Complainant

Respondent

Anonymised Parties

A factory worker

A factory

Representatives

John P. Prior & Co Solicitors

In-house legal advisor

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-00006251-001

26/07/2016

The complainant worked for the respondent from 8th September 2014 until 3rd June 2016 when her role was made redundant. She is claiming that the respondent did not need to make her redundant as the company hired others shortly afterwards, and secondly, that she was unfairly selected for redundancy.

The complainant began work on a temporary contract for 12 weeks with the respondent on 8th September 2014 and received no further contract. Her role was made redundant with effect from 3rd June 2016. Initially she was employed as a General Operative in the Quality Inspection Department until May 2015 when she was moved to the Production Department.   The manager in the latter Department encouraged her to take over the role of Supervisor as he had heard great things about her in the Quality Control Department. The complainant declined this offer as she wanted to get a better idea of how the Production Department was run first.

On 11th March 2016 the complainant was informed by Ms B that she was being laid off for 12 weeks due to a reduction in customer demand. No explanation was given as to why she was chosen rather than any of her co-workers. The complainant was the only one of 8 comparable workers laid off. By letter dated 21st March the complainant asked why she had been chosen when three members of the team had only joined the preceding August and two had received warnings about poorly executed jobs the same week she had been laid off. In her reply Ms B stated that she could only discuss the complainant’s situation and could not comment on other employees, and that the reason for the lay off related to reduced customer demand. The complainant, in the absence of any reasons relating to the selection process, concluded that the reason she had been laid off was because she had fallen out of favour with the respondent. This possibly related to sick leave resulting from being overcome by paint fumes and an incident regarding taking leave. Also the supervisor had instructed staff to stop speaking Lithuanian at work.

The respondent states that they wrote to the complainant on 31st May 2016 stating her role was at risk of redundancy. In earlier correspondence the complainant had advised the respondent of a change of address and therefore did not receive this communication.   Subsequently she received a phone call on 3rd June stating that her role was redundant and inviting her to a meeting on 7th June. By letter dated 3rd June the complainant was advised that her role was redundant, and offering her a right of appeal within 5 days.   The complainant did not fully understand the meaning of the word appeal and only sought advice on the matter on 5th July. It is clear that the decision had already been taken on 3rd June.

A meeting took place on 7th June with Ms B at which the complainant asked why new staff had been employed if customer demand was still in decline. She was informed that this was seasonal work which might last for 6-8 weeks and that the company had to offer the complainant a role of at least 13 weeks but were not in a position to do so. The respondent has misunderstood the law in this regard as the above stipulation relates to a situation following lay off in which the employee may seek redundancy. The complainant would have accepted 6-8 weeks’ work.

It is also recorded in the notes of the meeting of 7th June that the company hoped the decline in customer demand might change in the next 3-4 months. If this was the case the lay-off could have been extended as the complainant had no other job and was not seeking redundancy. 24 days later the respondent advertised for a general operative.

The complainant was not advised in person that her position was being considered for redundancy and that a consultation process was to take place. She was not notified in writing as the letter was sent to the wrong address, and therefore there was no prior consultation.   As a result the complainant had no opportunity to put forward any alternatives to redundancy. No such alternatives were explored by the respondent and the reasons for the redundancy were not detailed in writing. The selection criteria for redundancy was not clearly identified or advised to the complainant. The respondent did not show that selection criteria applied to all employees in a consistent and fair manner. The respondent did not need to make the complainant redundant as she could have retrained for a different role, taken the seasonal work, or continued on lay-off until the next general operative role became available.

The respondents purchased the company from the liquidators pursuant to an asset sale agreement in July 2008. The completion of the sale was subject to agreement on new terms of employment and work practices including the abolition of ‘last in first out’ for both movement within the plant and in the case of redundancy.   These terms were agreed by the employees at the time and incorporated into the new ‘Green Book’. In relation to redundancy the Book states;

“The method of selection of employees in a compulsory redundancy situation will be determined solely by management and selection for redundancy will take place on the basis of an assessment of business needs by management.”

