UD1602/2013

EMPLOYMENT APPEALS TRIBUNAL

CLAIM OF:                                                                                                            CASE NO.

Marilyn McGivern

- claimant                                                                                                              UD1602/2013

against

Medpro Billing Solutions Limited

- respondent

under

UNFAIR DISMISSALS ACTS, 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman:    Ms V.  Gates B.L.

Members:     Mr E.  Handley

                     Mr. S.  O'Donnell

heard this claim at Dublin on 22nd January 2015 and 16th March 2015

Representation:

_______________

Claimant:          Ms Wendy Doyle, Wendy Doyle, Solicitors, Fitzwilliam House,

                         3/4 Upr. Pembroke St., Dublin 2

Respondent:      Ms Anna Broderick, O'Donnell Sweeney Eversheds, Solicitors,

                          One Earlsfort Centre, Earlsfort Terrace, Dublin 2

Background:

The respondent provides an invoicing service to medical consultants. They charge a fee for dealing with health insurers. RJ is the managing director who set up the business with herself and two other employees. The main work involves data input. The claimant was an excellent employee who was hired in July 2012 as office manager following interview. The role of office manager was set up at that time, which allowed RJ time out on the road trying to gain more business. Following a meeting with the respondent’s accountant in July 2013 it was apparent that the respondent could not sustain the 38k salary being paid to the claimant who was made redundant. 

Respondent’s case:

JF (chartered accountant) told the Tribunal that he provided a service to the respondent doing half yearly management accounts. He outlined the profit and loss of the business and said that 2012 was a good year with a profit of 33k. In July 2013 he met with JR and told her of his concerns for the first half of 2013. Business had increased by 35k but overheads had increased dramatically by over 60k. Salaries had gone way out of line with the previous year. He told the directors to take immediate corrective action as the situation could not be sustained. He never met the employees, making the office manager redundant was purely a business decision.

RJ told the Tribunal that she had a background in nursing and set the business up in 2009. It was just her and one other person. As the business grew she took on someone else in 2011. Her dealings were mainly with the Mater Private and that was how she met the claimant (through e-mail correspondence). In one of her e-mails she told the claimant that she was under pressure and short staffed and the claimant sent a CV and asked to be interviewed. She was excellent at her job and told RJ that she could not work for less than 38k per year. RJ thought about it, it meant she could get out on the road to generate business and offered the claimant a position of office manager. Both other girls in the office were doing data input and were earning 28k per year.

RJ said that the claimant was a luxury for her and it was great, it took the burden off her and she was able to get out and try generate business. It was only when she met and had discussions with the accountant that she realized that it was a luxury she could not afford. RJ said that she wasn’t analysing figures and in hindsight was busy and did not realise the impact of the extra salary on the business.

She met with the claimant on 24^th July, it was a stressful because she was like a friend. The only thing to do was let her go or ask her to take a lesser role (data input) at a lesser salary and let the last person in go. The clamant suggested other cost cutting measures but they did not add up to the amount that needed to be saved, she also suggested working a four day week for the salary of the other girls but RJ didn’t think that was fair and it was not what was needed. RJ took back the role of office manager and said that she now does 70/80 hours per week.

Claimant’s case:

The claimant told the Tribunal that she worked at the Mater Private hospital and due to family circumstances had to hand in her notice and cease work. Circumstances changed for her and she was able to resume work with them but had to begin again with a new contract. There was no maternity leave or sick pay cover for the first year so it didn’t really suit her, she had dealings with the respondent and sent her a CV.

The claimant said that she sold herself at interview and persuaded the respondent to make the role an office mangers job allowing RJ to concentrate on generating business. Everything was fine as far as she was concerned, bonus’s and pay rises were even discussed. On Monday 22^nd July she received an e-mail from RJ asking for a meeting. She was told that following a meeting with the accountant RJ had no option but to make the role of office manager redundant. She was offered G’s job, the last girl employed to do data input but it was at a much lesser rate of pay and she was told to think about it. The situation she found herself in was her worst nightmare because of her financial position.

The claimant said that she offered alternative cost cutting measures to RJ, including a 5% pay cut across the board which would reduce her salary by €1900, or to work a four day week for the lesser amount. It would have been a starting point to negotiate. She would have been prepared to take up to a 15% paycut but that was never proposed to the respondent.

Determination:

The Tribunal accepts that in and around June 2013 the respondent was informed by her external accountant that overheads had increased dramatically to the extent that it was necessary to take immediate action to reduce such overheads, so that the company would remain viable. The respondent took a number of measures to reduce overheads including a reduction of the largest company overhead, salaries, in circumstances wherein the ratio of salaries to sales had increased from 25% to 44% in the previous six months.

It was also decided to make the position held by the claimant of office manager redundant as this role could be subsumed by the Managing Director. The claimant was offered the position of office administrator at a reduced salary of €30,000 per annum. This was a decrease of €8,000 per annum in salary but was slightly higher than the three existing office administrators’ salaries which were €28.500 per annum. If the claimant had accepted this offer it would have resulted in the most junior office administrator, in terms of length of service, being made redundant. The claimant did not accept this proposal.

The Tribunal considered the evidence adduced by both parties and the submissions of their legal representatives, together with a review of the case law submitted by both parties in support of their contentions. The Tribunal is satisfied that the process engaged in by the respondent was fair and that a genuine redundancy situation did exist. Therefore in all the circumstances the Tribunal finds that the dismissal was not unfair and the claim under the Unfair Dismissals Acts 1977 to 2007 fails and is hereby dismissed.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

      (CHAIRMAN)