UD964/2014

EMPLOYMENT APPEALS TRIBUNAL

CASE NO.

UD964/2014

CLAIM OF:                                                                                                  

David Curtin

-Claimant                                                           

Against

Kevin O'Keeffe

Mary Redmond

representing the Trustees of Mallow Golf Club                                         

   -Respondent

under

UNFAIR DISMISSALS ACTS 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman:   Ms. K. T. O'Mahony B.L.

Members:     Ms M. Sweeney

                     Ms. P. Doyle

heard this claim at Cork on 10th June 2015 and 21st October 2015 and 18^th January 2016 and 7^th March 2016.

Representation:

Claimant: Mr. Michael Hegarty, Smyth O'Brien Hegarty, Solicitors, 24 Lower Abbey Street, Dublin 1

Respondents : Mr. John Boylan, McNulty Boylan & Partners, Solicitors, Hanover Street, Cork.

The determination of the Tribunal is as follows:-

Summary of Evidence

The claimant was employed by the respondent as secretary-manager of its golf club (the club) from July 2000. His hours of work were from 8.30 am to 5.30 pm Monday to Thursday and 8.30 am to 4.00 pm on Friday but he viewed his employment as more than a job and was always available, normally working between 50 to 60 hours per week running the club. Following a change to the club’s constitution in 2009, a Board of Management (Board) was put in place comprising of a chairman, treasurer and three elected members and thereafter the claimant reported to it. The Treasurer and claimant were friends, golfed together and the claimant had the use of the Treasurer’s holiday home. The claimant’s duties included dealing with the financial and accounting aspects of the club as well as having some administrative duties.

Over the years of the recession membership in the respondent’s golf club fell by 25% and the resulting loss of subscriptions as well as the decline in green fees in the same period had a significant impact on the club’s financial position. From 2008 on the claimant worked closely with the Treasurer to cut costs to ensure the survival of the club. They discussed all overheads and on one such occasion the claimant indicated to the Treasurer that he would go if he got redundancy. The cost-cutting measures implemented included inter alia the non-replacement of a number of staff including the bar manager, other bar staff and a housekeeper; reduction in catering staff, replacing higher wage earners who left the employment with employees on the minimum wage; bar opening hours and clubhouse opening hours were reduced; house cleaning in the club was reduced from seven to five days; Sky sports subscription was suspended during   the winter months; the entrance fee of €5,000 for new members was removed: and, free subscriptions for Board members and other officers were removed apart from a few exceptions. In the period the locker rooms were refurbished and furniture was purchased.  

The claimant’s position was that he never had any problems until his last year in the employment. From December 2012 until April or May 2013 he felt subtle pressure from the Board. A member of the Board (BM), who is a qualified auditor, was appointed to audit policy and procedures within the financial area. The claimant was under scrutiny and felt enormous pressure when the audit was being carried out. He had been subject to an independent audit some years previously which found that he was running the club in a very satisfactory manner. The auditor reviewed his work and although he found no fault with his work he put many changes in place. The claimant did not agree with these changes and believing they were needless he felt undermined. The respondent’s evidence was that it had no issue with the claimant’s competence, conduct or performance.

The claimant brought his concerns to the Chairperson and the Treasurer but the Treasurer’s response was that the auditor was just doing his work. The claimant felt that he was “being got at” and he was not eating or sleeping well. His doctor put him on certified sick leave due to work related stress. He was out of work for three weeks in the period April to May 2013. On his return to work, his hours were reduced and he accepted the offer of meetings with a professional trainer/coach. At this time he felt secure in his employment.

