ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00011349

Parties:

Complaint(s):

Date of Adjudication Hearing: 29/06/2018

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Procedure:

In accordance with Section 8 of the Unfair Dismissals Acts, 1977 – 2015 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

Background:

The Complainant was employed as a store manager from 2nd January 2014 until her termination on 28th June 2017. Her salary was €41,000 per annum and she maintained she was unfairly dismissed on 28th June 2017on the basis of a sham redundancy. The Respondent maintained the dismissal was based on the financial situation in the store and that the dismissal which was based on a redundancy was fair.

Summary of Complainant’s Case:

The Complainant maintained that she had worked for three years with the Respondent. Over this time she had a blemish free period of employment in a growing business where profits were increasing, and in her role as store manager she was responsible for the successful management of the store over.

The Complainant advised that she was put on a short period of forced leave on 14th June 2017 and when the she returned to the store two weeks later she alleged that she was met by the general manager who told her that her position was no longer required. She advised she received no written or oral notification or warning prior to the termination of employment, nor was she offered any alternative roles or positions within the shop which she had successfully managed over the three-year period. The Complainant contended that she was she not offered any alternative role in the other stores owned by the Respondent, or within its business where it operates approximately 28 stores.

The Complainant maintained that an advertisement had been placed for a manager in the area where she had worked and accordingly submitted her role was never redundant. As such she maintained that it was a sham redundancy where she was dismissed without proper process and without the employer following proper redundancy procedures. When she returned to the store in September to collect personal belongings she was met by a new person who introduced herself as being the manager to store. She was advised she was barred from the shop. She therefore maintained that her role had not been made redundant and was filled by another person.

The Complainant submitted that in the first year of employment she was advised of the need to take a pay cut due to a reduction in sales and she took this cut. In the following year she had increased sales in the store and as sales continued to grow her salary was restored in 2016 on condition that she would meet her target every six months which she did. As a consequence of recovering the sales the Complainant maintained that was the only manager to get her salary restored, and she was also the highest paid manager in the group.

The Complainant submitted that she understood there was a hack on the computer system during Christmas 2016 which impacted the stocktaking. She also maintained that stock items were showing incorrectly on the system in her store, and other stores, and she would have received calls from managers in other stores asking if there were problems or difficulties with the system. She maintained these errors would have been known to the Respondent at the time.

The Complainant advised that in March 2017 she was diagnosed with Crohn’s disease and she was replaced by another person to manage the store for a period of time when on sick leave. The Complainant maintained during her absence the store was run in a haphazard manner, and in April 2017 when she returned she had to redress merchandising issues in the store. She advised that when she had returned from sick leave the attitude of management and changed towards her and where the Managing Director had stopped consulting with her despite the improvement in sales upon her return.

The Complainant submitted that in May 2017 an email was sent to all managers regarding a stock take which referred to a serious fraud in one of the stores and which would probably result in a prison sentence. She advised that there had been little guidance provided with regard to stocktaking procedures prior to this.

The Complainant advised that in June 2017 a stock-take occurred at her store and she was suspended on 14th June 2016. The Complainant heard nothing more from the Respondent until she was notified that she was required to attend a meeting on 22nd June 2017. She advised at this meeting she was told she was being made redundant and she was to receive a statutory minimum redundancy payment. The Complainant maintained there was no process regarding the redundancy, there was no negotiation on a redundancy package for her, that she was not offered any alternative job, and she was provided with a reason in writing with regard to the need for redundancies.

The Complainant advised that she believes she was being blamed for the discrepancy in the stock at her store. However, she was not involved in any investigation of the matter. She also advised there was no other redundancies, and she maintained the reason for her dismissal was due to the Respondent believing she had been involved in the discrepancies within the store but that there was no evidence produced which would give grounds for substantiating that belief. She was never afforded a right to respond to any of the evidence or concerns.

The Complainant maintained that during her time working in the store the store would have performed well despite the downturn in the economy. The Complainant submitted that her store would have outperformed other stores and was profitable.

