The Minister for Employment Affairs and Social Protection v The Labour Court

• Jurisdiction: Ireland
• Judge: Mr. Justice Michael MacGrath
• Judgment Date: 04 July 2019
• Neutral Citation: [2019] IEHC 634
• Docket Number: [2017 No. 173 MCA]
• Court: High Court
• Date: 04 July 2019

IN THE MATTER OF S. 46 OF THE WORKPLACE RELATIONS ACT, 2015 BETWEEN

THE MINISTER FOR EMPLOYMENT AFFAIRS AND SOCIAL PROTECTION

APPELLANT

AND

THE LABOUR COURT

AND

MARY DUNNE

RESPONDENTS

[2019] IEHC 634

Michael MacGrath

[2017 No. 173 MCA]

THE HIGH COURT

Judgment of Mr. Justice Michael MacGrath delivered on the 4th day of July, 2019.

1 This is an appeal on a point of law pursuant to s. 46 of Workplace Relations Act, 2015 by the Minister for Employment Affairs and Social Protection (“the Minister') from a determination of the Labour Court made on 19th April, 2017 which concerns the interpretation and application of Regulation 3 of the Transfer of Undertakings Regulations 2003 (“the Regulations”). Ms. Heffernan was the manager of a Branch Office of the Minister's department which was responsible for the delivery of certain services in connection with the disbursement of social welfare payments, in Edenderry, County Offaly. Ms. Dunne was an employee of Ms. Heffernan. The Labour Court determined that a transfer within the meaning of the Regulations occurred on or about 11th December, 2005, when Ms. Nuala Heffernan retired as Branch Officer. The services previously provided by Ms. Dunne were transferred to and subsumed into a greater range of services provided by the Minister's department at its Intreo office in the town.

2 Section 46 of Workplace Relations Act, 2015 (“the Act of 2015”) provides:-

“A party to proceedings before the Labour Court under this Part may, not later than 42 days from the service on that party of notice of the decision of the Labour Court in those proceedings, appeal that decision to the High Court on a point of law, and the decision of the High Court in relation thereto shall be final and conclusive.”

The Regulations

3 Regulation 3 of the Transfer of Undertakings Regulations 2003 (“the Regulations”) provides:-

“(1) These Regulations shall apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger.

(2) Subject to this Regulation, in these Regulations -

‘transfer’ means the transfer of an economic entity which retains its identity; ‘economic entity’ means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity.

(3) These Regulations shall apply to public and private undertakings engaged in economic activities whether or not they are operating for gain.

(4) An administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities is not a transfer for the purposes of these Regulations.”

4 An important purpose of the Regulations is to safeguard the rights and entitlements of employees when the business or part of the business in which they are employed transfers from one employer to another. It is a fundamental requirement of the Regulations that the service must constitute an economic entity but it can only do so if it is engaged in an economic activity. “Economic activity”, however, is not defined in the Regulations but has been addressed in caselaw. An issue arises as to whether this court should entertain arguments on the issue of economic activity as it applies to the circumstances in this case; as it is contended that this is not an issue which was argued or addressed in the Labour Court. A similar controversy arises as to whether any such transfer constituted an administrative re-organisation or a transfer of administrative function within the meaning of Regulation 3(4).

Factual Background

5 Ms. Nuala Heffernan was contracted by the Department of Social Protection, pursuant to what is described as “a contract for services”, to run and manage a social welfare Branch Office in Edenderry. Under her contract, she was required to provide necessary premises and associated facilities, including staff, and to deliver services relating to the distribution of social welfare payments, as agent of the Department. Ms. Dunne, the second respondent, was employed by Ms. Heffernan who retired on 11th December, 2015. In anticipation of that event, the department made a decision to alter arrangements regarding the provision of those services. It did not seek to enter into a further contract for service with an alternative contractor but decided to consolidate the delivery of the services with other services that it intended to provide through its Intreo office in the town. Ms. Dunne had been employed under a contract of service with Ms. Heffernan from 2nd June, 2002 to 11th December, 2015 when the business ceased operating.

