Complainant

Respondent

Anonymised Parties

A Customer Services Executive

A Label Company

Representatives

Mr Liam Doherty, Stratis Consulting

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00021332-001

25/08/2018

The respondent is a label manufacturer and the complainant worked in the customer services department from November 2000 until March 2018. She handed in her notice in February 2018 due to the relocation of the company from Tallaght to Ballycoolin. The complainant lives in Tallaght and the distance from her home to her job was five kilometres. The new location is 20 kilometres from her home. The complainant argues that she should have been entitled to a redundancy payment because the change of location meant that it would have been more expensive and would have taken her considerably longer to get to and from work each day.

At the hearing, the complainant read a submission she prepared and explained that she worked part-time for 26.5 hours over five days and that she earned €368.68 per week.   In April 2017, the company announced that it was moving from Tallaght to Ballycoolin, although the actual move was almost a year later.

At the hearing, it emerged that employees in the manufacturing part of the company were members of SIPTU, in addition to some of the complainant’s colleagues in administration. The complainant herself was not a union member, although it appears that the outcome of negotiations with the union on the relocation also applied to her.

In the months before the move, the complainant said that she considered her options, which came down to relocating or resigning. She felt that the additional travel time from her home in Tallaght to Ballycoolin was excessive. She explained that she didn’t drive to work and her journey to the premises in Tallaght took from 40 minutes to an hour each way. If she moved to Ballycoolin, she would have to take three buses and it would have taken up to two and half hours each way.

In the months before her resignation, the complainant said that she approached her manager about the possibility of being made redundant on the grounds of the relocation of her job.   When she got no satisfaction, she spoke with the sales manager, and finally, she asked the financial director, as the most senior manager on the site, if she could be made redundant.   The financial director responded that he had been advised that the move would not give any employee an entitlement to redundancy. However, he suggested that she should make a formal request in writing. The complainant said that on January 11th 2018, she made a written request to the finance director for payment of a redundancy lump sum. On January 23rd, she said that the director told her that he hadn’t passed on her request to “upper management,” but that he would do so.   She didn’t get a response and on February 14th 2018, she handed in her notice.

The complainant said that she got no offer of help to move, apart from a general offer of compensation for continued service on the new site. She also understood that drivers were to be given a paid toll pass and, at the hearing, it emerged that employees who travelled to and from work by bus were given paid Leap cards for 12 months from the date of the move.

At the hearing, the complainant said that before she resigned, she gave a lot of consideration to what she would do about the relocation of the company. She felt that spending up to five hours a day and travelling each way on three buses was disproportionate, considering that she worked 26.5 hours a week. She considered moving to a full-time role, but she decided that this change would make her working week excessively long.

When she got no response to her request for redundancy, and having concluded that the travelling distance was too far, the complainant said that in January 2018, she started looking for a new job. She handed in her notice on February 14th and she resigned on March 2nd 2018.

The complainant’s case is that she had no option but to give up her job, as the time taken to travel to and from the location to which her employer moved was excessive.   Her position is that consideration should be given to the relocation of her job as grounds for redundancy.

Having been established in a unit in Tallaght since 1981, by 2017, it had become evident that the business had outgrown where it was and in April that year, the respondent announced its intention to move to a state of the art facility in Ballycoolin, Dublin 15. Mr Doherty explained that, in discussions with SIPTU, it was agreed that redundancy would not be a feature of the transition. In December 2017, a final agreement was reached between the company and the union and this applied to all staff, including non-union members.

This agreement provided for pay increases of 2.5% in 2017 and 2018, a transition bonus and compensation for the costs associated with travelling to the new location, but no agreement on redundancy. Arising from the move, some employees had an advantage as they lived near Blanchardstown / Ballycoolin, and others were in a worse position because they lived nearer to the old facility in Tallaght. Mr Doherty gave examples of employees who were disadvantaged because of the move, and showed that some changed their start and finish times so that they could manage the increased distance.

Office staff at the company commenced moving to Ballycoolin on March 24th 2018, with the final two employees moving at the end of May. The complainant left her job at the beginning of March.

Mr Doherty outlined the general right to a redundancy payment which is set out at section 7(2) of the Redundancy Payments Act 1967. He argued that this entitlement is predicated on an employee being dismissed by their employer, for one of the reasons set out in the Act:

(a)The business has closed or the place where the business was carried out has changed;

(b)There is a requirement for fewer employees in the business or at the place where the business was carried out;

(c)The employer has decided that the work that that was done by the employee could be done by fewer or no employees;

(d)The job will be done in future by a person who is more qualified or trained than the employee;

(e) The job will be done by a person who is also capable of other work that the employee is not qualified or trained to do.

As the complainant was not dismissed for any of the reasons provided for in the legislation, the respondent’s case is that this complaint should fail. Mr Doherty also argued that, as someone else is now doing the job that used to be done by the complainant, her job was not made redundant.

As an alternative to resignation, Mr Doherty said that the complainant should have accepted the compensation payment and transferred to the new facility, even for an initial period to determine if the move was viable.

Setting out the difference in the distance between the old and new facilities, Mr Doherty said that the distance from the complainant’s home to Tallaght was around five kilometres and the distance to Ballycoolin is 21 kilometres. He argued that this distance is not sufficient to justify a redundancy payment and that it is not reasonable or in the public interest for a claim for redundancy to succeed in these circumstances.

