REDUNDANCY PAYMENTS ACTS, 1967 TO 2014
GLENBEIGH FIRE & FLOOD LIMITED
REPRESENTED BY M.P. GUINNESS BL
INSTRUCTED BY FLYNN & O'DRISCOLL SOLICITORS
- AND -
(REPRESENTED BY HOBAN BOINO SOLICITORS)
Chairman: Mr Geraghty
Employer Member: Ms Doyle
Worker Member: Mr McCarthy
1. Appeal Of Adjudication Officer Decision No. ADJ-00016796.
2. The Worker appealed the decision of the Adjudication Officer to the Labour Court on the 10 January 2019. A Labour Court hearing took place on the 3 May 2019. The following is the Court's Determination:
This is an appeal of a decision by an Adjudication Officer, (AO) of the Workplace Relations Commission, (WRC), that Ms. Olejniczak, ‘the Complainant’,was not entitled to a redundancy payment from Glenbeigh Fire and Flood Ltd., ‘the Respondent’
The Complainant was employed from March 2009 to May 2017 by Glenbeigh Records Management Ltd. She accepted a position with the Respondent in May 2017.
On 21 May 2018, the Complainant was advised that there was no longer a job for her in the Respondent company. There is disagreement between the parties as to whether she was offered her previous job on that date or whether that offer was made subsequently on 28 May 2018. In any event, the Complainant declined the offer and sought to be paid according to the terms of the Redundancy Payments Act.
The Respondent declined to pay redundancy on the grounds that the Complainant had been employed by them for less than the requisite period of 104 weeks continuous employment specified in s. 7(5) of the Act.
The Complainant referred a case under the Act to the WRC and the AO issued a decision that she was not covered by the Act as she did not have the requisite service.
The Complainant appealed this decision to the Court.
The Complainant was employed continuously by the Glenbeigh Group from March 2009 until her post was made redundant in May 2018. In May 2017, she was promoted within the group of companies.
The Respondent accepts that the Complainant was dismissed by reason of redundancy. The only issue is whether she had the requisite service.
s.7(5) of the Act states that the requisite period of service is 104 weeks, within the meaning of Schedule 3. This schedule creates a presumption of continuous service unless terminated by dismissal or a voluntary departure. The Complainant was not dismissed from the Group in May 2017 nor did she resign. She was offered and accepted a promotion within the Group.
All employees within the Group used the same e-mail address for annual leave, there was a single contact number and the Complainant was asked, from time to time, to cover the role of receptionist for the Group.
The links were so strong that the Complainant used the e-mail for Glenbeigh Fire and Flood prior to working there.
s.9(3)(a) of the Act states that a dismissal under the terms of the Act will not be deemed to have taken place if, as was the case when the Complainant moved from one part of the group to another in May 2017, a re-engagement took place with the agreement of the employee, the previous employer and the new employer.The contract issued to the Complainant upon herpromotion was contrary to s.9(3)(iii)(b) of the Act in not specifying that her prior service would be counted as service with her new employer.
The contract of employment with the Respondent is void as, contrary to s.51 of the Act, it attempts to limit the operation of the Act.
The Respondent also failed to provide the Complainant with her minimum notice entitlements and this should have been covered in the AO’s decision.
The Complainant’s assertion that she was employed ‘within the Respondent’s group of companies since March 2009’ is legally incorrect. S.16 of the Act states that two companies shall be taken to be associated companies if one is a subsidiary of the other or both are subsidiaries of a third company. Neither is applicable in the instant case.
s.7 of the Companies Act re-inforces the point that there is not a ‘superior company’ and ‘lower company’ relationship in the instant case.
The respondent is a completely distinct legal entity from Glenbeigh Records Management Ltd. The Glenbeigh Group is made up of Glenbeigh Construction Ltd., which is the 100% owner of Glenbeigh Fire and Flood Ltd and some other companies that do not include Glenbeigh Records Management Ltd. This latter company is owned separately and has no legal relationship with the Respondent.
The Complainant’s relationship with her previous employer ended in May 2017. She was issued with a P45 and a new contract of employment. Therefore, she did not have the requisite service to qualify for a redundancy payment.
The relevant sections of the Redundancy Payment Act are as follows;
General right to redundancy payment.
