3rd party vendor breached employment rights

FiveFingers

Hi,

Consider this scenario:
A large multinational company, CompanyX, employs several vendors to provide them with contractors. One of those vendors, VendorX, employs Tom on a full-time basis and puts Tom working with CompanyX for a number of years. Work dries up and VendorX terminates Tom's employment. VendorX doesn't pay Tom his redundancy entitlements. Tom takes a case to the WRC and his complaint is upheld. VendorX is currently dithering and stringing Tom along and Tom is now waiting 8 months for his statutory redundancy entitlement. VendorX still has lots of other employees placed with CompanyX.

This breach of employment rights - is this something that CompanyX would be interested to know? Would this breach be an ethical or legal issue for CompanyX? Would Tom have any leverage in threatening to tell CompanyX all about VendorX's refusal to operate within Irish employment law?

Any advice appreciated!

Thanks

pedroeibar1

Who represented you at the WRC?

FiveFingers

I'm not sure how that's relevant to my question But I'll bite. I represented myself. It was a very straightforward complaint and the Adjudicator told me on the day what her decision was.

pilly

Multi-nationals have a whole range of expected standards from vendors so I'm sure they would be interested to know. I know as a vendor that responsible employment practices would be one of these standards but I don't think I've ever seen redundancy specifically mentioned.

FiveFingers

Thanks pilly. That was the type of information I was looking for. The issue is further complicated by the fact that VendorX has let their company status lapse in Ireland, so they are a legal non-entity and can't be pursued through the courts for any employment breaches, or tax issues. Based on what you've said, I think CompanyX would definitely be interested in that little nugget.

FiveFingers

<< double post >>

pedroeibar1

The post no.5 by the op has disappeared - the information in that changes the situation completely and doesn't stack up.

FiveFingers

pedroeibar1 wrote: »

The post no.5 by the op has disappeared - the information in that changes the situation completely and doesn't stack up.

Huh? Boards.ie is acting weird today. I posted the same message twice after the first one didn't show up. I've now removed my double-post.

What doesn't stack up???

pedroeibar1

FiveFingers wrote: »

<< double post >>

Aaaaagh!

OP - the directors/shareholders cannot legal just walk from a company. You say it (vendorX) is a legal non-entity...what do you mean by that? Has it been liquidated? Struck off?

pedroeibar1

Boards Notice -
Some work is being carried out in the datacentre today, which may cause some disruption. Sorry for any inconvenience!

FiveFingers

pedroeibar1 wrote: »

Aaaaagh!

OP - the directors/shareholders cannot legal just walk from a company. You say it (vendorX) is a legal non-entity...what do you mean by that? Has it been liquidated? Struck off?

VendorX is a Canadian based multinational. When they won the contract for CompanyX, they employed 3 people in Ireland and lots more in other countries where CompanyX had offices. VendorX registered as a "place of business" in Ireland in June 2012. Changes in the Companies Act in 2014 meant that external companies registered as a "place of business" were no longer recognised. The CRO directed VendorX to regregister a branch. VendorX didn't. So, if I search for them on the CRO website, they don't exist. VendorX, to my understanding, has no legal status because they have no company status. They have an Irish bank account through which wages are paid, and they file tax returns in Ireland, but no company status. The WRC confirmed that any ruling by them could not be enforced legally because of VendorX has no company status. I rang Revenue, the people I spoke to had never heard of such a situation but initial readings are that it would be a problem. I rang VendorX's bank, they definitely have a problem with VendorX not being set up properly as a company and upon receipt of a complaint from me, they would immediately investigate and freeze funds.

pilly

FiveFingers wrote: »

VendorX is a Canadian based multinational. When they won the contract for CompanyX, they employed 3 people in Ireland and lots more in other countries where CompanyX had offices. VendorX registered as a "place of business" in Ireland in June 2012. Changes in the Companies Act in 2014 meant that external companies registered as a "place of business" were no longer recognised. The CRO directed VendorX to regregister a branch. VendorX didn't. So, if I search for them on the CRO website, they don't exist. VendorX, to my understanding, has no legal status because they have no company status. They have an Irish bank account through which wages are paid, and they file tax returns in Ireland, but no company status. The WRC confirmed that any ruling by them could not be enforced legally because of VendorX has no company status. I rang Revenue, the people I spoke to had never heard of such a situation but initial readings are that it would be a problem. I rang VendorX's bank, they definitely have a problem with VendorX not being set up properly as a company and upon receipt of a complaint from me, they would immediately investigate and freeze funds.

