THE INDUSTRIAL TRIBUNALS

CASE REFS:   2454/14
2456/14

CLAIMANTS:		1.	Grazyna Staszewska
				2.	Anna Zelakiewicz

RESPONDENTS:		Department for Employment and Learning and Others

DECISION 
In each of these two cases:

(A)	I am satisfied that nobody is liable to make a redundancy payment to the claimant.

(B)	The claimant’s appeal under Article 233 of the Employment Rights Order (“ERO”) is dismissed.

Constitution of Tribunal:
Employment Judge (sitting alone):	Employment Judge Buggy
Appearances:
Each of the claimants was self-represented.
The respondent was represented by Mr A Sands, Barrister-at-Law instructed by the Departmental Solicitor’s Office.

REASONS

1.	These two claimants, along with four other persons, constitute a team of cleaners. At all material times, the main task of that team was and is to clean the bedrooms in the Ramada Hotel in Portrush (“the hotel”).  Each member of that team has been part of the team for a lengthy period.  The relevant team currently consists of the two claimants in these cases, along with:
		
			Ms Jolanta Cygan

			Ms Jadwiga Jucha

			Ms Katarzyna Nowak

			Ms Karolina Siewruk

	The claimant Ms Zelakiewicz is the team supervisor.

2.	All of those six individuals have brought proceedings in the industrial tribunal, appealing against decisions which were made by the Department for Employment and Learning (“the Department”).  In each instance, the Department made the relevant decisions in its capacity as the statutory guarantor in respect of certain employment debts.  In each instance, the appeals relate to the claimant’s claim for redundancy pay, the claimant’s claim for notice pay and the claimant’s claim for holiday pay.

3.	In each of the six cases, there originally was also an appeal against the Department’s refusal of the claimant’s application to the Department in respect of wages.  However, while these “wages” appeals were pending, the Department (entirely properly, in my view) decided, in each case, that the decision to refuse a payment in respect of wages was inappropriate, in light of the additional information which had by then become available to the Department; accordingly, the Department then decided to make payments to these claimants in respect of wages.

4.	As I have explained, and as all the relevant claimants accept, each relevant claimant’s notice pay appeal is unsustainable, because no claimant has sustained any financial loss as the result of any relevant lack of notice.

5.	That leaves questions relating only to redundancy pay and holiday pay to be resolved.  In each of these two cases, the remaining key questions are as follows:

	(1)	Is anybody liable to make a redundancy payment to the relevant claimant and, if so, has that employer failed to make that payment?

	(2)	Who is responsible in respect of any holiday leave entitlement (in respect of untaken holidays) which the claimant had built up by             mid-March 2014?  (Is the Department responsible for making a payment to the claimant in respect of the cash-equivalent of the untaken leave entitlement?  Or is Omni Facilities Management Ltd responsible for crediting the claimant with that untaken leave?).

6.	In each case, in order to determine the second of the questions posed in paragraph 5 above, it is necessary to determine the following additional issues:

	(1)	In March 2014, was there a relevant service provision change (“SPC”), within the meaning of the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 (“SPCR”)?  

	(2)	If so, was the relevant claimant assigned to the transferred entity (the organised grouping of resources and employees which was the subject of that SPC)?  If the answer to each of those questions is “yes”, an additional question has to be resolved.  

	(3)	That additional question is whether the transferee under the relevant SPC became responsible for crediting the relevant employee with the relevant holiday pay entitlement.  Or instead, because of the transfer, did the previous leave entitlement crystallise, and become an entitlement, instead, to holiday pay; and, if so, has the Department become liable in respect of that holiday pay entitlement?

7.	In the present context, I use the following acronyms as a handy way of referring to the following companies:  

		(1)	I use “JK” as an acronym for Jani King (GB) Ltd.

		(2)	I use “CR” as an acronym for City Recruitment Ltd.

		(3)	I use “OFM” as an acronym for Omni Facilities Management Ltd.

8.	From 6 January 2014 until mid-March 2014, the relevant cleaning services were provided to the hotel by JK.  Throughout that period, each relevant claimant was employed by JK.

9.	On 12 March 2014, JK went into administration.  By letters dated 13 March 2014, which were not received by any team member until 14 March 2014, the administrators of JK purported to dismiss each member of the team, with effect from 12 March 2014.

10.	On 14 March 2014, each member of the team was offered and accepted employment, by CR, in the role which she had been previously carrying out for JK.

11.	CR continued to be the employer of the members of the relevant team until May 2014.

12.	Since May 2014, each of the members of the team has been employed by OFM and each relevant contract of employment is still continuing.  Since May 2014, OFM has been responsible to the hotel for the provision of the relevant cleaning services.

