Complainant

Respondent

Parties

Complainant

Respondent

Anonymised Parties

A general operative

A traction motor specialist company

Representatives

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-00022677-001

17/10/2018

The Complainant commenced employment with the Respondent on 16/03/2015 and worked for the Respondent until 04/05/2018.

This complaint was received by the Workplace Relations Commission on 17/10/2018.

The Complainant was employed as a Factory Worker with the Respondent Company from 16^th March 2015. 

The Respondent Company is a traction motor specialist specialising in the remanufacture, service and repair of AC and DC traction motors for rail vehicles and have a registered address in Dublin.

The Respondent production facilities include three factory units based in close proximity to each other. The Complainant was working in one of the three units.

Employees based in the Unit where the Complainant was employed raised an issue in relation to pay increases in late January 2018.  Those employees approached their Supervisor in order to communicate their request to the Company owner.

Employees including the Complainant noticed that the Supervisor was suspended on Monday 29^th January 2018 and subject to some disciplinary action.  Those employees decided to arrange a meeting with the Company owner in order to establish why their Supervisor was suspended.  That meeting took place on Tuesday 30^th January 2018.  Large number of employees are Polish nationals and therefore they asked for an interpreter – one of the office workers in the company.  The owner of the Company got agitated and communicated that if they do not like the work / company they can go home.  Employees felt humiliated by such an approach of the owner and started clocking out from the company premises.

Only Polish employees from the Unit where the Complainant worked clocked out.  The Irish employees and one Iranian employee stayed.  The owner of the Company became unwell and was taken from the workplace by ambulance.

Those employees including the Complainant showed up at the workplace the following day and expected some explanations.  They were approached and advised via the interpreter that they shall return to work.  The son of the factory owner however kept coming for meetings every Wednesday where he informed employees when they will get their demanded pay rise.  Those Wednesday meetings were only conducted in the unit (one of the three the Company has in Dublin) where the Complainant worked clearly in order to calm down the situation and deal with staff complaints and demands for a pay rise following the dramatic end of the meeting with the Company owner.  He also asked and encouraged employees to send him emails with any issues and he said he will address them.  During those Wednesday meetings he assured employees that their jobs were not at risk and communicated the way to pay increases (employees were getting pay rise in groups depending on the length of service with the Company).  Complainant was due to receive her pay rise from 1^st June 2018.

On Wednesday 2^nd May 2018 no meeting took place and on Friday 4^th May another employee of the Company came from the office and handed the Complainant termination / redundancy notice dated 4^th May 2018.  the document was handed at 2pm and immediately the Complainant was asked to leave the factory and go home.  Strangely earlier that week – on Monday 30^th April two other employees were dismissed.

Complainant appealed that decision.

In response to the appeal, the Respondent by letter dated 24^th May 2018 indicated that LIFO policy was not applied although admitting that there was not much difference in competence levels of employees, as the tapping process (work performed by Complainant) is a simple task.  Therefore, the following criteria were used: productivity levels in the selection process.  However, in another part of that letter Respondent advised that selection “has always been on skill needs and any contractual need”.

Complainant also in correspondence addressed to Respondent refused to accept redundancy that was lodged to her account as there was no genuine redundancy and advised she will take the money transferred to her as a part compensation for the unfair dismissal.

SUBMISSIONS

According to Section 6 (1) of the Unfair Dismissals Act:

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.

Therefore, an Employer must rely on substantial grounds justifying the dismissal.  If the ground upon which the Respondent herein proposes to rely upon is the redundancy of employee, therefore it is for the Respondent to prove that it was a substantial ground and that the Complainant was dismissed wholly or mainly due to redundancy situation.

There are essentially three aspects to redundancy:

-          dismissal must arise wholly or mainly because of redundancy.

-          Employee must be fairly selected for redundancy.

-          The Employer must act reasonably when dismissing on grounds of redundancy (Section 6 (7) of the Unfair Dismissals Act).

DISMISSAL BY REASON OF REDUNDANCY

The Respondent in their submissions seems to rely on the fact that their requirements of the business for employees to carry out work of particular kind diminished (the document showing the average amount of motor coils needed).

It is submitted that the Complainant was not dismissed wholly or mainly due to redundancy but due to the fact of the short stoppage at work by the Polish employee at the end of January and their demand for pay rise and explanation as to the suspension of their Supervisor who approached the Respondent in relation to pay rise on their behalf.

