UD458/2015

EMPLOYMENT APPEALS TRIBUNAL

CASE NO.

UD458/2015

CLAIM OF:

Eleanor Cullinan

against

Reagecon Diagnostics Limited

under

UNFAIR DISMISSALS ACTS 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman: Ms. K. T. O'Mahony B.L.

Members: Mr J. Hennessy

Ms H. Murphy

heard this claim at Ennis on 28th April and 5th July 2016

Representation:

Claimant Mr Niall Casey, John Casey & Co, Solicitors, Bindon House, Bindon Street, Ennis, Co Clare

Respondent: John Boylan, B D M Boylan Solicitors, Clarkes Bridge House, Hanover Street, Cork

The determination of the Tribunal was as follows:

Preliminary Issue

The respondent contended that the Tribunal had no jurisdiction to hear the unfair dismissal claim as the claimant, signed an agreement for consideration on 6 February 2015, which contained a full and final settlement clause releasing the respondent from any further liability or litigation, including liability under the Unfair Dismissals Acts 1977 to 2007, in respect of her employment or its termination.

The determination on the preliminary issue, although made before hearing evidence on the substantive issue, is included immediately after the summary of the evidence on both issues.

Summary of Evidence

The claimant started with company in 1999. Friday 6 February 2015 started as a normal busy day in the office. At 2.10pm her manager, who is also the he Human Resource Manager (HRM), phoned inviting her to a meeting and on presenting for the meeting she found that the commercial director was also present. HRM informed her that due to a review and restructure in the business there would be a reduction in headcount in her department and that her position was being made redundant. The claimant was confused as 2014 was the busiest year to date for the company. She was the longest serving of the four employees working in the Order Entry Department (OEM). She knew the customers, their accounts and discounts and wondered why she was selected for redundancy. She asked if there was a problem with her work and if she would get a reference. HRM read through a letter and documentation but the claimant was in a state of shock and although she had a copy of the letter in front of her it was “just words” to her and she was not absorbing its contents. She did not know the meaning of ‘ex-gratia’. She was given the documents to take back to her office and advised to phone her husband. She did not recall being told by HRM to get legal advice.

When she returned to her office she sat at her desk in a state of shock. She printed out some order forms. Her heart was racing. She tried to talk to her husband but he did not answer his mobile phone. She was very much alone. She had been told at the earlier meeting that she was finishing that day. About an hour later she returned to HRM’s office and signed the letter and redundancy forms. She was given cheques in respect of her statutory entitlements and an ex-gratia payment in the sum of €2,500. The cheques had been prepared in advance. The document signed by the claimant on 6 May 2015 contained the following:

“In consideration of the payments received by me from Reagecon I acknowledge that I will become redundant on 3^rd April 2015 and agree to accept the severance terms shown on the attached schedule in full and final settlement, release and discharge of any and all actions claims, contracts, liabilities and agreements (if any) as I may have against Reagecon … whether arising under Statute, common law equity or otherwise arising out of my employment and/or the termination of such employment by reason of redundancy.”

The document then went on to list several employment right statutes including the Unfair Dismissals Acts under which liability was purportedly excluded as well as the following paragraph:

“I acknowledge that I understand the effect and implications of this agreement and confirm and agree that I have been afforded the opportunity of obtaining independent legal advice regarding the contents and effect of this agreement”.

In cross-examination the claimant denied that she was happy or having told HRM that she was happy to sign the documentation. She signed it because she felt she had no choice but to sign. She had been ambushed. She felt a failure. She had never before been in such a situation. Some friends of hers had previously been made redundant but they had been given prior notice of the redundancy.

The claimant had trained in one of the other workers in the department. That worker resigned within a week of the claimant’s redundancy and was replaced by a man. She had not been offered the opportunity to up-skill. There was no indication prior to this that things were bad in the company.

HRM told the Tribunal that following a review in 2014 the Board of Directors decided that certain positions were to be made redundant. The company wanted to up-skill and restructure its workforce and reduce its headcount. The respondent decided not to engage in consultation with those being made redundant. Four were made redundant on this occasion and three others some eight months earlier.

HRM went through a prepared letter and the redundancy documentation with the claimant all the while observing the claimant’s reaction but she did not seem shocked or upset and did not ask any questions. She advised the claimant to get advice and to talk to her husband and gave her the letter and documentation to take back to her office. Within an hour the claimant contacted her requesting a second meeting at which she signed the agreement and redundancy forms and letter and took the two cheques. Shortly thereafter the claimant left the premises. There was nothing personal in her selection for redundancy. The respondent had no suitable alternative position for the claimant. The respondent had 86 employees, 45-50 of whom are engineers. The claimant has not been replaced and her work was absorbed by the team.

Determination on Preliminary Issue

The Tribunal has to determine whether in signing the document/ letter of 6 February 2015 the claimant waived her right to bring a claim under the Unfair Dismissals Acts 1977 to 2007

The relevant document attached to the letter of 6 February 2015 and signed by the claimant contained the following:

The document then went on to list several employment right statutes including the Unfair Dismissals Acts under which liability was purportedly excluded and which contained the

following paragraph: “I acknowledge that I understand the effect and implications of this agreement and confirm and agree that I have been afforded the opportunity of obtaining independent legal advice regarding the contents and effect of this agreement”.

In Hurley v the Royal Yacht Club [1997] ELR 225 Buckley J. in the Circuit Court considered a waiver clause in an agreement in the context of the Unfair Dismissals Acts and having concluded that there must be informed consent to such a waiver later in his judgment set out what this requires:

“I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the employee. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice I find the agreement to be void”

The Tribunal accepts the uncontested evidence of the claimant that she was told at the first meeting on 6 February 2015 that she “was finishing” that day (although the technical date of dismissal was 3 April 2015 when her notice entitlement expired).

The Tribunal unanimously accepts the claimant’s evidence that at and after the 2.10pm meeting on 6 February 2015 the contents of the letter were “just words” to her and that its meaning was lost on her. Having been ambushed by members of management she was in a state of shock and did not absorb the essential facts that she was to get legal advice and that she was signing away her statutory rights. The first meeting took place at 2.10pm and there was no reality to the opportunity, purportedly being afforded to her, to obtain legal advice at mid-afternoon on a Friday. Any sense of fairness would have required in this particular situation that the claimant should have been advised to bring a competent representative with her to the meetings on 6 February or in the alternative have ensured that she had at the very least a few days to decide, it being a Friday afternoon, whether she wanted to sign the documents. Obtaining informed consent is not a matter of rushing through a number of cursory steps but a matter of making a genuine effort to enable the employee to take the necessary steps to realise what she is being asked to do when she signs the document containing a full and final settlement clause.

The Tribunal finds that the claimant’s mind was so overborne with shock when signing the document at the second meeting that she was not capable of giving informed consent to the waiver agreement. Accordingly, the Tribunal finds that it has jurisdiction to hear the claim under the Unfair Dismissals Acts 1977 to 2007.

Determination on Substantive Issue

The claimant, who had worked for the respondent for almost 16 years, was the longest serving employee in the OED department. There was no evidence before the Tribunal to show that the respondent had applied any criteria to selecting the claimant’s position for redundancy. The Tribunal is satisfied that the claimant was arbitrarily selected for redundancy. Accordingly, the dismissal is unfair. The claim under the Unfair Dismissals Acts, 1977 to 2007 succeeds. The Tribunal awards the claimant the sum of €20,000 in compensation under the above Acts. This award is in addition to the amount already paid by the respondent to the claimant relating to the termination of her employment.

Sealed with the Seal of the

Employment Appeals Tribunal

This ________________________

(Sgd.) ________________________

(CHAIRMAN)