Today's email focuses on just one case but it is a complex one that involved an employee attempting to return from maternity leave and the operation of TUPE.

Diana Marcinkeviciute v Francis Galligan, Josephine Galligan, Guars Geiba, Ramunskas Kasperavics T/A The Kesh Bar/Restaurant UD559/2009, MN 613/2009

Facts

The claimant (the employee) worked as a chef in the Kesh Bar/Restaurant before taking maternity leave in July 2008. Before returning to work, the employee was told that she “didn’t have to come back”.

The employee brought her claim against four respondents. The first and second named respondents (the “original owners”) stated that they were not the employer as the bar/restaurant was being run by the third and fourth named respondents (the “lessees”) when the employee was dismissed from her job.

The original owners transferred the business by way of lease to the lessees in November 2008. At the time of the transfer, the staff did not receive P45’s from the original owners.

Although disputed, evidence was heard that the original owners continued to work in the business. It was also in dispute whether the employee was informed of the transfer in writing. However, it was accepted that the employee was verbally told of the transfer.

Upon the employee’s return to work after maternity leave, the employee wrote to the original owners who in turn notified the lessees.

The lessees then ran into financial difficulties and the original owners took over the operation of the business again.


Determination

The Employment Appeals Tribunal (the "EAT"), which was chaired by Mr P O’Leary BL in Cavan on 29 October 2009, noted that the employee was dismissed contrary to Part IV of the Maternity Protection Act 1994. The EAT awarded €15,000 to the employee under the Unfair Dismissals Acts. The EAT also had regard to the Transfer of Undertaking Regulations (S.I. 131/2003) and found that no transfer had taken place so that the original owners were liable to the employee.


Legal Review

The EAT noted that the employee had been dismissed contrary to Part IV of the Maternity Protection Acts (the “Acts”). The Unfair Dismissals Acts provide that where a dismissal results wholly or mainly from the following that it will be deemed to be an unfair dismissal;

"The exercise or proposed exercise by the employee of a right under the Maternity Protection Act 1994 to any form of protective leave or natal care absence, within the meaning of Part IV of the Maternity Act...,"

The EAT did not clarify how Part IV of the Acts had been breached. However, it is likely that the EAT took account of section 26 of the Acts which states that an employee is entitled to return to work with the same employer, or the new owner (if there was a change of owner) and to the same job under the same contract after maternity leave.

If the employer cannot offer the employee their job upon return, then the employee is entitled to be offered “suitable alternative employment” under a new contract of employment. Suitable alternative employment must be suitable to the employee and appropriate for her to do. This is essentially a subjective test dependant both on the employee and the work she carried out before going on maternity leave. In Tighe v Travenal Labaratories (Ireland) Ltd, it was held that to give promotions work to a woman who had previously done office work amounted to constructive dismissal.

In Marcinkeviciute, it is clear that the lessees were in flagrant violation of the Acts, as the employee was told she “didn’t have to come back”. Neither the original owners nor the lessees gave consideration to the employee coming back to work after maternity leave.


Transfer of Undertakings

Finally, the EAT also considered if there had been a transfer of undertaking of the bar/restaurant. Under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations S.I. 131 of 2003 (“TUPE”), a transfer of undertakings situation arises where a business or any part of a business is transferred from one employer to another and the business retains its identity. Therefore, the new employer essentially steps into the shoes of the old employer in relation to the employees. There are various duties and obligations imposed on the old and new employer under TUPE. Where a transfer occurs, the rights and obligations of the former employer are transferred to the new employer.

It is often wrongly thought that TUPE does not apply to property transactions but TUPE can apply. For example, in Guidon v Farrington 1994 ELR, the landlord took a reversion of the lease from a company which had gone into receivership. The lease was in respect of a seven-eleven convenience store located in a garage and the landlord accepted a surrender of the lease, and operated a garage shop from the premises. The EAT following the ECJ decision in Ny Molle Kro, 1987, held that TUPE applied to the transfer.

In the Marcinkeviciute case, the original owners had materially transferred their business by way of lease. Unfortunately, the EAT did not elaborate on its decision that there was no transfer. The EAT could possibly have taken two different approaches leading to the same result:

1. The lease for the bar/restaurant was given to the lessees on 10 November 2008. This may have been a first transfer. However, when the bar/restaurant ran into financial difficulty, the original owners resumed the running of the business. This may have been a second transfer (i.e. back from the lessees to the original owners).

2. Instead, the EAT found that there was no transfer possibly because the original owners remained involved in running the business. The EAT may well have taken the view that the original owners did not in fact step back from the business at all, and no real transfer to the lessees had taken place.

Either way, the outcome was correct as even if there had been two transfers, the original owners would have become the employer again, and would have been responsible for the employee and the consequences of the dismissal.

Any employer or potential employer who is considering entering into an arrangement which could trigger a TUPE situation should be aware of their responsibilities to existing employees.