They can also not continue to make tax returns without being registered.

pedroeibar1

Not looking for a row here but what I meant (and said before) the info does not ‘stack’. For starters. it would be highly unusual for their bankers to discuss it with you, or comment on the lines you said, and impossible for them to freeze funds. (“I rang VendorX's bank, they definitely have a problem with VendorX not being set up properly as a company and upon receipt of a complaint from me, they would immediately investigate and freeze funds.”)

Also, it would be highly unusual for any MN to handle corporate governance the way you describe, particularly when it continues to operate in this jurisdiction. It would have all sorts of issues,not only Revenue/ tax, So. Welf., but also Data Protection, etc.,

A big issue for MNs is ‘reputational risk’. Your contract is with Vendor X so Company X has no liability but would not want to be linked with that type of behaviour. In your position I would write by registered mail to the company secretary of Vendor X, enclosing a copy of the findings of the WRC and stating that unless you received the sum due to you within 21 days you intended to take all actions necessary to protect your position including contact with Company X. You also should also contact the Dept. of Social Protection, speak to the person who handles VendorX’s account and inform them of your position.

Not legal advice, just what a layman would do.

FiveFingers

Thanks pedroeibar1.

When discussing this issue with their bank, I didn't name VendorX, I kept it to a hypothetical situation, nothing was disclosed on either end of the conversation. But that was the information I was given by the person I spoke to. I rang again today and someone from the relevant department is to ring me back. I haven't made anything official yet with them, not until I get absolute clarity that the bank would have a problem with their non-company status.

VendorX has proven to be extremely inept at operating in the Irish market. So it doesn't surprise me that they've landed themselves in this huge mess. I told them that their company status was an issue for them, but they ignored me. They're not a huge multinational. They've got about 600 employees in their main country and a few small offices in the USA and a big one in India. I think they'll be looking to get out of Ireland as soon as they stop receiving funding from CompanyX for their remaining 2 Irish employees. There was never a physical presence in Ireland, just remote employees. So, it's probably more expense than it's worth to make themselves fully legit right now.

I agree that my only leverage is to outline their reputational risk. I've already made enquiries about reporting them to the legal/ethics division of CompanyX. I've also contacted the business registrations section of the Revenue Commissioners to ascertain what the impact there would be, again without divulging and details just yet. I'm not sure how the Dept of Social Protection would be involved? Maybe that's something else I can threaten them with?

pilly

FiveFingers wrote: »

Thanks pedroeibar1.

When discussing this issue with their bank, I didn't name VendorX, I kept it to a hypothetical situation, nothing was disclosed on either end of the conversation. But that was the information I was given by the person I spoke to. I rang again today and someone from the relevant department is to ring me back. I haven't made anything official yet with them, not until I get absolute clarity that the bank would have a problem with their non-company status.

VendorX has proven to be extremely inept at operating in the Irish market. So it doesn't surprise me that they've landed themselves in this huge mess. I told them that their company status was an issue for them, but they ignored me. They're not a huge multinational. They've got about 600 employees in their main country and a few small offices in the USA and a big one in India. I think they'll be looking to get out of Ireland as soon as they stop receiving funding from CompanyX for their remaining 2 Irish employees. There was never a physical presence in Ireland, just remote employees. So, it's probably more expense than it's worth to make themselves fully legit right now.

I agree that my only leverage is to outline their reputational risk. I've already made enquiries about reporting them to the legal/ethics division of CompanyX. I've also contacted the business registrations section of the Revenue Commissioners to ascertain what the impact there would be, again without divulging and details just yet. I'm not sure how the Dept of Social Protection would be involved? Maybe that's something else I can threaten them with?

If they do intend to get out of Ireland altogether they may not care about their reputational damage though?

FiveFingers

But VendorX still gets huge funding from CompanyX to supply them with employees from their other locations.