Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF: 1506/16

 

 

 

CLAIMANT: James Agnew

 

 

RESPONDENT: SPS Ireland Ltd (In Liquidation)

 

 

 

DECISION

(A) The claimant's complaint, under Article 217 of the Employment Rights (Northern Ireland) Order 1996 ("ERO"), is well-founded.

 

(B) I have decided to make a protective award in respect of the descriptions of employees who are specified at paragraph 45 below.

 

(C) It is ordered that the respondent shall pay remuneration for the protected period.

 

(D) The protected period began on 29 April 2016 and lasted for 90 days. The attention of the parties is drawn to the Recoupment Statement below. The address of the respondent is:

 

SPS Ireland Ltd (In Liquidation)

C/o Official Receiver

Fermanagh House

Ormeau Avenue

BELFAST

BT2 8NJ.

 

Constitution of Tribunal:

Employment Judge (sitting alone): Employment Judge Buggy

Appearances:

The claimant was represented by Mr C McGlone, Solicitor.

The respondent was debarred from participating in these proceedings because no response has been presented on behalf of the respondent.

REASONS

 

1. I refer to the Decision of a full tribunal in Dempsey & Others v David Patton & Sons (NI) Ltd (In Administration) [case reference no. 947/13 & Others, Decision issued on 4 April 2014]. In the present case, I adopt and apply the statements of legal principle which were set out in Dempsey.

 

The collective consultation legislation

 

2. Article 216 of the Employment Rights (Northern Ireland) Order 1996 ("ERO") imposes duties upon an employer, in some circumstances, to collectively consult with certain workforce representatives.

 

3. Article 217 provides for the making of a complaint to a tribunal in respect of a failure to comply with Article 216.

 

The context

 

4. The respondent company ("the Company") provided services to several clients but mainly to Michelin in Ballymena. With effect from 29 April 2016, the Company's business closed down and all the Company's staff were then made redundant. Subsequently, the Company was the subject of a winding-up order.

 

The claim

 

5. In these proceedings, the claimant contends that, in breach of Article 216 of ERO, no relevant collective consultation, of the type which is envisaged in Article 216 of ERO, took place in relation to the relevant dismissals.

 

6. The situation in respect of workers' representation in the Company was as follows:

 

(1) The Company did not recognise any trade union for collective bargaining purposes.

 

(2) There were no employee representatives, appointed or elected by the "affected employees", who, although elected for purposes other than the purposes of Article 216, had authority from those employees to be consulted, on their behalf, about the relevant proposed dismissals. (See
Article 216(3)(b)(i) of ERO).

 

(3) The Company had taken no steps, in relation to the election of employee representatives, of the type which are envisaged in Article 216(3)(b)(ii) of ERO.

 

7. In these proceedings, the claimant seeks a declaration that the Company failed to comply with requirements of Article 216. He has also asked me to make a protective award, as a remedy in respect of that alleged failure.

 

The course of the proceedings

 

8. The High Court has granted leave to this claimant to bring these proceedings. No response was presented by the Company.

 

9. The Official Receiver has decided not to participate in these proceedings.

 

10. Upon the application of the claimant, I granted third-party discovery orders in this case, in relation to the Department for the Economy (in respect of the Redundancy Payments Service) and in relation to the Official Receiver.

 

11. I required the Department for the Economy to provide the claimant with discovery and inspection of all documents in its possession or under its control which related to work locations of relevant staff, or which related to the numbers of relevant staff. (In the present context, "relevant staff" means staff who were working for the Company at the time when the Company made all of its staff redundant).

 

12. I required the Official Receiver to provide the claimant with discovery and inspection of all documents in its possession or under its control which related to work locations of relevant staff, or which related to the numbers of relevant staff.

 

13. Both of those orders were complied with.

 

The evidence

 

14. During the course of the main hearing, I received sworn oral testimony from the claimant and from Mr Robert Allen.

 

15. During the course of that hearing, my attention was drawn to a number of documents, most of which were contained in a bundle of documents.

 

16. In arriving at my conclusions in this case, I paid particular attention to the contents of documents which had been provided pursuant to the third party discovery orders which have been referred to above.

 

The facts

 

17. In this paragraph, I have set out various findings of fact. For ease of reference, and in order to minimise repetition, I have also set out some other findings of fact elsewhere in this Decision. I made the following finding of fact:

 

(1) The claimant was employed by the Company from February 1989 until
April 2016.

