UD2237/2010, RP3026/2010, MN2191/2010

EMPLOYMENT APPEALS TRIBUNAL

CLAIMS OF:                                                                                                CASE NO.

                                                                                                                        UD2237/2010

Employee        -           claimant                                                                      RP3026/2010

                                                                                                                        MN2191/2010

against

Employer         -           respondent

under

UNFAIR DISMISSALS ACTS, 1977 TO 2007

REDUNDANCY PAYMENTS ACTS, 1967 TO 2007

MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005

I certify that the Tribunal

(Division of Tribunal)

Chairman:        Ms D. Donovan B.L.

Members:        Mr. J. Browne

                        Mr. J. Flavin

heard this claim at Waterford on 25th November 2013

                                            and 26th November 2013

Representation:

Claimant: Ms Cliona Kimber BL instructed by Ms Bernice Garrett

     Solicitor Bowe O'Brien, Solicitors, 1 Adelphi Quay, Waterford

Respondent: Mr Ercus Stewart SC instructed by Neil J. Breheny

                             & Co., Solicitors, 4 Canada Street, Waterford

Background:

The claimant contends that on Thursday 1^st July 2010 the Editor and Director (aka PG) of the respondent entered his office with a security guard and without notice and in an intimidatory manner told him to clear out his desk and to leave the premises because his position as general manager was not sustainable. He asked PG if his position was being terminated or if it was being made redundant. PG told him to discuss it with his legal advisors. When he enquired more about the reason for the decision PG refused to discuss it with him. He asked PG if he could appeal the decision and PG told him no. He requested to have a witness present and PG refused him this. He was told to leave the premises and that he would get his statutory entitlements in due course. On Friday 2^nd July he returned to the office and received his P45 and final pay slip. He received payment of only two weeks’ notice even though he had 16 years’ service.

The respondent contends that the claimant was dismissed on financial grounds.

Respondent’s case:

The Tribunal heard evidence from MP who is a chartered certified accountant and the auditor of the respondent company. He gave evidence as to the financial situation in the respondent company.

The witness told the Tribunal that the letter of 5^th July dismissing the claimant was signed by PG and that he himself posted the letter and sent the redundancy form RP50. He said also that if the relevant cost cutting had not been implemented the respondent company would not be in existence today.

The Tribunal heard evidence from PG. He outlined his experience in the printing trade. He served his time as a compositor. He started the respondent business from his front room. He started the business with JM who is the claimant’s father. The first issue went out in September 1989. The business grew and grew.   However PG described how in latter years the business suffered in the challenging times.

The company was in a state of crisis and he was having daily talks with the auditor. The business was in imminent danger of closing. The employees were put on “short time” and they introduced 10% pay cuts.   Both he and the claimant took 50% pay cuts.   They temporarily cancelled pension payments. He had to make a journalist position redundant.   It came to a point when he felt that he would have to make the claimant’s position redundant. He made the claimant redundant in July 2010.   The auditor issued the RP50 redundancy form.   His daughter who was on maternity leave came into the business to help sort things out after the claimant was made redundant.

The witness explained that the claimant retired as a director in February 2010and now he and his wife are directors.

The Tribunal heard evidence from Ms NW.

The Tribunal heard evidence from RB who is a qualified chartered accountant.   He and his firm were the auditors for the respondent for 2007 and 2008. He gave evidence as to the financial situation of the company.

Claimant’s case:

The Tribunal heard evidence from the claimant. He had a background in retail business. He outlined his experience to the Tribunal. He had opened a shop in Kilkenny.   When he moved to the respondent he closed the shop in Kilkenny.

It was put to the claimant that PG’s evidence was that he had very little input to do with introducing colour to the publication. The claimant explained that a client wanted something more different with an advertisement. Colour was becoming less expensive so he spoke to their printer who gave him a phone number for a printing company in Cork. They moved from having two full colour pages tofull colour and it was his idea to move to full colour. Regarding publishing and issuing the publication on a weekly basis this was also his idea.

His relationship with PG was uneventful up until he became a director and took over his father’s role; he noticed a difference in their relationship after that.

Regarding PG being titled managing director he did not agree with this but PG used his majority shareholding to back this up.

As to financial steps that had to be taken when business declined, he recommended to PG that the two office women reduce their hours and PG and the office women agreed. He also recommended to PG that he and PG take a pay cut for twelve weeks. He himself never went back to his original pay.

Regarding his dismissal, he was in his office and PG handed him an envelope and said open it. Then PG opened the letter and placed it on his desk and said to read it. He read the letter and PG told him to clear his desk and leave.

