Complainant

Respondent

Anonymised Parties

An Event Designer

An Event Management Company

Representatives

William McLoughlin, BL

Suzanne Walsh, 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-00021991-001

21/09/2018

Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973

CA-00021991-002

21/09/2018

The complainant was employed by the respondent’s event management company from September 2012 until August 2018 when his employment was terminated due to redundancy. He claims that this was an unfair dismissal.   He contends that his job was made redundant when he informed his employer of his intention to initiate a claim for damages for injuries he sustained following an accident at work.   The complainant’s solicitor wrote to the respondent’s managing director to this effect on July 17th 2018 and he was issued with notice of redundancy on August 14th 2018.

In her evidence at the hearing, the respondent’s managing director, “MD,” said that she set up an event company more than 20 years ago, in partnership with her husband. They separated in 2016 and in 2017, MD set up a new event business. Two employees, one of whom was the complainant, transferred from the first company to MD’s new company. In April 2018, MD said that she and her husband were divorced and that, as a result, she suffered from stress and her health was badly affected.

Evidence was submitted at the hearing of the unaudited accounts for the company for the 16 months ending on April 30th 2018. They show that, on that date, the company had two employees and one director and that it made a loss of over €100,000 in its first trading period.   In July 2018, MD said that her accountant advised her that she could not continue to operate with two employees and their associated wage costs.

On July 28th, MD met her two employees and gave them letters confirming that they were on protective notice. In the letter, MD explained the reason for this as:

“…due to the personal stress I have experienced through my marriage separation with my husband / business partner over the last 2.5 years, I need to look after my health. As a new business-owner and a single mother of 3 x (sic) children I now need to prioritise my health over my business. I need to take a personal rest from work for a short period.   Unfortunately, it has only been 8 x (sic) weeks since the separation which has resulted in my decision.

“Furthermore as explained in the meeting, the focus in my business is distracted due to my issues therefore I need to reassess the business module (sic). Unfortunately at present it is not working either structurally or financially and I need to redress it. This will be further corrected at a later stage at my decision to return to work.

“Please note that during your period of protective notice, you will be required to attend working hours as normal. I will inform you on Monday the 13th August 2018 of my decision regarding the future of (name of company).”

MD gave evidence at the hearing about these letters and she said that they day after she sent them, her accountant advised her that they were not necessary and that it was adequate to notify the employees verbally. She said that she told the complainant and his colleague to disregard the letters.

Concluding her evidence, MD said that she will continue to try to run her business on a smaller scale until the lease on her warehouse is up. She said that business is usually good in June, July and August.   She said that it was important to her that she paid her employees their entitlement to statutory redundancy and that they “didn’t have to go to the State” for the payments.

MD received a letter from the complainant’s solicitor on July 17th 2018, in which he informed her that the complainant intended to apply to the Personal Injuries Assessment Board (PIAB) for damages resulting from an accident at work on April 30th 2017. Four days before she got this letter, MD said that she asked the complainant to attend the company doctor to ascertain if he was able to do the work involved in setting up and taking down events.

On October 17th 2018, MD’s solicitor wrote to the WRC, setting out the reasons for the complainant’s his dismissal:

“In relation to the Unfair Dismissal, we state that all members of staff were let go at the same time due to a downturn in the business and accounts will show the losses for the financial year 2018. (Name of the company) was therefore left with no option but to notify all parties of her intention to let all employees go. The reason for this was due to the ill health of the owner of the company. No further staff have been employed by the Company since that date, nor is there any intention to employ any further staff.”

MD said that from January to May, there is no work in the event business, and that her accountant advised her to reduce the cost of direct labour during that period. She said that the summer months are generally busy and she has a lease on a warehouse that she is committed to for another 18 months. She said that she will not continue in business when the lease is finished.  