During the years from 2012 the respondent experienced severe financial difficulty. As a consequence urgent restructuring was necessary to reduce costs. Various cost saving measures including redundancies were put in place. This pattern continued and in 2016 the respondent was continuing to struggle due to reduction in customer volumes resulting in 37 employees being put on temporary lay-off. 34 of the 37 were general operatives. 19 sought redundancy, 2 returned to work and the remaining 16 – all general operatives - were in a compulsory redundancy situation.

The respondent tried to contact the complainant by phone on 30th May but was unable to do so. The complainant was advised of the situation by letter on 31th May to arrange consultation. The letter was returned with ‘Gone away’ ticked on the envelope. On 3rd June the complainant was notified by letter that her role was redundant. A consultation meeting took place on 7th June. Available alternatives were discussed including a small number of seasonal vacancies. The respondent could not guarantee the minimum 13 weeks’ continuous employment.   It was noted that the complainant understood this. In accordance with the conditions of employment the complainant could have appealed the decision within 5 days of the date of the decision.

ln accordance with section 5(1) of the Unfair Dismissals Act, 1977 there were substantial grounds justifying the dismissal of the complainant. In accordance with section 5(5) of the Act the complainant’s termination resulted wholly and/or mainly from the fact that the complainant’s position was redundant as a result of a redundancy situation as defined by section 7 of the Redundancy Payments Act. As set out above, there was a real and genuine need to make cost reduction as a consequence of trading losses and the outright loss of major customers all resulting in the overall reduction and elimination of many of the roles of General Operatives. There was no longer a requirement for the majority of the work the Complainant was specifically employed to do. On this basis, there was a genuine redundancy situation within the meaning of the Act. The complainant's termination is therefore not unfair in accordance with section 6(4)(c) of the 1977 Act. ln so far as the complainant contends that she was unfairly selected for redundancy, it is quite clear the provisions of section 5(3)(a) of the 1977 Act do not apply. The complainant was not dismissed explicitly for one of the matters specified in section 6 (2) of the 1977 Act . It is quite clear the provisions of section 6(3}(b) of the 1977 Act do not apply as the complainant was not dismissed in contravention of a procedure agreed with a Trade Union or accepted body etc. To the contrary, complainant was made redundant in accordance with such agreed procedure and therefore not unfairly selected.   ln so far as the decision to make her role redundant was communicated to the complainant on 7 June 2016 by the Operations Manager and HR Manager, there was no alternative work available that the complainant could undertake. The fact is that the company was forced to shed 27% of the work force in less than 2 years. There was no alternative work available for the complainant.

ln summary, the Respondent's decision to terminate the complainant’s employment resulted wholly and mainly from a redundancy of the role she was undertaking. A commercial business decision had been taken to reduce costs, which impacted on other employees in the business that were also made redundant. There was no unfair selection of the complainant in accordance with section 6(3) of the 1977 Act. The selection was based on the Cell Training Matrix completed by the Cell Leader, under which all employees were assessed. It can be seen from the matrix that the complainant, on one of the two relevant matrices, scored less than the other employees, and in the second matrix she scored approximately the same.

The complainant's dismissal for the reasons set out above was not unfair and the Company decision at the time based on the information available to it was fair and reasonable and the Complainant's claim should be dismissed. Further, the complainant made no appeal of her redundancy as she was entitled to do under company policies.

Section 1 of the Unfair Dismissals Act 1977 defines a dismissal as follows;

“dismissal”, in relation to an employee, means—

(a) the termination by his employer of the employee's contract of employment with the employer, whether prior notice of the termination was or was not given to the employee,

Section 6 (6) of the Act states;

(6) In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal.

The burden is therefore on the employer to demonstrate that the dismissal is fair. There are two questions that need to be addressed;   firstly, whether there was a genuine redundancy situation and; secondly, was the selection process for redundancy fair.

