Complainant

Respondent

Anonymised Parties

Sales Manager

Employer

Representatives

Patrick Igoe Solicitors

Rebecca De Groot Peninsula

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00023736-001

04/12/2018

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00023736-002

04/12/2018

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

CA-00023736-003

04/12/2018

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

CA-00023736-004

04/12/2018

The Complainant is seeking adjudication by the Workplace Relations Commission under Section 6 of the Payment of Wages Act, 1991, and has submitted that he was not paid his bonus entitlement (CA-00023736-001).

The Complainant is seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act , 1977, and has submitted that he was unfairly dismissed (CA-00023736-002).

The Complainant is seeking adjudication by the Workplace Relations Commission under Section27 of the Organisation of Working Time Act, 1991, and has submitted that he is entitled to payment for working on two Sundays (CA-00023736-003).

The Complainant is seeking adjudication by the Workplace Relations Commission under Section 6 of the Payment of Wages Act, 1991, and has submitted that he was not paid for the last two months of his contract (CA-00023736-004).

The Complainant was employed as a sales manager in relation to footwear and accessories for the Respondent from the 2nd January 2017 until the 9th November 2018 when his position was made redundant. The Complainant was paid €4,166.00 gross per month and worked 45 hours per week. The Complainant has extensive experience in this particular area of sales and had been recruited for this particular position with the Respondent.

Upon securing this position he received a contract of employment which provided that the employment was to be for a two year fixed contract. The Complainant was led to believe this was a permanent role however it was explained to him by the human resources manager that all employees within the Respondent company received two two year fixed contracts before they are made permanent. It was further explained that this was company policy and that employees are made permanent after 4 years.

The Complainant was informed that he had passed his probationary period on the 30th June 2018 and was informed he had become an important part of the Respondents team. However, the Complainant stated that his working relationship with the Country Manager (CM) began to deteriorate. There was an issue in April 2018 in relation to parental leave and then the Complainant was informed on the 27th July 2018 by the CM that he had not reached his targets and therefore she would not be sanctioning his bonus and this was 4 days before the end of the financial year.

However, the Complainant was informed on the 1st August 2018 by sales support in HQ that his target had been met due to his orders being shipped on the 30th and 31st July. The Complainant informed the CM of this at a meeting on or about the 6th August 2018 and in light of his targets been met requested his bonus. The CM declined as she stated his performance wasn’t good enough as she had expected the targets to be exceeded.

On the 12th September 2018 the CM informed the Complainant that the Respondent anticipated having to make redundancies and his role was at risk. The Complainant did not believe any other role in the company was being made redundant and he perceived that he was being unjustly singled out. The CM suggested she would try and locate the Complainant work at another store but this role would be on the shop floor and he regarded this as humiliating in light of his significant experience and current role as a sales manager. The CM further declined to pay the bonus payment on the grounds that the orders had been brought forward from August into July in order to meet the target. The Complainant explained that this was common practice in the organisation.

The Complainant was informed on the 21st September 2018 that it would not be possible for him to stay on in his current role. The Complainant suggested he be allowed to work until the end of his contract but the CM said the decision had been made at HQ. The Complainant requested to be allowed a six week notice period rather than four. The Complainant believed the reason he was not allowed to finish out his contract was to deny him both his statutory redundancy and the Christmas bonus.

The Complainant met with the CM on the 7th November 2018 wherein it was proposed that he would be paid a goodwill gesture of €5,000.00 with the proviso that he would sign a waiver that he would not pursue any further action against the Respondent. Further, he was promised a glowing reference.   Ultimately, the Complainant declined this offer and was provided with a simple reference.

The Complainant has sought   employment since the 9th November 2018 and secured employment in June 2019.

These complaints were received by the Workplace Relations Commission on the 4th December 2018.

The Respondent accepts the timeline in relation to the Complainants employment from the 2nd January 2017 until the 9th November 2018.

The Respondent submitted that it became apparent that the role occupied by the Complainant was not viable as the position was loss making, as evidenced in the turnover figures for the financial year and the order book.

The Complainant was informed on the 12th September 2018 that it was likely that his position was at risk of redundancy and he was advised that there would be a further meeting on 21st   September 2018 to discuss alternatives to redundancy.

On the 21st September 2018 the Complainant suggested that he finish out the 2 year contract or that he be given 6 weeks’ notice instead of the contractual 4 week notice period. In relation to the option of alternative employment the CM asked the Complainant to forward a copy of his CV and so she could put him   forward for alternative employment. The CM made enquiries regarding what vacancies were open and confirmed that there were store manager roles available however the claimant advised that he did not want to be avail of this position.

At a further meeting on the 28th September 2018 the Complainant was informed that his role was being made redundant and as a gesture of goodwill he was given 6 weeks’ notice as he requested and the Complainant responded by requesting his bonus.

In relation to the Complainants claim for Sundays worked, the Respondent submitted   under the heading Remuneration in the Statement of Main Terms and Conditions of Employment it states “your salary is currently €50,000 per annum payable monthly in arrears arrears….Payment for

additional hours is deemed incorporated into your salary”. Accordingly, it is submitted that the

the Complainant is not entitled to payment for any extra hours worked.

In relation to the Complainants claim for the Bonus payment, it is submitted that the Complainant   was entitled to a €5,000 per annum bonus payable at the end of each of the

respondent’s financial years upon achieving set targets. These targets were conservative and were set by the Complainant and the Country Sales Manager soon after the Complainant commenced employment. The financial year is from 1st August until the 31st July. It is submitted that in order to achieve the bonus an employee needs to work the entire financial year. The Complainant did not work the entire financial year in 2016/2017 and 2018/2019. Further, in any event the Complainant did not achieve the targets set within these relevant periods.

In relation to the financial year, 1st August 2017   to the 31st July-2018, it is submitted that the Complainant did not achieve his target for this financial year. At a meeting on the 27th July 2018 with the CM the Complainant   was advised of this and that the forward order book shows ‘significant gaps to achieve the budget set by you for 18/19’ . It is submitted that the Complainant did not contradict the CM when she said he had not achieved his target.

The Respondent submitted that the Complainant was terminated as a result of redundancy.

It became apparent earlier than anticipated that the role operated by the Complainant was not profitable and that was clearly shown in the accounts and sale figures. The fact that position was not viable is inextricably linked with the fact that the claimant did not achieve the conservative targets set and therefore was not entitled to his bonus.

It is further submitted, by the Respondent, that it was not represented to the Complainant that every employee, upon commencing a fixed term contract goes on to obtain a second fixed term contract and then goes on to obtain a permanent contract. Further, it is submitted that the prospect of a permanent contract was not advertised to any prospective candidates.

In the circumstances of this matter, I have carefully listened to the evidence tendered in the course of this hearing by both parties and have considered the written submissions provided.

The Complainant has referred these matter to the Workplace Relations Commission and in relation the one of the four Complaints, it is submitted that he was unfairly selected for redundancy where no genuine redundancy situation existed and ultimately he is seeking compensation.

In that respect, the statutory definition of redundancy is located in the Redundancy Payments Act 1967, Section 7 (2) as amended which provides that:

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

The lawful reasons for dismissal are set out in Section 6 (4) of the Unfair Dismissals Act 1977 which provides:

“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 one or more of the following:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.”

Under Section 6(3) of the 1977 Act there may be a finding of unfair selection for redundancy where an employee is dismissed but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have been dismissed and either

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure.”

Further, an onus is placed on the employer by Section 6 (6) of the Unfair Dismissals Act 1977 which provides

“In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal”

Under Section 6(4) redundancy is a substantial ground and once the redundancy is established the employer has discharged the onus. However, an employee may meet a redundancy defence by claiming the unfair selection under Section 6 (3).

In Williams –v- Comp Air (1982) 1 ICR 156, Browne-Wilkinson J in considering the issue of fair selection, identified the following as generally accepted principles governing how reasonable employers will typically act:

1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.

2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.

3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.

4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.

5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment.

In Boucher –v- Irish Productivity Centre (1994) ELR 2005, this was an illustration of an unfair selection process. In this case, no agreement was reached as to the method of selection for redundancy. The selection process was carried out by without any consultation or interviews In describing this selection procedure as unfair and holding that the claimants has been unfairly dismissed the Employment Appeals Tribunal emphasized that those in the group likely to be dismissed should be made aware that such assessment is being made and they should be given an opportunity to give their views which should be considered.

InMulligan –v- J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy the tribunal stated:

“In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.”

In JVC Europe v Panasi (2011) IEHC 279, Charleton J stated:

“ It is made abundantly clear by that legislation that redundancy, while it is dismissal, is not unfair. A dismissal, however, can be disguised as redundancy; that is not lawful. Upon dismissal an employer can simply say that the employee was not dismissed for a reason specific to that person but that, instead, his or her services were no longer required, pointing to apparently genuine reasons for dispensing with the services of the employee. In all cases of dismissal, whether by reason of redundancy or for substantial grounds justifying dismissal, the burden of proof rests on the employer to demonstrate that the termination of employment came within a lawful reason.”

“The comment on the nature of redundancy made in St. Leger v. Frontline Distributors Ireland Ltd., [1995] E.L.R. 160 at 161 to 162 by Dermot MacCarthy S.C., as chairman of the Employment Appeals Tribunal, is apposite:-

“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. Definition (d) and (e) involve change in the way the work is done or some other form of change in the nature of the job. Under these two definitions change in the job must mean qualitative change. Definition (e) must involve, partly at least, work of a different kind, and that is the only meaning we can put on the words ‘other work'. More work or less work of the same kind does not mean ‘other work' and is only quantitative change.”

Justice Charleton also remarks that “It may be prudent, and a mark of a genuine redundancy, that alternatives to letting an employee go, should be examined”.

He also comments

“As a matter of contract, where selection procedures for redundancy, or a consultation process to seek to discover alternatives to redundancy, are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed. Following what is on the surface a fair procedure does not necessarily demonstrate that the decision maker is taking an honest approach to a decision.

As with much else, an apparently fair procedure can be used as a cloak for deceptive conduct. It may be followed in form only so as to mask an ulterior motive or with no intention of fulfilling its purpose, even should the best of reasons for not proceeding to redundancy arise during its course.

In the circumstances of this case, I accept on behalf of the Respondent Company that from a business and operational point of view there were difficult circumstances in which the particular brand that the Complainant was involved with was operating. This was indicated in the aforementioned letter of the 12th September 2018 wherein the MC states “ On a personal note, may I sorry I am that situation has come about, and I wish to assure you that this is no reflection upon your ability or commitment to the company. It merely reflects the difficult trading circumstances in which the band is operating.”

It is noted that this letter or the subsequent letter of the 28th September 2018 does not reflect any of the concerns that have been mentioned both in the course of   this hearing and in submissions, both oral and written, in relation to the alleged failure of the Complainant to achieve certain targets in the course of the financial year. Further, there are no criticisms of the Complainants   performance in the course of his employment with the Respondent Company.

However, regardless of the difficult circumstances mentioned by the Respondent, this does not absolve the Respondent from affording the Complainant fair procedures in relation to consultations or exploring alternatives. In that respect, it was noted that there was a meeting on the 12th September   2018 and the 26th September 2018 and then the letter of the 28th September 2018 wherein the Complainant was informed he was being made redundant. These two earlier meetings cannot be regarded as an adequate part of the consultation process. On the balance of probabilities and in consideration of the evidence presented at the hearing and noting the respective position of the parties I have concluded that there was no adequate consultation process and the onus was on the Respondent Company to carry out such a process.

I have further noted   the Respondent Company did not provide any or adequate evidence in relation to any redundancy procedures and whether there was any appeal procedure available. Further, there was a less or no adequate explanation and an absence of transparency with respect to any criteria or matrix for selection for redundancy.

Accordingly, I have concluded that the claimant was unfairly selected for redundancy and consequently I am upholding his complaint of unfair dismissal.

In relation to this Complaint (CA-00023736-002) , I require the respondent to pay the Respondent   compensation in the amount of € 3,000.00 which is equivalent to his statutory redundancy if the Complainant was allowed to work out his contract until January 2019. As this award is compensation for loss of earnings, it is subject to the normal statutory deduction.

In relation to the issue of the Complainants entitlement to a bonus payment (CA-00023736-001) the Complainants contract of employment states “ You will receive an annual bonus of €5,000 based on your performance and achieving agreed targets”. It is noted that the Complainant has indicated that he will pursue his pro rata bonus for January 2017 to July 2017 through the Civil Courts. There is a conflict of evidence between the parties in relation to the Complainants ability to achieve certain targets for the appropriate financial year.

On the balance of probabilities, I accept that there was a manipulation of sales and this appears to be common practice within this particular industry and I further note the “goodwill gesture” made on or about the 7th November 2018. Accordingly, in the circumstances of this particular complaint and allowing for the conflict of evidence,   I require the Respondent to pay the amount €2,500.00 in relation to the bonus entitlement.

In relation to the Complaint (CA-00023736-003) wherein the Complainant worked two Sundays (trade shows) on the 11th March 2018 and the 5th August 2018. The Complainants contract of employment provided in relation to remuneration that your salary is currently €50,000 per annum payable monthly in arrears ….Payment for additional hours is deemed incorporated into your salary”. Accordingly, I find that the Complainant is not entitled to payment for any extra hours worked and this Complaint fails.

In relation to the Complaint (CA-00023736-004) the Complainant is seeking payment for the last two months of his contract. The Complainants employment ended on the 9th November 2018. Accordingly, the Complainant is not entitled to payment for the last two months of his contract and I find that this Complaint fails. Further, the Complainant has been compensated in relation to the unfair dismissal in the amount equivalent to his statutory redundancy.

I find that the Complaint (CA-00023736-001) made pursuant to Section 6 of the Payment of Wages Act, 1991, succeeds and find that the Respondent is to pay the sum of €2,500.00 to the Complainant.

I find that the Complaint (CA-00023736-002) made pursuant to Section 8 of the Unfair Dismissals   Act, 1977, succeeds and find that the Respondent is to pay the sum of €3,000.00 to the Complainant.

I find that the Complaint (CA-00023736-003) made pursuant to Section 27 of the Organisation of Working Time Act, 1997, fails.

I find that the Complaint (CA-00023736-004) made pursuant to Section 6 of the Payment of Wages Act, 1991, fails.

Unfair Dismissal Redundancy