The complainant had an accident at work on April 30th 2017 when he fell from a scaffold. He returned to work four weeks later and he said that from then on, he had regular conversations with MD about his back, and he told her when it was sore and when he needed to rest. Fourteen months after the accident, on July 17th 2018, his solicitor sent MD a letter by registered post, confirming his intention to apply to PIAB for damages. On July 18th, MD phoned him to say that she got the letter and she asked him not to come to work and to get a letter from his doctor certifying that he was fit to work. Later that day, the complainant sent MD an e-mail asking for an explanation for not being permitted to work. In this e-mail he said,

“I got shock what just happened over the phone. You were sent me home and you said you were unfit to work. I have pain but I am fit to work in the same way as I am working for you since the accident. I would like to ask that are you firing me now? Please let me know. Thank you.”

The complainant is not a native English speaker and this e-mail is reproduced verbatim.

MD replied, not with a message but with an attachment of a digital recording of a conversation she had with the complainant on May 8th 2017, about a week after his accident at work. This recording was made without the complainant’s knowledge. About 90 minutes later, MD sent another e-mail in which she said,

“Apologies, that was meant to be sent to me. I wanted to check that I did not do anything regarding your safety wrong. It was an error that I sent it to you. It cannot be used anywhere.

“Regarding your question

“Of course you are not being let go. You are a valued member of the team. I was simply trying to explain as I have done over the last few weeks since you told me your back was sore, that I need a letter from you explaining that you are fit to work. You have stated your back pain to other members of staff but never to me (sic).The safety of all employees and clients is very important to me and I need know that you can carry out your job carefully and safely.”

She also said,

“I was very surprised to get your solicitor’s letter today because I was unaware of any need for your actions and I have forwarded it to my insurance company today for their reference.”

The complainant’s doctor was on holidays until July 24th and he looked for an explanation about why he wasn’t permitted to be at work. On July 19th, MD wrote to him again:

“Apologies for any confusion. Let me clarify. I have no problem with you working, in fact we could really use you right now … I had no idea that your injury was so significant that you felt you needed to make a claim. You never indicated this level of severity to me. Upon receiving your solicitor’s letter I took advice to ask you to confirm your fitness to work to ensure your health and safety and the safety of others you work with. You have not provided this which led me to asking you to stay home (on pay) until you could confirm your fitness to work.

“On the basis that your GP is unavailable, I have made an appointment with an independent doctor …This is standard practice in this type of situation and I have taken advice on this.

“While we are waiting for the appointment and medical report, I would very much like you to come back to work. Can you confirm by e-mail whether you feel fit and able to carry out normal activities during the next two-week period or not?”

The following day, the complainant replied as follows:

“Answering for your email I will write again that I have permanent pain in my back but I am fit to work with the same condition as I am working since the accident. During busy time and heavy lifting my pain stronger and more painful.

“…I noticed my back pain to you in the past. I have details of them. Especially noticed on couple work sites…”

The complainant advised his solicitor about the covert recording he received attached to the e-mail from MD and on July 25th, the solicitor wrote to MD alleging that she had “carried out an unlawful and secretive recording of at least one conversation with our client.” In his letter, the solicitor for the complainant informed MD that she had breached the complainant’s right to privacy and that she was also in breach of the General Data Protection Regulations.

On July 26th, the complainant attended an examination by the company’s occupational health consultant. An e-mail from the consultant was provided in evidence in which he said that the complainant was “medically fit for normal duties.”   A detailed report was sent to MD on August 7th.

On July 28th however, the complainant and the other employee were working with MD in Kilkenny. MD informed them both that they were being placed on protective notice. The complainant said that he drove his colleague home and then went to the company’s premises to leave back the work van. At the warehouse, MD handed him a letter confirming that he was on protective notice.  

The following day, July 29th 2018, the complainant and his colleague were back in Kilkenny. On the drive back to Dublin, MD called them and asked them to come to the warehouse.   At the warehouse, she asked them to ignore the letter she had given them the previous day and she spoke about how they could make the work easier.

The week that ended on August 3rd 2018 was very busy and the complainant said that he worked for 70 hours in six days. He sent MD an e-mail and said that his back was more painful during busy times that he said that he needed a day off to rest.

On August 14th, the complainant said that he thought it was a normal day, but when he was in the office, MD told him that the company was closing.

In his evidence, the complainant said that one person could not do the level of physical work required when events are being set up and taken down. He said that he doesn’t know if the company has done work since his employment was terminated in August 2018, but he got calls from people that he knows in the business who were working on events and he said that they were looking for him. He thinks that the respondent company was involved in events and that people expected to see him there.

