Complainant

Respondent

Anonymised Parties

Key Account Supervisor

Clothing Manufacturer

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-00030855-001

11/09/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00030855-002

11/09/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00030855-003

11/09/2019

Because of the loss of several key accounts, the company rationalised its key account sales support structure; significantly reducing the number of personnel in such roles. This in turn gave rise to a redundancy programme. The complainant alleges that she was unfairly chosen for redundancy, the decision to terminate her employment was made in advance of consultation and that the consultation was a tick box exercise and was not genuine. The company states that it followed a fair and thorough process which was open and genuine and considered alternatives other than redundancy. The rationalisation and redundancy programme were implemented arising from the very substantial loss of sales directly linked to difficult trading conditions experienced by large High Street retailers that the company supplied product to. In turn this negatively impacted on the company’s profitability requiring cost savings which also necessitated redundancies.

[The complainant withdrew her complaints CA-00030855-002 and CA-00030855-003 relating to Terms of Employment (Information) and the Industrial Relations Acts.]

The complainant initially was told by her line manager that she would be fine. It came as a great surprise when by telephone her line manager informed her that her role was being eliminated, later the company changed the language from her role would be made redundant as stated on the 11th February to potentially being eliminated in later correspondence received on or about the 18th February 2019. From start to finish the exercise was simply a box ticking exercise as exemplified in how the language was changed during the process from her role would be eliminated to maybe eliminated.

She was shocked at how she was treated and by phone told that if no alternative could be found for her she would be compulsorily made redundant. She was asked to apply for a lower level role, which would pay her €29,300 in comparison to her Supervisor’s role that paid €34,000. She was told not to talk to anybody about the restructure. The lower level role would require her to cover all of Ireland and all of Scotland a huge geographical area. The role in effect was designed so she had no choice but to leave the company. It was not a viable alternative role. It was designed to push her out. To date the role has not been filled.

After the first meeting the complainant was very wary of meeting without receiving independent advice about her rights. The facts are that at no time did the complainant receive any policy or procedure about how the redundancies would be implemented. She was asked to apply for another role which paid a lot less and entailed a lot more travel. There were no criteria presented or discussed about the selection process. The consultation had no character of an enquiry; rather it was a fait accomplit.

The complainant accepted that the company was facing a difficult financial situation. However, a reasonable employer would not have made its mind up at the very beginning of the consultation process. All the evidence demonstrates that this in fact was the situation.

There is no dispute regarding the payment of contractual and statutory entitlements, what is at dispute is the fairness of the process.

The sales support structure for Ireland and the UK consisted of 1 Account Manager, I Key Account Executive, 1 Consultant Supervisor, 8 Mobile Consultants and 21 In-Store Consultants.

Post restructuring the consultant supervisor role was eliminated along with 3 mobile consultant roles and in-store consultant roles reduced from 21 to 6.

The complainant sought advice early in the consultation process from her Solicitor who in turn wrote to the respondent alleging that the consultation process was a sham, that the decision to make their client redundant had been made, that there was no genuine consultation process, that the decision to eliminate her role was made without any prior consultation, that no meaningful engagement had taken place about alternatives. The consultation process was a tick box exercise and the alternative role of mobile consultant that their client was informed about covering both Scotland and Ireland and much reduced terms was impossible to successfully carry out.

These allegations are without any merit.

The company initially briefed the sales support team about the serious financial challenges facing the business as result of two major retail accounts experiencing trading and financial difficulties that threatened their continuation and would give rise to store closures. This briefing was given on two occasions to ensure that staff who work in the field were fully appraised of the seriousness of the challenge facing the company. These briefings were held in December 2018.

After reviewing potential options, the company was able to commence the consultation process with affected employees in February. On the 11th February 2019 the complainant’s line manager and Human Resources held a telephone consultation with the complainant. During this consultation the complainant was informed that her role was at risk and unless an alternative role could be identified. If no role was identified, then with regret her employment would end on the 31st March 2019. She was requested to either apply for roles in the UK or for the newly created mobile consultant role that would cover stores in Ireland and Scotland. Subsequently in February Human Resources wrote to the complainant to inform her that her role was at risk.

Her line manager contacted the complainant on the 18th February 2019 to inquire if she was going to apply for the mobile consultant role, during this conversation the complainant stated that she felt as if she was ‘being pushed out of the business’. Her line manager stated that this was not the case and that she was available to talk through all options or review alternatives.

On the 27th February the respondent received correspondence from the complainant’s solicitor that stated:

‘No meaningful engagement or consultation process has taken place. You have failed refused or neglected to give any adequate consideration to alternatives and you have failed refused or neglected to afford our client a genuine opportunity to put forward suggestions as to saving her job.’

