UD1619/2012, TE259/2012

EMPLOYMENT APPEALS TRIBUNAL

APPEAL OF:                                                                                                 CASE NO.

Micheal McCann                                                                                            UD1619/2012                                                                                           - appellant                   TE259/2012

against the recommendation of the Rights Commissioner in the case of:

CIL Precision Limited                                                   - respondent

under

TERMS OF EMPLOYMENT (INFORMATION) ACT, 1994 AND 2001

UNFAIR DISMISSALS ACTS, 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman:       Ms D. Donovan BL

Members:       Mr. J. Browne

                        Mr. F. Dorgan

heard this appeal at Waterford on 18th July 2014 and 11^th September 2014.

Representation:

Appellant:       Mr. Derek Dunne BL, instructed by Mary T Ronayne, Solicitor, The Brewery, Shandon, Dungarvan, Co Waterford

Respondent:    Nolan Farrell & Goff, Solicitors, Newtown, Waterford

The determination of the Tribunal was as follows:-

At the outset of the hearing the appeal under the Terms of Employment (Information) Acts, 1994 and 2001 was withdrawn.

This case came before the Tribunal by way of an employee appealing against a Rights Commissioner’s Recommendation ref. r-115537-ud-12/MMG.

Respondent’s Case;

The respondent is engaged in metal fabrication. The appellant was one of four engineers working in the engineering department. Each engineer worked with specific customers. JN was specially trained to implement the Robotic Welder. MB was a lead engineer for company S. He was very knowledgeable. PC’s main customer was company L, a very large company which had potential for growth.

The appellant had responsibility for company A and commenced employment in May 1999. One third of his time was spent on the contract with company A. There was interchangeability with Engineers.

CR was General Manager of the respondent company and was appointed to that position in May 2009.

In around 22^nd June 2009 CR became aware that the respondent had lost a major contract from company A. She immediately made an announcement to all staff about the loss of this important contract which resulted in 35% of business being lost within the respondent company. The respondent was hoping to avoid redundancies. She outlined measures to secure alternative business. The respondent wanted to make the company more attractive and to make improvements to retain existing customers and get new customers. System improvements were required to be implemented.

In October 2009 Company C had business for the respondent and temporary employees were engaged until Christmas 2009.

In the process of planning for upcoming redundancies the witness engaged with MMcG, Production Manager regarding potential redundancies on the factory floor. HR Specialist RW was engaged to ensure that this process was carried out in a fair and transparent way.

On 25^th February 2010 CR announced to the staff that a number of redundancies would be made due to the imminent loss of business from company A as this was a huge per cent of the respondent’s turnover. The business was in dire straits. The respondent was forced into identifying a number of positions for redundancy. While the appellant had approximately seven months extra service than PC, CR considered that the extra service was not enough of a discernible difference on its own. Accordingly LIFO was not considered. CR met with the appellant and informed him that his position would be made redundant if there were no alternatives. Eight other redundancies were also being effected in the company.

The appellant met CR on 12 April and said he was not happy with the process. He questioned his redundancy payment. He enquired if any alternatives had been considered.

JN agreed to job share with the appellant.   The job sharing arrangement commenced in August 2010 and continued until end December 2010. In early January 2011 it was apparent that the respondent had not sourced new business. Everything had been done to avoid redundancies. Voluntary redundancies were not appropriate at the time. In January 2011 the appellant commenced a period of lay off until the end of March 2011 after which he was made redundant. The appellant had secured consultancy work with another employer.

The appellant has secured a small amount of work as a sub-contractor with the respondent.

MB gave evidence. He is an engineer with the respondent. He re-joined the respondent’s employment in Jan 2000, having previously worked there from 1996 to 1998. He was head hunted to work on a project for company S.

After the contract with company A was lost the appellant employee felt worried. He was also disappointed because company A wanted cost savings but the respondent would not give them. The contract with company S became critical as without it the business would not survive.

The appellant was not present when the redundancies were announced. CR phoned him to tell him that a hard decision had been made and that he would be made redundant. However work increased and the proposed job-share was postponed until June. The 4 engineers were flexible and each did whatever needed to be done.

The job-share arrangement worked but a change-over was required and it was not an efficient way to work. When the number of engineers dropped to three it impacted on the ability to quote for projects. An additional person came into the office. DC an engineer in production came to the engineering department. There was work for 4 engineers.

PC a qualified engineer gave evidence. Requests for quotes come in to the engineering department informally and are assigned to an engineer. If a contract results the engineer who handled the quote becomes the prime contact while ongoing sales go to production and quality issues go to the quality manager.

