UD1551/2012

EMPLOYMENT APPEALS TRIBUNAL

CLAIM(S) OF:                                                                                                       CASE NO.

David McDonald

- claimant                                                                                                            

                                                                                                                               UD1551/2012

against

Computer Placement Limited

- respondent

under

UNFAIR DISMISSALS ACTS, 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman:   Ms N. O'Carroll-Kelly BL

Members:     Mr. B. Kealy

                   Ms M. Maher

heard this claim at Dublin on 8th January 2014

                         and 22nd July 2014

Representation:

_______________

Claimant(s) :       Mr Stephen Moran BL instructed by Brian Grogan & Co, Solicitors, Main

                             Street, Lucan, Co Dublin

Respondent(s) :   Ms. Colleen Cleary, Colleen Cleary, Solicitors, 127 Lower

                            Baggot Street, Dublin 2

Respondent’s Case

The respondent company is part of a group of companies which offers a range of staffing, recruitment, management and outsourcing services. The company provides these services to local customers and multinationals and serves the European needs of global corporations in the technology, social media, financial and pharmaceutical sectors.

The Tribunal heard evidence that in 2009 the respondent had, as part of a package acquired a Health & Safety company known as (N) which had been in receivership. This company was not in particularly good shape as it was overly dependent on the construction industry but it had a good reputation. The group felt that the acquisition of this company would enable them to offer additional services to those already provided.

The Tribunal heard evidence from the company’s Operations Director that following the acquisition of (N) as part of the acquisition package she was asked by the company’s Managing Director to either fix (N) or shut it down. She gave evidence that the claimant was employed as a consultancy manager within the (N) organisational structure which provided Health & Safety services. Over time the requirement for Health & Safety consultancy became much quieter and the market was depressed. The demand for the services of the consultancy managers became very low and sporadic. She undertook a full Human Resources and organisational review of (N). The cost associated with delivery of the Health & Safety service had become greater than the revenue it generated. The figures were nowhere near the budget targets and for the period from October 2011 to March 2012 and the provision of the consultancy services showed a loss of €18,000.

As part of the review she requested the claimant to complete a business plan going forward. The claimant produced the plan in March 2012 but there was nothing in the plan to suggest that the consultancy business could be brought to profitability. The incoming revenue from the consultancy was not covering the cost of providing the service. Following this review she re-structured the company and recruited an additional number of sales people on salaries of €25,000 per annum. Going forward the company took a decision to hire self-employed contractors to deliver the Health & Safety consultancy aspect of the work on a needs basis. She informed the claimant that she would be happy to use his services as a self-employed consultant if he wished to do so.

The Tribunal heard further evidence from the Managing Director of the company that the company employed four people including the claimant in the consultancy division of the business. Two of these employees had left in 2010 and 2011 and had not been replaced. The company had also lost its largest customer in terms of consultancy in September 2011. The business was loss making and could not continue to operate in that manner. He gave evidence that he met with the board of the company and highlighted his concerns to them. He was given the authority by the board to do whatever he considered necessary with the consultancy aspect of the business. He then met with the claimant on 29 May 2012 and informed him that the company was making a decision to employ self-employed contractors in terms of the consultancy aspect of the business. He informed the claimant that his position was at risk of redundancy. He undertook a review of the business in the following two weeks and on 13 June 2012 he informed the claimant by way of letter that his employment was being terminated by reason of redundancy. The remaining consultancy manager based in the Cork office was also made redundant on the same day. He told the Tribunal that there was no reason why the claimant could not provide a consultancy service to the company on a self-employed basis post the redundancy. The positions of both consultancy managers both of whom earned over €50,000 per annum were made redundant and have not been replaced. The claimant was paid his statutory redundancy entitlement.

The business of the group has now changed from a Health & Safety focus and the future of the group is focussed on training and career management. The group now invests very little time in Health & Safety consultancy and is considering whether to continue offering this service into the future as it is not adding any value to the business. This consultancy work now accounts for 3.9% of turnover.

Claimant’s Case

The claimant gave evidence that he commenced working for the respondent in November 2005. He was promoted to the position of consultancy manager in June 2007 with an increased salary of €54.000 per annum. He gave evidence that he was extremely busy in his position and on occasions worked up to 90 hours per week. He was employed under a contract of employment a copy of which was opened to the Tribunal. He told the Tribunal that he achieved all his key performance indicators in accordance with his contract of employment. He accepted that while the consultancy aspect of the business was not in good shape overall, this was a result of the figures from the Cork office.

It was a challenging business environment but his role was not confined to consultancy as he regularly delivered all kinds of training classes and in 2011 his work in the training area secured earnings of €44,000 for the company. He gave evidence that the training and consultancy areas were not separate they were part of the same division. He delivered monthly financial figures to the Operations Director and was never made aware that there was any difficulties with the figures provided. In early 2012 he was asked to provide a business plan going forward and while he had never compiled such a plan previously he was happy to do so. He gave evidence that while the company had lost a contract with a large customer, this was a finite contract and the company had many other customers.

He told the Tribunal that he was invited to attend a meeting with the Managing Director on 29 May 2012. He enquired by way of an e-mail if he needed to have anything prepared for the meeting and was informed by return e-mail that there was no preparation required as it was just a quick chat. He gave evidence that the meeting was very informal and while the Managing Director did mention the word redundancy he came away from the meeting with the understanding that his figures were okay and if there was to be a redundancy it would involve the Cork office. He felt that he may be placed on a three day week or have to take a reduction in pay and would have been happy with such an outcome. He also suggested to the Managing Director that he should be doing more training work for the company rather than the company hiring contractors to do that work. He was told that the business was under review but did not accept that this meeting had put him on notice of redundancy.

He was subsequently called to a meeting by the Managing Director on 13 June 2012 and told that he was being made redundant. He was stunned by this news. He told the Tribunal that no alternatives were put to him other than redundancy. He confirmed that he was paid his redundancy entitlement and he was never offered the opportunity of returning to work for the company on a self-employed basis.

He gave evidence to the Tribunal that he is now self-employed and his earnings since the termination of his employment were provided to the Tribunal.

Determination

The Tribunal considered all the evidence adduced at the hearing. The claimant stated that he was unfairly selected for redundancy. He stated that he was not consulted about the potential redundancy situation. The respondent stated that it had requested the claimant to prepare a business plan so that they could assess the viability of the consultancy business going forward. The claimant prepared that business plan and the findings therein showed that there was no future for the consultancy side of the business. The claimant was also informed in a meeting of 29 May 2012 that his position was at risk of redundancy. He did not contest this evidence. The Tribunal is satisfied that he was consulted about the potential redundancy situation in fact he was the one preparing the financial information to give it to the respondent.

The respondent gave evidence that due to the small amount of revenue generated by the consultancy business it would employ self-employed contractors on a needs basis to carry out that function. Currently that part of the business accounts for only 3.9% of annual turnover.

The claimant stated that the respondent failed its obligation to offer him an alternative position. The respondent only has that obligation if other positions for which the claimant is qualified exists. No such position existed within the respondent company. It was open to the claimant to apply for the independent contractor position but he did not do so.

In conclusion the Tribunal is satisfied that a genuine redundancy situation existed and finds that the claimant was fairly selected for redundancy. In those circumstances the Tribunal finds that the claim under the Unfair Dismissals Acts 1977 to 2007 fails.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

     (CHAIRMAN)