The club’s income was in continuous decline from 2008. For the first time during the recession years, the accounts for 2012 (calculated for a 15 month period) showed an excess of almost €80,000 of expenditure over income. The Treasurer prepared the accounts for the first half year of 2013 and predicted losses of €70,000. Board meetings were held on 3 September 2013 and 25 September 2013. At the Board meeting of 3 September 2013, the Treasurer recommended reducing the club’s costs by €70,000 and the Board divided into two sub-committees: one to review income generation and the other cost reduction. The claimant was not on either sub-committee or approached during the reviews. Ultimately, the Board took the decision to make the position of secretary manager redundant. The claimant was shocked but not surprised given the events earlier in 2013. He did not protest. Towards the end of the meeting the Chairwoman handed him a letter dated 16 October 2013 from the Board stating inter alia:

       “[W]e regretfully confirm that your employment with Mallow Golf Club is terminated by way of redundancy with effect from October 30^th 2013.

       The economic circumstances of the past 5 years have put the club under continuing       financial pressure resulting in the role of Secretary Manager being no longer sustainable and consequently the Board of Management have no option but to allocate the main functions of the Secretary Manager to existing Board members who will undertake them on an honorary basis.

       The decision by the Board of Management in no way reflects adversely on your performance of your role as Secretary Manage, which has been entirely satisfactory. The Board has considered other options for you but, within the club, none exist at this time.”

The claimant sought the terms of his redundancy package in writing. At a second meeting held on 22 October the claimant was accompanied by his brother–in-law, a former Managing Director of a major construction company and the same Board members were present. At the meeting the claimant complained that there had been no prior consultation about the redundancy and that he had not been afforded the opportunity to explore alternatives to redundancy, such as a cut in pay or hours. The claimant informed them that he had taken legal advice and that if a financial settlement could be agreed it would be in full and final settlement of all his claims against the club. Following negotiations between the parties, an enhanced offer was made by the respondent and two days later, on 24 October 2013, the claimant signed the RP50 and was given the agreed payments. The final redundancy package included free membership of the club up to 31 December 2018 as well as an additional €5,000, in return for certain assistance the claimant would provide for the club, payable in two instalments in 2014 once the 2014 subscriptions began to come in. The terms of the agreement had been reduced to writing and having considered these over night the claimant indicated on 23 October that he accepted the package. He met with the Treasurer on 24 October 2013 to sign the RP50 and he was given three cheques by the Treasurer. The claimant’s wife was the incoming lady captain and she took her place on the Board some weeks after the claimant’s dismissal.

Determination

There was clear and uncontested evidence before the Tribunal that the financial position of the respondent was in continuing and serious decline in and from 2008 onwards. The respondents had implemented several cost cutting measures to combat this decline over the preceding years, but the decline continued. In October 2013 the respondent decided to make the claimant’s position redundant. The Board members subsumed his executive functions on a voluntary basis and his administrative duties were taken on by an assistant whose hours were increased. That employee had longer service than the claimant had. The Tribunal is satisfied that this constitutes a redundancy as defined in Section 7(2) of the Redundancy Payments Act 1967 as amended, which states:

“an employee shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to –

         (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.

Thus, a genuine redundancy situation existed in the employment.

The Tribunal rejects the respondent’s argument that the agreement reached on 23/24 October 2013 between the parties was “in full and final settlement of all claims against the Club and the matter of his redundancy would be concluded. Buckley J. in the Circuit Court in Hurley v the Royal Yacht Club [1997] ELR 225 considered a waiver clause in an agreement in the context of the Unfair Dismissals Acts and concluded that there must be informed consent to such a waiver. Later in his judgment Buckley J sets 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….”

This statement of the law was applied by Smyth J. the High Court in Sunday Newspapers Ltd v Kinsella and Brady [2008] ELR 53. The effect of Buckley J.’ s judgment is that to waive a claim the employee must, at the very least be clear as to what he is waiving.

