Redundancy Payments

Cases

Barry & ors -v- Minister for Agriculture & Food

[2015] IESC 63 (16 July 2015)

Supreme Court Charleton J.

“10. The Employment Appeals Tribunal was originally established in 1967 as the Redundancy Appeals Tribunal under s.39 of the Redundancy Payments Act 1967. With the introduction of statutory rights to redundancy on the failure of a business or on surplus employees being let go, an entitlement was also established with a view to determining rights by ex-employees to redundancy payments to seek a ruling from a rights commissioner, whose ruling in turn could be appealed to a more formal quasi- judicial tribunal. Both the rights and the manner of enforcing the rights were new to the legal system and were justiciable not in the courts established under Article 34 of the Constitution, but through a mechanism of resolution established separately. Procedural rules are contained in the Redundancy (Redundancy Appeals Tribunal) Regulations 1968, which have been since much amended; SI No.24 of 1968. Hearings are conducted by a panel of three, with a legally qualified chairperson and hearings are open to the public, save by request. Complaints of not being given the statutory minimum notice of dismissal may be referred to the Employment Appeals Tribunal under the Minimum Notice and Terms of the Employment Act 1973 section 4. Upon such a claim succeeding, an award may be made in compensation for any loss and this is recoverable as a simple contract debt against the employer; section 12 (2). A right of appeal is provided, as noted above, and this may also be exercised by the relevant Minister; section 12 (3). The extensive jurisdiction of the Employment Appeals Tribunal includes such legislation as the Maternity Protection Acts 1994-2004 and the Transfer of Undertaking Regulations 2003; see generally Forde and Byrne, Employment Law 3rd Ed., (Dublin, 2009). The appellate jurisdiction is specifically defined in s.39 of the Redundancy Payments Act 1967 in providing:

The decision of the Tribunal on any question referred to it under this section shall be final and conclusive, save that any person dissatisfied with the decision may appeal therefrom to the High Court on a question of law.

11. The Employment Appeals Tribunal is a creature of legislation exercising jurisdiction in the enforcement of modern employment rights which did not exist at common law and which were created specifically by statute, often pursuant to international convention obligations, and with precise remedies under legislation, the analysis of which are within the exclusive competence of that statutory body. The High Court is not mandated to exercise that jurisdiction. Appeals are not by rehearing, with the High Court applying its own view, but are on the basis of whether there has been an error of law in the reasoning or, alternatively, such a fundamental error of fact such that an error of law may be inferred. Clarke J in Fitzgibbon v. Law Society of Ireland [2014] IESC 48 (Unreported, Supreme Court, 29th July, 2014) at para 1.2 commented on the wide range of statutory wordings which can cause confusion;

[The] problem stems from the use of terminology in the context of appeals which can be open to legitimate debate as to its proper meaning and which can, therefore, lead to significant uncertainty as to the precise form of appeal permitted. The background to that difficulty is that the term “appeal” covers a wide range of possible forms of process. These comments are offered in the hope that they may be taken on board by those who are charged, whether in the public or private spheres, with drafting rules or legislation (whether primary or secondary) which provide for the possibility of an appeal.

The only body with jurisdiction in respect of redundancy payments and minimum notice payments on the termination of employment is the Employment Appeals Tribunal. That jurisdiction exists by virtue of statute and its exclusive nature determines that no other body can make decisions that are mandated solely to the Employment Appeals Tribunal.

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Result

16 It is also reasonable to comment in this context that it is far too common for complex issues of law to overwhelm or occlude the clear questions that are necessary to be stated for the decision of any tribunal, or the decision of any court, as to what result should be arrived at. In the rehearing of this matter by the Employment Appeals Tribunal, the courtesy extended to courts whereby it is indicated as to what issues, cast as simple and ordinary questions, need to be decided for the result to go one way or the other should be adopted. This used to be the function of pleadings but this purpose of clarification through pleading has now largely been lost. As a matter of practice, it is for the advocate pursuing a case to put before a tribunal or court such straightforward questions for its determination as will enable a decision to be made.

