EMPLOYMENT APPEALS TRIBUNAL
CLAIM OF: CASE NO.
Sean Quinn Junior – claimant UD2415/2011
against
Quinn Insurance Limited (in administration) – respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr T. Ryan
Members: Mr C. Lucey
Mr P. Trehy
heard this claim at Dublin on 3rd May 2013, 5th November 2014 and 22 January 2015.
Representation:
Claimant: Mr Ercus Stewart SC instructed by Mr Laurence Brennan of
Arthur McLean Solicitors, 31 Parliament Street, Dublin 2
(on the 5 November 2014 and 22 January 2015)
and
Mr Barra Faughnan BL instructed by Mr David Fagan of
Fitzwilliam Business Centre, Sir John Rogerson’s Quay, Dublin 2 –
(on the 3 May 2013)
Respondent: Mr Conor Power SC instructed by McCann Fitzgerald Solicitors,
Riverside One, Sir John Rogerson’s Quay, Dublin 2
The decision of the Tribunal was as follows:-
Respondent’s Case
The joint administrator (MMcA) gave evidence. The Tribunal heard that the company continues to operate. Historical claims are being run down and the losses need to be managed. Three people are now employed by the respondent. At one time 2,500 people worked for the company based in Cavan, Blanchardstown, Navan, Enniskillen, Manchester and London.
On 30 March 2010 the High Court ordered the administration of the company. On the same date the Central bank directed that the company cease writing UK business which meant sales were stalled in the UK. The administrators had to see if aspects of the business could be reopened. The business needed to be resized and as a result a redundancy programme was instituted. Then a process of selling the company commenced. From 1 April 2010 no new business was done, however existing policies were renewed. The claimant was head of UK commercial insurance at the time. Motor insurance was channelled differently. Day to day the claimant met with brokers and liaised with head office.
The witness understood that KL was head of claims, taking over from the claimant on a consultancy basis. When the witness took over as administrator the head of claims role was divided into two positions. KL did not suggest the claimant and suggested two others. The claimant never indicated at that time that he was head of claims. From that time the claimant assisted with applications that were made to the Central bank in trying to identify profitable lines of commercial business. The applications were made during April and May 2010. As a result the company was permitted to reopen the UK motor business with significant price increases but were unable to identify UK commercial profitable business. The claimant made representations that the commercial book was profitable but analysis indicated otherwise. Historically the area was loss making. There were pockets of profitability but overall it was substantially loss making. The claimant continued to interact with UK brokers keeping them informed of developments.
At the end of April they announced to the workforce that the business was being resized and as a result 900 redundancies were sought. The first phase involved putting the company on a sound financial footing and the second phase was to enter a sales process and try to find a purchaser. That phase commenced in June 2010 and was completed during the second quarter of 2011.
The office in Manchester continued until 2011. It took time to run down an insurance business. As the business decreased people were let go. A meeting was arranged with the claimant on the 2 June 2011. He gave the claimant a list of positions available. Following a robust exchange the claimant commented that he was just carrying out a tick the box exercise and should just sack him. A letter dated the 3 June 2011 was opened to the Tribunal. The letter requested the claimant to review the list of positions available and to communicate back which position he wished to be considered for. He received an email response from the claimant dated the 9 June 2011 which indicated he was on certified sick leave. He received a further email from the claimant alleging victimisation and harassment. This was the first time such allegations were made against him by the claimant. The witness wrote to the claimant on the 20 June 2011 including a further list of positions which he accepted were positions the claimant did not have the necessary qualifications or experience to take up. The letter concluded that the claimant did not have the required qualifications for the positions and advised the claimant of his redundancy effective from 1 August 2011.
At the resumed hearing on the 5 November 2014 the Tribunal were informed that the claimant’s legal representation had changed. Mr E. Stewart SC taking over as the claimant’s representative.
MMcA gave evidence that there was nothing to indicate that the claimant was entitled to a bonus payment. All executive powers had passed to the administrators. The CEO at the time handed over the necessary information including the organisation charts to the administrators. Soon after the 26 May 2010 the CEO applied for voluntary redundancy and left shortly after that date. The witness submitted that the claimant was the UK commercial broker manager and RS was head of Ireland and UK commercial. A new organisation structure had come into effect since late April 2010. KL suggested motor and commercial insurance be divided into two positions. An organisation chart from November 2009 was opened to the Tribunal. This chart was presented to the financial regulator in November 2009 and included the claimant as operations director. KL was not included on that chart although he was senior claims manager at the time the witness said it was very unusual he was not included on that chart. An email dated the 19 November 2009 which referenced the claimant’s role change was opened to the Tribunal. The witness accepted that although there were changes to the organisations structures in late 2009 the claimant retained overall responsibility in claims.
