Breda O'Malley, Partner at Hayes Solicitors, Dublin, has written three case summaries of Transfer of Undertakings cases which were recently heard by the Employment Appeals Tribunal. The cases look at issues such as what constitutes a transfer or an economic entity and the impact of the contractual relationship between the transferor and transferee.

1. Michael Brady v. Sinead McNamara [TU36/2014]

This concerned whether the post of Cork County Sheriff could be considered an economic entity for the purposes of the Regulations and if so, whether there had been a relevant transfer.

The Tribunal held that the Office of the Sheriff is not precluded from being an economic entity by reason of the office being held by a natural entity. The Tribunal reached this determination by examining the activities carried out by the Office itself and concluding that the enforcement of judgments constitutes an economic activity and that the Sheriff and her staff are an organised grouping of persons and assets which enable this activity.

In terms of whether a relevant transfer had taken place, the Tribunal held that there was a concomitant transfer of assets and the majority of the workers from the Former Sheriff to the new Sheriff. Although there was a new individual running the operation, the economic activity retained its identity in so far as it had the same name, the same work and had taken over a majority of the workforce of the former entity and some of the assets.

2. Cavan Industrial Cleaning Services Limited [TU29-TU36/2013]

This case concerned the awarding of a cleaning service contract to a new service provider. The employees argued that a transfer had taken place within the meaning of the Regulations as tangible assets including the central vacuum system and the washing machines transferred to the new service provider. However, evidence was adduced regarding the fact that these assets belonged to a third party and were thereby incapable of transfer. In the circumstances, the Tribunal was satisfied that no assets, tangible or intangible, had transferred and that the service undertaking previously entrusted with the service contract did not, on losing the contract, cease to fully exist. The EAT therefore concluded that there had not been a transfer of the business or part of the business to the appellant so the Regulations did not apply.

3. Stobart Ireland Driver Services Limited [TU29-5TU46/2011]

The appellants were employed by Company K which was contracted to a large supermarket chain (Company T) to operate a chilled and frozen foods warehousing and national distribution centre. In September 2010, Company K was informed that the contract had been awarded to the respondent. The contract (relating to distribution & transport) was based on Company T’s premises and remained there after the expiry of Company K’s contract with the respondent in occupation. During the course of the transfer, trucks, trailers, equipment (owned by Company T) and the workforce in almost its entirety was transferred to the respondent. The only aspect of the undertaking that changed was the name of the company discharging the duties under the contract.

The tribunal also considered whether the lack of contractual relationship between the transferor and transferee would impact on the Regulations applying. The EAT held that there is no requirement for the transferor or the transferee to own the undertaking and no need for a contractual link between them.

The tribunal held that the passing of the contract from Company K to the respondent was a transfer of an undertaking within the meaning of the Regulations.