High Court of Ireland Decisions

1. This judgment relates to an appeal, or rather a series of appeals, by the Plaintiffs/Appellants from decisions of The Employment Appeals Tribunal, concerning notices given under the provisions of the Minimum Notice and Terms of Employment Acts, 1973 to 1991.

2. The Plaintiffs in all three actions, which raise essentially the same issues, are in liquidation. They were placed in liquidation by Orders of The High Court made on the 4th July 1998. Leave was subsequently given to bring these proceedings.

3. The relief sought in the three Summonses is for Orders - or declarations - that the Employment Appeals Tribunal erred in law when it found that the notices served by the Plaintiffs on the Defendant employees did not constitute “proper notice in accordance with the legislation” and did not comply with the provisions of Section 4 of the Act, together with certain ancillary reliefs.

4. The Plaintiffs also seek, in the last of the cases, an Order that the Tribunal erred in law in concluding that the notices which were given were not impliedly extended.

5. It would be helpful for an appreciation of the arguments and the issues arising, to set out in brief the history of the matter. Both companies were, prior to their liquidation, thriving companies, and it must be a matter of public knowledge that the Plaintiff, Bell Lines, was a large transport/shipping company, while the Plaintiff Waterford Multi Port operated an affiliated business out of that port.

6. Difficulties apparently arose in connection with the businesses of the two companies, in consequence of which an application was made for the appointment of an Examiner to both companies. I do not know the exact date of the application, but this is immaterial for the purposes of this judgment. That application was made pursuant to the provisions of The Companies (Amendment) Act, 1990. In accordance with the procedure fixed by that Act, a proposed Scheme of Arrangement was drafted, and in the usual way, negotiations took place with the various creditors and with possible investors during a period of time, with a view to seeing whether a scheme could, in fact, be agreed and submitted to the High Court for approval.

7. The companies, on the 5th and 6th May 1997 served notices of termination of employment on their respective employees. I set out below samples of the letters sent. The first of these reads:-

8. The second sample letter reads:-

9. It is agreed by all parties to the action that these letters effectively relate to two categories of persons, namely, those whose date of termination is fixed at 20th June and those whose termination is fixed at 7th November.

10. The Employment Appeals Tribunal heard claims by the several

11. Defendants/Respondents, and gave written decisions on each of these on several dates in 1998. It is from these decisions that the Plaintiffs/Appellants appeal to this Court.

12. In each of the three cases the Employment Appeals Tribunal found, in short,:

13. In the case of Maria Boyle and others, the majority decision of the Employment Appeals Tribunal is in slightly different terms, but the only additional findings of substance are the following, namely:-

14. The issue of law which arises for consideration is whether, in giving the above notices of the 5th and 6th May, 1997, the requirement of Section 4 of the Act of 1973 were complied with. Section 4 of the Act reads as follows:-

15. The statutory periods in question are from one week to eight weeks depending on the length of service of the individual employee. There is no complaint in this case that the actual notices given did not accord with the time scales provided for under the Act.

16. It has been contended for on the part of the Plaintiffs that the purpose and the basis for the section have been considered in detail by The Supreme Court in the case of

17. Further, in the judgment of McCarthy, J. it is stated:-

18. There is one further passage of importance. Having quoted from the decision of the learned High Court judge who had found that if the employer did not move on the notice at the termination date, he must be seen to have waived the original notice or re-employed the employees (with the consequences which that brings), McCarthy J. stated:-

19. It seems to me that this last paragraph is a reference to the fact that in the High Court there were arguments about a claimed waiver by the employer of its rights under the notice because the employees were not fired immediately upon the expiry of the notices. If that is a correct assessment of the meaning of the words used by McCarthy, J., then it seems to me that the Supreme Court has clearly stated that what is required under the Act is that the length of notice given is what must be specific, that it is not necessary that the actual termination date be included, but that in no case should the words used not be clear and certain. In the case of the letters used here, the length of time given - all other things being equal - was wholly lawful. Moreover, the actual date of termination in the notice was certain, namely the 20th June on the one hand and the 7th November on the other hand.

20. That being so, I have now to consider whether the other factors I am asked to take into account alter the position so as to render the notices not valid under the Act.

21. The first of these is the claim by the Defendants that the notices given were conditional notices, and were dependent upon the approval of the High Court as part of a successful Examiner's Scheme of Arrangement, and that, having held as a fact that the notices were conditioned and were subject to a Scheme of Arrangement being approved, this court is bound by that finding of fact.