17. In the result, the ruling Hedigan J in the High Court must be overturned. The case of whether the vets were employed by the respondent Minister or were, instead, self-employed persons doing shifts at the Mitchelstown meat plant is a matter of fact for the Employment Appeals Tribunal on a rehearing of the matter.”

Limerick Health Authority v. Ryan

Kenny J.
[1969] IR 194

KENNY J. :
Section 16 of the Health Act, 1953, and s. 7 of the Health Authorities Act, 1960, imposed on the plaintiffs an obligation to provide a midwifery service for those eligible for it in their district and so, in the month of April, 1959, they employed the defendant as a temporary midwife for the Grean dispensary. The defendant was originally employed for six months but her contract was renewed for this period on a number of occasions until the 14th April, 1968, when it ceased and she has not been employed by the plaintiffs in any capacity since then. When she was first employed her salary was £197: in April, 1968, it was £346. This was payable without regard to the number of cases which she attended though, if she had to attend more than 25 cases in a year, she was entitled to extra payment for each case in excess of that number. Most women now go to hospitals to have children and so the defendant never attended 25 cases in any year: the number of deliveries of children at home which she attended was usually about four or five in each year. She was bound to live in the district for which she was appointed and to keep herself available to perform her duties at all times. Subject to this, she was free to engage in private practice and could take up other employment. In addition to her work in connection with confinements at home, she gave advice on midwifery and maternity matters and often went with expectant mothers when they were worried that the child might be born before they reached the hospital. Her employment was insurable under the Social Welfare Acts, 1952-1968. Counsel for the plaintiffs has agreed that she was obliged to be available at all times during the day and night to do her work when it became necessary and that she could not leave the dispensary district without their consent. Her counsel has agreed that the number of hours for which she was normally expected to do work for the plaintiffs was at all times less than 21 in a week.
The policy of the Department for Health is that the services which were formerly performed by district midwives should be carried out by permanent public-health nurses who are qualified to give other medical care and advice. The defendant was replaced in April, 1968, by a permanent, full-time, public-health nurse who carried out the midwifery duties formerly done by the defendant and who does other medical work.
The defendant claimed that she was entitled to a redundancy payment under the Redundancy Payments Act, 1967, and the plaintiffs disputed their liability for this because, they said, the Act did not apply to her as she was “normally expected to work . . . . for less than 21 hours in a week” for them; and as she had not been dismissed by reason of redundancy. She appealed to the Redundancy Appeals Tribunal, established by the Act of 1967, and they, having heard argument, rejected both these contentions
and have stated their conclusions in an admirably lucid and careful decision. The plaintiffs have now appealed to this Court on these two matters which are questions of law.
Section 4, sub-s. 2, of the Act provides that:”This Act shall not apply to a person who is normally expected to work for the same employer for less than 21 hours in a week.” The plaintiffs did not, and could not, fix any hours during which the defendant was to do her work: children do not arrive into our world at appointed times. She was bound, however, to be available to do her work at all times, and the hours during which she could be summoned must be included when calculating the time during which she was normally expected to work. Section 4, sub-s. 2, does not apply when the employer does not or cannot specify the hours during which an employee is to do the work and when its nature requires that the person employed has to be available to do it at all times. I think that the decision of the Tribunal on this part of the case was correct.
Section 7, sub-s. 1, of the Act provides that:”An employee, if he is dismissed by his employer by reason of redundancy . . . shall, subject to this Act, be entitled to the payment of moneys which shall be known . . . as redundancy payment . . .” Section 7, sub-s. 2, provides that:”For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if 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, or 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.”