In cross-examining, the complainant said that, when he came back to work after the accident, he told MD that he didn’t want to do heavy lifting. He said that when he returned after the accident, he went on a manual handling course. In October 2017, he did training in mobile access tower operations. He said that he had regular conversations with MD about heavy lifting and manual work. He said that MD never asked him to do another job instead of heavy lifting.   He said that he often had to cancel physiotherapy appointments because of the job.

The complainant’s case is that no genuine redundancy situation existed and that he was made redundant because of his disability and in retaliation for engaging a solicitor to protect his rights. He also claims that he was singled out for redundancy because he made a complaint against his employer for a breach of the Safety, Health and Welfare at Work Act 2005 and the Data Protection Acts 1998 - 2018.

The Relevant Law

The complainant submits that his dismissal is unfair, in contravention of section 6 of the Unfair Dismissals Acts 1977 – 2015, (“the Act”). Some consideration must also be given to the circumstances constituting redundancy, as set out at section 7 of the Redundancy Payments Acts 1967 – 2012.

The Unfair Dismissals Act 1977 – 2015

Section 6(1) of this Act provides that a dismissal is unfair, “unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.” The burden of proof therefore rests with the respondent to establish the substantial grounds justifying the dismissal of the complainant in this case.

Section 6(3) of the Act states:

Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure,

then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.”

In the case under consideration, “the circumstances constituting the redundancy” were stated by the respondent to be the perilous state of the company’s finances and the stress suffered by the managing director due to her recent divorce. These circumstances applied equally to the complainant and the only other employee in the company. Therefore, the complainant’s job was not singled out for redundancy. I must find therefore that, because “the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer,” that the main provision of section 6(3) does not apply to the complainant’s circumstances. It follows therefore that sub-sections (a) and (b) of this section are not applicable.

Section 6(7) provides that, in considering a complaint of unfair dismissal I, as the adjudicator, may have regard,

“(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 referred to in section 14(1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7(2) of this Act.]”

Essentially, this section provides that I can consider the reasonableness of the employer’s decision to make the complainant’s job redundant, or her adherence or failure to adhere to a procedure that the employee has been notified of that will be used in the event of a decision to terminate his employment.

The Redundancy Payments Acts 1967 – 2012

The definition of redundancy, as set out at section 7 of these Acts is the starting point for a consideration of the respondent’s position. Section 7(2) sets out five definitions of redundancy.   For our purpose here, we need to concern ourselves with the definition at subsection 7(2)(c):

“…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—  

(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…”

Was the Complainant’s Job Redundant?

MD said that, because of the losses incurred in the first sixteen months of trading, she was advised to continue her business with no direct employees. She said that the winter months are quiet and that it didn’t make sense to keep two people employed when there was very little work.   She also said that she intended to take a break from the business due to the stress that followed her divorce.   Because she had 18 months to run on a lease on a warehouse, she said that he would continue in business until the lease was up and then she planned to close down.

At the hearing, when I asked her how she did the physical work of erecting lighting scaffolds and other fixtures against a time deadline without any employees, she said that people in the business knew the circumstances she was in and that she got help to do her work.

In St Ledger v Frontline Distributors Ireland Limited, UD 56/1994, the chairman, Mr Dermot McCarthy remarked that redundancy “has two important characteristics, namely, impersonality and change.” In 2003, the view of the Employment Appeals Tribunal (EAT) in this and other cases led to the amendment of section 7(2) of the Redundancy Payments Act and the insertion of the statement underlined above which emphasises that redundancy is impersonal, and “not related to the employee.” The focus of redundancy must, in the first instance, be on a job. Its purpose is to eliminate a job or to effect change on a job and not a person.

The complainant was made redundant in August and the weeks before his employment was terminated were busy. In the six days up to August 3rd, he said that he worked for 70 hours.   In a message to the complainant after she told him to stay at home, MD said, “we could really use you right now.” There was no suggestion that September or October would be quiet, and it is common knowledge that September is a busy month for weddings, which is a feature of the respondent’s business.

Following the dismissal of the complainant, MD said that she managed to do her work with help from her friends in the business who understood that she had been through a difficult time. If the respondent could call on the support of friends to do the work that the complainant used to do, then the work remained to be done, at least until the commencement of what might turn out to be a quiet period in January 2019. Having considered all of these matters, and, keeping in mind that redundancy is about a job and not a person, it is my view that, when his employment was terminated in August 2018, the job of the complainant was not redundant.

Impartiality

While I have determined that the complainant’s job was not redundant, I recognise the difficult financial and personal circumstances confronting the respondent. It is clear that the company’s business model wasn’t working; the two employees worked very long hours during certain times of the year and they were slack in the winter. I accept that until MD got back to full health and was able to dedicate more energy to the running of her company, an intervention was required to address the financial losses.

I am concerned however, that MD’s decision to make the complainant’s job redundant coincided with his decision to sue for personal injuries. The timing didn’t line up with the low business season, and the respondent said that she was 18 months from closing down altogether. She provided no evidence that she stopped working for any length of time. As a single parent, MD needed an income; she had business losses of €100,000 and she had to pay for the lease on her warehouse. It is apparent that she needed to continue working to some extent.   These facts lead me to question the impartiality of her decision to make her two employees redundant and the reasonableness of the solution she proposed to address her financial and personal challenges.  

Findings

From the information submitted in evidence at the hearing, it seems to me that the respondent was disappointed by the complainant’s decision to make a claim for personal injuries. In an e-mail on July 19th she wrote:

“I was very surprised to get your solicitor’s letter today because I was unaware of any need for your actions….”

It seems that she may have anticipated such a move, as she made a covert recording of a conversation with the complainant in June 2017, shortly after the accident. More than a year had passed however, before the letter from the complainant’s solicitor arrived informing her of his intentions.

It is apparent therefore, that the financial and personal challenges that required some radical change in the respondent’s business model, coincided with the complainant’s decision to claim for personal injuries. It is my view however, that the decision to terminate the complainant’s employment by reason of redundancy was more radical than what was required to resolve these challenges and that it was influenced by his decision to take legal action.

The complainant’s contract of employment contains a clause with the heading, “Short-time Working / Redundancy.” Under this heading, clause 2.4.1 states:

“The company reserves the right to introduce unpaid lay-offs or short-time working at the relevant hourly rate in accordance with any statutory provisions in force.”

It seems to me that this clause in the complainant’s contract provided the most appropriate solution to the financial difficulties faced by the respondent. The complainant could have been laid off for several weeks, or even months, or he could have been placed on short-time.   This would have reduced the cost of labour, while retaining the complainant when work was available.   After a period on short-time or lay-off of 13 weeks, in accordance with section 12 of the Redundancy Payments Act, if he chose to do so, the complainant could have made a claim for redundancy.

I see no reason why the respondent could not have resorted to the option of lay-off or short-time, options which were legally and contractually available to her, when the work that the complainant was employed to do was ongoing. There was no discussion with the complainant about this option, or about any alternative to redundancy. I find it difficult to accept the respondent’s explanation that, from mid-August on, the complainant’s work and that of his colleague was done by friends in the business. It is my view that the respondent was influenced by the complainant’s decision to claim for personal injuries and, in this context, the “impartiality” referred to in the St Ledger v Frontline decision was compromised.

In conclusion, while I understand the rationale behind the decision of the respondent to terminate the complainant’s employment, I find that a redundancy situation did not exist.   As a result, the decision was unreasonable and I find that it was unfair.

I have concluded that the dismissal of the complainant was unfair. Of the redress options available, the complainant selected compensation. On the date of the hearing, on January 7th 2019, he said that he had not taken up new employment and he had therefore been unemployed for five months. It is my view that, as the occupational health consultant that examined the complainant in July 2018 found that he was fit for work, there is no impediment to the complainant finding similar work in the near future. I decide therefore, that the respondent is to pay the complainant €22,000 in compensation for his unfair dismissal. I have based this award on an estimate of the complainant’s gross earnings for nine months, less €7,836 he received in statutory redundancy.

Redundancy, unfair dismissal