22. As to the purported finding of fact that the notices were conditional on the Scheme of Arrangement, one of the difficulties in an appeal of this nature is that this court does not have before it any of the evidence which was before the Tribunal. What the Court does have is the actual decision of the Tribunal.

23. Insofar as the decision in the Boyle case is concerned, the decision of the Tribunal (a majority finding) is slightly different, and I now set this out:-

24. It is clear that the above decisions, in the main, reflect each other in so far as concerns the scheme of arrangement. I should, for completeness, set out the paragraphs in the Scheme of Arrangement which are relied on which read as follows:-

25. All Schemes of Arrangement are required, pursuant to the provisions of the legislation governing companies, to have the approval of The High Court. It is said in the Boyle decisions and there is no indication to the contrary in the other two decisions, that the notices given were "generally in accordance with the terms of employment" of the employees concerned. In other words, in so far as concerns the common law or contractual arrangements existing between employees and their employer, it is conceded by the Defendants that the actual notices given were not in breach of those common law or contractual arrangements.

26. That being so, it seems to me that the legal issue to be decided is whether, if statutory notices are served within the context of a Scheme of Arrangement, those statutory notices must inevitably fail if the Scheme of Arrangement is not thereafter approved by the High Court at the end of the day. I think this is where some misunderstanding of what is required by S.4 of the Act of 1973 may have occurred.

27. I do not think that the fact that the notices were given in the context of a Scheme of Arrangement, even if that scheme must be approved by the Court - as it must pursuant to the law - has the effect of rendering the notices not compliant with the statutory requirement. In the first place, it is clear from the judgment of McCarthy, J. that whereas the common law dictates that the termination of employment may be subject to terms and conditions of the contract of employment, S.4 of the Act is a gloss on the common law, and in so far as the statutory obligation is concerned, the only requirement is that the minimum period must be given. That being so, it seems to me that, even if the Employment Appeals Tribunal found, as a purported fact, that the notice of termination given was conditional upon the terms of the Scheme of Arrangement being approved by the Court or that the notices themselves were subject to approval and would inevitably fall if the Scheme also fell, this is not a valid basis in law to support an argument as to non compliance with the statutory provisions.

28. I agree with counsel for the Defendants that on an appeal of this nature from the Employment Appeals Tribunal, I am bound by findings of primary fact, and the rule in Hay v O’Grady (1992) 1 I.R. 210 clearly applies to such findings of primary fact as were found by the Tribunal. I agree also with the submission made on behalf of the Defendants that the court should have particular regard to the decision in Henry Denny & Sons Ireland) Limited v. The Minister for Social Welfare , unreported, 1st December 1997, when the Chief Justice considered it important enough to indicate, in a judgment confined to this specific point, that the court should be slow to interfere with the decisions of expert administrative tribunals. It is equally true however that the learned Chief Justice also stated:-

29. It does not seem to me that the Plaintiffs are seeking to challenge the expertise of the Employment Appeals Tribunal, but rather the legality of its findings.

30. On the finding of fact that the notices were "conditional" as is apparent from the Boland case, supra, the requirement for notice is met merely by giving appropriately lengthy notice, and no more. Indeed, it is quite clear, having regard to the provisions of The Companies Act 1990, and the manner in which an Examiner's scheme must be prepared and submitted to court under that Act, that it would be very difficult to serve a valid statutory notice (under the Minimum Notice and Terms of Employment Act ,1973/1991), in anticipation of a possibly successful scheme, if the notices inevitably fell once the Scheme failed because the Scheme is always subject to the Court's approval. In the Deegan and Fagan decisions the Tribunal appears to have conceded that the original notices were valid, but that they “ceased to be valid” when the Scheme did not proceed. As a matter of law, having regard to the Boland decision, that finding does not appear to me to be well founded.

31. In the second place, it seems to me that the correct interpretation of the decision in the Bolands case is that, so far as the statutory requirements are concerned, they must be looked at prospectively, that is say, at the date on which the notices are given. The only requirement at law under Section 4 is to ensure that the actual notice furnished is of sufficient length. It is also clear from the decision in the Boland case that even if viewed prospectively, the notice could still be impugned (despite being of appropriate statutory length) if the notice was given for spurious reasons or mala fides. In other words, if the "notice" was a ruse, it could not constitute a valid notice. While the Scheme of Arrangement did not in the end proceed, or meet the approval of the Court, there is no suggestion whatsoever that the original notices were given for any such spurious reason or mala fides. Absent such spurious reason or mala fides, I do not find in the statute any requirement that the notice must be given for a stated reason, or even if given for such stated reason, that its validity is suspect if the reason does not come to fruition.

