Complainant

Respondent

Anonymised Parties

Financial Controller

Engineering Company

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00016548-001

21/12/2017

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

CA-00016548-002

21/12/2017

The Complainant contends that she was unfairly dismissed by being unfairly selected for redundancy.    She further contends that she did not receive her entitlements to payment in lieu of annual leave accrued and not taken at the cessation of her employment.

The Complainant was employed as a financial controller for over 17 years.  On 27^th June 2017 she was advised by the company that she was being made redundant with an exit date of 31^st December 2017.  She was given statutory redundancy lump sum calculations.  She was to have been given a meeting with the company in September 2017 to discuss matters further.  However, this meeting did not take place.   She was left with no information as to whether there was a future for her in the company.  Other individuals more junior and with less service than the Complainant were kept on in the employment and she felt she was being unfairly selected for redundancy. No alternatives were sought or considered and her position was not discussed in advance of being made redundant.  The Complainant believes that her employer did not act fairly or reasonably and the process lacked transparency.  The Complainant subsequently went on sick leave on 26^th October 2017 suffering from work related stress, depression, anxiety and inability to sleep. By letter dated 15^th November 2017 she was requested to attend a disciplinary process to discuss her absence from work and alleged inconsistencies in payroll deductions.  The Complainant contends that the company introduced an unwarranted disciplinary process 6 weeks prior to her proposed redundancy exit date, in order to circumvent any redundancy payment.

The Complainant also contends that as she accrued a substantial amount of holiday leave, and was compensated for 75 days out of a total of 97 days, she is due compensation for 22 days holiday pay. (This was amended at the hearings to 11 days.)   

The Respondent submits that a genuine redundancy existed.  However, before the redundancy could be effected, the Respondent formed a genuine belief that the Complainant had committed an act of gross misconduct and was in breach of her contract of employment, resulting in her summary dismissal.   Such belief was based on reasonable grounds discovered in the course of a proper investigation.   The Respondent’s disciplinary process associated with the matter was both fair and transparent.  The Respondent contends that it terminated the Complainant’s employment on the basis of summary dismissal due to gross misconduct and breach of trust; and accordingly, she is not entitled to redundancy payment, pursuant to Section 14 of the Redundancy Acts which provides:

“an employee who has been dismissed shall not be entitled to redundancy payment if his employer, being entitled to terminate that employee’s contract of employment without notice, by reason of the employee’s conduct, terminates the contract because of the employee’s conduct.”

Should the Respondent’s position not be accepted, the Respondent maintains, in the alternative, that a genuine redundancy situation existed and the selection process was fair.

The Complainant was given notice of termination on 30 June 2017 following a process which was both fair and transparent.  No final date for termination was confirmed at that time.  On 27^th October 2017, the Respondent became aware of evidence which suggested that the Complainant had failed to deduct correct sums from her payroll in respect of AVC.  Subsequently after further investigation it became apparent the Complainant failed to make proper deductions for healthcare and pension contributions made by the company on her behalf, to which she was the controller of the payroll process.    Such failure appeared to have subsisted for a prolonged period which the Respondent believes extended from 2001 to 2017, and in aggregate, comprised a sum in excess of €50,000.  In addition, the Complainant failed to maintain compliance with the Office of the Revenue Commissioners that resulted in rescission of the company’s tax clearance certificate.  The Respondent investigated the matter fully and identified that the failure of the Complainant to make the correct deductions related exclusively to her salary, and not to any other employee.  The failure was not an error or simple act of negligence as it required manual interventions by the Complainant.   The Respondent afforded the Complainant multiple opportunities to put forward her response to the allegations, and expressly stated that a written submission would be acceptable.  Notwithstanding, the Complainant failed to engage in the process until the appeal stage.  The Respondent sent registered letters to the Complainant on 8^th November 2017 which included a copy of the Employee Assistance Programme,  and 15^th November 2017  which advised her of the disciplinary hearing to be held on 24 November 2017.  On 23 November 2017, the Complainant’s solicitor notified the Respondent that he would be representing the Complainant and requested a postponement of the hearing so that he may familiarize himself with the case.  The Respondent confirmed a new hearing date of 30 November 2017.  That was further postponed as the Complainant’s solicitor stated she was unable to participate due to her medical condition.                On 21 December 2017 the Complainant’s solicitor acknowledged receipt of the Respondent’s previous letters and informed the Respondent that the Complainant was going to meet her doctor and that he would write to the Respondent as soon as possible after that meeting.  The same day, the Complainant’s solicitor lodged the claim of unfair dismissal to the WRC without the Respondent’s knowledge.  On 9^th January 2018 the Respondent wrote to the Complainant scheduling the hearing for 17^th January 2018.  This hearing had been postponed a number of times and the Complainant failed to engage.  The Complainant was then dismissed following the 17^th January hearing.               The Complainant and her solicitor finally attended an appeal hearing on 29 March 2018, following which a letter issued confirming that no grounds could be identified upon which the Appeals Manager could differ from the conclusions reached on 17^th January 2018 in relation to the allegations and the dismissal of the Complainant was confirmed.