Under cross examination the witness told the Tribunal he commenced his role as joint administrator on the 30 March 2010. He went to the Cavan office that day and met with the claimant and his father. He could not recall meeting with the claimant on a one to one basis on the 1 April. He could not recall telling the claimant that he did not want him involved in claims and could not recall the claimant expressing his dissatisfaction at any meeting. He understood that KL was head of claims and a consultant not an employee. The claimant worked with the witness preparing a proposal for the financial regulator to allow the re-opening of the UK business. The UK retail business re-opened but the commercial business never re-opened. In May 2010 he asked the claimant not to attend senior management meetings. He could not recall the reason why other than attempting to stabilise operations at the company. He denied asking the claimant to take redundancy and denied telling him that he had no future in the company. The witness denied travelling or meeting with the claimant in Cork. He had no recollection of a meeting in the offices of Grant Thornton on the 6 May 2010 at which it was alleged he again asked the claimant to take redundancy. MMcA accepted that he possibly disabled the claimant’s I.T access in and around mid 2010 without informing him and explained the reason being that sensitive information was involved. He commenced the redundancy programme in June 2010 and staggered it over the following twelve months.
It was denied that after a meeting in November 2010 he asked five board members to stay back and pointing at the individuals said “friend of SQ junior”. He also denied saying they were not to associate with the claimant and if they did they risked further redundancies. At that time he was involved in the managing of the sale process and the Quinn family were not involved in the process or any proposal to purchase the business. He accepted that he informed the employee representative committee (ERC) that Quinn would never ever be involved in the business again.
A letter dated the 19 May 2010 from the witness to the claimant was opened to the Tribunal. At a meeting on the 6 June 2010 when a buyer for the business was secured he offered the claimant a junior role with a low salary. The claimant’s letter of redundancy dated the 20 June 2010 was opened to the Tribunal. He accepted that the claimant was on certified sick leave at that time and medically unfit.
An organisation chart dated June 2010 which was opened to the Tribunal indicated the claimant at a level lower than Mr Byrne and Mr Storey. The witness accepted that the claimant should at least be at the same level as Mr Byrne and Mr Storey. His evidence was that the claimant was not reporting to him and he had no knowledge of who the claimant was reporting to at that time. The witness accepted he did not consult with HR on the claimant’s qualifications prior to making the decision to dismiss the claimant on the grounds that there was no suitable alternative role for the claimant. He was unaware of the selection criteria he applied and did not accept that he cleared out the Quinn family.
Claimant’s Case
The claimant commenced employment in September 2001 in the claims department. He was claims director and a shareholder up to the appointment of the administrators. In addition to his role in claims he had responsibility for a number of short term projects. In 2009 a decision was taken that he would take on a project to develop the commercial book in the UK. The company management structure changed in late 2009 and KL was appointed as a consultant on a short term basis to the role of senior claims manager. He communicated with KL almost daily.
