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Latest in Employment Law>Case Law>Gary Treacy v Irish Packaging Recycling Limited [2013]
Gary Treacy v Irish Packaging Recycling Limited [2013]
Published on: 16/04/2013
Issues Covered: Transfer Regulations (TUPE)
Article Authors The main content of this article was provided by the following authors.
Patrice O'Keeffe
Patrice O'Keeffe
Background

FACTS

The Plaintiff, Mr. Gary Treacy commenced work for Greyhound Recycling and Recovery in and around September 2008 as a Business Manager. He continued his employment within the Greyhound group until the 1st of August 2011, when a new Contract of Employment issued. His new employer, Greyhound Green Bin was an unlimited company within the same group. The contract was poorly drafted and contradictory throughout. Examples of the contradictions include:

* “Previous employment with Greyhound Recycling and Recovery from the 15th of September 2008 will count as part of your continuous employment with the company. Your employment will be on a probationary basis for a period of 6 months from the date you commence employment under this contract. During this period the company has the sole and absolute right of deciding on your suitability for continued employment”.

* “The company shall be entitled to terminate your employment at any time during the probationary period by giving you one week’s notice”

* “You have successfully completed your probationary period”.

* “Your employment may be terminated at any time by the company giving you not less than 6 months’ notice in writing except during the probationary period where notice of termination should be one month”.

On foot of the 2011 contract, the Plaintiff’s annual salary amounted to €92,400.00.

January 2012 heralded major changes in collection and disposal of waste business in the greater Dublin area. One consequence of these changes was that Greyhound Recycling and Recovery entered a licence agreement with Irish Packaging Recycling Limited and it was agreed that certain employees of the Greyhound Group would be transferred to Irish Packaging Recycling Limited, pursuant to the Transfer of Undertaking (TUPE) Regulations. In full, 27 employees were to be transferred to the Defendant company, including the Plaintiff. The licence agreement was signed by the Defendant on the 13th of January 2012. It would seem that the Defendant did not carry out adequate due diligence and in particular to the terms of employment and the roles and functions of employees, before becoming contractually bound by the licence agreement.

On the 26th of January 2012, Mr. Treacy was called to a meeting with his employer and was told he was being made redundant and was getting one month’s notice. A letter followed on the 31st of January 2012, which was hand delivered to the Plaintiff, enclosing the redundancy notice and confirming details. 

Mr. Treacy sought legal advice and proceedings were issued on the basis that he was entitled to 6 months’ notice. Irish Packaging and Recycling Limited duly paid statutory redundancy and one month wage in lieu of notice. Redundancy was calculated on the basis of the Plaintiff’s fixed annual salary of €77,000.00 and not the Plaintiff’s aggregate salary of €92,400.00.

DETERMINATION

Initially, the Court was asked to confirm that there were breaches of the provision of the Redundancy Payment Act, 1967. The Court pointed out that it did not have the jurisdiction to make any determination in this regard. This complaint could only be addressed before an Employment Appeals Tribunal.

The Court was then asked to determine the Plaintiff’s contractual entitlements under his 2011 contract of employment and in particular: 

A. Whether the Defendant was liable for a Breach of Contract, having regard to the manner in which the Plaintiff was dismissed, and

B. Damages.

Where issues of interpretation are raised before the Court, its task is to “decide what the intention of the parties was, having regard to the language used in the Contract itself and the surrounding circumstances”.

The Court described the contradictory provisions in the 2011 contract as “ludicrous”. Laffoy J. was satisfied that it was not the intention of the parties that the Plaintiff would be deemed to be on probation from the 1st of August 2011 until the 31st of January 2012 or that during that period, his employment could be terminated by one week’s notice. The Court found that the intention of the parties was that the Plaintiff would be entitled to not less than 6 months’ notice, if the employer wished to terminate his contract of employment.

Therefore, the Defendant was in breach of Contract and the Plaintiff was entitled to damages for wrongful dismissal.

DAMAGES

Generally speaking, where an employee is wrongfully dismissed he is entitled (subject to the rules of mitigation) to compensation for loss of remuneration during notice or on an unexpired fixed period of contractual employment. In this case, Mr. Tracey was deemed entitled to his aggregate salary (to include benefits in kind) from the date of dismissal in January 2012 until the end of the Contact (i.e. 6 months).

LEGAL REVIEW

1. Properly drafted Contracts of Employment are vitally important and must be able to withstand scrutiny. It is clear that the contracts in this instance were poorly drafted and for that reason the Employer was largely exposed. Employers should regularly review contracts thereby minimising exposure.

2. Transfer of Undertakings legislation is one of the most onerous and tricky pieces of employment legislation. Far too often, employers are caught by obligations arising from a transfer for various reasons. Shortcuts should not be taken and we would strongly advise obtaining specialised employment advice for any transfer of undertaking situation. 

Full High Court decision:
http://www.bailii.org/ie/cases/IEHC/2013/H41.html 

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 16/04/2013
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