Geoghegan v Department for Employment and ... [2012] NIIT 01332

THE INDUSTRIAL TRIBUNALS

CASE REF: 1332/12

CLAIMANT: Jonathan Geoghegan

RESPONDENT: Department for Employment and Learning

DECISION

The claimant’s appeals are dismissed.

Constitution of Tribunal:

Chairman (sitting alone): Mr P Buggy

Appearances:

The claimant was self-represented.

The respondent was represented by Mr P Curran.

REASONS

1. I announced my decision at the end of the hearing. At the same time, I gave brief reasons for that decision.

2. I understand that the claimant is currently seeking to invoke the statutory guarantee provisions in the Republic of Ireland (whereby authorities in the Republic make payments in respect of certain unpaid employment debts). Accordingly, in this Decision, I have repeated and amplified my reasons for dismissing the claimant’s appeals in respect of the statutory guarantee in Northern Ireland.

3. The claimant was employed by Anam Mobile Ltd, a Republic of Ireland-registered company (“the Company”), which had its main office in Dublin. He worked for that company for approximately eight years, until 30 March 2012. The claimant says that, with effect from that date, he was dismissed, because of redundancy. The company is now formally insolvent.

4. In these proceedings, the claimant asserts that the Company owes debts to him in respect of salary commission and in respect of accrued, but untaken, holiday pay entitlements.

5. It seems very unlikely that the claimant would be able to recover any amount awarded against the Company. Accordingly, he has sought to invoke the statutory guarantee provisions of the Employment Rights (Northern Ireland) Order 1996 (“the Order”).

6. That application was refused by the respondent Department.

7. The claimant has appealed against that refusal. This is my Decision in respect of that appeal.

8. I was shown the claimant’s written contract/s of employment with the company.

9. The claimant moved to Northern Ireland in 2004. He has lived here ever since.

10. Although, according to his job title, the claimant was a director of the Company, he was not a director in legal terms. He never participated in Board Meetings.

11. Although his contract of employment specified that he was to be paid a certain figure, by way of salary, in euros, he and the Company arrived in an understanding, whereby his wages were always paid to him in sterling. According to the claimant, the Company paid him his salary through another company, a UK-registered company, Anam Wireless Internet Solutions UK Ltd. However, as Mr Curran pointed out during the course of this hearing, that UK company had been dissolved by 25 June 2010.

12. The claimant told me that, until the termination of his employment, he had always believed that National Insurance contributions and PAYE Income Tax deductions were being paid over to the UK authorities in respect of his salary, on a continuous basis. Since then, it has emerged that, in reality no such payments were made on behalf of the Company at any time during the latter years of the claimant’s period of employment with the Company.

13. In his application to the Department, the claimant has claimed in respect of commission which was allegedly due for the first half of 2011, and in respect of holiday pay entitlements in respect of the period from January 2012 onwards. This statutory guarantee application is being made to the Northern Ireland authorities in respect of periods during which social security and tax deductions, in relation to the claimant’s employment, were not being made to the UK authorities.

14. The great majority of the staff of the Company were resident in the Republic of Ireland. In 2011, there was just one Company employee who was resident in Northern Ireland (the claimant himself).

15. In 2012, the Company employed 45 staff.

16. For the purpose of determining these proceedings, I have accepted the claimant’s evidence in relation to his “working at home” practices. He told me that he always worked at home on a Friday. He always worked in Dublin on a Monday, Tuesday and Wednesday. When he was at home, he was able to do broadly the same work as he was able to do in Dublin. He could write documents, he could do conference calls, he could write proposals, and he could respond to tenders. In his residence, he had a room which he used as an office. He had a computer and printer there. He had internet access there. He had a desk there. He had a phone line there, and the Company paid for his phone line and for his Broadband. The claimant worked more than one day a week at home at least twice a month, probably more often.

The legislation

17. Northern Ireland’s statutory guarantee legislation, in respect of wages and holiday pay, is to be found in Part XIV of “the Order”. The rights which that Part creates in favour of employees are provided for in Article 227 of the Order, in the following terms:

“If, on an application made to the Department in writing by an employee, the Department is satisfied that—

(a) the employee's employer has become insolvent,

(b) the employee's employment has been terminated, and

(c) on the appropriate date the employee was entitled to be paid the whole or part of any debt to which this Part applies,

the Department shall, subject to Article 231, pay the employee out of the Northern Ireland National Insurance Fund the amount to which, in the opinion of the Department, the employee is entitled in respect of the debt”.

18. Article 233 of the Order provides what amounts to a right of appeal, against any refusal of an Article 227 application. Any such appeal is heard by an industrial tribunal. If the industrial tribunal finds that the Department ought to have made the Article 227 payment, it must make a declaration to that effect.

19. The provisions of Part XIV of the Order are the means whereby the United Kingdom has purported to implement the obligations which were imposed upon the UK by EU Directive 2008/94/EC (“on the protection of employees in the event of the insolvency of their employer”).

