ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00000505

Complaint(s)/Dispute(s) for Resolution:

Date of Adjudication Hearing: 26/02/2016

Workplace Relations Commission Adjudication Officer: Marguerite Buckley

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 8(1B) of the Unfair Dismissals Act, 1977 following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).

Respondent’s Submission and Presentation:

1. The Complainant commenced working for the Respondent on the 17^th of November 2013. Initially he was employed as a labourer but in April 2014 his apprenticeship papers for Solas (The Further Education and Training Authority) were signed. He was apprenticed as an apprentice carpenter. His pay commenced at €223.47 gross per week and increased as per the Solas guidelines on apprentice pay to €335.79 at the time of the termination of his employment. He worked forty hours a week 8am to 5pm.

2. The fact of      dismissal was not in dispute.

3. The Respondent      managing director gave evidence that

3.1. The Respondent was a building company. They were registered on the small builders’ panel with a city council and worked in every area of the city. The respondent was company number 3 on the small builders’ panel. The Respondent had thirty one employees including six Solas trainees in August 2015.

3.2. The Respondent was made aware that the city council was winding down the small builders’ panel and intended to run a new tender process to start a new panel. The managing director gave evidence that the respondent was placed on the new panel six points below its previous position on the old panel.

3.3. He had worked with the Respondent’s accountant and quantity surveyor on restructuring the Respondent however it was made clear to him by the advisors that he had to cut the number of staff employed by the Respondent.

3.4. On the 25^th of August 2015 he called a meeting of the Respondent’s staff. The meeting lasted around half an hour. The staff were handed a letter from the Respondent. It was discussed at the meeting that there would be redundancies. It was mentioned that the respondent had engaged a HR Consultant. There was no mention as to how the selection process for redundancies would be made. The staff were allowed to ask questions.

3.5. The written notice given to the staff was as follows:

Date 25^th of August 2015

RE: Protective Notice

Dear ­­­­­­­­­­______________,

Due to the current economic conditions, I am forced to issue you with protection notice. From the 25^th of August 2015 you will be working on a day-to-day basis until further notice. Unfortunately this was a necessary measure for the company at this time. You will be kept informed of relevant developments and a return to normal operations will be made as soon as circumstances permit.

If you have any questions please do not hesitate to contact me in the office at any time.

Yours sincerely,

_______________________

Managing Director

3.6. The Managing director produced a redundancy selection matrix at the hearing. The managing director confirmed that he was provided this matrix form by the HR consultant the Respondent had engaged. He confirmed that the categories of the redundancy matrix had not been discussed with the Respondent’s staff. The Managing Director gave evidence that he assessed the thirty one staff members himself and the training officer “behind the scenes”.

3.7. The categories of the matrix were as follows:

Satisfactory Levels 1-5

1 = very unsatisfactory, 2 = unsatisfactory, 3 = satisfactory, 4 = very satisfactory, 5 = excellent

3.8. The table provided the names of 31 employees and their rating across the different categories. 

3.9. Under cross examination the managing director admitted that:

a. employee number 3 on the completed matrix had left a number of weeks before the redundancy process took place

b. employee number 16 was only employed by the company for summer work and

c. employee number 32 was not on the selection matrix. He was an apprentice and was in training in college with Solas at the time.

d. that there was no discussion or consultation about the matrix contents or how the scoring would be carried out with the staff.

3.10. He gave evidence that it was the toughest thing that he ever had to do and he tried to do so in a fair manner in accordance with “industry norms”. By the end of the process, eleven employees had been selected to be made redundant. Two of these employee number 3 and number 16 are referred to above. Employees’ number 26 and 27 were brothers of the managing director.

3.12. The Complainant scored the lowest of all the employees under the redundancy selection matrix. He scored twelve out of a possible thirty.

3.13. There was a dispute as to how this was communicated to the Complainant.

3.14. The training officer of the Respondent gave evidence that he was given the task of letting the Complainant know that his employment was terminating. Initially his evidence was that he couldn’t remember whether it was by meeting the Complainant in person or by telephone call. He later clarified that he wouldn’t have done so over the phone. He gave evidence that he had responsibility to contact half of the staff that were being made redundant and to notify them. He didn’t notify all of the staff on one day; some of the other staff were being retained for a longer time than the Complainant.

 
3.15. He gave evidence that on the 31st August 2015 he handed the Complainant the letter that was typed and signed by the office manager which read as follows:

Dear __________

Unfortunately I must inform you that as of the 31^st of August 2015 I will no longer have enough work to sustain the role of apprentice carpenter performed by you in our employment and will therefore have to terminate your employment. Your P45 will be posted as will a final payslip which will show one week’s salary in lieu of notice and all monies owed to you pertaining to your employment with [the Respondent]

Thank you for all your hard work and dedication during your employment with [the Respondent]

Yours sincerely,

___________________

Office manager

3.16. The managing director confirmed that there was no right of appeal. He said if there were any issues, the staff concerned would have contacted him directly.

3.17. It was submitted that all other alternatives to redundancy were discussed by the management team before proceeding with making staff redundant. No examples of the other alternatives were given.

3.18. The Respondent submitted that it had acted reasonably at all times and that the redundancy of the complainant was genuine as a result of the economic downturn. The Respondent submitted that the consultation(s) that took place were among management and the company acted on the advice of its accountant as the company was then operating at a loss. The managing director submitted that the redundancies were put in place to ensure the continued survival of the company.

3.19. The managing director confirmed that he had made no contact with Solas to advise them of the termination of the complainant’s employment or to see if another training contract could be obtained for the complainant.

