The High Court has allowed two appeals by software manufacturer Symantec Limited against findings that former employees Declan Leddy and Diarmuid Lyons were entitled to redundancy payments after part of the company’s operations was outsourced.
Symantec transferred part of its undertaking to Corporate Occupier Solutions (Ireland) Limited on November 10, 2006 as part of the outsourcing of its EMEA facilities.
Mr Leddy, a Manufacturing Engineer Grade 7, and Mr Lyons, a Senior Manufacturing Engineer Grade 8, had been told in advance that their employment contracts would transfer to the new company. Both objected on the transfer date and chose not to move. They had also been told that refusing the transfer would be treated as resignation.
The two men subsequently claimed they had been dismissed by reason of redundancy. The Employment Appeals Tribunal upheld their claims, finding that an employee was not obliged to accept a new employer following a transfer of undertaking.
Symantec appealed those rulings to the High Court.
Mr Justice John Edwards accepted that European law does not force an employee to continue working for a transferee. An employee remains free to reject the new employer. However, the court held that this did not prevent the employment contract itself from transferring automatically under Regulation 4(1) of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.
The distinction was decisive. Irish legislation did not provide that an employee who rejected the transfer would remain employed by the original employer. Nor did refusal to transfer automatically create a redundancy situation against that employer.
Edwards J said that if the legislature had intended the employment relationship with the transferor to continue so an employee could claim redundancy from it, legislation could have provided for that outcome.
As no such provision existed, the court held that Mr Leddy and Mr Lyons could not make redundancy claims against Symantec. Both appeals were allowed.