UFD Scope of Act

Cases

General

West Midlands Co-op v Tipton

[1986] ICR 192, [1986] 1 All ER 513

Lord Bridge

‘Both the original and the appellate decision by the employer, in any case where the contract of employment provides for an appeal and the right of appeal is invoked by the employee, are necessary elements in the overall process of terminating the contract of employment. To separate them and consider only one half of the process . . is to introduce an unnecessary artificiality.’ After considering the Savage case, Lord Bridge said: ‘Adopting the analysis which found favour in J Sainsbury Ltd v Savage, [1981] ICR I, if the domestic appeal succeeds the employee is reinstated with retrospective effect; if it fails the summary dismissal takes effect from the original date. Thus, in so far as the original dismissal and the decision on the domestic appeal are governed by the same consideration, the real reason for dismissal, there is no reason to treat the effective date of termination as a watershed which separates the one process from the other.’

McCotter v Quinn Insurance

[2013] E.L.R 45

EAT

“In the first instance, Counsel for the respondent made an application that the Tribunal did not

have jurisdiction to hear the matter because the clamant was not an employee as defined in the Unfair Dismissals Act 1977 but that he was an independent contractor. The Tribunal considered the evidence adduced taking into consideration all the factors relating to the working relationship between the Claimant and the Respondent.

The Tribunal noted the following facts which emerged during the hearing, which are now set

out in summary hereunder, some supportive of the contention that the claimant was engaged as an Independent Contractor and others supportive of the claimant having employee status:

(i) the claimant considered himself an independent contractor since 2004

(ii) he was responsible for paying all his own taxes. In this respect he confirmed that he made

revenue returns as a self- employed person, under Schedule D, from 2007 onwards;

(iii) the claimant’s email of the 22nd September 2009 requested it was more tax efficient to

trade as a limited company rather than as a sole trader and requested that all payments after the

1st October 2009 should be made to the company of which he was a 100 per cent owner;

(iv) he was not paid when out sick;

(v) he was not paid for holidays;

(vi) he was not part of any pension scheme;

(vii) he was not paid wage increases when other employees were;

(viii) he could work for other clients so long as there was no conflict of interest;

(ix) he submitted invoices for his services;

(x) the claimant had to carry out the work himself and could not delegate his functions;

(xi) he was given business cards by the respondent;

(xii) he was provided with an email address by the respondent;

…….It is clear that Paragraphs (i) to (ix) above strongly suggest that the claimant is an Independent

Contractor while (x) to (xiii) support the contention that the claimant was an employee.

Whether a worker is an employee or self employed depends on a large number of factors……… In summary there is no single test. Each case must be considered in the light of its own particular facts.

Standing back and looking at the picture as a whole, and mindful of the legal principles set out

in the Barry Case and the other cases referred to above, the Tribunal determines that the

working relationship between the Claimant and the Respondent was one of a Contract for

Services and that the claimant was working as an Independent Contractor. The Tribunal

therefore does not have jurisdiction to hear the claim under the Unfair Dismissals Acts, 1977 to

2007 or the Redundancy Payments Acts 1967 to 2007.”

O’Sullivan v Board Management

(UD/217/2007)

EAT

“The question before the Tribunal is what was the effect of the withdrawal of the nomination of the claimant to her teaching position by her Order?

The Education Act, 1998, Appendix D, Section 7 (i) gives the Religious Order power to have a suitably qualified member of the Order nominated as a teacher and appointed by the BOM. It is clear that the BOM’s hands are tied, they must appoint as per section 7 (1) to a school.

The respondent argues that the Religious Order have a corollary right to withdraw the nomination and that the BOM must also act on that direction and terminate the employment. The respondent argues that this termination is not subject to the normal Disciplinary rules for termination of a Teachers employment and does not amount to an unfair dismissal.

It must be noted that while the Order withdrew the nomination giving rise to the termination of employment, they are not a party in this case; nevertheless, they are central to the decisions and actions of the BOM. Considerable evidence was provided by the Provincial Leader, XXXX, in relation to the decision. She confirmed in evidence that she and her leadership team, had taken the decision, within the rules of the order to “mission” the claimant XXXX to rest and had written to the BOM withdrawing her nomination from her teaching position. She further confirmed that there was a practice of transferring members of the order from one position to another to meet the congregation’s needs, including from one school to another. Discussion/consultation took place with the claimant on various options and the final decision to withdraw her nomination left the claimant unhappy and not accepting the decision.

The claimant in her evidence confirmed that during her 30 plus years of teaching she had been nominated by her Order and appointed to teaching roles on previous occasions to other schools and that subsequently her nomination had been withdrawn and her employment terminated and she was transferred/nominated to another school, but the difference in the instant case was that she did not agree to the transfer.”

Sharma & Anor -v- Employment Appeals Tribunal

[2010] IEHC 178 (13 May 2010)

Hedigan J.

“Applicable Law

10. Section 2(1)(a) of the Act of 1977, as amended, provides for the following exclusion:-

“2.(1) This Act shall not apply in relation to any of the following persons:

(a) an employee (other than a person referred to in section 4 of this Act) who is dismissed, who, at the date of his dismissal, had less than one year’s continuous service with the employer who dismissed him and whose dismissal does not result wholly or mainly from the matters referred to in section 6(2)(f) of this Act.”

11. Section 6(1) of the Act of 1977 provides for dismissals to be deemed unfair unless there are substantial grounds justifying the dismissal. Section 6(2) goes on to state that the dismissal of an employee shall be deemed unfair “if it results wholly or mainly from” specified grounds. Those grounds include membership or proposed membership of a trade union or engaging in trade union activities; religious or political opinion; legal proceedings against an employer where an employee is a party or a witness; race; sexual orientation; age; membership of the travelling community; pregnancy or matters connected with pregnancy and birth; penalisation; availing of rights under legislation to maternity leave, adoptive leave, carer’s leave, the National Minimum Wage Act 2000, parental or force majeure leave and unfair selection for redundancy.

Decision of the Court

19. The grounds for presumed unfair dismissals have grown over the years through a series of amending legislation to the Act of 1977. It is expressly stated in several of the amending pieces of legislation that the one year’s continuous service requirement, as set down in s.2(1)(a) of the Act of 1977, is not applicable to particular grounds for presumed unfair dismissal. Those pieces of amending legislation are as follows:-

Section 14 of the Unfair Dismissals (Amendment) Act 1993

This provides inter alia that s. 2(1)(a) of the Act of 1977 shall not apply “if the dismissal results wholly or mainly from one or more of the matters referred to in subsection (2)(a) of the said section 6” i.e. the employee’s membership or proposed membership of a trade union or excepted body under the Trade Union Acts 1941 and 1971.

Section 38(5) of the Maternity Protection Act 1994

This provision inserted s.6 (2A) into the Act of 1977. In essence, it provides, inter alia, that for the purposes of the sections of the Act of 1977 which deal with pregnancy and maternity matters, the term “employee” includes a person who would otherwise be excluded from the Act by virtue of inter alia paragraph (a) of section 2(1) of the Act of 1977.

Section 25 of the Adoptive Leave Act 1995

Section 24 of the Act of 1995 inserted a new ground for a presumed unfair dismissal i.e. the exercise or contemplated exercise by an adopting parent of her right under the Act of 1995 to adoptive leave or additional adoptive leave. Section 25 of the Act of 1995 substituted the above s.6(2A) of the Act of 1977 so that the term “employee” and “adopting parent” include a person who would otherwise be excluded from the Act by inter alia paragraph (a) of section 2(1) of the Act of 1977.

Section 25(2)(b) of the Parental Leave Act 1998

Section 25(2)(a) of the Act of 1998 inserted s.6(2)(dd) into the Act of 1977. It provides for the dismissal of an employee for the exercise or proposed exercise of the right to parental leave or force majeure leave under and in accordance with the Act of 1998 to be deemed unfair. Section 25(2)(b) provides that the term “employee” includes a person who for the purposes of s.6(2)(dd) would otherwise be excluded from the Act of 1977 by inter alia paragraph (a) of section 2(1) of the Act of 1977.

Section 27(2)(b) of the Carer’s Leave Act 2001

Section 27(2)(a) of the Act of 2001 added, in s.6(2)(dd) the exercise or proposed exercise by the employee of the right to carer’s leave under and in accordance with the Carer’s Leave Act 2001 to the list of grounds for presumed unfair dismissal. Section 27(2)(b) goes on to provide that the term “employee” includes a person who would otherwise be excluded from the Act of 1977 by inter alia paragraph (a) of s.2(1) of the Act of 1977.

Section 36(2) of the National Minimum Wage Act 2000

This provision stipulates that the dismissal of an employee in contravention of s.36(1) (including inter alia for having exercised or proposing to exercise a right under the Act) will be deemed to be an unfair dismissal for the purposes of the Unfair Dismissals Acts 1977-1993 and that it is not necessary for such an employee to have at least one year’s continuous service.

20. In contrast, s.27 of the Act of 2005 makes no mention of whether s.2(1)(a) of the Act of 1977 is applicable or not. I am satisfied, having regard to the expressio unius est exclusio alterius principle that the one year’s continuous service requirement must apply. This Court may not read into the Act of 1977 a specific provision lifting the service requirement specified in s.2(1)(a) in circumstances where the legislature has expressly stated in other enactments that the requirement was not to apply in respect of other grounds for dismissal but has not done so therein in respect hereof. It seems to me for these reasons that the respondent rightly concluded that it did not have jurisdiction to hear the applicants’ claims.

Conclusion

25. In summary, I am satisfied that employees who pursue claims under the Unfair Dismissals Acts 1977-2007 for penalisation, as defined in s.27(1) of the Act of 2005 must have one year’s continuous service with the employer who dismissed them. In addition, I find that the reasons provided to the applicant are not clear on their face but were clear to the applicants, having regard to the central challenge they made in these proceedings and thus adequate. I would refuse the reliefs sought in these proceedings.

