EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
Conor McGleenon - claimant UD1372/2014
against
McSweeney Assets Group Holding Limited - respondent
under
UNFAIR DISMISSALS ACTS 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr. J. Revington S.C.
Members: Mr. J. Horan
Mr. A. Butler
heard this claim at Dublin on 19th November 2015 and 14th & 15th January 2016
Representation:
Claimant: Ms. M.P. Guinness B.L. instructed by Ms Anna Broderick, Eversheds,
Solicitors, One Earlsfort Centre, Earlsfort Terrace, Dublin 2
Respondent: Mr. Glenn Cooper, Dundon Callanan, Solicitors, 17 The
Crescent, Limerick
Respondent’s Case
The Managing Director of the respondent company gave evidence that the company operates a group of pharmacies in Ireland. Prior to 2012 the group consisted of 26/27 pharmacies but having emerged from examinership in 2012 this figure reduced to 10 pharmacies. He took over the role of general manager in 2008 and operates between Holland and Ireland.
He gave evidence that the claimant was employed as a pharmacist since 1995. Initially he had been employed as a dispensing pharmacist but after a period of time he became employed as pharmacist in a managerial position, and was based at the company’s head office. From 2008 onwards the company was faced with a double recession. There was the general worldwide recession coupled with a recession in the pharmacy business. He was confronted by the hard financial world. Turnover in pharmacy business had decreased by 30%-40%. In order to survive the company had to sell assets, reduce in size, and increase profitability. Cost cutting measures had to be introduced and the company reduced its workforce by 32 employees. Labour costs were the company’s main costs.
He told the Tribunal that the claimant had been working four days per week in a management role and one day per week as a dispensing pharmacist. He (the witness) discussed the claimant’s role with the company’s financial controller in the summer of 2013. He gave evidence that the claimant’s role as a pharmacist working in a management position was of no value to the company, his position could no longer be sustained and it was a residue from the pre-recessionary period. The claimant’s role was unclear; he was not reporting to anybody and was not contributing to anything. His work related to only minor items that had no impact on the company. He was occupying a non-existent position in the pharmacy chain.
He met with the claimant on 8 January 2014 in order to commence a redundancy process. He informed the claimant that he was considering making his position redundant and told him that he would be entitled to statutory redundancy. If the claimant did not want to accept this proposal, he offered the claimant a position of supervising pharmacist. This role differed to the management pharmacist’s role in that it would involve Saturday work and some Sunday work. The new role carried a salary of €70,000 per annum plus a pension contribution of 5%. The claimant had previously been earning approximately €92,340 per annum plus a pension contribution of €855 per month.
A series of correspondence was subsequently exchanged between the parties in relation to the matter but ultimately the claimant did not accept the offer of a supervising pharmacist role, and he was made redundant in March 2014. His position was not replaced in the company.
The witness accepted that he had a firm discussion with the claimant on 3 December 2013. This discussion related to products on sale on a website. He told the claimant that the matter had nothing to do with him (the claimant), and the matter was being handled by an outside company. He gave evidence that the claimant was arrogant and threatening during the discussion and demanded that the website be closed down. He accepted that he called the claimant mad and stupid during the exchange but denied that this influenced him in any way in making the claimant’s position redundant.
He did not accept that the roles of an employee (DC) and the claimant were comparable. He described their roles as totally different. He gave evidence that DC is not doing a central management role. He liaises with the pharmacies on minor issues, but the majority of his work is dispensing. He spends 25 hours per week in a dispensing role and 15 hours per week in a management/liaison role. The cost of dispensing did not increase and so the witness believed DC was doing what had been agreed and perhaps the time sheets were wrong.
He was incredulous that the claimant would query if there was actually a supervising pharmacist position available. He had employed thousands of people in his career and no one had queried whether there was an actual position to be filled. It was for him to ensure there was a position. He believed the claimant simply did not want to accept the position. The claimant would not accept any position other than the one he had. The witness did not believe the claimant had managerial ability.
