ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00002352
Complaint(s)/Dispute(s) 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-00003177-001 | 14/03/2016 |
Date of Adjudication Hearing: 20/09/2016
Workplace Relations Commission Adjudication Officer: Michael McEntee
Procedure:
In accordance with 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).
1: Summary of Respondent’s Submission and Presentation:
The Complainant, the General Manager, was made redundant on the 23rd December 2015 –having been given four weeks notice at a meeting on the 25th November 2015.
The revenue of the Respondent Organisation, (a Representative Body with a national membership) had fallen by €67K since 2012 necessitating a reorganisation.
Accordingly the Board of the Organisation decided that steps needed to be taken to reorganise the business.
This took two principal forms
Staff redundancy of position of General Manager
In a staff of 4 persons the position of General Manager in addition to the Chief Executive Officer was no longer viable.
2. Encourage and secure greater member voluntary participation in the running of the organisation.
This has resulted in many duties formerly carried out by permanent staff now being undertaken by Board /National Executive Members on a Voluntary basis.
A break down of the Complainants duties was presented – these have been allocated among existing staff members or assumed by members of the Board. Payroll was outsourced and invoicing was eliminated by changes in the manner of subscription collection.
Details were given of the four staff members employed at or prior to the date of the redundancy.
The Chief Executive now assumes to himself many of the higher level duties previously undertaken by the Complainant. The running of the Annual General meeting and associated Black Tie function is now undertaken by a sub committee of the National Executive. Publications and materials for Trade Magazines and In House News letters are either outsourced on handled directly by the Chief Executive.
The Membership Development Officer, who previously reported to the General Manager (The Complainant), now reports directly to the Chief Executive.
In conclusion the Organisation made a decision to make the position of General Manager redundant for both economic and business reasons. The work previously undertaken by the Complainant has been assigned to other members of the permanent staff and to members of the Officer Board. One element of the role has been outsourced and another disappeared due to a change in the process of managing membership subscriptions.
A genuine redundancy existed. There is no basis whatsoever for an Unfair Dismissals claim.
2: Summary Complainant’s Submission and Presentation:
In breach of natural justice and without any basis the Complainant was dismissed on 23rd December 2015 supposedly for reason of redundancy. There was no genuine redundancy. I was ill treated and unfairly dismissed. A lengthy submission was presented at the hearing. In summary the Complainant’s case rested on her assertion that she had been denied her rights under Natural Justice. The Redundancy had been a sham process. She had been presented with a premediated decision at the meeting on the 25th November 2015.The meeting was conducted by an Employment Consultant, a stranger ,that she had never met before and naturally she was placed in a shocked condition. She had had a number of periods of serious ill health in the previous two years. This was well known to the Organisation. She had not been consulted in any way in advance of the meeting and the decision on her Redundancy was a complete shock to her. She was not offered any opportunity for alternative work or other duties. The Complaint pointed to Legally Discovered Materials in relation to Board and Executive meetings that pointed, in her view, to a premediated decision having been taken well in advance of the November 25th 2015 meeting. A new staff member a Ms.F had been recruited on a Temporary basis in October 2015 and made permanent in April 2016 as Marketing Manager. The Complainant asserted that this person had in effect been brought in the replace her albeit under cover of some changed job titles. The Complainant also asserted that the finances of the Organisation were not is such a critical state as was asserted by the Respondents. Extensive legal arguments and precedents were quoted by her Representative. In summary the Complainant submitted that this was not a genuine redundancy and or the dismissal was conducted unfairly and the employer acted unreasonably. |
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3: Decision:
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.
4: Issues for Decision:
Was the case in hand a genuine Redundancy as defined by the Redundancy Act, 1967 or was it an Unfair Dismissal as provided for in the Unfair Dismissals Act, 1977
5: Legislation involved and requirements of legislation:
Redundancy Act, 1967, The Unfair Dismissals Act, 1977(with consolidations from later UD acts) and supported by SI. 146 of 2000 –Code of Practice on Grievance and Disciplinary Procedures.
Extensive legal precedents were quoted by both parties.
6: Decision:
6:1 It is useful first to briefly consider the fundamental legal principles as set out in Legislation and the case precedents involved here.
In this I was guided by Employment Law (2014) by Ms. Frances Meenan, Employment Law in Ireland by Cox, Corbett and Ryan (2009) and Dismissal Law in Ireland by Dr. Mary Redmond. (2007)
In summary the fundamental legal principles in this type of case are ones of Fairness and Natural Justice.
Giving due weight to the possible validity of the economic rationale for the Redundancy can the Respondent adequately show that the Complainant was treated fairly and reasonably in the entire process?
Employers may make staff Redundant for a wide variety of genuine business reasons. Can the Respondent clearly prove that it was a genuine Redundancy ?
In regard to the reorganisation of the Organisation post the Redundancy of the Complainant the following from UD /993/2009 Edwards v Aerials and Electronics (Ireland) Ltd is thought provoking.
“[T]he claimant had raised major doubts as to whether the redundancy was genuine. We recognise that the function of a full-time managing director no longer exists but we must direct our minds to the cause-and-effect relationship between redundancy and dismissal. The issue was whether he was dismissed because the employer had decided to reorganise the structure of the company, or whether a decision was taken to dismiss him for some other reason. In other words, was the reorganisation a cause or a consequence? On balance, we are inclined to the latter view.”
The employment of Ms. F in a Temporary capacity in October 2015 and her subsequent promotion in April 2016 to the position of Marketing Manager –was it a cause or a consequence in terms of the quote above?
6:2 However taking the principles raised in the legal summary above I proceeded to consider the following points.
6:3 The Pertinent Facts from the Evidence
Precedents notwithstanding it is well accepted law that all cases run on their own facts
The Complainant was employed in January 2008 and was subsequently promoted to the position of General Manager. She brought a considerable multi role skillset to the Organisation and this was recognised by the Respondent.
Unfortunately in October 2012 she went on Sick Leave for a serious life threatening condition and was absent until February 2013. The condition reoccurred in February 2014 necessitating sick leave until May 2014 with considerable follow up medical appointments and treatments during 2015. This was all well known to the Organisation and the Board/Executive.
From early 2014 (In documents discovered by the Complainant) the Board/Executive of the Organisation set in place a process to consider the future of the organisation. In September 2014 a decision was made to make the position of the General Manager redundant. On the 9th June 2015 a time line was requested by the National executive for the completion of this process. A specialist HR person was to be engaged to assist in carrying out this process. A document dated the 21st October 2015 drawn up with the assistance of the HR Specialist outlined the options and the “Package” to be offered.
In October 2015 a Ms. F was recruited on a temporary basis, to cover the sick absence of another staff member. Ms. F was later promoted to the permanent position of Marketing Manager in April 2016.
At a National Executive Meeting on the 4th November 2015 the minutes under Item 11 Operations: noted that “the Executive agreed to the proposal to make the General Manager redundant.” It was mentioned that the “Decision relates to the position and is not a reflection on the incumbent”.
The HR Specialist and the Chief Executive then met with the Complainant on the 25th November 2015 to inform her that her position was redundant. A notice period to the 23rd December was allowed. A letter (25th November2015) was handed to her at the meeting detailing her severance offer.
The Complainant immediately sought legal advice and correspondence ensued with the HR Specialist during December. The severance offer was increased by letter of the 15th December 2015.
6:4 Natural Justice and Reasonableness of the Employer.
The key issue here is one of Consultancy and the involvement of the employee in this process.
The EAT has a statement in UD/993/2009 (Names of Parties redacted) which offers some guidance.
“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.”
In the case in hand the Complainant was not informed in advance of the meeting of the 25th of November that her position was in danger of being made redundant.
She was not provided with indication in advance of the 25th November meeting of the likely subject matter or that a specialist HR person, unknown to her, would likely be in attendance.
In this context and indeed generally she was not offered any opportunity to consider or engage Representation in advance of such a crucial meeting.
The production of the Severance Letter with a detailed package included was in effect, in my view, tantamount to a statement of a Fait Accompli decision.
6:5 Developing the Right to Consultation principle further it is accepted law that before a decision is made to make an employee’s position redundant, fair procedures should be applied in that there should be an attempt or sufficient effort made on the part of the employer to consider other organisational or financial alternatives in reaching the cost-saving required. The cases often quoted are O’Driscoll v CIL Precision Ltd [2011] ELR68 and Moran v Ernst and Young Ireland UD12/2011
In regard to the economic or organisational rationale to the decision the HR Specialist stated (as quoted below) in correspondence (dated the 15th December 2015) which was prompted by correspondence from the Complainant’s Legal Representative
The Association remains open to suggestions of alternatives to redundancy which would generate equivalent savings but it has already sought these initiatives from the Management team who are unable to propose suitable alternatives.
The Complaint was in effect the number 2 in the Organisation, nominally a member of the Management Team but was not party to any of these discussions that would have a material impact on her position. The wording of this sentence –“it has already sought these initiatives” again suggests a fait accompli decision with no involvement with the Complainant in any financial considerations of alternatives. She was not involved or consulted in any of the decisions underlying her Redundancy.
The Organisation, by their letter of the 15th December 2015, had already exhausted this approach and thereby rendering any suggestions she might have to make in December somewhat futile. The letter of the 15th December had as its bottom line an offer of an increase in the Ex Gratia offer.
6:6 Section 7(2) - b & c of the Redundancy Act, 1967
The Respondent in their defence drew attention to the grounds set out in Section 7(2) of the Redundancy Act, 1967 specifically sub section 7:2
Section 7 “General right to redundancy payment.
(2) 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 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 had 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 had 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 had 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,]
Section 7(2) of the Redundancy Act, 1967 - Sub Section 7 (2) b
Regarding the economic aspects of the Redundancy decision the Complainant, as General Manager, would have been in a very good position to understand economic arguments. However it did not appear that she was afforded an opportunity to have an input. At the Oral hearing and in her written evidence she maintained that the Organisations finances were in a healthy state and not in the perilous situation as maintained by the Respondent. This financial evidence was not contested .In evidence the Respondent stated that the membership driven finances, irrespective of internal costs, had effectively stabilised.
While there was no doubt that the Organisation faced and still faces considerable challenges and has relocated from Kildare to West Dublin the economic arguments put forward to justify the Redundancy of the Complainant were open to serious question as a convincing proof of the Redundancy.
Section 7(2) of the Redundancy Act, 1967 specifically sub section 7:2 (c)
In considering this section I noted the following facts
In early 2016 a colleague of the Complainant, a Ms. G was offered and accepted redundancy. She had been the Office Clerk. A Ms. F. had been recruited on a temporary basis in October 2015 initially to cover Ms. G sick absence. However it was stated in uncontested evidence that Ms. F was, with effect from April 2016 now a new permanent appointee as the Marketing Manager of the Organisation – a new role. I noted from pages 3 & 4 of the Respondent’s Supplementary submission a breakdown of the duties of the current staff. I noted the prominence of Ms.F. specifically in duties formerly carried out by the Complainant. I noted the marked reluctance of the chief witness of the Respondent (The CEO) in answering questions from the Complainant’s legal representative in relation to this lady and in particular her salary package which was not disclosed to the hearing.
Taking into account the non consultation of the Complainant on possible reorganisation options before November 2015 and the effective dismissal of any suggestions she might have to make in the Respondent’s letter of the 15th of December 2015 (referred to above) I felt that the recruitment and subsequent promotion of Ms. F ,when also looked at from the point of the duties she now carries out (details supplied) certainly cast a serious shadow over the Redundancy rationale ( fewer staff and re allocation of duties) for the Complainant
6:7 Additional Factors / Climate of Reasonableness
The Complainant had two serious bouts of a life threating medical condition in the years prior to her Redundancy. Her set of mind could be expected to be delicate to say the least. In this context the meeting of the 25th November 2015 with the HR Consultant could not have been expected to be an easy meeting for her. At the Oral Hearing the CEO of the Respondent explained that he had “sat beside the Complainant to offer her emotional support” and as he acknowledged that as she had no Representation at the meeting it was difficult for her. The Medical condition of the Complainant was well know in advance and should have prompted a less vigorous and more considered Employer approach to the meeting of the 25th November.
6:8 Summary
First of all it has to be emphasised that Redundancy is a fact of life and all Employers can and do make staff Redundant in accordance with the relevant law. The Board of the Organisation was perfectly entitled to decide on a course of action that would involve Redundancies. The key issue was how this decision was implemented.
Having considered all the facts and the presented evidence both oral and written I came to the following three main conclusions
1: Procedurally the Dismissal/Redundancy was fatally flawed. The meeting of the 25th November 2015 was a fait accompli decision with no opportunity offered to the Complainant to offer reasonable counter arguments. The Executive minutes from the Organisation clearly indicated a prior decision having been taken. Advance warning of the subject of the meeting and the right to have Representation were not offered. The health situation of the Complainant faced with this type of meeting seems to have been ignored.
2: The Economic Arguments for the Redundancy were not convincingly advanced or made to a level to provide unequivocal justification.
3: The Reorganisation/Redistribution of the Work Load post the Redundancy raised serious questions –particularly the appointment and subsequent role of the new Marketing Manager Ms F. who appeared to carry out a significant portion of the Complainant’s duties.
Accordingly I find that that the case for Unfair Dismissal as against Redundancy is well founded.
6:9 Redress
The Complainant has not worked since the dismissal. Evidence was presented of her job hunting efforts. In regard to future losses of income it is unlikely that she will secure a General Manager position comparable to the position she was made redundant from.
Reinstatement or Reengagement is not an option considering the complete breakdown in relationships between the parties.
Compensation in the amount of € 35,000 (approximately 12 months nett pay) to be paid to the Complainant less Statutory Redundancy (€10,152) and Minimum Notice (€ 3,078) already paid. This gives a final Compensation figure of € 21,770.
If an Ex Gratia has been paid in the interim it likewise should be deducted.
Dated: 25th November 2016