RPD2510

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00045621 (CA-00056354-001)

BACKGROUND:

The Worker appealed the Decision of the Adjudication Officer to the Labour Court on 30 January 2025

in accordance with the Redundancy Payments Acts 1967 to 2014. A Labour Court hearing took place on 23 April 2025.

 The following is the Decision of the Court:

DECISION:

This is an appeal by Barry Ryan against the decision of an Adjudication Officer made under the Redundancy Payments Act 1967 (‘the Act’) against his former employer Dhl Supply Chain (Ireland) Limited. The Adjudication Officer did not uphold his complaint.

The parties are referred to in this Determination below as they were at first instance. Hence, Barry Ryan is referred to as “the Complainant” and Dhl Supply Chain (Ireland) Limited is referred to as “the Respondent”.

Background

On 30 June 1997, the Complainant commenced employment with another entity (referred hereafter as “Company X”). His employment transferred to the Respondent company by way of a transfer of undertaking on 1 September 2009. The Complainant worked for the Respondent as an Operations Support Supervisor managing the “Company X” contract.

The Respondent’s contract to provide services to “Company X” terminated on 31 August 2022.

In advance of that date, the Respondent notified the Complainant that his employment would transfer, by way of a transfer of undertakings, to a third-party entity (“Company Y”) that successfully tendered for the contract to provide services to “Company X”.

“Company Y” disputed that a transfer of undertakings process was applicable.

The Complainant’s contends that he is entitled to a statutory redundancy payment in circumstances where his employment with the Respondent ended on 31 August 2022. 

The Respondent refutes that any entitlement to redundancy arises in circumstances where a transfer of undertakings arose by operation of the law and the Complainant’s employment transferred to “Company Y” on 1 September 2022.

Summary of the Complainant’s position

The Complainant is entitled to a statutory redundancy payment as he was dismissed from his employment with the Respondent company. The Respondent severed its contract providing services to “Company X”. Therefore, an entitlement to statutory redundancy automatically arises. 

The Complainant was led to believe that a transfer of undertakings arose. He wanted to transfer his employment to the third party and preserve his pension and employment service. The position of the third party - “Company Y” – is that no transfer of undertakings arose. The Complainant submits that there was no legal transfer of employment and no evidence of a transfer of undertakings.

The Complainant was offered an alternative role in the Respondent company, which was not a suitable alternative role. The Complainant was told to accept the suitable alternative role or to transfer employment to the third party.

Summary of the Respondent’s position

The Complainant’s employment with the Respondent transferred to a third-party entity by way of a Transfer of Undertaking on 1 September 2022 following an unsuccessful tendering process, in which the Respondent was not awarded the contract to provide services to “Company X”. His role was not subject to redundancy.

The continuation of the provision of the services by the third-party entity constitutes a business transfer for the purposes of the European Communities (Protection of Employees’ Rights on Transfer Undertakings) Regulations 2003 (The Regulations).

The Complainant was notified of the termination of the contract with “Company X” by letter on 26 July 2022. On 29 July 2022, employees were briefed by management about the Transfer of Undertakings process. The Respondent conducted regular consultation meetings, and the Complainant kept up to date on all proceedings.

The Complainant was advised that upon the termination of the contract between the Respondent and “Company X” on 31 August 2022, 17 direct employees of the Respondent would transfer employment to the Transferee “Company Y” in line with the Transfer of Undertaking Regulations, as was the case when the Complainant’s employment transferred from “Company X” to the Respondent.

At all times, the Complainant confirmed that he wanted to transfer his employment to the Transferee “Company Y”. The Transferee’s position was that a transfer of undertakings process was not applicable. The Respondent informed employees that in circumstances where the transferee was resisting the application of the Transfer Regulations, it is a matter for the employees to assert their rights to transfer.

On 23 August 2022, the Respondent, the Transferee and the Complainant’s union attended a Workplace Relations Conciliation process concerning the disputed TUPE process. The Respondent was agreeable to provide the Complainant with an alternative role should he choose not to assert his rights to transfer to “Company Y”. The Complainant declined the roles offered and stated that he wanted to transfer to “Company Y”.

The Respondent confirmed to the Complainant that no termination of his employment arose. It was made clear to him that employment would transfer to “Company Y” or he could accept an alternative vacant role suitable to him.

The Respondent referred the Court to Katsikas -v- Konstantinidis and Merckx & Neuhuys -v- Ford Motor Co of Belgium, where the ECJ held that an employee has the right to object to becoming employed by a Transferee. The Complainant did not at any point object to transferring to ”Company B”.

The Respondent relies on Symantec Ltd V Leddy [2009] IEHC 256 where the High Court found that: -

“If the Irish legislature had wished the employment relationship with the transferor to continue so as to facilitate the employee in making a claim for redundancy it could have enacted legislation to that effect. It has not done so. “

The Respondent further relies on Ballymun Regional Youth Resource v Mark Davis RPD 249 where:-

“…the Court concluded that a transfer of undertakings between the Respondent and Star occurred on 01 January 2022 and that the Complainant in this case formed part of that transfer, as a matter of law. He was not therefore dismissed by reason of redundancy by the Respondent.”