He described the meeting on 8th January as ‘a simple discussion’. He had prepared the letter prior to the meeting. He denied that this demonstrated pre-judgement of the redundancy. He was open to discussion with the claimant. After the meeting, which he agreed was ‘not long’ but disputed was as short as five minutes, he decided to give the letter to the claimant as the discussion had not changed his mind. The claimant was upset after the meeting and the witness informed the office staff that it was because of a redundancy situation.
He denied ever refusing any of the claimant’s calls. He was a busy man with interests in different companies. He preferred to have letters directed through the Financial Controller so that he could deal with them while he was in Dublin. He did not accept that the claimant fulfilled the duties he described in his letter of 22nd January 2014. The claimant was failing to report and he described the claimant as very difficult to find. He did not raise this with the claimant in writing as he preferred to have chats with employees and contended that he did have some chats with the claimant. The witness had more important things to do. He had to take it into cost restructuring.
The claimant’s access to the office system was removed as there was a concern that the claimant was taking sensitive information. He did not query this with the claimant. The witness denied that he had given a direct instruction for his access to be removed. He asked DC to ‘protect’ the company ‘from damage’ and DC may have considered this to have been an instruction to remove the claimant’s access. The claimant was not happy after the redundancy process began and created huge problems in the office. Office employees were unhappy and threatening to leave. The witness believed the claimant was trying to provoke another row. The witness denied instructing that the claimant’s Citrix access be removed, which occurred on 5th March 2014. He did not know what Citrix was.
He contended that he gave the claimant the financial information he had requested, but the claimant wanted more which was not available. The estimates he was working with for 2013/14 were optimistic. In reality there were no earnings before interest, taxes, depreciation and amortization (EBITDA) in 2013 and no profit. The witness had not taken a salary from the company in 7 years.
He believed he was entitled to put the claimant on garden leave. In the letter of notification of redundancy on 11th March 2014 the witness notified the claimant of an assistant pharmacist position which had been advertised. He offered the claimant the opportunity to apply for this role through the normal recruitment process. The claimant did not apply and this position was filled.
He wrote to the claimant after the dismissal to notify him that his grievance was not being pursued as he was no longer with the company.
The Financial Controller gave evidence that he recalled being involved in general discussions around cost-cutting measures in August 2013. Staff had already accepted substantial pay cuts in 2009 and a number of pharmacies were sold in 2007. However, salaries remained the biggest cost to the company. The company emerged from examinership in early 2013 but the problems that caused the examinership still existed such as cash flow and profitability issues.
From August 2013 onwards, the Financial Controller continually stressed to the Managing Director that the company needed to reduce costs and they considered various options to bring this about. For example, the Managing Director initially tried to reduce pharmacy hours in an attempt to reduce costs.
The Financial Controller’s evidence was that he did not know what the claimant’s role was nor could he see the necessity of his role. During the two month process from January to March 2014, when the claimant’s position was made redundant, the workplace was unbearable. The Financial Controller received complaints from staff that the claimant was seeking information to which he was not entitled.
In relation to the company accounts for 2013, the Financial Controller stated that not all of the figures on the profit and loss account for year ending 31st December 2013 were known at the time of January 2014. It was also the first full year of trading since emerging from examinership. The company needed to achieve EBITDA of €1 million approximately. The group EBITDA subsequently reduced in 2014 as did sales.
During cross-examination it was put to the witness that the company accounts did not tally with the document produced by the Managing Director. The Financial Controller did not know where the Managing Director’s figures had originated.
It was also put to the witness that the accounts did not include pharmacies in the North of Ireland which had a positive EBITDA but he replied that EBITDA was not material. He added that the majority of the income came from the dispensing shops and the pharmacies in the North did not affect the EBITDA figure.
The Financial Controller met the claimant on the 20th March and provided him with his redundancy and holiday pay. He enquired if the claimant was taking up the pharmacy position that was offered. In the end a pharmacist was transferred from Limerick to fulfil this role.
A computer consultant gave evidence that he overheard the argument between the claimant and the Managing Director on the 3rd December 2013. He later heard the Managing Director place a telephone call to the claimant reassuring him that they would “move on” from their disagreement.