Waite v Government Communications Headquarters

[1983] UKHL 7

House of Lords

“For reasons which I shall explain when I come to consider the subsidiary question, I am of opinion that the retiring age laid down in the terms and conditions of the appellant’s employment (which I shall call the ” contractual ” retiring age “) for a person holding his position was 60. The respondents had power, in their discretion, to retain him in his position after he had attained the age of 60 and until he reached the age of 65, and they did in fact retain him until he was 60 1/2 in order to carry out a particular task, but he had no right under the terms of his employment to be retained after attaining the age of 60. Such retention was entirely a matter for the respondents’ discretion. Nevertheless the appellant contends that on 30th April 1978 when he was dismissed, he had not attained the normal retiring age for an employee in his position, and therefore that the Industrial Tribunal had jurisdiction to consider his complaint.

….The decision of the Court of Appeal in Nothman has stood until the present time though not without some judicial criticism especially in Howard v. Department of National Savings [1981] I.C.R. 208 from Ackner L.J. and Griffiths L.J. and Secretary of State for Trade v. Douglas [1983] I.R.L.R. 63

from Lord MacDonald.

In Post Office v. Wallser [1981] 1 All E.R. 668 the Court of Appeal held that the normal retiring age was a matter of evidence and did not depend exclusively on the relevant contract of employment. Some of the observations in that case are not altogether easy to reconcile with what had been said in Nothman supra but I respectfully agree with the view expressed by my noble and learned friend Lord Bridge (who was then Bridge L.J.) at page 673 as follows:

” I agree with the broad proposition that the normal retiring age ” within the meaning of [paragraph 10 of schedule 1 of the 1974 Act] ” is not necessarily to be discovered in the contract of employment of ” the group of workers with whom the Court or Tribunal is concerned, ” but it does seem to me that when contractual terms and conditions ” of employment do govern the age of retirement of the relevant group, ” those terms provide the best evidence which will prevail to determine ” what is the normal age of retirement, unless effectively contradicted ” by other evidence.” (Emphasis added.)

In Howard v. Department for National Savings supra the Court of Appeal reverted to the view that the contractual retiring age, express or implied, conclusively fixed the normal retiring age, and they also said that unless a contractual retiring age is either expressed or to be implied, it is impossible to establish that there is any normal retiring age. But in Duke v. Reliance Systems Ltd. [1982] I.C.R. 449, where there was no express contractual retiring age, the Employment Appeal Tribunal took a more flexible view. Browne-Wilkinson J., delivering the judgment of the Tribunal, first held that no contractual retiring age could be implied, and then proceeded to consider whether there was evidence of practice which established a normal retiring age. In my opinion that was the correct approach.

I have reached the opinion that the Court of Appeal in Nothman, supra, stated the law in terms which were too rigid and inflexible. If the normal retiring age to be ascertained exclusively from the relevant contract of employment, even in cases where the vast majority of employees in the group concerned do not retire at the contractual age, the result would be to give the word ” normal ” a highly artificial meaning. If Parliament had intended that result, it would surely not have used the word ” normal ” but would have referred directly to the retirement age specified as a term of the employment. Moreover in a case where, unlike Nothman, the contract provides not for an automatic retiral age but for a minimum age at which employees can be obliged to retire, it would be even more artificial to treat the minimum age as fixing the normal age, as the respondents would have us do, even in a case where the minimum age has become a dead letter in practice. By no means all contracts of employment specify the age, or the minimum age, of retirement; indeed outside of large organisations like the Civil Service it is probably exceptional for the age of retirement to be specified. So, if the normal retiring age can be ascertained only from the terms of the contract, there will be many cases in which there is no normal retiring age and in which the statutory alternatives of 65 for a man and 60 for a woman will automatically apply, although some other age may be well established and recognised in practice. If that were the law it might operate harshly in the case of women employees over the age of 60, as they would never be entitled to complain to the Industrial Tribunal of unfair dismissal unless they could establish that they were subject to a contractual retiring age higher than 60.

I therefore reject the view that the contractual retiring age conclusively fixes the normal retiring age. I accept that where there is a contractual retiring age, applicable to all, or nearly all, the employees holding the position which the appellant employee held, there is a presumption that the contractual retiring age is the normal retiring age for the group. But it is a presumption which, in my opinion, can be rebutted by evidence that there is in practice some higher age at which employees holding the position are regularly retired, and which they have reasonably come to regard as their normal retiring age. Having regard to the social policy which seems to underlie the Act—namely the policy of securing fair treatment, as regards compulsory retirement, as between different employees holding the same position—the expression ” normal retiring age ” conveys the idea of an age at which employees in the group can reasonably expect to be compelled to retire, unless there is some special reason in a particular case for a different age to apply. ” Normal ” in this context is not a mere synonym for ” usual “. The word ” usual ” suggests a purely statistical approach by ascertaining the age at which the majority of employees actually retire, without regard to whether some of them may have been retained in office until a higher age for special reasons—such as a temporary shortage of employees with a particular skill, or a temporary glut of work, or personal consideration for an employee who has not sufficient reckonable service to qualify for a full pension. The proper test is in my view not merely statistical. It is to ascertain what would be the reasonable expectation or understanding of the employees holding that position at the relevant time. The contractual retiring age will prima facie be the normal, but it may be displaced by evidence that it is regularly departed from in practice.

Wlliam O’Mara v College Freight Limited T/A Target Express Ireland

(UD 1371/2009)

“Determination:

The Tribunal having heard all of the evidence are satisfied that there was no retirement clause in the claimant’s terms and conditions of employment. The respondent stated that it was custom and practice within the company and that there was a policy document on the issue filed in each

of the warehouses. This document was not produced at the hearing nor was it ever given to the claimant.The claimant was not aware there was a retirement policy. Furthermore the company produced itsopen drive option insurance policy which they alleged did not permit anyone to drive beyond their65th birthday.

The respondent conceded that there were two other employees employed who worked beyond their 65th birthdays. It transpired after much probing that there was a third employee in Limerick who also worked beyond his 65th birthday. The respondent stated that each of these employees had a specific purpose within the company and for that reason they felt they came under the exception clause.

Evidence was adduced by MC in relation to a computer programming fault with the respondent’s personnel files wherein the system altered the ages of several employees from their true age to 45.

This was not discovered until late 2008 and it took until Mid February 2009 to discover the fault in relation to the claimant. Conflicting evidence was given by MC on behalf of the respondent when asked by the tribunal why the claimant was not considered for the redundancy programme they were embarking on in February, 2009. He stated the reasons were two fold. Firstly, the claimant had an excellent employment record and he was an excellent driver. He went as far as stating that he was one of the best the company had. He stated that because he had an unblemished record he would not have been selected even if he had been subjected to the selection test. Secondly, because he was due to retire. If the respondent’s earlier evidence is to be believed, the respondent could not have been aware that the claimant was due to retire because his age on his personnel file was 45

and that was not rectified until mid February, 2009.

……..Based on all of the evidence adduced the tribunal is not satisfied that the company had a retirement policy or even a comprehensive custom and practice in relation to retirement. The claimant’s terms and conditions of employment were silent on the issue, no staff handbook existed and if a policy document did exist it was not put in evidence nor was it ever given to the claimant. No notice was given to the claimant either, before, on or directly after his 65 th birthday. The Tribunal is not satisfied that the respondent’s insurance policy was as restrictive as was alleged to be.

The Tribunal find that the claimant was unfairly dismissed and accordingly award him the sum of € 33,500.00.

Sweeny v Aer Lingus Teo

(DEC-E2013-135.)

The dispute concerns a claim by Ms Elizabeth Sweeny that she was subjected to discriminatory treatment by the Respondent on the grounds of age in terms of Section 6(2) of the Employment Equality Act 1998 (as amended) and Section 8 of those Acts.

The Respondent contended that in every employee’s contract of employment, it was subject to an express or implied term that it ran until the normal retirement date, that is after attaining the age of 65.

The Equality Officer determined that the Respondent had established that the retirement age for its non flying staff was 65 years of age even though no age was set out in the Complainant’s contract of employment. The Equality Officer noted that it was common practice for those employees reaching the age of 65 to retire and the Complainant was aware or ought reasonably to have been aware that 65 was the retirement age for non flying staff.

Whilst it was noted that there was “no doubt that the decision to retire someone at a particular age is a decision that is influences by that persons’ age” and that this had been held to be direct discrimination (Deutche Lufthansa AG v Gertraud Kumpan Case C-109/09 and others), the Respondent submitted that Section 34(4) of the Acts provided a defence in that it states inter alia “…..it shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntary or compulsory) of employees or any class or description of employees”.

The Equality Officer concluded that

(a) the Complainant has established facts from which discrimination may be inferred and the onus to rebut the presumption is on the Defendant.

(b) In circumstances where there is an absence of justification, the Complainant is entitled to succeed.

John Roche –v- Complete Bar Solutions

DEC-E2013-197:

Mr Roche was originally employed by Celtic Technology Ltd on 1st March 1996. The company became Complete Bar Solutions in 2005. Mr Roche was the manager of approximately 16 people. The Respondent company engaged in contract work on behalf of various breweries in servicing the equipment in various licensed premises. Mr Roche submitted that his employment was terminated simply because he reached the retirement age of 65 on 7th March 2011….

Dismissal

There is no dispute that Mr Roche was compulsorily retired when he reached the age of 65.

The respondent initially stated that it does not have to objectively justify its retirement age because of Section 34(4) of the Acts:

Without prejudice to subsection (3) it shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntary or compulsory) of employees or any class or description of employees.

However, it has been the practice of the Equality Tribunal to interpret Section 34 (4) in a harmonious way with Article 6 (1) of the Equal Treatment Directive:

Notwithstanding Article 2(2), Member States may provide

those differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.[2]

Authority for this is Donnellan v The Minister for Justice, Equality and Law Reform where McKechnie, J. states:

Any discrimination with regards to age must, as put by that Directive, serve a legitimate aim or purpose, and the means taken to achieve that purpose must be appropriate and should go no further than is necessary, i.e. they should be proportionate.[3]

This has been followed in Saunders v CHC[4], Paul Doyle v ESB International[5], Rosanna Nolan v Quality Hotel[6] Patrick Dunican and Thomas Spain v Offaly Civil Defence[7] and McPhillips v ISS Facility Services[8]. This instant decision differs from the Labour Court case Hospira and Roper, Needham, Bryson, Ward and Dunnion as that dealt with redundancy payments under Section 34 (3) (d) of the Acts rather than Section 34(4) here..