In a further letter dated 4th March 2019 it was alleged that the company had contacted their client for a further consultation; however, this was just a tick box exercise.

These allegations were untrue, and the company wrote to the complainant’s solicitor on the 15th March 2019 and stated:

‘To call the consultation process a “tick box” effort is not only offensive but also inaccurate. The consultation process with is ongoing. In a number of conversations M has stated that she will not meet with us to discuss the proposal in more detail and to consult with her regarding alternative measures…Since having begun preliminary discussions in the Telephone Meeting M has confirmed her refusal to attend such meetings.’

In a further letter dated 26th March 2019 her solicitor writes requesting that the respondent compensate their client because of the manner in which she had been treated and that they would be seeking their costs. This letter confirmed that the complainant was seeking an enhanced redundancy package and that was the main issue and not that she may be made redundant. This request had previously been made in earlier correspondence dated the 27th February 2019:

“We hereby call on you to compensate our client for the manner in which she has been treated by you, in addition to or as part of an enhanced redundancy package.”

The respondent made numerous requests to the complainant to meet to fully engage in an open consultation process; however, these requests in the first instance were resisted. A meeting was arranged on the 12th March 2019 and the complainant refused to attend as the company had not replied to her Solicitors letter.

The company had in fact replied on the 15th March 2019. The company again contacted the complainant on the 25th March 2019 to meet without success and then on the 28th March 2018 the company wrote and stated:

‘we have responded to your solicitors on each and every occasion and we are anxious to continue the consultation process.’

The company asked the complainant to apply for the mobile consultant role again and other alternative roles available to avoid redundancy.

Eventually the complainant did attend a second consultation meeting with her line manager and Human Resources on the 1st April 2019 and a final consultation meeting was held on the 9th April 2019. At this meeting the complainant stated she would not be applying for the mobile consultant role. The Human Resources manager then stated that it was the company’s wish to retain people in the business whenever possible and asked would the complainant consider being redeployed to other vacant positions. The complainant stated that there were no vacant suitable roles that she was interested in.

On the 11th April 2019 the company wrote to the complainant to confirm the redundancy of her role and employment and to advise her of her right to appeal this decision. The company also addressed several queries raised during the consultation process relating to benefits. The complainant’s employment would cease on the 12th April 2019 (the termination date) by reason of redundancy and she was informed that she would receive statutory redundancy; payment in lieu of her contractual notice period and payment in lieu of all accrued but untaken annual leave. The complainant did not appeal the decision.

Section 7(2) of the Redundancy Payments Acts 1967 as amended provides that a person who is dismissed shall be deemed to be dismissed by reason of redundancy if the dismissal arose wholly or mainly from:

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in that 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 out 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,

At face value the facts of this case are covered under the Redundancy Acts. However, section 6(7) of the Unfair Dismissals Act 1977 as amended states:

“Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so-

(a)    To the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”

Section 6(4) (c) of the Unfair Dismissals Act 1977 as amended provides that a dismissal is not an unfair dismissal if it results wholly or mainly from the redundancy of the employee.

The company restructured its business in the face of very challenging trading conditions and reduced its sales support staff across all sales territories and as a result the supervisory role occupied by the complainant was no longer required.

The complainant failed to avail of an appeal process; however, in a no-fault redundancy situation that is not fatal to a claim for Unfair Dismissal, having regard to all the circumstances of the case.

The issue in contention relates to the fairness and openness of the process. The respondent makes a very robust defence of its actions. It denies that it made any promise to the complainant that she would be ok and not affected by the redundancy programme or that it told her not to tell anyone about the matters discussed with her on the 11th February when she first learnt that her role was being made redundant and that her job was at risk.

At face value the consultation process looks to be beyond reproach. The complainant wouldn’t apply for the mobile consultant role or apply for any other suitable vacancy. The complainant decided to engage a solicitor and all correspondence received was considered and responded to in a thorough and complete way. The complainant was pushing for an enhanced package. The challenge to the process it was suggested was tactical and without merit— to advance an enhanced payment.

The complainant stated that she felt like she was being pushed out.

Boucher and others v Irish Productivity Centre [UD 882, 969 and 1005/1992] is cited by the respondent to demonstrate that their actions have been reasonable as assessed against the reasonable employer test:

“the fairness or unfairness of dismissal is to be judged by the objective standard of the way in which a reasonable employer in those circumstances in that line of business (and at that time*inserted by the Tribunal) would have behaved.”

The test is an objective one having regard to the facts of the case and a range of potentially reasonable responses; to be assessed in their totality; with no one response to be judged in isolation. It is not what the adjudicator would have done; the reasonableness or otherwise of the employer’s responses are to be assessed in comparison to a reasonable employer and having regard to range or band of reasonable responses.

