Complainant

Respondent

Parties

Premyslaw  Osztap

Nvd Trading  Limited

Representatives

Boino Solicitors

 Alastair Purdy & Co. Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Regulation 18 of the European Communities (Road Transport)(Organisation of Working Time of Persons Performing Mobile Road Transport Activities) Regulations 2012 - S.I. No. 36/2012

CA-00045691-001

17/08/2021

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00045691-002

17/08/2021

The complainant has submitted a complaint that he was unfairly dismissed from his employment on 26/03/2021.

He had been employed as a heavy goods vehicle driver transporting cars for the respondent since 02/10/2006.

His average, gross weekly salary was €1,151

He submitted his complaint to the WRC on the 17/08/2021.

The respondent advised that the company changed its name to NVD Trading Ltd. In August 2024.

This was accepted by the complainant and is reflected in the decision.

The complainant withdrew complaint numbered CA-00045691-001.

CA-00045691-002. Complaint under Section 8 of the Unfair Dismissals Act, 1977

 The complainant contends that he was unfairly dismissed when he refused to sign a new contract altering his terms and conditions to his detriment. The termination was not due to a valid redundancy as claimed by the respondent.

His contract provided for a weekly salary of €937. The employer introduced new terms and conditions without the complainant’s consent in 2009 which had the effect of initially reducing his salary by a €100 a week. Prolonged efforts over the next twelve years to revert to the contract he signed on commencing employment in 2005 failed to yield a satisfactory resolution for the complainant.

The respondent presented the complainant with a new contract in January 2021 with problematic terms and notified the complainant of their intention to dismiss him, should he fail to agree to the new contract.

The complainant maintains that the market should have been assessed at that time as a reason to maintain him or not on his pre- 2005 terms and salary. At that point the market was improving slightly.

The work was always seasonal even in times when he had better conditions.

He and his three colleagues were the only ones made redundant in 2021.

The complainant gave evidence given under affirmation.

He commenced work as a driver in 2006 transporting new cars on trucks to various destinations in Ireland, the UK and the EU.

In January 2021, he was offered a new contract with non – negotiable terms. Unacceptable aspects included the increased penalties for damages to vehicles, the flexibility clause in the new contract which could see him having to work on Sundays, uncertain weekly hours and payment over 4 days as opposed to the pre- 2009 regime which provided payment for 5 days.

He met and informed the then Head of HR of these impediments to his signing the January 2021 contract. The then Head of Hr refused to accept any changes.

He was dismissed on 26/3/2021.

 Mitigation of Loss.

He secured alternative employment on 12/4/21 at an average weekly  salary of €760. 

Cross examination of complainant.

The complainant stated that had the respondent accepted the changes which he had sought to the 2021 contract, he would have accepted this 2021  contract.

He cannot remember if he was a member of SIPTU at the time they negotiated the agreement on altered terms of employment with the respondent. He was fearful of trusting the respondent as they had assured the employees in 2009 that wages would revert to pre 2009 levels when the company would regain their pre-2009 levels of profitability.

Concerning the respondent’s letter of 15/1/2021, giving assurances about continuity of working hours ,and working patterns, he did not respond.

Legal Arguments

The representative disputes the respondent’s contention that a genuine redundancy had arisen and refers to JVC Europe v Panisi (2011) IEHC 279,  which held

“In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy is impersonal”.

The complainant also relies on Barry St Ledger v Frontline Distribution Ireland Ltd., 1995, ELR 160 which observed that

“Impersonality runs through the five definitions in the Act.”

The complainant’s case is that the contract is being made redundant and not his  position. The letter of dismissal refers to the contract of employment. A unilateral change in contractual terms is not a ground for redundancy. At the start of 2021,  the market was expanding at the time the complainant was dismissed, as opposed to contracting. The respondent has failed to show that there was a reduced need for drivers in 2021. The decision to terminate the complainant’s employment was not based on a desire to reduce the number of drivers but was based on his refusal to sign a contract.

The respondent’s own submission referred to the worldwide shortage of HGV drivers and that they wished to retain staff and minimise turnover.