Therefore, I am satisfied that the complainant has established a prima facie case of discriminatory dismissal and the respondent (even as a private actor) must provide me with objective justification. When the Heyday case was returned from the Court of Justice of European Union to the United Kingdom High Court, Blake J stated that:

I consider that examining the legislative context as a whole, there is a distinction between the social aim of confidence in the labour market and the application of that aim in the particular Regulations that permit employers to discriminate where they can show it is necessary and proportionate to do so in the interests of their business. The private employer is not afforded the wider margin of discretion in the application of the regulation that the State is. The flexibility shown to the employer in permitting it to endeavour to justify discriminatory treatment is not an aim in itself, but a means of advancing the social policy aim of confidence in the labour market. There is no reason to believe that in the special context of age discrimination, the kind of business practice reasons that can justify indirect discrimination are fundamentally different from those that can justify direct discrimination.[9] [my emphasis]

The reasons given by the respondent was that it was the custom and practice to retire people at 65 to create certainty in business planning and to encourage staff morale by using the consequential vacancy as an internal promotional opportunity. Mr A emphasised that because of the technical nature of their work a ‘man off the street’ could not be employed as it took years of experience to build up the technical expertise. This is in line with the Petersen case where the CJEU heldthat ‘in view of development in the employment situation in the sector concerned it does not appear unreasonable for the authorities of Member States to consider that the application of an age limit, leading to the withdrawal from the labour market of older practitioners, may make it possible to promote the employment of younger ones’[10] The Court goes on to say that ‘ Article 6 (1) of the Directive must be interpreted as not precluding such a measure where its aim is to share out employment opportunities among the generations in the profession of panel dentists, if, taking into account the situation in the labour market concerned the measure is appropriate and necessary for achieving that aim’.[11]

I find this is a legitimate aim of the respondent. It is also appropriate in that the respondent provided access (and contributed towards) to a defined contribution pension to be drawn down at age 65 so the employee had access to two income streams – an occupational pension and the State pension. This is similar to Fuchs and Kohler v Landhessen, where the CJEU found it relevant that the complainants were entitled to a reasonable pension.[12] I also find the aim to be necessary as the respondent could lose valuable staff if there were no promotional opportunities provided. Like Georgiev[13] Mr Roche was also offered a fixed-term contract of employment after he turned 65. Unlike Mr Georgiev he turned it down. It also differs from Mangold where the age at issue is much higher – that is 65 rather than 52.[14] In the circumstances of this case, I am satisfied that, cumulatively, these reasons objectively justify the compulsory retirement at 65. Therefore the respondent has successfully rebutted the case.

Decision

I have concluded my investigation of John Roche’s complaint. Based on all of the foregoing, I find, pursuant to Section 79(6) of the Acts, that the complainant was not discriminatorily dismissed on the grounds of age.

Thomas O’Mahony v Southwest Doctors On Call Ltd (trading as SouthDoc)

DEC-E2014-031

“Dismissal

4.3 Despite his lack of consent, Mr O’Mahony was compulsorily retired when he reached the age of 65.

4.4 Section 34(4) of the Acts states:

However, it has been the practice of the Equality Tribunal to interpret Section 34 (4) in a harmonious way with Article 6 (1) of the Equal Treatment Directive:

…..4.5 Authority for this is Donnellan v The Minister for Justice, Equality and Law Reform where McKechnie, J. states:

4.6 This has been followed by the Tribunal in Saunders v CHC[8], Paul Doyle v ESB International[9], Rosanna Nolan v Quality Hotel[10] O’Neill v Fairview Motors[11]Patrick Dunican and Thomas Spain v Offaly Civil Defence[12] McPhillips v ISS Facility Services[13] and John Roche v Complete Bar Solutions[14]. This instant decision differs from the Labour Court case Hospira and Roper, Needham, Bryson, Ward and Dunnion as that dealt with redundancy payments under Section 34 (3)(d) of the Acts rather than Section 34(4) as in here.

4.7 Therefore, I am satisfied that the complainant has established a prima facie case of discriminatory dismissal and the respondent (even as a private actor) must provide me with objective justification.

4.8 As per Seldon, I fully accept the respondent’s reasoning that it is entitled to give a ‘business-centric’ justification for a compulsory retirement age. In that case Mr Seldon was forced by the respondent law firm to retire at 65 as required by the partnership deed. Mr Seldon lost his case as it was found that the needs of the firm to retain associates and plan for succession did indeed constitute legitimate aims for a fixed retirement age policy. In other words – intergenerational fairness in a practice where there was a greater mix of generations as well as more clearly-defined career trajectories than is the case with the respondent. These are legitimate aims for a law firm but they do not apply to the respondent here. The respondent was not trying to retain younger people or plan for succession; it was simply trying to reduce headcount in the least expensive way. Where Seldon also differs from this instant case is that Mr Seldon knew he had to retire at 65 from the time he became a partner.

4.9 It was obviously cheaper for the respondent to retire people than to make their positions redundant. About 30 people were let go around the same time – 24 were made redundant while 6 were forced to retire. Those made redundant received 4.5 weeks (plus a week) pay for every year they worked. Those who were retired only received a gratuity of 2 weeks pay in total. In Fuchs and Kohler v Land Hessen the European Court of Justice has held that budgetary restrictions can underpin the chosen policy but cost considerations cannot in themselves constitute a legitimate aim within the meaning of Article 6 (1).[15] This is known in the United Kingdom as the ‘costs plus’ rule.

4.10 Turning to the health and safety justification, one does not need to be an expert to realise the physical capabilities required to be a helicopter winch operator are much greater than taxiing doctors around. While occasionally driver/attendants may have to assist in lifting patients, this would only be in non-emergency situations or else an ambulance would be called. In the Saunders v CHC case the respondent provided empirical evidence to show that sick-leave doubled for winch operators aged over 50 thereby showing a valid reason for this fixed retirement age. The respondent in this case has provided no evidence to demonstrate why the chosen cut-off point of 65 is appropriate and necessary especially when employees happily worked beyond it prior to 2008. Nor did they show evidence of exploring a more proportionate response to safety concerns e.g. sending employees over 65 for an annual health check or as in Georgiev v Tehnickheski Unviersitet offer Mr O’Mahony a fixed term contract of employment after his 65th birthday.[16] Although both of these options would also have to be objectively justified as they choose 65 as an age-based criterion. However, they may be less assailable as they are less absolute than the compulsory retirement age that the respondent chose.

Decision

5.1 I have concluded my investigation of Thomas O’Mahony’s complaint. Based on all of the foregoing, I find, pursuant to Section 79(6) of the Acts, that the complainant was discriminatorily dismissed on the grounds of age.

Red Sail Frozen Foods Ltd ( In Receivership) -v- Companies Act

[2006] IEHC 328

Laffoy J.

“The Receiver’s concern is whether, having regard to the manner in which the employment contracts of employees of Frozen Foods and Kilmore were operated in practice, as a matter of law, the employees’ claims under the Minimum Notice and Terms of Employment Act, 1973 (the Act of 1973), the Unfair Dismissals Act, 1977 (the Act of 1977) and the Protection of Employees (Employers’ Insolvency) Act, 1984 (the Act of 1984) were enforceable and whether the Department’s claim to be subrogated is valid. It is regrettable that the Department was not represented before the court to argue for the enforceability of the claims, which it in fact discharged, and the validity of its claim to subrogation. The Receiver had envisaged that the issue would be argued as between the Minister/Department, on the one hand, and Frozen Foods and Kilmore, on the other hand. However, in the absence of the Minister, counsel for the Receiver set out the relevant legal principles for consideration by the court.

There is authority in this jurisdiction for the proposition that, where it is a term of a contract of employment that it will be implemented in a manner which defrauds the Revenue Commissioners, the contract is illegal and wholly unenforceable. That is the decision of this Court (Barron J.) in Hayden v. Sean Quinn Properties Limited (unreported, 6th December, 1993). On the facts of the case Barron J. held that there had been a breach of the plaintiff’s contract of employment. However, on the basis that the contract had provided for a basic salary to which there was added a sum by way of “non-taxable allowance to cover expenses”, he held that the contract itself was an illegal one. In dealing with the consequences of that, he referred the decision of the Court of Appeal of England and Wales in Napier v. National Business Agency Limited [1951] 2 All E.R. 264, stating that the facts in that case were almost identical to the facts in the case under consideration by him. He quoted the following passage from the judgment of Sir Raymond Evershed M.R. (at p. 266):

“It must be that, by making an agreement in that form the parties to it were doing that which they must be taken to know would be liable to defeat the proper claims of the Inland Revenue and to avoid altogether, or at least to postpone, the proper payment of income tax. If that is the right conclusion, it seems to me equally clear … that the agreement must be regarded as contrary to public policy. There is a strong legal obligation placed on all citizens to make true and faithful returns for tax purposes, and, if parties make an agreement which is designed to do the contrary, i.e. to mislead and to delay, it seems to me impossible for this court to enforce that contract at the suit of one party to it.”

Barron J. recorded that the Master of the Rolls then went on to consider whether or not the fraudulent part of the agreement could be severed and he held that it could not. The plaintiff’s claim was dismissed on the ground that the contract was unlawful and so unenforceable. Concluding his judgment, Barron J. stated as follows:

“In my view that case would have been decided in the same way and upon the same grounds in this jurisdiction at that date. Notwithstanding the very great changes that have occurred in society in this country since then I do not believe that public policy on this issue would have changed in any way. The plaintiff allowed himself to agree to something which would benefit the defendant at the expense of the Revenue. Such an agreement is unenforceable and the plaintiff’s claim must therefore fail.”

Similarly, in a statutory claim for unfair dismissal under the Act of 1977 and a claim under the Act of 1973, the Employment Appeals Tribunal determined that the claim should be dismissed due to the illegality of the contract of employment, which had the effect of rendering the contract unenforceable and depriving the claimant of the basis on which to establish that he was an employee as required by the Act of 1977, where the facts were that part of the claimant’s salary was treated in the employer’s books as an expense: Lewis v. Squash (Irl) Limited [1983] I.L.R.M. 363. That decision predated the amendment of the Act of 1977 by the Unfair Dismissals (Amendment) Act, 1993. The current position is that s. 8 of the Act of 1977, as amended, now contains a sub-s. (11) which provides as follows:

“Where the dismissal of an employee is an unfair dismissal and a term or condition of the contract of employment concerned contravened any provision of or made under the Income Tax Acts or the Social Welfare Acts, 1981 to 1993, the employee shall, notwithstanding the contravention, be entitled to redress under this Act, in respect of the dismissal.”

Because of that provision, counsel for the Receiver submitted that the pre-receivership practice of “under the counter” payments is not now an impediment to an employee successfully prosecuting a claim under the Act of 1977 and the Minister having a valid right of subrogation arising out of the discharge of that claim. Counsel for the Companies agreed that this is a correct statement of the law. Accordingly, I am satisfied that it is lawful for the Receiver to pay the components of the Minister’s claim and, insofar as it arises, the employees’ residual claims relating to unfair dismissal.

It was submitted on behalf of the Receiver that there is also a statutory solution to the issue insofar as it relates to claims under the Act of 1973. Those claims have all been the subject of awards made by the Employment Appeals Tribunal under s. 12 of the Act of 1973. The awards were made notwithstanding that the Receiver apprised the Employment Appeals Tribunal that certain employees of Frozen Foods and Kilmore were in regular receipt of cash payments in respect of which their employer did not make returns or pay the relevant PAYE/PRSI. The awards stand and, by virtue of s. 13 of the Act of 1973, they have preferential status under s. 285 of the Act of 1963. Although counsel for the Companies was not in agreement with the submission made by counsel for the Receiver on this point, it seems to me that, by virtue of the combined operation of ss. 12 and 13, the awards stand and they stand as debts which have preferential status. Therefore, I consider that it is lawful for the Receiver to pay the component of the subrogation claim and any component of the residual claims in relation to minimum notice as preferential claims.

That leaves the components of the claims in relation to arrears of wages and holiday pay to be considered. In relation to these components, it was submitted on behalf of the Companies that, as the Oireachtas had not intervened, the common law position should prevail and that these payments should be treated as deriving from an illegal contract and to be unenforceable. It was submitted that, as the Department paid the claims in the knowledge that a significant doubt arose as to their validity, the Companies should not bear the burden of a decision made by the Department, particularly in circumstances in which the Department has not been prepared to argue in favour of its entitlement to be paid. While, at first sight, that smacks of “the pot calling the kettle black”, that is invariably the perception which arises from the application of the common law principle that a contract tainted with illegality is not enforceable. Counsel for the Companies drew on the following passage from the judgment of Lord Goff in Tinsley v. Milligan [1994] 1 AC 340 (at p. 354) to illustrate the principle:

“The basic principle was stated long ago by Lord Mansfield C.J. in Holman v. Johnson [1775] 1 Cowp. 341, 343, in the context of the law of contract, when he said:

‘The objection, that a contract is immoral or illegal as between plaintiff and defendant sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say so. The principle of public policy is this; ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff’s own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has not right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis.’

That principle has been applied again and again, for over two hundred years. It is applicable in courts of equity as well as courts of law … it is important to observe that, as Lord Mansfield made clear, the principle is not a principle of justice; it is a principle of policy, whose application is indiscriminate and so can lead to unfair consequences as between the parties to litigation. Moreover, the principle allows no room for the exercise of any discretion by the court in favour of one party or the other.”

Counsel for the Receiver referred the court to a recent decision of the Court of Appeal of England and Wales in Hall v. Woolston Hall Leisure Limited [2001] 1 WLR 225. That case arose out of a statute which gave effect in the United Kingdom to the provisions of the Equal Treatment Directive (Directive 76/207/EEC). The statute provided that in the case of unlawful discrimination on the ground of sex an industrial tribunal could award damages measured in the same manner as any other claim in tort. Accordingly, the Court of Appeal was not considering a claim in contract. While the observations made in relation to the application of the principle of illegality in the context of the law of contract were clearly obiter, they do help to explain the concept. In his judgment, Peter Gibson L.J. (at p. 234) identified two types of case in which it is well established that illegality renders a contract unenforceable from the outset: where it is entered into with the intention of committing an illegal act; and where the contract is expressly or implicitly prohibited by statute. He also identified a third category of cases in which a party may be prevented from enforcing the contract. That is where a contract, lawful when made, is illegally performed and the party participated in that illegal performance. In summarising the position under the law of contract he stated as follows (at p. 236):

“In cases where the contract of employment is neither entered into for an illegal purpose nor prohibited by statute, the illegal performance of the contract will not render the contract unenforceable unless in addition to knowledge of the facts which make the performance illegal the employee actively participates in the illegal performance. It is a question of fact in each case whether there has been a sufficient degree of participation by the employee.”

Mance L.J. (at p. 246) broadly agreed with that dictum but pointed out that the conceptual basis upon which a contract not illegal or prohibited when made may become unenforceable due to the manner of its performance is open to debate.

…..It would appear, on the basis of the evidence before the court, that the relevant officers of the Department either ignored the anomalous state of the law, which has not translated the protection given in s. 8(11) of the Act of 1977 to redress under the Act of 1984, and took a pragmatic view in relation to the matter and made payments from the Redundancy and Employers’ Insolvency Fund on the basis of the taxed payments which had been made to the employees without regard to the issue of enforceability of his or her employment contract at the suit of each individual employee, or, alternatively, were satisfied that no issue as to enforceability arose. Given that the Department did not avail of the opportunity to apprise the court of the basis on which it acted, I consider it reasonable to infer that a pragmatic view was adopted. While I am conscious that this is not a principled way of dealing with the issue, on the state of the evidence, I consider that the court has little option but to accept the approach which was adopted by the Department. Accordingly, I hold that it is lawful for the Receiver to pay the arrears of wages and holiday pay components of the preferential claims made by the Department. “

Higgins & Anor -v- Bank of Ireland & Anor

[2013] IEHC 6

O’Keeffe J.

“35. The plaintiff’s case, insofar as the termination of his employment is concerned, appears to be:-

1. that his dismissal resulted from a flawed disciplinary process that was part of an unlawful malicious conspiracy to which the person who conducted the inquiry was a party

2. That consequently, by definition, his dismissal was in breach of fair procedures.

3. That, even if there was no conspiracy, there was a breach of fair procedures such as to render his dismissal unlawful

536. The plaintiff’s written submission appear to rely upon a concept of wrongful dismissal that is much wider than the action for wrongful dismissal that is recognized in law. At common law the action for wrongful dismissal lies where a contract of employment is terminated without reasonable notice. Quite separately from the action for wrongful dismissal, in the case of a dismissal for misconduct, the Court has a jurisdiction to intervene if there has been a breach of fair procedures. The plaintiff’s claim in these proceedings is not a wrongful dismissal action for failure to give reasonable notice.

537. It is the defendant’s case that, as a matter of law, the Court does not have any jurisdiction to intervene in relation to the termination of the plaintiff’s employment unless it reaches a finding of a breach of the rules of natural justice, either on the basis of the existence of a conspiracy or otherwise.

538. The law in relation to wrongful dismissal is that, absent express provisions to the contrary, employment contracts can be terminated by notice for good reason, bad reason or no reason. In Sheey v. Ryan and Moriarity [2008] 4 IR 258 , Geoghegan J. stated as follows:-

“The judge in fact went on to point out that the plaintiff had chosen a common law remedy. She could have initiated proceedings under the Unfair Dismissals Act 1967 or under the Redundancy Payments Act. The trial judge then said that the position at common law is that an employer is entitled to dismiss an employee for any reason or no reason on giving reasonable notice. I would slightly qualify that by saying that it does depend on the contract but in the absence of clear terms to the contrary which are unambiguous and unequivocal, that clearly is the position.”

539. A similar view was expressed in England in R v. Hull University [1999] 4 All ER 747 where Donaldson L.J. put it in the following terms:-

“In the ordinary course of events the legal relationship of employer and employee, which is the relationship with which we are concerned, can be determined by either party with or without notice and with or without “good” or any cause. It is a personal relationship and cannot survive its repudiation by either party whether or not the repudiation is accepted by the other. The relationship having ended, all that remains is to determine whether it was wrongful dismissal, which turns on the terms of the contract, or was an unfair dismissal, which turns on the provisions of the relevant English statute.”

540. The Courts are unwilling to extend the common law remedies available in wrongful dismissal in circumstances where the Oireachtas has created an entirely stand alone regime of unfair dismissal. The leading case in this area in England Johnson v. Unysis [2001] ICR 480 sets out the principles. In that case the employee claimed common law damages for breach of the implied term of trust and confidence in an employment relationship. He alleged that, because of the manner in which he had been dismissed, he had suffered a mental breakdown and was unable to work. His claim was struck out as disclosing no reasonable cause of action. The principle annunciated in Johnson is that the implied term of trust and confidence cannot be extended to allow an employee to seek to recover damages for loss arising from the manner of his dismissal. In that case the English Court was unwilling to in effect create a new common law right governing the same ground as that provided under the English statutory scheme similar to that applying in this jurisdiction under the Unfair Dismissals Act. Nicholls LJ. stated that it:-

“…would fly in the face of the limits Parliament has already prescribed on matters such as the classes of employees who have the benefit of the statutory right, the amount of compensation payable and the short time limits for making claims.”

541. What has become known as the Johnson exclusion area has developed from the decision in Johnson v. Unysis. In essence the Courts recognise that a dismissed employee may be compensated for damage caused to him (including personal injury) where the wrong occurred prior to the dismissal. The extent of that exclusion area was considered in Eastwood v. Magnox Electric Plc [2004] IRLR 733 where Nicholls LJ. made the following observations:-

“27. Identifying the boundary of the ‘Johnson exclusion area’, as it has been called, is comparatively straightforward. The statutory code provides remedies for infringement of the statutory right not to be dismissed unfairly. An employee’s remedy for unfair dismissal, whether actual or constructive, is the remedy provided by statute. If before his dismissal, whether actual or constructive, an employee has acquired a cause of action at law, for breach of contract or otherwise, that cause of action remains unimpaired by his subsequent unfair dismissal and the statutory rights flowing therefrom. By definition, in law such a cause of action exists independently of the dismissal.