After contract A was lost, it was a busy time as the staff was trying to locate work and they had to go through a lot to get very little work. DC was on rolling three month contracts on the production floor and then he was brought into the engineering department. KW who is a fitter by trade was brought in to help with sales to allow the engineers more time for doing quotes.

The respondent’s legal representative made a submission stating that there had been a redundancy resulting from the loss of contract A.

Appellant’s Case

The appellant, a project engineer, gave evidence. He worked on quotes for new projects, looked at drawings, did programming and dealt with a wide range of customers.

The contract with company A was for metal work for ventilators. It was a complicated project to set up taking 12 months to get into production but after that it did not change. Day to day he did very little on this contract despite being the lead engineer. The majority of his time was spent doing quotations and making prototypes to get new business.

The appellant was one of four engineers employed by the respondent. Their original skills had differed but time and on the job experience had dissolved the differences.

The contract with Company A was lost over price. Another business offered to do it for a lower price. The appellant felt that the respondent could have significantly reduced the price but they decided not to. In spite of the lost contract redundancies in the engineering department were not merited in his view.

CR met with him in the canteen and informed him that he would be made redundant. He said very little at the meeting. He was shocked. Later he met again with CR and suggested alternatives e.g. reduced hours or reduced pay. CR responded that all options had been explored and nothing could be done.

The job-share arrangement was suggested by his two colleagues. It worked out well. He often came in and was paid for days during his week off. When the job-share arrangement finished the appellant was put on a three month lay-off. Later he heard that there was a spike in work in the engineering department and he phoned CR asking for work but she told him it was not a possibility. Resources were taken from other departments to get the work done. When the lay-off was over he was made redundant. He believes that now there are 5 engineers in the engineering department.

After his employment terminated he did look for further employment. There are not many suitable jobs around. Due to illness he was not available for work for 6 months. He set up his own business in March 2103.

Determination

Having considered the evidence of the parties and the submissions of the legal representatives for the parties the Tribunal finds as follows:-

1. That the workload and the income of the respondent reduced because of the loss of the contract from Company A. The reduction in workload and income entitled the respondent to effect redundancies.
2. That the work in the engineering section had not decreased as a result of the loss of contract A and therefore the appellant’s role still remained albeit that the respondent was entitled to decide that the work in the engineering department should be carried out by three engineers rather than four in order to effect savings.
3. That the role of the four engineers were interchangeable, that there were no discernible differences in the skills set of the four engineers and the respondent’s evidence that they retained the three retained over the appellant because of their lead role in the remaining contracts, particularly the contract from Company S which was now crucial to the respondent’s survival, was controverted convincingly both by the evidence of the appellant and two of the engineers and by the fact that during his time on the job-share the appellant was carrying out the role of lead engineer on the Company S contract. In these circumstances, selection for redundancy in order to be fair and reasonable should have been effected on the basis of LIFO. Had the respondent so done the appellant would not have been selected for redundancy.
4. That the respondent failed to consider seeking voluntary redundancies and failed to consider alternatives to the redundancy of the appellant such as a pay cut across the board, reduced hours or other cost cutting measures. The alternative of job sharing did not come from the respondent, albeit that the respondent agreed to it, but was put forward by two of the other engineers and could be discontinued and was in fact discontinued by the other engineers.
5. That the respondent failed to act reasonably and fairly when it failed to consider or offer the appellant the three monthly rolling contract being done by DC.
6. That the respondent failed to act reasonably and fairly when it failed to consider the appellant for or offer the appellant the position in the engineering department which was offered to DC in October 2011 in or about 4 months from the dismissal of the appellant and when it failed to consider the appellant for or offer the appellant the position of planner which became available some time later even though the respondent had undertaken with the appellant that it would do so.
7. That the appellant had adequate notice that there would be a dismissal in the engineering department in circumstances where he was first notified of the redundancy on 25^th February 2010 but was not dismissed until 20^th May 2011 albeit he was on job-share from August 2010 and was on lay-off from January 2011.

Accordingly, the Tribunal upholds the recommendation of the Rights Commissioner but varies it to the extent that the Tribunal finds that there was a substantive unfair dismissal by reason of unfair selection for redundancy. The Tribunal awards the appellant compensation in the sum of €30,000 over and above the statutory redundancy lump sum already received by the appellant. In calculating the level of award the Tribunal took into account that the appellant was unavailable for work for six months during the relevant period and the appellant’s evidence of his efforts to mitigate his loss which fell short of the test in Sheehan v Continental Administration Co. Ltd UD858/1999 where a Division of the Tribunal stated as follows:-

            “A claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. … The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss”.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

     (CHAIRMAN)