The computer consultant also gave evidence that the pharmacy dispensing computer system was logged on to 15 times between December 2013 and March 2014. The claimant had logged on 14 of those 15 occasions.
As part of his remit he was asked to design the company’s website and populate it with products. The Managing Director provided him with the information content for the website. During cross-examination the witness confirmed subsequently receiving an email from DS of the respondent company to remove items from the website.
DC gave evidence that he is located in one retail outlet which operates a pharmacy, a retail medical appliance store and a mastectomy clinic. Between 2005 and 2012 DC was superintendent of pharmacy.
During 2012 he was asked by the Managing Director if he would be interested in taking on extra responsibility to which he agreed. The Managing Director wanted him to use a portion of time (15 hours) to visit the various shop premises.
In April 2012 he attended a meeting with the claimant and the Managing Director. The Managing Director provided DC and the claimant with details of their duties going forward. DC’s role was to communicate the company’s policies, emanating from the Managing Director and the claimant, to the various pharmacies. They each had a clear outline of their various duties and the claimant’s entailed dealing with suppliers and managing margins.
A number of documents were opened to the Tribunal which detailed DC’s dispensing time in the shop premises in which he was based during 2013 and 2014. The documents showed an increase in DC’s dispensing hours in 2014 and he attributed this to the departure of a support pharmacist whose hours he had to cover. He also added that the hours were not all strictly dispensing as he may also have been dealing with paperwork and other duties during those hours.
In or around the time the claimant’s position was being made redundant DC recalled receiving a telephone call from the Managing Director who stated that with regard to the claimant “the company needed to be protected.” DC subsequently ensured that the claimant’s Citrix access was removed.
During cross-examination it was put to the witness that he had carried out a considerable amount of management hours during the period of September to December 2013 when redundancy was being considered but yet his management hours had reduced in 2014 according to the timesheets. DC confirmed he had a conversation with the claimant on the 5th February 2014 in which he told the claimant that the Managing Director had said to DC, to remember that he was only working 1.5 days on management duties. It was also put to DC that he had told the claimant that he was carrying out three days dispensing over two weeks and the rest of his time was spent on management duties. DC recalled the claimant being anxious to meet and when they met DC reassured the claimant that he was not doing his job and the claimant accepted that.
DC confirmed he was the supervising pharmacist in the retail unit where the claimant was offered a position as an alternative to redundancy. DC believed that the company were considering buying another pharmacy at that time. DC was also aware that CL, another pharmacist would be leaving the company once he had completed his MBA.
During re-examination DC was asked when he became aware that CL was leaving the company. This question was formally objected to by the claimant’s representative on grounds that it was not put to CL when he was interposed to give evidence.
The Tribunal allowed the question and DC stated that he was aware CL was leaving as it was well known that he was undertaking an MBA. During cross-examination on this matter DC confirmed that CL had neither resigned nor told the Managing Director that he would be resigning. However, he was certain that it was known to the Managing Director as DC told him that CL may well “jump ship.” It was put to the witness that CL did not leave until ten months later and that he was still in his position when his position was offered to the claimant and the witness agreed.
Claimant’s case:
It was the claimant’s evidence that he was employed with the respondent since achieving his qualification and registering as a pharmacist in 1995. During his employment the claimant was involved in a number of acquisitions and also putting the “company stamp” on the businesses once they had been acquired. He also acted as area manager for a number of stores and travelled to the stores to ensure central policy was being implemented.
The number of pharmacies later reduced and a number of shareholders departed. The Managing Director decided to “beef up” central management and the claimant was offered an increased role and a €20,000 increase in salary. However, the cost basis spiralled out of control and a 15% pay cut to salaries was recommended and implemented in two phases.
Following the period of examinership the Managing Director approached the claimant in April 2012 and asked him to transfer the license to the new company for the wholesale business. The claimant rewrote the quality documentation and submitted it to the Irish Medicines Board and was listed as the responsible person, as he was qualified to do so.
The General Manager’s position was vacant. The claimant recalled the meeting where the Managing Director divided up the duties of the General Manager’s role. The Managing Director had suggested DC help with central management and the claimant agreed.