28. In the ordinary course, suspension apart, an employer’s failure to act fairly in the steps leading to dismissal does not of itself cause the employee financial loss. The loss arises when the employee is dismissed and it arises by reason of his dismissal. Then the resultant claim for loss falls squarely within the Johnson exclusion area.”

542. In the instant case the plaintiff determined, as did the plaintiff in Sheey v. Ryan, to launch his action at common law rather than taking a claim pursuant to the statutory provisions. By doing so he limited his remedies and in particular he cannot ask this Court to act as some type of employment appeals tribunal to determine the fairness of the substantive grounds justifying his dismissal.

543. In Maha Lingam v. HSE [2006] ELR 137, Fennelly J. giving the Judgment for the Court stated as follows:-

“the employer was entitled to give that notice so long as he complied with the contractual obligation of reasonable notice whether he had good reason or bad for doing it. That is the common law position and it is an entirely different matter as to whether a person has been unfairly dismissed and a different scheme of statutory remedy is available to any person dismissed whether with or without notice under the Unfair Dismissals Act, but this is not such an application. This is an action brought at common law for wrongful dismissal in the context of which an injunction was sought.”

544. In McGrath v. Trintech Technologies Ltd and Trintech Group Plc [2005] 16 ELR 49, Laffoy J, at p.391 stated as follows:-

“The first point to be made in relation to that submission is that the plaintiff has not invoked any statutory provision in support of his claim. Although decisions of the Employment Appeals Tribunal were cited, I did not understand the plaintiff to argue that the principles applicable under the statutory scheme should be imported into common law. On the authority of the judgment of Carroll J. in Orr v. Zomax Ltd. [2004] IEHC 131, [2004] 1 IR 486, it would not have been open to them to do so. His claim is grounded entirely in the common law – in contract and tort. In particular his claims for declaratory relief are based on the express or implied terms which he contends for, not on any statutory protection. On the authority of the decision of the Supreme Court in Parsons v. Iarnród Éireann [1997] 2 I.R. 523, however, the plaintiff is not entitled to any declaration which extends beyond the ambit of the contractual rights which he establishes and the breach of those rights. On the same authority, the only other remedy to which he is entitled, if he establishes his claim in contract, is damages.”

545. Prior to her making that observation Laffoy J. expressly referred to Sheehy v. Ryan, Hickey v. The Eastern Health Board, Johnson v. Unysis Ltd and Malik v. BCCI. This matter was also referred to in some detail by Clarke J. in Carroll v. Bus Atha Cliath [2005] 4 IR 184. At page 208 of the Judgment he stated as follows:-

“It is, of course, the case that Parsons v. Iarnród Éireann [1997] 2 I.R. 523 was concerned with dismissal rather than with breaches of terms of an employee’s contract of employment. However, it does appear to be a recent reiteration of the general principle of law to the effect that a court will not grant orders which have, in substance, the effect of ordering specific performance of a contract of employment. In Cassidy v. Shannon Castle Banquets [2000] E.L.R. 248 Budd J. granted a declaration that a purported dismissal was in breach of natural and constitutional justice and that, as a consequence, the dismissal was without efficacy and invalid. However it is made clear that the above declarations did not coerce a reinstatement. In that respect Parsons v. Iarnród Éireann [1997] 2 I.R. 523 was distinguished. It is also clear from a consideration of the judgment of Budd J. in Cassidy v. Shannon Castle Banquets [2000] E.L.R. 248 that a factor taken into account in that case was the entitlement of the plaintiff to clear his name. In that respect it is of some importance to note that there have been significant developments in the typical terms of employment of many employees in recent years. Such changes have a material effect upon the circumstances in which, as a matter of contract, many employees can be dismissed.

The traditional position at common law was that a contract of employment could be terminated on reasonable notice without giving any reason. In those circumstances it was obvious that the only remedy for a breach of contract by way of dismissal was for the payment of the amount that would have been earned had appropriate notice been given. However, it is now frequently the case that employees cannot be dismissed, as a matter of contract, save for good reason such as incapacity, stated misbehaviour, redundancy or the like. It would appear that the development of the law in relation to affording employees a certain compliance with the rules of natural justice in respect of possible dismissal derives, at least in material part, from this development. If the stated reason for seeking to dismiss an employee is an allegation of misconduct then the courts have, consistently, held that there is an obligation to afford that employee fair procedures in respect of any determination leading to such a dismissal. That does not alter the fact that an employer may still, if he is contractually free so to do, dismiss an employee for no reason. It simply means that where an employer is obliged to rely upon stated misconduct for a dismissal or, where not so obliged chooses to rely upon stated misconduct, the employer concerned is obliged to conduct the process leading to a determination as to whether there was such misconduct in accordance with many of the principles of natural justice.

In those circumstances it seems to me that it is open to the court to grant declarations concerning most alleged breaches by an employer of his contractual obligations. Parsons v. Iarnród Éireann [1997] 2 I.R. 523 imposes a limit in cases where the declaration could not avail the plaintiff in any practical way.

Where, as here, the consequence of a declaration as to a breach in respect of the plaintiff’s entitlement to date simply gives rise to a claim in damages then no difficulty, therefore, arises.”

546. In Nolan v. Emo Oil Services Ltd [2009] IEHC 15 Laffoy J. dealt expressly with an attempt by a plaintiff to litigate what was in truth an unfair dismissal claim that is an allegation that he was either unfairly selected for redundancy or alternatively the grounds for his dismissal was not in truth redundancy. She described the plaintiff’s claim in the following terms:-

“Although not articulated in this way by counsel for the plaintiff, the plaintiff’s case, as I understand it, is that it is an implied term of his contract of employment that, notwithstanding the express right to terminate his contract on notice, the plaintiff is entitled to litigate the fairness or otherwise of the termination of his contract on the grounds of redundancy by reference to the statutory code in plenary proceedings in this Court. I base that understanding on the submission of counsel for the plaintiff that the defendant, as his employer, owed a duty of good faith to the plaintiff, in consequence of which it was an implied term of the plaintiff’s contract of employment that, if he was to be let go on the grounds of redundancy, there would have to be a valid redundancy.”

547. Laffoy J. then went on to make reference to the Supreme Court decision in Maha Lingam and noted that in that case the Supreme Court had made reference to Eastwood, a case in which the House of Lords had considered its earlier decision in Johnson v. Unysis Ltd. She then quoted from Lord Nichols and his views on the “Johnson exclusion area” and she then dealt with the case at issue in the following terms:-

“In this case, the plaintiff’s employment with the defendant came to an end on 30th November, 2008 and his last day at work was the 28th November, 2008. In essence, what he is trying to achieve by these proceedings is to get his job back. He got the required notice under his contract of employment and his contract of employment was lawfully terminated. If, as he contends, his dismissal was unfair, then the remedy available to him is the remedy provided by statute. As a matter of fact, that is the only remedy he could pursue because, in my view, he had not acquired a cause of action for breach of contract or otherwise prior to his dismissal. In the circumstances, there is no remedy which he can pursue in this Court.

That conclusion is supported by the decisions of the Supreme Court in the Maha Lingham case and in the Sheehy case.

In my view, it is also correct in principle. There may be situations in which, on the reasoning of Lord Nicholls in the Eastwood case, a dismissed employee is entitled to maintain an action at common law, for example, where he has suffered financial loss from psychiatric or other illness as a result of pre-dismissal unfair treatment which would give rise to an action for damages. That scenario was signposted by Lord Steyn in the Johnson case and recognised in the Eastwood case. The plaintiff’s situation here is entirely different. In effect, he is inviting the Court to develop its common law jurisdiction by reference to the statutory concepts of redundancy and unfair dismissal. Specifically, the Court was invited by counsel for the plaintiff to have regard to the statutory definition of “redundancy” in s. 7 of the Redundancy Payments Act 1967, as amended. The Oireachtas in enacting the Unfair Dismissal Acts 1977 to 2008 and introducing the concept of unfair dismissal provided for specific remedies for unfair dismissal and specific procedures for obtaining such remedies in specific forums, before a Rights Commissioner or the Employment Appeals Tribunal. For the Courts to expand its common law jurisdiction in parallel to the statutory code in relation to unfair dismissal and redundancy would, to adopt Lord Nicholls’s terminology, end up supplanting part of the code.”

548. The above cases from this jurisdiction recite what are the applicable principles to be considered and applied. In the instant case much of what the plaintiff claims relates to the unfairness of the decision to dismiss as distinct from wrongful dismissal and, as such, this Court has no jurisdiction in same.

Stephens -v- Archaeological Development Services Ltd

[2010] IEHC 540

Judgment by: Mac Menamin J

“48. Counsel for the defendant, however, relies strongly on the decision of the Supreme Court in Parsons v. Iarnród Eireann [1997] 2 I.R. 523. The facts of Parsons bear some consideration. Arising from a labour dispute, the plaintiff appeared before a disciplinary committee of that defendant company. He was dismissed from his employment. He informed the defendant he intended to pursue a claim through the rights commissioner’s office under the Unfair Dismissals Act 1977. The matter was heard before a rights commissioner, who recommended the plaintiff should proceed to the next stage of the defendant’s internal disciplinary proceedings. This took place and the plaintiffs dismissal was confirmed. Subsequently, the plaintiff issued proceedings seeking a declaration that the decision to dismiss him from his employment was null and void, and an injunction compelling the defendant to reinstate him and damages for breach of contract and wrongful and/or unfair dismissal. As can be seen then, in Parsons, the plaintiff had invoked the rights commissioner procedure. Subsequently, as well as claiming injunctions, he also sought damages for what was termed in the statement of claim “wrongful and/or unfair dismissal”. The claim was doomed to failure in the courts on two separate grounds: first the invocation of the rights commissioner procedure; second the claim for wrongful dismissal.

49. In the course of his judgment, speaking for the Supreme Court, Barrington J. set out the statutory boundaries in this way:-

“… Section 15 of the Unfair Dismissals Act, 1977, provides that the worker must chose between suing for damages at common law and claiming relief under the new act. Sub-section 2 accordingly provides that if he claims relief under the Act of 1977, he is not entitled to recover damages at common law; while subs. 3 provides that where proceedings for damages at common law for wrongful dismissal are initiated by or on behalf of an employee the employee shall not be entitled to redress under the Unfair Dismissals Act, 1977, in respect of the same dismissal ….” (p. 529)

He added later in the judgment, at p. 530:-

“If the plaintiff loses his right to sue for damages at common law the heart is gone out of his claim and there is no other freestanding relief which he can claim at law or in equity ….”

The issue in this case is whether Parsons is a binding authority or whether, on the facts, it should be distinguished.

50. Here there is no plea of wrongful dismissal. The plaintiff has not invoked the barring mechanism of rights commissioner proceedings. A further issue then arises as to whether, in any case the facts and circumstances of the Tribunal claim and that in the High Court are separate and severable. There is helpful authority on this issue.

51. In Quigley v. Complex Tooling and Moulding Ltd. [2009] 1 IR 349, Lavan J. found that, where an employee had also acquired a common law cause of action against an employer prior to his dismissal, his cause of action in tort might nonetheless proceed in the High Court as well as a Tribunal claim. Where the facts of that High Court claim were independent of the subsequent dismissal therefore, a claim might be pursued in the Tribunal. In so finding, that Judge specifically approved the House of Lords decision of Eastwood v. Magnox Electric plc. [2004] 3 WLR 322, and did not follow earlier dicta of that same court in Johnson v. Unisys Ltd. [2003] I A.C 518. The background case law to the Eastwood decision is of some importance. I will deal with this briefly.

52. In Mahmud v. Bank of Credit and Commerce International SA (in liq.) [1997] 3 All ER 1, the House of Lords had considered the application of the implied term of trust and confidence in employment contracts. There, the plaintiff claimed damages at common law for breach of this term. The House of Lords held that the claim was well founded as a matter of law. It held that damages for the trust and confidence implied term should be assessed in accordance with ordinary contractual principles.

…..57. It is undoubtedly true that the terms of the United Kingdom legislation differs somewhat from the Unfair Dismissals Acts. However, I am satisfied that the observations in Quigley by Lavan J. are illustrative of a distinction the lines of which were fully set out in the Eastwood, and which apply in our law. Provided a demarcation line can be similarly drawn, the effect of Quigley should be followed by this court. I say this subject to two caveats. First, clearly, there can be no question of double recovery; second; it may be necessary for a court to intervene by way of case management in order to identify precisely the case to be made before the Tribunal and that which may ultimately come before this Court. I mention in passing that Quigley was successfully appealed: however that appeal did not concern the point at issue

……

59. The plaintiff says that the matters pleaded refer to conduct during the continuation of her employment and in no way refer to the manner of her dismissal; that the facts and circumstances pre-date her date of dismissal by over eighteen months at the earliest stage, and six months at the latest date. She says that the employment appeal proceedings refer to the actual dismissal, how it came about, and whether the employer’s actions were reasonable or not in the context of her resignation. I accept the proposition that this plaintiff, on these facts, may proceed before the Employment Appeals Tribunal, and, on separate aspects of the facts in the High Court.

60. I find support for the proposition that the plaintiff may (if the case is made out on evidence) recover damages for mental distress, for breach of implied terms of trust and confidence in a breach of contract proceedings (see Pickering v. Microsoft Ireland Operators Ltd. [2006] 17 ELR 65; Berber v. Dunnes Stores [2009] IESC 10) (Unreported, Supreme Court,Ii11 February, 2009). This aspect of the notice of motion must fail.

Quigley -v- Complex Tooling & Moulding Ltd

[2008] IESC 44

Fennelly J.

“35 An examination of the law on unfair dismissal is necessary to answer the first question.

It has been held in this jurisdiction, in Parsons v. Iarnrod Eireann [1997] 2 I.R. 523, that a plaintiff was precluded, by virtue of the provisions of s. 15 of the Unfair Dismissal Act 1977, as amended, from bringing an action at common law in respect of a dismissal which had previously been the subject of a claim to a rights commissioner under the Act of 1977. Explaining the relationship of the statutory code to the common law jurisdiction, in delivering judgment in the Supreme Court Barrington J. stated as follows at p. 529:-

“What the Unfair Dismissals Act 1977 does is to give the worker, who feels that he has been unfairly dismissed, an additional remedy which may carry with it the very far-reaching relief of reinstatement in his previous employment. It does not limit the worker’s rights; it extends them. At the same time, s. 15 of the Unfair Dismissals Act 1977, provides that the worker must choose between suing for damages at common law and claiming relief under the new Act. Sub-section (2) accordingly provides that if he claims relief under the Act he is not entitled to recover damages at common law; while sub-section (3) provides that where proceedings for damages at common law for wrongful dismissal are initiated by or on behalf of an employee the employee shall not be entitled to redress under the Unfair Dismissals Act 1977, in respect of the same dismissal.

The traditional relief at common law for unfair dismissal was a claim for damages. The plaintiff may also have been entitled to declarations in certain circumstances, for instance, that there was an implied term in his contract entitling him to fair procedures before he was dismissed. But such declarations were in aid of the common law remedy and had no independent existence apart from it. If the plaintiff loses his right to sue for damages at common law the heart has gone out of his claim and there is no other free-standing relief which he can claim at law or in equity.”

[36] It is submitted by counsel for the plaintiff that when an employee suffers from an illness caused by his pre-dismissal unfair treatment he has a common law cause of action which precedes and is independent of, his subsequent dismissal. In support of this submission, counsel for the plaintiff referred to the recent English decision of Eastwood v. Magnox Electric plc. [2004] UKHL 35, [2005] 1A.C. 503. In this case, the plaintiffs commenced proceedings for negligence and breach of contract against their former employers. Both men brought unfair dismissal proceedings which were settled. In their common law proceedings, which were considered by the House of Lords, they alleged they suffered personal injuries in the form of psychiatric illnesses caused by a deliberate course of conduct by certain individuals using the machinery of the disciplinary process.

[37] The claims against the defendant employers were dismissed by the High Court and then the Court of Appeal on the basis that all the circumstances attending their dismissals were covered by the Employment Tribunal.

[38] However the House of Lords unanimously overturned the Court of Appeal and ruled that the claims could proceed. Lord Nicholls of Birkenhead stated at para. 27 that:-

“If before his dismissal, whether actual or constructive, an employee has acquired a cause of action at law, for breach of contract or otherwise, that cause of action remains unimpaired by his subsequent unfair dismissal and the statutory rights flowing therefrom. By definition, in law such a cause of action exists independently of the dismissal.”

And at para. 29 continued:-

“In such cases, the employee has a common law cause of action which precedes, and is independent of, his subsequent dismissal. In respect of his subsequent dismissal he may of course present a claim to an employment tribunal. If he brings proceedings both in court and before a tribunal he cannot recover any overlapping heads of loss twice over.”

Lord Nicholls, at para. 13 of his speech, described the statutory code of unfair dismissals as providing “a floor and not a ceiling”.

Counsel for the plaintiff submitted that the decision in Eastwood v. Magnox Electric plc. [2004] UKHL 35, [2005] 1 A.C. 503 is not inconsistent with the law on unfair dismissals in this jurisdiction. I take the view that this would seem to be the preferable interpretation. It has not been proved by the defendant that the injuries suffered by the plaintiff on account of harassment in the workplace were not a separate cause of action to the plaintiff’s unfair dismissal action.

[39] Counsel for the defendant submitted that the injury to the plaintiff was caused by the dismissal and therefore it falls inside the remit of the Employment Appeals Tribunal. In support of this submission, counsel for the defendant referred to the decision of the House of Lords in Johnson v. Unisys Ltd. [2001] UKHL 13, [2003] 1 A.C. 518 which looked at the interaction between statutory unfair dismissal claims and claims for damages arising out of dismissal. In that case, the plaintiff, who had been the beneficiary of an award from a statutory industrial tribunal, which had upheld his complaint that he had been unfairly summarily dismissed, initiated a civil action against his employer for breach of contract and negligence alleging that the manner of his dismissal had caused him to suffer a nervous breakdown and had made it impossible to find work.

The House of Lords held that an employee had no right of action at common law to recover financial losses arising from the unfair manner of his dismissal.

Johnson has been quoted with approval in this jurisdiction by Carroll J. in Orr v. Zomax Limited [2000] IEHC 131, [2004] 1 I.R. 486.

Counsel for both the defendant and the plaintiff referred to the recent judgement of Laffoy J in McGrath v. Trintech Technologies Ltd. [2004] IEHC 342, [2005] 4 I.R. 382. Here one of the issues before the court was whether this principle could accommodate the implication into the contract of a more specific term that the plaintiff would not be dismissed without due cause or without reasonable notice. In rejecting this argument, Laffoy J. analysed the decision in Johnson and at p. 395 states:-

“[28] The essence of the plaintiff’s case, however, is that there should be implied into his contract with the defendant a term that mere compliance with the express notice provision in the contract would not validly and effectively terminate the contractual relationship at common law. There is no authority for this proposition. I am persuaded by the authorities cited by counsel that the proposition is not sound in principle. Accordingly, I have come to the conclusion that terms in relation to dismissal and redundancy on the lines pleaded by the plaintiff cannot be implied into the plaintiff’s contract of employment with the first defendant so as to give rise to a cause of action at common law.”

[40] It is my opinion, however, that the argument being made in this case is different in that the plaintiff, unlike in McGrath v. Trintech Technologies Ltd. [2004] IEHC 342, [2005] 4 I.R. 382, does not seek to challenge his dismissal but rather contends that the conduct of the defendant during the course of his employment was such as to amount to a breach of an implied duty to maintain trust and confidence during the employment relationship and this caused him injury. In the plaintiff’s case the remedy ordered by the Employment Appeals Tribunal was re-engagement.

[41] Accordingly it was submitted that there is no basis for precluding the plaintiff in these proceedings from claiming compensation for personal injuries. In doing so, he cannot be accused of having “a second bite at the cherry”, asper Lord Nicholls in Eastwood v. Magnox Electric plc. [2004] UKHL 35, [2005] 1 A.C. 503 at para. 23 thereof.