Following the appointment of the administrators MMcA and JMcC travelled to Cavan to meet the senior executive team. On the 1st April 2010 MMcA met with all the executives. One to one meetings were held and which point the claimant explained his role as operations director in claims and his project work. MMcA made it clear he did not want the claimant involved in claims. The claimant informed him that he was not happy with this situation. A further meeting was held on or about the 3 April with MMcA, KL, the claimant and his father present. MMcA would not tolerate his involvement in claims and KL was assigned to the role. He again reiterated his dissatisfaction with this position. At a further meeting in late April with all senior executive managers it was evident the administrator’s strategy was to reduce the staff numbers and redundancies was discussed. The redundancies were announced on the 30 April 2010. The claimant was asked not to attend any further senior management meetings and was asked to take redundancy. The claimant informed MMcA of his disappointment of being singled out and refused the redundancy offer. He expressed the wish that he and his family intended to become involved as shareholders in the future and MMcA said that it was highly unlikely this would ever happen. Other meetings took place between the claimant and MMcA in Cork and at the offices of Grant Thornton. MMcA only wanted him involved in the UK commercial business which was closed at the time. The claimant submitted to the Tribunal that sufficient efforts were not made to re-open the UK commercial business. During the summer of 2010 his I.T access was disabled without any prior notification. At this time MMcA was not communicating with him and from the period May 2010 to May 2011 there was no contact. The claimant received a letter dated the 19 May 2011 from MMcA. The letter was addressed to his family home address in Cavan although he had not lived there for some time. The letter referred to his absence from the company. He responded by email dated the 24 May 2011 which was opened to the Tribunal. A meeting described as a reintegration meeting was arranged for the 2 June 2011. The claimant was offered junior positions with a lower salary although the salary was up for further negotiation. At the meeting the claimant suggested that MMcA was only carrying out a tick the box exercise to which MMcA said “we could end up in court some day”. The claimant left that meeting with the expectation of a further meeting which never happened. The claimant was certified sick from the 9 June 2011. He received an email dated the 13 June which was opened in evidence to the Tribunal. The claimant’s response of the 14 June setting out his position was opened to the Tribunal. Emails of the 15 and 16 June between the parties were opened to the Tribunal. The claimant submitted that he was prepared and capable to carry out some of the roles offered to him. The claimant received a letter dated 4 August 2011 informing him of his redundancy. He was given no opportunity to clear out his office or desk.
Under cross examination the claimant said JMcG had given him a contract of employment in early 2011. A copy of the contract was not available to the Tribunal as he had submitted it to a former firm of solicitors (Eversheds) and it was never returned to him. Although there were organisation changes in late 2009 including the appointment of KL the claimant remained in charge of claims and retained overall responsibility making all the decisions. KL was reporting to him. The changes had not been approved by the board at the time the financial regulator conducted its audit on the 23 and 24 November 2009. The changes were approved on the 27 November 2009 and implemented on the 1 December 2009. The claimant denied moving to the UK at that time. The company had rented an apartment there. He did not attend a meeting with the HIA on the 6 April 2010 as he had been instructed not to attend by MMcA. The CEO was also informed that the claimant should not attend. KL attended that meeting. KL was at that time taking instructions from MMcA. The claimant denied that it was one year after the administrators were appointed in April 2011 that he first expressed his dissatisfaction with how he was being treated. The claimant submitted that he had raised his complaint and grievance as early as April 2010. A diary in which he had recorded contemporaneous notes of meetings where he raised his dissatisfaction was not available to the Tribunal as it had been lost. He did not accept that he had no role in the organisation from September 2010 as he continued meeting claims managers. He was excluded by the administrator and prevented from carrying out his work. Although limited access to I.T. was restored he had no access to the day to day claims and quotations. It was unfortunate that at the time the administrator was appointed he was working on the UK project and he believed this was used against him. His role in the organisation was very comparable to the roles of BM and SS but he was dealt with in a very different manner to them. The claimant thought it unusual that the head of claims role was divided in to two with SS and BM appointed to the roles by MMcA. Following the sale of the business the head of claims role was returned to one position.
Determination
The Tribunal considered all the evidence. The respondent contended that there was a redundancy of the claimant’s position.
Was there a genuine redundancy of the claimant’s role? For a redundancy defence to succeed it must result from, as Section 7 (2) of the Redundancy Payments Acts 1967, as amended, provides, "reasons not related to the employee concerned". Redundancy is impersonal. Indeed impersonality runs through the five definitions of Redundancy set out at Section 7 (2) of the Redundancy Payments Act 1967, as amended by Section 4 of The Redundancy Payments Act 1971 and Section 5 of The Redundancy Payments Act 2003, provides:
"For the purposes of Subsection (1) an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to-
(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed,
or,
(b) the fact that the requirements of that business for employees to carry out of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish,
or
(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) or to be done by other employees,
or
(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforth be done in a different manner for which the employee is not sufficiently qualified or trained, or
(e) the fact that his employer has decided that the work for which the employee had been employed (or had being doing before his dismissal) should henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.
The Tribunal notes the following relevant matters:
MMcA accepted that he ‘possibly’ disabled the claimant’s I.T access in and around mid 2010 without informing him and explained the reason being that sensitive information was involved.
The Tribunal is satisfied that one of the options [Commercial Operations Manager] referred to in McA’s letter of the 20th June 2011 could have been done by the claimant given his previous experience as Head of Claims. This letter also confirmed the claimant’s redundancy and offered an ex gratia payment (totalling €75,000 ) conditional on the claimant signing a severance agreement. The claimant refused to accept this.
