Complainant

Respondent

Anonymised Parties

General Operative

Manufacturing Company

Representatives

  Self

 Self

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-00028417-001

15/05/2019

The Complainant is a general operator and the Respondent is a manufacturing company. 

The Complainant commenced working with the Respondent as general operative initially as a casual worker and later a full-time contract on the 27^th of November 2017. 

The employment terminated by reason of redundancy on the 19^th of April 2019. 

The Respondent explained that it was a business to business manufacturer of foam and fibre products for furniture, bedding and medical markets in Ireland and the UK.  The company was loss making and had been for some time.  It currently employs two staff one of which only works five hours per week.  The Respondent is in the process of winding down its business. 

The Complainant’s case is that he was unfairly selected for redundancy.  His employment ended on the 19^th of April 2019.  His preferred redress was compensation.  The reasons he was given for his dismissal was restructuring or shutting down the business.

He explained that he was the longest serving employee after management staff. 

He submitted that a co-worker was rehired by the Respondent after it had put in place the redundancies.   This co-worker had shorter service than the Complainant.  The Complainant was in employment four months longer than him.  He had introduced the co-worker to the business.

The Complainant explained that the manager and the supervisor retained by the Respondent were husband and wife.  They employed their seventeen-year-old son to work for the Respondent for several days also before rehiring the co-worker as set out above.

The Complainant’s case was that since he was the longest serving member of staff and he should have been offered any available position that arose in the wind down process.  He has a fork lift licence, knowledge of the product, CAD programming etc.  The Complainant felt that he was extremely skilled in the use of the foam machine that was sold.  He felt he should have been approached and offered employment by the new owner of this machine.  His evidence was that he could run the foam machine on his own.

His evidence was that he went out of his way for the Respondent.  He felt he was passed over for somebody that got on better with the supervisor.  He explained that he never took holidays.  His main concern was always for the company to succeed.  He started at 6.00am every morning to have the manufacturing machines up and running.  The factory opened at 7.30am. 

He was most annoyed that his former co-worker also a general operator was now working for the the company that bought the foam machine. 

The Respondent disputed that the Complainant was unfairly selected for redundancy.  Its case was that the Complainant’s role became redundant following significant operational changes in the Respondent’s business when it ceased all manufacturing activities on both thermal bonded fibre and foam production lines. 

The Respondent had invested heavily in the thermal bonded fibre manufacturing market in 2016.  However, the following year – 2017- further investment was required to keep the business operating.  The Respondent continued to show significant losses and despite an investor continuing to fund the business these losses continued throughout 2018 and the first quarter of 2019. 

A certificate from the company’s accountant was furnished to show that the company had incurred losses from 2012 to 2017 in the amount of €2,317,061.00.  These losses were largely funded by an investor who was a company director.  The accountants and auditors confirmed that under their advisement the Respondent was being wound up in an orderly fashion through the sale of assets and redundancies. 

In April 2019 a management meeting was held to come up with solutions to keep the production lines going and safeguard jobs.  However, no solution could be found, and a very difficult decision was taken to restructure the business resulting in immediate job losses. 

A client meeting was arranged for the 12^th of April 2019 to which all employees were invited.  At the meeting the Respondent regrettably informed the staff that no progress would be made in relation to getting the business to break even the position.  The Respondent was still trading with significant losses which it could not sustain.  The meeting was advised that regrettably the difficult decision had been made to shut down both production lines immediately resulting in job losses.  All employees who were made redundant at the time were paid in lieu of notice plus payment for annual leave which had been accrued by not taken.

As regards selection criteria for redundancies, the Respondent submitted that this was based on retaining critical skills required for the wind down of the business.  The Respondent’s case is that the work for which the Complainant was employed to do ceased to exist.  Eight of the Respondents staff (including the Complainant) were made redundant on the 19^th of April 2019.  The names of these co-workers were furnished to me and their roles in the company.  They had similar roles to that of the Complainant.  One general operative was not made redundant at that time.  He was on sick leave.  He returned to work only at the beginning of May 2019. 

The Respondent’s case is that it issued this co-worker with a letter of termination and asked him to work out his notice while the business was winding down.  His role was made redundant on the 24^th of May 2019.  His role was to complete the decommissioning of the factory between these dates. 

The Respondent disputed that a supervisor’s son had been recruited to work in the business following the redundancies.  It submitted that there were no employees recruited following the redundancies. 

The only two staff still retained by the company are a sales director whose job still involves liaising with former customers to collect outstanding debts and an accounts supervisor who works one hour a day to manage the accounts department.

The Respondent’s HR consultant gave evidence.  No evidence was furnished about any warnings or consultations with the employees prior to the meeting of the 12^th of April 2019.  Evidence was given that there was a rumour and innuendo circulating the factory floor for some time.  Those made redundant on that day were not given the option to work out their notice.  No redundancy was paid to the Complainant as he didn’t have the necessary service. 

At the meeting of the 12^th April 2019, the Respondent informed the employees that they couldn’t afford to pay the wages and they were being dismissed with immediate effect.  Letters of termination were given.  The witness’s evidence was that she was in tears herself. 

The Respondent had anticipated that it would take two to three weeks for the wind down to take place.   The Respondent ceased all manufacturing in April 2019.  The matrix applied by the Respondent was what critical skills were needed for the wind down of the business.

Six staff remained in employment on the date of the Complainant’s termination.  A production supervisor, an operational warehouse supervisor, a sales director, accounts supervisor and upholstery machinist.

The Respondent gave evidence that the machinery and the stock was sold.  The general operative that remained in employment to the end of May and the production supervisor were hired by the company that purchased the machinery and they started employment at the start of June 2019.  This company is totally different from the Respondent and has no connection with the owner of the Respondent.

The Respondent submitted that HR support was available for everyone and while the Complainant didn’t approach her for CV or interview skills training, he did approach her about clarification of his pay and holiday pay. 

It is not disputed that the Complainant’s employment terminated on the 12^th of April 2019.  It is the Respondent’s case that the Complainant’s employment was terminated by reason of redundancy and he was paid his notice and holiday pay as required.

I accept that the Respondent is entitled to restructure its business especially in view of the mounting losses that incurred and reduce its workforce as necessary.  However, no evidence was presented to me to show that consideration was given to the selection to the selection process for redundancy especially given that roles were remaining open for a time after the redundancies were to take place.  No evidence was presented as to what engagement with the Complainant took place regarding alternative roles the Complainant could be deployed to even on a short-term basis. 

I cannot be but influenced by the way the Complainant was dismissed.  He was giving no warning of what was in contemplation.  He didn’t have an opportunity to influence the Respondent.  He made efforts to return to the Respondent’s warehouse and offered to work for free however this was declined. 

While I accept that the Respondent found itself in a very difficult position, it has not showed that the selection for redundancy was fair and, in these circumstances, I must conclude that the dismissal was unfair. 

Regarding redress, I am not satisfied that the Complainant has discharged his duty to mitigate his loss.  Since April 2019 to the date of hearing on the 9^th of August 2019 he has applied for four jobs.  He confirmed he is on social welfare and has been doing some DIY work. 

I find that the termination process was procedurally unfair, and the claim is well founded.  I award the Complainant ten weeks’ pay which amounts to a gross payment of €4,600.00.

Redundancy selection.  Procedurally unfair.