In relation to the redundancy process, up until the time it was put on hold, the process had been fair and transparent.  The WRC has already determined in a case related to the same round of redundancies (Reference CA-00016130-001) that the redundancy process was fair.   In this instant case, the Complainant’s role was eliminated.  Three other roles were created post restructuring so the Last In First Out approach did not require consideration.  All employees were considered for the three roles.  The Complainant was met the same way as the other employees whose jobs were at risk.   The staff requested the Senior Vice President handling the matter to make the decision.  The Complainant’s skill set did not match the three remaining roles but in any event the SVP chose the employees to remain based on the skill sets which would best align with the positions going forward.

Adj-00016548-001   Payment of Wages Act 1991

The parties dispute what remaining annual leave was accrued at the end of the employment.                 I note the balance sheets provided.  I note the 2 half days and 6 full days between August and October 2017 which it was agreed was for a course attended by the Complainant.  I note the Respondent’s evidence that no agreement was made between the parties for paid attendance at this course.  However, as it has been established at European and National level that annual leave is primarily for recreational purposes, I find that the Respondent unilaterally decided that these 7 days were to be recorded as annual leave.  In the circumstances I find the Complainant’s claim to be in part well founded and I require the Respondent to pay to the Complainant the net sum of €1,347. 

Adj-00016548-002   Unfair Dismissals Act 1977

The complaint submitted by the Complainant for adjudication is that she was unfairly selected for redundancy and was therefore unfairly dismissed.  I have reviewed the redundancy process conducted by the Respondent.  The Complainant held a relatively senior position as Financial Controller and I find that her situation was not on all fours with the Complainant in case number   CA-00016130-001, upon which the Respondent sought to rely in arguing fair selection process.            I note the Respondent’s evidence that staff wished for the Senior Vice President handling the matter to make the decisions.  However, some onus must be on the employer to demonstrate that the process was fair and transparent.  In this regard, I note no evidence of a matrix of skills and service and the normal components which go to make up a fair selection process undertaken in best practice employments.  There were 3 junior staff selected to take on the new roles.  I find very little evidence of any consideration of alternatives to redundancy.   In the circumstances, I find that the Complainant was unfairly selected for redundancy and I uphold her complaint.  I note the Respondent’s counter claim that the Complainant was dismissed by reason of gross misconduct.  Because the primary complaint before me is that of unfair selection for redundancy which complaint I uphold, I am making no finding on the Respondent’s assertion that the Complainant was fairly dismissed for gross misconduct.

In relation to redress, I find that compensation is the appropriate remedy as the job no longer exists.     I note the Complainant’s evidence that she has not worked since the termination of her employment and that she may never return to the workplace.    It is well established that in circumstances where there is no mitigation of loss, a limit is placed on compensation.

Section 7 (1) (c) (ii) provides in relation to redress:

“(ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances..”.

In the circumstances, I find compensation in the amount of €5,333 should be paid to the Complainant by the Respondent.