Complainant

Respondent

Anonymised Parties

A Project Manager

A horticulture company

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00010335-001

21/03/2017

The complainant asserts that he was unfairly dismissed by the respondent. The respondent denies the claim, asserting that the complainant did not have one year’s service and was made redundant.

The respondent outlined that the fact of dismissal is not in dispute. It submitted that the complainant did not have the service required to bring a claim. It submitted that the employment commenced on the 2nd February 2016 and referred to a sheet signed by the complainant. This sheet is signed by employees on their first day of employment. The complainant was given one week’s notice on the 24th January 2017, ending on the 31st January 2017. It referred to the P45, which gives the date of cessation as this date.

The respondent outlined that the complainant’s role involved managing contracts and seeking new business nationally and internationally. The complainant initially billed as a contractor and later worked as an employee. The respondent’s turnover dropped to €1.3m and the complainant and other employees were made redundant. The complainant’s role was not replaced. As the job no longer existed, it was entitled to rely on section 7(2)(e) of the Unfair Dismissals Act and the decision of McArdle v Oxygen Environmental (UD 657/2015).

The Managing Director gave evidence. At the time the complainant started, the respondent had many contracts and the respondent needed help in this area. Later, there was a slowdown in the pipeline of work and they were not making profit. The company was losing money, €45,000 in the previous year, and they had to reduce outgoings. The complainant was the only one in a project management position and the Managing Director took over the role.

The Managing Director said that the redundancy process was a verbal one. He had weekly project management meetings with the complainant. He spoke to the complainant about the seriousness of the situation and mentioned the other redundancies. The respondent had about 15 staff and over six months, it lost six or seven people. The respondent applied ‘Last In, First Out’. The complainant was the last in. The Managing Director gave the complainant an excellent reference and rang other businesses on his behalf. The Managing Director gave the complainant one week’s notice on the 24th January 2017.

In cross-examination, the Managing Director accepted that the only signed document was dated the 18th February 2016 and this was when the complainant filled in the sheet. It was put to the Managing Director that the complainant started on the 1st February 2016 and had invoiced the preceding Friday; he replied that the complainant submitted many invoices including up to the 29th February 2016. It was put to the Managing Director that the invoice of the 29th February 2016 related to the purchase of machinery and not to work, the last invoice for work was the 31st January 2016; he replied that he only had one definitive signed document. He rejected that the complainant started on the 1st February 2016.

The Managing Director accepted that he incorporated two new companies in June 2016. He said that while there was still work in 2017, this was on a massively reduced scale. It was clear all the way through 2016 that it was not going well. The Managing Director referred to the complainant losing an Irish client. It was put to the Managing Director that he never told the complainant that his position was under threat or used the word “redundancy”; he replied that he mentioned lots of times that jobs were under threat. He had said that they had to have redundancies or they would all be out of work. It was put to the Managing Director that he had not mentioned pay cuts or changing the complainant’s role; he replied that in late 2016, they discussed changing work roles and they looked at many options. The Managing Director was desperate to keep the complainant in a job and they did not have an actual discussion about him doing manual work. It was put to the Managing Director that there was no formal redundancy process and no agreed selection procedure; he replied that they applied LIFO. It was put to the Managing Director that the P45 states the 3rd February 2017 as the end date; he replied that he had not seen this document before and the one he had stated the date as the 31st January 2016, a clerical error. It was put to the Managing Director that the 3rd February 2017 was the agreed handover date and there was a handover meeting on the 6th February and an email on the 7th February; he replied that the complainant finished on the 31st January and any high-level professional would tidy up. It was put to the Managing Director that there were text messages and emails of early February; he did not accept that the complainant worked until the 6th February 2017.

In closing comments, the respondent submitted that the company was in trouble and the Managing Director took over the complainant’s role. It was clear that there was a weak pipeline. Others were made redundant and they had a good relationship. While there was no redundancy procedure, the complainant was a senior manager and knew of the financial constraints.

The complainant initially worked for the respondent as a sub-contractor, through his own horticulture company. As this role increased to 20 or 30 hours per week, he agreed to become an employee of the respondent. The respondent bought the assets of the complainant’s company. The complainant’s last work invoice as a contractor is dated the 31st January 2016.

The complainant outlined that his role was to manage works and to price variations. At the start there were two projects, one in the UK and one in Ireland. He worked over 50 but under 60 hours per week and this never really reduced, even in January 2017. He travelled to the UK four or five days a week, managing existing jobs and pricing new work. He stopped travelling to the UK at the end of November or early December. The respondent had two staff in Ireland and three in the UK as well as subcontractors.

