ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00002178
Complaint for Resolution:
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00002959-001 | 01/03/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00002959-002 | 01/03/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997 | CA-00002959-003 | 01/03/2016 |
Venue: WRC Tom Johnson House, Haddington Rd, Dublin 4.
Date of Adjudication Hearing: 07/06/2016
Workplace Relations Commission Adjudication Officer: Eugene Hanly
Procedure:
In accordance with Section 41(4) of the Workplace Relations Act, 2015 [and/or Section 8(1B) of the Unfair Dismissals Act, 1977following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
Background
The Complainant was employed as Sales & Commercial Manager from 20th September 1994 to 8th October 2015. He was paid €7,221.97 per month. He has claimed that he was unfairly selected for redundancy and he has sought compensation.
The claims under Terms of Employment (Information) Act - CA-00002959-002 and the Organisation of Working Time Act - CA-00002959-003 were withdrawn.
Respondent’s Submission and Presentation:
The business operated sales and delivery functions through two offices in Northern Ireland and one in Dublin. The Complainant was employed in the Dublin Office. The greater proportion of sales was handled through the Northern Ireland offices. There were five employees in the Dublin Office. The business suffered trading losses in 2014/15 (details supplied). Northern Ireland offices were accounting for 60% of the business. The transport costs were also significantly more expensive in the Republic of Ireland. Sales costs in Dublin were 25% higher than in Northern Ireland. In order to address this problem it was proposed to consolidate the Irish business north and south in favour of Northern Ireland. A proposal to close the Dublin office was made to the five employees on 4th June 2015. Thereon the Respondent engaged in a comprehensive and detailed consultation process both individually and collectively, explaining the rationale for the decision to close and looked for alternatives to the closure including seeking alternative business proposals. This was confirmed in writing to all employees. On 9th June the General Manager held one to one meetings and a group discussion with the five employees. Following this a Q&A document was circulated. This was updated following a second meeting on 16th June 2015. Throughout the consultation process the Complainant was encouraged to put forward any alternative proposal to achieve the necessary cost savings without closing the Dublin Office. The Complainant emailed projected gross profit figures for an 18 month period to December 2016 he did not forward any substance or rationale for these figures and how they could be achieved. The Respondent then made the final decision to close the Dublin office. This led to the redundancy of all five employees. This was communicated individually and collectively on 7th July 2015 and was confirmed in writing. He was given the right to appeal this decision within five working days. He requested an extension to the time limit and this was given but he did not appeal the decision.
It is their position that sustained and significant trading losses across the island of Ireland made consolidation imperative. The logical decision was to consolidate the business in Northern Ireland as most of its business is based there. It was decided to focus on the bigger accounts. The sales strategy was to move away from Dublin. Since the redundancy and the closure of the Dublin office this is what has happened. So there was a genuine redundancy. They endeavoured to apply the correct procedures. This complaint is rejected.