 

(2) On the latter date, the claimant was dismissed by reason of redundancy.

 

(3) In January, February, March and April 2016, approximately 25 staff were employed by the Company.

 

(4) The main business of the Company was to carry out maintenance of plant and machinery.

 

(5) During the years leading up to the date on which the Company stopped trading, the great majority of its workload consisted of work which was carried out for the Michelin factory in Ballymena.

 

(6) At all times which are material for present purposes, the Company had two workplaces. One of those workplaces was the Michelin factory in Ballymena. The other workplace was the Company's workshop at Dargan Road, Belfast.

 

(7) Some, although very few, of the Company's staff were permanently based at, and worked almost exclusively at, the Dargan Road workshop. The great majority of the Company's staff worked only at the Michelin factory, and worked there only on services which were being provided by the Company to Michelin.

 

(8) In November 2015, Michelin announced that the factory would be closing. From then onwards, the Company's workload at Michelin was substantially reduced.

 

(9) On or about 27 April 2016, the claimant and three other employees were having a conversation with Mr John Matchett (a director of the Company) about materials for a job. During the course of that conversation, Mr Matchett stated that the Company would cease trading on the Friday of the same week. That was the first time that that news was brought to the attention of this claimant.

 

(10) On Friday 29 April 2016, the claimant, and all other employees of the Company, received a letter from Mr Matchett, confirming the closing of the business and its inability to pay outstanding pay, notice pay, redundancy pay or holiday pay. The claimant was then also provided with a form for applying to the RPS for payment of those debts.

 

(11) All of the company's employees were made redundant by the Company in April 2016.

 

(12) The claimant is unaware of any attempt ever having been made to inform or consult on the redundancies, whether with individual employees or with workers' representatives.

 

Liability

 

18. At paragraphs 19-37 below, I focus on matters which are relevant in the context of determining whether this complaint is well-founded.

 

The issues (General)




19. The relevant dismissals took place on 29 April 2016. These proceedings were presented on 14 June 2016. Accordingly, these proceedings have been brought within the relevant primary time limit.

 

20. Because of the situation in respect of workers' representation in the Company (as described at paragraph 6 above), the claimant has the "standing" to make the Article 217 complaint in these proceedings: He is obviously an "affected employee" within the meaning of Article 216(1) of ERO. (In this context, see paragraph (d) of paragraph (1) of Article 217).

 

21. As paragraph (1) of Article 216 makes clear, the Article 216 collective consultation duties did not apply at all (in the circumstances of this case) unless the Company was proposing to dismiss as redundant 20 or more employees "at one establishment" within a period of 90 days or less. Accordingly, in that connection, there are three preconditions:

 

(1) There must be a proposal to dismiss as redundant 20 employees or more,

 

(2) The proposal must relate to proposed dismissals at one establishment.

 

(3) The dismissals must be proposed to take place within a period of 90 days or less).

 

All the relevant dismissals took place on the same date. For reasons which are explained at paragraphs 25-37 below, I am satisfied that preconditions (1) and (2) were also satisfied in this case.

 

22. The Company never carried out any pre-dismissal consultation, to any extent or of any nature, with any representatives of the relevant employees. Accordingly, I am satisfied that the Article 216 duties were not complied with.

 

23. Paragraph (9) of Article 216 envisages the possibility of there being special circumstances which might render it not reasonably practicable for the employer to comply with one, or several, or all of the Article 216 collective consultation duties. That paragraph makes it clear that, if there are such special circumstances (which render it not reasonably practicable for the employer to fully comply with any particular requirement), the employer must take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances. Paragraph (6) of Article 217 provides that, if any question arises either as to:

 

(1)           whether there were "special circumstances" or

 

(2)           whether the employer took "all such steps towards compliance" as were reasonably practicable,

 

the onus of proof, in relation to each of those questions, is upon the employer.

 

24. In this case:

 

(1)           The Company has not shown that there were special circumstances which rendered it not reasonably practicable for the Company to comply with any requirement of Article 216.

 

(2)           I am not satisfied that the Company took all such steps towards complying with any relevant Article 216 requirement as were reasonably practicable in those circumstances.

 

Accordingly, the potential "special circumstances" defence has not been established in this case.

 










The threshold issue

 

25. At paragraph 21 above, I have already referred to the quantitative requirement which must be met if the Article 216 duties are to apply. (There must be a proposal to dismiss, as redundant, at least 20 employees at one establishment).

