ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00002901
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-00003982-001 | 21/04/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967 | CA-00003982-002 | 21/04/2016 |
Date of Adjudication Hearing: 06/10/2016
Workplace Relations Commission Adjudication Officer: Roger McGrath
Procedure:
In accordance with Section 41(4) of the Workplace Relations Act, 2015, Section 39 of the Redundancy Payments Act, 1967 and Section 8 of the Unfair Dismissals Act, 1977, following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
Attendance at Hearing:
By | Complainant | Respondent |
Parties | A Community Centre Manager | A Community Centre |
Background
The Complainant was employed by the Respondent from the 5th of November 2007 until the Complainant terminated the employment on 1st April 2016 after which she took up employment elsewhere. The Complainant was paid €576.90 per week and worked 30 hours per week.
The Complainant referred a complaint to the Workplace Relations Commission on the 21st April 2016, alleging the Respondent had breached the Unfair Dismissals Act, 1977 and the Redundancy Payments Act, 1967.
Complainant’s Submission and Presentation:
The Complainant commenced employment as manager at a Community Centre on the 5th May 2007. From the beginning of her employment she worked at least 30 hours per week at the Centre.
On the 24th February 2016 she was informed at a meeting with the Board of Management that her work hours were to be reduced to 15 hours per week. At this meeting the Complainant refused to give an answer when asked if she would accept this change and requested that the matter be put in writing.
The Complainant subsequently received an undated letter from the Chairperson of the Board of Management, in or around the 1st March 2016. This correspondence outlined the proposed reductions in work hours and the reasons for same.
The Complainant responded by letter dated 2nd March 2016. This letter clearly stated that she could not accept the changes. The Complainant sent further correspondence dated the 4th March 2016, again outlining her anxiety as the proposed changes to her working hours were due to begin soon. She then received an undated letter from the Chairperson confirming that her employers were going to alter her hours of work which she had enjoyed since starting employment at the Centre.
The Complainant replied to this correspondence in a letter dated 9th March 2016 stating that this "drastic" alteration of her hours amounted to the redundancy of her full time position and the creation of a part-time position at the Centre and as such she requested her redundancy entitlements.
The Complainant received a reply from the Chairperson dated the 10th March 2016 stating that the Board did not consider the alteration of her conditions of work a redundancy. The Complainant was offered an increase in hours to 17.5 hours per week from the original 15 hours the Board had proposed previously.
Following this correspondence the Complainant met with her solicitors and instructed them to send a letter, dated 11th March 2016, warning of potential legal action. Neither the Complainant nor her solicitors received any reply to this letter.
In light of this lack of contact the Complainant phoned the board of management requesting that they confirm that they would not alter her terms of employment. It was then confirmed to the Complainant that her conditions of employment were to be altered and that her hours of work were to be reduced.
On the 21st of March 2016 the Complainant's hours of work were reduced as per the intentions of the Board of Management. The Complainant handed in her 14 day Notice to her employer.
Her employment ceased on the 1st April 2016. During her notice period she had begun searching for a new job and secured employment in an administration role which began on the 4th April 2016.
The Complainant stated that because of the drastic reduction made to her working hours her full time position had been made redundant and that a part-time position had been put in its place.
The Complainant's representative submitted that in circumstances where an employer has unilaterally reduced hours or pay, the employee has the option of treating the breach as a repudiation of the contract as would entitle her to terminate it under section 9(1) (c) of the Redundancy Payments Act.
It was also his contention that the finances of the employer are not of concern in such a situation, rather it is the circumstances of the employee that matter. In this case it was perfectly reasonable for the Complainant not to accept the new hours. It was also suggested that if her contract of employment had allowed for such changes they would not have been acceptable, but in this case such changes were not even mentioned in the contract. The absence of a time scale for a return of the lost hours made matters worse.
The Complainant cited cases Gallagher v Donnybrook Inns Ltd., RP547/2013 and Lynch v Bellerophon Ltd., T/A Griffith College, Case No. RP1089/2013.
Respondent’s Submission and Presentation:
The Respondent's written submission explained that the Respondent is a company limited by guarantee, established to provide Community space at affordable rates in order to facilitate groups and organisations in their area. The Board of Directors, all of whom are volunteers, operate the Centre.
The Community Centre is staffed by both workers on a Community Employment Scheme and by three part-time staff funded by Pobal. The Respondent has one employee who is paid from the Respondent's own resources, namely the manager, the position previously held by the Complainant.
The Respondent's income is made up of grants from the County Council and the local Education & Training Board, together with income generated by charging groups and organisations for the hire of rooms and other facilities in the Community Centre.
The Complainant was employed as Centre Manager in 2007 following the securing of a specific grant. However, grant income reduced from €51,000 in 2008 to €35,000 in 2012, €30,000 in 2014 and €20,000 in 2015. The manager's salary amounted to €33,000 approximately, thus it was no longer covered by grants. The income of the Community Centre had been steadily decreasing, with the exception of 2014, from €77,199 in 2006 to €32,623 in 2015. The manager was fully aware of the worsening financial position of the centre.
Because of the decline in grants the Board decided to reduce the manager's hours from 30 to 15 hours per week. However, following representations from the manager the decision was amended to 17.5 hours per week.
The Complainant ended her employment with the centre on 1st April 2016 following a 14 day notice period.
The Respondent rejected the claim of redundancy on the grounds that the Complainant was always aware that her position was subject to the availability of ongoing funding and that the temporary reduction in hours of work did not constitute an entitlement within the requirements of the Redundancy Payments Act with regard to short time working or lay off.
The Respondent also stated that as a result of the Complainant's resignation the Respondent has entered into a recruitment process to engage a new manager who will, initially, be employed for 17.5 hours per week, illustrating their contention that the Complainant's position has not been made redundant.
In direct evidence the Chair of the community centre explained the financial difficulties of the centre, but stated that it was always the intention to keep a manager post in place. In reply to questioning from the Complainant's representative the Chairperson said that she could not define exactly what "temporary" would mean in these circumstances.
The Treasurer of the Community Centre also gave evidence about the poor state of the Centre's finances.
CA-00003982-002
Complaint under the Redundancy Payments Acts, 1967.
Issues for Decision:
Were the changes made to the manager's contract of employment significant enough to justify her repudiating her contract as per section 9 (1) (c) of the Redundancy Payments Act, 1967.
Legislation involved and requirements of legislation:
Section 9 of the Redundancy Payments Act 1967 states:
Dismissal by employer.
—(1) For the purposes of this Part an employee shall, subject to this Part, be taken to be dismissed by his employer if but only if—
(a) the contract under which he is employed by the employer is terminated by the employer, whether by or without notice, or
F25[(b) where, under the contract under which the employee is employed by the employer the employee is employed for a fixed term or for a specified purpose (being a purpose of such a kind that the duration of the contract was limited but was, at the time of its making, incapable of precise ascertainment), that term expires or that purpose ceases without being renewed under the same or similar contract, or]
(c) the employee terminates the contract under which he is employed by the employer F26[…] in circumstances (not falling within subsection (5)) such that he is entitled so to terminate it by reason of the employer‘s conduct.
Findings and reasonings :
The reduction in working hours from 30 hours per week to 17.5 hours per week is a significant change to the employment contract. In this case the Complainant did not accept the changes made to her working hours, in fact she objected to the proposed changes in writing, nevertheless the reduction in hours went ahead.
The ambiguity surrounding the timescale of the reduction in hours, compounded difficulties for the Complainant. It is unreasonable to expect an employee to work in a reduced hours arrangement when they have no idea when that arrangement will end and when the original hours will be re-instated.
It is noted that there is no Short-time or Lay Off clause in the Complainant's employment contract with the Community Centre.
In finding in favour of the employee in Gallagher v Donnybrook Inns Limited RP547/2013 the decision of the Tribunal contained the following;
"It is well settled law following decisions of the Court of Appeal of England and applied by this Tribunal for four decades, that substantial unilateral reductions in hours or pay amount to a fundamental breach of contract. In such circumstances an employee has the option of accepting the breach of contract and working at reduced hours of pay or treating the breach a s a "repudiation of the contract" as would "entitle" him to terminate it under section 9(1)(c) of the Redundancy Payments Acts 1967."
Decision:
Having carefully considered the submissions and presentations I am of the view that in the circumstances it was reasonable for the Complainant to terminate her contract of employment and the Complaint is well founded. Accordingly I find the Complainant is entitled to her statutory redundancy payment and under the Redundancy Payments Acts, 1967, award a redundancy lump sum based on the following:
Date of Commencement; 5th November 2007
Date of Termination; 1st April 2016
Gross Weekly Pay; €576.90
CA-00003982-001
Complaint under the Unfair Dismissals Act, 1977.
As I have upheld the Complaint under the Redundancy Payments Act, 1967, the claim under the Unfair Dismissals Act 1977 is no longer valid.
Dated: 25 November 2016