In the instant case it was the claimant who introduced the term ‘full and final settlement’ into the negotiations between the parties on 22 October 2013 and the respondent now seeks to enforce it. The memorandum of “Settlement Terms” of 22 October 2013 was prepared by the Treasurer and recited inter alia the payment which were on offer to the claimant and were equivalent to the claimant’s entitlements under the redundancy, minimum notice and working time (holiday) legislation. The claimant agreed to these terms on 23/24 October 2013. However, the memorandum is silent as to the agreement being a full and final settlement of all claims by the claimant against the respondent. Finally and significantly, reverting to informed consent and the standard propounded by Buckley J. in Hurley v the Royal Yacht Club, there is no evidence from which the Tribunal can be satisfied that the claimant understood he was waiving his rights under the Unfair Dismissals Acts 1967. Thus, the Tribunal has jurisdiction to hear and determine the unfair dismissal claim.

Under Section 6(4)(c) of the Unfair Dismissals Act 1977 redundancy is a fair reason for dismissal. However Section 6 (3) of the Unfair Dismissals Act, 1977 sets out circumstances where a dismissal on grounds of redundancy may none the less be unfair. A dismissal will be unfair under the terms of the Act where one or more other employees are in similar employment with the same employer who has/have not been dismissed, and either the selection of the employee for redundancy was wholly or mainly for one or more of the enumerated unfair grounds for dismissal in subsection (2) or the dismissal was in contravention of an agreed procedure between the employer on the one part and the employee or a trade union on the other part or in contravention of a procedure established by custom and practice and there were no special reasons justifying the departure from the procedure. In Kim McNally v Westwood Fitness Club UD1391/2009 Mr. Dermot McCarthy SC the foremost authority on redundancy law in Ireland strictly applied section 6(3) to the issue of unfair selection for redundancy. The instant case falls at the first hurdle as there was no other employee in similar employment to the claimant. If this primary requirement could be stretched to apply to the whole employment rather than just similar employment it would still not benefit the claimant as he was one of only two full-time employees in the employment and the other employee was the head greenkeeper, a vital employee for a golf club and in particular for a golf club seeking to maintain and build membership. In any event, there were no agreed procedures or established custom in place for selecting employees for redundancy. (See also Thomas Cruise v Nugent Manufacturing Limited UD 2099/2009 on this point.) The Tribunal is satisfied that the claimant was not unfairly selected for redundancy.

Many of the authorities cited to the Tribunal in support of the claimant’s case import procedural rules of fairness over and above what is prescribed in section 6(3) above. It has been argued that had the Oireachtas intended such rules and procedure to apply where there is a genuine redundancy situation it would have included a provision to that effect in the Act. The Tribunal feels that the latter approach is the correct one but it is mindful of subsection (7) of section 6 (see below). In the instant case the claimant complained of a number of procedural failures by the respondent including that the Chairman had failed inter alia to give him prior notice of the redundancy or the purpose of the meeting of 16 October 2013, failed to engage in consultation with him prior to the redundancy and did not afford him the opportunity to suggest alternatives. The aforementioned section 6 (7) of the Unfair Dismissals Act, 1977 as inserted by section 5 (b) of the 1993 Amendment Act provides:

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

This provision confers a broad discretion on the Tribunal. Having regard to the facts: that a genuine redundancy situation existed in the employment, that the claimant’s position was unique and that the respondent had already implemented several cuts over the previous five years, the Tribunal, in exercising its statutory discretion, finds that the respondents had not acted unreasonably.

The Tribunal notes the objection by the claimant’s solicitor to the introduction of the minutes of three relevant Board meetings, during the submission stage on the final day of the hearing herein, as they had not been produced during the hearing or in response to the claimant’s solicitor’s application under the Data Protection Acts. The respondent’s sole witness was credible and the Tribunal accepts his evidence on those meetings. And finally, not informing the claimant of his right to appeal is not fatal. He was the manager and had prepared the club’s handbook and must have been aware of his right to appeal.

Handling redundancies can be difficult but in light of the claimant’s long service, his status and the high regard in which the Board held him, the Tribunal feels that the situation could have been handled more sensitively.

For all the above reasons the Tribunal finds the dismissal was not unfair and the claim under the Unfair Dismissals Acts, 1977 to 2007 fails.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

     (CHAIRMAN)