It is clear from the evidence presented that the company faces trying financial circumstances necessitating considerable cost saving measures including redundancies.   However, the practice of hiring replacement workers, albeit on seasonal work, shortly after full time workers have been made redundant will inevitably raise questions as to whether or not such redundancies were immediately necessitated. The complainant in evidence said that she would have accepted such seasonal work for the 6-8 weeks concerned. The respondent’s position that by law, in the context of a lay-off, the respondent had to be in a position to offer a minimum of 13 weeks, is not correct. It is clear that redundancy should be a last option, only to be used when other viable options have been exhausted. In this regard I am of the view that seasonal work anticipated within a reasonable timeframe should have been considered as an alternative to redundancy.

The second issue to be considered by me relates to selection for redundancy. It is clear from the evidence given in relation to conditions of employment that the intention of the ‘agreement’ regarding redundancy was to abolish the last in first out principle that had previously applied, and to ensure that the company could   retain staff most necessary to carry out its business. The extract of the book containing the terms and conditions of the staff agreed in 2008 submitted by the respondent states;

‘The method of selection of employees in a compulsory redundancy situation will be determined solely by management and selection for redundancy will take place on the basis of an assessment of the business needs by management.’

A second document provided by the respondent entitled ‘Explanatory note on changes to Working Conditions….’ deals with the abolition of the ‘last in first out’ rule and states;

‘Any involuntary redundancies which occur in the future will take place on the basis of an assessment of competency’

It is clear from the above that there was intended to be a process for selection with the final decision being taken by management. Such a process could not be interpreted as bestowing on management an unfettered prerogative to make the selection without reference to a reasonable assessment and the employee’s right of consultation.   The respondent contends that the Cell Training Matrices was in fact the assessment of competencies to be used in case of redundancy. At the hearing the respondent stated that the primary purpose of the Cell Training Matrices related to the effective running of the plant. It was clear from the evidence given by both parties that neither the employees, or the cell leaders carrying out the assessment for the two matrices, were aware that these could be used for selection purposes in a redundancy situation. In the absence of this vital knowledge the complainant could not make a constructive contribution to the process.

The onus of proof is on the employer to establish that he or she acted fairly in relation to the dismissal of the complainant. It is necessary to establish that he/she acted fairly in the selection of each individual employee for redundancy and that where assessments are involved and used as a means for selection that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made. The legislation establishes the right of each individual employee to be fairly-treated and particularly so on matters greatly affecting his/her welfare such as the loss of employment.

In the current case I find, Boucher v Irish Productivity Centre ([1994] E.L.R. 205)   informative.

‘it would appear to the Tribunal that at least those threatened with dismissal, or in the group likely to be dismissed, should be made aware that, what for some could be a final assessment was being made and their views and contributions, in support of their case for remaining, canvassed, valued and considered in a full and bona fide way.’

Also in the Boucher case the tribunal, in deciding in favour of the complainant, stated;

The Tribunal notes from the evidence that at the time of the selection of the claimants for redundancy Mr Cahill did not make the criteria for selection used by him known to the claimants and subsequently did not state the criteria for selection at a Rights Commissioner's hearing. The first occasion that the claimants became aware of the criteria was at the Tribunal hearing of 6 January 1993

In the current case the complainant was unaware of the relevance of the assessment relied upon by the respondent until the hearing. No opportunity was given to the complainant to make any input into the assessment used, which concerned a matter of vital interest to her, namely her continued employment or otherwise. It is not for me to decide whether or not such input would have made any difference. In addition, it is clear from the letter of 3rd June that the decision to make the complainant redundant had already been made in advance of any consultation.

I determine therefore, that the onus on the respondent to establish substantial grounds that the complainant was fairly dismissed by virtue of fair selection for redundancy has not been discharged and the complainant was unfairly dismissed.

In accordance with s.7 of the Act, I order the Respondent to:

Pay the complainant the sum of €8,000 in compensation within 42 days of the date of this Decision.

Unfair selection for redundancy.