 

26. The decision of the European Court of Justice in USDAW v WW Realisations 1 Ltd [2015] IRLR 577 makes clear that, in paragraph (1) of Article 216, the quantitative criterion, in relation to any particular employer, applies per establishment, as distinct from applying (if the relevant undertaking consists of more than one establishment) in the aggregate across that employer's various establishments.

 

27. On the basis of the oral and documentary evidence which I have received:

(1) I am satisfied that the Company's undertaking consisted of two establishments.

 

(2) I am also satisfied that one of those establishments was the Company's work unit at the Michelin factory in Ballymena and that the other establishment was the Company's workshop at Dargan Road, Belfast.

 

28. In the USDAW case, at paragraph 52 of its judgment, the Court of Justice commented as follows:

 

"Consequently, according to the case law of the Court, where an 'undertaking' comprises several entities meeting the criteria set out in paragraphs 47, 49 and 51 above, it is the entity to which the workers made redundant are assigned to carry out their duties that constitutes the 'establishment' for the purposes of Article 1(1)(a) of Directive 98/59."

 

29. At paragraphs 36 and 37 below, I will set out my conclusions on the question of whether or not this claimant belonged to the Michelin factory establishment at the relevant time. However, I wish to make it clear that I am satisfied that, even if I had decided that this claimant did not belong to the Michelin factory establishment at the relevant time, the quantitative criterion would still have been satisfied in respect of that establishment. I am satisfied, on the balance of probabilities, that, at the relevant time, the Michelin factory was the establishment to which 20 "other" staff (staff other than the claimant) were assigned to carry out their duties. I have arrived at that conclusion having carefully considered the documentary evidence and the sworn oral testimony. The relevant staff (the staff who worked exclusively or nearly exclusively at the Michelin factory) were identified by the claimant, by name, during the course of his oral testimony in this case.

 

30. Accordingly, even if I had decided that this claimant did not belong to the relevant establishment, the Article 216 duties would still have been owed in relation to the redundancies which were being proposed in respect of the Michelin-based staff.

 

31. At paragraph 47 of its judgment in USDAW, the CJEU noted that in Rockfon [1996] IRLR 168, the ECJ had observed, that, in Article 1(1)(a) of Directive 98/59, the term "establishment" must be interpreted as designating, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties.

 

32. In the same paragraph of the USDAW judgment (in confirming that an employment relationship is essentially categorised by the link existing between the worker and the part of the undertaking or business to which he is assigned to carry out his duties), the CJEU referred to its judgment in Botzen and Others [1986] 2 CMLR 50.

 

33. In effect, in that paragraph, the CJEU confirmed that the Botzen assignment criteria should be applied in determining any question as to whether a particular individual belonged, or did not belong, to a particular establishment.

 

34. In the Court of Appeal judgment in Gale v Northern General Hospital NHS Trust [1994] IRLR 292, the Botzen assignment criteria were being considered in the context of a determination of the question of whether a particular individual was to be regarded, for the purposes of transfer of undertakings law, as having been assigned to a transferred entity. In that case, Bingham MR suggested that, where there is doubt about the issue of assignment, an appropriate test is whether the employee in question formed part of the "human stock" of the entity which was transferred.

 

35. I consider that the "human stock" test is appropriate in the context of deciding whether or not a particular individual was within, or outside of, a particular establishment.

 

36. I have concluded that this claimant was part of the human stock of the Michelin establishment. In arriving at the latter conclusion, I have taken account of the following.

 

(1) This claimant started work in the Company in February 1989. He had served his time as a rigger. However, most of his work in the Company was as a mechanical fitter and steel fabricator. Whenever he started working for the Company, he was based at the Courtaulds complex in Carrickfergus (At that time, the Company rented premises there and used it as a workshop).

 

(2) He was never given any contract of employment which stated his work location. The amount and location of work that the Company had on would depend on what work the Company managers managed to bring in. Employees were required to do any job, and to travel to any job. When working for the Company, the claimant was always employed on the understanding that he had to go and work in any location, at any time, if instructed by the Company to do so.

 

(3) Over the years, he worked on lots of different sites for the Company. He worked at various locations, including power stations, Belfast City Council, Harland and Wolff shipyard, and lots of other places.