[42] In my opinion, the question of what loss the Employment Appeals Tribunal can award compensation for is not relevant as evidence has been given that the tribunal did not look at the plaintiff’s claims of harassment during the appeal. Under s. 7(1)(c) of the Unfair Dismissals Act 1977, the Employment Appeals Tribunal cannot award compensation for anything other than financial loss in an unfair dismissal claim (save in exceptional circumstance where if there is no financial loss, the Employment Appeals Tribunal can award compensation limited to a maximum of four weeks pay).

The plaintiff has offered uncontradicted evidence as to the immediate effect of the harassment on his state of health. Evidence has been offered to prove that the injuries of which the plaintiff complains had their root in the treatment of him by the servants of the defendant during his employment with the defendant.

[43] Given this, I would accept the plaintiff’s argument that the claim for injuries resulting from harassment in the workplace is a separate and distinct cause of action to his claim for unfair dismissal.

Duty of employer to protect employee from bullying in the workplace

[44] Secondly, it falls to be decided whether the defendant was in breach of it’s duty to the plaintiff as an employee to provide a safe place of work by exposing the plaintiff to bullying in the workplace, and that by being in breach of this duty the defendant has caused the plaintiff to suffer personal injuries.

Flynn v. Power

[1985] IEHC 1

Costello J .

“. The Act of 1977 contains a new and self-contained code of rights and remedies in cases in which an employee to which the Act applies is “unfairly dismissed”, as defined. When an employer terminates a contract of employment this is deemed to be a “dismissal” (s. 1), and every dismissal is deemed to be unfair unless “having regard to all the circumstances there were substantial grounds justifying the dismissal” (s. 6, sub-s. 1). The main and substantial issue in this case is whether in all the circumstances it can be said that the respondents had substantial grounds for terminating the appellant’s employment in their school. But this is not the only one. The appellant relies on a provision of the Act by which a dismissal of an employee shall be deemed to be unfair if it results wholly or mainly from the pregnancy of the employee or matters connected therewith (s. 6, sub-s. 2 (f)) and before going any further I will deal with that point now. It seems to me to be perfectly clear that in this case the appellant’s dismissal did not “result” from her pregnancy or matters connected with it and that the sub-section to which I have referred does not assist her case. It resulted from the appellant’s refusal to terminate a relationship of which the respondents had complained long before the fact of her pregnancy was known to them. No doubt the pregnancy confirmed (if a confirmation was needed) the nature of the relationship, but the warning of dismissal had been given before such confirmation had been obtained and had it continued, dismissal would have occurred in any event.

11. On the main issue I was referred by counsel to Spiller v. Wallis Ltd. (1975) IRLR 362; Cassidy v. Goodman Ltd. (1975) IRLR 86; Whitlow v. Alkanet Construction Ltd. (1975) IRLR 321; Treganowan v. Robert Knee &Co. Ltd. (1975) IRLR 247; Nottinghamshire Co. Co. v. Bowly (1978) IRLR 252; Newman v. Alarmco Ltd. (1976) IRLR 45 and Wiseman v. Sa/ford CityCouncil (1981) IRLR 202.

12. Whilst these cases are not directly in point they do assist by showing that under corresponding English legislation a rigid line is not drawn between private sexual behaviour outside the place of work (which can never be used to justify a dismissal), and conduct in the place of work (which may do so). One of the principles they illustrate (and indeed it is one accepted as applicable to the provisions of the 1977 Act) is that an employee’s conduct in sexual matters outside the place of employment may justify dismissal if it can be shown that it is capable of damaging the employer’s business.

15. I come now to consider whether, hearing in mind that the onus of proof is on the respondents, it can objectively be said that there were substantial grounds which justified the dismissal in all the circumstances of this case.

16. The gravamen of the respondents’ complaint against the appellant is, in the words of the letter of the 6th August, 1982, that the appellant openly rejected the norms of behaviour and the ideals which the school existed to promote. The appellant has not contested, as a matter of principle, the right of school authorities to dismiss a teacher who openly rejects its norms and ideals. Nor has she denied that she is living by a code of conduct which is different in important respects from that which the school has been established to foster and instill in its pupils. Her claim is that her private life is her own affair and that there has been no “open” rejection by her of the school’s norms, as alleged.

17. In adjudicating on this dispute it is important to appreciate that two of the important circumstances in which the dismissal occurred are these. Firstly, the appellant was employed in a religious, not a lay, school and the evidence establishes that such a school has long established and well known aims and objectives as well as requirements for its lay staff which are different to those of a secular institution. Secondly, the evidence establishes that the dismissal occurred not as a punishment for breach of a code of conduct taught in the school, but arising from an assessment made of the effect on the school and its pupils of a continued breach of that code by the appellant. In making their assessment the respondents were, it seems to me, entitled to take into account that the appellant’s association was carried on openly and publicly in a country town of quite a small population; that within a short period of time it would have been common knowledge in the town (a) that the appellant was associating on a regular basis with a member of the town’s business community whose wife had recently left him, (b) later, that she had commenced to live with him as man and wife, and (c) that she had a child by him. But what is more to the point, the respondents were entitled to conclude that these facts must have become known to many if not all the pupils in the school, and that they would regard her conduct as a rejection of the norms of behaviour and the ideals which the school was endeavouring to instill in and set for them. I do not think that the respondents over emphasised the power of example on the lives of the pupils in the school and they were entitled to conclude that the appellant’s conduct was capable of damaging their efforts to foster in their pupils norms of behaviour and religious tenets which the school had been established to promote. In these circumstances they had substantial grounds for dismissing her.

18. Finally, the appellant submitted that as there was no express term in her contract of employment bearing on her private life or requiring her adherence to a particular moral code and as none is to be implied, then the dismissal is unfair because she was under no contractual obligation to act as the respondents had required of her. The contract of employment in this case was a very informal one. But because of the view I take of the 1977 Act it is unnecessary for me to decide what, if any, implied terms it contained. Undoubtedly, in certain circumstances it could be unreasonable to dismiss an employee for conduct which is not prohibited by the terms of the contract of employment. But in considering a claim under the Act the test is: in all the circumstances were there substantial grounds to justify the dismissal? and not: was the conduct relied on to justify the dismissal prohibited by contract? In reaching a conclusion on this issue the terms of an employee’s contract are part of, but only part of, the overall circumstances to be considered by the Court. In the present case, the appellant knew from her own upbringing and previous experience as a teacher the sort of school in which she sought employment, and should have been well aware of the obligations she would undertake by joining its staff. Even if the contract of employment was silent on the point, (a), she must have known that objection could be taken that her conduct violated her obligations to the school and, (b), she was in any event given an opportunity to alter it. It cannot therefore be said that in this case the absence of an express or implied contractual term relevant to the matters of complaint tainted with unfairness a dismissal which otherwise was justified. “

Employer v Employee

UD1201/2012

EAT

“The appellant was an employee with the Council as part of a FAS Community Employment Scheme on fixed term contracts. The first contract commenced on 16th March 2009 until 23rd October 2009. Her second contract ran from 26th October 2009 until 22nd October 2010. All contracts ended on 22nd October 2010 and a list was compiled with twelve names on it, including the claimant. Eleven of the people named on the list had their contract renewed. The clamant was the only person that was not given another fixed term contract. The claimant was dismissed on the recommendation of her Line Manager.

Determination:

Having considered the evidenced adduced at the hearing and the submission of the claimant and respondent the Tribunal finds that the claimant was unfairly dismissed in circumstances where there was a further two year’s work available on the scheme but it was not offered to the claimant and no reason was given to the claimant at the time for not so offering. The

Tribunal finds that the respondent did not act with mala fides but rather acted on the recommendation of the scheme supervisor as was their normal practice. The Tribunal finds that the scheme supervisor gave the respondent no reason for such recommendation and the respondent sought none at the material time.

Accordingly the claim under the Unfair Dismissals Acts 1977-2007 succeeds and the Tribunal directs reinstatement of the claimant as and from 22 October 2010 for the remaining two years.”

UD796/2015, MN388/2015

R & R v Hyper Trust Limited

under

UNFAIR DISMISSALS ACTS 1977 TO 2007

MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005

I certify that the Tribunal

(Division of Tribunal)

Chairman: Ms. J. McGovern BL

Members: Mr. L. Tobin

Mr. M. O’Reilly

heard this case in Dublin on 24 June 2016 and 27 September 2016

Representation:

_______________

Claimant(s):

Mr. Tom Mallon BL instructed by Mr. Larry Brennan, Arthur P. McLean & Co, Solicitors, 31 Parliament Street, Dublin 2

Respondent(s):

Mr Gary Compton BL instructed by Mr. Gavin Simons, Amoss Solicitors, Warrington House, Mount Street Crescent, Dublin 2

The determination of the Tribunal was as follows:-

By way of background, the claimants were formerly directors and equal shareholders in respondent company which owned and operated the Leopardstown Inn, a public house and restaurant in Stillorgan, Co. Dublin. The company was incorporated in 1975 and operated said public house since 1978. By Order of the High Court an interim examiner was appointed to the respondent in or about 22 October 2014 following a petition by the respondent grounded on affidavit sworn by DR, the second claimant. As part of the examinership process the claimants made an investment proposal to the examiner which was not accepted and ultimately both claimants ended up opposing the examinership. A Scheme of Arrangement was subsequently approved by the High Court on 10 February 2015 wherein, inter alia, the proposal for investment of a company named Borderridge Limited was accepted the effect being that the respondent came under new ownership. Further, as part of the Scheme of Arrangement no redundancies from the respondent were to take place. In these proceedings both claimants, who asserted that they were at all times employees of the respondent, seek redress for unfair dismissal from the respondent following the approval of the said Scheme of Arrangement. Some days following the Order of the High Court the claimants state that they were ordered off the Leopardstown Inn premises. It is contended on behalf of the respondent that the claimants were not employees but rather were proprietary directors with full and absolute control over the ownership and operation of the Leopardstown Inn.

