Richard Grogan

Case ADJ12743 is a timely reminder, for those thinking of issuing proceedings where there has been a transfer under the Transfer of Undertakings Regulations, to make sure that the claim is made against the transferee. By this, we mean the person who has acquired the undertaking.

In this case, the employee brought a claim against the transferor which was rejected because it was brought against the wrong entity. Regulation 3 of our Regulations provide that the claim is brought against the new owner.

I think it is important that we would set out what we mean by this in plain English.

While it is not covered in this case, I think it is important that we would give examples of claims that go against the new owner of the business rather than the old owner, even though the claims would have arisen while the employee was employed by the old owner of the business.

Take a situation where an undertaking, being a business, transfers on the 1st of September under the Transfer of Undertaking Regulations. The activity of Company A has transferred to Company B.

Company A, for example, provided cleaning and security services for a particular company. Company A lost the contract and the contract moved over to Company B. The employees of Company A transferred to Company B and would continue to work on the premises as before.

Let us assume that there is an employee who claims that, on 1st July 2018, they were subject to sexual harassment. Let us take another employee who claims on 2nd July 2018 they did not get their holiday pay paid in advance. Let us take it that a number of employees on the 2nd October are complaining about the fact that they were not advised in relation to the proposed transfer by the old employer, Company A.

In all of those situations, you might consider that the claim would be brought against Company A. The claim must be brought against Company B.

Our legislation states that, even though Company B might say that they knew nothing about these matters and that they did nothing wrong, they are still responsible for all the breaches and the claim must be brought against the new employer, being Company B not against Company A.

This may sound strange. It may well be. However, it is the law. When acting for an entity acquiring a business where the Regulations apply, proper due diligence is required for the acquiring entity.

• Richard Grogan is the principal solicitor at Richard Grogan & Associates Solicitors. You can subscribe to the firm’s monthly newsletter at grogansolicitors.ie.