The respondent informed the complainant in early January 2017 that the business was not going well. They had a management meeting and discussed real-time costings. There was not a lot in the pipeline and there was poor visibility. He had priced a lot in January and there were projects to be priced. Developers were sending in repeat business. He and the Managing Director were both working 50+ hours a week. The respondent did not say that his job was under threat and he would have done other work, including manual work. He would have taken a pay-cut.

The complainant said that he worked for the respondent until the 6th February 2017. He worked from his home office throughout his employment with the respondent and emailed the respondent in early February. He was unavailable on medical grounds in early February, so they met the following week to complete the handover.

In respect of mitigation, the complainant said that he did commission-only work for a software company and generated no income. He was paid €600 a week for a named company in a role he worked for one month at the end of July. The nursery job did not work out. He started employment on the 2nd January 2018 selling ventilation units. He is paid €36,000 per annum. This is permanent role with six months’ probation.

The complainant outlined that he abided with the non-compete clause. A named client of the respondent offered the complainant their contract in November 2017. The complainant replied that he could not do the work. A developer also contacted the complainant to price work, but he told them that he could not do this because of the clause.

In cross-examination, the complainant accepted that he started as a subcontractor. He signed the respondent document around the time it was emailed to him. He worked mainly on projects and priced work, using a software package. He did not access accounts and did not receive management accounts. He was asked why he continued to work after the expiry of the notice; he replied that they agreed he would work beyond this date. It was put to the complainant that the end date of his employment was the 31st January and he was paid until then; he replied that they agreed that he would be paid until the 7th February. The complainant was asked why he did not do groundworks after the end of his employment with the respondent; he replied that he did not have industry approval for groundworks. It was put to the complainant that he did not seek other work; he replied that he took the software position and could not do manual gardening because of the non-compete clause. It was put to the complainant that he never suggested doing other roles or taking a pay cut, including at a meeting in a hotel during the notice period; he replied what choice did he have and there was no opportunity to suggest alternatives. It was put to the complainant that they did not hire anybody new after he left; he commented that the respondent was looking for a UK-based estimator in May 2017 but he did not print out this advertisement.

In closing comments, the complainant outlined that the start date was the 1st February 2016 and the last work-related invoice was issued in January 2016. His employment started the following week. The respondent advanced that his employment commenced on the 2nd February 2016, but advanced at the adjudication that this was the 18th February. Even if the 31st January 2017 was the last day of the complainant’s employment, he had a full year from the 1st February 2016. The complainant continued to work in the week up to the 6th February 2017. He submitted that he had sufficient service to avail of the Unfair Dismissals Act.

The complainant submitted that this was a manifestly unfair redundancy. There was no selection procedure and no rights were given to him. He was not advised of a selection procedure or criteria. He was told that his job was over. This was unfair. The strongest line of authority relates to warnings and he is entitled to make his case and put forward alternatives. He was not afforded this. The only explanation given was that his salary was high.

The absence of a warning is sufficient to ground the claim. The only meeting took place after notice was served and it was unfair to criticise the complainant for not then putting forward alternatives. There was no consultation, no warning and the procedure used was not sufficient. Addressing substantive grounds, while the pipeline was bleak, the complainant was working long hours and there was work coming in.

In supplemental submissions, the complainant submitted a pay slip of the 7th February 2016 and a copy advertisement of June 2017. This is for a part-time QS role in the UK, working for the respondent.

The first issue is whether the complainant has sufficient service as an employee of the respondent to maintain a claim pursuant to the Unfair Dismissals Act. The complainant’s case was that he commenced employment with the respondent on the 1st February 2016 and this came to an end on the 6th February 2017. The respondent submission states that the period of employment commenced on the 2nd February 2016 and came to an end on the 31st January 2017. There was conflicting evidence over the importance of a sign-in sheet dated the 18th February 2016 and a P45 issued giving the 3rd February 2017 as the date the employment ended.

Section 3 of the Terms of Employment (Information) Act requires an employer to provide an employee with a statement of the terms of their employment. Subsection 1(e) provides that this should state the date of commencement of employment. The document entitled ‘principal statement of terms and conditions’ provided in this case states that the date the employment commenced was the 1st February 2016. It follows that the date from which to calculate service for the purposes of the Unfair Dismissals Act is the 1st February 2016.

The complainant submitted that he completed one year’s continuous service on the 31st January 2017. In assessing this question, I note the Employment Appeals Tribunal decision in McGowan v McLoughlin [2000] ELR 106, which held “A year means a calendar year, beginning on 1 January and ending on the 31 December, or a period ending on the date before the date of the anniversary.” While the complainant contends that he worked into February 2017 (a contention rejected by the respondent), it is not necessary for me to resolve this conflict as he has one year’s continuous service on the 31st January 2017. Even though this was the date the notice came to an end, the complainant completed one year’s service on this date.

The second question is whether the complainant’s employment ended by reason of redundancy. The complainant asserts that there were procedural and substantive failings in the process leading to his redundancy. The respondent asserts that the complainant was aware of the difficult situation faced by the respondent from his attendance at meetings as a senior manager. It asserts that the Managing Director took over the complainant’s role.

In JVC Europe Limited vPanisi [2011] IEHC 279, the High Court held as follows in respect of fair procedures and the assessment of whether a redundancy was genuine:

“It may be prudent, and a mark of a genuine redundancy, that alternatives to letting an employee go should be examined. However, that does not arise for decision in this case. Similarly, a fair selection procedure may indicate an honest approach to redundancy by an employer, but I do not wish to comment on matters which are outside the competence of the decision to be made in this case: see Stewart and Dunleavy, Compensation on Dismissal – Employment Law and Practice, (Dublin, 2007) at paragraph 19.8.6. As a matter of contract, where selection procedures for redundancy, or a consultation process to seek to discover alternatives to redundancy, are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed. Following what is on the surface a fair procedure does not necessarily demonstrate that the decision maker is taking an honest approach to a decision. As with much else, an apparently fair procedure can be used as a cloak for deceptive conduct. It may be followed in form only so as to mask an ulterior motive or with no intention of fulfilling its purpose, even should the best of reasons for not proceeding to redundancy arise during its course.”

There was no formal redundancy procedure used in the complainant’s dismissal. This is sufficient in this case to establish that the redundancy was not genuine. In reaching this finding, I note that the complainant worked mainly at home, on site or visiting potential clients in Ireland and the UK. It is a competitive business, in which the respondent tenders to secure contracts. The complainant built up his role, initially working as a contractor and in February 2016 he became an employee of the respondent. Business fell off towards the end of 2016, although the complainant was more optimistic than the respondent about the potential pipeline for 2017. The complainant refers to an advertisement posted by the respondent after his role came to an end, which covered his UK work. While the complainant attended business meetings in late 2016, there were no meetings about the future of his employment. He worked to secure contracts during this period and worked long hours. He was not given the opportunity to put forward ways of reducing or changing his role in the light of a potential redundancy. Applying Panisi v JVC Europe, the absence of fair procedures indicates that the redundancy was not genuine. The complaint of unfair dismissal is, therefore, upheld.

In assessing redress, I note that the complainant obtained one month’s employment in July 2017. He also did a commission-only role related to software in the horticulture industry. This did not generate income. He commenced a new sales role in January 2018, earning considerably less than his employment with the respondent. The complainant refers to the non-compete clause in his contract of employment in his decision to turn down offers of works following his dismissal. The relevant clause states “Restrictive Covenant: On leaving the company, I agree not to undertake provision of the same services / products as supplied by the Company either from my own business, or the employment of a competitor to the Company, for a period of 1 years, unless this is specifically agreed by the Company. The Company will only enforce that which is reasonable to protect its business.” I note that the complainant did not ask the respondent whether it intended to rely on the covenant to prevent him availing of these opportunities. In assessing redress, I also note that while the complainant asserted that the respondent should have made manual work available to him as an alternative to dismissal, he did not seek manual work following his dismissal. I note that skilled, manual work is at the centre of horticulture; any project relies on the physical transformation of a landscape.

Taking these factors together, I assess redress that is just and equitable in this case at €24,500. This takes account of the duration of employment of just over one year and the complainant’s yearly remuneration of €75,000. It takes account of the month of paid employment in July 2017 and his efforts to sell licenced software. It takes account of the complainant’s new employment commencing in January 2018.

CA-00010335-001

For the reasons set out above, I find that the complaint made pursuant to the Unfair Dismissals Act is well founded and the respondent shall pay to the complainant redress of €24,500.

Unfair Dismissals Act

Terms of Employment (Information) Act / section 3

McGowan v McLoughlin [2000] ELR 106

JVC Europe Limited vPanisi [2011] IEHC 279