Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF: 192/15

 

 

 

CLAIMANT: Colum Patrick Murphy

 

 

RESPONDENT: Robert O'Reilly

 

 

 

DECISION

The unanimous decision of the tribunal is that:

 

(a) The claimant's holiday pay claim is well-founded and it is ordered that the respondent shall pay to the claimant the sum of £400 in respect of holiday pay.

 

(b) The claimant's claim for notice pay is well-founded and it is ordered that the respondent shall pay to the claimant the sum of £3,900 in respect of notice pay.

 

(c) The claimant's redundancy pay claim against the respondent is well-founded and it is declared that the respondent is liable to make a redundancy payment of £6,200 to the claimant.

 

(d) The claimant's unfair dismissal claim was withdrawn and accordingly it is dismissed.

 

Constitution of Tribunal:

Employment Judge: Employment Judge Buggy

Members: Mr S Devlin

Mr I Rosbotham

 

Appearances:

The claimant was self-represented.

The respondent was not present nor represented.

 

REASONS

 

1. Throughout a continuous period, which began on 2 June 2000 and which ended on 5 January 2015, the claimant was working as an employee and, in that capacity, throughout that entire period, this respondent was always the claimant's line manager or supervisor.

 

2. The claimant was first employed by Eurofibres Ltd; then, without any intervening break, he became an employee of Eurofibres (Ireland) Ltd; without any intervening break, he became an employee of O'Reilly Bedding Supplies Ltd; that then, without any intervening break, he became an employee of Dormir Beds Ltd; and then, without any intervening break, he became an employee of the respondent.

 

The claims and the defences

 

3. The claimant says that he was dismissed, because of redundancy, by the respondent in these proceedings. The claimant currently makes claims in respect of holiday pay, notice pay and redundancy pay. (He had been making a claim in respect of unfair dismissal, but that claim was withdrawn during the course of this hearing.) According to the claimant, in the calculation of his notice pay and redundancy pay, he is entitled to be treated as a person who has had continuity of employment throughout the period from June 2000 until January 2015.

 

4. The respondent contends that the claimant was not dismissed and that, instead, he resigned. The respondent also contends that there was no continuity of employment between the various employments of the claimant during the period up to the date on which he first became employed personally by the respondent (which was May 2014). For the latter reason, according to the respondent, the claimant is not entitled to a redundancy payment; and, for the same reason, he should be treated, for notice pay purposes, as though he was employed for less than one year.

 

The issues

 

5. Accordingly, for present purposes, the key issues are as follows:

 

(1) Did the claimant resign or was he dismissed?

 

(2) If he was dismissed, was he dismissed by reason of redundancy?

 

(3) Can the claimant be regarded as having continuity of employment, between some or all of his various employments, during the period beginning in 2000 and ending in January 2015, in light of the requirements of the Transfer of Undertakings (Protection of Employment) Regulations (Northern Ireland) 2006 ("TUPER")?

 

The process

 

6. Ms Kathleen Hand is also an ex-employee of this respondent. Her employment came to an end in January 2015. The context of her various employments (in businesses in which this respondent was her manager/supervisor) and the context of the termination of her employment, were similar to the equivalent contexts of this case. Accordingly: (1) The main hearing of the Hand case was conducted alongside the main hearing of this case. (2) The evidence presented in the Hand case was treated as evidence which had been presented in this case, and the evidence presented in this case was treated as evidence which had been presented in the Hand case.

 

7. The respondent was not present or represented at this main hearing. We were unaware of any "good" reason for his absence. We therefore decided to dispose of the proceedings in the absence of the respondent. In doing so, we took account of any information in the possession of the tribunal which had been made available by the parties.