After the termination of her employment, the Complainant sought work elsewhere and would have gained employment one month later but at a lower salary and a loss if €3,000 per year. She advised that she subsequently sought another role in December 2017 which she accepted and handed her notice to her then employer. However, when she sought to get a reference from the Respondent none was forthcoming and she was subsequently told that she would not be appointed to this new role because she had failed to provide a reference and where the job offer was withdrawn. As the Complainant had handed in her notice she was not accepted back. As a consequence of not getting an reference from the Respondent she maintained she has lost a job opportunity and was unemployed until she found alternative employment in May 2018 in a similar role for €43,000 per annum.

Summary of Respondent’s Case:

The Respondent acknowledged that the Complainant commenced employment on 2nd January 2014 and was made redundant on 28th June 2017. The Respondent maintained that the role was made redundant for economic reasons where the store had experienced trading difficulties due to construction work adjacent to the store, and where the shopping mall the store operated in had suffered a loss of 7% of business.

The Respondent acknowledged that there had been a fraud in a different store at which time the person had been charged. As a consequence, checks were taken in its other stores throughout the country and where it identified a loss of £154,765 in the store that the Complainant managed. The Complainant was suspended on pay on 15th June 2017 to allow an investigation into the stock irregularities at the store. The Complainant was advised that when the investigation was complete the Respondent would contact her to outline to her the findings of the investigation.

The Respondent advised that on 22nd June 2017 it invited the Complainant to attend the meeting to respond to the discrepancies. The Respondent confirmed that at this meeting there was no notes taken, however it maintained the Complainant could shed no light on the discrepancies and that there was a concern with regard to the value of the discrepancy. This meeting took approximately 15 minutes. On 27th June 2017 the Complainant was invited to a further meeting and was advised that due to the shop financially haemorrhaging they would need to make her position as manager redundant. They advised the Complainant that a decision was made to put in a manager for 2 to 3 days a week from another store. The Respondent advised that they had done something similar in other stores which had proved successful and cost-effective for the business.

The Respondent submitted that the Complainant initially rejected the redundancy package however she accepted it on 3 July 2017.

The Respondent acknowledged that none of its other stores had experienced a loss of the amount that was experienced in Complainant’s store. The Respondent maintained that the Managing Director had decided to make the Complainant redundant due to the economic loss in the business. The Respondent confirmed that the Complainant was the only person who was suspended during the course of the investigation, and the only person made redundant.

The Respondent maintained that they no longer required a full-time manager in the store that the Complainant had been made redundant from. The Respondent maintained it did not recruit a new person to the role but that that the manager appointed in the store also covered other stores in the area, and where the role was shared across a number of shops. The general manager also advised that she was redeployed to assist in the store due to the redundancy.

The Respondent advised that it operates 28 shops and it also confirmed it did not consider alternatives for the Complainant, nor did it consult with the Complainant or other staff prior to the decision to make the Complaint’s role redundant. It also confirmed it did not seek possible alternative roles for the Complainant before making her redundant.

The Respondent acknowledged that despite the store performing well when compared to other stores, the Complainant was the only person made redundant. The Respondent did not offer a response as to whether it gave an unsatisfactory reference when the Complainant was seeking alternative employment to redress her losses due to the dismissal.

Findings and Conclusions:

In accordance with Section 6(1) the Unfair Dismissals Act, 1977 “the dismissal of an employee should be deemed, for the purpose of this Act, to be an unfair dismissal unless having regard to all circumstances, the were substantial grounds for justifying the dismissal”.

S6(4) of the Act states the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if inter alia it results wholly or mainly from the redundancy of the employee.

In addition S6(7) of the Act requires that in determining if a dismissal is an unfair dismissal, regard may be had, if the Adjudication Officer considers it appropriate to do so- (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and (b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure which the employer will observe before and for the purpose ofdismissing the employee …or with the provisions of any code of practice.

