Today’s article looks at Conor Brennan v Irish Pride Bakeries (in Receivership), a case in which the employee sought to use the common law remedy of injunctive relief to compel the employer (through the management of Receivers) to provide him with his full contractual notice period (3 months) to terminate his employment. 

Case Name and Reference: Conor Brennan v Irish Pride Bakeries (in Receivership) 2015 6548 P

Court or Tribunal: High Court

Jurisdiction/Subject Matter: Interlocutory Injunction/ Termination Period/ Contractual Terms

Date of Judgement: 22nd October 2015, Mr. Justice Gilligan

Facts of the case ⚓︎

Mr. Brennan commenced employment with Irish Pride (“the company”) in February 2015 as a Sales and Business Development Manager. Mr Brennan’s written contract of employment provided for three months’ notice to terminate his employment (save in certain circumstances), with the company reserving the right to pay him in lieu of notice. 

Receivers were appointed over the company in June 2015. Mr Brennan was advised in a meeting with the Receivers on 6th August 2015 that his role was redundant. They purported to provide two weeks’ notice to Mr Brennan pursuant to the Redundancy Payments Acts. The Receivers ignored his contractual notice period. 

On the following day, the Receivers issued a press release advising that they had secured the sale of the majority of the company’s assets to “Pat the Baker”, securing 250 jobs. One section of the business was not part of the sale, and the press release confirmed that an information and consultation process would commence with those employees. In addition, employees at management level would not be retained. 

Mr Brennan’s case could broadly be divided into two points:

1. He was entitled to 3 months’ notice, and to deny him that right was in breach of his contractual entitlement.

2. By failing to provide contractual notice to Mr Brennan, he was denied the ability to transfer (or at a minimum be involved in the consultation and information process) to Pat the Baker in accordance with the TUPE/Transfer of Undertaking Regulations. 

The Receivers made the case that it was their responsibility to reduce down staffing costs, including making those at Senior Executive level redundant, given that it was clear that their role was not critical to the continued operation of the part of the business that they sold to Pat the Baker. 

The Receivers stated that there was no present or continuing role for Mr Brennan as Sales and Business Development Manager. There was no work for him to do in light of the company’s position, and there was no anticipated future role. The Receivers submitted that it “was one of the clearest cases of redundancy that one could ever come across”. 

The Receivers argued that Mr Brennan has no entitlement to remain in the company’s employment beyond the minimum statutory notice period which, with less than two years’ service, was one week. 

Mr Brennan’s proceedings sought:

• An injunction restraining the purported termination of his employment or removing him from the position of Sales and Business Development Manager.
• An injunction restraining the company from taking any steps to effect or implement the purported termination of his employment.
• An injunction restraining the company from terminating Mr Brennan’s employment, save in conformity with his contractual entitlements.

Mr Brennan accepted that he was seeking a mandatory injunction directing the Receivers to continue to retain him in employment.

Determination ⚓︎

In considering the standards required to grant a mandatory injunction, Gilligan J cited Maha Lingham v HSE in noting that it was necessary for Mr Brennan to “show at least that he has a strong case that he is likely to succeed at the hearing of the action”. 

The Court noted that the issue as to the adequacy of the redundancy was not in issue, merely the relevant notice in respect of the redundancy.

The Court stated that it had “to give consideration to whichever course would carry the lower risk of injustice if it turns out to have been a wrong decision having regard to the consequences of the position in which [Mr Brennan] finds himself in with no remedy pursuant to statute and yet holding a valid contract of employment which provides for three months' written notice of the termination of his employment”.

It was also submitted by the Receivers that even in the event that the Court held that Mr Brennan was entitled to his contractual notice, he was not entitled to be paid that notice pay ahead of any other unsecured creditors of the company. 

The Court did not, for the purpose of the application, take the view that Mr Brennan was attempting to rank ahead of other unsecured creditors, nor did it form the view that the Receivers were being asked to elevate Mr Brennan’s claim ahead of the claims of other unsecured creditors.

The Court took the view that Mr Brennan made out a strong case for the interlocutory relief and granted the mandatory injunction sought, directed that Mr Brennan be paid his salary during the notice period. In coming to its decision, the Court was mindful of the fact that the relationship of trust and confidence between Mr Brennan and the company, continued to exist.

Legal Review  ⚓︎

1. Consideration should be given to the length of notice in any contract of employment. Save in the case of senior executive roles, it may be more practical for employers to provide for notice periods in line with the statutory notice periods. It is helpful to remember that an employee is entitled to the longer of a statutory or contractual notice period. 

2. Even in the clearest of redundancy situations, fair procedures and contractual notice must be provided to employees. This is particularly critical in a TUPE/Transfer of Undertakings case such as this, where the employee would miss the entire information and consultation period in the event that his redundancy (and associated statutory redundancy notice) was held to be valid. 

3. While a Receiver’s duty is to achieve the best possible price for the sale of a business, it is not at the cost and to the detriment of an employee’s contractual entitlements.