It is further submitted that while the Respondent proposes to rely on the reduced need for particular part-motor coils:

-          other employees working on that product were on overtime in August 2018 which suggests that either the afforded reason is not genuine or there was no proper consideration of the redundancy situation.

-          Another employee is moved from shop owned by Company to do job performed by Complainant.

-          Two employees are moved from another Unit to the Unit where the Complainant worked.

It is also submitted that in order for the redundancy situation to exist it must be unconnected to the particular employee who is to be made redundant.  Complainant was made redundant along with 6 other employees – all Polish Nationals – who were among the group who decided to clock out from the workplace after the Respondent company owner comments during meeting on 29^th January 2018.

Respondent also seems to rely in their submissions on the financial aspect of dropping sales by about 40% between 2016 and 2018.  If that was the case it is difficult to understand why pay rises were agreed with employees between March and June 2018 and implemented.

FAIR SELECTION FOR REDUNDANCY

The Complainant relies on the case Williams v Compare Maxam Limited where the EAT for England and Wales provide very comprehensive guidelines as to what is meant by fair selection in redundancy.  In essence, the employer typically shall:

-          Seek to give as much warning as possible.

-          Consult Unions as to the best means by which result can be achieved.

-          Whether or not there is unions involved the employer shall seek to establish criteria for selection which can be objectively checked.

-          Ensure that the selection is made fairly in accordance with adopted criteria.

-          Seek to see whether instead of dismissing an employee he could offer him alternative employment.

WARNING / CONSULTATION

It is submitted that no warning was provided to the employees and they were dismissed by other company employee (not by the son of the Owner who was conducting the Wednesday meetings) – Mr A and were dismissed after last of those Wednesday meetings did not take place.  Complainant was also not advised what criteria were applied which resulted in her selection for redundancy and in fact the dismissal letter dated 4^th May 2018 only by its heading entitled “Redundancy Notice” hints that Complainant was dealing with redundancy.

Complainant further relies on case Boucher v Irish Productivity Centre [1994 ELR 205] where it was observed that the selection process was carried out without any consultations or interviews.  In that case the Tribunal observed “it would appear to the Tribunal that at least those threatened with dismissal, or in the group likely to be dismissed, should be made aware that, what for some could be a final assessment was being made and their views and contributions, in support of their case for remaining, canvassed, valued and considered in a full and bona fide way”.

In the Boucher case the Tribunal in deciding in favour of the Complainant also stated: the Tribunal notes from the evidence that at the time of the selection of the claimants for redundancy Mr Cahill did not make the criteria for selection used by him known to the claimants and subsequently did not state the criteria for selection at a Rights Commissioner’s hearing.  The first occasion that the claimants became aware of the criteria was at the Tribunal hearing of 6^th January 1993.

In case ADJ00004403 the Adjudication Office observed:  in the current case the Complainant was unaware of the relevance of the assessment relied upon by the Respondent until the hearing.  No opportunity was given to the Complainant to make any input into the assessment used, which concerned a matter of vital interest to her, namely her continued employment or otherwise.  It is not for me to decide whether or not such input would have made any difference.  In addition, it is clear from the letter of 3^rd June that the decision to make the Complainant redundant had already been made in advance of any consultation.

I determine therefore that the onus on the Respondent to establish substantial grounds that the Complainant was fairly dismissed by virtue of fair selection for redundancy has not been discharged and the Complainant was unfairly dismissed.

OBJECTIVE CRITERIA

As already submitted Complainant learned of the alleged criteria only in response to her appeal challenging the dismissal due to alleged redundancy.  At that stage Respondent provided following as alleged criteria used: skill levels, productivity levels, contractual needs.

On the one hand it admits there is not much difference in competence levels of the employees and the job is a simple task and on the other hand advices that selection was based on skill levels.  Even if that was the case there was no evidence produced how the skill levels of 120-140 workforce were firstly established and secondly compared.

It is alleged productivity levels of each employee were considered but the Complainant submits that there was no mechanism to assess productivity levels in the workplace, Complainant was never seen and was never advised how the productivity was measured and how she was performing comparing to other employees.  No such document showing productivity of compared employees was produced during the 4^th May meeting, during the appeal, and not submitted to the WRC so far.

