UD657/2015

EMPLOYMENT APPEALS TRIBUNAL

CASE NO.

UD657/2015

CLAIM OF:                                                                                      

Gordon McArdle                                 

against

Oxigen Environmental

under

UNFAIR DISMISSALS ACTS 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman: Ms. M. Levey BL

Members: Ms. J. Winters

                 Mr. J. Maher

heard this claim in Dublin on 26^th May 2016 and 28^th July 2016.

Representation:

Claimant: Ms. Emma Cassidy BL instructed by Mr. Terry Gorry, Terry Gorry & Co. Solicitors, Main Street, Enfield, Co. Meath

Respondent: Mr. John Farrell, IBEC, Confederation House, Waterford Business Park, Cork Road, Waterford

Background:

The respondent’s representative opened by saying that he had only taken on the case on the day preceding the hearing. The claimant’s gross pay and the respondent’s address were agreed. The claimant’s employment with the respondent as head of commercial sales ended in 2015. He received a redundancy lump sum but alleged unfair selection.

The Tribunal adverted to the fact that no notice of appearance had been filed on behalf of the respondent such that the Tribunal had not received any written defence. The respondent’s representative referred to this as an administrative matter. The Tribunal told him that it needed a defence on the file.

Outlining the respondent’s case, the respondent’s representative said that the respondent had had a series of redundancies. There were close to two hundred. The respondent had been in difficulty.

The respondent’s financial year ended in March. There were large losses in 2013 to 2015 Further staff had left since then mainly through redundancy.

The respondent had to farm out business to competitors. It was running at a loss to keep market share.

Contracts got discontinued. There were now less sales. There was one person working in sales now on a salary of some thirty-three thousand euro per year. That person had joined about six months after the claimant. The claimant’s salary had been seventy-eight thousand euro per year. It was submitted that it was not reasonable to expect the respondent to cut by fifty per cent.

AD now did the claimant’s work and the work of the respondent’s head of HR who had earned a salary of eighty thousand euro before being made redundant. AD also now did the work of the managing director who was also made redundant. AD was head of operations.

There had been a twenty million euro reduction in business. Employee numbers were now down to half. The respondent paid three weeks’ pay capped at six hundred euro for all redundancies.

The Tribunal now observed that the respondent had to show redundancy was fair. The respondent’s representative said that the claimant was claiming unfair selection. The claimant’s representative said that there was a lack of figures and that the claimant would say that his department was in profit. The Tribunal asked if there were certified accounts. The respondent’s representative said that he would call AD.

Respondent’s case:

Giving sworn testimony, AD said that the respondent was in waste and recycling and based mainly in North Leinster and the midlands. It followed the cycle of the economy. It had success in the boom. The downturn started in mid-2008. The respondent looked at the business and addressed losses by price increases.  

The respondent had some seven hundred employees in 2008. It now had less than half that number. There were 133 redundancies in 2014. The claimant left in March 2015. The respondent was now starting to stabilise. All aspects of costs were looked at. AD took on more responsibility. Redundancies were forced. The claimant’s post had to be looked at. The respondent looked at sub-contract work. The margin was small. The respondent decided to get out where it was not tied in. The respondent was forced to farm out work and gave discounts (e.g. one free month in twelve) to try to keep customers.

The respondent was still losing money. It was being forced out of markets. Staff reduced. The bulk of those remaining were drivers and general operatives. In the context of sales and general management costs were looked at. The respondent was being priced out of the market. Heads of staff left.

No staff redundancies were replaced by new people.

Asked if the claimant had been targeted, AD said that he would not agree and that about one hundred and twenty people were made redundant.

Asked if the claimant would have gone from a salary of seventy-eight thousand euro to thirty thousand, AD said that he would be surprised. The respondent was restructuring.

Queried under cross-examination as to his qualifications, AD said that he had a degree in environmental science and a master’s (degree) in business management. He said that he had no formal qualifications in HR but that his junior was qualified in HR. He also got help from IBEC.

Loose pages of information (supporting the respondent’s case that it had been under severe financial strain) were furnished to the Tribunal but, as AD was pressed for very formal financial information, the respondent’s representative, after saying that certain information was commercially sensitive, said that the Tribunal could adjourn to a further date.

The claimant’s representative said that she had asked for documents which had not been furnished. The Tribunal said that AD was there to defend his case. AD said that the respondent’s financial manager was not available on that day.

Asked if external advice had been sought about redundancies, AD said that the respondent’s audited accounts showed the respondent losing money. The respondent had lost customers in all areas. The claimant was head of commercial sales. The respondent looked at budget and performance. A profit of between five and eight per cent was budgeted for.

Under re-examination, AD said that three of the staff in the claimant’s department were made redundant.

It was put to AD that an employer might look at LIFO (last in first out) or a skills matrix. AD said that he had not been involved with the claimant’s redundancy. It was put to him that not to consult with people made redundant could be viewed as unsatisfactory. There had been pay-cuts in previous years.

The case was adjourned to 28 July 2016. The parties were told to bring all relevant documentation to the resumed hearing and to copy it to the other side in advance of the said hearing.

At the resumed hearing on 28^th July 2016 the respondent told the Tribunal that they had not supplied accounts as requested on the previous hearing date. The reason given for this was that the respondent is an Unlimited Company and accounts are not published. The Tribunal were told “This is sensitive information and the respondent did not want to give it to the other side”.

AD resumed direct evidence and outlined figures in relation to losses from 2011 to 2015 along with figures in relation to sales for 2014 and 2015. The amount of losses reduced year on year from 2011 to 2015 whereas the sales figures increased year on year for 2014 to 2015.

It was put to the witness that the business was doing better in latter years. The witness agreed with this but said that the company continued to make losses and had to make changes and hence redundancies.

AD told the Tribunal that there was a significant fire in the company’s premises in January 2014 and this was a turning point for the company.

It was put to the witness that the downturn was not in the claimant’s side of the business but AD said that the claimant was head of commercial sales and that was to do with sales.

AD confirmed that the claimant had only been informed of him being made redundant on the same day as he was told to leave the premises and said that he was not involved in that. AD said he could only apologise for that. AD believed that another person (CB) had done this. CB is no longer working for the respondent and declined when AD asked him to attend the EAT hearing.

When asked by a member of the Tribunal what happened to the claimant’s work after he left AD said that he did some of the work and the Regional Manager also did some.

Claimant’s case:

The claimant produced figures which he said demonstrated a growth in sales for the area he was in charge over a 9 month period before he was dismissed by way of redundancy. There were Key Performance Indicators (KPI) that formed the basis of reviews carried out by CB on the claimant and the claimant was simply asked “are you growing the business, yes or no”.

The claimant was told in the corridor by CB on 6^th March 2015 that the claimant was to be made redundant, the decision was made and there was nothing he could do about it. CB told the claimant to “get his stuff and go that day”. The claimant was not given anything in writing, offered any alternative or told that he could appeal. The claimant left about 5 minutes later.

When asked who would he have appealed to if he could the claimant replied CB or SD.

The claimant returned to the office the following Wednesday and collected his P45 and cheque.

When asked if he would have taken alternative if offered to him the claimant said that he has a wife and children and a mortgage and would have been glad to discuss any alternative to unemployment. The claimant also said that he would have accepted a pay cut in his current role and that he had previously accepted an 8% pay cut.

The claimant referred to another person who had been taken on a year before the claimant was let go. That person was earning €40,000 and the claimant told the Tribunal that he would have done that job. The claimant also made reference to a Dublin sales job that paid €40,000 plus commission and expenses but it was not made clear to the Tribunal whether this was the same job as referred to above.

The claimant gave evidence in respect of his loss and efforts to mitigate that loss.

The respondent’s representative asked the claimant did he accept that the company was in serious difficulty. The claimant replied that in the year previous to him joining, the company had made a big loss but since he started there was a big improvement.

The claimant accepted that his dismissal was not performance related.

When asked if he had said to the company “I could do that job over there” the claimant replied he had said “is there not something I could do as an alternative to redundancy”.

The claimant told the Tribunal that he had applied for sales jobs with other companies but was told he was too senior. The respondent’s representative put it to the claimant that the respondent would possibly have taken that view too. The claimant replied “No, this was a business I knew. The sales man in Dublin was on €40,000 plus 2% commission plus mileage. The overall package would have been €50,000 to €60,000 and this is €40,000 better than being on the dole”.

Determination:

Having carefully considered the evidence adduced at the hearing the Tribunal is satisfied that a genuine redundancy situation existed at the time of the claimant’s dismissal. However the Tribunal also finds that the manner in which the claimant was dismissed was completely devoid of any fair procedures.

While it is clear that the claimant was in a stand-alone position that the company had decided they no longer needed and which could be absorbed into other roles; nevertheless there was no consultation with the claimant; he was informed of his redundancy in the corridor and told to leave that day and was not informed of any right to appeal.

Bearing in mind that the claimant has received a redundancy payment; that he was in a stand-alone position which was genuinely redundant; yet the lack of fair procedures render it an unfair dismissal. The Tribunal finds on balance that the appropriate award is €10,000.00.

Accordingly the Tribunal determines that the claimant was unfairly dismissed and awards him €10,000.00 under the Unfair Dismissals Acts, 1977 to 2007.

Sealed with the Seal of the

Employment Appeals Tribunal

This   ________________________

(Sgd.) ________________________

     (CHAIRMAN)