7.— (1) An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided—
(a) he has been employed for the requisite period, and
(b) he was an employed contributor in employment which was insurable for all benefits under theSocial Welfare Acts, 1952to 1966, immediately before the date of the termination of his employment, or had ceased to be ordinarily employed in employment which was so insurable in the period of F18 [ four years ] ending on that date.
(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,
(2A) For the purposes of subsection (1), an employee who is dismissed shall be taken not to be dismissed by reason of redundancy if —
(b) the dismissals concerned were effected on a compulsory basis,
(c) the dismissed employees were, or are to be, replaced, at the same location or elsewhere in the State, (except where the employer has an existing operation with established terms and conditions) by —
(i) other persons who are, or are to be, directly employed by the employer, or
(ii) other persons whose services are, or are to be, provided to that employer in pursuance of other arrangements,
(d) those other persons perform, or are to perform, essentially the same functions as the dismissed employees, and
(e) the terms and conditions of employment of those other persons are, or are to be, materially inferior to those of the dismissed employees.
(3) For the purposes of subsection (1), an employee shall be taken as having been laid off or kept on short-time for the minimum period if he has been laid off or kept on short-time for a period of four or more consecutive weeks, or for a period of six or more weeks which are not consecutive but which fall within a period of thirteen consecutive weeks.
(4) Notwithstanding any other provision of this Act, where an employee who has been serving a period of apprenticeship training with an employer under an apprenticeship agreement is dismissed within one month after the end of that period, that employee shall not, by reason of that dismissal, be entitled to redundancy payment.
(4A) In ascertaining, for the purposes of subsection (2) (c), whether an employer has decided to carry on a business with fewer or no employees, account shall not be taken of the following members of the employer ‘s family —
father, mother, stepfather, stepmother, son, daughter, adopted child, grandson, granddaughter, stepson, stepdaughter, brother, sister, half- brother, half-sister.
(5) In this section requisite period means a period of 104 weeks continuous employment (within the meaning of Schedule 3) of the employee by the employer who dismissed him, laid him off or kept him on short-time, but excluding any period of employment with that employer before the employee had attained the age of 16 years.
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.
(2) An employee shall not be taken for the purposes of this Part to be dismissed by his employer if his contract of employment is renewed, or he is re-engaged by the same employer under a new contract of employment, and—
(a) in a case where the provisions of the contract as renewed or of the new contract as to the capacity and place in which he is employed, and as to the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract, the renewal or re-engagement takes effect immediately on the ending of his employment under the previous contract, or
(b) in any other case, the renewal or re-engagement is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract, and takes effect either immediately on the ending of that employment or after an interval of not more than four weeks thereafter.
(3) (a) An employee shall not be taken for the purposes of this Part as having been dismissed by his employer if—
(i) he is re-engaged by another employer (hereinafter referred to as the new employer) immediately on the termination of his previous employment,
(ii) the re-engagement takes place with the agreement of the employee, the previous employer and the new employer,
(iii) before the commencement of the period of employment with the new employer the employee receives a statement in writing on behalf of the previous employer and the new employer which—
(A) sets out the terms and conditions of the employee’s contract of employment with the new employer,
(B) specifies that the employee’s period of service with the previous employer will, for the purposes of this Act, be regarded by the new employer as service with the new employer,
(C) contains particulars of the service mentioned in clause (B), and
(D) the employee notifies in writing the new employer that the employee accepts the statement required by this subparagraph.
(b) Where in accordance with this subsection an employee is re-engaged by the new employer, the service of that employee with the previous employer shall for the purposes of this Act be deemed to be service with the new employer.
(4) For the purposes of the application of subsection (2) to a contract under which the employment ends on a Friday, Saturday or Sunday—
(a) the renewal or re-engagement shall be treated as taking effect immediately on the ending of the employment under the previous contract if it takes effect on or before the next Monday after that Friday, Saturday or Sunday, and
(b) the interval of four weeks mentioned in subsection (2) (b) shall be calculated as if the employment had ended on that Monday.
(5) When an employee terminates his contract of employment without notice, being entitled to do so by reason of a lock-out by his employer, subsection (1) (c) shall not apply to that termination.
