ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00006833

Parties:

Complaint:

Date of Adjudication Hearing: 22/03/2017

Workplace Relations Commission Adjudication Officer: Aideen Collard

Procedure:

Pursuant to Section 39 of the Redundancy Payments Act 1967, the Director General of the Workplace Relations Commission (hereinafter ‘WRC’) referred the aforesaid complaint received on 23^rd January 2017, to me for adjudication. Technically, this complaint comes before the WRC as an appeal against an employer’s decision to refuse an employee statutory redundancy pursuant to Section 39(15) of the Redundancy Payments Act 1967 (also referred to as ‘the Act/s’) and should be construed accordingly. I proceeded to hearing on 22^nd March 2017, and gave the Parties an opportunity to be heard and to present any relevant evidence.  The Complainant represented himself and HR Representatives appeared on behalf of the Respondent. The documentation referred to herein was furnished by the Parties before and at the hearing. All oral evidence, written submissions, supporting documentation and case law presented have been taken into consideration.

Background:

The Complainant is seeking payment of statutory redundancy following completion of a fixed-term contract in excess of 104 weeks with the Respondent under the Redundancy Payments Act 1967. The Respondent declined to pay him redundancy contending that he is not entitled to same as he had unreasonably refused an offer of suitable alternative employment with its Parent Company.

Summary of Complainant’s Case:

In addition to the details outlined in his complaint form, the Complainant gave evidence confirming that he had been employed by the Respondent as a Project Co-ordinator on Team A on a fixed-term contract from 6^th November 2014 to 30^th December 2016, earning €29,750 gross per annum. He received a letter dated 22^nd November 2016 from the Respondent confirming that his contract would expire on 30^th December 2016, that he would be paid any accrued annual leave in his final payroll, that his P.45 would issue to him shortly thereafter and also stating: “I would like to thank you for your valuable contribution to (the Respondent) and wish you every success for the future.” Facing the prospect of unemployment, the Complainant applied for positions with other companies.

Around the same time, Management informed the Complainant’s Team A that it would be discontinued and its functions would be divided between the Respondent and its Parent Company with a smaller Team B being set up under the latter. The Complainant was encouraged to apply for a role on Team B and applied for two roles- an Administrator (one of three available roles similar to his current role) and Team Lead. Following interview, he was verbally offered a twelve month fixed-term contract for an Administrator role. At that stage, he had not been called for interview for the Team Lead role but verbally accepted the Administrator role hoping he was still in line for it. He was subsequently informed that his existing Team Lead (direct supervisor) had been appointed to the new Team Lead role. He said that prior to interview he had a conversation with a Manager informing him that he would not work on Team B if the Team Lead remained the same. Whilst there had not been a history of interpersonal differences, he said that he did not rate his ability for the job. He also felt that he would be left to undertake significant additional work training in new team members. He would not have proceeded with his application for the Administrator role had he known that his existing Team Lead would remain. He was only informed of this after he had verbally accepted the Administrator role. He also had an expectation that he would get the Team Lead role. Furthermore, the Team Lead was a permanent position whereas he was being offered a temporary twelve month fixed-term contract. He felt that this was a diminution on his existing fixed-term contract which was in excess of 24 months and offered nothing more. He did not sign the contract and left at the end of his existing contract to take up employment as a Financial Advisor with another employer on a higher salary. At his exit interview on 22^nd December 2016, he raised issues with his Team Lead’s abilities as per the record furnished at the hearing. He also questioned the propriety of the recruitment process for the Team Lead role, particularly as he had not been informed that he had been unsuccessful until 19^th January 2017 and was never given any feedback.

With in excess of 104 weeks’ service, the Complainant would have been entitled to statutory redundancy upon the completion of his fixed-term contract. He subsequently became aware that some of the other former Team A members who had not applied for and/or been interviewed for other roles were deemed entitled to redundancy. He made enquiries with HR and was told that he was not entitled to redundancy as he had declined an offer of continuous employment. He feels that this is unfair and his position would have been the same had he known all the facts before going for interview for the Administrator role and the Respondent should have made him explicitly aware of the position. He contends that it was reasonable to refuse this role in all the circumstances.

