Complainant

Respondent

Anonymised Parties

A Service Engineer

A Wholesale Distribution Company

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-00016494-001

21/12/2017

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00016494-002

21/12/2017

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

CA-00016494-003

21/12/2017

The Complainant commenced employment with the Respondent, a wholesale distribution company, on 19 September 2016, in the role of Service Engineer. The Complainant’s employment ended on 7 December 2017 when he was made redundant.

The Complainant submitted his complaint to the Workplace Relations Commission on 21 December 2017. The complaint, which is submitted under the Unfair Dismissals Act, 1977, alleges that the Complainant was unfairly selected for redundancy, as no redundancy situation existed.

The Complainant also lodged complaints under the Organisation of Working Time Act in relation to outstanding Annual Leave and under Payment of Wages Act in relation to outstanding expenses owed to him.

CA-00016494-001 – Unfair Dismissal:

The Complainant alleged that he was unfairly selected for redundancy and that a genuine redundancy situation did not exist.

CA-00016494-002 – Organisation of Working Time Act:

The Complainant’s claim under this Act relates to his belief that he had not received payment for all his holidays.

CA-00016494-003 – Payment of Wages Act:

Under this Act, the Complainant claimed that his employer had not paid him the expenses that were appropriately due to him. From evidence presented, it appears that the expense in question related to the purchase of fuel for a company vehicle amounting to €62.94, which the Complainant expensed on 3 November 2017.

Background:

The Respondent submitted that the Complainant commenced employment on 19 September 2016, as a Service Engineer. The Respondent submitted that the Complainant’s employment continued until 7 December 2017, when he was selected for a genuine redundancy.

According to the Respondent’s submission, in about April 2017, the Respondent’s customer base was targeted by one of its main competitors in the form of offering products of cheaper price. The Respondent submitted that this necessitated them decreasing their selling price in order to hold onto the customers. It was submitted that this resulted in a decrease in sales between February 2017 and May 2018 of between 9% and 18%. In addition, it was submitted that the Respondent estimated the loss of revenue to be in the range of €50,000 - €60,000 during this period. It was also contended that the Respondent lost a number of large customers between May and June 2017.

The Respondent submitted that, as a result of the aforementioned situation, it was felt best to keep the Complainant informed of the situation. Consequently, it was submitted that, on 9 October 2017, the Complainant was given a verbal warning that his job was at risk of redundancy. It is further submitted that, on 20 October 2017, the Complainant was invited to meet with the Respondent, on 24 October 2017, to discuss the possibility of redundancy and any alternative options that might exist.

According to the Respondent’s submission, they received an email from the Complainant on 24 October 2017 in relation to the verbal warning of redundancy and the invitation to the meeting to discuss same. According to the Respondent, the email began with the Complainant noting his frustration that the meeting arranged for 24 October 2017 hadn’t taken place. In addition, it was submitted that the Complainant requested the respondent to outline why he was being considered for redundancy. The Respondent submitted that the email concluded with the Complainant stating he worked very hard for the Respondent and contested the validity of the redundancy.

The Respondent submitted that, on 25 October 2017, they responded to the Complainant’s email by informing him that the meeting hadn’t taken place due to the Complainant’s failure to reply to the invitation received on 20 October 2017. It was submitted that the Respondent emphasised that they were ready and available to discuss the potential redundancy at the appointed time on 24 October 2017. It was further submitted that the Respondent then suggested a meeting on 25 October 2017 so as to listen to any suggestions the Complainant may have in relation to the situation.

According to the Respondent’s submission, they received an email from the Complainant, a short time later, in which he requested that any issues they had with him or his work will be put in writing. It was submitted on behalf of the Respondent that they had no issues with the Complainant or his work and were only seeking to meet with him to discuss the proposed redundancy.