The Tribunal notes that the respondent split the role of Head of Claims into two. The claimant was formerly head of claims and could have done either of these roles if requested to do so. Indeed the persons appointed to these roles formerly reported to the claimant. The tribunal also notes that the respondent appointed people to management roles, at or near the claimant’s level at a time, when it was considering making the claimant’s role as head of claims redundant.
It is clear that from as far back as from at least April 2010 the claimant was excluded from meetings.
The Tribunal notes the claimant’s contention that the meeting of the 2nd June 2011 was only a “tick the box” exercise in case the matter “ended up in court”. This respondent denied using this terminology. This meeting was to discuss alternative positions for the claimant. The Tribunal notes that other staff within the company were given positions when their roles ceased.
In May 2010 McA asked the claimant not to attend senior management meetings and could not recall the reason why other than attempting to stabilise operations at the company.
Employer made no attempt to show, or discuss, the selection criteria and process in respect of the proposed redundancy;
No meaning-full engagement with claimant in respect of his qualifications. Administrator relied on HR for any qualifications yet no HR evidence supporting that. The Tribunal wonders about the wisdom of offering positions unsuitable.
Mr McA accepted that he informed the employee representative committee (ERC) that the claimant would never ever be involved in the business again;
redundancy letter was sent to the claimant when he was on sick leave;
The Tribunal considered whether the respondent acted reasonably. Section 5 of the Unfair Dismissals (Amendment) Act 1993 provides that the reasonableness of the employer’s conduct is now an essential factor to be considered in the context of all dismissals. Section 5, inter alia, stipulates that:
“…..in determining if a dismissal is an unfair dismissal, regard may be had……to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”
Was the claimant dismissed by the respondent for issues, other than redundancy, under the cloak of redundancy?
The dismissal of an employee under the cloak of redundancy is considered by Charleton J in clear, concise and unambiguous terms in the case of JVC Europe Limited V Jerome Panisi 2011 125CA wherein he states "it has been made abundantly clear by that legislation [Unfair Dismissals Act 1977] that, redundancy, while it is a dismissal, is not unfair. A dismissal, however, can be disguised as a redundancy; that is not lawful"......... He goes on "Redundancy, cannot, therefore be used as a cloak for weeding out of those employees who are regarded as less competent than others......if that is the reason for letting an employee go, then it is not a redundancy, but a dismissal".
Having considered the totality of the evidence the Tribunal is not satisfied that there was a genuine redundancy. The Tribunal must be satisfied that where an employee is dismissed by reason of redundancy that there must be a redundancy and the redundancy must be the main reason for dismissal. The respondent falls well short of proving that a redundancy situation existed and that redundancy was the main reason for the dismissal. The decision to dismiss the claimant has to be viewed against a background of antagonistic relations between the parties. The Respondent acted with total disregard for the claimant’s employment rights.
The Tribunal is satisfied that there was no prior meaningful discussion with the claimant in relation to the proposed redundancy. He was not invited to submit any alternatives to redundancy. When considering a redundancy defence the Tribunal has also to consider (i) was the redundancy genuine or did the dismissal take place under the cloak of redundancy and (ii) was there a cause and effect relationship between the redundancy and the dismissal. When deciding this, the Tribunal must have regard to all the circumstances.
Reasonableness and Fair Procedures: A dismissal is deemed unfair under Section 6 (1) of the Unfair Dismissals Act 1977 "unless having regard to all the circumstances, there were substantial grounds justifying dismissal"
The lawful reasons for dismissal are set out in Section 6 (4) of the Unfair Dismissals Act 1977 which provides:
"Without Prejudice to the generality of subsection 1 of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:
(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
(b) the conduct of the employee,
(c) the redundancy of the employee, and
(d) the employee being unable to work or continue to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute"
The Tribunal is satisfied that the respondent did not act fairly and reasonably in his dealings with the claimant. There was a fractious relationship between the claimant and the respondent and the dismissal lacked the impersonality associated with redundancy.
Having considered the totality of the evidence, the Tribunal is satisfied that the claimant was dismissed for matters other than redundancy under the cloak of redundancy. The claim under the Unfair Dismissals Acts 1977 to 2007 succeeds.
The Tribunal determines that compensation is the most appropriate remedy and awards the claimant €95,000.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)