 

(4) Within the first year of starting work in the Company, he had been sent to the Michelin factory in Ballymena to work on a boiler. That work lasted for approximately five weeks. He continued to be sent to Michelin on a regular basis.

 

(5) Over the years, the Company rented different premises as a workshop. In or about 2012, the Company rented the premises at Dargan Crescent in Belfast.

 

(6) Those premises were used as a workshop, both in respect of work in the Michelin factory and in respect of work at other sites (sites of other customers in respect of which the Company also had contracts). The purpose of the Dargan Crescent workshop was mainly to fabricate steel for use on such contracts. Mr Matchett (see paragraph 17 above), also had an office there.

 

(7) Most of the claimant's working life in the Company was spent at the Michelin factory. Over the years, he had worked in every department in the Michelin factory. His main work was machine installation, renewing pipe work, boiler maintenance and dealing with moulds.

 

(8) In about the year 2009, he started to be based in Michelin. That was his sole workplace, for practical purposes, until January 2016.

 

(9) Until the termination of his employment, the claimant continued to have a Michelin factory pass, which allowed him ready access to the Michelin factory.

 

(10) In or around November 2015, Michelin announced that they would be closing the factory.

 

(11) At that time, and until the termination of the claimant's employment, Mr Mike Ryan was the overall Company manager at the Michelin factory.

 

(12) While subsequently working in the Dargan workshop, the great majority of the claimant's workload was work which was carried out in respect of the Michelin factory.

 

(13) Around the middle of March 2016, he was sent back to work in the Michelin factory, to do a maintenance job on a boiler.

 

(14) That work, at the factory, lasted for approximately four weeks. When that work was finished, he was sent back to the workshop by Mr Ryan.

 

(15) However, he was told at that time that there was another boiler which he would soon have to "do" at the Michelin factory. Accordingly, at that time, he left his tools at the factory and believed that he would be going back to Michelin soon.

 

(16) Upon his return to the Dargan workshop on that occasion, the claimant did some preparation work which was necessary for his return to Michelin. He made a spade for the second Michelin boiler which he was supposed to be going to work on. He was also waiting on material for making two blank flanges for steam-control on that boiler.

 

(17) Other than that, he then did very little work at that time, because there were no materials to make the other parts for the Michelin job. That situation continued until he was made redundant on 29 April 2016.

 

(18) During the time when the claimant was working in Dargan Road, Mr Ryan would have had "the last say" if the claimant had wanted to take time off. If he was off sick, he would report that sickness absence to Mr Ryan (and not to Mr McVeigh, who was in charge of the Dargan Road workshop).

 

37. Against the background set out at paragraph 36 above, and because of the findings of fact which are set out in that paragraph, I am satisfied that, throughout the relevant period, this claimant was part of the human stock of the Michelin factory establishment. I have therefore concluded that he then belonged to the Company's Michelin factory establishment.

 

Liability outcome

 

38. Against the background set out at paragraphs 19-37 above, and for the reasons set out in those paragraphs, I have concluded that this Article 217 complaint is well-founded.

 

Remedies

 

39. At paragraphs 40-46 below, I focus on matters which are relevant in the context of determining remedies issues. Legal principles which are relevant in that context are set out at paragraphs 74-87 of Dempsey. (See above). In this case, I have applied those principles.

 

The declaration




40. Because I have found this claim to be well-founded, I am obliged to make a declaration to that effect, and I now do so.

 

A protective award ?




41. On the face of it, I have a discretion as to whether to make a protective award in this case. However, in light of the legal principles which are mentioned at paragraphs 75-81 of Dempsey, and having had regard to the fact that no pre-dismissal consultation (of any kind, or of any quality) was carried out in this case, I am sure that, in this case, the only appropriate determination is that a protective award should be made.

 

Beginning when ?




42. The protected period has to begin with the date on which the first of the relevant dismissals took place, or the date of the making of the protective award, whichever is the earlier date. (See paragraph (4) of Article 217). Accordingly, in the circumstances of this case, it is clear that the protected period must begin on 29 April 2016.

 

Duration ?




43. In deciding on the duration of the protective award, I have adopted and applied the statements of principle which are set out at paragraph 84 of Dempsey.

 

 

 

 

44. As I have already made clear, this was a case in which there was no relevant dialogue, and no relevant consultation, whatsoever. I know of no relevant mitigating circumstances. Against that background, and for those reasons, I have decided to make an award of 90 days.

 

For whom?