6 By letter dated 2nd November, 2015 the Department advised Ms. Heffernan that it did not consider that the Regulations applied to her staff as no transfer of undertaking was occurring. There would be no change of ownership of the Branch Office and it would merely cease to exist following her retirement. All social welfare services were to be provided via the department's existing office in the town which would become an Intreo office. It was explained that this was part of an administrative reorganisation of the department's public services for the area and, once closed, the Branch Office could not reasonably be regarded as retaining its identity nor could it be considered as remaining in operation as a going concern.

7 The Branch Office ceased to operate from midday on Thursday, 10th December, 2015. By the next morning equipment was already installed in the new office.

8 Ms. Dunne, who was the only full-time employee of the Branch Office, was not paid redundancy nor was she afforded the opportunity to transfer her employment to the new Intreo office. She complained to the Workplace Relations Commission that her “ new employer” did not ensure that her terms and conditions transferred from her previous employer.

9 An adjudication officer upheld her complaint. The Minister was not represented at the hearing, but made submissions which the adjudicator took into consideration in arriving at his conclusion. This decision was appealed to the Labour Court. It was rejected. The matter now comes before this Court pursuant to the provisions of s. 46 of the Act of 2015. The Minister does not accept that the consolidation of the delivery services in Edenderry constituted a transfer of undertaking within the meaning of the Regulations.

10 By way of historical background, counsel for the Minister, Mr. White S.C., drew the court's attention to O'Coindealbhain (Inspector of Taxes) v. Mooney [1990] 1 I.R. 422 where the history of branch managers was discussed. They were appointed to pay out social insurance under the Labour Exchange Act, 1909 and apart from being assigned additional functions there have been no major changes to the structure. To this day those offices carry out this function on behalf of the Minister. While various different schemes have been introduced over the years, their basic function has remained unaltered. Blayney J. noted that they were established, in the main, in rural areas where it would have been too costly to set up a district office of the parent department staffed by civil servants.

The role of the court

11 This is an appeal on a point of law from a specialist body. Appropriate deference must be shown by this court to its decisions. What this means has been the subject of debate. It is submitted on behalf of Ms. Dunne that it is only in the most exceptional of circumstances that this court should or ought to set aside a determination of the Labour Court on appeal. Ms. Bolger S.C. submits that in accordance with dicta of O'Sullivan J. in Mulcahy v. Minister for Justice, Equality and Law Reform and Waterford Leader Partnership Ltd [2002] 13 E.L.R. 12, that it is only if tribunal's conclusion is “so abhorrent to logic and common sense or involves an error of law”, that the High Court should intervene. A practical reason for this court not to interfere is that it has not heard the evidence. Mr. White S.C. acknowledges that the court is not at large and that it may intervene where it finds that the decision is based on an identifiable error of law or an unsustainable finding of fact, but that its jurisdiction is wider than that which applies in judicial review applications.

12 In Fitzgibbon v. The Law Society [2015] 1 I.R. 516 Clarke J. (as he then was) observed at para. 51:-

“Where the legislature confirms a right to a statutory appeal, it must evidently be assumed that this was intended to have some meaning and some purpose. Where, for example, judicial review is independently available, it must be considered as conferring some additional benefit(s) on the appellant. Something separate from a mere “test” for legality, or the mere quashing or remitting of a decision based on standard judicial review grounds. The range of possibilities in this regard is extensive, varying from a full appeal, as from the Circuit Court to the High Court on circuit (s. 38 of the Courts of Justice Act 1936), to one strictly limited, say on a point of law, perhaps even further limited by the nature of the point and only then on due certification by the trial court (see as examples, s.29 of the Courts of Justice Act 1924 as substituted by s. 22 of the Criminal Justice Act 2006 and as later amended and s. 50(3)(f) of the Planning and Development Act 2000). In between, one can find several other variable forms of “appeal”. It therefore follows that the availability of such a right does not mean that all reviews, by way of appeal, are necessarily the same: quite obviously they are not. As Costello J. pointed out in Dunne v. Minister for Fisheries [19S4]1 I.R. 230, “in every case the statute in question...