The Relevant Law

Section 7(2) of the Redundancy Payments Act was referred to by Mr Doherty where the circumstances in which an employee may be entitled to a redundancy payment are set out:

“…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 to –

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed or,

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish…”

Sub-sections (c), (d) and (e) are not relevant to this complainant’s case.

The Characteristics of Redundancy

In St Ledger v Frontline Distributors Ireland Limited, UD 56/1994, the chairman, Mr Dermot McCarthy remarked that redundancy “has two important characteristics, namely, impersonality and change.” In 2003, the view of the Tribunal in this and other cases led to the amendment of section 7(2) of the Redundancy Payments Act and the insertion of the statement underlined above which emphasises that redundancy is impersonal, and “not related to the employee.”   The fact that the complainant’s employer ceased to carry on the business in the place where she was employed was in no way related to the her, but was an impersonal change in the business. It is my view that the provisions of sub-section (a) and (b) of section 7(2) of the Act include the cessation of a business in a particular place, or the change in the number of people required to work in a particular place and the transfer of the business to a new location. It is my view therefore, that the relocation of the employer’s business means that, for this employee, her job was redundant.

The question that arises is, was it reasonable for the employer to expect this employee to change her place of work from Tallaght, a distance of five kilometres from her home, to Ballycoolin, a distance of 21 kilometres?

Disentitlement to Redundancy

Section 15 of the Redundancy Payments Act 1967 (as amended) sets out the circumstances in which an employee will not be entitled to a redundancy payment. This section generally applies where an employer has issued notice of redundancy and then finds that the employee may be retained.   While, in the case under consideration, no notice of redundancy was issued, it is still necessary to consider the circumstances in which a redundancy payment will not be due:

“(1) An employee shall not be entitled to a redundancy payment if—

(a) his employer has offered to renew that 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 not differ from the corresponding provisions of the contract in force immediately before the termination of his contract,

(c) the renewal or re-engagement would take effect on or before the date of the termination of his contract, and

(d) he has unreasonably refused the offer.”

In the case of Louise Earley v Floorstyle Contracts Limited, RP382/2003, the claimant worked in Skerries and her employer moved to new premises in Swords. Where she had walked for 10 minutes to work, the move to Swords meant that Ms Earley had to take two buses. In his determination, the chairman of the Tribunal, Mr McCarthy found that section 15(1) did not apply to Ms Earley, as the offer meant that she would have to work at a different place. As the circumstances of the complainant in this case are similar to those of Ms Earley, I find that section 15(1) does not apply to the complainant here.

Section 15(2) address the situation where there is a change in the job, or in the job location, and the suitability of the offer to the employee:

“(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.”

Considering the suitability of the offer, Mr McCarthy stated:

“Given the amount of travel involved by contrast with the short walk in Skerries, we would find it unsuitable. For these two reasons, we find that the claimant is not disentitled under Section 15.”

By contrast with the 40-minute bus journey to the old premises, I find that the two-hour plus journey to the new premises is unsuitable and, on this basis, the complainant is not disentitled to a redundancy payment.

The Subjective Test

The circumstances of the claimant in the Employment Appeals Tribunal (EAT) case of Deirdre Heavey v Casey Doors Limited, RP1040/2013 are similar to this complainant’s circumstances. Ms Heavey lived in Baldoyle and her employer moved from Baldoyle to Balbriggan, a distance of 28.6 kilometres. Instead of a 10 minute walk to work, Ms Heavey would have to leave her home much earlier and take two buses. Ms Heavey’s employer refused her application for redundancy. Finding that her job had become redundant, the chairman determined that,

“The legal test to be applied is a subjective one. It is not what the employer found reasonable.”

In a Labour Court case heard in August this year, Cinders Limited and Celina Byrne, RPD1811, the Chairman, Mr Haugh found against the complainant when, on the closure of the shoe shop she worked in at the Merrion Centre in Dublin 4, she refused an offer of a similar job in Wicklow Street.   Ms Byrne told the Court that moving to Wicklow Street would not have caused any issues for her travelling to and from work.

In his determination on the Cinders case, Mr Haugh referred to the British case of Cambridge & District Co-operative Society Ltd v Ruse [1993] IRLR 156 where the Tribunal found that,

“…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 the Cinders case, the ease of the commute to and from work was a factor in the Court’s conclusion that the claimant’s refusal to re-locate was unreasonable. I find that, in the case under consideration, the complainant has met the requirements of the subjective test.   She would have had considerable difficulties with the commute to the new location and I find that her claim for a redundancy payment is not unreasonable.

Conclusion

I have considered the arguments of the complainant and the respondent on this matter. I agree with the respondent that the complainant was not dismissed and I am mindful of his concern about employees in his workforce in similar circumstances. However, I am guided by the authorities of the EAT and the Labour Court that I have referred to here and I find that, due to the change in the commuting distance arising from the relocation of the company’s business, the complainant should have been made redundant.

Section 7 of the above Act sets out five specific circumstances in which an employee may be entitled to a redundancy payment, the first of which is:

“(a) the fact his employer has ceased or intends to cease to carry on the business for the purpose of which the employee was employed by him, or has ceased or intends to cease to carry on that business in the place where the employee was so employed,”

As the complainant’s employer has ceased operations in the place where she was employed, her job has become redundant. Subject to her PRSI contribution status, I have decided that the complainant is entitled to a statutory redundancy payment, based on her service from November 27th 2000 to March 2nd 2018.

Redundancy, relocation