EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
Feargal Anderson – claimant 1 UD570/2013
Eugene Brady - claimant 2 UD569/2013
Cormac Donohoe – claimant 3 UD568/2013
Against
Ascension Lifts Limited – respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms V. Gates BL
Members: Mr T. O'Grady
Mr. J. Dorney
heard this claim at Dublin on 22nd April 2014
Representation:
_______________
Claimant(s) : Mr Arthur Hall
Technical Engineering And Electrical Union,
6 Gardiner Row, Dublin 1
Respondent(s): Mr Aidan Phelan
Peninsula Business Services (Ireland) Limited
Unit 3 Ground Floor Block S, East Point Business Park, Dublin 3
The determination of the Tribunal was as follows:-
The second named claimant (EB) did not attend the hearing. His representative informed the Tribunal that he is currently residing in Australia. The two other claimants were present. Their employment, as lift engineers, was terminated on 22nd March 2013 by reason of redundancy. They contended that the dismissal was unfair as they were given a choice of either accepting inferior pay and conditions of employment or accepting redundancy. The respondent contended that the redundancies were made due to the financial situation of the company.
Summary of Respondent’s Evidence:
The Managing Director (MD) of the company gave evidence. The company installs and services lifts. Business was good until 2009 and the company built up a substantial cash reserve. The company broke even in 2011, but in 2012 was losing €1k per day. The reserve was gone by 2013. Six redundancies were made in 2012 from the administration, sales and installation areas. Staff not on hourly rates took pay cuts and the company agreed lower rates from its suppliers. The lift engineers were paid on an hourly rate and did not accept a pay cut.
In 2013 there was a 20% drop in lift installations and the value of the maintenance portfolio had fallen by 50%. The company lost €26k worth of maintenance contracts in the first eight weeks of 2013. The company decided to make two redundancies from the five lift engineer roles in the Installation Department.
The first ‘at risk’ meeting was held on 21st January 2013 with all five lift engineers. The employees were informed that the company was in financial difficulty and that their roles were at risk. The MD suggested options such as week on/week off, voluntary redundancy or compulsory redundancy on a last in first out basis. He also sought suggestions from the employees, but only a suggestion of 3 weeks on/1 week off was suggested, which was not a viable option for the company. Only two employees were amenable to working week on/week off. At the end of the meeting each of the employees was given a letter advising them that their positions were at risk. Each was invited to an individual meeting on Friday 25th January 2013 and advised that they could bring someone with them.
The letter advised the employees that in the event that cost saving measures did not resolve the company’s financial issues the company anticipated making two positions redundant on a last in first out (LIFO) selection criteria. Individual meetings were held with the claimants and their Trade union representative on 28th January 2013. The purpose was to agree cost cutting proposals in order to avoid possible redundancies. The Trade union representative indicated that if redundancies were being discussed a package of 4 weeks’ pay per year of service plus statutory redundancy was what he wished for his members on a last in first out principle. They were the terms of an earlier Labour Court agreement that the trade union had negotiated. The company were offering statutory redundancy only. The company agreed to look at the LIFO principle if redundancies arose. The Trade union representative indicated that he would be unhappy if the company retained nonunionised employees over unionised ones. The company indicated that this would not be taken into account. The Trade union representative indicated that his members would not accept voluntary redundancy if only statutory was being offered. The company did not accept that it was party to any Labour Court agreement on pay for lift engineers. The two remaining employees whose positions were at risk were not up to date with their trade union dues and so were not represented by the trade union.
The MD gave evidence that the company decided to restructure the company by way of three of the manager/directors assuming engineering roles as they were all qualified engineers. The claimants were informed of this at meetings on 1st February 2013 and that the number of possible redundancies was 2 or 3. The remaining positions would be field engineers, junior to their current positions on an hourly rate of €22.50.
The meetings scheduled for 7th February 2013 did not proceed as the claimants’ wished to have a group meeting which the company objected to as it believed it was best to discuss the situation individually. Individual meetings were arranged for 12th February 2013. The three unionised employees arrived together and insisted on a group meeting. As they would not agree to individual meetings the meeting finished. Ultimately a group meeting with the 3 unionised employees was held on 21st February 2013.
At the meeting the employees were informed that the company restructure was going ahead. The claimants’ Trade union representative indicated that the claimants were unwillingly to accept the new posts on offer due to the reduced pay and conditions. The Trade union representative was seeking to have the company engage through the LRC to discuss redundancy terms. The company refused to do this. The claimants indicated that they were not interested in the positions available. The MD gave the claimants until 4pm the following day to decide if they wanted the positions on offer. If no response was received he would offer the positions to the other engineers on a LIFO basis.
A further meeting with the claimants was held on 22nd February 2013 at 4pm. They advised the company that they did not intend to accept the new positions offered or statutory redundancy. The MD advised them that if they did not accept the new positions then redundancy would have to take place. The three claimants’ positions were made redundant.
An appeal heard by an independent consultant on 11 March 2013 found that the selection process was fair and that the roles had been made redundant due to company restructuring.
Subsequent to the redundancies one extra junior engineer was hired to fill the field engineer position. The two other engineers accepted the new roles on offer. FA, one of the claimants, and CD2 one of the other engineers at risk, were the last two in and would have been let go under the LIFO principle. As the other two claimants refused the new roles CD2 remained in employment.
Summary of Claimants’ Evidence:
The first named claimant, FA, gave evidence. He identified his role as a senior lift engineer on a rate of €24.04 per hour on the TEEU’s pay rates table for lift engineers. He did not wish to accept redundancy. He was dismissed as he would not accept the new terms and conditions. He gave evidence of his loss. He was unaware of the extent of the company’s financial difficulties.
The second named claimant CD gave evidence. His role was in line with that of a lead engineer on a rate of €25.50 per hour on the TEEU’s pay rates table for lift engineers. He believed he was working under the national arrangement according to his hourly rate, lunch and subsistence rates. He believed he was made redundant as he would not accept lesser pay and conditions. He was unaware of the extent of the company’s financial difficulties.
Determination:
The Tribunal accepts that due to the economic downturn a genuine redundancy situation arose. The company identified that two redundancies were required. It was deemed appropriate by all parties that the LIFO selection criteria should apply. However, the company decided not to proceed on the foregoing basis and decided on a complete company restructure which resulted in three redundancies being implemented. In order to effect the restructure the company unilaterally proposed a new job title, pay rate and some altered conditions of employment. These proposals were unacceptable to the claimants and due to their refusal their employment was terminated. In the circumstances the Tribunal finds that the claimants were unfairly selected for redundancy and dismissed.
Accordingly, the Tribunal awards the first named claimant (FA) €8,000 (eight thousand euro) and the third named claimant (CD) €10,000 (ten thousand euro) under the Unfair Dismissals Acts, 1977 to 2007.
The second named claimant (EB) did not attend the hearing and accordingly his claim under the Unfair Dismissals Acts, 1977 to 2007, is dismissed for want of prosecution.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)