FULL RECOMMENDATION
SECTION 8A, UNFAIR DISMISSAL ACTS, 1977 TO 2015 PARTIES : COMPONENT DISTRIBUTORS (CD IRELAND) LTD (REPRESENTED BY PENINSULA BUSINESS SERVICES (IRELAND) LTD) - AND - BRIGID (BEATRICE) BURNS (REPRESENTED BY RICHARD GROGAN & ASSOCIATES) DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Mr Hall |
1. Appeal of Adjudication Officer's Decision No: ADJ-00006177.
BACKGROUND:
2. The Worker appealed the Decision of the Adjudication Officer to the Labour Court in accordance with Section 8A of the Unfair Dismissals Acts, 1977 to 2015 on 1 December 2017. A case management hearing took place on 21 March 2018 and Labour Court hearings took place on 3 April 2018, 18 July 2018 and 3 October 2018. The following is the Determination of the Court:
DETERMINATION:
This is an appeal by Ms Brigid Burns against the decision of an Adjudication Officer No. ADJ-00006177, CA-00008417-004 under the Unfair Dismissals Act 1977 – 2015 in a claim of unfair dismissal against her former employer, Component Distributors (CD Ireland) Limited.Ms Burns complained that her alleged dismissal by reason of redundancy was an unfair dismissal. The Adjudication Officer held that she was not unfairly dismissed and rejected her complaint.
For ease of reference the parties are given the same designations as they had at first instance. Hence Ms Burns will be referred to as “the Complainant” and Component Distributors (CD Ireland) Limited will be referred to as “the Respondent”.
Background
The Respondent was established in 1963 and specializes in importing, sale and distribution of automotive products. Its head office is in Mallusk, Co Antrim and it has bases in Dublin and Cork.
The Complainant was employed in the Dublin office as a Credit Controller from 31stAugust 2004 until her dismissal on 11thNovember 2016. The claim was referred under the Act to the Workplace Relations Commission on 25thNovember 2016.
Summary of the Respondent’s position
Mr Brian Dolan, Peninsula, on behalf of the Respondent, submitted that the Complainant’s employment was terminated on 11th November 2016 on the grounds of redundancy and was carried out in accordance with Section 7(2)(a) of the Redundancy Payment Act.
He said that throughout 2016, the Respondent’s Finance Director, Mr John Cordner, undertook a comprehensive review of the Respondent's operations, including the Finance Department. During the years the Complainant wasemployed, the Finance Department was spilt between Northern Ireland (Mallusk, Co. Antrim) and the Republic of Ireland (Dublin). The Respondent's Head Office, and all other departments, are based in Co. Antrim, with the Complainant and two other part-time credit controllers based in Dublin. A warehouse remains in Dublin.
Mr Dolan said that in October 2016, Mr Cordner proposed centralising the finance team in Co. Antrim and closing the Finance Department in Dublin. He said that this was consistent with the other support functions such as marketing, purchasing etc. Mr Dolan outlined the Respondent’s objective behind the decision to close the Finance Department in Dublin, which he said was based on the following reasons: -
- i.Improve cross-team communication.
ii.Streamline reporting.
iii.Allow for easier annual leave and illness cover.
iv.Increase opportunity for cross training and staff development.
v.Avoid duplication and / or cross-over of roles.
He also said that it envisaged that the proposed structure would allow the Finance Department to benefit from the proximity to other departments (such as IT) and the senior management of the company. Mr Dolan furnished minutes of Board meetings where the issue of the closure of the finance office and the consequent redundancies was discussed.
Mr Dolan told the Court that with the unanimous support of the Board, Mr Cordner commenced a period of consultation with the Dublin Office regarding the proposed closure of the Finance Department. On 13th October 2016, Mr Cordner met with the assembled staff members and informed them that their roles were at risk of redundancy. He further informed staff members that individual consultation meetings would be arranged in the coming days.
Mr Cordner held his next consultation on a group basis, on 19thOctober 2016. During the course of this meeting it appeared to the Respondent that staff members accepted that the Dublin office was to close and that their roles would be made redundant.
