The Labour Court has recently provided guidance for employers on the application of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 ("TUPE Regulations"). Irish case law under the TUPE Regulations is relatively rare and as such these cases provide a current reminder of some of the primary considerations involved. In Kenmare Brewhouse Ltd T/A McCarthy's Bar and Restaurant v Ms
Kenmare Brewhouse Ltd T/A McCarthy's Bar and Restaurant v Ms
Background
The complainant was employed as a bar attendant by a company called
The complainant brought a claim to the WRC. She claimed that the respondent did not comply with the consultation requirements of the TUPE Regulations and that she had been dismissed, contrary to Regulation 5 of those regulations. The WRC held that the claims were well founded and awarded compensation of a total of €8,320. The respondent appealed this decision to the Labour Court.
The Parties' Submissions
The complainant alleged that neither the respondent nor her previous employer complied with the requirements of the TUPE Regulations, including Regulation 4 in relation to terms and conditions of employment and Regulation 8 in relation to the provision of information and measures that would impact on the complainant. The complainant alleged that, contrary to Regulation 5, she was effectively dismissed with effect from the
The respondent claimed that when it took over the business on
The Labour Court Decision
The Labour Court stated that it was clear that very little interaction took place between the complainant and either the transferor or the transferee (i.e. the respondent). It noted that this view was reinforced by the lack of written documentation in respect of both the transfer and what the respondent claimed was a temporary lay-off. The Court stated that the obligations under the Regulations are clearly set out. It held that there was a clear breach of Regulation 4 as there was no engagement between the respondent and the complainant either before or after the transfer, other than to place her on layoff without notice.
In respect of Regulation 8, the Court held that the fact that the transfer process was fluid right up until the point of transfer did not negate the requirement to inform and consult as set out in the Regulations. It held that the failure to engage with the complainant in respect of the impact of the transfer on her employment was the most serious of the breaches under Regulation 8. There was also a failure to convey the legal implications of the transfer and to provide a summary of the economic and social implications of the transfer which the Court noted were highly relevant in this case.
Finally, the Court held that the respondent's failure to comply with statutory requirements to place the complainant on temporary lay-off, in addition to its lack of communication with the complainant, meant that the complainant was entitled to consider herself dismissed with effect from
The Court varied the decision of the WRC and awarded compensation of €3,960 as follows: €600 for the breach of Regulation 4; €672 (or 4 weeks' compensation - the maximum compensation available) for breach of Regulation 8; and €2,688 in respect of the complainant's dismissal which the Court held was unfair.
Background
The Labour Court upheld a decision of the WRC which found that, as there was no entity capable of being transferred, no transfer of undertakings had occurred under the TUPE Regulations.
In 2004, the respondent was approached by its client, University Hospital Kerry (part of the HSE), and asked to recruit a number of Health Care Assistants ("HCA") to work in the hospital. A total of 14 HCAs were recruited in this manner. The staff were paid through the respondent's payroll and issues relating to annual leave and sick leave were dealt with by a manager of the respondent. The nurses in the hospital were in charge of assigning work to the HCAs, who the complainant submitted would often be placed in the same area for the duration of their employment.
In
The Complainant's Claim
The complainant claimed that either she had been transferred to another organisation in which case the respondent had not complied with the requirements of Regulations 4 and 8 of the TUPE Regulations, or she had been made redundant, unfairly dismissed and not afforded her statutory notice.
The WRC Decision
The WRC found that no transfer of undertaking had taken place and so there was no breach of the TUPE Regulations. It also held that the complainant had not been unfairly dismissed as the respondent had "substantial grounds" for terminating her employment. However the Court upheld the complainant's claims in respect of redundancy and failure to provide statutory notice. It awarded statutory redundancy and two weeks' notice which it found she was entitled. The complainant appealed the decision in respect of the TUPE Regulations to the Labour Court.
The Labour Court Decision
The Court had to determine whether there was a transfer within the meaning of the TUPE Regulations. It concluded that there was not such a transfer, on the basis that no entity capable of being transferred existed. The Court noted that for there to be a transfer under the Regulations there must be the transfer of an "economic entity", being "an organised grouping of resources which has the objective of pursuing an economic activity...". The Court examined case law of the
Conclusion
The decision of the Court in the Kenmare Brewhouse case reminds employers that clear and effective communication with employees, both pre and post transfer, is essential for compliance with the TUPE Regulations. In particular, employers must make employees aware pre-transfer of the consequences that the transfer will have on their employment.
The decision of the Court in the Bidvest Noonan case provides guidance as to when and in what circumstances an arrangement will be deemed to be an "economic entity", the transfer of which is capable of triggering the application of the TUPE Regulations, thereby creating obligations for the employers concerned.
With thanks to
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
Mr
Ten
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