The Respondent submitted that a meeting with the Complainant took place on 25 October 2017. According to the Respondent, the details discussed at this meeting were summarised in an email to the Complainant on 3 November 2017. It was set out in this correspondence that, at the meeting of 25 October, the Respondent explained to the Complainant the possibility that his position in Galway could be made redundant. It was further set out that it was put to the Complainant that this situation was necessitated due to a loss of accounts, which had occurred over several months, mainly due to the competing company who had repeatedly undercut the Respondent in one of their main products.

It was further submitted by the Respondent that it was explained to the Complainant that the loss of accounts had led to a decline in the number of calls that required the service of a coffee machine engineer. According to the Respondent’s submission, their communication of 3 November, also advised the Complainant that they had been endeavouring to avoid this situation by looking at all alternatives to redundancy.

According to the Respondent, the communication also referred to a sister company in Dublin, which employed three engineers and where most of the work was carried out. It was further stated, in this regard, that the Complainant was advised that in the event the Respondent were to make the position in Galway redundant, they would invite the Complainant to apply for a position as a coffee service engineer in the Dublin base. The Complainant was further advised that if he decided to express an interest in applying for the position in Dublin then the Respondent would inform the employees in the sister company and invite all four candidates for interview with the purpose of selecting three service engineers for the positions available in the Dublin base.

The Respondent submitted that, as the Complainant had no submission or recommendation to make at their meeting on 25 October, their correspondence of 3 November concluded by requesting him to submit any ideas he may have to avoid the redundancy situation.

According to the Respondent’s submission, the Complainant’s position was made redundant on 7 December 2017. It was further submitted that, on 15 December 2017, the Respondent sent the Complainant an email noting that there was a cheque for his outstanding wages and holiday pay waiting in the warehouse for him to collect. In addition, the Respondent submitted that the request of the Complainant to provide a new address so that his P45 could be sent to him. In addition, the Respondent stated that the Complainant was requested to return €215, being money collected by the Complainant of the Respondent’s behalf, to the office or that it could, alternatively, be deducted from the Complainant’s wages which were due.

The Respondent submitted that a payment in the sum of €757.09 was paid to the Complainant, by way of credit transfer, on 15 December 2017. The Respondent submitted that this amount included the Complainant’s Holiday Pay of €461.54. in this regard, the Respondent stated that this payment represented the outstanding balance of the Complainant’s annual leave.

Respondent’s response to the Complainant’s substantive complaint:

Against the background events, set out above, the Respondent made the following arguments in response to the individual complaints made by the Complainant:

CA-00016494-001 – Unfair Dismissal:

In relation to the Complainant’s claim of unfair selection for redundancy, in a situation where he contends the redundancy did not exist, the Respondent referred to Section 6 (4) (c) of the Unfair Dismissal’s Act, 1977, and specifically to the provision that a dismissal is not an unfair dismissal if it results wholly or mainly from the redundancy of an employee. It was submitted on behalf of the Respondent that the net effect of this section of the Act is that a redundancy is an absolute defence for the claim of unfair dismissal provided that the employee has been fairly selected for redundancy.

According to the Respondent, the Complainant was fairly selected for redundancy. In this regard, it was submitted by the Respondent that the first hurdle that all employers have to cross in defending an unfair dismissal claim relating to redundancy is that the redundancy was genuine. In this regard, the Respondent submitted that the situation in the within case was a genuine redundancy and that this is borne out by the facts and figures set out above in relation to the Respondent’s business.

The Respondent next made reference to the provisions of Section 7, with particular emphasis on Sections 7 (2) (b) and (c) of the Redundancy Payments Acts.

The Respondent submitted that the second hurdle, which employers have to cross, is to prove that the redundancy, whilst being fair, does not relate to the person but to the job or function. According to the Respondent, this “impersonality requirement” has been further strengthened by Section 5 of the Redundancy Payment Acts, 2003, which set out that “the selection of the employee for redundancy must be for one or more reasons not related to the employee concerned”.