He then spoke to PG and PG told him to get legal advice. He asked PG if they could talk about it and the security guard that was with PG told him that his employer wanted him to leave. He asked the security guard if he knew that he was a 40% shareholder. PG raised his voice to him and he said to PG what would happen if he did not leave and PG said that he would call the Gardaí. The security guard became agitated so he said he would get a box to collect his belongings. He collected photos of his children. He did say to PG that they had a policy whereby they were allowed a witness but PG said he was not allowed a witness.

He called into the office the next day and saw the security man there. He went to PG’s office and handed PG a letter and said to read it and if they could talk afterwards.   He wanted his phone back amongst other things. Eventually the Gardaí were called and they told them it seemed it was a civil matter.

He did not get his phone back but he got a memory clip. The claimant outlined other matters such as the respondent cancelling his car insurance.  

He said other staff who had been let go were invited back part-time.   He said there was work in sales.  The claimant was asked if he would have taken a sales job in the respondent if he was offered it and replied “yes I certainly would”.

The claimant gave evidence as to mitigating his loss.  

The Tribunal heard evidence from the claimant’s father. He told the Tribunal that he started the respondent business with PG in 1989. He left the business in 2006. They had been issuing the paper on a fortnightly basis and his son had the idea to publish it weekly. This was around 2005. At the time his son advised that they rebuild the office which they did.

It was PG who offered the job to his son.   He never heard PG say a bad word about his son.   He told PG that he would be leaving in 2006 and that he would be handing over his directorship to his son. He had said to PG that he was sure that he would be handing over his directorship to his daughter and PG agreed that he would.

PG did say to him that he did not think that he could work well with the claimant (when he took over his father’s position as a director). He told his wife and his son what PG had said.

Determination:

The claim under the Redundancy Payments Acts 1967 to 2007 was withdrawn at the outset of the hearing.

Having carefully considered the evidence adduced at the hearing the Tribunal finds that both parties accepted that the respondent company was in financial difficulties and needed to cut costs in order to ensure the survival of the respondent company.   However, the parties differed as to where the costs should be cut.   The evidence of the financial expert witness for the respondent was that he advised the respondent on various areas where costs could be cut one of these being a reduction in staff.   The evidence of the financial expert witness for the claimant was also that there were various areas where costs could be cut but without the need to make the claimant redundant.   The Tribunal is of the opinion that it is for the respondent to ultimately decide where to cut costs but where cost savings was to be through redundancies the respondent must comply with the provisions of the Redundancy Payments Acts 1967-2007.

The Tribunal is not convinced on the evidence that the dismissal of the claimant was attributable wholly or mainly to redundancy albeit that the ‘redundancy’ of the claimant resulted in much needed savings to the respondent.   The Tribunal arrived at this conclusion for the following reasons:-

1. The Tribunal finds that the relationship between the claimant and the respondent had clearly become difficult as evidenced by the resignation of the claimant from his directorship of the respondent company in February 2010 and the Tribunal felt that the respondent wished to be rid of the claimant.

2. The Tribunal accepts that the respondent was under financial pressure and feels that the refusal of the claimant to continue on the 50% pay cut may have aggravated him and was the trigger that ultimately caused the respondent to terminate the employment relationship with the claimant.

Regarding the manner in which the respondent effected the dismissal of the claimant the facts speak for themselves and the Tribunal finds it was particularly unfair and unreasonable.   The Tribunal, however, finds that the respondent most likely acted this way due to the pressure he was under rather than with mala fides.   In particular, the Tribunal notes the following:-

1. The respondent failed to adhere to any or any fair procedures.

2. The respondent failed to comply with the provisions of section 17(1) of the Redundancy Payments Act 1967 which provides that an “employer who proposes to dismiss by reason of redundancy an employee who has not less than 104 weeks service with that employer shall, not later than two weeks before the date of dismissal, give to the employee notice in writing of the proposed dismissal…….”.

3. There was no discussion whatsoever or howsoever with the claimant in advance of the decision to make him redundant.   The claimant was simply told on 1^st July 2010 that he was being made redundant there and then and escorted off the premises by a security man.

4. The claimant was not given his statutory notice entitlement and was not paid in lieu of notice.

5. There were no discussions as to the possibility of alternatives to redundancy.   However, in circumstances where the claimant was pushing for a return to full salary the Tribunal is not convinced that the claimant would have taken alternative work at a significantly lower salary.

6. The claimant was not offered a right to appeal the decision to make him redundant.

Accordingly, the claim under the Unfair Dismissals Acts 1977-2007 succeeds and the Tribunal awards the claimant an amount of €30,000.

The claim under the Minimum Notice and Terms of Employment Acts 1973-2005 succeeds and the Tribunal awards the claimant an amount of €10,488.00 being pay in lieu of eight weeks’ notice.   The Tribunal determines that the weekly salary of the claimant is €1,311.95 per week because although the claimant agreed a 50% reduction in his salary it was only agreed for a limited period and this period had expired prior to the start of the notice period.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

     (CHAIRMAN)