Mr Dolan said that on 2nd November 2016 Mr Cordner convened an individual consultation meeting with the Complainant to answer the queries she raised at the previous meeting. When Mr Cordner asked whether the Complainant had any further questions she repeatedly stated that"this is notavalid redundancy"and refused to further elaborate on this statement.
On 8th November 2016, at the completion of the consultation stage, the Respondent confirmed that the Dublin Office was closing. The Complainant appealed his decision on 14th November 2016, claiming that it was not a"valid redundancy".
Mr Dolan said that at the appeal meeting on 2nd December 2016 the chair of the meeting, Mr Mark Cooper, requested the Complainant to expand upon these grounds. Again, she simply stated that she did not believe that the redundancy was valid and refused to elaborate as to why she believed this to be the case.
On the 14th December 2016, Mr Cooper announced that he was upholding the decision to terminate the Complainant's employment on the ground of redundancy.
Mr Dolan submitted that contrary to Mr Grogan’s contention, all aspects of the Complainant’s role could be undertaken from the office in Northern Ireland, indeed a specific document outlining the same was attached to the redundancy rationale.
Mr Dolan stated that at no stage did the Complainant seek the right to be legally represented, consequently she was never denied such a right and she was given the opportunity to have a colleague or a Trade Union representative represent her at meetings in line with company procedures. Furthermore, he contended that in the circumstance of this case, there was no reason for the Complainant to cross-examine witnesses, as contended for by the Complainant’s representative. In support of his contention, Mr Dolan citedShortt v Royal Liver Assurance Limited[2008] IEHC 332 where the High Court held that“not every disciplinary process will give rise to a right to cross-examine the complainant”.
Summary of the Complainant’s Case
Mr Richard Grogan, Solicitor, Richard Grogan & Associates, Solicitors, on behalf of the Complainant submitted that the dismissal of the Complainant for redundancy purposes was not conducted in a fair manner. He submitted that insufficient consideration was given to alternatives to redundancy, she was not afforded the right to legal representation during the redundancy process, she was not given the right to cross examine members of management in relation to the rationale for the redundancies and she was not furnished with Board of Management papers on the discussions which took place concerning her redundancy.
Mr Grogan accepted that the Complainant did not request legal representation, however, he contended that in not giving her the option to be legally represented the Respondent was in breach of her constitutional right to fair procedures. In support of his contention he relied uponLyons v Longford Westmeath Education and Training Board[2017] IEHC 272 where the High Court held that the refusal to allow legal representation to appear on behalf of the Applicant was in breach Article 40(3)(1) and (2) of the Constitution of Ireland. He also relied on theLyonscase as authority for the Complainant having the right to cross examine witnesses.
Mr Grogan dismissed the argument that while Mr Lyons in theLyonscase was at hazard of considerable personal and reputational damage, the Complainant in the instant case was not, as her dismissal was due to redundancy reasons. However, he submitted that theLyonscase had application to the Complainant's case as she had a right to earn a living.
On behalf of the Complainant, Mr Grogan contended that the Respondent did not produce any information to demonstrate that it carried out an exercise to consider alternative options to redundancy. He submitted that there was no agreed selection for redundancy procedure in place, therefore the Respondent was obliged to act fairly and reasonably. He disputed the Respondent’s attempts to submit documentation to justify the dismissal after the event.
Mr Grogan informed the Court that the Complainant has secured alternative employment since October 2017 earning €30,000 per annum. Therefore, he submitted that she had an annual loss of €14,000 per annum going forward. He cited the case ofEWL Electrical Limited v GaynorUDD1720 as the authority for future loss.
Summary of the Witness Testimony
- Mr John Cordner, Financial Director
With regard to the finance function, he examined the business at the company’s Head Office in Mallusk in Northern Ireland and at its Dublin office. He said that while the model was not broken in the Dublin office, the economies of scale dictated that there was merit in combining the Finance Departments into one. He said that this would lead to more efficiencies, would lead to easier communication between employees and lead to better management of staff. He said that there was no difference in debt collection in Northern Ireland and Southern Ireland and that that task could be performed anywhere.