Complainant’s Submission and Presentation:
The Complainant was unfairly dismissed as the Complainant did not accept that the notice for redundancy was genuine. The Complainant refers to the following; The Complainant Commenced employment in September 1994 and the Respondent purchased it in May 2012. Termination date is 8th October 2016 1. Company did not provide a Contract of the Complainants Terms of Employment. 2. The Complainant wishes to Claim Unfair Dismissal and the Complainant has more than 12 months service. The Complainant relies on Section 13 of The Unfair Dismissal Act 1997 as the United Kingdom is part of the Convention of Law applicable to Contractual Obligations which became law in Ireland through the Contractual Obligations (Applicable Law) Act 1991 and the Complainant under Article 6 of the Convention chooses the Republic of Ireland as the Applicable Law and intends to proceed thereon. 3. On 4th June 2015 when issuing the Company Statement referring to the Proposal to close Dublin, the Company, issued a copy of the Republic of Ireland Section of the Companies May Opcon. The Opcon sheet shows performance v targets and projections. This sheet also showed a figure for Redundancies, which was exactly the figure The Company would have anticipated. This sheet was dated 25th May 2015 before the Complainant was informed. The decision was already made. 4. The Company failed to recognise or discuss previous achievements where the Complainant had overcome many bleak situations and turn them into Profitable situations. Not least of these was in 2009/10. This event and Contract has been a major contribution to the Company’s success to the day the Complainant was dismissed. The Company has actually without consulting with the Complainant during this period has Increased business with this Client and increased their exposure. Two things the Complainant was not allowed to do in the previous six months. This also reflects on the basis for any consideration of the performance or otherwise on the Republic of Ireland Section of the Company. 5. The Complainant has a Lost orders list of up to 9300t of material, conservative estimated value over £4million, between January and May 2105. If the Complainant and his team were afforded the facility to compete, the company could have easily expected 40 to 50% of these lost opportunities give the temporary nature of the losses. 6. The loses that the Company proffered and ultimately blamed the Republic of Ireland Sales Section of the Company on are based on a very short period of time, mainly 3 months March, April and May. When one considers that the Complainant was prohibited from selling at Market prices, prohibited from delivering to many areas unless achieving extra transport charges. The Company refused to move its High Cost Stock this actually cost the Company more in the long run. Steel costs reduced by £60/t between January and June 2015. If the Republic of Ireland Section of the Company had of sold steel at £20/25 per tonne loss, and not always that much, the Company would have reduced its loses. This is not Hindsight as the Complainant had suggested that Republic of Ireland Sales Section of the Company do this in February 2015. 7. These loses were bolstered by the Company with monies from a Reserve that the Irish business had built up. £120,000 (approx.) appears to have been reinserted into our 2015 accounts. It also appears that the Northern Ireland Sector of the Irish business received about £96,000 (80%) of this and the balance £24,000 (20%) went into the Republic of Ireland Sector. Creating an deliberate unreal imbalance vis-a-vis, the Companies Republic of Ireland Sector and the Northern Ireland Sector. 8. In 2014 the Company had recruited a Sales Manager for Northern Ireland Section of the Company. This exemplifies the lack of consideration and proper criteria in redundancy within the Company when the Company proposed redundancy to the Complainant after 21 years’ service for the Company. This Sales Manager is very active in Republic of Ireland Sales to date. 9. Company took a Contract for £700,000 approx, from a Republic of Ireland customer two days before making their announcement in the Dublin Office on 4th June 15. This Contract was taken @ €600 a ton, a price the Republic of Ireland Section of the Company were not allowed to do for the previous 6 months. The Complainant knew this because he was the one who negotiated the Contract. When asked why the Company could suddenly do this price the Republic of Ireland Sales Section of the Company received no reply. A further Example of the pre-orchestrated and design to reduce the Republic of Ireland Sector without fair comparison to other sections of the Company 10. The Company employed a Sales Manager in the Northern Ireland Section of the Company towards the latter part of 2014. This Person along with 2 others from the Company are also now very active in Republic of Ireland sales Section having displaced the Complainant. 11. The Sales in the Republic of Ireland Section has been passed on to the Northern Ireland Section. The Company never explained to the Complainant, when asked, how they had the time to do this and that if they had time Why was there no proposals to even consider redundancies in the Northern Ireland office. It is clear no consideration was given to same, to the detriment of the Complainant. 