 

The facts

 

8. Both the claimant and Ms Hand provided sworn oral testimony. We considered them to be honest witnesses.

 

9. In the following sub-paragraphs, we set out findings of fact which are relevant to the issues which we have had to determine in this case. (For ease of reference, and in the interests of minimising avoidable duplication, we have included some additional findings of fact elsewhere in this Decision):

 

(1) As already been noted above, Mr Murphy and Ms Hand each worked successively for the following employers:

 

(a) Eurofibres Ltd ("Eurofibres");

 

(b) Eurofibres (Ireland) Ltd ("EIL");

 

(c) O'Reilly Bedding Supplies Ltd ("O'Reilly BS");

 

(c) Dormir Beds Ltd ("Dormir"); and

 

(d) O'Reilly Agencies ("Agencies").

 

(2) Ms Hand worked for Eurofibres from 1996 onwards. Mr Murphy, this claimant, worked for Eurofibres from 2000 onwards. From April 2010 until the Summer of 2010, Mr Murphy and Ms Hand were employed by a firm called Eurofibres (Ireland) Ltd.

 

(3) In the Summer of 2010, Mr Murphy and Ms Hand ceased to work for EIL and began to work for O'Reilly BS. They worked for the latter firm until July 2012. In July 2012, they ceased to work for O'Reilly BS and began to work for Dormir.

 

(4) In May 2014, they ceased to work for Dormir Beds Ltd and began to work for the respondent personally. "O'Reilly Agencies" was merely a trade name, in an unincorporated business, which was used at a time when the respondent was operating as a sole principal.

 

(5) During all those various employments, Ms Hand was working as an accounts administrator and Mr Murphy was working as a manager.

 

(6) From 1996 until April 2010, this respondent was, in effect, running Eurofibres Ltd. From April until the Summer of 2010, the respondent was, in effect, running EIL. From the Summer of 2010 until July 2012, this respondent was, in effect, running O'Reilly BS. From July 2012 until May 2014, this respondent was, in effect, running Dormir. Obviously, from May 2014 until January 2015, this respondent was running the business which he was then operating as sole trader.

 

(7) Eurofibres went into liquidation in April 2010. From then onwards, the workforce of the former Eurofibres business was paid by Eurofibres (Ireland) Ltd until the Summer of 2010.

 

(8) From 1996 until April 2010, Eurofibres Ltd was run from a particular office ("the Office"). EIL was also run from that same office. O'Reilly BS was also run from the Office. Dormir was also run from the Office. The Agencies was also run from the Office.

 

(9) Eurofibres, EIL and O'Reilly BS operated from the same warehouse (which was in Edentubber). Dormir operated at a different warehouse (which was at Armagh Road, Newry).

 

(10) All of the five relevant firms used the same forklifts and the same Mercedes van.

 

(11) Eurofibres, EIL and O'Reilly BS supplied components for bed makers. Dormir and the Agencies constructed beds.

 

(12) Eurofibres, EIL and O'Reilly BS had essentially the same circle of customers. Dormir and the Agencies had essentially the same circle of customers which was, however, different from the circle of customers which Eurofibres, EIL and O'Reilly BS had had.

 

(13) Both Mr Murphy and Ms Hand were successively, and without any intervening breaks, employed by Eurofibres, EIL, O'Reilly BS, Dormir and the Agencies.

 

(14) Many of the employees of Eurofibres were employed by O'Reilly BS from the Summer of 2010 onwards.

 

(15) Eurofibres, EIL and O'Reilly BS used the same loading ramp.

 

(16) From 1996 until January 2015, Ms Hand was never given a P45. From 2000 until January 2015, Mr Murphy was never given a P45.

 

(17) On Monday 5 January 2015, Mr Murphy tried to go back to work for the Agencies, after the Christmas holidays. He went to go into work but the door was locked. He went over to the respondent's house. The respondent called Mr Murphy into his house. He then informed the claimant that he had no more money to keep the business open. He said he was owed money but nobody paid him. He said "sorry" about the way things had worked out. He said that he would try to give the claimant, Mr Murphy, the money he owed him. (He never did.)

 

(18) The claimant treated that conversation as constituting a dismissal. We consider that it was entirely appropriate for him to treat it as such.

