the previous owner.

I am satisfied that the Complainant was not retained on less favourable terms and conditions of employment following the transfer.  In the circumstances, I find that the Respondent has not breached the regulations and this complaint is not well founded.

I have decided that the Complainant was not retained on less favourable terms and conditions of employment following the transfer on 23/12/2023.  I have decided that the Respondent has not breached the regulations and this complaint is not well founded.

Transfer of undertakings.  Terms and conditions of employment.