12. According to the above but not limited to same the Northern Ireland Section of the Company increased its level of staff in order to deal with business in the Republic of Ireland. The Company refused to give the Complainant any information regarding how they were going to deal with the Republic of Ireland Section of the Company. 13. The Complainant had monthly Management meetings. The last one the Complainant was informed of was in April 2015 which the Complainant attended. The Complainant was not informed of subsequent meetings; it now appears same was deliberate in order to avoid any consultation with the Complainant. 14. The Companies Commercial Director whom the Complainant shared many phone conversations per month up until March 2015 only spoke to the Complainant on one occasion since then and that was concerning the Client mentioned earlier regarding the Company’s exposure to them. He told the Complainant that he would have no more to do with it that it was now X’s responsibility. His manner and tone left the Complainant believing that he did not want to converse with the Complainant on any issue. This was also demonstrated by the fact that the Complainant received no emails from him for a number of months prior to the redundancy announcement, except for cumulative emails. 15. An Annual salary review was completed every February 2015. Even if the Company did not offer a raise they would issue a statement explaining why. The Complainant would have expected. The Complainant believes some if not all members of staff in the Northern Ireland section of the Company received a raise. 16. The Complainant does not believe that the Criteria, Selection or Proper Consultation process was afforded to him. In fact the Complainant believes the process to have been not impartial, intimidating and per-ordained. An opinion only reinforced by a number of statements made by X during the process. Some examples; When first asked What Criteria was used to reach this Proposal? His reply was “NONE”. When first asked What was the selection process? He responded “ Full or Partial closure of the Dublin Office. ”Another question “What other Alternatives were examined?” Reply no other alternatives were considered. Other comments made where “ Reversing this decision would be like pushing water up a hill” “The only way this decision will be reversed is by a Miracle.” 17. During one meeting when X refused to give the Complainant information based on a very serious Allegation stating that “ The reason I won’t give Confidential information is that Someone in this office has given Confidential information to an opposition Company.” the Complainant strongly refuted this allegation and demanded him to substantiate it. He was unable to do so and attempted to dismiss it and move on. The Complainant asked, on the basis that his allegation was unfounded and untrue, that he now furnish the information requested, He refused. 18. X made several personal attacks on the Complainant throughout the process. All of which were replied to the point where he accepted the Complainants versions. 19. On the June 4th 2015, X arrived in the Dublin office to inform the Staff that there was a Proposal to close the Dublin office and make 5 people redundant. During his announcement he stated that it was due to losses over the last 3 months (March to May) which were mostly associated with the South sales. X wrongly and unfairly alleged that part of the blame for this was attributed to the Complainant personally as he stated “That a fair proportion of the blame lay at the Complainants door ” On requesting how he came to that conclusion he stated “That the Complainant did nothing to prevent the situation and that the Complainant had come up with no ideas or suggestions to help. He pointed his finger at the Complainant and told him that he had done nothing to help the Company” When the Complainant reminded him of the suggestions that he had made, he agreed that they were made. The Complainant then asked him what the Company had done to help. At this point he told the Complainant that he had no right to ask that question. In the interest of obtaining an answer the Complainant asked a colleague to ask the same question. Despite repeating this question he never answered it. 20. All Dublin Office access to information was turned off by 9 am the following morning (04/02/2015). After discussion between the Complainant and IT, the Complainant was informed that this was done by instruction from X. The Complainant never received any notes from the 4th June 2015 meeting other than the document with the announcement he presented to the Complainant on the day. 21. On the 9th June 2015 X and HR turned up 40 minutes late. It was agreed to have a Group meeting as the staff all had the same general questions and it was thought that answering them collectively would save time and repetition. This was agreed on the basis that the Complainant and other staff each had a personal Consultation afterwards. No notes were ever furnished for the Group Meetings. All notes received by the Complainant from his personal consultation meetings were disputed both verbally and in writing. They did not reflect nor represent what was said at these meetings and in some cases were incorrect factually. 