Brady v Minister for Social Protection

JurisdictionIreland
JudgeMs. Justice Baker
Judgment Date13 October 2016
Neutral Citation[2016] IEHC 553
Docket Number[2015 No. 66 JR]
CourtHigh Court
Date13 October 2016

[2016] IEHC 553

THE HIGH COURT

Baker J.

BETWEEN
JADE BRADY
KEITH RAMSEY
CATHAL O'REILLY
APPLICANTS
AND
MINISTER FOR SOCIAL PROTECTION
RESPONDENT
AND
STEPHEN TENNANT (RECEIVER OF WHITE SANDS HOTEL LIMITED)
NOTICE PARTY

Employment – Dismissal from employment – Quantum of damages – S. 6 of the Protection of Employees (Employers' Insolvency) Act, 1984 – Insolvency of the employer – Role of the Minister

Facts: Following the grant of an order by the Circuit Court to award the damages to the applicants on the ground of unfair dismissal from the employment and the decision of the respondent for reducing the quantum of that award, the applicants now sought an order of certiorari for quashing the decision of the respondent. The applicants claimed that the respondent misapplied the relevant statutory provisions and wrongly reduced the amount of damages awarded by the Circuit Court.

Ms. Justice Baker refused to grant the desired reliefs to the applicants. The Court, however, proposed to return the matter to the respondent for further review in the light of the fact that the respondent had agreed for further review subject to the agreement by the applicants to that effect. The Court held that the respondent had power to adopt a formula or methodology to calculate the amount of damages. The Court held that s. 6(1) of the of Protection of Employees (Employers' Insolvency) Act, 1984, permitted the respondent to direct payment to an applicant out of the fund, which the respondent found was due to the applicant, in respect of the debt. The Court held that the role of the respondent was not to make an award of damages, but to evaluate, discharge all or part of a debt in respect of a financial loss arising in an employee from insolvency discharge.

JUDGMENT of Ms. Justice Baker delivered on the 13th day of October, 2016.
1

These proceedings relate to the operation of a mechanism established to offer limited financial redress to employees who suffer loss owing to the insolvency of their employer. The Insolvency Payments Scheme ('the Scheme') was established under the Protection of Employees (Employers' Insolvency) Act, 1984 – 2006 ('The Acts'). Under the Scheme the Minister may, if certain conditions are met, direct that payments be made out of the Social Insurance Fund to employees who qualify. Expressly included under the Scheme are awards made by the Employment Appeals Tribunal (the 'EAT'), or by order of the Circuit Court on appeal, under the Unfair Dismissals Acts.

2

The applicants were all employed by the White Sands Hotel Limited in Portmarnock, Co. Dublin and in each case their employment was terminated on or about 21st February, 2010 on the grounds of a purported redundancy. These three applicants, together with other persons not relevant to this judgment, brought proceedings under the Unfair Dismissals Acts 1977 – 2011 to the Rights Commissioner Service, and subsequently appealed the decision of the Rights Commissioner dismissing their claim. The EAT, on appeal, made a determination on 29th May, 2013 that the applicants had been unfairly dismissed, and financial awards were made in respect of each of them.

3

Each of these three applicants appealed the determination of the EAT to the Circuit Court with regard to the quantum of the award.

4

Before the appeals to the Circuit Court came on for hearing, the notice party had been appointed receiver of the Company on 5th July, 2013. Neither he, nor the former employer of the applicants, took any part in the proceedings before the Circuit Court.

5

The President of the Circuit Court delivered his decision on 18th October, 2013, and increased the awards substantially. In each case, the President of the Circuit Court made his award in round figures, €20,000 to the first applicant, €60,000 to the second applicant, and €70,000 to the third applicant. In each case the amounts directed to be paid were less than the maximum jurisdiction of the Circuit Court under the Unfair Dismissals Acts. The decision of the Circuit Court made no express reference to the basis of the calculation and the awards were not expressly calculated by reference to the remuneration of the applicants.

6

Oral evidence had been offered by the applicants to the Circuit Court of their actual financial loss and future prospective loss, and each of them also gave evidence of the effect of the dismissal on their personal and professional lives.

7

The perfected order of the Circuit Court was then transmitted to the receiver who submitted an application under s. 6 of the Protection of Employees (Employers' Insolvency) Act, 1984, doing so on the relevant statutory form called an IP2. Each of the applicants signed the form as a declaration.

