Locations
A senior executive of Irish Pride Bakeries (In Receivership) (“Irish Pride”) has recently secured an interlocutory injunction restraining his dismissal, by reason of redundancy. The plaintiff was employed as a Sales and Business Development Director, a role which he commenced in February 2015. A receiver was appointed to Irish Pride in June 2015.
On 6 August, the plaintiff met with the receiver and was advised that his position was being made redundant and his terminati...
A senior executive of Irish Pride Bakeries (In Receivership) (“Irish Pride”) has recently secured an interlocutory injunction restraining his dismissal, by reason of redundancy. The plaintiff was employed as a Sales and Business Development Director, a role which he commenced in February 2015. A receiver was appointed to Irish Pride in June 2015.
On 6 August, the plaintiff met with the receiver and was advised that his position was being made redundant and his termination of employment was to take effect just two weeks later, on 21 August. On 7 August, a press release issued announcing the sale of Irish Pride to Pat the Baker, by way of an asset sale (pending approval from the Competition Authority). It was agreed that the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (“TUPE”) would apply to the sale. Pat the Baker had been advised that a redundancy process was ongoing regarding Irish Pride’s senior executive team.
The receiver was of the view that there was no requirement for the plaintiff’s position and it was a clear case of redundancy. It was not the validity of the redundancy that was at issue in this case, but rather the plaintiff’s entitlement to three months’ notice under his contract of employment. The plaintiff argued that the purported termination of his employment would result in a denial of his rights and entitlements to transfer under TUPE. Due to the circumstances of the case and the length of the notice, this would in effect mean that the plaintiff’s employment would continue and automatically transfer to Pat the Baker under TUPE, assuming that the receiver did not exercise the contractual right to pay the plaintiff in lieu of notice prior to the transfer. The question which arose was whether the receiver should be entitled to terminate the plaintiff’s employment without the contractual notice period. The receiver argued that the plaintiff was entitled to the minimum statutory notice period of one week and that it was not possible to give the plaintiff the benefit of his contractual entitlements ahead of all other unsecured creditors.
Mr Justice Gilligan in the High Court considered the appropriate test to determine whether the plaintiff should succeed in obtaining an interlocutory injunction. The Court applied the Campus Oil principles and adopted the course of action which carried “the lower risk of injustice” for the plaintiff. The Court appears to have been influenced by the short length of the plaintiff’s employment, which effectively meant that he would not be entitled to redress under the relevant statutes. In addition, the Court acknowledged that the receiver could, if he wished to do so, proceed to terminate the plaintiff’s employment by providing three months’ notice in accordance with the contract of employment. In accordance with Campus Oil, the High Court concluded that the plaintiff had made out a strong case for interlocutory relief, damages were not an adequate remedy and the balance of convenience favoured the plaintiff. The Court granted an injunction restraining the termination of the plaintiff’s employment and directed that the plaintiff be paid his salary in accordance with his contract, pending the full hearing.
It is important to note that the civil courts are not the correct forum for an injunction to challenge a redundancy and the issue in this case centred on the plaintiff’s contractual entitlement to notice from the receiver. A full copy of the decision can be viewed here