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Director of company claimed there was ‘no money to pay the wages’, WRC hears

Adjudicator said it was a “particular concern” Pharmtrans Direct workers lost their jobs on the day their wages were due

WRC: File photograph

Stephen Bourke
Wed Mar 27 2024 - 12:59

A logistics company director who said there was “no money to pay the wages” when his company ceased trading on pay-day has been criticised for his “failure to act responsibly” by the Workplace Relations Commission.

The firm, Pharmtrans Direct Ltd, alleged to the employment tribunal last month that its main client was ordered last June to divert a €97,000 contractual payment to the Revenue Commissioners – and that was why it was forced to suddenly shut up shop.

In decisions published this morning, the company has been ordered to pay a dozen former employees a combined sum of nearly €90,000 for multiple employment law breaches, including non-payment of wages and unfair dismissal.

Addressing the employment tribunal last month as a spokesman for his colleagues, driver John Hayden told the tribunal they got a text from the firm’s office administrator on the morning of Friday 16 June, 2023 telling them there had been a “technical error in the bank” and that their wages would not be “sorted out” until the following week.

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He said he was told by the administrator that a co-owner of the firm, Anthony Saul, who lived in Spain, was to lodge money to the firm’s account so that the workers could get €500 to “keep them going”, he said.

The drivers considered a work stoppage, but stayed on the job because of the offer, Mr Hayden said. However, he said at 4.15pm that afternoon he got a phone call from the transport manager at Uniphar, Pharmtrans’ main client, who told him that Pharmtrans had “ceased trading”.

The 12 drivers were then offered new employment to start the following Monday with another Uniphar delivery subcontractor, Alltrans, Mr Hayden said.

Barry Saul, a co-owner and director of Pharmtrans Direct, said he lived in Spain and that the day-to-day running of the firm had been left to his son-in-law and niece.

He said the firm had lost some smaller contracts during the Covid-19 pandemic and had “warehoused” a tax bill that fell due in 2023. He said the Revenue Commissioners contacted his main client, Uniphar, and instructed it to divert payment for a €97,000 invoice from his firm to Revenue.

His evidence was that this was the reason he had “no money to pay the drivers” on June 16th last year and that he had borrowed €10,000 in order to pay them the offered €500 as a “stopgap”.

Mr Saul added that at the time of last month’s hearings his company had “ceased trading” and that he had “no money to pay the wages due”, but added that if he receives anything he will pay it to the staff.

Mr Saul addressed some of the hearings called on before the WRC on February 28th this year, but left to attend an appointment as the hearings continued, adjudicator Catherine Byrne noted.

In her decisions on the cases, Ms Byrne wrote: “I accept that Mr Saul was in financial difficulties; however, the way that his employees lost their jobs was completely disorganised, with no regard for notice or procedures.”

“Mr Saul’s failure to act responsibly was the cause of stress and worry for the [workers],” she wrote. She said it was a “particular concern” that the workers lost their jobs on the day their wages were meant to be paid and got nothing.

On this basis, Ms Byrne upheld complaints under the Unfair Dismissals Act 1977 by eight of the workers who had the 12 months’ service to qualify for the protection of the law and made awards for loss of earnings ranging from €1,384.60 to €3,000.

Of those eight, six had the two years’ service required to qualify for statutory redundancy and received orders for lump sums worth between €2,305.36 and €4,956 under the Redundancy Payments Act 1967. The redundancy awards against Pharmtrans Direct, which are subject to confirmation by the Department of Social Protection, amounted to €21,914.91 in total.

The company was also directed to pay the 12 drivers the month’s net pay due to them on June 16th, 2023, along with pay in lieu of accrued holiday entitlements – a total of €38,400.59.

All the workers, save for one who had only four weeks’ service and not the 13 required, also received orders for notice pay totalling €9,313.30.

Including the €18,848.92 for the dismissal awards, Pharmtrans Direct has been ordered to pay €88,477.72 to its former employees on foot of the complaints.

The employment rights complaints against Pharmtrans Direct Ltd were made by drivers Shay Brady, Serbain Ioan Chiheri, Brian Kelly, Paul Martin, Laurence McDonald, Darren McDonnell, Andrei Ilimcav, John Mullen, John Hayden, Gregor Primurac and Richard Warren, along with driver-manager Michael Cahill.

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