Under questioning, the Complainant accepted that he had never raised a grievance in respect of his Team Lead although he said he had expressed disquiet about his abilities. He accepted that the Respondent had furnished him with the link to the Citizens Information page on Redundancy before he applied for the other roles but felt that this was inadequate. Based upon his own research, he said he was aware that the offer of continuous employment could render him ineligible for statutory redundancy. It was also put to him that he may not have received confirmation that he was unsuccessful in relation to the Team Lead role as he would have ceased using his work email.

Summary of Respondent’s Case:

A detailed written submission was furnished on behalf of the Respondent supplemented with evidence from a HR Specialist on its behalf. She confirmed the Complainant’s position as a Project Co-ordinator on a fixed-term contract with the Respondent as set out above. She also outlined the background and rationale for the company restructuring leading to the dissolution of the Complainant’s Team A under the Respondent and creation of a new Team B with slightly different functions under the auspices of its Parent Company. At a meeting on 15^th March 2016, the Complainant and other Team A members had been informed that a review of its functions was being conducted. Following conclusion of this review on 11^th November 2016, one-to-one sessions between the Manager and all members were held to allow them to ask any questions or raise any concerns. The Complainant was informed that new roles in both areas would be advertised and he was encouraged to put himself forward for roles suitable to his competencies and experience.

The Respondent’s HR Manager confirmed that the Complainant was issued with a formal notification on 22^nd November 2016, that his fixed-term contract was due to expire on 30^th December 2016. The Complainant emailed the Respondents’ HR Business Partner to enquire as to whether he would be entitled to statutory redundancy, in response to which he was emailed with a link to the Citizens Information page on Redundancy specifically highlighting the section on ‘Qualifying for Redundancy’.

Arising from the company restructuring, a number of new roles were advertised on 28^th November 2016 including for the Administrator role (two permanent and one fixed-term positions) and permanent Team Lead role for Team B with the Parent Company applied for by the Complainant. The recruitment process conducted by another branch of the Parent Company entailed an internal scoring system whereby each candidate’s CV was assessed against the minimum criteria set out in the job description. The Complainant met the minimum criteria for the Administrator role but not for the Team Lead role and accordingly he was invited to attend for interview for the former. He attended for interview on 12^th December 2016 and on 15^th December 2016 was given a verbal offer for the fixed-term Administrator position which he verbally accepted. This offer was confirmed in a letter dated 19^th December 2016 to the Complainant including the contract confirming the same terms and conditions as his existing contract and remaining open for written confirmation until 30^th December 2016. As is standard practice when an employee is leaving the Respondent’s employment even when moving internally, the HR Business Partner conducted an exit interview with the Complainant on 22^nd December 2016. On the same date, an email from his Team Lead to the Parent Company confirmed: “(The Complainant) has just advised me that he has been offered a job elsewhere and is handing in his notice. His contract ends the 30^th, but he’s willing to work up to circa 20^th Jan if needed. Theproblem is he doesn’t want to sign on to a new (Parent Company) contract only to leave 2 weeks later.” Following the Complainant handing in his notice and declining the Administrator role, it was offered to the next candidate on the shortlist and he was paid for accrued untaken annual leave and issued with his P.45. In early January 2017, there was an exchange of emails between the Complainant and the HR Business Partner regarding his entitlement to statutory redundancy. By email dated 12^th January 2017, the HR Business Partner confirmed that he was not entitled to redundancy as follows: “I spoke with Mr XY, (Compensation & Benefits Manager) and he confirmed unfortunately you are not entitled to Redundancy. You were offered a role in (the Parent Company) that offered you continuous employment to which you declined.” It was accepted that at least one employee from the Complainant’s Team A who had not sought a new role had been paid redundancy. The Complainant did not take any great issue with the Respondent’s version of events save than maintaining the reasonableness of his refusal of the new contract in all the circumstances.