In the six months leading to December 2013 the claimant carried out extensive work regarding over-the-counter medicines and the standardisation of the pharmacies in the group. The product range was re-visited during 2013 and the Managing Director told the claimant that a website was being developed.
When the claimant viewed the completed website he saw a number of restricted pharmacy items were on sale on the website. The claimant realised that the matter needed to be resolved quickly and on the 3rd December 2013 he spoke to the Managing Director about the matter and informed him that the company was in breach of regulations. The Managing Director refuted this stating “everyone does it.” The claimant queried where the products were being issued from but was told that it was a separate company and had nothing to do with him. The claimant insisted that it did concern him if the products were stored in the warehouse registered with the Irish Medicines Board for the wholesale business; as members of the public could not be sold products directly from the warehouse. As the responsible person named on the paperwork this could have resulted in repercussions for the claimant. The claimant insisted that the website must be taken down but the Managing Director became irate and told the claimant that would destroy the company. The claimant was also concerned for the professional integrity of the pharmacies involved.
The claimant subsequently emailed DS of the respondent company and listed the 31 products that he had identified on the website that needed to be removed. On the 17th December the claimant again addressed the issue with the Managing Director as the matter was not resolved but the Managing Director insisted there was no problem with the website.
When the claimant attended the meeting on the 8th January 2014 the Managing Director asked him if he realised what his salary was, that the company could no longer afford to pay it and that his position was being made redundant. The alternative offer of work as a pharmacist was put to him. However, subsequently the claimant received a letter of the same date which stated that the company was “considering” making his position redundant and outlining the options open to him.
The claimant raised the issue that his position was selected for redundancy after he had raised the website issue with the Managing Director. Inter-party correspondence ensued for a period of time thereafter. The claimant had tried unsuccessfully to contact the Managing Director by telephone on a number of occasions and due to this he was forced to raise his concerns in written correspondence. He raised the issue that DC was the last person to become involved in central management and that his position should have been considered for redundancy. The claimant also sought to invoke the company’s grievance procedure.
On 25th February 2014 the claimant’s computer access was denied when he attempted to log on. He confirmed logging on to the computer system a number of times. It was part of his role to link products to suppliers and promote various generic brands on the system.
When he met the Managing Director on the 26th February 2014 the claimant sought the financial information on which the decision was taken to make his position redundant but the information provided was very scant. The claimant was taken aback given his 19 years’ service to the company when the Managing Director commented that he did not know what the claimant had contributed to the company.
When the claimant received the notice of redundancy he wrote to the Managing Director asking him to telephone but he heard nothing further. In addition the grievance that he had raised was not investigated on the basis that his position was redundant.
The claimant gave evidence of loss and efforts to mitigate that loss. He outlined that he had enquired as to what entity would be his employer if he accepted the alternative position as he did not want to be employed by a holding company which did not have a pharmacy license. The claimant also spoke with both CL and DC and he knew that there was no available position at that time. The claimant did not accept the alternative role offered as he did not believe the role existed and the company did not engage with him with a view to exploring alternatives to redundancy.
During cross-examination it was put to the claimant that the contents of the letter dated the 8th January 2014 show that a final decision regarding redundancy had not been taken at that time. The claimant replied that the letter was at odds with what had actually been said to him at the meeting.
CL gave evidence that he was employed by the respondent as a supervising pharmacist. He confirmed that his position was not available at the time that the claimant’s position was selected for redundancy. Another manager attended a meeting with the Managing Director in December 2013 and she told CL afterwards that the claimant’s position was going to be made redundant.
CL understood DC to have a central management role in the company. The claimant’s work regarding generic substitutions was carried out by DC after the claimant’s employment ended. CL believed the instruction for this came from management.
Determination:
Having carefully considered the evidence adduced by both parties the Tribunal is satisfied that a genuine redundancy situation existed in relation to the claimant’s position. It is evident that the company was under immense financial pressure having just emerged from examinership. It was necessary for the company to reduce costs and that entailed selecting the claimant’s position for redundancy. The offers of alternative positions were not accepted by the claimant. The claim under the Unfair Dismissals Acts, 1977 to 2007, fails.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)