32. Nor do I consider that the conclusion reached by the Tribunal was sound in law, if the true meaning and purpose of S.4 is considered. I do not myself have to analyse and interpret the true meaning of the provision, as it has been clearly stated, in the Bolands case, that the true purpose of the section is, to ensure that the notices provide employees with sufficient time to make provision for alternative employment. It was clearly stated by Murphy J. in The High Court, and not appealed from, on this point, that:

33. A further argument is made on behalf of the Defendants to the effect that, in contra distinction to the position in Boland, in the present case there was no actual or express extension of the notice period after that period expired (so far as the first category is concerned). The Tribunal found, as a fact, that no such extension of the notice was served, and stated that no evidence had been tendered by the Plaintiffs to the effect that such extensions were made or given.

34. It is said by the Defendants that, in these circumstances, the employees became re employed, by virtue of the fact that they continued to turn up to work and by virtue of the fact that the employer accepted them, paid them, and they continued working on precisely the same terms and conditions as had previously applied.

35. However, it is again clear from the Boland case, supra, that an extension of the notice period, howsoever made, or a continuation in employment after the expiry date of the notice, does not in law, have any effect on the lawfulness or otherwise of the notice. The Supreme Court expressly held that the failure by the employer to fire the employees at the time of expiry of the notice period, did not constitute the employees re-employed by the employers, nor was this failure a waiver of the notice. I do not find in that judgment any suggestion that, absent mala fides or a spurious notice, the statutory requirement covers anything other than length of notice. What was clearly stated by McCarthy, J. in The Supreme Court in the Bolands case, was:-

36. In the circumstances I am bound to find that the notices were not invalidated by virtue of the employer not ensuring that the employees left on the due date, being a certain date for the purposes of the Act, nor by virtue of the Defendant's claim that the employees at the expiry of the notice term, and not having left or been fired, became re-employed. It was submitted on behalf of counsel for Mary Clohisey, the fifth defendant in the Maria Boyle case, that the legal consequence of the failure to ensure that the employees who were given notice which expired on the 20th June, 1997 actually left, was that the employees became re-employed or had their contracts renewed.

37. It seems to me, having regard to the findings in the Boland case, supra, that the contention put forward on behalf of Ms. Closihey is not well founded. And this notwithstanding the provisions of Rule 6 of the Rules comprised in the First Schedule to the Act of 1973. The Rule states as follows:-

38. Having regard to the remaining matters found in the First Schedule to the Act of 1973, the purpose of this Rule is to ensure that an employer does not seek to avoid continuous service by an employee, so as to evade the provisions of the Act, by artificially dismissing an employee and immediately re-employing or re-instating him. Moreover, it seems to me that the use of the word “re-employment” in this Rule means an actual re-employment of the employee. That is not what occurred here, and the Rule does not cover the mere failure of the employer to ensure that the employee no longer continued in employment after a minimum notice period had expired. It is argued by the Plaintiffs that Rule 6 cannot apply because, in fact, the dismissal did not take place until the liquidator was actually appointed.

39. It was also said on behalf of Ms. Clohisey that she is protected, on the same facts, by the provisions of Section 9(2) of the Redundancy Payments Act, 1967, on the grounds that her contract was either renewed or she was re-engaged. The Plaintiff argued that this section also does not apply for the same reason, namely that there was no actual dismissal prior to the 4th July 1997.

40. As to the claim by the Defendants that the second category of employees had a contractual basis on which to rely, I take the view that that contractual basis might in certain circumstances be enforceable in a common law context subject to the provisions of the Companies Acts relating to a winding up - and I reach no conclusion on that. But this does not affect the determination as to whether the statutory requirement was complied with.

41. I find with some reluctance that the notices which were given were in compliance with the provisions of Section 4 of the Act, and that the decisions of the Employment Appeals Tribunal were wrong in law. I therefore find in favour of the Plaintiff in respect of the reliefs sought at paragraph 1 of each of the Summonses. Having regard to this finding I do not require to make any orders in respect of the other reliefs.