The role offered to the complainant at the date of the hearing hadn’t been filled. That was explained by the company as another cost saving measure to delay the filling of that position. In an Unfair Dismissal case the onus in on the employer to establish that it acted reasonably and fairly. The complainant has argued that the role she was offered was not a suitable or reasonable alternative. The delay in filling the role on balance would tend to affirm that it is the case. At the outset the employer did inform the employee that ‘as a result the role of Consultant Supervisor will be removed from the business structure’ as detailed in a power point communication provided to the complainant on or about the 14th February 2109. Then on or about the 18th February 2019 in a letter dated erroneously February 2018 the company changes the language from the role will be removed to might be removed, saying ‘we are currently in a period of consultation with you regarding the potential removal of your role from the business’. No criteria were provided at any stage in the process regarding the selection of an individual for redundancy

The complainant argues that the consultation exercise was a tick box exercise and the employer states it was open and genuine. The company states early in the process that it was beginning a process of consultation and continued to reiterate this statement on several occasions in subsequent correspondence; however, did it in fact have the characteristics of a genuine and open consultation?

In the company’s submission at Appendix 3 a power point presentation was given or sent to the complainant on 14th February; and in it the company states:

·         the role of Consultant Supervisor will be removed from the business structure

There is no rationale given for the new structure or the reasons specified why the complainant’s role was chosen for elimination over other management roles. There is no invitation from the employer for the employee to give her views about the new structure or to present an alternative to what had been proposed. The employee was asked to apply for the newly created role of mobile consultant

That communication also states:

·         Unless suitable alternative employment can be found within the company (redeployment) the 31st March 2019 will be your final day of employment

There is no redundancy selection procedure detailed such as the criteria for selecting the complainant over other employees in the event of no suitable alternative role been found.

The company letter erroneously dated February 2018 (Appendix 5 in submission) and sent on or about the 18th February 2019 states:

“a streamlining review of (the company’s) Retail, Wholesale and Strategic Accounts business has taken place, and the Company has taken the difficult decision to remove the Consultant Supervisor position from the business structure”.

This is a clear statement that the role had been made redundant and removed out of the structure and was not a matter under review; later in the letter the language is changed to the ‘potential removal of your role’.

The letter then states, without any reference to the detail about what was discussed in the line of alternatives during the first telephone conference:

“We discussed with you the proposal in more detail and consulted with you regarding any alternative measures”.

This letter refers to the first telephone conversation where the complainant was told that her role was being made redundant. It would be hard to envisage other than the employee being in shock at the news and in those circumstances this letter on balance has the characteristic of a box ticking administrative record in contrast to the character of a genuine consultation. The letter does end by stating if the employee had any alternative suggestions or measures regarding the current situation to contact HR or her line manager. On balance allowing for the contradictory statements in this letter and the date on the letter of Swindon, February 2018 rather than the 18th February 2019, this letter appears simply to be box ticking.

In a very detailed letter to the complainant’s solicitor dated 15th March 2019 the company states that:

“I must reiterate that no final decision regarding the redundancy of M’s role has yet been taken and I wish to make it clear the contents of this letter do not constitute notice of termination of her contract of employment.”

The letter then states that:

“However, please note that one potential outcome of the consultation process may be that M’s position is, regrettably, confirmed as redundant and her employment would, therefore, be terminated on that basis”.

This statement appears to conflate the elimination of a role an employee holds with selection for redundancy.

The letter of the 15th March 2013 also states that the meeting to be arranged with the employee’s line manager and HR as ‘the first consultation meeting’ which seems to be at odds with the erroneously dated letter at Appendix 5, which states:

“We discussed with you the proposal in more detail and consulted with you regarding any alternative measures.”

In Boucher the EAT stated:

“the onus of proof is on the employer to establish that he acted fairly in relation to the dismissal of each of the claimants, it is not sufficient to establish an overall umbrella context such as ‘redundancy’

The termination of the complainant’s contract did take place in the context of a genuine redundancy situation. It is less clear if the process applied to the complainant was fair and reasonable. The onus is on the employer to show that it acted reasonably. I have concluded that on careful examination of the evidence that the employer has not met that test for the following reasons:

·         The evidence demonstrates that a decision was made to eliminate her role prior to the first meeting as detailed in the power point presentation given to her about the 14th February 2019. Subsequently the company attempts to change what has happened and what has been decided. It states in correspondence that the meeting with the employee that took place on the 1st April 2019 was the first consultation and selectively ignores that in writing in a power point presentation sent on the 14th February and in a letter dated February 2018 which was received on or about the 18th February 2019 it states that ‘the Company has taken the difficult decision to remove the Consultant Supervisor position from the business structure’.