(6) Where by virtue of subsection (2) an employee is treated as not having been dismissed by reason of a renewal or re-engagement taking effect after an interval, then, in determining for the purposes of section 7 (1) whether he has been continuously employed for the requisite period, the period of that interval shall count as a period of employment.
(7) In determining for the purposes of this Act whether at a particular time before the commencement of this Act an employee was dismissed by his employer, the appropriate provisions of this section shall apply as if the matter to be decided occurred after such commencement.
Amount of Lump Sum
1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following:
( a ) the product of two weeks of the employee ’ s normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and
(b) a sum equivalent to the employee ’ s normal weekly remuneration.
(2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4(2) ofthe Redundancy Payments Act 1979at the time the employee is declared redundant.
2. If the total amount of reckonable service is not an exact number of years, the “ excess ” days shall be credited as a proportion of a year.
3. (a) For the purpose of ascertaining, for the purposes of paragraph 1, the number of years of continuous employment, the number of weeks in the period of continuous employment shall be ascertained in accordance with this Schedule and the result shall be divided by 52.
(b) In ascertaining the number of weeks in the period of continuous employment, a week which under this Schedule is not allowable as reckonable service shall be disregarded.
4. For the purposes of this Schedule employment shall be taken to be continuous unless terminated by dismissal or by the employee’s voluntarily leaving the employment , but for the purposes of this paragraph ‘ dismissal ’ does not include a dismissal within the meaning of theUnfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7 (1) ( a ) or 7 (1) ( b ) of that Act .
4A. Notwithstanding anything in paragraph 4 (and anything in clause ( b ) of the definition of “ date of dismissal ” in section 2), the period of notice due to an employee undersection 4(2) ( a ) of theMinimum Notice and Terms of Employment Act, 1973, but not given by the employer, shall, where the Tribunal so orders, be allowed as continuous service for redundancy purposes where, but for the failure of the employer to comply with the provisions of that Act, the employee would have qualified for redundancy payment.
5. Where an employee’s period of service has been interrupted by any one of the following —
(a) any period by reason of —
(iv) service by the employee in the Reserve Defence Forces of the State,
(v) any cause (other than the voluntary leaving of the employment concerned by the employee) not mentioned in clauses (i) to (iv) but authorised by the employer,
(b) a period during which, in accordance with the Adoptive Leave Acts 1995 and 2005, an adopting parent was absent from work while on adoptive leave or additional adoptive leave or while attending certain pre-adoption classes or meetings,
(c) a period during which an employee was absent from work —
(i) while on protective leave or natal care absence, within the meaning of Part IV of the Maternity Protection Act 1994 or to attend ante-natal classes in accordance with section 15A (inserted bysection 8of the Maternity Protection (Amendment) Act 2004), or for breastfeeding in accordance with section 15B (inserted bysection 9of the Maternity Protection (Amendment) Act 2004), of the first-mentioned Act,
(ii) while on parental leave or force majeure leave, or
(iii) while on carer’s leave under the Carer’s Leave Act 2001,
(d) any period during which an employee was absent from work because of a lock-out by the employer or because the employee was participating in a strike, whether such absence occurred before or after the commencement of this Act,
(e) any period during which an employee was absent from work while on paternity leave or transferred paternity leave under the Paternity Leave and Benefit Act 2016,
continuity of employment shall not be broken by such interruption whether or not notice of termination of the contract of employment has been given.
(5A) If an employee is dismissed by reason of redundancy before attaining the period of 104 weeks referred to in section 7 (5) (as amended) of the Principal Act and resumes employment with the same employer within 26 weeks, his employment shall be taken to be continuous.
6. Where a trade or business or an undertaking (whether or not it be an undertaking established by or under an Act of the Oireachtas), or part of a trade or business or of such an undertaking, was or is transferred from one person to another, the period of employment of an employee in the trade, business or undertaking (or in the part of the trade, business or undertaking) at the time of the transfer shall count as a period of employment with the transferee, and the transfer shall not break the continuity of the period of employment.
16.— (1) Where the employer is a company, any reference in this Part to re-engagement by the employer shall be construed as a reference to re-engagement by that company or by an associated company, and any reference in this Part to an offer made by theemployer shall be construed as including a reference to an offer made by an associated company.
(2) Subsection (1) shall not affect the operation of section 20 in a case where the previous owner and new owner (as defined by that section) are associated companies; and where that section applies, subsection (1) shall not apply.
(3) Where an employee is dismissed by his employer, and the employer is a company (in this subsection referred to as the employing company) which has one or more associated companies, then if—
(a) none of the conditions specified in section 7 (2) is fulfilled, but
(b) one or other of those conditions would be fulfilled if the business of the employing company and the business of the associated company (or, if more than one, each of the associated companies) were treated as together constituting one business,
that condition shall for the purposes of this Part be taken to be fulfilled in relation to the dismissal of the employee.
(4) For the purposes of this section two companies shall be taken to be associated companies if one is a subsidiary of the other, or both are subsidiaries of a third company, and “ associated company” shall be construed accordingly.
(5) In this section—
“ company” includes any body corporate;
S.7 of the Companies Act 2014 reads as follows;
Definition of “subsidiary”
7. (1) In this section the expressions “superior company” and “lower company” are used solely to assist the understanding of its terms and—
(a) are not indicative of the status (in any manner not relevant to this section) of the respective companies vis a vis one another; and
(b) do not constitute definitions to which regard must be had for any other purpose of this Act.
(2) For the purposes of this Act, a company (the “lower company”) is, subject to subsection (5), a subsidiary of another (the “superior company”) if, but only if—
(a) the superior company—
(i) is a shareholder or member of it and controls the composition of its board of directors; or
(ii) holds more than half in nominal value of its equity share capital; or
(iii) holds more than half in nominal value of its shares carrying voting rights (other than voting rights which arise only in specified circumstances); or
(iv) holds a majority of the shareholders’ or members’ voting rights in the lower company; or
(v) is a shareholder or member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders’ or members’ voting rights;
(b) the superior company has the right to exercise a dominant influence over it—
(i) by virtue of provisions contained in the lower company’s constitution; or
(ii) by virtue of a control contract;
(c) the superior company has the power to exercise, or actually exercises, dominant influence or control over it; or
(d) the superior company and the lower company are managed by the superior company on a unified basis; or
(e) the lower company is a subsidiary (by virtue of the application of any of the provisions of this section) of any company which is the superior company’s subsidiary (by virtue of such application).
(3) For the purposes of subsection (2)(a)(i), the composition of the lower company’s board of directors shall be regarded as being controlled by the superior company if, but only if, the latter company, by the exercise of some power exercisable by it without the consent or concurrence of any other person, can appoint or remove the holders of all or a majority of the directorships.
(4) In applying subsection (3), the superior company shall be deemed to have power to appoint to a directorship in relation to which any of the following conditions is satisfied—
(a) that a person cannot be appointed to the directorship without the exercise in his or her favour by the superior company of such a power as is mentioned in that subsection; or
(b) that a person’s appointment to the directorship follows necessarily from his or her appointment as director of the superior company.
(5) In determining whether the lower company is a subsidiary of the superior company—
(a) any shares held or power exercisable by the superior company in a fiduciary capacity shall be treated as not held or exercisable by it;
(b) subject to paragraphs (c) and (d), any shares held or power exercisable—
(i) by any person as a nominee for the superior company or by any person acting in that person’s own name but on behalf of the superior company (except where, in either case, the superior company is concerned only in a fiduciary capacity), or,
(ii) by, or by a nominee for, or by any person acting in that person’s own name but on behalf of, a subsidiary of the superior company, not being a subsidiary which is concerned only in a fiduciary capacity,
shall be treated as held or exercisable by the superior company;
(c) any shares held or power exercisable by the superior company or a nominee for the superior company or a subsidiary of it shall be treated as not held or exercisable by the superior company where the shares are so held or the power is so exercisable by way of security but only if such power or the rights attaching to such shares are exercised in accordance with instructions received from the person providing the security;
(d) any shares held or power exercisable by the superior company or by a nominee for the superior company or a subsidiary of it shall be treated as not held or exercisable by the superior company if the ordinary business of the superior company or its subsidiary, as the case may be, includes the lending of money and the shares are so held or the power is so exercisable by way of security but only if such power or the rights attaching to such shares are exercised in the interests of the person providing the security.