Finally, in relation to the Complainant’s allegation of unfair dismissal, the Respondent made reference to the Unfair Dismissals (Amendment) Act, 1993, which requires that the reasonableness of an employer’s conduct when making an employee redundant is an essential factor to be considered. The Respondent identify this as the third hurdle which must be crossed by all employers to prove that their conduct was reasonable in coming to a decision to make the person redundant. It was submitted, on behalf of the Respondent, that it is necessary, prior to making anybody redundant, that the employer looks at all alternatives to redundancy.

The Respondent contends that a proper and transparent consultation process took place whereby consideration was given to all alternatives. In this regard, the Respondent submitted that the Complainant was afforded an opportunity to consider any alternative and was given an opportunity to put forward same during two meetings, which were held during the consultation period. The Respondent further contends that it is notable that the Complainant did not put forward any such alternatives.

According to the Respondent’s submission, having carefully considered other options such as layoff and short time, it was felt that, due to the loss of customers, it was concluded that they had to make the Complainant’s position redundant.

In conclusion, in relation to this aspect of the Complainant’s complaint, the Respondent submitted that the Complainant’s role was redundant and that the redundancy, in this regard, was carried out in line with best practice, in a fair and reasonable manner. Accordingly, the Respondent submitted that the provisions of Section 6 (4) (c) of the Act mean that the Complainant’s claim must fail.

CA-00016494-002 – Organisation of Working Time Act:

With regard to the Complainant’s claim for Holiday Pay, pursuant to Section 27 of the Organisation of Working Time Act, 1997, the Respondent submitted that it was clear from the documentation provided that the Complainant was paid his full entitlement to holiday pay and,   therefore, his claim in this regard must fail.

CA-00016494-003 – Payment of Wages Act:

Finally, in relation to the claim under the Payment of Wages Out, 1991, the Respondent submitted that they were a stranger to the Complainant’s claim in relation to outstanding expenses.

CA-00016494-001 – Unfair Dismissal:

The Complainant’s claim is that the termination of his employment by the Respondent represented unfair selection for redundancy, in a context where he alleged a redundancy situation did not, in fact, exist. Therefore, in order to appropriately assess the Complainant’s claim it is necessary to consider the context in which the employment termination took place.

Having carefully reviewed all the evidence adduced in this case, I am satisfied that the relevant timeline for consideration of the employment termination commenced on 9 October 2017.   On that date, the Respondent met with the Complainant and advised him as to the possibility of having to make his position redundant. Following this meeting, the Respondent confirmed the position, in writing, to the Complainant on 20 October 2017 and invited him to a further meeting, in this regard, to be held on 24 October 2017.

It appears from the evidence adduced, that this meeting did not actually take place. However, the evidence further suggests that a casual encounter, on the same day between the Complainant and the Respondent did take place. It was submitted by the Complainant that during this encounter, the Respondent raised issues in relation to his (the Complainant’s) work performance.

While the Respondent denied that issues were raised, during this discussion, in relation to the Complainant’s performance, I note from the evidence that the latter referred to this in his email to the Respondent on 24 October 2017. I believe it is reasonable to conclude, based on the balance of probability, that had work/performance issues not been raised with the Complainant during the meeting earlier that day, it would be expected that the Respondent would have corrected the position in his response email which he sent to the Complainant on 25 October 2017.

It is also noted that, in his reply to the afore-referenced email, which he sent to the Respondent on 25 October 2017, the Complainant specifically asked the Respondent to put in writing any issues he had with him and/or his work. However, the next correspondence from the Respondent, a detailed email sent to the Complainant on 3 November 2017 (17:30) in relation to the redundancy situation, does not make any reference to work/performance issues or respond in any way to the Complainant’s request for detail in this regard.

In my view, the Complainant’s contention that the Respondent raised issues in relation to his performance at the casual meeting on 24 October 2017, is given further credence by the Complainant’s oral evidence at the Hearing, where he provided a detailed list of the issues raised by the Respondent in this regard. This list included two customer complaints about the Complainant and his failure to order parts.

Based on the above, I am satisfied that, on the balance of probability, the Respondent, most likely, did raise issues of performance with the Complainant during their casual conversation on 24 October 2017. This clearly introduces an element of performance into a situation where the Respondent maintains the only issues influencing the decision to make the Complainant’s position redundant were business related and, in doing so, undermines the credibility of the Respondent’s contentions in relation to the genuineness of the redundancy situation.

It appears from the evidence adduced, that the next significant event, in the lead up to the   Complainant’s redundancy, is the Respondent’s correspondence of 3 November 2017. In this letter, the Respondent refers, inter alia, to the Complainant’s position as potentially at risk of being made redundant mainly due to the loss of accounts incurred in the previous number of months and the ongoing pressure on margins due to price undercutting by a competitor, who was selling the same product as the Respondent.

While this letter also states that the Respondent has made every effort to recover the business situation and had “looked at all alternatives to try to avoid this redundancy”, there was little evidence presented to the Hearing as to the extent of these efforts and/or the nature of the alternatives considered.

It is also noted that this letter refers to consultation that had taken place with the Complainant over the   previous weeks. However, other than the casual conversation which took place on 24 October 2017, there appears to be little evidence of any meaningful consultation with the Complainant. In this regard, the letter suggests that, at their meeting the previous week, the Complainant had “no submission or recommendation to make”. While seeking suggestions/recommendations from employees whose positions may be under threat of redundancy is to be welcomed, this cannot be seen to negate the employer’s responsibility to make every effort to ensure that credible alternatives to redundancy are seriously considered. Consequently, the Complainant’s inability or failure to provide alternative suggestions in this regard cannot be considered to be a legitimate reason for proceeding with the redundancy.

Having carefully considered all the evidence adduced, it appears that there was no further discussion or consultation on the matter prior to the Complainant’s redundancy been confirmed, by way of letter dated 30 November 2017. This correspondence clearly sets out that the decision to make the Complainant’s position as Coffee Machine Service Engineer redundant resulted from “loss of business we have suffered over the last six months and as a consequence the reduced number of calls that require the attendance of a coffee machine service engineer”.

Against the background as set out above, I proceeded to consider the Complainant’s selection for redundancy and, in that context, determine whether the termination of his employment was fair and reasonable in all the circumstances. In doing so, I first considered the applicable law that applies in such situations.

Section 6 (1) of the Unfair Dismissal Act, 1977, states 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 are substantial grounds justifying the dismissal”.

Section 6 (4) (c) of the Act further states, inter alia, 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 Act states as follows:

“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 Adjudication Officer, 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….”

On the basis of the legal position as set out above, the dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy. Arising from this, the burden of proof rests with the Respondent to establish, in the first place, that the dismissal was wholly connected to redundancy and, having done so, to justify the selection process whereby the complainant was selected for redundancy.

The Respondent’s submission, in the within case, is that the Complainant’s employment was terminated by reason of redundancy and that a reasonable and appropriate selection process was used to identify the Complainant as a candidate for redundancy in line with the Redundancy Payments Act, 1967 – 2014.

Section 7 of the Act deals with the general right to redundancy payment. Section 7(2) there of states that:

“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”.

Based on the Respondent’s evidence, it appears that a combination of the circumstances set out at paragraphs (b) and (c) above are the most applicable to this particular situation.

The Respondent’s submission is that, in the context of reduction in customer numbers and subsequent downward pressure on margins as a result of price undercutting by a competitor, they had no choice but to make the Complainant’s position redundant.

Having carefully considered the evidence in this regard, I am not convinced that the Respondent engaged in any detailed review of the situation, at least not to the extent that they could contend reasonable consideration had taken place. While the financial data supplied by the Respondent purports to confirm their position, I find that the oral evidence provided by the Complainant in relation to additional customers was convincing, in that it clearly suggests the position may not be exactly as set out in the Respondent’s evidence.  

Having carefully reviewed the evidence adduced, it appears that there were windfall gains and losses in relation to customer numbers. However, the Respondent’s submission appears to concentrate solely on the losses with regard to customer numbers and ignores the additional customers that the Complainant’s evidence suggests were recruited during his time working for the Respondent. Against this background, I find the Respondent’s submissions in this regard to be les than convincing.

It is clearly established that, in relation to the selection of employees for redundancy, their right to retain their employment must be taken into consideration. In this regard, the employer is obliged to look at all available options by which this could be achieved. Having carefully considered all of the evidence adduced, I am not satisfied that the Respondent gave adequate or appropriate consideration to whether or not there were alternative roles into which the Complainant could be redeployed or whether other options, short of redundancy, existed.

In this regard, I find that the Respondent’s position, in relation to the possibility of a position being available at their Dublin base, should the Complainant wish to relocate there, does not, in my view, represent a reasonable or genuine alternative to making his position at the Galway base redundant. The Respondent’s suggestion was that the Complainant and the three Dublin-based engineers would compete for three positions. This proposal ignores the fact that the Complainant, who was being required to relocate to Dublin, had longer service with the Respondent than two of his colleagues at the Dublin base. In a context where the Complainant expressed an interest in moving to Dublin, I am of the view that the application of service-based criteria for selecting the position to be made redundant would have been fairer to the Complainant and would also have eliminated any suggestion that issues in relation to his performance might also be influencing the decision.

Finally, I find that the Respondent’s contention that the requirement for an engineer to service customers out of the Galway base was reduced as a consequence of the loss of business, is undermined by the evidence submitted by the Complainant, who claimed that these calls were being serviced by an engineer who relocated from Dublin. In my view, this raises serious questions in relation to the genuineness of the redundancy, on which the Respondent based the termination of the Complainant’s employment.

Consequently, I find that, in all the circumstances, the Respondent’s actions in making the Complainant’s position redundant does not meet the requirements as set out in Section 6 (4) (c) of the Act and furthermore lacks the reasonableness and fairness required by Section 6 (7) of the Act.

Therefore, having carefully considered all of the evidence adduced in this case I am of the view that the Respondent did not follow fair process and procedures in making the Complainant redundant. Consequently, I find the Complainant’s dismissal to be unfair.

CA-00016494-002 – Organisation of Working Time Act:

Having carefully considered all the evidence adduced under the Complainant’s claim in relation his holiday payment, I find that the Respondent has no case to answer, as all   liability in this regard has been fully discharged.

Consequently, I find the Company’s complaint is not well founded and is, therefore, rejected.

CA-00016494-003 – Payment of Wages Act:

Having carefully considered all the evidence adduced in relation to the Complainant’s complaint under the Payment of Wages Act, I find that the Complainant’s complaint is not well founded and is, therefore, rejected.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I set out my decisions in relation to the individual aspects of the Complainant’s complaints as follows:

CA-00016494-001 – Unfair Dismissal:

I find the Respondent to be in breach of Section 6 (7) of the Unfair Dismissals Act, 1977. Therefore, I find that the Complainant’s dismissal, by way of redundancy, was unfair and I award him an amount of € 15,000 as fair and reasonable compensation for the losses incurred as a result of the breach of the Act.

CA-00016494-002 – Organisation of Working Time Act:

I find that the Respondent has no case to answer, as all liability in relation to annual leave have been fully discharged.

Consequently, I find the Complainant’s complaint is not well founded and is, therefore, rejected.

CA-00016494-003 – Payment of Wages Act:

I find that the Complainant’s complaint is not well founded and is, therefore, rejected.

Unfair Dismissal

Unfair Selection for Redundancy

Organisation of Working Time Act

Payment of Wages Act