 

(19) A couple of weeks after that conversation, Mr Murphy sent the respondent a letter demanding payment of the debts which this respondent still then owed to Mr Murphy. A few days later, the respondent rang the claimant and asserted that he had never 'paid him off' and that he had just been waiting for some money to come through. The respondent, during that call, invited the claimant to come back on the following Monday. The claimant did not do so.

 

Liability : The law and our conclusions

 

10. Under this heading, the main issues are as follows:-

 

(1) Was the claimant dismissed?

 

(2) If so, was he dismissed by reason of redundancy?

 

(3) In the circumstances of this case, do the TUPE Regulations have the effect of entitling the claimant to be regarded as having been in continuity of service, ever since 2000, for the purpose of deciding whether he had enough service to claim a redundancy payment, and also for the purpose of deciding on the extent of his notice entitlement.

 

11. First, we deal with the "dismissal" issue. It is clear law that, if an employer unambiguously tells a claimant that he is being dismissed with immediate effect, that employer cannot subsequently undo that dismissal, even if he wanted to do so.

 

12. In this case, on 5 January 2015, the respondent unambiguously informed the claimant that he was being dismissed with immediate effect. Accordingly, that dismissal took effect on that day. On that day, the respondent did not envisage, or mention, any possibility of renewing this claimant's contract of employment, or of re-engaging him. Accordingly, even if this respondent, later during January 2015, really was willing to undo the effects of the dismissal, he would have had to do so by re-employing the claimant. The dismissal had already occurred, and could not then be undone.

 

13. The second issue is whether or not the claimant's dismissal was by reason of redundancy. Against the following background, and for the following reasons, we have concluded that the dismissal was indeed by reason of redundancy.

 

14. In these proceedings, the claimant is making a reference to this tribunal, under Article 198 of the Employment Rights (Northern Ireland) Order 1996 ("the ERO") for a declaration of his entitlement to a redundancy payment. Paragraph (2) of Article 198 provides that, for the purposes of an Article 198 reference, an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been dismissed by reason of redundancy.

 

15. The contrary has not been proved in this case. Indeed, the reason for the dismissal which was mentioned to the claimant by the respondent on 5 January 2015 is a reason which comes comfortably within the definition of redundancy, as set out in Article 174 of ERO.

 

16. The third of the liability issues was the TUPE issue. That is the most complex liability issue.

 

17. The Transfer of Undertakings (Protection of Employment) Regulations 2006 have already been defined, for the purposes of this Decision, as "TUPER". Those Regulations implement the EU Acquired Rights Directive of 2001 ("the Directive").

 

18. TUPER applies to a "relevant transfer" within the meaning of those Regulations.

 

19. Regulation 4(1) of TUPER is important in the present context. The effects of a relevant transfer, on the contract of employment of any person who, immediately prior to that transfer, was assigned to the transferred entity, can be summarised as follows. (1) Other than in situations which are irrelevant in the present context, the relevant transfer does not operate so as to terminate the contract of employment of that employee. (2) Instead, after the transfer, any such contract has effect, as if it had originally been made between that employee and the transferee.

 

20. Put in different terms, the relevant effects of paragraph (1) of Regulation 4 of TUPER are as follows:

 

(1) If there was a relevant transfer (within the meaning of TUPER) from Eurofibres to EIL, Mr Murphy's and Ms Hand's respective contracts of employment, after that transfer, will be treated as though they had been originally made with EIL at the time when Eurofibres actually entered into the relevant contract of employment with Mr Murphy/ Ms Hand:

 

(2) If there was a relevant transfer from EIL to O'Reilly BS, the contract of employment of Mr Murphy and Ms Hand respectively will be regarded, as a matter of law, as having originally been made with O'Reilly BS.

 

(3) If there was a relevant transfer from O'Reilly BS to Dormir, the contract of employment of Mr Murphy, and the contract of employment of Ms Hand, will be regarded, as a matter of law, as having originally been made between Mr Murphy/Ms Hand and Dormir.