The witness said that having examined the various business operations he took his proposals to the Board of Management. On 3rdOctober 2016, he prepared a private and confidential paper for discussion at the Board of Management. This paper included a breakdown of the tasks undertaken in the Dublin Office, Pre-Restructure and Post Restructure, entitled“Credit Controller: Job Specification”. This indicated that all tasks performed in the Dublin Finance Department could be performed in Northern Ireland.
Mr Cordner said that at the Board of Management meeting he outlined the current state of affairs in the Finance Department and made the proposal to amalgamate both the Dublin Finance Department and the Northern Ireland Finance Department into one, to be based at its Head Office in Northern Ireland. He said that the Board of Management engaged in a rigorous challenge of his recommendation. They discussed the work of the Dublin office and whether that work could be performed in Northern Ireland.
Mr Cordner said that a decision was made by the Board of Management to accept his proposal and to close the Finance Department in Dublin. It decided to hold consultation meetings with the staff and explain to them that one possible outcome for the individuals concerned was redundancy. The witness said that the first consultation meetings was held on 13thOctober 2013 and a second on 19thOctober 2016. He said that the first of these meetings was a very difficult meeting as the employees involved had no prior warning, it came as a shock to them. He said that this was not a formal notice of redundancy but a consultation about the risk of a redundancy due to the proposed closure of the Finance Department in Dublin and transferring the operation to Northern Ireland.
Mr Cordner said that at the meeting on 19thOctober 2016, he confirmed that a decision had been made to close the Dublin Finance Office. There was a lot of emotion and lots of questions from employees. He informed them that there was one vacant position, for an IT/Web Designer, based in Northern Ireland. However, he said that none of the employees involved were interested in that role. On 2ndNovember 2016 he held a one to one consultation meeting with the Complainant to discuss the situation and to offer her support and guidance in seeking alternative employment. He said that the Complainant made a statement that“this was not a valid redundancy”. When he asked her to elaborate on this, she simply continued to repeat the statement.
In cross-examination he confirmed that he had no input from anyone into the proposals he submitted to the Board of Management and it was the Board that made the ultimate decision to proceed with his recommendation. He was asked why he did not provide the Complainant with a copy of the report he submitted to the Board of Management. He accepted that he had not provided it to her and did not know that he needed to as it was a private and confidential report for the Board.
The witness was questioned about the Complainant’s right to be legally represented. He replied that he had offered her the right to be represented by a colleague or a trade union representative. He said that in the past employees had opted to be represented by SIPTU in certain grievance matters. He accepted that he had not offered her the right to be legally represented, however, he said that she had indicated that she did not need to be represented and had not sought legal representation.
- Mr Mark Cooper, Operations Manager
Mr Mark Cooper, Operations Manager, gave evidence on behalf of the Respondent. He said that as Operations Manager, he was also responsible for HR, Quality Assurance and Health and Safety. He commenced employment with the Respondent in 1982 and had retired in April 2017.
He said that he was designated to hear the Complainant’s appeal of her dismissal for redundancy. He wrote to her on 28thNovember 2016 to set up an appeal hearing. In his letter he informed her of her right to be accompanied by a fellow employee or trade union. He informed the Court how at the appeal hearing on 2ndDecember 2016 he explained the appeal process to the Complainant - hear her appeal, make enquiries and finally he would set out his decision in writing. When he asked her to outline the grounds of her appeal she stated that“this was not a valid redundancy”. When he asked her to explain what she meant, he said that she simply repeated the statement. The witness told the Court that as the Complainant was not prepared to expand on her statement that the meeting was very short. In his decision he upheld the redundancy decision.
In cross-examination, Mr Cooper said that he was familiar with the proposals which had been put to the Board of Management, he was aware of the decision made by the Board. He said that he researched redundancy law and was satisfied that the redundancy situation in question came within section 7(2)(a) of the Redundancy Payments Acts.