The Respondent set out the relevant provisions of the Redundancy Payments Act 1967 in detail in its written submission. Section 7 of the Act provides for the general right to a redundancy payment when an employee is dismissed by reason of redundancy as defined therein or is laid off or kept on short-time for the minimum period, and has the requisite minimum 104 weeks service in insurable employment. Section 9(1) of the Act sets out the various circumstances in which an employee shall be taken to be dismissed for the purposes of redundancy which includes the expiration of a fixed-term contract. Sections 9(2) and (3) of the Act provide that an employee shall not be taken to have been dismissed for the purposes of redundancy where there is renewal of a contract or re-engagement under a new contract with the same employer (or associated company) or with another employer and sets out the conditions that must be satisfied in relation to each scenario. The Respondent further relied upon Sections 15(1) and (2) of the Act which set out the circumstances in which an employee becomes disentitled to a redundancy payment for refusal to accept alternative employment. It was submitted that it had met the requirements of Sections 15(1) and (2) of the Act and the Complainant had unreasonably refused the offer of the new contract. In the instant case, he had been offered a twelve month fixed-term contract which was due to commence the day after the expiry of his existing contract so there would be no break in service. Notwithstanding that the Administrator role was new, the material terms and conditions remained the same including the same status, pay and benefits, location and hours of work. The only difference was that the contract was with an associated company, the Parent Company as permitted by Section 16 of the Act.

The Respondent relied upon case law from the Employment Appeals Tribunal addressing the issue of what constitutes ‘reasonable refusal’ of an offer of suitable alternative employment. Similar to the situation prevailing in the instant case, in Nolan -v- Certus (Determination No. RP11/2015), the employee had declined the offer of continuous employment on a fixed-term contract with the employer to take up alternative employment. In the case of Morrow -v- Fogarty (Determination No. RP154/2014), an offer of employment 16 miles away from the existing location was found to constitute suitable alternative employment within the meaning of the Act. Overall, it was submitted that the Respondent had behaved in an extremely reasonable and responsible manner in all its dealings with the Complainant and had not dismissed him within the meaning of the Act such that he was entitled to payment of statutory redundancy and it sought to have his complaint dismissed.

Findings and Conclusions:

This complaint has been made within the requisite twelve month time limit and save for immaterial matters, there is no dispute as to the primary facts giving rise to this claim. Under Section 9(1)(b) of the Redundancy Act 1967, the Complainant would have automatically been entitled to payment of statutory redundancy upon the expiry of his fixed-term contract without renewal under the same or similar contract and having in excess of the requisite 104 weeks service pursuant to Section 7. There is no issue that the expiry of his contract coincided with the Respondent making his role redundant owing to the reconstitution of its functions including the setting up of a new Team B under its Parent Company. Upon applying for two of the new roles, the Complainant was offered a twelve month fixed-term contract for an Administrator role which he declined in favour of an external post. There is no issue that the new contract fell within Section 9(2) of the Act, being the offer of a new contract of employment which is substantially the same as his pre-existing contract albeit with a different job title and for a twelve month period, in writing with an associated company. The issue in contention and to be determined is whether the Complainant has unreasonably refused the offer and has thus disentitled himself to statutory redundancy under Section 15 of the Act. The Complainant contends that his refusal of the new contract was reasonable whilst the Respondent argues the contrary.

Section 15(1) of the Redundancy Act 1967 provides for a scenario whereby an employer offers renewal of an employee’s contract or new contract which does not differ from the pre-existing contract and takes effect on or before the termination of that contract. Section 15(2) provides for a scenario whereby an employer offers in writing, renewal of an employee’s contract or a new contract which differs wholly or in part from the pre-existing contract, subject to the proviso that it constitutes suitable employment and takes effect within four weeks. Given that the contract offered herein was for a new role with a new title, Section 15(2) is probably the more applicable as follows:

“Disentitlement to redundancy payment for refusal to accept alternative employment.

15 (2) An employee shall not be entitled to a redundancy payment if (a) his employer has made to him in writing an offer to renew the employee’s contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before the termination of his contract,

(c) the offer constitutes an offer of suitable employment in relation to the employee,

(d) the renewal or re-engagement would take effect not later than four weeks after the date of the termination of his contract, and

(e) he has unreasonably refused the offer.

(2A) Where an employee who has been offered suitable employment and has carried out, for a period of not more than four weeks, the duties of that employment, refuses the offer, the temporary acceptance of that employment shall not solely constitute an unreasonable refusal for the purposes of this section.”

The Respondent refers to both Sections 15(1) and (2) of the Act but nothing turns on this as both include the additional requirement that the employee concerned “has unreasonably refused the offer” of the alternative employment so as to disentitle him/her to redundancy, giving rise to the issue in dispute in the instant case. In terms of interpreting these provisions, the cases from the Irish employment fora including those cited above on this point appear to turn on their own particular facts. Notably, in Nolan -v- Certus (Determination No. RP11/2015), the employee had accepted and worked under the new contract for some time before resigning in favour of external employment. However, the English EAT has provided some useful guidance in relation to the appropriate test in Cambridge & District Co-operative Society Ltd -v- Ruse [1993] I.R.L.R. 156 at 158, when considering the similarly worded provisions of the British legislation, holding that the question of “the suitability of the employment is an objective matter, whereas the reasonableness of the employee's refusal depends on factors personal to him and is a subjective matter to be considered from the employee's point of view”. In this respect, I note that the Irish employment fora have consistently applied a subjective test to the reasonableness of an employee’s refusal of alternative employment.

As there was no real issue that the employment offered was objectively suitable, I must assess the factual matrix subjectively to determine whether the Complainant’s refusal of the twelve month fixed-term contract for the Administrator role was reasonable. This requires consideration of the matter from the Complainant’s point of view taking into account the factors personal to him as outlined in his evidence above, to determine whether his refusal was a reasonable response. In the absence of any history of interpersonal differences or grievances, I do not consider his objection to his existing Team Lead being appointed to the new role or his disappointment at not being offered that role to constitute grounds for reasonable refusal of the contract offered. However, I am satisfied that such refusal was reasonable in circumstances where he was offered a temporary twelve month fixed-term contract less than half the length of his existing contract, representing a diminution in job security, particularly when two permanent Administrator positions were available.

As an aside, it is apparent from the exchange of emails in early 2017 that the Respondent had not explicitly advised the Complainant that an offer of a position with its Parent Company would disentitle him to redundancy and this was only clarified when he enquired about payment of redundancy after he had applied for and declined the role offered. Basic fairness dictates that if the Respondent had intended to rely upon the offer of alternative employment to obviate redundancy in circumstances where employees had a choice of applying, and those who had not sought re-employment were deemed eligible for statutory redundancy, this should reasonably have been made explicit beforehand. Had the Complainant been properly apprised of the situation, he could have made an informed decision about applying for the role offered at the outset and confined himself to an application for the Team Lead role. I also note that the position declined by the Respondent was filled with the next candidate so causing little inconvenience. I do not accept the submission that the Respondent has behaved in an extremely reasonable and responsible manner in all its dealings with the Complainant, in circumstances where it seeks to rely upon Section 15 of the Act to deny him statutory redundancy without properly apprising him of the position beforehand.

Decision:

Section 39 of the Redundancy Payments Act 1967 requires that I make a decision in relation to this appeal. Based upon the aforesaid, I am satisfied that the Complainant reasonably refused the offer of the twelve month fixed-term contract for the Administrator role with the Respondent’s Parent Company and direct payment of redundancy under the Redundancy Payments Acts as follows:

Start Date: 6^th November 2014

Termination Date: 30^th December 2016

Gross Pay: €29,750 yearly so €572 weekly (rounded down to the nearest euro)

Any award under the Redundancy Payments Acts is subject to the Complainant having been in insurable employment for the relevant period under the Social Welfare Acts. It also follows that the Parties may have to complete the necessary redundancy forms to effect payment of redundancy.

Dated:   25/10/17

Workplace Relations Commission Adjudication Officer: Aideen Collard

Key Words: Section 15 of Redundancy Act 1967 - disentitlement to redundancy payment for refusal to accept suitable alternative employment - subjective test for unreasonable refusal of an offer