Complainant

Respondent

Anonymised Parties

A Sales Representative

A Medical Supplies Company

Representatives

Ferrys Solicitors

Venture Legal Services

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-00020523-001

13/07/2018

The Complainant claims that the redundancy was sham, no alternative positions were offered to her and no proper procedures were followed.

The Respondent denies the complaint

The Complainant worked for the Respondent (with her husband) as sales representatives. She commenced her employment on 5 January 2016. The Complainant’s husband also issued a WRC complaint (Adj. 15816) but this was discontinued on the second day.

The Complainant’s job function with her husband was to increase the Respondent’s customer base in the NI/UK market. The Complainant and her husband were made redundant on 15 March 2018 when the Respondent decided to discontinue the expansion of their NI/UK market. The Complainant alleges that this was a sham redundancy, that no suitable alternative employment was considered by the Respondent and that no consultation or procedures quite apart from fair procedures were afforded to her. She contends that she was unfairly dismissed from her position.

The Complainant worked very successfully and without any management criticism until July 2017 when the CEO informed her and her husband that they were the most expensive members of staff and that salary reductions would have to be made. The Complainant asked if any other staff were having their pay cut. The CEO proposed changing her from a salary to a base salary plus commission scheme. The Complainant was not happy with the suggestion. The CEO gave her time to consider it. In August 2017 the CEO decided instead to put the Complainant and her husband on a Performance Improvement Plan. The Complainant considered this scrutinising of her work performance to be very undermining. She accepts however that her sales did improve during this time. The PIP ended early in November as her sales figures had improved.

The Complainant accepts that sales dipped again in early 2018 but that this was due to the usual dip in sales that occurred in the new year. Also the sales targets were unrealistic and had not been set by the Complainant or her husband.

In March the CEO brought the Complainant and her husband into a meeting and said that the NI/UK market was not profitable enough and that changes would have to be made. He suggested again a drop in salaries and a commission based pay or else her position would be made redundant.

There was no consultation, no discussion, no fair procedures were afforded to the Complainant. The CEO just decided to make them redundant without any forewarning. The offer of changing their pay to be mainly commission based was not an offer of suitable alternative employment because the proposed reduction in salary was too great.

The reason that the Complainant was made redundant was because she and her husband had the highest salary.

Not having any option they accepted the payment of a redundancy payment and accepted that this amount must be off set against any loss of earnings award that the Adjudicator might make.

The Respondent employed the Complainant and her husband for a specific purpose to develop and increase the Respondent sales in NI and the UK. The salaries of the Complainant and her husband were considerable and the profitability of the NI and UK market needed to increase otherwise the purpose for which they were employed was not justifiable.

The MD (managing director) met with the Complainant and her husband in July 2017 to discuss the fact that the NI/UK sales were not increasing sufficiently. They were not matching the sales for the second half of 2016. He suggested an incentivisation pay plan, where they would instead work on commission. In this way, if their performance improved, their pay could be increase beyond their current salaries. They declined this. Instead he put them on a PIP, which was initially successful. He met with them on a monthly basis to discuss sales. The PIP was not a disciplinary procedure it was to improve their performance. Unfortunately once the PIP ended the increase in their sales also tailed off and in the first two months of 2018 the sales were too low to justify the positions. It was either their performance or the market was too busy to compete in, either way a solution needed to be found. Therefore a decision was taken either to put them on a commission based pay or discontinue the NI/UK market and make the positions redundant. In March 2018 the MD outlined the choices to the Complainant and her husband. They declined the offer of a commission-based pay and instead accepted the redundancy payments.

The decision to discontinue the NI/UK market was taken after a year- long effort to make this market more profitable. The redundancy situation was real and the Respondent was justified in deciding to discontinue that market. The roles held by the Complainant and her husband were confined to the NI/UK market so when that market was discontinued, their jobs became redundant. The dismissal was wholly or mainly attributable to the fact that the employer ceased to carry on the business for the purpose of which the employee was employed.

The PIP was a genuine attempt to increase sales. If the MD had decided in July 2017 that the Complainant’s role was redundant, she would not have been entitled to statutory redundancy, being employed less than 2 years. The decision to keep the role was done in good faith in order to allow the Complainant and her husband the opportunity to increase sales, but unfortunately this did not prove possible.

There was no option other than to discontinue this market, which was draining the profits of the rest of the business. The option of moving the complainant from her position into a RoI sales position and making that person’s role redundant was not considered because it was the NI/UK role that was being discontinued. But the Complainant’s suggestion is premised on an acceptance that the role had gone.

The existing customer base in NI and UK is now being maintained and not increased. The existing customer base is being managed by the MD directly.

Preliminary observation

This Adjudication took place over three days. 13 November 2018, 26 February 2019 and 10 April 2019. The legal representatives for the Complainant were Ferry’s Solicitors, but the legal representative presenting the case changed on each of the hearing days. On 13 November 2018 Cathal McGreal B.L. presented the Complainant’s case, on 26 February 2019, Shane Quinn B.L. presented the Complainant’s case and on 10 April 2019 Barry O’Donoghue, solicitor presented the case. This change of legal team is unsatisfactory in that the Adjudication process was disadvantaged by the lack of consistency but specifically was disadvantaged because the representatives were not present on all three days which meant that matters that were agreed on the second day (in relation to time limits to file submissions) were not shared with the others on the Complainant’s legal team in advance of the 3^rd and final hearing day. This resulted in the Complainant’s submissions not being furnished until  the morning of day 3, which prejudiced the Respondent in that they then did not have an opportunity to file replying submissions, as had been agreed.

Decision

I find on the balance on probabilities that a genuine redundancy situation existed on 15 March 2018. The Respondents were entitled to make the decision to stop developing the NI/UK market of their business and the role held by the Complainant was as a sales representative for those markets. I am satisfied therefore that the purpose for which the Complainant was employed had ceased or diminished. I am satisfied that the selection of the Complainant arose purely because the role that she held was no longer required. I am satisfied there was no alternative role available for the Respondent to offer to the Complainant. I do not accept that there was either an obligation on the Respondent to make a pay cut to all staff instead of effecting the two redundancies and no authority that has been cited supports such an obligation. The absence of procedures in making a redundancy is not the same as in other Unfair Dismissal cases. The obligation when making a redundancy is to prove that a genuine redundancy situation exists, that the selection of the employee can be justified and that where there are suitable alternative positions available, that such positions are offered to the employee. A failure to use fair procedures in the context of unfair dismissal cases where a redundancy occurs is confined to the selection of the employee (where there are a number to choose from) or where suitable alternative positions were available but were not offered to the employee. Neither of which pertained in this case. There is no right to an award for unfair dismissal if the lack of procedures do not have a causal link to one of these two issues. A lack of fair procedures do not of themselves alter the fact that a redundancy situation pertained and no one other than the Complainant could have been selected as she operated the market that was discontinued. In this respect the submissions of the Complainant are misconceived.

For the above reasons I find that this complaint is not well founded.

Unfair Dismissal – Redundancy – Lack of fair procedures