The question whether sub-s. 2 of s. 7 is a complete statement of the circumstances in which an employee is dismissed “by reason of redundancy” for the purposes of sub-s. 1 of s. 7 or whether that expression is to be given a general meaning in sub-s. 1, so that the circumstances stated in sub-s. 2 are only some of the cases in which there is a redundancy, was not discussed before the Tribunal or in this Court. I mention the question to show that it has not been overlooked and because conflicting views on the sections in the English Act of 1965 (containing provisions similar to those in sub-ss. 1 and 2 of s. 7 of the Act of 1967) have been expressed. In Hindle v. Percival Boats Ltd. 3 the dissenting judgment of Lord Denning contains this passage at p. 177 of the report:”He [the employee] is entitled to it [the redundancy payment] if he ‘is dismissed by his employer by reason of redundancy’: see s. 1 (1) (a). Those words are not defined in the Act. The Act only gives us a recital of circumstances in which a man is deemed to be dismissed for redundancy. Sections 1 (2) and 3 (1) set out circumstances in which a man ‘shall be taken’ to be ‘dismissed’ and ‘dismissed by reason of redundancy’. But those circumstances are not an exhaustive definition. Thus if an employer is overstaffed, and for that reason dismisses some of his men, then the dismissal is by reason of redundancy. The case may not come exactly within section 1 (2) (b), but still it is dismissal for redundancy”. The other members of the Court (Sachs and Widgery L. JJ.) did not adopt this view and they, and those who decided North Riding Garages Ltd. v. Butterwick 4,regarded words similar to those in sub-s. 2 of s. 7 of our Act as an exhaustive statement of the circumstances in which an employee should be taken to have been dismissed by reason of redundancy.
I think that sub-s. 2 of s. 7 specifies all the circumstances in which an employee is to be taken to have been dismissed by reason of redundancy, and that it is not a statement of some of them only. The word “redundancy” is not defined in the Act but its popular meaning includes all the circumstances stated in paragraphs (a) and (b) of sub-s. 2 of s. 7 which would, therefore, have been unnecessary if redundancy was to be given its popular meaning in sub-s. 1 of section 7.
The definition section in the Act defines “business” as including”. . . any activity carried on by a person or body of persons, whether corporate or unincorporate, or by a public or local authority or a Department of State, and the performance of its functions by a public or local authority or a Department of State.”
The reasons given by the Tribunal for their conclusion that the defendant had been dismissed by reason of redundancy were that:”The evidence before us was that, in keeping with departmental policy, it was the practice of the Health Authority when a district midwife’s job became vacant to replace her with a qualified, public-health nurse and that this was the reason why the appellant’s appointment was not renewed after the 14th of April, 1968. In order to qualify as a public-health nurse it is necessary to undergo a special course of training and we were told that the appellant would probably not be eligible for this course on account of her age. It is our opinion that the appellant would have been retained in the employment of the Health Authority were it not for the policy of replacing temporary, district midwives by public-health nurses and we find that the requirements of the Health Authority for temporary, district midwives, of the age group and training of Mrs. Ryan, who had not undergone and who are not able to undergo this special course, had ceased or diminished. Accordingly, we find that she was dismissed for redundancy within the meaning of section 7 (2) of the Act.”
The plaintiffs have not ceased and do not intend to cease to carry on the functions for the purposes of which Mrs. Ryan was employed by them, nor have they ceased nor do they intend to cease to carry on these functions in the dispensary district of Grean. Therefore, para. (a) of sub-s. 2 of s. 7 does not apply.
The requirements of the plaintiffs for employees to carry out midwifery work have not ceased or diminished nor are they expected to cease or diminish, and the requirements of the plaintiffs for employees to carry out this type of work in the dispensary district of Grean have not ceased or diminished. The kind of work, not the type of employee, is the decisive factor under para. (b) of sub-section 2. I think that the Tribunal were correct in holding that the requirements of the plaintiffs for temporary district midwives of the age group and training of the defendant had ceased or diminished; but their requirements for employees to carry out this work had not and so the defendant was not, in my view, dismissed by reason of redundancy. I agree with the remarks of Mr. Justice Widgery in North Riding Garages Ltd. v.Butterwick 5 at p. 63:”It is, we think, important to observe that a claim under section 1 (2) (b) is conditional upon a change in the requirements of the business. If the requirement of the business for employees to carry out work of a particular kind increases or remains constant no redundancy payment can be claimed by an employee, in work of that kind, whose dismissal is attributable to personal deficiencies which prevent him from satisfying his employer. The very fact of dismissal shows that the employee’s services are no longer required by his employer and that he may, in a popular sense, be said to have become redundant, but if the dismissal was attributable to age, physical disability or inability to meet his employer’s standards he was not dismissed on account of redundancy within the meaning of the Act.”