The Complainant’s claim for redundancy is misconceived. His employment transferred to “Company Y”, as per the transfer regulations. His employment did not end by reason of redundancy.

Evidence of Barry Ryan - the Complainant.

The Complainant worked with the Respondent for 13 years and, before that, with “Company X” for a period of 12 years. In February 2022 he was told that the Respondent had declined to tender for a new contract with “Company X”. On 26 July 2022 he received a letter confirming that the contract would end on 31 August 2022.

There was no further consultation or engagement by management until the 24 August after the company went to the WRC.

The Complainant was employed as an “operations support supervisor”, with responsibility for the day-to-day operations on site. He reported into the UK. Stock came in from the UK. The stock was unloaded, warehoused and distributed for “Company X”. The Respondent offered him two alternative roles; neither was suitable.

The first offer was a job at another named site, but no details were provided. The other was just an ad hoc comment if he was interested in working on another named contract.

The Complainant was dismissed from his employment on 31 August 2022. He did not transfer employment on 1 September 2022.

 The Complainant later approached “Company Y” and went through an interview process for a role. He took up the role on a day one basis. “Company Y” made it clear that it was not a transfer of undertakings. It was a different role; the job title was “operations manager”. He had no continuity of service and lost his sick leave, pension and service entitlements. His salary increased slightly.

Under cross examination, the Complainant said he was dismissed at a meeting with Mr Spencer on the 29 August 2022 when he was told to accept the alternative role by 5:00pm that day. He understood that he was dismissed. He could not recall the exact words used, but that is what he understood.

He was aware of the meeting arranged on 1 September 2022 between employees of the Respondent and “Company Y”. He did not attend that meeting, as he was not in any state of mind to do so. He was devastated at his treatment after 25 years of service. He accepted that if he had attended the meeting, he might have received some clarity. In his view, about four employees ended up working with “Company Y”, two of whom went to the meeting on 1 September and two others - including himself - who secured roles on the back of a job interview.

Evidence of Mr Peter Spencer

The Respondent operated the contract with “Company Y” entirely separately to the rest of the Respondent company, so that if the contract ended a transfer of undertakings would arise. Employees working on that contract had their own terms and conditions of employment and a separate handbook.

The Complainant was never in scope for redundancy. The Respondent wrote to “Company Y” on 5 July 2022 to state that the continuation of the provision of services by that entity to “Company Y” constituted a transfer for the purposes of the Transfers Regulations and that 17 employees would transfer employment to that entity, when the Respondent’s contract terminated after 31 August 2022.

The position of the other entity was the Transfer of Undertakings Regulations did not apply.

The Complainant was notified about the termination of the contract by letter on 26 July 2022. He was given a statement of his terms and conditions of employment attached to a letter.

The Respondent attended a conciliation conference at the Workplace Relations Commission with the Complainant’s union representatives on 23 August 2022. “Company Y” also attended.

As part of the WRC conciliation process, the Respondent agreed as a gesture of goodwill to explore suitable alternative roles for employees who did not wish to assert their rights to transfer employment. The Respondent had no obligation to offer alternative roles to employees. That was an IR solution agreed.

After the WRC process, Mr Spencer made contact with “Company Y” who agreed to facilitate a meeting with employees on 1 September 2022.

The Complainant was offered a suitable alternative role if he wished to stay with the Respondent. The Complainant made it very clear that he wanted to transfer his employment to “Company Y”.  Mr Spencer told him that if he wished to transfer employment, he would have to assert his rights and attend the meeting arranged with “Company Y” on 1 September 2022.

The contract with “Company X” ended on 31 August 2022. At that point the IT system and stock management system for the contract transferred across to other entity. All tangible assets moved across to the third party and the contract work retained his identity as an economic entity.

In the end only four employees transferred employment. The other employees remained with the Respondent. None of the employees who transferred contacted the Respondent to say the transfer had not applied. The door was left open for them to come back to work for the Respondent.

Relevant Law

General right to redundancy payment.

7.—

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,

Dismissal by employer

9.—

(1) For the purposes of this Part an employee shall, subject to this Part, be taken to be dismissed by his employer if but only if—

(a) the contract under which he is employed by the employer is terminated by the employer, whether by or without notice, or

 (b) where, under the contract under which the employee is employed by the employer the employee is employed for a fixed term or for a specified purpose (being a purpose of such a kind that the duration of the contract was limited but was, at the time of its making, incapable of precise ascertainment), that term expires or that purpose ceases without being renewed under the same or similar contract, or

(c) the employee terminates the contract under which he is employed by the employer in circumstances (not falling within subsection (5)) such that he is entitled so to terminate it by reason of the employer‘s conduct.

Deliberation and findings

The Complainant submits that his employment was terminated by reason of redundancy on 31 August 2022.

The Respondent contends that the Complainant’s role was not subject to redundancy, as his employment transferred to another entity by way of a transfer of undertakings on 1 September 2022, when the warehousing and distribution contract it held with “Company X” transferred to another entity “Company Y”

The Court heard that the Complainant’s stated preference was to transfer employment to that other entity, and he went on to work for “Company X”, albeit on a day one basis. The Complainant’s evidence was that his job title changed to that of “manager” and his duties expand to include other duties in addition to the delivery of contract services to “Company X”. 

The Complainant is seeking a redundancy payment under the Act in circumstances where he says his employment was terminated by the Respondent on 31 August 2022 and where he was advised by “Company Y”, that it has no liability for his service with the Respondent company.

The Complainant is caught between a rock and a hard place where the Respondent asserts that his employment transferred to another entity when it lost the contract to provide services to “Company X” and a transfer of undertakings is disputed by the other entity.

That third party entity was not a party to these proceedings.

There is no complaint under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 before the Court.

The central issue to be determined in the within appeal is whether the Complainant’s employment was terminated by the Respondent by reason of redundancy.

A general right to a redundancy payment arises when the contract under which an employee is employed is terminated by the employer, whether by or without notice, by reason of redundancy in accordance with s.7 of the Act.

S.I. No. 131/2003 - European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 provides, in relevant part, as follows:

3. (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.

Subject to this Regulation, in these Regulations -

(2) “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.

….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.

 The purpose of the Regulations is to safeguard the rights and entitlements of employees where a business or part of the business in which they are employed transfers from one employer to another.

From the submissions made and testimony proffered, the Court determines that the facts of this case are as follows: -

The Respondent secured the contract to provide warehousing and distribution services to “Company X” from 1 September 2009, at which point the Complainant’s employment transferred from “Company X” to the Respondent by way of a transfer of undertakings.

The Respondent operated the contract for provision of warehousing and distribution services to “Company X” separately to the rest of the Respondent company.

Employees working on that contract had their own terms and conditions of employment and a separate handbook.

The Complainant was employed by the Respondent company and engaged solely in the delivery of contract services to “Company X”.

The contract between the Respondent and ”Company X” terminated on 31 August 2022.

Prior to the termination of the contract, the Respondent entered into a consultation process with the Complainant regarding the transfer of his employment to “Company Y”.

The contract for the delivery of services to “Company X” moved to “Company Y” when the Respondent’s contract ended on 31 August 2022.  At that point, certain assets associated with the delivery of the services to the “Company X” contract, in terms of the IT system and stock management system, transferred to “Company Y”.

The Transferee’s position was that a transfer of undertakings process was not applicable.

The Respondent informed employees that in circumstances where the Transferee resisted the application of the Transfer Regulations, it is a matter for the employees to assert their rights to transfer. However, it offered employees who did not wish to transfer employment to “Company Y” the option of remaining in the employment with the Respondent company.

The Complainant offered the Complainant two roles. The Complainant’s evidence was that neither role was suitable, and his preference was to transfer employment to the other entity.

The Complainant’s employment with the Respondent ended on 31 August 2022. 

The Court heard that only four of the seventeen employees who worked on the “Company X” contract left the employment of the Respondent to work with the other entity as all other employees opted to take up other roles

within the Respondent.

Having regard to the evidence adduced and the facts presented the Court determines that the Complainant’s role was not subject to a redundancy. The Complainant’s employment was not terminated by the Respondent on 31 August 2022.

The work undertaken by him in terms of the delivery of contract services to “Company X” continued after 31 August 2022. In the view of the Court, the work associated with the delivery of the third-party services to the “Company X” retained its identity as an economic entity and a transfer of undertaking within the meaning of the European Communities (Protection of Employees on the Transfer of Undertaking) Regulations 2003, occurred on 1 September 2022.

 In Symantec Limited v Leddy and Lyons [2009] IEHC 256, Edwards J determined that when a transfer of undertakings within the meaning of the Regulations occurs, an employee who does not transfer employment does not become entitled to a redundancy payment under the 1967 Act. It follows that the Complainant’s claim under the 1967 Act is not well-founded.

The Court finds that the Complainant’s employment was not terminated by the Respondent by reason of redundancy. In such circumstances, there is no liability on the part of the Respondent to pay a statutory redundancy payment to the Complainant in this case.

Having regard to the above, it follows that the Complainant’s complaint regarding a contravention of the 1967 Act is not well-founded.

 The decision of the Adjudication Officer is upheld.

The Court so determines.

	Signed on behalf of the Labour Court
	Katie Connolly
AL	______________________
26 May 2025	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Amy Leonard, Court Secretary.