Challenges & Changes

In January 2016 a new Managing Director was appointed by the Board with a mandate to bring transformation and change to the business. Significant organisational change and investment in systems and processes and the way things were done in the company had been anticipated by the Board. During the course of 2016 a review of the business’s core functionality was initiated and this included a full review of systems and processes in Sales, Marketing, Customer Service, Finance, Purchasing, IT, Technical Services and Warehouse & Logistics. It was found that many of the systems were antiquated and not fit for purpose. An implementation plan was put in place to address these shortcomings in a systematic manner. Significant change was introduced and has been continuous in the company since the beginning of 2016. In October 2016 as part of this strategy “a “new” company that is customer driven, with optimum efficiency and capable of being agile and innovative in its approach to achieving ambitious growth targets” was announced to all staff. The restructure of the Sales, Customer Service and Technical Service teams was also announced. In December 2016, as part of this restructure the Sales Team were invited to apply for the new Sales Roles, the new roles were filled and not all the internal candidates were successful. In July 2017, a large Customer of the company advised that they would no longer be buying from them. A long-standing supplier had entered the market in direct competition and set up offices in Cork. This single customer represented a third of the annual sales turnover. Due to the seriousness of the loss of this key customer it was imperative that the company acted swiftly and decisively to mitigate the impact on the Company. Consequently, marketing ceased to be a separate function and was integrated into the Sales function. This was necessary to align the structure and in particular stream line the commercial team so that they adapted to the new environment. On 1st October the upgraded IT systems which included revised systems for Sales, Customer Service, Internal Sales, Finance, Purchasing, TSD, Warehouse and Logistics went live. In light of these developments allied with the introduction of new systems the operating environment significantly changed. The change programme was accelerated and this incorporated a change in the organisational structure, a change in the roles within the company and a reduction in the number of roles as a necessary measure to ensure the continued success of the business. Redundancies became necessary.

The Process

On November 6th at a company meeting the Managing Director advised all Staff inter alia that further changes were necessary to the organisational structure: This briefing advised staff that "in line with the announced strategy of creating a "new" company which will give a step change in efficiency and customer focus" organisational changes were needed. As was explained at the briefing these changes followed on from those that had already taken place within the Sales, Customer Service and Technical Services teams. The announcement on November 6th was a change to both "structure and roles within the company". The briefing continued to point out that the restructured company would now look as set out in the organisation chart presented.

The key changes that were to take place and the areas that they would impact were identified as Finance, Purchasing, Warehouse and Internal Sales. The meeting confirmed that new job descriptions would be published for the newly defined roles and that these were open to all staff to apply for.

The briefing was explicit in stating "some roles will cease to exist" and "that at the end of this process there won't be jobs for everyone because the new structure needs approximately half a dozen less roles than we currently have". This part of the process was carried out in 4 high level stages over the following time frame to expedite matters and to minimise business disruption and Staff anxiety:

Communication – the announcement was made to all staff on November 6th. Immediately after the Managing Director’s announcement Staff met their Managers in smaller groups and in one to ones, as required, to work through the new roles and how the changes would affect them personally. Job descriptions for all available roles were circulated to Staff.

Procedure

• • Expressions of interest to be submitted by close of business Tuesday 7th
  • Applications to be submitted by 4pm on Wednesday 8th
  • Professional support and advice in relation to interview preparation was offered on Wednesday 8th and Thursday 9th

Interviews were held on Thursday 9th and Friday 10th

Staff were informed of the outcome of the interview process on Monday 13th November

On 14th November Staff were advised of two further vacancies of Customer Service Specialist Lead and Schools Operations Specialist and were invited to apply .

By correspondence dated November 6th staff were informed that all job descriptions were emailed and were available from Payroll or on Company Intranet. Following the meeting on November 6th staff in the impacted areas were provided with a personalised letter confirming that their "role was at risk of redundancy".

Supports were put in place to ensure that staff understood the interview process and the criteria they were being measured against.

An application form was made available. Section B of the Application form noted that

“Certain skills and abilities have been identified in the job descriptions provided and available on the Public Folder – HR Forms. These include for example, commercial acumen, results driven, problem solver etc. At interview you will be asked to give examples of your personal achievements to date under these various headings.” The company also offered a professional support service for interview preparation. This was provided by Communiqué International and was held off site on Wednesday 8th and Thursday 9th November. In advance of the meetings Communiqué international where provided with a sample interview template and competency framework to ensure they could provide comprehensive and robust preparation for staff. This document identified the competency/skills required, defining them and applying it to the roles on offer by function.

A total of 10 employees availed of the interview preparation support.

Interviews The selection interviews were held off site on November 9th and 10th 2017. In total 11 roles were to be filled. 11 interviews were conducted with one employee applying for two roles.

All interviews were chaired by an external HR Consultant, who was tasked with ensuring that this process was carried out in a professional efficient and fair manner. As appropriate the relevant Line Manager took part in the interview.

The interviews followed the competency and skills set out in each job description. All candidates were asked consistent open-ended questions that were designed to elicit their knowledge and expertise in the area as well as examining their communication skills.     The purpose of the interview was to determine the candidates’ suitability and this assessment would be based entirely on the performance at interview.

Outcome and Support

On November 13th staff were advised of the outcome of the selection process. A total of 8 appointments were made, while 4 employees were unsuccessful in the process and were made redundant. Those staff to be made redundant received a letter setting out the terms of their redundancy and the available supports. All employees who went through the selection process were offered feedback. This was availed of by one employee who had been unsuccessful.

Conclusion

This process was necessary in the context of the situation the Company found itself in for the reasons mentioned above. In this part of the change process there were 8 redundancies, 6 people were promoted / reassigned. Interview training was offered by an independent company to all candidates. For the 8 people who were made redundant the Company provided Pension Advice, Outplacement Advice and Tax Advice. The redundancy process was carried out using objective criteria and overseen by a HR Professional. For the 6 people who were promoted or reassigned ongoing training / mentoring is being provided to ensure they achieve every success in their new roles. In conclusion, it is respectively submitted, that in relation to these redundancies, the Company behaved reasonably, responsibly and fairly.

The Complainant was employed from 7th March 2005 to 25th December 2017. He was employed as Product Manager. His salary was €41,626.68 per annum. He was a member of the company pension scheme.

He did not apply for any in-company position and did not attend any interviews. He received €15,972 in statutory redundancy payment as well as any holidays owed and salary owed:

How did the Process apply to the Claimant

             The Announcement and Organisation Chart was sent to the Claimant

               He received a letter confirming that their "role was at risk of redundancy"

All Application forms were made available on the Company intranet.

Job specification were sent to the Claimant

Interview training was offered to the Claimant, which included the interview competency model

The Claimant received a letter notifying them of redundancy

The Claimant received a Reference Letter

The Claimant received a letter detailing a further two roles that had become available

The Claimant received an RP50 Form

Summary

It is respectively submitted, that in relation to this redundancy, the Company behaved reasonably. The claim is rejected.

This complaint referred to Adjudication, under Section 8 of the Unfair Dismissal Act, 1977, arises in circumstances of exceptional arrogance and lack of concern displayed by an employer towards its employee with long service.

The Respondent terminated the employment, suddenly and without forewarning. There was no process of engagement or consultation whatsoever.

On Monday morning, November 6th, 2017, the Managing Director, who had taken up duty just under 2 years previously, in January 2016, sent an email to all staff, directing them to gather for a meeting 30 minutes later. At the meeting an email was read in full content.

There was to no discussion, no input from staff, decisions were already made, and a time line to affect the "...reduction of the number of people working in the company." was set out.

It would commence there and then, and be completed on the following Monday.

The context was alluded to as a "restructured company" with changes in a number of areas. However as noted in the email some minor changes, in line with the normal evolution of companies, had already been made. No fundamental change was announced. One hard reference point was the upgrading of the IT systems and a switch to SAGE suite.

As will be seen, the effect of this particular change in respect of the Complainant, was that he had already been excluded from information and training in SAGE.

Job Descriptions were attached to the Managing Director's email, and purported to be fundamentally different or new. The fact is that they were neither.

After the general meeting a number of personnel were corralled by their respective managers, and received letters advising them that their roles were at risk of redundancy.

Against this backdrop a compressed 'recruitment process' was announced in the Managing Director's email; Staff were obliged to "express interest" in the roles published, by "close of business" the next day, Tuesday, November 7th, 2017. Applications were to be submitted by 4pm on the next day, Wednesday, November 8th, 2017. Interviews would take place over the following two days, Thursday, November 9th, and Friday, November 10th, 2017. It was stated that they anticipated that there would be a "half dozen" less roles at the end of the process. In the event 8 staff, including the Complainant received notice of redundancy.

This was a sham process for a number of reasons, not least because the roles involved, were not fundamentally different to those existing, but also because it was sudden, and compressed into five days. There were no grounds to justify this whatsoever.

The approach was neither objectively based or reasonable by any normal standard.

The Complainant was effectively dumped out of the employment in a scenario contrived to look like redundancy, and in a manner contrived to look like some kind of due process.

In retrospect the scenario that played out might have been anticipated; some 23 personnel, from a workforce of 50, had either left or had their employment terminated since the current Managing Director joined the Respondent, less than two years previously.

The Complainant worked with the Respondent from March 7th, 2005, until his employment was terminated on Christmas Day, December 25th, 2017.

He began employment in a role that required duties in administration and customer service in the 'Instrumentation Section. He was assigned additional responsibilities within his first year when a more senior employee left. By 2010, the 'Pump & Process' section grew with the acquisition of a large new contract and Alan became more and more involved in this area.

Circa 2013, the Pump & Process Manager was promoted, and he was placed in the role of Product Manager, not least because he had forged strong relationships with the Respondent's customers and suppliers, while working alongside the former Manager, who had been assigned the title of Sales Director.

His career path looked set to position him to succeed the Sales Director, however things changed considerably after the current Managing Director joined the Respondent in early 2016.

Between then, the termination of his employment, he observed considerable upheaval, which included a High Court action by two Directors, the termination of employment of experience staff, resignations, and the employment of personnel previously associated with the new MD.

In November 2016, the Sales Director left to join the employment of a main supplier who had restructured its relationship with the market. This Director had expressed dissatisfaction with how the Respondent was then being run. He was given a €10,000 bonus in recognition of his demonstrable commitment to the Respondent.

The Sales Director was not immediately replaced.   He, together with another colleague, a Sales Engineer, were the most senior personnel in the Pump & Process section. The Sales Engineer later resigned to take up alternative employment. Two personnel were recruited externally in 2017; one to replace the Sales Engineer, and a second as a Technical Services Engineer.

The latter recruit was gradually assigned duties normally undertaken by the Complainant. Significantly, his responsibility for pricing, was reallocated.

In August 2017, without any prior indication, he was advised by the Managing Director, that he was now the designated 'Product Procurement Specialist'. He was not provided with a Job Description, and became less and less occupied. The only duty he was assigned, of any particular significance, albeit as part of routine administration, was the issuing of purchase orders to suppliers.

The two personnel who had been externally recruited, were clearly short on product and supplier knowledge. Despite this evident fact, he had both in depth knowledge and strong supplier and customer connections, built up over time, was specifically excluded from mentoring, which the two personnel had sought.

The MD made her announcement on Monday, November 6th, and he, like other colleagues, received a letter advising that his role was at risk of redundancy.

Roles were advertised as part of the sham 'process' announced. The only role that he could identify in any way with, was a 'Single Use Systems Assistant. This was a considerably junior role.

Bearing in mind his experience of the very profound change in attitude towards him which was ongoing, and seeing developments in their obvious context, he decided not to participate in the sham recruitment process.

No effort was made to persuade him to do otherwise.

He was on leave on Monday November 13th, 2017, when colleagues were given written notice of the termination of their employment, at 5.30pm, he received a text message from the Finance Director, advising that he was being made redundant, and that there was no need to attend again, for work.

He was very deliberately stripped of his responsibilities and very evidently marginalized, in the months leading up to the November 6th announcement.

Based on his service, twelve years, he was formally given notice of termination, dated November 13th, 2017 to expire on December 25th, 2017.

Since the termination of his employment, he has had interviews with more than half a dozen companies. A second-round interview is pending with a preferred employer.

His income, since the termination of his employment, has been Jobseeker's Benefit.

The Basis of the Unfair Dismissal Complaint

The dismissal occurred in circumstance contrived to look like redundancy, and where, in any event, there was no fair selection process applied.

The dismissal on grounds of redundancy cannot, again, in any event, be sustained because the law requires both fair selection, and that the fact of redundancy being established on an impersonal basis consequent on specific and specified change imperatives.

As already demonstrated the decision to dismiss was preceded by particular behaviours of the Respondent towards the Complainant and where the invention of new job titles and alternative or amended wording in Job Descriptions were relied on to show change imperatives.

In addition, the application of law requires that employers behave both objectively and reasonably when dealing with their employees. Neither of these essential were met in the instant cases. There was no consultation, and there was no adequate or proper explanation of the alleged change imperative relied upon, either in justifying redundancy or justifying the compressed timeframe applied in effecting the dismissal of the Complainant.

A number of authorities can be quoted to support the interpretation and application of the relevant employment law concerned. However, there is one particularly relevant to the instant cases.

This is the case of Jerome Panisi v JVC Europe Limited, which was initially determined by the Employment Appeals Tribunal (UD 949/2009) and ultimately on second appeal by the Employer, from the Circuit Court to the High Court [2011] IEHC 279. The determination of unfair dismissal was upheld in each of the two appeal Courts who both increased the earlier awards of compensation, and awarded costs against the employer. He was ultimately awarded a full two years pay equivalent.

JVC Europe Limited     and       Jerome Panisi [2011] IEHC 279.

In this case it was determined that the employee was dismissed in a sham redundancy scenario. The objective was determined to have been to remove him as General Manager and as part of the sham process it was proposed that he apply for a position as Sales Manager. At meeting in March 2008, Mr. Panisi was advised that due to restructuring his role of General Manager was being eliminated. He was handed a letter confirming this advice attached to which there were Job Descriptions related to two of three 'new' roles, which he could apply for.

In his High Court judgment, Judge Peter Charleton stated that he believed that the third JD was not initially given to Mr. Panisi as it closely resembled that which applied to his General Manager role.

This third role was that of Sales Manager Ireland and was filled by an employee recruited prior to the sham redundancy. Mr. Panisi declined to apply for what was his own job.

Judge Charelton recited two specific legal requirements in effecting a legitimate redundancy, both of which are directly relevant to the instant cases; The first is Section 7(2) of the Redundancy Payments Act 1967, as amended by Section 4 of the 1971 Act, and by the Redundancy Payments Act 2003, wherein Section 5 (2)1 requires that "(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly..." five listed grounds.

Thus, highlighting the essential requirement of 'impersonality' in effecting a fair dismissal on grounds of redundancy, noting later that in St Leger V Frontline Distributors Ireland Ltd [1995] E.L.R 160 at 161 to 162 an EAT Chairman stated that “Impersonality runs throughout the five definitions in the Act"

These in brief summary are as follows ; cessation or intended cessation of the business; cessation or diminished requirement for a particular kind of work in the employees place of work; the fact that an employer decides to carry on business with fewer employees whether the work performed by the employee is continued or otherwise; that the work performed by the employee be carried on in a different manner for which the employee is insufficiently qualified or trained;       that the work performed by the employee be carried on another employee capable of performing it along with work for which the employee is insufficiently qualified or trained.

In this case Judge Charelton remarked that " it may be prudent, and a mark of a genuine redundancy that alternatives to letting an employee go should be examined".

No alternative to redundancy was ever contemplated in the instant cases.

Dealing with the legal requirement under contract for fair procedure in effecting redundancy, the Judge Recited Section 6 of the 1977 Unfair Dismissals Act;

S 6(3) states; "Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either -

the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

he was selected for dismissal in contravention of a procedure...as part of a collective agreement in the employment. relating to redundancy and there were no special reasons justifying departure from that procedure"

The Judge distilled the requirement for his determination in the Panisi case into two issues;

Whether or not the basis for dismissal was disguised as redundancy, or

Were fair procedures followed (in form but not in substance)

These are core to the instant cases. The Complainant was dismissed in disguised circumstances, and fair procedure, by any reasonable measure, was absent. The resonance of the Panisi case is very clear here; the Judge examined the Job Description of the Sales Manager Ireland and concluded that "...in reality, the work to be undertaken by the individual taking that post was virtually the same." as that related to Mr. Panisi's General Manager role.

This is the reality in the instant case, for example, with regard to the roles of the Internal Sales Specialists and the proposed Sales Support Specialists.

Unlike in the instant cases some consultation did take place, albeit without the essential of authenticity.

Largely, but not entirely, because of the similarity in the two Job Descriptions compared,          the Judge posited whether or not there was evidence of a plan for Mr Panisi to go, through an "apparent redundancy" and for his post to be filled by a colleague recruited into a sales role a year prior to his redundancy.

Again, there is a strong resonance in the instant cases, for example in respect of the IT Manager and the two female Complainants in Customer Services, and Accounts.

Commenting on the fact that Mr. Panisi did not apply for the Sales post 'on offer', the Judge reasoned that, in summary it would have been less than rational to apply in circumstances where his role was diminished, after 17 years of dedicated and successful service.

Apart from any other consideration, the Judge determined that the redundancy was a disguise for the intended termination of employment of Mr. Panisi. He decided that, in summary, there was a burden of proof on the employer to demonstrate the presence of "genuine process" was not fulfilled.

It was also clear, as alluded to earlier, that the requirement of 'impersonality' in effecting redundancy was also absent.

In summary, it is the case of the Complainant that the Respondent, constructed a plan, with some elaborative detail, but no plausible finesse, to affect the termination of the employment under the guise of redundancy.

The termination of the employment was affected in an arrogant and blatantly unfair manner, by any reasonable measure, and certainly in conflict with the law as written and as required to be applied.

There was no consultation. The process was sudden and deliberately compressed to maximise pressure on those concerned. The evidence of the treatment of the Complainant demonstrates how the selection was anything but impersonal. There was no fair procedure applied, on the contrary it was wholly unfair.

Accordingly, the Adjudication Officer is respectfully requested to determine that the Complainant was not fairly dismissed, because a genuine redundancy situation simply did not exist, but was contrived, and to award each the maximum compensatory amount permitted.

I note that in January 2016 a new Managing Director was appointed by the Board with a mandate to bring transformation and change to the business.

I note that the Respondent advised that in 2016 a review of the business’s core functionality was initiated and this included a full review of systems and processes in Sales, Marketing, Customer Service, Finance, Purchasing, IT, Technical Services and Warehouse & Logistics. It was found that many of the systems were antiquated and not fit for purpose.

I note that significant change was implemented.

I note that the new computer system replaced a 40-year-old one. It resulted in a reduction of 50/60% administrative duties.

I note that there was a restructure of the Sales, Customer Service and Technical Service teams. This involved creation of new restructured Sales Team with amended roles.

I note the Respondent’s position that the new roles were much more strategic, giving them the ability to respond to the needs of the business by being commercially focussed.

I note that the new system of operation introduced commercial accountability and this was the big change in the company.

I note the loss of a major customer meant that the restructure had to speeded up considerably.

I note that on 1st October the upgraded IT systems which included revised systems for Sales, Customer Service, Internal Sales, Finance, Purchasing, TSD, Warehouse and Logistics went live.

I note that the changes had the effect of incorporating a change in the organisational structure, a change in the roles within the company and a reduction in the number of roles as a necessary measure to ensure the continued success of the business. Redundancies became necessary.

I note that a total of 23 employees out of 50 either left or were made redundant in two years.

I note that in this situation eight employees’ positions were made redundant.

I note the Complainant’s position that all this was a contrived to get rid of long serving staff.

I note the conflict on evidence of both parties.

I am satisfied that significant change was deemed necessary by the Board of Directors.

I find that the company appointed a new managing director to implement these significant changes, which has resulted in revised roles, upgrading of IT systems and procedures with its concomitant impact on operations and procedures which in turn has given rise to the need to restructure departments and review the number of people deemed necessary to carry out the functions of the company.

I find that a company has a right to restructure its business.

On the balance of probability, I find that all this restructure was necessary and that as a consequence redundancy was inevitable.

Therefore, I find that the redundancy was genuine.

I find that that there were substantive reasons to implement this redundancy.

I find that the dismissal by reason of redundancy was substantively fair.

Procedural matters

I note that the Respondent stated that the loss of a major customer amounting to one third of their overall business resulted in them having to implement the changes and redundancies much quicker.

I find that the restructure of a business can cause serious upheaval to employees especially long serving employees, as in this case.

I note the process of implementing the redundancies.

Unfair selection for redundancy/Unfair dismissal