Evidence on behalf of the respondent

CD gave evidence that she commenced employment as an administrator with the respondent in 2012 and shared an office with DR, the second claimant. Part of her role was to prepare wages etc for members of staff. She confirmed that both claimants received wages, they were both registered class S1 PRSI (self employed) and neither had a contract of employment. She further confirmed that both took holidays and received sick pay when appropriate. She stated that she reported to the claimants as did the other management staff in the business and the claimants “reported to themselves”. In or about October 2014 the staff were aware that there were problems in the company and it was a stressful time for everyone. She recalled being asked to prepare contracts of employment for the claimants in February 2015 but did not recall which claimant asked her to do so. No contracts were drafted up however. No contract of employment for either claimant was produced for the Tribunal.

On cross examination CD confirmed that the claimants worked six days per week. While there was a clocking in system in place it did not affect the pay of members of staff. It was put to her that there had been an alteration in the class of PRSI payable by the claimants in 2008 from A1 (employee class) to S1(self employed) she stated that she was not employed by the respondent in 2008 so was not aware of it. During the course of the examinership process CD confirmed that she was never told her role was at risk of redundancy. On the date the claimants were asked to leave the premises following the approval of the Scheme of Arrangement she was asked about pay for BR, the first claimant and was told it would be sent on to him. She heard nothing further.

This concluded the evidence of the respondent.

The claimants’ case

DR, the first claimant, gave evidence that he and his brother bought the Leopardstown Inn in 1978 and that both were shareholders of the respondent, the company named as owner of the pub. He stated that he worked full days in the pub and restaurant and was heavily involved in its administration. There was a large staff, a mix of both full time and part time persons many of whom had been with the business for years. DR stated that he was an employee of the respondent and it was his sole employment. He earned a salary of approximately €40,000 but when queried by the Tribunal confirmed that this was not his sole source of income. He further stated that he did have certain expenses paid by the respondent but by and large they were vouched. DR stated that he knew nothing about S1 or A1 PRSI and stated he reached the age of 65 in 2008.

On cross examination DR confirmed that both claimants were directors of the respondent and were in receipt of the profits from the pub. He confirmed that a considerable sum was re-invested in Newstalk Radio on behalf of the respondent which said investment was lost following the examinership process. He was questioned concerning some specific payments made by him from company accounts post the appointment of the interim examiner. He stated that any such funds were used to pay suppliers. It was put to him that this, and other examples of access to funds, would not be the actions of an employee of the company but rather someone who had total control of the business. DR stated in reply, and on numerous other occasions, that he was an employee of the company. DR was further asked whether he and his brother ‘torpedoed’ the examinership when it became apparent that another investor was being preferred he stated that he was guided by his lawyers during that process. DR denied asking CD to draw up contracts for him and his brother in February 2015. On re-examination DR stated that he co-operated fully with the examinership process and after opposing the scheme of arrangement he had no further involvement.

BR gave evidence stating that he was a director/operations manager and shareholder of the respondent and was in receipt of a salary of approximately €45,000. He stated that he was paid as an employee and received holiday pay, sick pay etc in that regard. He acknowledged his PRSI status changed in 2008 but was not aware of this at the time or why it was done. Following the Order of the High Court dated 10February 2015 he attended work as normal but was denied entrance by a security guard. He was never told that his employment was terminated and did not receive a P60 or P45. BR confirmed that he had no written contract that could be produced to the Tribunal but stated that he had one in years gone by. He indicated that he had stacks of paper work supporting his position but did not have copies of same for the Tribunal.

BR was cross examined in detail concerning a number of transactions that the respondent, he and his brother entered into over the years. BR was asked to explain an arrangement with a mobile phone operator for a mast located on the respondent’s lands and confirm who was in receipt of fees payable by the said mobile phone operator. Following much back and forth, BR eventually confirmed that he and his brother received those fees and considered it personal income albeit the “arrangement” was between the respondent and the mobile phone operator. In or about 2010 a re-zoning issue with Dun Laoghaire Rathdown County Council arose in relation to a strip of land adjacent to the Leopardstown Inn. The said strip of land is owned personally by BR and DR. BR was queried as to who had paid the legal fees associated with making representation to the Council concerning the zoning of the land and was presented with a number of invoices in this regard. BR eventually confirmed that it was the respondent who paid the said fees although the fee notes were made out to BR and/or DR personally and related to their lands as opposed to the assets of the respondent. During the course of the examinership this strip of land adjacent to the Leopardstown Inn became a feature of the process. It appears that a material part of the storage space for the Leopardstown Inn was located on the adjacent strip of land owned by BR and DR. In addition access this land affected delivery access and car-parking for the respondent. Following the examinership, and indeed during the course of the litigation, access to the storage area on the lands of BR and DR was heavily contested. It was put to BR that he considered this land to be his in the same manner he considered the Leopardtown land to be his and his brothers, and not the respondents; there was no difference. No clear response was given despite much back and forth between BR and Counsel for the Respondent and it appeared to the Tribunal that BR was not able to give a straight answer to a relatively simple question.

MON, chartered tax consultant, gave evidence. He advised that PRSI class A1 represented employee contributions whereas class S1 represented contributions of self employed persons. He referred to a July 2013 ruling from Revenue which stated that a ‘working director’ could be classified as an employee unless their shareholding was in excess. Given that both claimants were classified as S1 since 2008 he concluded that both were directors who were employees.

Submission on behalf of the Respondent

It was firstly argued that if the claimants were employees (which was denied by the respondent) their employment was terminated by operation of law i.e. the approval by the by the High Court of a Scheme of Arrangement which, it was argued, made provision for the removal of the claimants from the business as directors. The claimants were not employees therefore they were not dealt with in this regard in the Scheme of Arrangement. In the circumstances they were not dismissed by the respondent.

In reply to the argument that the claimants were employees the respondent relied on the evidence proffered by both DR and BR. It was argued that, based on this evidence, they were proprietary directors and shareholders who had such control over the business that they could not be regarded as employees in the normal sense. In this regard Counsel outlined the long standing ‘control test’ being that the essence of employment was that an employee was “subject to the command of the master as to the way which he shall do his work”. Counsel referred to number of long standing decisions in this jurisdiction together with the UK decision of Fleming v Secretary of State for Trade and Industry [1997] IRLR 682.

Submissions on behalf of the Claimants

It was argued on behalf of the claimants that they are employees whose employment could not be terminated by operation of law but rather only by dismissal as set out in Section 1 of the Unfair Dismissals Act 1977.The concept of ‘dismissal’ under the Act is not displaced by the fact that a High Court Order was made during the course of an examinership and the Act does not make any such provision.

The fact that the claimants exercised control over the business does not of itself render them outside the protection of the Unfair Dismissal Act 1977. The “control test” is only part of the consideration to be given in determining whether or not a person is an employee. It is the claimants ‘case that they were not terminated by the facts and circumstances of the examinership but rather they were dismissed when Borderridge Limited took over as employer following the approval of the Scheme of Arrangement. The Scheme of Arrangement was modified during the course of the examinership and the scheme ultimately approved by the High Court did not provide for the termination of the claimants employment and if it had done, it would have provided for their redundancy. Counsel referred the Tribunal to a number of UK decisions detailing development of the law in relation to employee/directors including Lee v Lee’s Air Farming Ltd [1961] AC 12,Buchan v Secretary of State for Employment; Ivey v Secretary of State for Employment [1997] IRLR 80, Connolly v Sellers Arenascene Ltd [2000] ICR 760, Secretary of State for Business Enterprise and Regulatory Reform v Nuefield and Howe and Secretary of State and Industry v Botrill [1999] ICR 592.

It was submitted that in light of this UK case law, that the claimants can be shareholders and directors at the same time as being employees when all other factors are taken into consideration. A director/employee can be an employee of a company which s/he has control when the other factors consistent with employment also exist e.g, contract, sick pay, holiday pay etc.

It was submitted that in this case the evidence is that the claimants had the appropriate deductions made from their salaries in line with employees on a weekly basis, that they had implied terms of contract consistent with an employee and the mere fact that the claimants exercised control over the business was not of itself enough to displace their status as employees.

Determination

Having heard the evidence of the parties the Tribunal do not believe that the claimants were employees of the respondent for the purpose of the provisions of the Unfair Dismissals Act 1977 (as amended). While the summary of the law in the United Kingdom on behalf of the claimant is helpful in setting out what the Tribunal has to consider, in these circumstances we do not believe that the entirety of the facts and evidence proffered during the hearing support the argument that the claimants were employees. It is commonplace between the parties that there is no one factor that determines whether or not the claimants are employees and we are required to look at all of the relevant facts. It is accepted that both claimants received a salary, holiday pay, sick pay etc in the same manner as the other members of staff. Counsel relies on ‘implied terms of contract’ on behalf of the claimants presumably because no written contract exists for either although all other member of staff had contracts. The claimants had regular work hours and both state that this was their only employment. In that regard DR and BR stated in response to the Tribunal that his was not their sole income however as they availed of the profits of the business and were, inter alia, in receipt of income arising from the telephone mast on the respondent’s lands. The Tribunal had the benefit of observing both the claimants during the course of their evidence and while the claimants had no difficulty answering certain basic questions, particularly those concerning the day to day operation of the pub and restaurant, it became more difficult to comprehend the answers that related to the material and in-depth running of the business. BR in particular was quite evasive in his evidence.

Having considered the evidence and submissions of both parties the Tribunal do not believe that the claimants were employees but rather directors and shareholders with such control over the respondent that could not be considered employees. It is clear that the claimants considered the assets of the respondent to be theirs in a personal capacity and this is evidenced by the way in which they ran the business over the years, the manner in which they used the adjacent lands owned by them personally as part of the business and the manner in which they received and had access to certain funds of the business. It is also clear from the oral evidence of the claimants that, in spite of their argument that they are employees, they considered the Leopardstown Inn to be their property personally and in reality saw no difference between what they considered they owned and what the company owned. In the circumstances the Tribunal does not propose dealing with the argument that the claimants’ employment was terminated by “operation of law”.

The claims under the Unfair Dismissals Acts, 1977 to 2007 and under the Minimum Notice and Terms of Employment Acts, 1973 to 2005 fail.

Sealed with the Seal of the

Employment Appeals Tribunal

This ________________________

(Sgd.) ________________________

(CHAIRMAN)

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