ADJ-00021374

Complainant

Respondent

Anonymised Parties

A Sales Representative

A Machinery Company

Representatives

Johanna Lacey Solicitors

Seamus Brennan Solicitors

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00028085-001

30/04/2019

The complainant was employed by the respondent as a Sales Representative from 1 March, 1990 until 28 December, 2018 when his employment was terminated. The complainant contends that his employment was terminated by reason of redundancy and claims that he is entitled to a statutory redundancy payment. The respondent disputes the claim and contends that the complainant’s employment was terminated by reason of retirement.

The complainant was aged sixty-nine years when his employment was terminated by the respondent. The complainant contends that he did not have a written contract of employment and that the respondent did not have a mandatory retirement age in operation for its employees. The complainant stated that he continued to work for the respondent on reaching the age of sixty-five years and the respondent did not raise the issue of compulsory retirement at that juncture or at any stage thereafter prior to the termination of his employment.

The complainant states that he was informed by the General Manager in October, 2018 that he was being “let go” from his employment at the end of the year as a result of the company losing the franchise for one of its main products. The complainant was informed that there would not be sufficient work for all of the company’s sales representatives following the loss of this franchise. The complainant states that the notification of his redundancy came as a complete shock to him and the General Manager agreed to explore the possibility of retaining him on a three day per week basis. However, the complainant was subsequently informed by the General Manager on 21 November, 2018 that a three day week was not an option. The complainant contends that he raised the issue in relation to the payment of his redundancy entitlements with the General Manager at this juncture but was informed that the respondent was not obliged to make any such payment to him.

The complainant heard nothing further in relation to the matter until 21 December, 2018 when he was called to the General Manager’s Office and was informed that his employment was being terminated with effect from 28 December, 2018. The complainant was given an envelope by the General Manager with a cheque for €5,000 and was informed that this was a token in respect of his time with the company. The complainant states that he did not cash the cheque and returned it to the company in February, 2019.  

The complainant disputes the respondent’s contention that there was an agreement in place between the parties that he would retire from his employment at the end of 2018. The complainant submits that his employment was terminated by reason of redundancy as a result of a reduction in the workload of the respondent.

The respondent submits that the company has an established policy of requiring employees to retire at the age of sixty-five years. The respondent’s General Manager stated that the complainant approached him around the time that he reached the retirement age of sixty-five and requested that he be allowed to continue in employment as he didn’t have a pension. The General Manager stated that the respondent agreed to allow the complainant to continue working for the company for as long as there was work available.  

The General Manager had a meeting with the complainant in October, 2018 and informed him that the company had lost one of its main franchises and as a result his employment would be terminated with effect from the end of December, 2018. The General Manager stated that the Complainant asked if it would be an option for the company to retain him in employment on a three-day week basis and it was agreed that this option would be considered. However, after discussing this suggestion with the Managing Director the complainant was informed by the General Manager that it would not be possible to retain him in employment on a three-day week. The General Manager had a further meeting with the complainant on 21 December, 2018 and informed him that the respondent was giving him a payment of €5,000 on his retirement in recognition of his long service with the company. The complainant was also allowed to keep the company car (valued at somewhere between €3,000 and €5,000) which he had used in his job following his retirement.

The respondent submits that the complainant was fully aware that his employment was being terminated by reason of retirement in December, 2018 and this fact was acknowledged by the Managing Director at the company’s Christmas party. The respondent submits that the complainant did not raise any issue about redundancy or the payment of a redundancy lump sum until he returned the cheque for €5,000 in February, 2019.

Section 7 of the Redundancy Payments Acts provide that:

“(1) An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided –

(a) he has been employed for the requisite period, and

(b) he was an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts, 1952 to 1966, immediately before the date of the termination of his employment, or had ceased to be ordinarily employed in employment which was so insurable in the period of four years ending on that date.

(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 the 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, ….”

The complainant claims an entitlement to a statutory redundancy lump sum payment pursuant to the Redundancy Payments Acts. The respondent denies the claim and contends that the complainant’s employment was terminated by reason of retirement rather than redundancy. Therefore, the key issue that I must decide in the context of the present complaint is whether or not the complainant’s employment was terminated as a consequence of a genuine redundancy situation within the meaning of Section 7(2) of the Redundancy Payments Acts.

I note that it was held by the Employment Appeals Tribunal in the case of St. Ledger v Frontline Distribution Ireland Ltd [1995] E.L.R. 160 when considering the statutory definition of “redundancy” that: “Impersonality runs throughout the five definitions in the Act. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job. It is worthy of note that the E.C. Directive on Collective Redundancies uses a shorter and simpler definition: ‘one or more reasons not related to the individual workers concerned’. Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a reduction in numbers”.

In the instant case, the respondent contends that the complainant was allowed by agreement between the parties to work beyond the normal retirement age of sixty-five for as long as there was sufficient work to keep him occupied. The complainant disputes that there was ever any such agreement in place between the parties and contends that his employment was terminated as a result of a reduction in the workload after the respondent lost the franchise in respect of one of its main lines of machinery.  

In considering this issue, I note that the respondent’s General Manager adduced evidence that the agreement to extend the complainant’s employment beyond the normal company retirement age occurred following discussions between the parties when he was approaching his sixty fifth birthday. The complainant disputes that he was made aware of the existence of a compulsory retirement age or that he had any discussions with the General Manager in relation to this matter either prior to his sixty-fifth birthday or at any other juncture during his period of employment. The complainant contends that the first indication he received from the respondent this his employment was to be terminated occurred in October, 2018 after he was informed of this fact during a meeting with the General Manger.

On balance, I prefer the complainant’s evidence in relation to this matter and in coming to this conclusion I have taken account of the following factors:

·         It was common case that the complainant was not provided with a written contract of employment by the respondent or any other documentation to confirm that the company operated a mandatory retirement policy for its employees on attaining the age of sixty-five years.

·         The respondent did not provide any documentation in support of its contention that there was an agreement between the parties to facilitate the complainant to work beyond the age of sixty-five years. I am of the view that it would not be unreasonable to expect that any such agreement, had it existed between the parties, would have been documented by the respondent.

It was not in dispute between the parties that the respondent lost the franchise for one of its main lines of machinery during 2018 and that the complainant was the sales representative within the company with responsibility for this franchise. Having regard to the totality of the evidence adduced, I am satisfied that the complainant’s dismissal was attributable wholly or mainly to the fact that there was a diminution in the respondent’s workload and the resultant requirement to reduce the number of sales representatives in its employment following the loss of this franchise. Furthermore, I am satisfied that the complainant’s employment would not have been terminated at the material time in question were it not for the fact that the respondent lost this franchise and the resultant diminution in the workload.

Therefore, I find that the respondent terminated the complainant’s employment by reason of redundancy in December, 2018 and that consequently the complainant is entitled to receive a statutory redundancy payment in accordance with the provisions of the Act.

I find that the complaint under the Redundancy Payments Acts 1967–2014 is well-founded and that the complainant is entitled to a redundancy payment based on the following criteria:

Date of Commencement: 1 March, 1990

Date of Termination: 28 December, 2018

Gross Weekly Pay: €510.80

This award is made subject to the complainant having been in insurable employment under the Social Welfare Acts during the relevant period.

Redundancy Payments Acts, 1967 to 2014 – Section 7(2) – Redundancy lump sum – Retirement – Diminution in workload