The English Act creates a presumption that an employee who has been dismissed shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy. This is not in our Act of 1967. If, however, such a presumption exists (and I do not think that it does), it has been rebutted in this case. In my opinion, the defendant was not entitled to a redundancy payment and the decision of the Tribunal must be reversed.

Transaer International Airlines Limited (In Liquidation) v Peter Delaney and v Two Hundred and Nine Others

2000 No. 235

High Court

24 October 2002

(Kelly J)

 

On October 20, 2000 Mr John McStay was appointed as provisional liquidator of Transaer International Airlines Ltd (the company). He was appointed official liquidator on November 1, 2001.

The appointment of the provisional liquidator on October 20, 2000 brought the employment of in excess of 400 employees to an end. This fact was communicated to the employees by letters dated October 27, 2000 in the following terms:

Dear Employee

I regret to inform you that your employment with the above company terminates as and from Friday October 20, 2000.

Please find enclosed your P45.

I also attach the following documentation in triplicate for signing.

1. Redundancy forms RP1, RP3 and RP14
2. IP1 form in respect of your claim for arrears of wages and holiday pay and IP2form
3. T-1A in respect of minimum notice.
My staff are available to assist you in the completion of these forms.

If you require any further information, please do not hesitate to contact me.

Yours faithfully

For and on behalf of Transaer International Airlines

John McStay

Provisional Liquidator

*3 This case is concerned with 210 of the employees who brought claims against the company under the provisions of the Minimum Notice and Terms of Employment Act 1973–1991 (the Act).

These claims were heard by the Employment Appeals Tribunal on March 27, 2001. The determination of that tribunal was given on May 30, 2001 and notified to the official liquidator on June 11, 2001.

This is the company’s appeal from that determination.

It is accepted that each of the 210 employees had an entitlement to be given notice of the termination of their employment in accordance with the terms of the Act. The length of such notice differed from employee to employee and falls to be determined in accordance with the provisions of the Act. No notice of termination whatsoever was given to any of these employees and that much is accepted by the company. Rather their employment was brought to an end by the provisional liquidator’s appointment with no notice of termination of employment being given.

Each of the employees was therefore entitled to make a claim before the Employment Appeals Tribunal for compensation in accordance with the terms of the Act. The dispute before this court arises from the approach of that tribunal in respect of these claims. It held as follows:

In relation to the contention submitted by the representative on behalf of the liquidator that all of the employees were paid up to the end of October 2000, it is the considered opinion of the tribunal that the High Court would not allow a liquidator to continue to pay employees beyond the date of termination of employment (the date of liquidation of this case) unless they were engaged by the liquidator to do additional work.

That clearly was an incorrect view of the situation and indeed no real attempt is made by the respondent to stand over the approach of the tribunal although they do contend that it reached the right conclusion albeit for the wrong reasons. Instead of attempting to stand over the reasoning of the tribunal counsel on both sides have, with commendable economy, concentrated on the real issue which is one of statutory interpretation of section 12 of the Act.

The position of each of the employees in suit was that they had been paid by the company in advance up to October 31, 2000. Accordingly, for the first 10 days of their dismissal they had in fact been paid by the company whilst having no work to do. The official liquidator contends that credit must be given for this period in calculating the compensation to which they are entitled. This the Employment Appeals Tribunal did not do. Counsel for the respondents says that the result achieved by the tribunal was correct though as I have already indicated not the basis upon which it was arrived at. He contends that the Act creates an entitlement to payment of a fixed sum of compensation regard *4 less of the actual loss sustained. In support of that contention he relies upon a dictum from Barrington J in the case of Irish Leathers Ltd v Minister for Labour [1986] IR 177 to which I will return later in this ruling.

Section 12 of the Act insofar as it is relevant provides as follows

1. If an employer—

(a) fails to give to an employee the notice required by section 4(2) of this Act, or

(b) fails to comply with the provisions of section 5 of this Act in relation to the rights of the employee during the period of notice,

the employee may refer the matter to the Tribunal for arbitration and the Tribunal may award to the employee compensation for any loss sustained by him by reason of the default of the employer.

