Complainant

Respondent

Anonymised Parties

Sales Representative

Packaging Company

Representatives

Robert Ryan O'Donohoes Solicitors & Patrick Marron BL

Gillian Considine Peninsula & Rock Treanor BL

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00027465-001

03/04/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00027465-002

03/04/2019

On or about the 30th January 2019 the complainant met his superior and a business consultant at the company’s offices. At this meeting he was informed that he had been provisionally selected for redundancy. He was told at this meeting that the company would now begin a process to ensure that it had fairly applied the selection process for redundancy. The complainant contends that the process applied by the company was unfair and unreasonable and did not afford him the right to a genuine consultation process prior to selecting him for redundancy. The company contends that it did apply a fair process and that a genuine redundancy situation existed. (The complainant withdrew their complaint reference CA 00027465-002     Section 7 of the Terms of Employment (information) Act, 1994. )

On the 30th January 2019 when the company met the complainant for the first time relating to redundancy it had in effect made up its mind to make him redundant. The selection matrix dated the 30th January 2019 had been filled in and scored; although, not shared with the complainant until the 12th February 2019. There was no consultation with him on the criteria applied or any consultation with him about the markings given to him. There was no opportunity given to the complainant to give his views on the marks awarded by his director. On the 30th January the company writes to the complainant and states that “The Company will now enter a period of consultation with you to ensure that we have fairly applied the selection for redundancy process, and to look at alternatives to making you redundant.” The Complainant contends that the procedures applied were demonstrably unreasonable and cited Mulqeen v Prometric Ireland Ltd UD1259/2012 as affirming the requirement for fair process:

“In particular the Tribunal notes that on 17 May 2012 the complainant was requested to attend a meeting where the gravity of the company’s financial position was outlined. The company then informed the complainant that his position along with two other employees was to be made redundant and in so doing produced a matrix that was adopted by the company to effect the redundancies. The complainant had no previous knowledge of the content of the matrix, its significance or its implications for his continuing employment. He was given no opportunity to examine, query or object to the matrix”.

In Boucher & Others-v-Irish Productivity Centre the EAT stated:

“The onus of proof is on the employer to establish that he acted fairly in the selection of an employee for redundancy”.

“Where selection for redundancy involves consideration of employee’s contribution and versatility to the respondent those in the group likely to be dismissed should be made aware that such assessment was being made and they should be given an opportunity to give their views which should be considered. To be considered fair the assessment should have the characteristics of an enquiry.”

The complainant states that the process was a sham and without the character of an inquiry that would have sought his views on the fairness of the selection matrix.

The dismissal arose from a genuine redundancy as provided for at Section 6(4) of the Unfair Dismissals Act 1977 as amended:

“Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purpose of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

(c) the redundancy of the employee.

S. (7)(2) Redundancy Payments Act 1967(as amended) provides for:

(2) For the purposes of subsection (1), 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, 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 henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, 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 henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,

At the meeting on the 30th January 2019, the claimant was informed that the company would be restructuring and requiring one less sales representative. The respondent had decided to carry on the business with fewer staff and that his role was being eliminated.

In the event of the dismissal deemed to be Unfair the respondent requested that regard be had to Section 7(2) of the Unfair Dismissals Act particularly relating to mitigation of loss. While it is denied there was any defect in procedures the respondent cited Loftus and Healy v. An Bord Telecom ( 13 February 1987) HC that held that defects in procedure were not sufficient to ground a claim for Unfair Dismissal:

‘whether denial to them of such procedures is such that the defendant must be deemed to have failed to establish…[the basis of its dismissal] as the whole or the main reason for justifying their dismissal’. In addition, other cases cited having regard to proportionality when assessing defects in procedures and the duty to mitigate loss: were Synergy Security Solutions v. Paul Dusa (UD/18/141) and (the importance to mitigate loss) Coad v. Eurobase (UD/18/141).

A key consideration under Redundancy is the ‘Impersonality Test’ as provided for at S. (7)(2) Redundancy Payments Act 1967(as amended):

(2) For the purposes of subsection (1), 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—

This requires that the selection process applied is fair, transparent and objective. It became evident during the hearing that the matrix applied to select the claimant was completed on the 30th January 2019 which in effect displaced the complainant from his current role. This was the first meeting between the complainant and his immediate manager. There were two comparable roles of sales representative. The company as was its right decided to reduce the sales roles from 2 to 1. The matrix was designed to select impersonally and objectively.

The matrix criteria were and scored as follows:

1.       Performance (Value of New Sales and a weighted calculation of Sales from existing customers) 3/5

2.       Knowledge (Both Sales and Account Management)3/5

3.       Skills (As agreed at time of employment) 3/5

4.       Experience (As agreed at time of employment) 3/5

5.       Qualifications (As agreed at time of employment) 3/5

6.       Attendance (Fully measured and recorded as per the Organisation of Working Time Act 1997) 5/5

7.       Disciplinary (Any formal disciplinary actions formally logged, documented and signed)

And in the event of a Tie Breaker Length of Service 4/5

The claimant only received the list of selection criteria at a meeting on the 12th February 2019; although, it had been completed on 30th January 2019 the first day he became aware that his role was suppressed over another comparable role. The complainant had no input into the matrix and was afforded no opportunity to challenge the scoring. On the 30th January, it appears the decision to select one of the two sales persons had been made, based on the matrix. As stated in Boucher the process should have the characteristic of an inquiry and those likely to be affected proactively canvassed about the criteria and their appropriateness.

It also became clear during the hearing that the scoring relating to the Criteria was made by the claimant’s Director to a large measure independent of objective fact and record, more akin to a subjective performance assessment. Apart from the attendance criteria, I find it hard to see how they could be viewed as objective and fair as there was little evidence provided at the hearing to demonstrate that this was the case. This at face value undermined the fairness of the selection process as it was subject to personal bias.

I have concluded that what appears to show that a fair selection procedure for redundancy was applied was fundamentally flawed. It predetermined an outcome and provided for little or no consultation.

The Unfair Dismissals Act 1977 as amended states at 6(7)(a) that I can have regard to the reasonableness or otherwise of the conduct of the employer:

‘to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal’.

I have determined that the selection procedure applied was inherently flawed and unfair to the complainant and I determine that his claim is therefore well founded.

The complainant has subsequently gained employment in a similar role; however, on less total remuneration. The complainant seeks compensation rather than re-instatement or re-engagement. In these circumstances it is more appropriate to award compensation for financial loss derived from the unfair dismissal.

At 7 (3) of the 1977 Act as amended “financial loss” is defined as:

“includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation.”

“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay”.

The complainant’s employment ended on 4th March 2019 and he received a statutory redundancy entitlement of €3576.00 and notice pay. He mitigated his loss quickly and was employed on a salary of about €50,000 several weeks later; however, he had no company car, which he had with his former employer.

Based on 7(3) of the Act, the definition of financial loss includes financial loss arising form the loss or diminution of the rights of the employee under the Redundancy Payments Acts as amended and other benefits such as his company car. His salary with his former employer was €65,000. He commenced employment within 5 weeks of being made redundant. His new salary is €50,000 and he has no company car. He may bridge the difference between the two employments overtime, at the date of the hearing a significant difference still existed of the order of 30% including benefits. This financial loss directly attributable to his unfair selection for redundancy will take several years to be fully restored. Having regard to his actual financial loss to date and continuing loss into the future attributable to his dismissal I award compensation of €30,000 as is just and equitable having regard to all the circumstances.

I have determined that the complainant’s claim is well founded and that he was unfairly dismissed. Section 8 of the 1977 Act requires that I make a decision in relation to the claim consisting of an award of redress in accordance with Section 7. I therefore award redress of €30,000 in respect of the financial loss attributable to his unfair dismissal

Unfair selection for redundancy-Selection Matrix