Two employees of a hotel which went into receivership have won an appeal over awards made to them under a Government fund for workers who lose their jobs due to insolvency.
Jade Brady and Cathal O’Reilly worked in the White Sands Hotel, Portmarnock, Co Dublin, and their employment was terminated in February 2010 on grounds of purported redundancy. They brought claims through the industrial relations process under the Unfair Dismissals Act. In 2013, an Employment Appeals Tribunal (EAT) found they had been unfairly dismissed and made awards to them. They appealed the amounts awarded by the EAT to the Circuit Court. That court substantially increased the awards, to €20,000 in the case of Ms Brady and €70,000 in the case of Mr O’Reilly. In the meantime, a receiver had been appointed over the hotel.
However, the Minister for Social Protection decided the amounts they should receive under the State’s Insolvency Payment Scheme should be calculated on the basis of a statutory limit of €600 per week, subject to a maximum of 104 weeks. This meant the amounts payable to them were reduced.
They then brought High Court judicial review proceedings against the Minister claiming she (Minister) had misdirected herself in law in the means by which she calculated the maximum amounts to be paid.
Then-High Court, now Court of Appeal (CoA) judge Marie Baker, found the Minister had not acted outside her powers by the adoption or a formula or methodology in reaching her decision on the amounts.
Ms Brady and Mr O’Reilly appealed, arguing the High Court erred in law and fact including by holding the Minister had the power to devise her own formula to guide her in the exercise of her statutory discretion. The High Court also erred in finding the formula devised was reasonable and reasonably applied, they said.
The Minister opposed the appeal arguing, among other things, these awards may be calculated by reference to an employee’s remuneration under the formula used.
Debts payable
A three judge CoA, comprising Mr Justice Michael Peart, Mr Justice John Edwards and Ms Justice Máire Whelan, allowed the workers’ appeal.
Mr Justice Peart, on behalf of the CoA, said the workers had argued that while the Circuit Court made no reference to the basis on which it calculated the award, it was clear that court took into account matters other than simple loss of grossly weekly wage as there was no other evidence provided by the employer or receiver who took over the business.
Mr Justice Peart said it was accepted by all parties the Circuit Court awards were debts payable under the insolvency fund set up under the Protection of Employees (Employers Insolvency) Act 1984.
The workers argued that while the Circuit Court made no reference to the basis on which it calculated the awards, it was clear that matters other than simple loss of weekly wage were taken into account.
Each award was a debt which came within the provisions of the 1984 Act. The discretion of the Minister, in forming an opinion on the amount due to a worker in relation to a debt under that Act, “does not extend to deciding on a figure she considers should be paid to the appellants”, he said.
That discretion is limited to deciding the amount due which in this case can only be the amount awarded by the Circuit Court, he said.