The issue

20. The central issue in this case was whether or not the relevant debts (the debts which may be owed to the claimant by the Company fall within the territorial scope of Part XIV.

21. I addressed that issue in the following way:

(1) First, I considered whether or not the claimant’s situation fell within the scope of that Part, if its provisions were to be considered without regard to any relevant requirements of the Directive.

(2) Then, I considered whether the claimant’s situation fell within the scope of that Part, if its provisions were construed in light of the requirements of the Directive.

Scope (Northern Ireland law)

22. I have concluded that, if Part XIV is construed without reference to any EU law requirements, it is clear that the territorial grasp of that Part does not extend to covering the claimant’s situation. I have arrived at that conclusion against the following background and for the following reasons. The claimant’s main
work-place was located in Dublin. He worked most of his time there. The employer did not have any substantial work location within Northern Ireland. At the times which are relevant for the purposes of the debts which are the subject of the claimant’s statutory guarantee application, no social security or tax payments were being made, in connection with his employment, to any UK authorities.

Scope (EU requirements)

23. However, the provisions of Part XIV have to be construed in light of any EU requirements. In practice, in the circumstances of the present case, that means that they have to be construed in light of the requirements of the 2008 Directive. The real question is whether the Directive requires the claimant’s situation to be brought within the scope of Part XIV. (If so, it would be my duty to broadly construe the provisions of Part XIV, and to construe those provisions in a manner which would cover the claimant’s situation, if it was possible to do so).

24. I am satisfied that the Directive, as interpreted by the Court of Justice of the European Union, does not require that Part XIV should be construed so as to cover the claimant’s situation. I have arrived at that conclusion against the following background, and for the following reasons.

25. The two leading European cases on this issue are Mosbaek’s Case [1998] ICR 954 and Everson v Secretary of State for Trade and Industry [2000] 1ICR 525.

26. In Everson, the Court of Justice ruled that, although a company was incorporated in one Member State of the EU, and was placed in liquidation there, the competent institution, under Article 3 of the Directive, for settling outstanding claims by employees who had been employed at a branch of the Company established in another Member State was in that other State.

27. However, the ruling in Everson was made against the following factual background. In that case, the relevant company, although incorporated in the Republic of Ireland, had an established business presence in the United Kingdom. It was placed in liquidation in the Republic. Its employees in the United Kingdom were employed at a registered branch of the company in the UK. Indeed, on the date in which it ceased operations, the company had 209 employees in the United Kingdom, working at six trading addresses there. Furthermore, both the company and its employees paid social security contributions in the United Kingdom.

28. In Mosbaek, the Court of Justice had indicated that the statutory guarantee institution of the Member State in which the claimant was working did not have any statutory guarantee responsibilities to the claimant under the Directive. However, the facts of Mosbaek were markedly different to the facts of Everson. The facts of Mosbaek can be summarised as follows. Ms Mosbaek, who lived in Denmark, was recruited in 1993 by an English Company, Colorgen Limited, as its commercial manager for several Scandinavian countries and, later, for Germany. Colorgen, whose registered office was in England, was neither established nor registered in Denmark, as an undertaking or for any other purpose, in particular for tax or custom purposes. In that country, it was represented solely by Mrs Mosbaek. For her to carry on her activities the Company did rent an office in Denmark and, while her employment relationship with them lasted, it paid her directly, but without any deduction of tax or social security contributions under Danish law.

29. In that case, when Ms Mosbaek made an application to the Danish statutory guarantee authorities, that application was refused. The Danish court sought a preliminary ruling from the Court of Justice. The answer given by the Court in that judgment was that, where the employer is established in a Member State other than that in which the employer resides and was employed, the guarantee institution responsible for the payment of that employee’s claims (in the event of the employer’s insolvency) is the institution within the State in which either it is decided to open the proceedings for the collective satisfaction of creditor’s claims, or the State in which it has been established that the employer’s undertaking or business has been closed down. Clearly, Ms Mosbaek could not satisfy those criteria.

30. It seems to me that the situation in the present case is much closer to the Mosbaek situation than it is to the Everson situation. In the Mosbaek case, unlike the present case, the employer had property (in the form of a rented office) in the claimant's State of residence. In that case, like the present case, no social security or tax was being paid to the authorities within State in which the claimant was residing. In Mosbaek, the claimant was working 100% of her time in Denmark. In contrast, in the present case, the claimant was working for most of the time in Dublin.

Chairman:

Date and place of hearing: 22 October 2012, Belfast.

Date decision recorded in register and issued to parties:

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	Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Geoghegan v Department for Employment and ... [2012] NIIT 01332_12IT (22 October 2012) URL: http://www.bailii.org/nie/cases/NIIT/2012/1332_12IT.html Cite as: [2012] NIIT 1332_12IT, [2012] NIIT 01332_12IT

Industrial Tribunals Northern Ireland Decisions