45. I have decided that the protective award should apply to this claimant, and to every other employee of the Company to whom both of the following criteria apply:

 

(1)           That employee was dismissed as redundant by the Company on or about
29 April 2016.

 

(2)           During the relevant period, the Company's Michelin factory "establishment" was the work unit to which that employee was assigned to carry out his/her duties.

 

46. In deciding upon the personal scope of the award, I have noted and applied the statements of legal principles which are set out at paragraphs 267-309 of Dempsey and at paragraphs 13-20 and 25-28 of Glendinning v Mivan (No. 1) Ltd (In Administration) [Case Reference No: 470/14, decision issued during December 2014].

 







Recoupment Statement

 

[1] In the context of this Notice:

 

(a) "the relevant benefits" are jobseeker's allowance, income support and income-related employment and support allowance; and

 

(b) any reference to "the Regulations" is a reference to the Employment Protection (Recoupment of allowance and Income Support) Regulations (Northern Ireland) 1996 (as amended).

 

[2] Until a protective award is actually made, an employee who is out of work may legitimately claim relevant benefits because, at that time, he or she is not (yet) entitled to a protective award under an award of an industrial tribunal.  However, if and when the tribunal makes a protective award, the Department for Communities ("the Department") can claim back from the employee the amount of any relevant benefit already paid to him or her; and it can do so by requiring the employer to pay that amount to the Department out of any money which would otherwise be due to be paid, to that employee, under the protective award, for the same period. 

 

[3] When an industrial tribunal makes a protective award, the employer must send to the Department (within 10 days) full details of any employee involved (name, address, insurance number and the date, or proposed date, of termination of employment).  That is a requirement of regulation 6 of the Regulations.

 

[4] The employer must not pay anything at all (under the protective award) to any such employee unless and until the Department has served on the employer a recoupment notice, or unless or until the Department has told the employer that it is not going to serve any such notice.

 

[5] When the employer receives a recoupment notice, the employer must pay the amount of that recoupment notice to the Department; and must then pay the balance (the remainder of the money due under the protective award) to the employee. 

 

[6] Any such notice will tell the employer how much the Department is claiming from the protective award.  The notice will claim, by way of total or partial recoupment of relevant benefits, the "appropriate amount", which will be computed under paragraph (3) of regulation 8 of the Regulations

 

[7] In the present context, "the appropriate amount" is the lesser of the following two sums:

 

(a) the amount (less any tax or social security contributions which fall to be deducted from it by  the employer) accrued due to the employee in respect of so much of the protected period as falls before the date on which the Department receives from the employer the information required under regulation 6 of the  Regulations, or

 

(b) the amount paid by way of, or paid on account of, relevant benefits to the employee for any period which coincides with any part of the protected period falling before the date described in sub-paragraph (a) above.

 

[8] The Department must serve a recoupment notice on the employer, or notify the employer that it does not intend to serve such a notice, within "the period applicable" or as soon as practicable thereafter.  (The period applicable is the period ending 21 days after the Department has received from the employer the information required under regulation 6).

 

[9] A recoupment notice served on an employer has the following legal effects.  First, it operates as an instruction to the employer to pay (by way of deduction out of the sum due under the award) the recoupable amount to the Department; and it is the legal duty of the employer to comply with the notice.  Secondly, the employer's duty to comply with the notice does not affect the employer's obligation to pay any balance (any amount which may be due to the claimant, under the protective award, after the employer has complied with its duties to account to the Department pursuant to the recoupment notice).

 

[10] Paragraph (9) of regulation 8 of the 1996 Regulations expressly provides that the duty imposed on the employer by service of the recoupment notice will not be discharged if the employer pays the recoupable amount to the employee, during the "postponement period" (see regulation 7 of the Regulations) or thereafter, if a recoupment notice is served on the employer during that postponement period. 

 

[11] Paragraph (10) of regulation 8 of the 1996 Regulations provides that payment by the employer to the Department under Regulation 8 is to be a complete discharge, in favour of the employer as against the employee, in respect of any sum so paid, but "without prejudice to any rights of the employee under regulation 10 [of the  Regulations]".

 

[12] Paragraph (11) of regulation 8 provides that the recoupable amount is to be recoverable by the Department from the employer as a debt. 

 

 

 

 

 

 

Employment Judge:

 

 

Date and place of hearing: 15 December 2016, Belfast.

 

 

Date decision recorded in register and issued to parties: