Complainant

Respondent

Anonymised Parties

A Principal Consultant

A Management Consulting Firm

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-00023903-001

07/12/2018

The complainant was employed by the respondent as a Principal Consultant from January 2008 until his redundancy on or about 26th July 2018. The complaint was referred to the Workplace Relations Commission on 7th December 2018 and relates to alleged unfair dismissal.

The respondent refutes the complaint of Unfair Dismissal and contends that the complainant was dismissed fairly by reason of redundancy. The respondent stated that the redundancy selection criteria used was based on transparent, impersonal and objective grounds.

The respondent stated that due to unfavourable economic circumstances and unsustainable financial losses, it had no option but to reduce its staff numbers by way of redundancies. The respondent confirmed that there was a total of twenty consultants employed in 2018 and currently only nine consultants remain employed.

The respondent outlined that a meeting took place with all consultants on 18th May 2018 and it was clarified that three consultant positions would be made redundant. The respondent stated that the selection criteria was based on the fee income and sales figures of the previous 12-month period.

The respondent stated that the complainant raised concerns in relation to the selection criteria and two meetings took place on 6th June and 14th June 2018 between the Managing Director of the respondent, the Operations Manager, the HR Manager and the complainant and his representative.

The respondent contends that the redundancy selection criteria was applied consistently to the Consultants employed at that time. The respondent stated that as the complainant was in the bottom three in relation to fee income and sales in the previous 12 months, he was one of the three consultants chosen to be made redundant. The respondent stated that the complainant was a competent employee but that his high levels of unavailability for projects resulted in him being in the bottom three performers which ultimately brought him into the space where he was made redundant based on the selection criteria.

The respondent confirmed that the complainant appealed the redundancy on 21st June 2018 and an appeal was conducted by the Vice President of a related Company from within the group. The redundancy was upheld and was notified to the complainant on 6th September 2018.

Summary of Respondent’s Evidence

The Managing Director/Vice President (MD) and the Operations Manager (OM) of the Respondent gave evidence in relation to the complaint. The MD stated that the business was incurring significant losses at the time and was being kept afloat by its Parent Company. The MD outlined that no bonuses had been paid in 2017/2018 and that a reduction in the cost structure was necessary in an attempt to ensure the future viability of the Company. As Salaries were the largest cost, it was deemed necessary to reduce the number of consultants. The MD stated that this was done as a last resort having previously made significant efforts to improve sales figures and avoid redundancies.

The OM gave evidence in relation to the complainant’s unavailability in relation to two projects as well as issues relating to other unavailability due to periods of annual leave. The OM stated that the complainant had made himself unavailable for a project that required between 40 and 60 days beginning in March 2018 and also made himself unavailable for 20 days of annual leave in April 2018. The OM stated that the annual leave was removed from the online availability planner in April 2018 and 20 days were added to a project from January 2018 that had only initially required between six and eight days. The OM stated that the complainant’s unavailability was unhelpful as it could have resulted in a loss of much needed business at that time.

Legal Submissions

Counsel for the respondent stated that it acted fairly in relation to the application of the selection criteria and cited the EAT decision in Boucher v Irish Productivity Centre 1994 EAT ELR205 in support of its position in that regard. The respondent quoted the following excerpt from the EAT Decision:

“In these circumstances and in the absence of any guidelines or precedent the employer is obliged to act fairly in relation to the criteria applicable in selecting who is to go and who is to stay and to apply such criteria fairly to each individual in order to bring about a fair assessment and decision. The assessment is to apply to all in the group and not just to some.”

Counsel also cited the decision in Hickey v Eastern Health Board 1991 SC9 ILT DIG24 in support of the respondent’s position that the complainant had the benefit of a lengthy consultation process, two individual consultation meetings prior to the redundancy being affected, was represented at all times and was provided with an independent appeal of the redundancy decision.

Counsel stated that the survival of the Company required a number of redundancies and the process applied by the respondent was fair and objective and applied equally to all within the Consultant group. Counsel concluded by stating that the complainant was fairly dismissed by reason of redundancy and that the complaint of alleged unfair dismissal should fail.

The complainant contends that he was unfairly dismissed on the basis that the redundancy was not genuine and that the selection criteria used by the respondent was grossly unfair and was simply a box ticking exercise to achieve a pre-determined outcome. The complainant also asserts that the person who dismissed him was not an employee and therefore had no entitlement to dismiss him from his employment. The complainant cites the case of Grenet v Electronic Arts Ireland Limited [2018] IEHC 786 in support of its position in that regard.

The complainant stated that he had in excess of ten years’ unblemished service with the respondent and there had been no negative performance appraisals during his employment. The complainant stated that until the redundancy selection criteria was announced, he had no reason to believe his performance over the previous 12 months would be used against him to dismiss him from his employment.

The complainant contends that the consultation meetings that were subsequently arranged were merely information sessions as there was no opportunity for the complainant, or his colleagues to influence the redundancy selection criteria that was being used by the respondent.

The complainant does not accept the respondent’s assertions that it “effected a fair and transparent redundancy selection process on transparent, impersonal and objective grounds”. The complainant stated that there was no transparency whatsoever in the process as there was no opportunity to influence the process prior to the selection criteria being implemented. Furthermore, the complainant stated that while fee income and sales for the previous 12 months were being used to determine the redundancies, there was no detail provided in relation to the fairness and transparency of the assessments of individual performance for the period in question. The complainant further stated that individual fee income and sales figures being used as the selection criteria are not in any way impersonal and the figures in question and those to be made redundant would have been well known to the respondent prior to any criteria being put in place.

The complainant also asserts that if there were any issues with his performance, these should have been addressed in the annual performance appraisal process outlined in the contract of employment and staff handbook and the complainant should have been advised of any performance shortcomings and be given an opportunity to address same.

The complainant contends that in the previous 12 months prior to the redundancy, Management directly influenced the distribution of his workload which resulted in a reduced number of billing assignments to him which in turn was a factor that ultimately led to his dismissal. The complainant stated that when he raised this issue, he was told that it was because he had poor attendance at monthly meetings and had been on holidays when another such meeting had been held. The complainant refutes the respondent’s position in that regard.

In relation to the appeal of his redundancy, the complainant stated that the issues he raised were not addressed in any meaningful way by the respondent and that the appeal itself was a rubber stamping of the decision to dismiss him from his employment.

The complainant’s Evidence

The complainant stated in evidence that he had never declared himself unavailable for work and had followed procedures to the letter in relation to the projects mentioned and in relation to recording annual leave. The complainant stated that for approximately 8-10 months there had been no work available for anybody. The complainant denied that he was working in an alternative employment as suggested by the respondent during the period in question. The complainant accepts that he set up a business and became self-employed in January 2019 and receives a subsistence payment each month but that he is not actively employed in that business at the moment.

Legal Submissions

Counsel for the complainant stated that in considering whether a redundancy is genuine, a key element is to establish that it is the job and not the person that becomes redundant. Counsel submits that the adjudication officer must decide on the balance of probabilities whether the dismissal was wholly or mainly attributable to a genuine redundancy situation. Counsel reiterated that the key element to a redundancy is the element of impersonality and cited the EAT Decision of McGeehan v Park Developments UD 950/2008 in support of the complainant’s position in that regard. In addressing the personal nature of the within complaint and the fact that unfair dismissals can be disguised as redundancies, which is not lawful, Counsel cited the case of JVC Europe Limited v Panisi [2012] E.L.R. 70.

Counsel further stated that the respondent’s selection process lacked any objectivity and was extremely unfair. Counsel cited the EAT case of Boucher v Irish Productivity Centre R492/1992 which stated that in addition to proving the genuineness of a redundancy, the employer had:

“to establish that he acted fairly in the selection of each individual employee for redundancy and that where assessments are clearly involved and used as a means for selection that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made.”

Counsel also cited the EAT case of O’Kelly v Exsil Limited UD1086/2007 in relation to a successful complaint of unfair dismissal where the employer had not acted in a fair and reasonable manner and where no discussions had taken place in relation to the selection criteria for redundancy or no attempts to find an alternative position had been considered for the complainant in that case. The complainant cited the EAT case of Fennell v Resource Facilities Support Limited UD57/2009 in relation to a company who failed to “consult or engage with the claimant prior to a restructuring of the company”. The tribunal stated that the respondent was “unfair and unreasonable” as it:

“(a) Failed to properly consult with the claimant on the procedures that it adopted.

(b) Implemented these procedures without giving the claimant a reasonable opportunity, or time period to consider them.

(c) Completed the redundancy process without informing the claimant of his right to appeal the decision”.

Counsel stated that the respondent did not apply fair procedures to the complainant or behave fairly or reasonably towards him when unilaterally deciding to use a redundancy selection criterion based on fee income and sales figures. Counsel argued that in recent years the EAT has focused on a standard of reasonableness an employee should expect based on the requirement that an employer engage and consult with employees as part of a meaningful process and consider all possible alternatives to effecting redundancies. Counsel contends that alternatives such as temporary layoffs, voluntary redundancies or a possible reduction in pay for all employees were not considered by the respondent.

Counsel concluded by stating that the respondent failed to carry out its duties and obligations to the complainant and unilaterally implemented a grossly unfair redundancy selection criteria which had the effect of meeting a predetermined requirement of the respondent to unfairly dismiss the complainant from his employment.

Mitigation of Loss

The complainant stated that he began looking for alternative employment in August 2018 and attended five or six interviews which ultimately proved unsuccessful. The complainant confirmed that he had a small number of short contracts from September 2018 but otherwise he has not been employed. The complainant confirmed that he set up a new business in December 2018 but is not actively employed in that business. The complainant confirmed that he remains available for full time employment.

I have given careful consideration consideration to the submissions and evidence of both parties. The complainant contends that he was dismissed unfairly by reason of a contrived redundancy. The complainant does not accept that the redundancy was genuine and contends that the selection criteria imposed by the respondent was to meet a pre-determined objective of dismissing him from his employment. The complainant argued that there was nothing impersonal, objective and transparent about the selection process, the result of which would have already been clearly known to the respondent before it was introduced, and it was obvious to the respondent and to him that he would be one of the first to be made redundant.

The respondent introduced its redundancy selection criterion based on fee income and sales figures in the twelve-month period prior to May 2018. The respondent identified the need to reduce its consultant numbers by three and decided that the three consultants with the least fee Income and sales figures would be made redundant.

The complainant is dissatisfied with the selection criteria as it was fait de compli and there was no option to influence the final selection criteria at the Information and Consultation meetings held with the group in May 2018 and with the complainant individually on two occasions in June 2018.

I note that the respondent did not have an established redundancy protocol in place on the basis that redundancies had not previously occurred, despite a suggestion to the contrary in relation to a period in 2005. I also note that the respondent did not apply the Last in First Out (LIFO) principal on the basis that it is not used in the UK and was not used on the basis of a UK employee being in the employment of the respondent. I also note that the respondent received advice that a matrix should be used in relation to its redundancy selection criteria but that this was not done.

The respondent outlined in evidence the financial difficulties it was experiencing, that its biggest costs were Salaries and its need to reduce its consultants’ numbers by three. The respondent stated that it needed to generate sales revenue and other billable income and took the decision to apply the redundancy selection criteria based on sales and income over the previous 12 months with a view to retaining the top performers who were most likely to generate the required level of income and ensure the continued viability of the Company. The respondent also outlined that it was being kept afloat by the Parent Company and that between 2018 and 2019, its number of Consultants dropped dramatically, and it had incurred significant and ongoing losses throughout that timeframe.

On the issue of the Selection Process, I find that it was ill advised of the respondent to impose a selection process along the lines it did and although it referred to “proposals” at the Information and Consultation meetings of May and June 2018, the reality it appears is that there was no opportunity for the complainant or anyone else to influence that selection process. I am of the view that a more transparent and comprehensive matrix could have been put in place by the respondent.

The complainant asserts that he was not assigned the appropriate level of work by the Managers who could influence the distribution of tasks and that it was this reduction in work that left the complainant in the position of having one of the lowest level of sales and other Income which ultimately led to his dismissal. While it is suggested that these two issues are related, on balance I do not find that the Managers in question would withhold work from the complainant in an attempt to reduce his level of productivity for the purposes of removing him from his employment at some future point.

It seems to me that notwithstanding its shortcomings in relation to the selection criteria used, the respondent was in a very difficult position, had a legitimate need to effect redundancies and from the evidence provided at the adjudication hearing, matters continued to be difficult after the redundancies took place leading to a significant reduction in the level of consultants employed by the Company.

I also note the updated contract of employment signed by the complainant in April 2016. The Managing Director who attended the adjudication hearing and gave evidence signed the updated contract on behalf of the respondent. While the dates that both parties signed the contract differ by almost two years, (possibly in error) it is clear that the Managing Director was acting on behalf of the Company and in my view is entitled to implement the redundancies. I do not accept the argument that he did not have the authority to dismiss the complainant.

The Applicable Law

Section 6(4) of the Unfair Dismissals Act, 1977 provides as follows:

(4) 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.

Section 7(2) of the Redundancy Payments Act, 1967 states as follows:

(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 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,

In all of the circumstances of this complaint, I find that the respondent’s need to effect redundancies was genuine. While I accept that more consideration should have been given prior to the selection criteria being introduced, I find that ultimately the respondent was acting in good faith. On that basis, I find that the complainant’s redundancy was genuine and that he was not unfairly dismissed.

Having considered the submissions of both parties, I find that the complainant was fairly dismissed by reason of redundancy. Accordingly, I find that the complaint is not well founded.

Unfair Dismissal