He was asked if he considered giving the Complainant the Board of Management proposals, including the document entitled“Credit Controller: Job Specification”. He said no as he understood that the reasons for the closure of the Dublin Finance Department had been explained to the Complainant in the consultation meetings which had taken place. He said that he had discussed the redundancy process with Mr Cordner in a brief conversation, and in that conversation, he was satisfied that options and alternatives had been explored with the Complainant prior to her dismissal. He said that his role as appeals officer was to determine if the process was valid and having considered all matters he decided that it was. He was asked if he informed the Complainant that she could call witnesses to the appeal meeting, he said no that he did not envisage that witnesses would be required and that she did not seek to have any witnesses present.
- The Complainant
At the hearing of the appeal before the Court, Mr Grogan informed the Court that the Complainant had opted not to give witness testimony.
The Law Applicable
Section 6(1) of the Unfair Dismissals Act 1977 provides that: -
- Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act; to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.
Section 6(4)(c) of the 1977 Act provides that: -
- Without prejudice to the generality of subsection(1)of this section, the
dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from ... the redundancy of the employee...
Section 6(7) of the 1977 Act provides that: -
Without prejudice to the generality of subsection(1)of this section, in
determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be,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...
Conclusions of the Court
The dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy. The burden of proof rests with the Respondent to establish that the dismissal was wholly redundancy connected and must justify the selection process whereby the Complainant was selected for redundancy.
Redundancy is defined in Section 7(2) of the Redundancy Payments Act 1967 – 2014. An employee who has been dismissed is taken to be dismissed by reason of redundancy if 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, or
(c) 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, or
(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should hence forward be done in a different manner for which the employee is not sufficiently qualified or trained, and/or
(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforth be done by a person who is also capable of going other work for which the employee is not sufficiently qualified or trained.
Where an employee is dismissed by reason of redundancy, the Court must be satisfied that a genuine redundancy situation existed and that redundancy was the main reason for the dismissal.
It is the Respondent’s case that the Complainant’s employment was terminated by reason of redundancy and she was paid the appropriate monies in discharge of her employment with the Company.
The Court accepts that the Respondent was entitled to restructure its business and reduce its workforce if necessary. While the Court accepts that the Respondent was entitled to decide on the most appropriate means of achieving its operational requirements, its entitlement in that regard is not unfettered. The right of the Complainant to retain her employment must have been taken into consideration. That necessarily obliged the Respondent to look at all available options by which this could be achieved. Having considered the submissions made and the evidence tendered on behalf of the Respondent, the Court is satisfied that consideration was given to whether there were alternative roles she could be redeployed to. It is clear that the Complainant was advised of a vacant position as a IT/Web Designer which she declared no interest in. In his evidence, Mr Cordner said that as part of the consultation process the Complainant was offered an alternative role in the Finance Department in Northern Ireland, which she turned down.
Mr Grogan submitted to the Court that the Complainant’s dismissal was unfair as it was lacking in fair procedures,viz,not provided with the rights to know the reasons for her dismissal, not provided with the rights to call/cross examine witnesses and not provided with the rights to be legally represented. In respect of the latter he relied upon theLyonscase, which gave her a constitutional right to fair procedures.
Mr Dolan contested Mr Grogan’s assertions and held that the Complainant at all times was fully aware of the reasons for the redundancy, she did not seek to call/cross examine any witnesses and was not denied legal representation. He stated that theLyonscase post-dated the Complainant’s claim and relied upon theAlan Burns and Another v The Governor of Castlerea Prison[2009] IESC 33 case which set down the criteria for the right to legal representation. Mr Dolan disputed that alleged procedural deficiencies (which were denied) did not serve to “imperial the Claimant’s right to a fair hearing” as set out inShortt v Royal Liver[2008] IEHC 332.