Contractual needs are also cited in Respondent correspondence as the selection criteria.  Complainant fails to see how contractual needs affect selection of particular employee (or to be precise selection of Complainant) for redundancy.

ACTING REASONABLY/DUTY TO CONSIDER OTHER OPTIONS

Respondent failed to identify the feasibility of pursuing less drastic measure to redundancy.  Respondent by their own submissions confirmed that “in 2018 13 people left due to downturn”.  Those were clearly not redundancies and therefore Respondent could reasonably in such circumstances ask the workplace for voluntary redundancies.  Respondent failed to do so.

Respondent operates three factory units in Dublin and no consultation took place, no alternative roles were offered to the Complainant.  It is submitted that around the time Complainant was dismissed due to alleged redundancy.  Respondent hired new employee to one of the other factory units.  Furthermore, another existing employee was moved after Complainant was dismissed, from Company shop to perform work which Complainant was performing before dismissal.   She had a shorter period of service than Complainant and subsequently was moved to one of the other factory units.  That clearly confirms such transfers of employees were performed and that there was work available.

Separately, it is also submitted that it was Mr A who took and communicated the decision of the redundancy and it was one and the same Mr A who considered the Complainant appeal.

CONCLUSION

It is submitted the Complainant was dismissed in a situation which is, at least, a questionable redundancy situation.  The Complainant was among Polish workers who clocked out following humiliating comments of the Company Owner at the end of January 2018 and was among Polish only employees who were made redundant.

Alleged redundancy situation coincides with pay raises taking place and also with employees being moved to perform work done by the Complainant and/or asked to work overtime.

Even if the redundancy situation in fact existed, no clear criteria were applied, LIFO rule was clearly ruled out by the Employer who described the Complainant work as simple task and at the same time proposed to rely on skill needs as a criterion.  Furthermore, unverifiable to Complainant criterion of productivity was used but no evidence was ever shown how the productivity – an objective criterion – was measured.  The Complainant does not understand how contract needs resulted in her selection for redundancy.

The Respondent failed to act reasonably and failed to consult the Complainant and also failed to consider other options.

MITIGATION OF LOSS

Complainant made numerous efforts to secure alternative employment that can be seen from the emails submitted.

Complainant finally secured new employment on 1^st October 2018 so was unemployed from 4^th May 2018 for a period of 21 weeks.

Average weekly earnings for the Respondent - €386.77 and it does not include the €1.00 increase.  Complainant was due from 1^st June 2018 which would make the weekly gross of €425.77.

Average weekly in new employment since 1^st October 2018 is € 371.99

At the time that the Complainant was made redundant from her position the remaining workers had either a unique skill level needed for certain customers who required very difficult products or a higher production rate on the standard easier products, in some cases both.

Employees made redundant were suited to the standard product referred to as D43 types. Demand for these products substantially slowed in 2018, some of these products from 2017 and 2018 remain in stock.

The Respondent representative present at the meeting stated that the company had been experiencing a negative trend from a business perspective. Most of the product was sold to UK based customers and the business was negatively impacted with falling exchange rates.

The Respondent representative also mentioned that two experienced senior managers had been very ill, this had a negative impact on the business.

At hearing the Respondent representative produced a skills matrix showing four different aspects of the operation and rated each employee on each operation. The Complainant rated poorly from a skills point of view. This matrix also included start dates, the Complainant had more service than two other employees on the list who were not made redundant.

The Respondent alludes to the fact that all employees were fully aware that there was a possibility of redundancies. In February 2018 some employees in this production area raised concerns in relation to the lack of overtime. To ensure that employees were adequately informed and to improve communications one manager attended this are every Wednesday for a six-week period, he met with the employees to keep them informed on customer contracts and the reduced workload being experienced at this time. These meetings were also used to address where possible any other employee concerns, the meetings were followed by one to one meeting with any employee who had a concern at that time.

The sales figures for the company had fallen from €13.2m in 2016 to €8.2m in 2018.

The area where the Complainant was employed dropped from an average 26 units in 2016 to an average of 9 units per month in 2018.

In 2018 thirteen employees left the company and another ten were made redundant. The Respondent company employs just over 120 employees.

The Respondent accepts that it is very difficult to make employees redundant, but it was necessary to secure the ongoing viability of the business. Many different factors were considered when choosing who should be made redundant. Skill needs along with customer contractual requirements were the main factor.

The Complainant’s representative as per conclusion of his submission states the following:

“It is submitted the Complainant was dismissed in a situation which is, at least, a questionable redundancy situation.  The Complainant was among Polish workers who clocked out following humiliating comments of the Company Owner at the end of January 2018 and was among Polish only employees who were made redundant.

Alleged redundancy situation coincides with pay raises taking place and also with employees being moved to perform work done by the Complainant and/or asked to work overtime.

Even if the redundancy situation in fact existed, no clear criteria were applied, LIFO rule was clearly ruled out by the Employer who described the Complainant work as simple task and at the same time proposed to rely on skill needs as a criterion.  Furthermore, unverifiable to Complainant criterion of productivity was used but no evidence was ever shown how the productivity – an objective criterion – was measured.  The Complainant does not understand how contract needs resulted in her selection for redundancy.

The Respondent failed to act reasonably and failed to consult the Complainant and also failed to consider other options aforementioned”.

From an employer’s perspective it is important to be able to point to the reasonableness of his / her conduct when faced with the necessity for redundancy.

As well as this level of reasonableness it is advisable to carry out the following steps:

·         The employer should consider all options before deciding on redundancy. Are there any alternatives?

·         Is alternative employment an option for the employees concerned?

·         Has the selection for redundancy been done fairly?

It may not be a legal procedural requirement it is however good practice for the employer to hold meetings and discussions to explore any alternatives. It would also be prudent for the employer to make a record of these discussions and proposals.

In her book ‘Dismissal Law in Ireland’ (second edition) the late Dr. Mary Redmond under the heading of Reasonableness states:

Where there is no agreed procedure or custom and practice relating to employment, and selection for redundancy does not result wholly or mainly from one or more of the grounds deemed unfair in s 6(2) of the Unfair Dismissals Act, the EAT will ask whether the employer has acted reasonably in the light of all the circumstances.  Two aspects are likely to be considered: the reasonableness of selection and the reasonableness of the manner of dismissal.  Clearly the EAT should not be hasty to substitute another view for that of the employer.  At the same time, the EAT is required to apply its own collective wisdom.  Reasonableness should be judged “by the objective standard of the way in which a reasonable employer in these circumstances, in that line of business, would have behaved”. 

Employers will be required (where appropriate) to have thought about the problem of redundancy in good time so as to have formulated a policy.  They will be required to have identified factors crucial to selection in their particular circumstances.  This is discussed further below.  An employee may have a constructive contribution to make to an employer regarding his possible selection for redundancy.  In Boucher the EAT reiterated that any fair assessment would “have the characteristics of an inquiry with the right to the threatened person to make a contribution in defence of any allegation against him or …. any unfair or unbalanced view being held by the [employer]. 

In this instant case I have looked at the case presented by the Respondent and accept that the trading patterns within the Respondent organisation were showing an ongoing negative trend between 2016 and 2018. It also cannot be overlooked that the nature of the work done has to be described as labour intensive and this does have a significant impact on organisation headcount.

There is no indication that any alternative to redundancy was looked at, such alternatives could include a temporary lay off for a number of employees or short time working for all employees in that particular section of the business.

There was no consultation with the Complainant beforehand and section 17 of the Redundancy Payments Act, 1967 reads as follows:

17. (1) An employer who proposes to dismiss by reason of redundancy an employee who has not less that four years service with that employer shall, not later than two weeks before the date of dismissal, give to the employee notice in writing of the proposed dismissal and send to the Minister a copy of that notice.

This notice should not be confused with the notice requirement contained within the Minimum Notice and Terms of Employment Act 1973.

Having fully considered all aspects of this case I believe alternatives to redundancy existed and note that within a short space of time after this dismissal employees were being brought from other areas to work in the area where the Complainant worked, overtime was being worked once more in this area.

I do not accept this was a genuine redundancy situation and the manner of the dismissal was deplorable.

I believe the complaint as referred under section 8 of the Unfair Dismissals Act, 1967 is well founded and decide that the Complainant was unfairly dismissed.

I now order the Respondent to pay compensation in the sum of €10,000 to the Complainant, I note that a sum of €2,533.44 has already been paid, this amount should be subtracted from the €10,000. The balance is €7,466.56 and this amount should be paid to the Complainant within 42 days from the date of this decision.

As outlined above.

Unfair Dismissals Act, 1967.