 

(4) If there was a relevant transfer between Dormir and the respondent, Mr Murphy's/Ms Hand's contract of employment with this respondent will be regarded, as a matter of law, as having been made with this respondent at the time when that contract was actually made with Dormir.

 

21. The implication of all this is that, if the four relevant transfers (within the meaning of TUPER) did occur, Mr Murphy will have deemed continuity of service dating back to 2000.

 

22. The transfers referred to in the last preceding paragraph above were as follows:

 

(1) a transfer from Eurofibres to EIL;

 

(2) a transfer from EIL to O'Reilly BS;

 

(3) a transfer from O'Reilly BS to Dormir; and

 

(4) a transfer from Dormir to the Agencies.

 

23. For the purpose of TUPER a "relevant transfer" is defined as applying to a transfer of an entity (an undertaking, business or a part of an undertaking or a part of a business) "to another person" where there is " ... a transfer of an economic entity which retains its identity".

 

24. TUPER has to be construed in light of the requirements of the Directive. Subject to certain exceptions which are irrelevant in the present context), Article 1 of the Directive provides that it is to apply to any transfer of an entity "to another employer as a result of a legal transfer or merger" which are irrelevant in the present context. Article 1(b) provides that subject to certain exclusions, there will be a transfer within the meaning of the Directive if there is a transfer of an economic entity which retains its identity.

 

25. Regulation 3(2) of TUPER defines "economic entity" as an organised grouping of resources which has the objective of pursuing an economic activity. The same definition of an economic entity is to be found in Article 1 of the Directive. (That provision, in Article 1, reflects the case law of the European Court of Justice which had developed during the period leading up to the enactment of the 2001 Directive.)

 

26. As Regulation 3(6) of TUPER makes clear, for the purposes of the Regulations, a relevant transfer may take place even if no property is transferred within the context of that transfer.

 

27. We are sure that if any of the situations referred to at paragraph 22 above constituted a transfer within the meaning of the Directive, there was a relevant transfer for the purposes of TUPER.

 

28. Spijkers v Gebroeders Benedik Abattoir CV [1986] ECR 1119 sets out the criteria which have to be considered in deciding whether or not there has been a transfer for the purposes of the Directive.

 

29. At paragraph 11 of its judgment in Spijkers, the European Court of Justice stated that:

 

" ... the decisive criterion for establishing whether there is a transfer for the purposes of the Directive is whether the business in question retains its identity."

 

30. At paragraph 12 of that judgment, the Court declared that the implication of that decisive criterion (the question of whether or not the business retained its identity) was that, for the purposes of the Directive, a transfer does not occur merely because the assets of a particular business are disposed of; instead, according to the Court, what really matters is whether or not the business was disposed of as a going concern (whether or not, in the hands of the putative transferee, the business retained its identity).

 

31. Also at paragraph 12 of that judgment, the Court pointed out that one relevant indicator (one indicator that the business was disposed of as a going concern and had retained its identity) would be provided by the fact, if indeed it be the fact, that (1) the operation of the business was actually continued or resumed by the new employer and (2) it was continued or resumed with the same or similar activities.

 

32. At paragraph 13 of Spikjers, the Court made the point that there has to be an overall assessment on the question of whether or not the business has been disposed of to the putative transferee as a going concern. In that paragraph, the Court drew attention to certain factors which could properly be taken into account in arriving at that overall assessment. (However, the Court also made the point that those factors are only appropriate for consideration as part of an overall assessment, and that " ... they cannot therefore be considered in isolation".)

 

33. The factors to which the Court drew attention (at paragraph 13 of the Spikjers judgment) were as follows:

 

(1) The court or tribunal was to pay regard to the type of undertaking or business which is involved.

 

(2) Were the tangible assets of the business, such as buildings and movable property, transferred to the transferee?

 

(3) What was the value of the intangible assets (such as goodwill) of the business at the time of the transfer?

 

(4) Were the majority of the employees of the business taken on by the new employer?

 

(5) Were the customers of the old employer transferred to the new employer?

 

(6) How similar were the activities carried on before and after the putative transfer?