There was no genuine redundancy.

Notwithstanding the complainant’s position which is that there was no genuine redundancy, should the adjudicator accept that there was, it should be noted that the complainant was not put on notice of redundancy, the respondent never selected a pool of persons or disclosed the criteria for identifying those at risk of redundancy, just selected the complainant and the three colleagues who refused to sign the new contract. The decision was made and communicated to the complainant. The respondent’s stated aim that they “can’t allow a further cause action to accrue, ”is not  a ground for a redundancy.

The respondent’s stated offer of suitable alternative employment was a fiction as the complainant’s oral and written evidence  itemised the loss of or reduction in benefits available to him under the contract of 2005 when compared to the contract offered to him and declined by him in January 2021.

The complainant asks the adjudicator to uphold this complaint of unfair dismissal.

The respondent denies that the complainant was unfairly dismissed. His employment was terminated due to a valid redundancy. Furthermore, the complainant was offered and refused suitable alternative employment so no entitlement to statutory redundancy payment arises in accordance with section 15 of the Redundancy Payments Act, 1967.

The respondent set out their response to this complaint.

The respondent company handles the logistics associated with the import of new cars into Ireland and the UK which involves the storage, pre delivery – inspection, and transportation of new cars to various locations. The complainant is a truck driver engaged in the transportation of these cars.

In 2008 the worldwide crash happened, massively affecting the import and sale of cars.

From a high of nearly 250,000 cars imported into Ireland in 2007, imports slumped by 60% to approximately 75,000 in 2009, followed by a partial recovery to in excess of 150,000 imports in 2016. Brexit arrived with the change in sterling /euro exchange rate triggering a further collapse. The market partially recovered in 2021 to a little in excess of 100,000 but has declined since.

The respondent responded to this collapse and these fluctuations by engaging with SIPTU on pay restructuring. The complainant is a member of SIPTU. The Carlow Agreement of 2009, negotiated with SIPTU introduced a pay cut of €100 per week, comprised of a wage cut of €55 and a drop of  €45 in bonus payments, with the proviso that when the pre 2009 revenue returned, there could be a return to those pay and conditions which were in force prior to the crash.

The respondent engaged in negotiations with SIPTU between 2010 – 2011. They were seeking a restoration of pre- 2009 pay levels. The matter was referred to the Labour Court. On 28 /11/2011, the Court ruled that market forces had not returned to the extent that would justify the return to pre-2009 levels of pay.

Negotiations resumed in 2013 on the union’s claim for a return to pre--2009 salary rates. A proposal was put to the drivers to accept a new contract with compensation ultimately raised to the sum of €8000 for the change in conditions and loss of salary or accept voluntary redundancy.

The new 2013 contract saw the salary restored to €100 a week, but it contained requirements to be more flexible in terms of working hours, travelling to the UK and the EU, and contained increased penalties for damage to vehicles. Six drivers accepted, eleven opted for voluntary redundancy and ten (including the complainant), refused to accept the new terms. The complainant held out for a return to the 2005 contract.

 From 2014- 2018 further efforts were made via conciliation conferences and mediation to secure the agreement of the complainant to the new contract of 2013 to no avail. The complainant rejected all but a return to his original 2005 contract. He lodged a civil bill in the Circuit Court in 2018 for breach of contract when the employer amended his terms and conditions as per the 2009 agreement to which the complainant never agreed. He sought judgement for arrears of wages calculated at €31,000 and damages for breach of contract for €75,00070,000. He accepted €20,000 in full and final settlement of that particular claim. The claim was struck out. This was settled without admission of liability in December 2020.

Renewed efforts were made to secure the complainant’s agreement to the new contract in the settlement talks in December 2020, and later in January 2021. The respondent issued a new contract on 15/1/2021 specifying that if he refused to agree to the new contract, which would see him at no loss of salary, his role would be made redundant and that he would not be entitled to redundancy as he had been offered suitable alternative employment. Following on this letter, and in response to a request from SIPTU who were still representing the complainant, the respondent agreed to SIPTU’S proposals for further local negotiations. The complainant declined by way of letter on 17/2/2021 to sign the new contract and the respondent issued a notice of redundancy on 18/2/2021 as the old pre--2009 contract was no longer fit for purpose.

Contrary to the complainant’s assertion, the market had a small lift in 2021 but slumped thereafter; it was not sustained and never made it back to 2009 levels.

It was a genuine redundancy in that change was present; there was a reduction in the need for such restrictive contracts which did not meet the needs of the business. That was the change as per Charleton J in JVC Europe v Panisi (2011) IEHC 279, who held that “Redundancy is impersonal. Instead, it must result from, as section 7(2) of the Redundancy Payments Act 1967, as amended, provides, ‘reasons not related to the employee concerned”.

This requirement is met in the instant case in that it was the contracts and not the employees who were deemed to be redundant.

The contract was the 2013 contract and was not so different from the 2005 contract as to merit a rejection of it.

Suitable alternative employment.

The complainant was offered the position of Heavy Vehicle Goods driver with somewhat altered terms designed to meet the altered environment in which the company was operating.

Contrary to what the complainant alleged, it was explained to him that he would not be required to serve a further probationary period.

 The new bonus arrangements would have given him greater pay. There were only minimal changes proposed regarding location and work patterns. The company operates in strict compliance with the Organisation of Working Time, Act, 1997.

The penalties for damage to vehicles were not of a sufficient order to warrant a refusal to sign the new contract, developed in 2013 and in operation for all employees bar the complainant and 3 colleagues.

The complainant appealed the decision to terminate their employment on 22/2/2021. His appeal was not upheld.

The company is unable to support the previous contract as it does not enable the company to compete with other companies when trying to secure foreign work- a factor which is necessary for the survival of the company.

Evidence of former Head of HR given under oath.

The witness was the HR manager from 2014-2021.

The respondent facilitated the importation of new cars into Ireland.

The witness became aware of the contract issue with the complainant in 2015, when he was briefed by the CEO, on the origins of the matter.

The financial crash of 2008 was catastrophic for the company which saw a 60% reduction in the importation of cars and was facing closure. They competed for work.

New terms were agreed with SIPTU for the drivers which were included in revised driver contracts. One hundred and fifty drivers are now employed on the new contract. Six would not accept the revised contract in 2009 but now all employees bar the complainant, and 3 colleagues are on the new 2013 contract.

The witness assured the complainant via a letter of comfort about minimal deployment to UK. Of note is the fact that their 2005 contract obliged him to work in the UK and the EU.

All IR and proposed mediation efforts conducted over a 5 year period to acquire their agreement to the revised 2013 contract failed.

The complainant and his three colleagues filed a claim for breach of contract in 2018 in the Circuit Court. In December 2020 this was settled and struck out with the sum of €20,000 being seen as a full and final settlement without admission of liability. Notwithstanding this settlement, the complainant still, at that stage, refused to sign the 2013 contract.

The respondent had to put a time limit on disposing of the matter. From 11-15 January 2021, the respondent made efforts to have the complainant agree to the 2013 contract.

Businesses changes and contracts change to align with business changes. While it is correct that the market recovered somewhat in 2015, Brexit arrived and with it sterling plummeted, second-hand car imports from the UK increased with a corresponding drop in the importation of new cars.

Concerning differences between the 2009 and the 2013 contract, the complainant did raise issues with the witness and his colleague, but he cannot remember the exact details. The respondent advised the complainant that there would be no second probation, no real change would arise for the complainant and the other 149 drivers in terms of place of work. The complainant would be mainly assigned in Ireland.  The last 3- 4 months of the year could see him deployed on UK deliveries.

The witness assured him that he would not be assigned to more UK work than was previously the case. The 4 days on 4 days off rota to which the complainant had objected, has never been implemented where a driver had objected to this rota.

In terms of the flexibility clause in the contract, no driver has been asked since its inception in 2013 to do non- driving work.

The market had structurally changed and couldn’t support the pre- 2009 rates of pay.

Cross examination of witness

The witness advised that he had left the company at the end of 2021 and there were 150 drivers employed at that point.

He confirmed that on 26 August 2013, 6 drivers accepted the new contract, 11 took voluntary redundancy and 10, including the complainant, declined to accept the new contract.

It is the case that 122 drivers were employed after 2013.

As to why they did not offer the complainant voluntary redundancy in 2021, unlike in 2013, the witness stated that they had made so many efforts to resolve it. The 2013 contract was rejected by the complainant.

Legal Arguments,

The respondent relies on Barry St Ledger v Frontline Distribution Ireland Ltd., 1995, ELR 160 which noted that redundancy arises because of change. This change might be based on the way the work is done or some other change in how the work is done. It clear that substantial change occurred as evident in the complainant’s refusal over a 12-year period to accept the changed nature of the contract.

The respondent submits that the key concept of impersonality as laid out Barry St Ledger case is found in the instant circumstances where the decision to terminate by way of redundancy is wholly attributable to the financial crash of 2008-09. Hence the redundancy was genuine.

Entitlement to redundancy payments.

Entitlement to redundancy payments does not arise when the employee is offered suitable alternative employment. Applying the terms of section 15E of the Act of 1969, as amended, the complainant “has unreasonably refused the offer”, particularly given the maintenance of salary and the negligible changes to other terms.

Conclusion.

Reasonableness of the respondent.

The respondent made every effort to maintain the complainant in employment offering him a contract as a driver up until 2021, albeit on terms that were not an exact match for those obtaining pre - 2009.

Up to that point, the company had had to pay 0.2 million between settlements and legal costs.

Their decision to offer a revised contract, to waive issuing the redundancy notice in January 2021  so as to allow for further local discussions on foot a SIPTU request, and the respondent’s offer to provide alternative employment amounts to reasonable conduct.

This was particularly so in the context where the complainant and 3 other employers had sued the company for breach of contract and had been awarded €20,000 without admission of liability. The complainant, though encouraged, had failed in the settlement talks to accept the new contract. The respondent was rightfully fearful of further claims arising for arrears of wages. The claimants had been looking for €70,000. The employer could not allow themselves to be exposed for repeated causes of action and they have behaved reasonably in the circumstances.

The respondent requests the adjudicator to reject the complainant’s complaint that he was unfairly dismissed, and to accept that the complainant’s employment was terminated due to redundancy and that as he refused suitable alternative employment, he is not entitled to a redundancy payment.

I must decide if the dismissal of this complainant contravenes the provisions of the Unfair Dismissals Act, 1977, or if it is a mere redundancy as advanced by the respondent.

Legislation involved and the obligations on the parties.

Section 6 of the Unfair Dismissals Act 1977 puts the burden of proof on the respondent faced with a complaint of an unfair dismissal.

6.(1) states

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

Section 6(4) expands on the meaning of substantial grounds and states:

6(4) “Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following”:

(a) n/a.

(b) n/a

(c) the redundancy of the employee”.

Section 6 of the Act provides that a redundancy is a defence in a case of a complaint of an unfair dismissal. The onus is placed on the respondent to justify the dismissal and where the respondent seeks to rely on the redundancy defence, the respondent must prove

that the dismissal resulted wholly or mainly from that redundancy situation and

that the employee made redundant was fairly selected.

The definition of redundancy is found in

Section 7(2) of the Redundancy Payments Act 1967 which provides that:

“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) N/A.

(e) N/A.”

Applying the facts of the instant case to the definition of redundancy found in section 7 of the Act of 1967, I find that the need for the transportation of cars was unchanged, the respondent’s own evidence was that the staff numbers had grown over the years and at the time of the redundancy remained constant; the complainant was replaced. The manner of doing business, submitted as a reason for the redundancy, except for timings which was unrelated to the demand for and the delivery of the service was unchanged. A similar volume of vehicles required to be transported on trucks driven by a similar number of truck drivers.

No one else was considered for redundancy, except the complainant and the three colleagues who took legal action against the respondent.

The evidence as stated in a letter from the Head of HR on 15/1/2021, explains that the reason for the redundancy was the complainant’s refusal to sign  a contract which the respondent believed was better aligned to the business needs of the company.

The altered terms in the contract put to the complainant in 2021 did not indicate a diminished need for a reduction in the service to customers as opposed to requiring greater flexibility on his part to meet the needs of those customers. It’s not a redundancy that meets the statutory definition as the requirement for truck drivers had not diminished.

That his refusal may have been unreasonable to accept altered contractual terms is not a matter which fits in with the definition of a redundancy.

I find that a genuine redundancy did not exist. I must conclude that the termination of the complainant’s employment on 26/3/2021 was not due to a genuine redundancy.

Having so determined, it is not necessary to examine the case that a suitable alternative was offered to the complainant; it was the same job but governed by somewhat different terms of employment.

I must now examine if the termination of the complainant’s employment contravened the provisions of the Unfair Dismissals Act, 1977.

Relevant Law.

Legislation involved and the obligations on the parties.

Section 6 of the Unfair Dismissals Act 1977 puts the burden of proof on the Respondent faced with a complaint of an unfair dismissal.

6.(1) states

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

Section 6(4) expands on the meaning of substantial grounds.

None of the defences contained in sub- section (4) are available to the respondent.

Reasonableness of employer’s conduct.

section 6.7 of the Act of 1977 (as amended), permits the adjudicator to have regard to the  conduct of the employer in deciding if a dismissal is unfair.

I find that the respondent ran out of patience with the complainant. They were a prisoner of their own contracts, designed in better times, to meet the circumstances of those times.

I have no doubt about the consequences of the financial crash for the respondent’s business in 2008 nor do  I have any doubt about the turmoil caused to his business with the arrival of Brexit.

The respondent did not present the complainant with any grounds for the dismissal such as misconduct, failure to comply with company rules, unreasonable behaviour, damage to company interests etc, to which they might have been entitled to as a defence at appeal, merely that it was a redundancy.

Failure to agree to new contractual terms where the contract specifies that parties must agree to such changes does not meet the definition of “substantial ground”, found in section 6 of the Act of 1977.

The biggest defect in the respondent’s conduct was the failure to process the termination via a disciplinary process- a facility where the complainant’s concerns could be examined and accommodated or dismissed as appropriate- a facility to which all employees facing a termination are entitled by virtue of S.1 146/2000. The complainant was given an ultimatum, The same person who issued the ultimatum also dismissed him one month later.

I must find on this basis that the dismissal was unfair.

Based on the entirety of the evidence, I find this complaint to be well founded.

The Employee’s conduct.

The fact that the employee failed  to accept the realities facing the company and exaggerated  the adverse consequences of the new contract, is not a reason to dismiss an employee. But the protracted nature of the negotiations, the questionable bone fides of the complainant in engaging in discussions and maintaining a posture that he was open to an outcome other than a return to the 2005 contract is short of what the respondent was entitled to expect.

I find that the complainant’s mistrust in the bone fides of the employer who had engaged in painstaking efforts to find a resolution and avert a dismissal was either misplaced or manufactured. The complainant’s behaviour was opportunistic. But opportunism does not meet the definition of a substantial ground.

While the employee’s conduct does not alter my finding that the dismissal was unfair, section 7(f)of the Act, as amended, allows an adjudicator, assessing redress, to consider

“ the extent to which the conduct of the employee (whether by act or omission contributed to the dismissal “.

Redress.

The complainant has gained alternative employment and has identified compensation as his preferred form of redress.

The complainant was paid up until 26/3/2021. He secured employment in another similar company on 12/4/2021 on a weekly, gross salary of €799.  His loss between 12/4/2021 and 31/12/21 was €1151-€799 x 38 weeks amounts to  is €13,376. His loss from 1/1/2022 until 29/4/2022 when he secured a better paying job  was €825-€1151 x 18 weeks = €5868. The total loss amounts to €19,244.

I decide that the respondent should pay the complainant the sum of €7400, which I consider to be just and equitable having regard to all of the circumstances.

I decide that this complaint is well founded.

I decide that the respondent should pay the complainant the sum of €7400 which I consider to be just and equitable having regard to all of the circumstances.

Not a genuine redundancy.