Having considered all matters in this case, the Court is of the view that the Respondent followed fair procedures in making the Complainant redundant when it closed its Finance Department in Dublin and it no longer had a role suitable for her. The Respondent engaged in extensive consultation process, two consultation meetings, 13thand 19thOctober, a one to one meeting with the Complainant on 2ndNovember 2016 and an appeal hearing on 2ndDecember 2016.
The Court is satisfied that at the material time the Complainant was fully aware of the reasons for the impending redundancies. At the consultation meeting on 13thOctober 2016, employees including the Complainant were informed that“a review had been carried out for the groups’ finance function with the decision being made at board level to close the Dublin finance office and centralise the finance function in Mallusk”.This was not disputed by the Complainant. A letter sent from Mr Cordner to the Complainant dated 13thOctober 2016 following the consultation meeting that day states: -
- ….I informed you that the Company has agreed to close the Dublin finance office and centralise the CD Finance team in Mallusk. It is likely that your position is a at risk of redundancy and you should regard the receipt of this letter as warning notice of that potential redundancy.
The Company will consult with you over the nest few weeks on a regular basis to discuss alternatives whereby your employment could be protected and redundancy avoided. The Company will also review and identify whether there are any alternative positions vacant within the Company that may be suitable for you.”
The letter stated that the Complainant was asked to attend a formal consultation meeting on 19thOctober 2016 where she could be accompanied by a fellow employee or a trade union official. The Court notes that this right to representation was as provided for in the Employee Handbook.
The Complainant was given the opportunity to make suggestions as to possible alternative roles that she might be considered for.
Similarly, the Court notes that at the meeting on 19thOctober 2016 the minutes record that the Respondent gave specific details surrounding the closure of the Dublin Finance Department. It explained that it was to improve operational efficiency and it outlined the benefits of having a centralised Finance Department. Therefore, the Court cannot accept Mr Grogan’s contention that the Complainant was not given information to challenge the Respondent’s actions. It is noted that the Complainant was not supplied with the Board of Management proposals, including the document entitled“Credit Controller: Job Specification”. However, these were confidential papers prepared for the Board of Management.
The Court notes that the Complainant was given the right to be represented at all stages of the process and was not denied legal representation. The decision in theLyonscase determined that the principles of natural justice must be applied when conducting a disciplinary procedure. This was a High Court judicial review case, where Mr Lyons was at risk of considerable personal and reputational damage arising from serious alleged internal employment related allegations. The High Court confirmed the right to cross examination and to be legally represented in a disciplinary process where an employee is losing their job and/or their reputation/good name is at stake. The Court is of the view that the circumstances in the instant case are very different. The Complainant was not in any form of a disciplinary process. Her good name was not in jeopardy. In contrast, the Complainant was furnished with a Job Reference by the Respondent dated 2ndNovember 2016. The Reference stated that it deeply regretted that the decision to move its finance function to Northern Ireland resulted in making her role as Credit Controller redundant. It was highly complementary of the Complainant and her work for the company for many years. In these circumstances, the Court is satisfied that the termination of the Complainant’s employment was directly related to the fact that her job no longer existed and no alternative positions were suitable/available for her.
The Court notes that the Supreme Court in theCastlerea Prisoncase stated that legal representation should be the exception rather than the rule.
Conclusions of the Court
Having considered the submissions made the Courtis satisfied that based on the requirements of the business the Respondent was faced with having to make three employees redundant in November 2016 was it ceased to operate its Finance Department from Dublin and transfer the business to Northern Ireland. On that basisthe Respondent has established to the satisfaction of the Court that the Complainant’s dismissal was wholly redundancy connected.Therefore, the Court finds that there was a genuine redundancy within the meaning of Section 7(2) (a) of the Redundancy Payments Acts.
Determination
In all the circumstances, the Court has concluded that the dismissal was not unfair. The Respondent has not contravened Section 6 (4) of the Acts. Accordingly, the Decision of the Adjudication Officer is upheld.
The Court so Determines
Signed on behalf of the Labour Court
Caroline Jenkinson
8 October 2018______________________
MNDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Michael Neville, Court Secretary.