3.20. When questioned, the managing director stated that he did not consider laying off the staff temporarily. He said that he had discussed it with the HR consultant but decided that redundancy “best suited the business plan going forward”.

3.21. He said that there were no alternatives to making the staff redundant. He had a number of meetings with his accountants and HR advisor. Relocation was not an option for the staff.

3.22. He confirmed there was only fifteen staff currently working for the Respondent.

Complainant’s Submission and Presentation:

4.1. The Complainants evidence was that at 4.30 pm on the 31^st of August 2015 he received a phone call from his foreman (also the training officer) who told him that the managing director had made a decision to let him go.

4.2. The Complainant stated that he requested confirmation of the termination of employment in writing. The letter dated the 31^st of August 2015 was not given to him by hand on that day but was posted at a later time.

4.3. He produced an email setting out his request for his P45 and final payslip. These were emailed to him on the 4^th of September 2015.

4.4. His claim was that it was unfair that he was the first person to be let go from the company and that fair procedures were not followed in regard to his dismissal.

4.5. Counsel for the complainant referred to case law from the Employment Appeals Tribunal on how consultation is a required component of fair procedures.

Decision:

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) 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.

5.1. In reaching my decision I have taken into account all of the submissions, oral and written, made to me in the course of my investigation as well as the evidence presented at the hearing.

5.2. Section 6 of the Unfair Dismissals Act 1977 puts the burden of proof squarely on the Respondent.

6. Unfair dismissal

(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.

Section 6(4) goes on to state

6(4) 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 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.

5.3. The definition of redundancy is found in Section 7(2) of the Redundancy Payments Act 1967-2003 as amended:

"[A]n employee who is dismissed shall be taken to be dismissed by reason of redundancy if 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 work 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 has been employed (or had been doing before his dismissal) - to be done by other employees or otherwise, or

(d) The fact that his employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) - should henceforward 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 has been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained."

5.4. Section (7) of the Unfair Dismissals Act 1977 (as amended) reinforces the concept of procedural fairness which the Employment Appeals Tribunal had developed since the Unfair Dismissals Act enactment and which requires that the employer establish not only that it had substantial grounds justifying dismissal but also that it followed fair and proper procedures before dismissal.

Section 7.   Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so—

(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal

5.5. Section 5 of the Unfair Dismissals (Amendment) Act 1993 provides, inter alia, 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.

5.6. The onus is placed on the Respondent to justify the dismissal and where the Respondent seeks to rely on the redundancy defence, the following criteria must be met:

• A genuine redundancy situation must have arisen
• The dismissal resulted wholly or mainly from that redundancy      situation and
• The employee made redundant was fairly selected

5.7. While the Unfair Dismissals Acts do not impose a statutory obligation on an employer to consult with employees, it is clear from the decisions of the Employment Appeals Tribunal that there is a duty to consult encompassed in the overall duty to act reasonably. A reasonable employer should therefore:

-        Give as much advanced warning as possible of a proposed redundancy

-        Set out in writing the objective selection criteria

-        Apply the selection criteria consistently and

-        Consult and explore alternatives to the redundancies

5.8. The Employment Appeals Tribunal stated in the case of UD/993/2009 that:

“In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedures may lead to the conclusion that an unfair selection for redundancy had taken place.”

5.9. In this case, I find that while certain elements of a redundancy selection process were followed, the process was carried out by management on their own, without any element of consultation with the complainant or his co-workers.

5.10. As the Respondent made a number of errors in the selection process (such as including an employee in the process who had voluntarily left and excluding an apprentice employed at the time but who was attending an off the job training phase) is particularly damning of the process undertaken. Had there been a consultation element to the redundancy selection process, the complainant or another member of staff may well have raised these issues with the Respondent and same could have been rectified as part of the process.

5.11. The remedies available to award to the complainant are re-instatement, re-engagement or compensation for the actual financial loss attributable to the dismissal up to a maximum of 104 weeks’ remuneration. I have been provided with the views of both parties as to the preferred remedy and consider compensation to be the most appropriate remedy.

5.12 The complainant is under an obligation to mitigate his loss by actively seeking alternative employment. I have reviewed the efforts that the complainant made to seek employment a further apprenticeship / training contract. I am satisfied that the complainant made efforts to mitigate his loss.

5.13. Overall, I find that on the balance of probabilities there was a genuine redundancy situation however the selection process was flawed. There was an absence of consultation both before and during the process with the complainant and his co-workers.   In this case neither the selection criteria nor the list of employees in the selection process was known to the complainant and the first time he was presented with this information was at the hearing of the case.  

5.14. No matter how small an organisation, or the number of staff being made redundant, the complainant should have been asked to provide his input into the decision making process before the final decision to make his position redundant was made.

5.15. There is a heavy onus on the employer to prove that his act is reasonably and fairly towards the employee selected for redundancy.

5.16. The complainant as an apprentice carpenter was in a particularly vulnerable employment position and without his employment with the Respondent, was not in a position to complete his Solas apprenticeship, qualify as a carpenter and progress his career. The claimant described his career as ‘stalled’ at present and he was unsure if he would ever progress to Phase 4 of his Carpentry and Joinery Solas apprenticeship. In view of the fact that the respondent did not contact Solas or make an effort to arrange an alternative training contract for the complainant, I cannot describe this as acting reasonably.   In this case, I find the Respondent failed to do so.

5.17. Therefore I find that the complainant’s dismissal was unfair and I award him €7,500.00 in respect of same.

Dated 25^th May 2016