Complainant

Respondent

Anonymised Parties

A former Worker

A Public House

Representatives

Melissa Wynne Ormonde Solicitiors

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-00029215-001

19/06/2019

The Complainant has brought a claim for unfair dismissal against the Respondent public house. The complaint was received by the WRC on the 19th June, 2019. It is the Respondent’s position that due to a downturn in its business, the Complainant was made redundant and not unfairly dismissed.

The Respondent was represented by Ormonde & Co. Solicitors.

The Complainant was unrepresented.

In accordance with Section 6(1) of the Unfair Dismissals Act [1977-2017], the Respondent outlined its position that it had not unfairly dismissed the Complainant.

The Respondent outlined that the Complainant worked as a bar person for the Respondent from mid 2014 until the termination of her employment because of redundancy. The Respondent stated that the Complainant worked on a part time basis – ie two nights per week – Tuesdays and Thursdays - from 6pm until closing time. The Respondent outlined that at the beginning of 2019 there were five people working in the business, he and his partner and three part-time staff including the Complainant. During the week the bar was staffed by the Respondent, his partner and the Complainant and the other two part-time staff members worked at the week-ends.

The Respondent stated that he and his partner purchased the bar in 2014, that they renovated it and added a takeaway. The Respondent’s partner manages the business. The Respondent stated the bar was now suffering from loss of trade and business like many similar type rural public houses and particularly during mid-week. The Respondent stated that trade was very quiet on the nights the Complainant was working – Tuesdays and Thursdays - and that essentially the business was relying on the week-end trade.

The Respondent stated that in early 2019, it became clear that the bar was not viable if it continued to operate at the same level and with the same cost base and that it could not sustain a paid member of staff to work mid-week. The Respondent stated that his Accountant advised that the bar should either be closed during mid-week or the cost base should be otherwise re-structured. As regards, the profits of the business, the Respondent advised that in 2017 there was an annual net profit of €17,140, that this reduced to approximately €8,500 in 2018 and that the Respondent anticipates a further reduction for 2019. The Respondent advised that the opening hours mid-week have been cut back from 2pm to 4pm and that currently the bar is being put on the market for sale.

The Respondent advised that the state of the business was the subject of on-going discussions between him and his partner and that ultimately, the following decisions were taken:

·       To maintain the bar open during the week as otherwise custom would be lost and more than likely there would be a consequential negative impact on the week-end trade;

·       That the Respondent would reduce costs during the week through redundancy.

With regard to the latter option, the Respondent stated that his partner had a brief discussion with the Complainant on the 14th February, 2019 regarding the likelihood of her redundancy. They agreed to meet the following day with the Respondent. On the 15th February, 2019 it was the Respondent’s partner who met with the Complainant. The Respondent stated that it advised the Complainant that her position was at risk of redundancy. The Respondent stated that it asked the Complainant to consider the matter and to revert with any suggestions that might avoid the need for redundancy. The Respondent stated that the Complainant never raised any issue regarding its proposal and nor did she make any alternative proposal.

Thereafter, the Respondent outlined the following:

·       On the 9th April, 2019 the Respondent spoke to the Complainant informally and advised of the initiation of redundancy and gave the Complainant two weeks notice;

·       On the 11th April, a further meeting was held with the Complainant at which redundancy was again discussed and that it was put to the Complainant that there was no reasonable alternative and that as such “her position would terminate on grounds of redundancy and that she would receive a letter to this effect”;

·       On the 17th April 2019 a letter was given to the Complainant by hand formally notifying her of the decision and giving her two weeks notice of the termination of her employment to take effect on the 2nd May, 2019. The Respondent stated that the letter contained a cheque for €1,267.20 redundancy pay;

·       On the 18th April 2019 the Complainant returned the redundancy letter and cheque to the Respondent with a note stating “Find enclosed you[r] Cheque. I do not agree with the content of this letter”.

The Respondent stated that it understood from its exchanges with the Complainant that she was disappointed by the decision to make her redundant. Initially the Respondent stated that the Complainant was to work her notice period. However, arising from an exchange between the Complainant and the Respondent and his partner on the 16th April, 2019, during which the Respondent claimed the Complainant was rude to them whilst in the company of patrons of the bar, the Respondent stated that it had no alternative but to request the Complainant not to work the remainder of her notice period and she was paid in lieu.

The Respondent furnished copy of its letter to the Complainant of the 17th April, 2019 which stated:

“It is with regret that I wish to give you notice of making you redundant today 17th April 2019……active from 2nd May 2019.

The reason for making you redundant is the significant downturn in the trade on the two nights you are employed (Tuesday & Thursday)

The notice period given is 2 weeks – you will not be required to work this notice period at all and you will be paid in full for this notice period up to and including 2nd May 2019. Your final active night on duty was Tuesday 16th April 2019.

Please see attached redundancy details applicable to you along with a redundancy cheque payable to you also.

Many thank for your service wishing you all the best in future endeavours”.

In relation to the two other part time members of staff, the Respondent stated one of these had also commenced employment in 2014 and that he was retained as he did physical work at the week-ends. The Respondent stated that the other part-time staff member also worked week-ends, that she did not have set shifts and that she did the cleaning as otherwise the business would have to engage contract cleaners which would have been a further expense. After that the Respondent stated that a local young person was employed to “pick up the slack” if needed.

The Respondent stated that it was the function of management to manage a business, that it was not obliged to consult with all employees about redundancy or follow a last in/first out policy (LIFO), that it must act in the best interests of the business and that there were legitimate reasons to retain the other two part-time members of staff.

It is the Respondent’s position that it had no alternative but to make the Complainant redundant due solely to the downturn in its business and that it was sorry matters had come to this. The Respondent maintained there were no other reasons behind the redundancy and the Respondent rejected the Complainant’s claims that the redundancy was related to any other matter – including her age or insurance costs. The Respondent stated it was not an easy decision, that the decision had nothing to do with the Complainant personally and that the Respondent never had any issue with the Complainant as an employee. The Respondent stated the bar was located in a small village and everyone working there was local. The Respondent further stated that the Complainant had not been replaced by any other employee.

The Complainant disputed there had been a fair redundancy. The Complainant outlined that on Thursday evening of the 14th February, 2019 she had started her shift at the usual time of 6pm. She outlined that she was asked by a customer to change the music that was playing but that she could not do this as she had never been shown how to do it. The Complainant stated that at approximately 7-7.30pm the Respondent’s partner came in and verbally abused her in front of customers for not having music on from 6pm. The Complainant stated that she advised the Respondent’s partner that the music was on from 6pm but that notwithstanding, the partner continued to “use bullying tactics” towards her.

The Complainant stated that the Respondent’s partner then left the bar but returned later that night at 12.40am and informed her that a meeting was to take place the following day – 15th February, 2019 in the Respondent’s home. The Complainant stated that there and then she “smelled a rat”. She stated that the Respondent himself did not attend the meeting on the 15th February but that his partner did. At this meeting the Complainant stated that she was advised that her “employment with [Respondent] would cease trading on 17th April, 2019”. The Complainant stated she did not meet with the Respondent until the 11th April, 2019.

The Complainant stated that she was given the following reasons for terminating her employment:

·       That the Respondent’s partner stated “Because you are seventy years old and you might slip”…..slip, slip, slip and you being seventy”. According to the Complainant, the Respondent’s partner stated that the business insurance costs would more than double because the Broker would not provide insurance due to the age of the Complainant;

·       That at the meeting with the Respondent on the 11th April 2019, the Respondent contradicted his partner and stated that her letting go “had nothing to do with the Broker” and that insurance “is now gone up to seven Thousand Euros”. In relation to this exchange with the Respondent, the Complainant stated “I had previously requested on six occasions that [Respondent] would put the Reason for letting me go in writing, as of this date 11th April, 2019 no reply”;

·       That a different reason was given in the letter of the 17th April, 2019 (already set out) which referred to the Complainant being made redundant due “….the significant downturn in the trade on the two nights you were employed….”.

The Complainant stated the first time redundancy was mentioned to her was when she received the Respondent’s letter of the 17th April, 2019. The Complainant confirmed that she returned the cheque for €1,267.20 enclosed with this letter.

It is the Complainant’s position that she has been unfairly dismissed because of her age and because of the impact of this on the insurance costs. She stated that she was always an honest, reliable and hardworking employee. The Complainant stated that she did not understand why she was the first to go because she was the longest serving employee and that LIFO should apply. The Complainant stated that she was not consulted about the proposed redundancy and that no alternatives to redundancy were considered by the Respondent including any re-arranging of work shifts which she would have been willing to do.

The Complainant did not have a written contract of employment.

Questioning & Cross Examination:

A number of matters arose in the questioning of the witnesses including the following:

·       In response to an issue raised by the Complainant about another male working in the business, it was put to the Complainant that this person was retired, that he was working on a voluntary basis to gain work experience and was now undertaking a horticultural course. The Complainant did not dispute this;

·       It was put to the Complainant that the other two part-time members of staff were in or around the same age bracket as the Complainant. This was not disputed by the Complainant;

·       It was put to the Complainant that she was aware from February 2019 that cost saving measures would have to take place due to the downturn in business and this was not disputed by the Complainant who answered that she thought “they had changed their minds”;

·       The Respondent’s partner accepted that she did discuss the cost of insurance with the Complainant and stated that she was not disputing this;

·       The Respondent’s partner stated the insurance cost was a factor they had to consider;

·       The Respondent’s partner denied linking the insurance costs with the Complainant’s age and she denied mentioning the Complainant’s age at all;

·       The Respondent’s partner denied verbally abusing the Complainant on the evening of the 14th February, 2019 and said she was sorry if she had come across disrespectful as this was not intended;

·       The Respondent’s partner stated that she did not discuss doing the cleaning job with the Complainant and that the Respondent did not have any discussions with the other two part-time staff members about the redundancy situation.

Section 6 (1) of the Unfair Dismissals Act [1977-2017] provides that: “Subject to the provisions of this section, the dismissal of an employee shall be deemed for the purpose of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal” - ie there is a statutory presumption of unfairness unless the Respondent employer can show there were substantial grounds justifying the dismissal.

Section 6 (4) of the Unfair Dismissals Act [1977-2017] sets out specific circumstances where the dismissal of an employee “shall be deemed…..not to be an unfair dismissal” and states:

“Withoutprejudicetothegeneralityofsubsection(1)ofthissection,thedismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal,ifitresultswhollyormainlyfrom……

                             (c) the redundancy of the employee,….”

Section 6(6) of the Unfair Dismissals Act [1977-2017] provides that:

“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 [6](4)….. or that there were other substantial grounds justifying the dismissal”.

Section 7(2) sub-sections (a)-­­(e) of the Redundancy Payments Acts [1967-2016] outlines the circumstances where dismissal for redundancy can lawfully arise (I do not consider sub-sections (d) and (e) relevant to the present case). Sections 7(2)(a), (b) and (c) state as follows:

7(2) “…… 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 concernedthe 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…….”

The combined effect of Section 6 of the Unfair Dismissals Act [1977-2017] and Section 7(2) of the  Redundancy Payments Acts [1967-2016], is to place the burden of proof on the Respondent employer to show that the redundancy of the Complainant was the operating cause of the dismissal. In this regard, the Respondent must demonstrate that the reasons for the redundancy were not related to the Complainant, that they came within the circumstances set out at Section 7(2) of the Redundancy Payments Acts [1967-2016] and were fair and reasonable in all the circumstances.

According to the Employment Appeals Tribunal in St Ledger v Frontline Distributors Ireland Ltd UD 56/1994 (reported at [1995] E.L.R. 160 at 161-162), change runs through each of the five circumstances set out at Sections 7(2) (a) – (e) of the Redundancy Payments Acts [1967-2016] and that “Change may also mean a reduction in needs for employees, or a reduction in numbers” . The EAT also stated that “impersonality runs through the five definitions in the [Redundancy Acts]. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job”.

In the present situation, the Respondent has detailed in its evidence the impact of the downturn in trade on its business and has outlined that the bar was quiet mid-week, that the profits have shown a marked decline since 2017, that the Respondent has reduced opening hours mid-week and that the advice of its Accountant was that the business was not sustainable going forward without reducing its cost base. Whilst the Complainant did point to till returns on some Thursday nights, I am satisfied that overall, the Respondent’s evidence in relation to the state of the business was credible and persuasive. Having considered the evidence presented at the hearing and in the written submissions and the fact that no one has replaced the Complainant in the role she formerly held, I am satisfied that a genuine redundancy situation existed with regard to the Respondent’s business.

I must now consider whether it was fair the Complainant - as opposed to any other employee – was selected for redundancy. The Respondent has stated the Complainant was selected because her shifts were on Tuesdays and Thursday nights, that it could no longer justify the retention of a paid employee working mid-week and that she has not been replaced. The Respondent outlined the reasons why it retained the other two part time staff at week-ends and stated they were doing additional work such as cleaning and physical work. The Respondent also stated that one of these part-time workers had no set shifts and that on occasions it also employed a young girlon a casual basis. As regards the process of redundancy, the Respondent stated that it was its job to manage the business, that it was not obliged to consult all employees, that it was not obliged to follow a LIFO approach, that its decision was not personal and was necessary in the best interests of the business.

The Complainant stated that the Respondent did not explore any alternatives to redundancy, that she was also willing to do cleaning and always cleaned after her own shifts, that a LIFO approach should have been followed and that she was unfairly dismissed because of her age and the impact of this on the rising costs of insurance.

Whilst the Complainant stated that the first she knew of redundancy was when she received the Respondent’s letter of the 17th April, 2019, I am satisfied from the cross examination and from the Complainant’s own evidence of what transpired at the meetings on the 15th February and the 11th April 2019, that the Complainant was aware from February 2019 that her redundancy was under active consideration. I have also considered the conflicting accounts of the exchange between the Respondent’s partner and the Complainant on the 14th February, 2019, however having regard to all the evidence, I am not satisfied this exchange had any material bearing on the redundancy decision.

In relation to the matter of selection for redundancy, Charleton J. stated in JVC Europe Ltd v. Panisi [2011 IEHC 279] that “It may be prudent and a mark of a genuine redundancy that alternatives to letting an employee go should be examined” and that “a fair selection procedure may indicate an honest approach to redundancy by an employer”.

In the case of Students Union Commercial Services Ltd V Alan Traynor [UDD 1726], the Labour Court stated that:

“In circumstances where redundancy is unavoidable, the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly…… The Court was presented with no information to demonstrate that the Respondent carried out a thorough exercise to consider alternative options/suggestions. The Court can accept that had such an exercise being carried out it may not have identified any alternative positions suitable to the Complainant, however, it seems clear that no such exercise was engaged in. On that basis the Court finds that the approach adopted by the Respondent was somewhat arbitrary and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair”

In coming to its decision in case [UDD 1726], the Labour Court considered the following statement from Mulcahy  v  Kelly [1993] E.L.R.35, where the EAT held that “it is well established that there is an obligation on an employer to look for an alternative to redundancy” and that “there is an obligation on an employer to look at all employees as possible candidates for redundancy.”

Section 6(7) of the Unfair Dismissals Act [1977-2017] provides that in determining whether a dismissal is unfair, regard may be had:

a)       “to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and

b)      to the extent (if any) of the compliance or failure to comply…..with the procedure….or with the provisions of any code of practice….”

The Tribunal in Boucher & Ors v Irish Productivity Centre [UD 882,969, 970 1005/1992] considered the obligation to act fairly and reasonably and stated that an employer had:

“…..to establish that he acted fairly in the selection of each individual employee for redundancy …… that reasonable criteria are applied to all the employees concerned ….This legislation establishes the right of each individual employee to be fairly treated and particularly so on matters greatly affecting his welfare such as the loss of his employment”.

The evidence is that following an exchange between the Respondent and the Complainant on the 14th February 2019, the Complainant was asked to attend a meeting on the following day where she was advised that her role was at risk of redundancy. There were further discussions with the Complainant about redundancy on the 9th, 11th and 16th April and on the 17th April, 2019 the Complainant was formally notified of her redundancy. Whilst the Respondent stated that it invited the Complainant to make proposals as regards alternatives to redundancy, I consider the employer had a primary role in this matter. In this regard, the Respondent has not provided any evidence that it took any steps or initiated any proposals to explore alternatives to redundancy – for example no evidence was put before me that the Respondent considered re-arranging the Complainant’s shifts or work duties. Nor did the Respondent provide any evidence of any reasonable procedure/policy having put in place for dealing with the redundancy situation – be it LIFO or another process. Further, the Complainant was not afforded representation or the right to be accompanied at any of the discussions with the Respondent.

I accept this was a difficult situation for the Respondent and one it would wished to have avoided. I also accept the Respondent was entitled to restructure its business as a result of the downturn in trade and consequential financial pressures.  Notwithstanding, having considered all the evidence and submissions, I find the Respondent has not demonstrated that it sufficiently explored alternatives to assess whether or not it could have avoided the redundancy of the Complainant. In this regard, I find that the Respondent acted unreasonably and accordingly, I find the Respondent has not rebutted the presumption that the dismissal of the Complainant was unfair.

With respect to the Complainant’s claim that her dismissal was age related, Section 6(2) of the Unfair Dismissals Act [1977-2017] provides that:

“…..the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal if it results wholly or mainly from one or more of the following:

(ee) the age of the employee”

The Complainant has cited age and the cost of insurance because of her age as being the reasons for her dismissal and this has been strenuously rejected by the Respondent. As regards the insurance, I note the Complainant herself confirmed that at the meeting of the 11th April 2019, the Respondent stated that the redundancy “had nothing to do with the Broker….and it is now gone up to seven Thousand Euros…”. Having considered the evidence in this matter, I consider that the rising cost of the business insurance was already an existing factor of concern for the Respondent. I am satisfied that the raising of this issue by the Respondent was consistent with its concerns about the financial pressures the business was experiencing.

In relation to the Complainant’s age, I note the evidence of the Respondent that the other two part-time staff members are in the same age bracket and that this was not disputed by the Complainant.

Having considered the submissions and evidence adduced and in the absence of any corroborating evidence, I find the Respondent has rebutted the presumption that the Complainant was dismissed for reason of her age.

I find that the termination process was procedurally unfair and that the complaint is therefore well founded. At the adjudication hearing, the Complainant stated that she was earning €120 gross/week. On this basis, I award the Complainant a gross payment of €2,100 being the approximate equivalent of four months pay. I consider this to be just and equitable in the circumstances having regard to the Complainant’s obligation to mitigate her losses. This amount is subject to the usual statutory deductions and taxable in the normal manner taking into account such Revenue Rules as apply on termination of employment.

Redundancy, Unfair Dismissal, Unfair Selection