13.	In each of the relevant cases (in each of the industrial tribunal cases which have been brought by the members of the relevant team, and which are still pending, including these two cases), the sole respondent is the Department.

14.	None of the relevant claimants wishes to make a claim against OFM, her current employer.

15.	However, I noted that, in each relevant case, in order to decide the issues in dispute between the relevant claimant and the Department, it would be necessary for me to make determinations as to the responsibilities (if any), of OFM under SPCRs.

16.	Accordingly, in these two cases, OFM were given the opportunity of participating as a notice party in the main hearing.  In each instance, OFM (for costs reasons) declined to avail of that opportunity.

17.	Nevertheless, during the course of a Case Management Discussion (“CMD”) which was held on 28 July 2015, Ms Anisa Khan, of RBS and Nat West Mentor Services, participated (by phone) on behalf of OFM.  I am appreciative of her constructive involvement in that CMD.

18.	During the course of an earlier CMD, which had taken place on 18 February 2015, I had posed the following questions, which were noted at paragraph 18 of the record of proceedings:

	“The central remaining issue is whether or not there was an SPC.  What is OFM’s position on this matter?

(1)	Does OFM accept that there was an SPC from JK to CR in March 2014, and then from CR to OFM in May 2014?

(2)	Or does OFM accept that there was an SPC, from JK to OFM directly, which began on 13 March 2014 and ended on 24 May 2014?”

19.	OFM’s response to those queries was contained in a four-paragraph statement, which was kindly provided by Ms Khan as an enclosure with an email which she sent on 29 April 2015:

	“(1)	OFM received notice from [the hotel] on 2 December 2013 that the housekeeping contract OFM performed on the Hotel’s behalf was terminated and a new contractor would take over on 6 January 2014.  [OFM] wrote to all employees on or around 16 December 2013 to inform them of the transfer.

	(2)	The housekeeping contract transferred to [JK] on 6 January 2014.  The employees’ employment transferred to the transferee on this date pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 and/or the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 (collectively referred to as “TUPE”).

	(3)	OFM is not certain of what happened with the contract thereafter as the Hotel would not provide information to OFM about this.  OFM received information from a Mr P Moore LLB of MCL Employment Law, 653 Antrim Road, Belfast ... that the employees stopped working at the Hotel for JK in February 2014.  The Hotel needed an agency to take on the employees so Mr Moore put them in touch with City Recruitment Ltd (CR).  Mr Moore advised that he believed there was a break of 2-3 weeks between the employees leaving the Hotel and commencing work for CR in March 2014.  Mr Moore advised that he thought the Hotel had brought another contractor in to perform the housekeeping contract between February and March 2014.  That did not however accord with the letters from the administrator that were sent to the employees which stated that the employees’ EDTs were 13 March 2014.  OFM’s understanding is that when JK went into liquidation, the employees received letters informing them that they were redundant.  However despite this they continued working on the housekeeping contract for CR.  OFM took over the contract again as of 26 May 2014.

	(4)	We do not accept that there was an SPC from JK to OFM directly that began on 13 March and ended on 24 May 2014.  We are uncertain whether or not there was an SPC from JK to CR in March 2014.  We accept that there was an SPC from CR to OFM on 26 May 2014”.

20.	It will be helpful now if I revert to the questions which I posed at paragraph 18 of the record of proceedings of 18 February 2015 (as already quoted at paragraph 18 above).

21.	As set out in the April 2015 statement, OFM’s position, was as follows: 

	(1)	OFM rejected the proposition (that there had been an SPC directly, from JK to OFM (beginning on 13 March 2014 and ending on 24 May 2014).  

	(2)	OFM’s position was that they were neither confirming nor denying that there had been an SPC from JK to CR in March 2014, but they fully accepted that there had been an SPC from CR to OFM in May 2014

22.	In light, in particular, of the latter concession which was (entirely appropriately) made on behalf of OFM, what are the remaining issues which have to be resolved in this case?  In my view, in each case, the remaining issues can be listed as follows:

(1)	Was the relevant claimant dismissed in March 2014 (and, if so, was she dismissed by reason of redundancy?).

	(2)	Was there an SPC, from JK to CR, on or about 13 March 2014?

(3)	If the alleged SPC, from JK to CR, did occur, which of the following scenarios applies:

(a)	Did the relevant claimant’s entitlement in respect of untaken holidays, as at March 2014, crystallize, and, if so, has the Department become responsible for paying the cash-equivalent of that untaken leave to her?

(b)	Instead, has OFM become responsible for crediting the relevant employee with the relevant holiday pay entitlement?

23.	It is convenient now to list my key conclusions (in each of these two cases), in respect of each of those issues:

	(1)	On 14 March 2014, there was an SPC from JK to CR.

	(2)	At the time of that SPC, the relevant claimant was assigned to the relevant transferred entity.

	(3)	In each of these two cases, the purported dismissal dated 13 March 2014 was legally ineffective.  Accordingly, the relevant claimant was still in the employment of JK at the time of the 14 March 2014 SPC.

	(4)	The claimants’ untaken leave entitlements did not crystallize (and turn into a holiday pay entitlement) on 14 March 2014.  Instead, the leave entitlement endured, and became the responsibility of CR on 14 March 2014 and subsequently (because of the May 2014 SPC), of OFM.   

	My reasons for those conclusions are set out below.

24.	These two cases were treated as lead cases, on the basis that the Department and the other four relevant claimants would regard the outcomes of these two particular cases as being indicative of what would be likely to happen if any of the other four cases became the subject of a main hearing.

25.	As Ms Zelakiewicz realistically accepted, regardless of the outcome of these proceedings, she could never have any entitlement to a payment from the Department in respect of redundancy pay, because she had been employed at the hotel for less than two years.

26.	However, Ms Staszewska did claim a redundancy payment in respect of what she contended was a dismissal which had occurred in mid-March 2014, the dismissing employer being JK.

27.	Both of the claimants provided sworn testimony during the course of this hearing.  As a result of clear and candid testimony provided by the claimant Ms Zelakiewicz towards the end of the hearing, a clearer picture of the events of March 2014 emerged.  On 13 March 2014, the administrators of JK sent letters to each of the claimants, purporting to dismiss each of them, with effect from 12 March.  However, in each instance, the letter of dismissal was sent to the relevant claimant’s home address and, in each instance, that letter was not received by the relevant claimant until 14 March 2014.  An employer cannot dismiss a employee retrospectively.  Accordingly, in each of these two cases, the purported dismissal of 12 March, which was communicated to the relevant claimant only on 14 March 2014, was a nullity.  In the case of Ms Staszewska, the relevant purported dismissal was also ineffective because of the fact that she only became aware of the purported dismissal after the SPC of 14 March 2014 had occurred.  Accordingly, by the time the relevant purported dismissal had been communicated to Ms Staszewska, the purported “dismisser” had lost the power to dismiss (because the employer, in respect of the relevant entity, had changed, from JK to CR).  Five members of the relevant team were at work on 14 March 2014.  Only Ms Zelakiewicz was at home, when the letter of purported dismissal arrived at her residence.  As soon as she became aware of the contents of that letter, she went and talked to the manager of the hotel.  As a result of that conversation, by midday, arrangements were in progress, whereby CR was taking over contractual responsibility, for the cleaning of the relevant rooms, in place of JK.  By the time the other five relevant claimants became aware of the fact that, at their respective homes, purported letters of dismissal were waiting for them, the relevant transfer of 14 March 2014 had already occurred.  As will be apparent from the foregoing, I have concluded that there was an SPC on 14 March 2014, from JK to CR.  In arriving at that conclusion, I have taken account, in particular, of the following.  First, there was no interruption whatsoever to the activity of cleaning the rooms.  Secondly, all of the members of the team who were involved in cleaning the rooms as at 12 March 2014 were employed, for that same purpose, 14 March 2014, by CR.

28.	Ms Staszewska’s claim in respect of a redundancy payment fails, because I am satisfied that she was not dismissed in March 2014.  Like Ms Staszewska, Ms Zelakiewicz was not dismissed in March 2014.  (Instead, each of these two claimants’ respective employments were transferred, on 14 March 2014, from JK to CR.  So, the continuity of service of each of these two claimants was unaffected by the SPC of 14 March 2014 and by the purported dismissal of mid-March 2014.)

29.	In each of these two cases, that leaves the question of whether the Department has responsibility in respect of holiday pay, in relation to accrued holiday leave entitlements, which had built up by mid-March 2014; or whether, instead OFM has responsibility for crediting the claimant with the relevant untaken leave.  

30.	Before addressing that question, I need to set out the legislation in some detail.

31.	In the context of an SPC from a transferor which is in administration, the provisions relating to the Department’s statutory guarantee role in respect of holiday pay are contained in Part XIV of ERO (which consists of Articles 227-235 inclusive) and in Regulation 8 of the SPCR.

32.	Article 227 sets out the conditions for entitlement to a relevant payment in respect of holiday pay, in situations which do not involve an SPC.  Those conditions are conjunctive, and they are as follows:

		(1)	The relevant employee’s employer must have become “insolvent” within the meaning of the statutory guarantee provisions.  (In each of these two cases, that condition is satisfied because, on 12 March 2014, JK went into administration).

	(2)	The employee’s employment must have been terminated.  (That condition has not been satisfied in either of these cases).

	(3)	On “the appropriate date”, the employee must have been entitled to be paid the whole or part of a “... debt to which this Part applies”.  Holiday pay is a type of debt to which Part XIV applies.  

33.	In each of these two cases, the claimant does not rely upon the provisions of Article 227 on its own.  Instead, she relies on Article 227 as applied by the provisions of Regulation 8 of SPCR.

34.	The effects of those provisions of Regulation 8 which are relevant in the circumstances of each of these two cases can be summarised as follows.  

(1)	As already noted above, on 12 March 2014, JK went into administration and, on 14 March 2014, there was an SPC, from JK to CR.  Therefore, paragraphs (2) to (6) of Regulation 8 applied in the context of that SPC:

(a)	An administration constitutes “relevant statutory insolvency proceedings” within the meaning of paragraph (1) of Regulation 8.  

(b)	A person who was assigned to the transferred entity at the time of the relevant SPC is a “relevant employee” for the purposes of paragraph (2) of Regulation 8.

(c)	Part XIV of ERO is one of the relevant statutory schemes which are referred to at paragraphs (3) and (5) of Regulation 8.  (See paragraph (4) of Regulation 8).

(2)	In effect, paragraph (3) of Regulation 8 provides as follows:

(a)	If an SPCR occurs after the commencement of an administration, Article 227 of ERO:

		“... shall apply in the case of [an employee who was assigned to the transferred entity at the time of the SPCR] irrespective of the fact that the qualifying requirement that the employee’s employment has been terminated is not met ...”.

					(b)	And, in that context:

		“... the date of the transfer shall be treated as the date of the termination and the transferor shall be treated as the employer”.

35.	Accordingly, in the circumstances of each of these two cases, in summary, the effect of the relevant provisions of Regulation 8 of the SPCR is that the provisions of Article 227 of ERO apply, in a modified form, to the situation in which the relevant claimant found herself on 14 March 2014.

36.	As so modified, the conjunctive conditions for entitlement to holiday pay, in the context of a post-administration SPC, are as follows:

		(1)	The transferor must have become insolvent.  (That condition has been satisfied in each of these two cases).

	(2)	There must have been an SPC and the relevant entity to which the claimant was assigned at the time of the SPCR must have been within the scope of the transfer.  (In each of these two cases, that condition has been satisfied).

	(3)	On “the appropriate date” the claimant must have been entitled to be paid holiday pay.  (In each of these two cases, that condition has not been satisfied : see paragraphs 37 and 38 below.)

37.	In the circumstances of these two cases, the appropriate date is defined at Article 230 of ERO as the date on which the employer went into administration.

38.	In each of these two cases, the transferor went into administration on 12 March 2014.  On that date, the claimant had not been “dismissed”.  On that date, the SPC had not yet occurred, and it had not even begun.  (Therefore, in each of these two cases, no relevant holiday pay debt was owed on 12 March, which was the date of the insolvency; and, on 12 March, the SPC had not taken place, or even begun, on that date.)

39.	In each of these two cases, the practical effects of the foregoing conclusions, in relation to the relevant untaken holidays, are as follows:  

		(1)	The relevant holiday leave entitlements were never converted into holiday pay entitlements.

		(2)	Those entitlements did not become the responsibility (pursuant to paragraph (3) of Regulation 8 of SPCR) of the Department.

		(3)	Therefore, responsibility for those leave entitlements did transfer to CR, when the relevant SPCR took place.  (The combined effect of Regulation 4, and of paragraph (5) of Regulation 8 of the SPCR, is as follows.  Responsibility for holiday leave entitlement transfers to an SPC transferee under an SPC unless both of two conditions are met:

	(a)	that entitlement has become a holiday pay entitlement and 

	(b)	the latter entitlement falls within the scope of the modified version of the Article 227 ERO rights which are conferred by paragraph (3) of Regulation 8).

		(4)	Because of the subsequent SPC from CR to OFM (see paragraph 19 above), CR’s responsibility in respect of the relevant untaken leave entitlement then became the responsibility of OFM.

40.	At the end of the main hearing of these two cases, (having read the relevant legal provisions during the course of that hearing), it seemed to me that each claimants’ untaken leave entitlements had become holiday pay entitlements which had become the responsibility of the Department.  However, since the conclusion of the hearing, I have had the opportunity to analyse the legislation in greater detail.  Having done so, I am now satisfied that the position is as set out at paragraphs 36 – 39 above.

Employment Judge

Date and place of hearing:	28 July 2015, Belfast

Date decision recorded in register and issued to parties: