EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
EMPLOYEE- claimant UD2293/2011
Against
EMPLOYER – respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms V. Gates
Members: Mr F. Moloney
Mr T. Brady
heard this claim at Dublin on 23rd April 2013, 6th November 2013 and 13th November 2013
Representation:
_______________
Claimant(s) : Ms Claire Bruton BL, instructed by:
Mr Shane O'Brien
Hussey Fraser, Solicitors, 17 Northumberland Road, Dublin 4
Respondent(s): Ms Jo De Lamar
JHR Solutions, 28 St Eithne Road, Dublin 7
The determination of the Tribunal was as follows:-
Background:
The respondent contends that the claimant was fairly selected for redundancy and that there was no requirement for consultation. Four positions were made redundant in November 2011.
The claimant contended that he was dismissed unfairly. He was on sick leave from 25th May 2011 after having fallen at work and injured his knee. He was still on sick leave when he was informed on 24th November 2011 that his position was being made redundant. He contended that two other employees should also have been considered for redundancy as their roles were interchangeable. The effect of the termination was that he was not actually assessed for the company’s permanent health insurance scheme which would have resulted in him receiving 2/3 of his income at no cost to the company.
Summary of Respondent’s Case:
The Finance Director gave evidence. The company owns and sells outdoor media space. Due to the downturn in the economy the company's sales declined by 40-50% from 2008-2012. In mid-late 2011 the company started planning redundancies. It decided to make the claimant’s role redundant in September /October 2011. The claimant’s position was one of four redundancies during November 2011; one from sales, one from business development and two from the technical team. The claimant asked about other redundancies but as his was the first meeting held the witness did not want the other employees finding out before he informed them himself.
The claimant’s role was Client Services Supervisor. He gave instructions to subcontractors who posted the billboards and liaised with the two poster specialist companies. He also produced reports on billboards. Due to the drop in business the level of work was impacted in this role more than other supervisory roles. The witness did not believe the claimant was shocked at the news, as the employees were aware of the poor market. The claimant said that he was disappointed as he was on sick leave and not fit for work.
The claimant’s sick pay scheme allowed for payment based on service. The claimant was entitled to 8-12 weeks sick pay. The company wrote to inform the claimant that he had exceeded his sick pay allowance and would have to work 42 days in lieu. The claimant appealed this and ultimately his sick pay allowance was extended to 26 weeks.
The Finance Director was cross-examined. He confirmed staff members were not advised of possible redundancies. The rationale for this was that the company did not want to scare the staff. They hoped that the cost cuttings that had been created and non-replacement of staff members who left would be sufficient to avoid redundancies. It became apparent in August/September 2011 that they were considerably off budget and that redundancies would be required. There were no notes from the board meetings at which redundancies were discussed. They did not ask employees to take a pay cut.
The decision to make redundancies was made in October 2011. He said that when he informed the claimant that his paid sick leave would be extended to 26 weeks he advised him that he could apply to the permanent health insurance scheme (PHI) which, subject to acceptance, would pay the claimant 2/3 of his salary. The claimant applied for the PHI scheme and the company sent him for a health assessment on 4th November 2011. The witness stated that they sent the claimant for a health assessment as they wanted to continue as normal, just in case there was a last minute change, even though the decision had been made to terminate the claimant’s position. The claimant’s claim for entry to the PHI scheme was not assessed as he was dismissed in the intervening period. There was no change to the PHI premium for the company if the claimant had been accepted. He accepted that the claimant was not costing the company any money at the time of his dismissal.
The company only considered the role which was to be made redundant and did not consider the claimant’s access to the PHI scheme. It was not certain that he would be accepted onto the scheme and even then the company was required to mitigate the expense by exploring other arrangements for the employee such as remote working. They did not want a situation where the claimant returned from sick leave and there was not enough work for him to do. The claimant’s position was not replaced. One employee had been on the PHI since 2008 and was still with the company. He was aware of the claimant’s personal injuries case against the company, but this did not influence the decision to terminate the claimant’s position.
Alternative work was not discussed at the November 24th meeting. The claimant was presented with his letter of dismissal, RP50 and cheques. It was decided in advance of the meeting to dismiss the claimant. He understood that the redundancy did not fall under the collective rules and so they were not required to consult or discuss it with the employee. They did not compare the claimant’s position to the other supervisors as they had different roles and duties. The claimant’s position was a stand-alone post. The claimant was not offered an appeal.
Staff numbers went from 67 in 2010 to 66 in 2011. Revenue from the bike scheme was collected by the respondent and forwarded to the city council. The scheme is operated by agency staff.
He did not have a signed copy of the Client Services Supervisor job profile. The claimant had received a substantial salary increase when promoted.
An operations administration role was advertised in the summer of 2012. The claimant applied for the position and was interviewed, but was unsuccessful. The witness did not accept that the claimant should have been offered the position.
The Technical Director gave evidence. Each director was charged to look at their division and identify roles they could do without. There were four supervisory positions in the operations division under the Technical Director; three in the Republic of Ireland and one in Northern Ireland. The Operations Supervisor supervised staff taken on to deal with the Metropole displays. In 2010 dry posting was taken in house and he had valuable fleet management experience. The Quality Supervisor had previously worked at bill posting and had a good attention to detail. Because of this he was developed as the Quality Supervisor.
The claimant’s role of Client Services Supervisor was selected for redundancy as the role had reduced. A new computer system made the work more straightforward. The claimant and two assistants sat in the same office as the claimant’s manager, the Operations Manager. They could go to the Operations Manager if there was an issue.
The witness attended the meeting on 24th November 2011 with the claimant and the Finance Director. The meeting was cordial. He explained to the claimant that due to the downturn they were down to the last step of cost-cutting and his role had been identified for redundancy. The claimant asked if he was the only one. They confirmed he was not but that the others were yet to be informed. The claimant seemed accepting of the situation and they left on good terms.
The witness was cross-examined. He was aware of the claimant’s application for the PHI scheme. The position was identified for redundancy. He could not look into individuals’ circumstances. The claimant was not being paid as of 24th November 2011. The cost savings were not for 2011. There was no input from the employee during the meeting and no notes were taken.
He agreed that the claimant took care of one of the poster specialists and Mr B took care of the other one (two of the three poster specialists had merged by this time). The claimant was paid a supervisor’s salary and had the title of supervisor. It is a small company and many employees are multi-skilled. The claimant took care of leave and attended meetings with the other supervisors. He attended meetings with the poster specialists as a supervisor. This began in 2005 when poor standards required frequent meetings with the specialists. The meetings stopped in 2010 due to standards improving. It was decided that these functions did not have to be done by a supervisor.
The Operations Director gave evidence. He joined the company in 2005. The company was struggling with meeting posting dates when he started. Cyclical meetings were organised with the specialists to address this. The claimant organised reports for the meetings. After the meetings stopped the claimant still produced the reports in case they were required. There were three in the team; the claimant (Client Services Supervisor) JB and TR (operations administrators). TR was hired to work on damages.
When the Technical Director asked him if he could identify any role for redundancy he suggested the Client Services Supervisor role as business had fallen off and reports could easily be produced with the new software package. In 2012 JB moved to a different position and his position of operations administrator was advertised on the Fás website. He received approximately 100 applications and interviewed 6 people including the claimant. He decided to hire a female with experience in the role from a similar company. He chose her over the claimant as he believed she had better motivation and had experience of the industry.
The claimant raised with him that he did not feel like a supervisor so he agreed for him to organise leave and to attend meetings without JB and TR. He believed the claimant was a supervisor and this was reflected in his salary.
The witness was cross-examined. He agreed that in regard to administration the claimant and JB’s roles were similar as each took care of a poster specialist. He signed off on holidays that the claimant had approved. The claimant was trained to drive a forklift, though he was rarely required to use it. Employees were trained on tasks across the business.
He did not look at job descriptions when discussing what role to make redundant. He and the Technical director discussed if they still needed a Client Services Supervisor. They agreed they still needed two operations administrators. They did not consider that the claimant was the longest serving employee of the three.
Summary of claimant’s case:
The claimant began his employment with the respondent company as an Operations Assistant in November 2004. He was promoted to Client Service Supervisor in April 2005. He understood that this post was the equivalent to that of Operations Clerk which had been vacated by a former employee in December 2004 and which he had been covering.
The claimant’s duties were to receive instructions from the poster specialist he was responsible for and to send instructions to the warehouse and posting staff, inputting dates on the system and preparing an end of day report outlining what work was outstanding. He reported any reasons for late posting back to the poster specialist.
The claimant had never seen the Client Services Supervisor role profile before the Tribunal hearing. The operations administrators prioritised their own workload. There was some supervision but not on a daily basis. After he complained that he did not have supervisory tasks he was given the leave files to oversee, but this still needed to be signed off by his manager. He felt his supervisory role fell away when they moved to the open plan office in Bluebell. If a problem came in on the phone the person who took the call dealt with it. He did not feel there was a big difference between what he and the operations administrators did.
The downturn led to fewer instructions coming in which he believed led to fewer instructions to the warehouse and therefore fewer inspections to make. He occasionally carried out other tasks when required such as taking deliveries in with the forklift, prismatic posting, cleaning, posting on the Luas. Earlier in the year he had prepared a spread-sheet outlining the savings of bringing cutting and bill posting for prismatic posters back in-house. The claimant was trained on cutting and had posted before.
He had an accident at work in May 2011. He injured his leg when he tripped over loose carpet tiles. He has undergone several operations on his leg since the accident. He queried when his sick leave was stopped after 30 days and ultimately he received 26 weeks sick pay. He was informed of this by letter of 26th September 2011 from the Finance Director. The letter also informed the claimant the company’s permanent health insurance scheme may come into operation after the 26 weeks, subject to his claim being accepted by the insurance company. He was required to attend the company doctor for examination. He understood that he PHI could take effect from November 2011.
The claimant attended the company doctor on 4th November 2011. The Doctor reported that he would be surprised if the claimant would be fit for work within three months. The claimant was unaware at this time that his position had been selected for redundancy. He submitted his application to the insurance company on 17th November 2011. The process did not proceed due to the termination of his employment. If accepted he would have received 2/3 of his salary.
There was no discussion regarding redundancies prior to the meeting on 24th November 2011. He was notified about the meeting via a phone call from his manager. He was told it was about finance and income protection.
At the meeting he was told that due to the economic downturn the company was in financial difficulties. Redundancies were required and his position had been identified. He asked what criteria were used and if others were being let go. He agreed that he was quiet during the meeting. He was thinking about what he should or should not say. He had not expected to be told he was being dismissed. They said they had considered other options but that there was nothing for him. He was not asked for suggestions on alternative positions he could do. He believed that the operations administrators’ roles should have been considered as well as they were basically the same role. He was there longer than the employees currently in those roles. Their salaries were €27k and €35k compared to the claimant’s salary of €41,662 (at time of dismissal). If asked he would have suggested that he could carry out roles performed by agency workers. He was not offered an appeal. He was presented with his letter of termination, RP50 form and cheque.
Following the meeting, the claimant sought legal advice. He did not believe he was treated fairly or reasonably. His employer did not seek any contribution from him. He had already instructed his solicitor in relation to his personal injuries claim prior to his dismissal. He had exhausted his sick leave at the time of his dismissal. Of the three other people who were dismissed by reason of redundancy one was also on long-term sick leave. The claimant believed the other two had performance and disciplinary issues.
The claimant is from South Africa and was concerned about his application for citizenship if he was unemployed. However, he was since successful in this application. The claimant’s last operation was a month prior to the last Tribunal hearing date. The claimant has been on disability benefit since his dismissal and at the time of the hearing was on partial capacity benefit, which expired on 15th November 2013. He was then to go onto jobseekers allowance.
He applied for the position of operations administrator in August 2012. He had previously carried out all of the duties described in the role. He was disappointed not to get the job.
The claimant’s representative explained that loss of earnings was being sought through the personal injuries claim. The claimant was seeking the loss of the PHI scheme from the Tribunal hearing.
The claimant was cross-examined. He agreed that both the Sandyford and Bluebell offices were open plan. He agreed that he dealt with reviews, hours and leave for the operations administrators.
Determination:
The evidence of the respondent was that sales declined by 40/50% in the period between 2008 and 2012. By mid-2011 management began to consider redundancies and, accordingly, four positions were made redundant in September/October 2011, including that of the claimant as Client Services Supervisor.
In denying that it unfairly dismissed and/or unfairly selected the claimant for redundancy, the respondent contended that there was no obligation to enter into a consultation process with the claimant but asserted that it did follow fair procedures by meeting with and explaining to the claimant the reasons for the redundancy, furnishing him with a RP50 form and issuing cheques in full payment of redundancy entitlements and any other outstanding payments.
The claimant contended that he was unfairly selected redundancy, that no consideration was given by the company in selecting his position for redundancy to the positions of any agency workers or to the positions of, specifically, two co-workers undertaking largely similar, if not interchangeable jobs and further contended that the respondent had been significantly influenced in its decision by the fact that he was on long-term sick leave as a result of a work related injury. He also stated that of the three other employees who were made redundant one had attendance issues, one had performance issues and one was on long-term sick leave.
The Tribunal is satisfied that prior to the meeting which took place between the parties on 24th November 2011, the respondent had already reached a decision to terminate the claimant’s employment. This meeting was the first occasion on which redundancy was raised with the claimant and he was given a pre-prepared letter of termination stating that the redundancy was for economic considerations, his RP50 form, cheques to cover redundancy, holiday pay and pay in lieu of notice and was informed that his P45 would be furnished in due course.
The Tribunal acknowledges the entitlement of an employer to introduce measures to counter the effects of economic downturn or financial difficulties, which measures may include redundancies. However, in all cases of dismissal, whether by reason of redundancy or for any other substantial grounds justifying dismissal, the burden of proof lies on the employer to show that the dismissal was for lawful reason and that the dismissal was fair.
In this case the claimant was given no prior warning of the purpose of the meeting which took place on 24th November 2011, was not afforded an opportunity to prepare his response to the redundancy, was not offered the chance to bring any representative to the meeting or advised of any right of appeal. The claimant was not advised of any selection criteria which had been applied by the respondent to the selection process and was not afforded any opportunity to express an alternative view or make suggestions whether in relation to co-workers, salary reduction or re-deployment.
The Tribunal finds that the respondent has failed discharge the onus of proof on the employer to establish that it acted fairly and reasonably by objective standards in the selection of the claimant for redundancy. Fair procedures were not followed by the respondent in the manner in which it reached its decision to terminate the claimant’s employment by making his position redundant. There was a disregard for natural justice in denying the claimant any opportunity to express a view on the selection process and/or to defend the decision to terminate his permanent employment and to give any consideration to the claimant’s views on the situation.
In the circumstances, and having carefully considered all the evidence adduced by both parties, the Tribunal is of the view that the provisions of section 7(1)(c) of the Unfair Dismissals Acts 1977, as amended, are applicable and, accordingly, that the claimant is entitled to compensation in the sum of €29,998.53 being a sum in respect of 20 months benefit to which the claimant would otherwise have been entitled if his employment had not been terminated and he was able to avail of the PHI scheme benefits. In reaching this decision, the Tribunal finds, that on balance of probabilities the claimant would have been entitled to avail of payment under the PHI scheme.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)