 

(7) Were those activities suspended for any period?

 

34. In relation to each of the situations listed at paragraph 22 above, we have had regard, in deciding whether or not there was a relevant transfers to the list set out in the last preceding paragraph, while bearing in mind that the listed factors can only appropriately be considered as part of an overall assessment.

 

35. We are sure that there was a transfer from Eurofibres to EIL. In light of all of our findings of fact, we have arrived at that conclusion against the following background and for the following reasons.

 

36. EIL, like Eurofibres, was run from the same office. EIL, like Eurofibres, used the same warehouse. All of the employees of Eurofibres were taken on by EIL. EIL had the same circle of customers as Eurofibres. The activities carried on before and after the putative transfer were essentially the same. Those activities were not suspended for any period.

 

37. We have concluded that there was a relevant transfer from EIL to O'Reilly BS. In light of all of our findings of fact, we have arrived at that conclusion, against the following background, for the following reasons.

 

38. Both businesses were run from the same office. Both businesses were using the same warehouse. Both businesses had essentially the same workforce. The customer-base of both businesses were much the same. Their respective activities were practically identical. The activities were not suspended for any period prior to the putative relevant transfer.

 

39. We are sure that there was a relevant transfer between O'Reilly BS and Dormir. In light of all of our findings of fact, we have arrived at that conclusion, against the following background, and for the following reasons.

 

40. We noted that the activities which were carried out by O'Reilly BS and the activities carried out by Dormir were not the same. We also noted that there were significant similarities between the two sets of activities. (Eurofibres, EIL and O'Reilly BS had been in the business of supplying components for bed makers; Dormir made the actual beds.)

 

41. We also noted that Dormir did not use the warehouse which had been used by Eurofibres, EIL and O'Reilly BS. However, we noted that Dormir used the same office as O'Reilly BS had used. We also noted that Dormir employed a majority of the people who had previously been employed by O'Reilly BS.

 

42. We noted that Dormir, like O'Reilly BS, used the same Mercedes van and the same forklifts.

 

43. We noted that the circle of customers of Dormir was very significantly different from the customer base of O'Reilly BS.

 

44. We are sure that, in May 2014, there was a relevant transfer from Dormir to the respondent. In light of all of our findings of fact, we have so concluded, against the following background and for the following reasons.

 

45. The Agencies' business was in precisely the same line of work as Dormir's business.

 

46. The Agencies used the same office as that which had been used by Dormir. Like Dormir, the Agencies used the same Mercedes van, and used the same forklifts.

 

47. The Agencies had essentially the same circle of customers as the circle which Dormir had had.

 

48. There was no gap between the termination of Ms Murphy's and Ms Hand's periods of employment with Dormir and the start of their respective period of employment by the respondent.

 

49. In light of the foregoing, we are satisfied that each of the changes-of-employer listed at paragraph 2 above constituted a relevant transfer. Accordingly, because of TUPER, the claimant is entitled to make a claim for a redundancy payment and is to be deemed, for notice pay calculation purposes, to have been employed by this respondent from the year 2000 onwards.

 

Amounts : The law and our conclusions

 

50. In calculating the amounts of notice pay and redundancy pay, we have taken account of the continuity of service which became available to the claimant because of the various TUPE transfers : See above.

 

51. In calculating the amount of notice pay available to the claimant, we have taken no account of the potential availability of Jobseekers Allowance because we are satisfied that the claimant did not qualify for income-based Jobseekers Allowance and that he did not receive contribution-based JSA because of a failure on the part of this respondent to make appropriate employer contributions to the relevant authorities.

 

52. This Decision is based on the following information:

 

Gross weekly pay : £400

Net weekly pay : £325

Number of actual completed years of service : 14

Age on date of dismissal : 44

Multiplier (for redundancy pay) : 15.5

 

53. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

 

 

 

 

 

 

 

Employment Judge

 

 

Date and place of hearing: 28 May 2015, Belfast

 

 

Date decision recorded in register and issued to parties: