EMPLOYMENT APPEALS TRIBUNAL
CLAIM OF: CASE NO.
EMPLOYEE -claimant UD450/2012
against
EMPLOYER -respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms S. McNally
Members: Mr D. Hegarty
Mr O. Wills
heard this claim at Cork on 4th September 2013
Representation:
_______________
Claimant:
Respondent:
This is a case of unfair selection for redundancy, therefore dismissal is not in dispute.
Respondent’s Case
The respondent is a car dealership with a number of garages and franchises. One of the respondent owners (KoL) gave extensive evidence of the financial loss due to the downturn in the motor sector as a result of the overall decline in the Irish economy.
The respondent had five motor dealerships which has now reduced to three. The claimant moved to the dealership he was made redundant from in November 2008. This dealership had two car franchises; (H) and (O). The dealerships have to ‘win’ the franchise from the car manufacturers and are subsequently bound by strict operating and customer service guidelines. One of these requirements is to have a dedicated sales person for their brand. This person undergoes specific training provided by the manufacturing company and is ultimately approved by them as their sales representative.
The respondent premises are divided into two showrooms; H on the left and O on the right. At the time leading up to the claimant being selected for redundancy there were two sales people for O (the claimant and another (JD)) and one for H (RoN).
The H sales position became vacant in July 2011. As there were so little sales the position did not need to be filled until October 2011, approaching the busiest car sales time of the year. The respondent approached the claimant about the position in the last week of October. This was not a formal interview but equally not a vague discussion; all the staff were aware that the H position needed to be filled. The claimant said he was happy in his sales position with O and did not want to work in the H position. The O position is a much bigger sales role. The claimant was very negative about the H position so the respondent did not pursue it or ask to speak to him further about it; the claimant never mentioned the position again. Redundancy of any position was not foreseen at this time.
RoN was interested in the H position and took up that position. The H manufacturers approved of RoN and he underwent their required training. He attended the H dealer conference with the respondent and was fully trained in the role.
JD had been working for a long period of time selling O cars for a different company. When that company closed the respondent hired JD in order to bring his long standing customers to the respondent. It would take a few years before the respondent saw the results of hiring JD and the sales as a result of his repeat customers. JD retired at the end of June and was replaced.
The respondent’s projected sales never materialised in January 2012. In February 2012 as a result of the sales figures the respondent made the decision that one of the three sales positions could be made redundant.
RoN was discounted as he was in a stand-alone position having been trained and approved by H. He was only in the position since November 2011; it would reflect very badly to H if he was suddenly removed. He was the fourth person placed in that role by the respondent. H valued consistency and they had invested in RoN. RoN was discounted to be made redundant.
JD was recruited for his contacts to sell O cars. If he was selected for redundancy the prospective sales would not materialise. He had sent all of his customers a letter informing them that he had moved to the respondent and that is where they would find him when it came to buying their next O car. JD was discounted to be made redundant.
The only remaining option was to select the claimant for redundancy. KoL called the claimant into his office on the 17th of February 2012 and told him he had been selected for redundancy as business and sales were not as they expected them to be. KoL had considered the situation and “made his mind up so it wasn’t a long discussion”, 5-10 minutes. KoL handed the claimant a letter at that meeting informing him that his redundancy would take affect from the 1st of March 2012. The claimant was unhappy, upset and shocked.
The claimant sent an e-mail asking why the policy of ‘last in first out’ was not applied. KoL responded by letter dated the 21st of February outlining his reasoning for selecting the claimant. There was no suitable vacancy to offer the claimant; the business was being rationalised.
An ad for a sales executive in a different respondent garage was placed in the media in October 2011. As the respondent realised that there was no requirement to fill the vacancy for business reasons the ad was withdrawn, but mistakenly left on the respondent website. This was done in error.
It was possible for the claimant to sell H brand cars but it would be unusual and the sales would not count towards his targets. His H business card was for use before RoN took up the position. The claimant was very capable and would have been more than able to do the H role, but was not interested.
KoL made the decision to make the claimant redundant before he met with the claimant on the 17th of February 2012; he accepts that there was no consultation process. The policy and procedures are included in the staff contracts; KoL did not read them before making the claimant redundant. An alternative of reduced hours or shorter working week is not viable in a sales role; the sales staff have to be consistently available.
Claimant’s Case
The claimant commenced work with the respondent in 2008 as a sales executive. The claimant was very surprised to be selected for redundancy as he had the longest service of all the sales executives. There was no consultation or forewarning that redundancy was a possibility and no alternatives to redundancy were offered. The claimant believes he was selected due to interpersonal issues with KoL.
KoL mentioned the H role to the claimant in passing. This was not a formal conversation or an offer of any kind. The claimant wanted to think about the suggestion and talk further about it. RoN was then placed in the role without any further reference to the claimant. The claimant was capable and had often sold H cars. He had H business cards and had undergone some training. The claimant was aware that JD was going to retire and had hoped to pick up his customers.
The claimant gave evidence of his loss and his attempts to mitigate his loss.
Determination
The Tribunal are satisfied that a redundancy situation did exist within the respondent but that the selection process in effect at that time was defective. In making it’s determination the Tribunal considered Section 5(b) of the Unfair Dismissals Amendment Act 1993, which amends Section 6 of the Principal Act;
‘(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so—
a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and,’
The Tribunal considered the reasonableness of the respondent. The respondent did not act reasonably when they failed to consult in advance with the claimant about his redundancy and in not considering any alternatives in advance of the decision to make the claimant redundant. Reason dictates that an employer should not opt straight for redundancy and full regard should be had for all the options. The Tribunal further notes that only after the claimant made the request did the respondent outline the reasons why he was selected for redundancy.
The Tribunal find that the claim under the Unfair Dismissals Acts, 1977 to 2007 succeeds and award the claimant €8,500.00 in compensation. This award is made in addition to the redundancy lump sum already received.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)