Under Section 7 (2)(c) the Redundancy Payments Act 1967 – 2014 …[A]n 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 concernedthe dismissal is attributable wholly or mainly to …the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise.

Dismissal as a fact is not in dispute, and so therefore it is for the Respondent to establish that in the circumstances of this case that the dismissal was fair.

In selecting a particular employee for redundancy, an employer should apply selection criteria that are reasonable and are applied in a fair manner. As with any dismissal, an employer must act reasonably when dismissing an employee in a redundancy situation. This requires prior consultation with the employee before the decision is made. In addition, an employer should consider all options including possible alternatives. In this case the Respondent argued that the Complainant’s role was made redundant due to economic circumstances, and as such it was justified.

In light of the size of the Respondent’s business, and on the basis that it decided to reduce the need to have a full-time store manager, it should have first consulted with the Complainant and offered her an alternative role or considered some other redundancy selection criteria before deciding to make the Complainant redundant. Having considered the evidence provided in this case I am satisfied that the basis of the dismissal was due to concerns the Respondent had regarding discrepancies in stock in the store. Clearly, before deciding to make the Complainant redundant the Respondent had advised the Complainant it was conducting an investigation into concerns regarding discrepancies with stock in the Complainant’s store, and where it suspended the Complainant to complete the investigation. However, the Respondent provided no evidence of conducting a thorough investigation of such matters, nor did it provide evidence that the Complainant was given an opportunity to respond to this evidence before a decision to dismiss her was made. Notwithstanding, the Respondent did provide evidence of an email it received from a person who conducted a review of the stock and who indicated that having reviewed the matter he concluded I’m clutching at straws-I think it’s all missing. The Respondent then moved the situation to a redundancy decision and decided for economic reason the Complainant’s job was redundant. Based on the evidence of the Complainant I am satisfied another manager was appointed to the store within three months of her dismissal.

Having considered all the evidence I am satisfied that the dismissal was not due to a legitimate redundancy as defined under section 7 of the Redundancy Payments Acts; but was primarily as a consequence of concerns the Respondent had with regard to the stock discrepancies at the Complainant’s store, and where it failed to adhere to proper procedures in investigating that matter before deciding to dismiss the Complainant.

Therefore, in accordance with S6(7) of the Unfair Dismissals Act, I find the conduct of the Respondent in relation to its failure to observe and comply with its obligations to adhere to fair procedures regarding the selection for redundancy, or the obligation to adhere to fair procedures regarding its concerns relating to stock discrepancies before dismissing the employee, it actions amounts to an unfair dismissal of the Complainant. I further conclude that the redundancy was not a genuine redundancy.

Decision:

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

For the aforesaid reasons, I find this complaint to be well-founded and conclude that the Complainant was unfairly dismissed by the Respondent.

Section 7 of the Unfair Dismissals Act 1977 sets out the various forms of redress including reinstatement, re-engagement and financial compensation which may be awarded. Relevant to the case within, where compensation only is sought, Section 7(1)(c)(i) of the Act provides: “…if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances,…”

Section 7(2) of the Act sets out the factors which should be considered when determining the amount of compensation and in such circumstances consideration has to be given as to whether the loss was attributable to an act, omission or conduct by or on behalf of the employer; the extent (if any) to which the said financial loss was attributable to an action, omission or conduct by or on behalf of the employee; and the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid. I also have to consider…the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure applied to dismiss the employee… and the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.

I have found the acts and omissions of the Respondent in its failure to either adhere to proper procedures regarding a redundancy, or adhere to proper procedures regarding an investigation of its concerns to have fallen way short of what is expected from a reasonable employer. Under such circumstances, a where the Complainant is seeking compensation, I find it just and equitable to award the Complainant compensation amounting to €21,000, which since being unfairly dismissed addresses her loss in income up to May 2018.

Dated: 7th November, 2018  

Workplace Relations Commission Adjudication Officer: Gerry Rooney

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