·         No rationale was provided why her role, over other management roles was chosen to be suppressed.

·         The company in correspondence throughout the process contradicts itself about the decision to suppress the role while also stating that it was only potentially at risk

·         The correspondence erroneously dated February 2018 sent on about the 18th February 2019 appears to be a box ticking exercise, as it states, ‘we consulted with you regarding any alternative measures’ and states ‘the Company has taken the difficult decision to remove the Consultant Supervisor position from the business structure.’ This letter is record of a phone conversation that took place on the 11th February 2019 where she was told that her role would be made redundant and that she also would be made redundant unless an alternative role could be found for her. This letter has all the appearance of a box ticking exercise and is the opposite of what characterises a genuine and open consultation process.

·         In correspondence dated the 15th March 2019 the company maintains that it has made no decision about suppressing the role and states that the request to meet will be the first consultation and ‘if she has any questions that she wants to discuss prior to the first consultation meeting.’

·         On the 28th March 2019 the company writes to the complainant to arrange a consultation meeting.

·         On the 9th April 2019 a meeting note states “Redundancy Consultation-Final Meeting”

·         On the 11th April 2019 the complainant is informed that her employment will end on the 12th April 2019 and the right of appeal of the decision to terminate afforded. The first consultation meeting according to the company only occurred on the 1st of April 2019. The final consultation meeting takes place on the 9th April 2019 and the complainant’s employment is terminated on the 12th April 2019. The 1st of April is a Monday and the 9th of April Tuesday, so the consultation process has lasted 6 days according to the company’s account ignoring what consultation or meetings and correspondence previously sent or had taken place in February; on the 11th, 14th and 18th of February 2019. This has all the signs of the company attempting to rectify what is a flawed process that commenced on February the 11th 2019 during the first telephone call to the complainant when she was told her role was being made redundant. This fact was confirmed in the power point presentation which the employee received on the 14th February 2019 and in the wrongly dated letter of February 2018 which in fact was received on or about the 18th February 2019 that confirmed that the decision to eliminate her role had been made.

·         The role that the employee was asked to apply for at the date of the hearing has not been filled and remained vacant.

The employer has not met the onus of proof based on these facts that it has acted reasonably. In summary the decision to suppress the complainant’s role is stated to have been made and then changed to potentially at risk. The consultation process is stated to have begun in correspondence received on the 18th February 2019 but dated February 2018. The first consultation in correspondence dated the 15th of March 2019 is stated to be scheduled to take place at a future date in late March 2019. The employee is met for a final consultation meeting on the 9th April 2019 and her employment is terminated on the 12th April 2019. At the date of the hearing the alternative role that she was asked to apply for, remains vacant, a role that the complainant maintains is so geographically spread between Ireland and Scotland that it is impossible to carry out. The employer maintains that the role has not been filled to save money. Having regard to what is referred to as the band of reasonable responses in any given situation, on balance based on a detailed examination of the facts as presented in evidence, the consultation process applied by the company was not fair or open nor had it the characteristics of an open enquiry. In contrast it does appear more to be a box ticking exercise for reasons as detailed. The respondent has not discharged the onus of proof that it acted reasonably.

For these reasons I find that the complaint is well founded and that she was unfairly dismissed.

The complainant has mitigated her loss and after 6 weeks on or about 29th May 2019 the complainant commenced a temporary role on a salary of €30,685 gross per annuum. Her gross loss for 6 weeks until gaining a temporary role was €3475. Her reduced income differential over a six-month period is estimated to be €3417. I have considered re-instatement and re-engagement; however, realistically these are not options having regard to the scale of downsizing that has taken place in the company. Having regard to the unique facts of this case I determine that the complainant receive compensation.

The Unfair Dismissal Act at 7(3) defines financial loss as:

“includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payment Acts, 1967 to 1973, or in relation to superannuation”

The complainant was paid a salary of €34,500 per annum, she had a contractual right to a lunch allowance of €6 per day, a company car worth €5500 a year and 26 days holidays along with a company pension contribution of 6%. In evidence the complainant’s actual loss over 6 months based on the differential in earnings between her old role and new temporary role and the period of 6 weeks to find another job is €6,900 and having regard to future loss (the period of time to find a role with comparable terms as her previous one) and what is just and equitable in this case I award €10,000 in total compensation for past and future loss (ten thousand euro).

I have determined that the complainant’s claim is well founded and that she was unfairly dismissed. Section 8 of the 1977 Act requires that I make a decision in relation to the claim of an award of redress in accordance with Section 7. I therefore award the complainant redress of €10,000 in respect of financial loss attributable to her unfair dismissal.

Redundancy; Individual Consultation; Reasonableness of Employer conduct