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Summary
A recent Irish Labour Court decision held that the complainant was not successful in his claim brought under the transfer of undertakings regulations because there was no transfer of an economic entity.
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Introduction
This case concerned an appeal to the Labour Court of a decision of the Workplace Relations Commission (WRC) relating to a complaint under the European Communities (Protection of Employees on Transfer of Undertakings) Regulation 2003, (S.I. No. 131 of 2003) (TUPE Regulations). Mr Conor Williamson (the complainant) alleged that Dublin City Council (the respondent) was in breach of the TUPE Regulations. The complainant was employed as a licensed dog warden by David Stone T/A Ashton Dog Pound and Warden Services (Ashton) between July 2017 and 30 June 2021. Ashton was engaged by Dublin City Council. The complainant argued that he had accrued employment rights with the respondent by means of a transfer conducted between Ashton and the respondent. The respondent rejected this claim. The respondent submitted that it had never employed the complainant and sought a preliminary decision on the matter. The respondent’s position was that a loss of contract by the complainant’s employer for the provision of dog warden services had occurred. These services were simply taken ‘in house’ and no assets transferred over.
The complainant brought numerous and duplicative claims under both the TUPE Regulations and various other Irish laws. He subsequently lodged numerous related appeals with the Labour Court. However, for the purpose of this case report, it is important to note that the Labour Court was consistent in its findings (regarding the complaint brought under the TUPE Regulations), that no transfer was established and that the complainant was not an employee of the respondent.
The following issues were considered at the WRC, and by the Labour Court on appeal:Whether there was a transfer of tangible and intangible assets from Ashton to the respondent.
Whether the facts demonstrated that there was no transfer of an economic entity but rather what occurred was a loss of a contract for services.
Whether the complainant was an employee of the respondent.
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Legal background
The TUPE Regulations were enacted in Ireland to give effect to the Transfers of Undertakings Directive 2001/23/EC (the Directive). Chapter II of the Directive provides for the safeguarding of employees’ rights and that Member States shall take the measures necessary to ensure that employees’ rights are protected when a transfer of an undertaking occurs. The Irish legislator enacted the TUPE Regulations to protect employees’ rights and the WRC is now the forum for employees to take unfair dismissal claims under the TUPE Regulations. Regulation 3 defines ‘transfer’ as meaning “the transfer of an economic entity which retains its identity” with ‘economic entity’ being defined as “an organized grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity”.
As readers will be aware, the CJEU has considered the legal issues raised in this complaint in a number of judgments and established tests which Member States have subsequently applied. The most notable of which are:Case C-13/95, Süzen – v – Zehnacker Gebäudereingigung GmbH Krankenhausservuce [1997] ECR I-1259; and
Case 24/85, Spijkers – v – Gebroeders Benedik Abattoir CV [1986] ECR 1119.
The Irish employment tribunals, the WRC and the Labour Court have relied on the tests provided in these two decisions of the CJEU. In this decision, the following aspects of the tests were considered and applied.
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Süzen
The WRC in reaching its decision looked at the following tests in determining whether there was a transfer of undertaking:
Was there a transfer of significant tangible or intangible assets? Or
Did a major part of the workforce in terms of numbers or skills (or both) transfer?
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Spijkers
In assessing whether a transfer of undertaking had occurred, the WRC assessed whether the economic entity had retained its identity and considered the following factors:
the type of business concerned;
whether assets, tangible (such as buildings and movable property) or intangible are transferred;
the value of the intangible assets at the time of the transfer;
whether the majority of employees are taken over;
whether or not its customers are taken over;
the degree of similarity between activities carried on before and after the transfer; and
the period if any for which activities are suspended.
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Facts and WRC Decision
The complainant was employed as a licensed dog warden for a company that provided dog pound and warden services. The complainant worked for Ashton for nearly four years, between July 2017 and June 2021. Ashton provided these services to the respondent and a number of other local authorities in Ireland. However, the complainant only provided his services to the respondent and not any other local authorities.
Between March and April 2021, the respondent sought expressions of interest through a tender process for the provision of warden services to the local authority. At the conclusion of this tendering process, an external party was not awarded the contract and instead the respondent decided to retain the services internally. The respondent had in place its own animal unit and decided to bring the dog warden services within this unit. As Ashton had not been successful in the tendering process and its existing contract with the respondent had expired, the complainant’s engagement with the respondent ceased on 30 June 2021. At this time, the respondent took into its possession five dogs, documentation, notice books and records that Ashton held.
As outlined above, the WRC considered the two leading CJEU decisions in this area: (1) Süzen and (2) Spijkers. In its brief discussion and application of the principles of these cases, the WRC held that the complainant’s circumstances were not analogous, and he had not met the evidentiary tests to be successful under these principles. The respondent relied on both of these decisions to support its position that no transfer of an undertaking had taken place. It outlined that the WRC, the Labour Court and the Irish High Court had applied and followed these decisions on numerous occasions. The respondent emphasized that in these decisions the decision-making bodies reviewed all the criteria when determining whether a transfer of undertaking took place, i.e. not just the mere transfer of assets.
The respondent further submitted that the key focus of the test was highlighted in the EFTA Court’s decision in Case E-2/04, Rasmussen – v – Total E&P Norge AS. The respondent highlighted the importance of assessing whether employees transferred to the new entity.
As noted above, assets transferred over, however it is clear that the WRC did not interpret this as a significant transfer for the purposes of the TUPE Regulations: “No assets transferred to the respondent save for the paperwork for the five dogs that were in possession of the employer at the end of the previous contract”. The WRC emphasized that the respondent did not take into its possession Ashton company assets such as “vans, uniforms, the containment area for the dogs and other capital assets”.
The WRC held that no transfer of an undertaking took place, that the complainant was not an employee of the respondent and that the complainant had failed to produce any evidence to demonstrate that any tangible assets transferred between Ashton and the respondent. The Adjudication Officer noted that the provision of dog warden services that the complainant’s role as an authorized officer under Irish legislation was operated in a “fundamentally different manner” by the respondent. The services had changed and included the care of animals, which was wholly different to the previous dog warden services. -
Decision of the Labour Court
The Labour Court heard the appeal on 1 December 2022. It issued a limited decision, confined to the question whether the alleged transfer of tangible and intangible assets constituted a transfer of an undertaking for the purposes of the TUPE Regulations. The Labour Court upheld the decision of the WRC, finding that the complainant had failed in his claim and that his arguments were not well-founded.
The Labour Court simply stated that, on application of the principles applied by the CJEU in Süzen, no transfer of an undertaking within the meaning of the TUPE Regulations had taken place between Ashton and the respondent.
The Labour Court held that dog warden services in Ireland are carried out by licensed personnel only and that it was clear that no Ashton employees transferred their employment to the respondent in June 2021 when the contract between the parties terminated. The Labour Court noted that these facts satisfied the principles laid down by the CJEU in Süzen because and in accordance with the TUPE Regulations no transfer of an undertaking took place between Ashton and the respondent. -
Commentary
This Labour Court decision reinforces the authority of domestic legislation and the decisions of the CJEU when determining whether a transfer for the purposes of the Directive has taken place.
The Labour Court’s decision is consistent with CJEU decisions such as Süzen and Spijkers.
Interestingly, in the WRC decision the Adjudication Officer made the following statement:The complainant stated in evidence that his employer said to him that there was a transfer of undertakings in existence but did not substantiate this with any form of written follow up or indication to his staff of the specifics of such a transfer. The complainant’s assertions amount to mere speculation in the absence of any verifiable fact of the existence of such a transfer.
It is clear that, for a complainant to be successful in bringing such claims under the TUPE Regulations, they must satisfy the WRC with actual evidence that a transfer took place. The WRC’s new procedures require parties to substantiate claims through the provision of evidence on oath/affirmation and this decision clearly demonstrates the burden placed on complainants to evidence their claims.
It is also worth noting that the WRC also referenced a 2018 decision of the Labour Court in Overpass Ltd T/A Ocean Property Management – v – Clancy (TUD 1713), which held that the Spijkers criteria are the “decisive criteria for establishing the existence of a transfer” for the purpose of the TUPE Regulations.
The decision emphasizes the importance of the Süzen and Spijkers criteria and the importance Irish employment law tribunals place on applying these principles. It is clear that a facts-based analysis must take place and that individuals who bring claims under the TUPE Regulations must do so with a strong evidentiary basis. Both the WRC and the Labour Court apply CJEU principles with considerable emphasis to the facts of the case. It is clear from this decision that employees cannot rely on mere assertions to be successful in their claims; claims will fail where an employee cannot provide fact-based supportive evidence.Subject: Transfer
Parties: Mr Conor Williamson – v – Dublin City Council
Court: Labour Court
Date: 1 December 2022
Case number: TU/22/11/ TUD2210/ADJ-00034320 CA-00045302-006, CA-00045302-004
Judgment: Workplace Relations Commission https://www.workplacerelations.ie/en/cases/2022/june/adj-00034320.html ; Labour Court https://www.workplacerelations.ie/en/cases/2022/december/tud2210.html
DOI: 10.5553/EELC/187791072023008001010
European Employment Law Cases |
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Case Reports | 2023/9 No transfer of dog warden services as there was no transfer of an economic entity (IE) |
Keywords | Transfer |
Authors | Meghan McSweeney |
DOI | 10.5553/EELC/187791072023008001010 |
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Suggested citation
Meghan McSweeney, "2023/9 No transfer of dog warden services as there was no transfer of an economic entity (IE)", European Employment Law Cases, 1, (2023):44-46
Meghan McSweeney, "2023/9 No transfer of dog warden services as there was no transfer of an economic entity (IE)", European Employment Law Cases, 1, (2023):44-46
A recent Irish Labour Court decision held that the complainant was not successful in his claim brought under the transfer of undertakings regulations because there was no transfer of an economic entity. |