22. Counter Proposal Meeting 30th June: The Complainant supplied a counter proposal on 24th June 15 despite having the document for over 4 days X managed to misinterpret the figures by a substantial amount(over £1 million) and before realising his mistake informed the Complainant and other employees of the Dublin Office that their Proposal was unacceptable and that he was recommending that the Closure proceed. When the mistake was pointed out to him he stated that it made no difference to his view. He was actually asked this question FOUR times before he answered it. 23. Counter Proposal Meeting 30th June. X at one point, during this meeting informed the Office that the Complainant was being made redundant right now. He then requested, from HR that they formally make the Complainant redundant immediately. With this he closed his book and put it away. HR informed him that this could not be done. He then asked could he postpone the meeting for an hour or so until they could obtain the authority to proceed with the redundancies. At this juncture he stated that he was removing himself from the meeting process despite the fact that there was a date set for the Final meeting the following week. When HR suggested we could avail of a Personal Consultation after this meeting. X sniggered at these suggestions. 25. The Company has and was even before the Complainant was dismissed offering Material at Market rates to Customers in the Republic of Ireland. In recent Months it has been cited as the being Market Leader in Price reductions. 26. On the 7th July the Dublin Office was unceremoniously closed and the Complainant and all staff dismissed. The Complainants termination date was 8th October 2016 Accordingly the Notification of the 4th June 2015 of Redundancy without criteria or selection process across employer. and Meetings arranged upon request only, dated 9th June 2015 and 19th June 2015, No proper consultation or consideration of employees proposals .Northern Ireland Section of the Company were not considered for Redundancy now operating Republic of Ireland branch of employer |
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It is his position that the redundancy was not genuine and the Respondent’s conduct was unfair.
Proper procedures were not applied. Had proper notes on meeting been maintained then miscommunication would have been avoided. There were accusations made against him and he was not given the opportunity to defend himself. He was unable to particularise his proposals because he was denied access to the company’s computer. Suitable alternatives to redundancy were not properly explored, e.eg salary cut, reduced hours, unpaid leave. He didn’t get the notification of appeal until the actual day of the appeal. He got a job on 23rd November 2015 earning over €20,000 per annum less. His total loss has been €30,472.82 to date. They cited case law in support, UD/236/1985, UD 56/1994 and UD156/1987. He is seeking compensation.
Issues for Decision
1) Was this a genuine redundancy?
I note the financial data supplied at the hearing.
I note the trading position of the Dublin office versus the Northern Ireland offices.
I note that a reduction of 250 staff has taken place.
I note that the Dublin office was closed and that all the 5 positions were made redundant.
I note that nobody has been recruited to a Dublin office since. I find no reason to doubt the Respondent’s position on the financial problems that they faced.
I accept a business’s right to rationalise its operation.
I find that this was a genuine redundancy.
2) Procedural fairness?
I note that the Respondent announced its proposal to close the Dublin office.
I find that there was no headline meeting to devise a rescue plan beforehand.
I note that the Complainant was aware of the drop in performance and profitability. I do not accept his assertion that this was primarily due to currency fluctuation.
I find that the company ‘proposal’ to close the Dublin office appears to me to have been a decision not a proposal.
I find that the Respondent’s decision to ‘cut off’ access to the IT system was not the actions of someone contemplating looking at alternatives to closure.
I note the conflict of evidence regarding the meetings and notes of meetings.
I find that the efforts to look at alternatives were not thorough enough.
I find that the list of jobs given for consideration were not a reasonable fit.
I note that no relocation of positions to the Northern Ireland offices was offered.
I find that there was no consideration given to reducing wage costs through pay reductions or reduced working hours.
I accept that consultation meetings both individually and collectively were held.
I note that management was eager to press ahead with the redundancies but HR held them off.
I find that the Respondent didn’t properly and fully engage and did not give consultation and looking at alternatives a realistic chance.
On the balance of probability I find that the Respondent decided to close the Dublin office and then proceed with a retroactive process to get onside procedurally.
On the balance of probability I find that the process was procedurally unsound.
Therefore it renders the dismissal by reason of redundancy procedurally unfair.
Decision:
Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint/dispute in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8(1B) of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
For the above stated reasons I have decided that the dismissal was unfair on procedural grounds.
I have decided that the Respondent should pay the Complainant €6,500 in compensation in addition to the statutory redundancy already paid.
This is to be done within six weeks of the date below
Dated: 2nd August 2016