8

On or about 30th April, 2014, the Minister for Social Protection made a determination that the applicants were entitled to payments under the Scheme in amounts less than the amounts directed to be paid by the Circuit Court. It was accepted that the applicants were entitled to the benefit of the Scheme, but the Minister reduced the amounts payable to them by reference to a calculation linked to the then relevant statutory limit of €600 per week on entitlement to redress under the Scheme.

9

The Minister was requested to, and did, engage in a review of her decision which was duly made on 25th November, 2014, but did not alter her view.

10

No provision exists in the legislation for an appeal from the decision of the Minister, and the applicants have brought application for an order of certiorari quashing that decision, primarily on the ground that the Minister misdirected herself in law in the means by which she calculated the maximum amounts to be paid to each of the applicants.

11

Leave to bring judicial review was granted by Noonan J. on 16th February, 2015.

The statutory scheme
12

Section 6 of the Act of 1984, as amended, provides for the payment to employees of certain debts owed by that person's employer on the happening of an insolvency. The legislation applies to cases where the employer became insolvent on a day not later than 22nd October, 1983 and an employee may apply for payment in respect of any debt to which the section applied. Section 6(1) provides as follows:

'(1) If, on an application made to him in the prescribed form by or on behalf of an individual, the Minister is satisfied that—

(a) the person by or on whose behalf the application is made (which person is in this section subsequently referred to as ' the applicant') is a person to whom this Act applies, and that he was employed by an employer who has become insolvent, and

(b) the date on which the employer became insolvent is a day not earlier than the 22nd day of October, 1983, and

(c) on the relevant date the applicant was entitled to be paid the whole or part of any debt to which this section applies,

the Minister shall, subject to this section, pay to or in respect of the applicant out of the Redundancy and Employers' Insolvency Fund the amount which, in the opinion of the Minister, is or was due to the applicant in respect of that debt.'

13

The section vests in the Minister a power to determine the amount due to an applicant in respect of a debt, and an employee has no automatic entitlement as to the amount of any payment to be made.

14

The applicants claim, and this was not a matter of controversy at the hearing of the application, that while the Minister has a discretion to determine the amount due to an applicant under the Scheme, her decision must be based on a correct interpretation of the statutory scheme, and must be rational and proportionate.

15

Certain classes of debts may be recovered under the Scheme and the relevant class is found in s. 6 (2)(a)(v):

'Subject to paragraph (b) of this subsection, the following are debts to which this section applies—

...

(v) any amount which an employer is required to pay by virtue of a determination under section 8 ( 1) or 9 (1) or an order under section 10 (2) of the Act of 1977 and made, in any case, not earlier than the commencement of the relevant period'

16

Section 10(2) of the Act of 1977 has been repealed and replaced by s.11 of the Unfair Dismissals (Amendment) Act, 1993. It is accepted by the respondent that the awards made by the Circuit Court to the applicants under the Unfair Dismissals Acts are debts that come within the ambit of the Scheme.

17

The Scheme imposes a monetary limit on the amount payable in certain circumstances and s. 6(4)(a), as amended, provides as follows:

'(4) (a) The amount payable to an employee in respect of any debt mentioned in subsection (2) or award mentioned in subsection (3) of this section shall, where the amount of that debt is or may be calculated by reference to the employee's remuneration, not exceed €600 in respect of any one week or, in respect of any period of less than a week, an amount bearing the same proportion to €600 as that period bears to the normal weekly working hours of the employee at the relevant date.' (Emphasis added)

18

No mechanism is provided in the legislation for the operation of the discretion of the Minister. What is clear however, is that under s. 6(4)(a), when redress is payable in respect of an award made inter alia by the Circuit Court under the Unfair Dismissals Acts 1977 – 2011, that a statutory limit does exist but only when the 'amount of that debt is or may be calculated by reference to the employee's remuneration'.

The grounds of review
19

The applicants claim that the Minister misapplied the statutory provisions in the operation of the Scheme and misdirected herself in law in the way in which she characterised the awards made by the Circuit Court. It is claimed that the Minister erred in the mechanism adopted to calculate the redress available under the Scheme, that she wrongly reduced or amended the amounts found to be due to...

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4 cases
  • Brady v Minister for Social Protection
    • Ireland
    • Court of Appeal (Ireland)
    • 3 July 2019
    ...of the High Court (Baker J.) dated 15th November 2016 refusing, for reasons stated in her judgment delivered on the 13th October 2016 ( [2016] IEHC 553) the appellants” application for certain reliefs by way of judicial review, including an order of certiorari to quash the decision of the ......
  • Norris v Radio Teilifis Éireann and Another
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