Devoid of any authority I would interpret this provision as meaning that in a claim being adjudicated on by the Employment Appeals Tribunal it is necessary on the part of the employee to prove that a loss has been sustained by him by reason of the default of the employer. By using the term “any loss” it seems to me that the legislature envisaged that there might be circumstances where loss might not be sustained at all notwithstanding the default of the employer. In other words it envisages a classic situation of injuria sine damnum.

The normal approach of the law is that compensation is payable only in respect of actual provable loss. It does not normally intend that windfall payments should be made. Of course the legislature might provide otherwise, but if it were to do so I would expect to find very clear words to that effect. I do not find any such language used by the legislature here.

The issue however, is not devoid of authority. In the case of Irish Shipping Limited (in liquidation) v Byrne and Ors [1987] IR 468 Lardner J had to consider the true construction of section 12 of the Act. In the course of his judgment he said as follows:

If, as counsel for the Minister submits, upon failure of an employer to comply with section 5 the employee receives under section 5 and the second schedule a statutory right or entitlement to be paid the wages he would have earned if notice of termination had been given whether he obtained other employment or not and whether he suffered any loss of wages or not, it is difficult to see why the tribunal should concern itself with ‘loss sustained by the employee by reason of the employer’s default’. In my judgment the intention of section 12 is to enable the tribunal to deal with real and actual loss sustained by loss of wages or for other reasons relating to the breach of contract or failure to comply with the provisions of section 5 and the second schedule. Actual loss must be *5 established, and where as here there is no evidence of any actual loss because the respondents were all re-employed by the liquidator and paid their full wages for a period longer than the prescribed period of notice, the tribunal should have taken that fact into consideration. In the circumstances I think the tribunal’s decision in these cases was erroneous.

These appeals are brought by the liquidator of Irish Shipping in the course of winding up the company. It is noteworthy that by section 13 compensation for loss sustained by an employee is included among the debts which under section 285 of the Companies Act 1963, are in the distribution of assets to be paid in priority to all other debts. If the submissions made on behalf of the Minister are correct it would follow that upon a winding up order and appointment of a liquidator, employees whose employment is ended without notice could become entitled to be paid their full wages for a period of the appropriate notice irrespective of whether they had actually suffered any loss of wages or not. And such compensation would be a priority payment which would reduce the assets of the company at the expense of both secured and unsecured creditors. I do not think that on its true construction section 12 was intended to have this effect.

I find myself entirely in agreement with both the reasoning and conclusion of Lardner J as set forth in the above passage.

Insofar as there may be a difference between the views of Lardner J and those of Barrington J in the Irish Leathers case I prefer the approach of Lardner J. In the Irish Leathers case Barrington J said:

Under these circumstances it appears to me that the second defendant had a statutory right to be paid the sum indicated in the second schedule to the Act of 1973 and that his ‘loss’ under section 12 of the Act is the amount of money which he was entitled by statute to receive and which he did not receive.

This is the passage relied upon by counsel for the respondents to support the contention that the Act creates an entitlement to a sum of compensation which is payable regardless of whether actual loss is sustained or not.

It appears to me that in making the observation which he did Barrington J did not (and indeed was not called upon to) carry out the detailed analysis of section 12 which Lardner J embarked upon. Furthermore, the approach of Barrington J would give rise in this case to double recovery on the part of the respondents which I do not think was intended by the legislature. In the context of a liquidation such as this it would lead to a depletion of funds available for other creditors it being remembered that the monies here have under the legis *6 lation a priority in respect of payment.

Therefore, insofar as there is a difference in interpretation between Barrington J and Lardner J I prefer the reasoning of Lardner J and my own analysis of section 12 accords with it precisely.

In these circumstances it is clear that the Employment Appeals Tribunal was wrong in law in the approach which it took. Credit must be given for the payment made by the company in respect of the period from October 20, 2000 to October 31, 2000 in the computation of the entitlements of the respondents to compensation under section 12 of the Act.

The matter will be remitted to the tribunal so that it may make a determination as to the amount of compensation payable in the case of each respondent in the light of this ruling.