(6) For the purposes of subsection (2)(a)(iv) and (v), the total of the voting rights of the shareholders or members in the lower company shall be reduced by the following—
(a) the voting rights attached to shares held by the lower company in itself; and
(b) the voting rights attached to shares held in the lower company by any of its subsidiaries; and
(c) the voting rights attached to shares held by a person acting in his or her own name but on behalf of the lower company or one of the lower company’s own subsidiaries.
(7) For the purposes of subsection (2)(b), a company shall not be regarded as having the right to exercise a dominant influence over another company unless it has a right to give directions with respect to the operating and financial policies of that other company which its directors are obliged to comply with.
(8) In subsection (2)(b)“control contract” means a contract in writing conferring such a right as is there referred to which—
(a) is of a kind authorised by the constitution of the company in relation to which the right is exercisable; and
(b) is permitted by the law under which that company is established.
(9) Subsection (7) shall not be read as affecting the construction of the expression “actually exercises dominant influence” in subsection (2)(c).
(10) If a document created before the commencement of this section defines the expression “subsidiary” by reference to section 155 of the Act of 1963, then, for the avoidance of doubt, the construction provided in respect of that expression by the document is not affected by this section in the absence of an agreement to the contrary by the parties to the document.
(11) In this section—
“company” includes any body corporate;
“equity share capital” means, in relation to a company, its issued share capital excluding any part of it which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.
The Court is clear that the issue to be determined is whether the Respondent is a separate legal entity from the Complainant’s previous employer. It is accepted by both parties that the Complainant was dismissed from her employment with the Respondent by reason of redundancy. However, the Respondent argues on the point of law that, if the Respondent is a separate legal entity to the Complainant’s previous employer, there is not continuous employment in excess of the requisite period of 104 weeks for her to be covered by the Act.
The Respondent was unable to say if the Complainant received notice from the previous employer, if she was paid in lieu of notice when she moved in May 2017 and if she carried entitlements such as untaken annual leave. It was also accepted that the two companies shared premises and marketing materials. Likewise, the Respondent was unable to say if the Complainant upon return to her previous role would have been deemed to be starting as a new employee or if previous service would have counted.
Furthermore, when the Complainant first moved to her new role in May 2017, initially she did so on a three week trial and it is not clear whether the Respondent refunded any wages paid nor could a simple explanation be offered as to how the Complainant’s former role could be offered to her to return to so readily, if there was no connection between the respective companies.
On the other hand, the Complainant was supplied with a P45 and a new contract of employment upon her move though, of themselves, these need not prove the Respondent’s case.
The Complainant argued s.9(3) of the Act, see above, in support of her case in respect of her move in May 2017. However, that is a section applicable where there is an issue in respect of a dismissal. There is no suggestion that the Complainant was dismissed by her previous employer or that there was any reason to contemplate such a course on the part of her employer when she moved to the Respondent company in May 2017.
All of these are factors worthy of note.
However, s.16 of the Act, see above, is clear about what constitutes an associated company. No evidence was offered to support the idea in the instant case that either company was a subsidiary of the other or that both were subsidiaries of a third company. That being so, the Court has to accept the evidence on behalf of the Respondent that the two companies involved are owned separately and are separate legal entities, albeit with rather visible and close inter-actions.
The only dismissal that occurred was in May 2018 when the Complainant was made redundant. Unfortunately for her, s.16 of the Act is clear that she was, at that time, working for an employer who was a separate legal entity from her previous employer. Therefore, her previous service with that former employer cannot be taken into account when considering if she has the requisite period of continuous service. That being so, she did not enjoy the coverage of the Act when she was made redundant. This is, no doubt, extremely frustrating and upsetting for her but it is, in the view of the Court, the clear, legal situation and the Court is obliged to apply the law without regard to considerations such as fairness.
As it does not appear that the issue of minimum notice was argued at adjudication, the Court has no jurisdiction to deal with the issue.
The decision of the AO is upheld.
Signed on behalf of the Labour Court
13 May 2019Deputy Chairman
Enquiries concerning this Determination should be addressed to Therese Hickey, Court Secretary.