Complainant

Respondent

Anonymised Parties

A Branch Manager

A Vehicle Servicing Organisation

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-00024146-002

14/12/2018

The complainant commenced employment on 3rd July 1989 and submits that he was unfairly dismissed when his employment was terminated on 23rd November 2018 by reason of redundancy.  

During this hearing, submissions were substantial with copious volume of documentation and oral evidence heard over 3 days and, whilst I will not be referring to every event or reference every case law presented, I have taken into account all the submissions including oral and written made to me in the course of my investigation as well as the evidence presented at the hearing.

The respondent refuted that the complainant was unfairly selected for redundancy.

It was submitted that the termination of the complainant’s employment occurred after a full and thorough process was carried out during which the complainant was afforded full and fair procedures.

In 2016 the complainant was transferred from Location X to Location Z as part of the respondent’s Management Exchange Programme (MEP) following which the complainant returned again to Location X.   In 2017 he transferred to Location Y following discussions between the complainant and the respondent and to support the complainant as he was dealing with stress related to his place of work at Location X. The respondent submitted that the complainant never raised any issues with moving to Location Y and indeed had made it clear that he never wanted to work at Location X again. While working at Location Y, the role of Branch Manager was vacant at Location X and the complainant never requested any wish for this role and that position was filled in July 2018 by an employee who has been with the respondent, working at another location, since 2015.

In January 2018 a review of all branches took place as was normal and it was confirmed that Location Y was one of 2 locations which had not completed upgrades. Some parts of the overdue upgrades for Location Y took place in May 2018. The other location listed as ‘outstanding’ for upgrades is a site which remains open therefore it would not be fair to assert that the complainant was advised of the closure of Location Y in January 2018. This decision only took place in August 2018 when a decision was taken to close Location Y as agreement on rent had not been reached and efforts to secure other potential sites had failed to materialise. The respondent submitted that it is not in their interest to close branches as their business model is based on providing customers with easy access to branches nationwide. It was regrettable that all six employees at Location Y were impacted by the closure.

On 28th August 2018 the complainant and the other employees were met by Ms A, HR Manager, to inform them of the decision to close the branch which had just been finalised the previous day. The complainant wanted to know what his redundancy entitlements was but the exact information was not available and the complainant was advised of an approximate figure of €35,000. The complainant laughed and said he would not accept such a payment and wanted €70,000 plus the company van and he requested that this would be brought to the attention of senior management which it was. The complainant was written to on 30th August 2018 confirming that his role was at risk, explaining the rationale and that all alternative viable options would be considered. It was also confirmed to the complainant that there were no other branch manager positions available but there was a role available as a mechanic at Location X.   It was not possible to offer the complainant the role at Location X as Location X and Location Y are two distinct entities operating separately and while employees move across branches employees are not shared between branches.

A consultation meeting took place on 12 September 2018 with the complainant’s solicitor. The complainant appeared to focus on a role of Branch Manager at Location X albeit there was no vacancy there. At the final consultation meeting the complainant was advised that there were no alternative branch manager roles available, that the mechanic position remained open and that his employment would terminate due to redundancy if no acceptable alternative role was identified. The complainant was advised on 28 September 2018 that no alternative roles or solutions to the redundancy had been identified and that he was to be made redundant. The complainant appealed this decision to Mr B Financial Director and was advised on 5 November 2018 that the complainant’s appeal was not successful.   The complainant was also advised that the decision to close Location Y was only made in August and not in January as the complainant had suggested.

The respondent submitted that a reasonable, thorough and comprehensive redundancy consultation process took place affording the complainant fair procedures but that unfortunately despite the complainant’s appeal the decision remained. It was further asserted that it was a genuine redundancy situation with fair selection, appropriate consultation process and there was no entitlement to an enhanced redundancy payment. The complainant had not sought employment until at least February and no evidence was provided regarding efforts to secure employment. The complainant had secured employment in July 2019 but his evidence was unreliable and inconsistent regarding his actual earnings and loss of earnings and it was submitted by the respondent that there had been no loss of earnings.

Evidence from Mr B Financial Director advised that Branch Y was not making any money and that there was a break clause within the contract for Location Y and as part of this break clause the respondent sought to secure agreement with the landlord about a rent reduction,   However, despite their best negotiations and while they looked at other locations they were not able to secure any appropriate location for Location Y. Mr E advised that when he heard the appeal of the complainant, he applied a fair procedure to the appeal.

Evidence from Ms A included that she had a good relationship with the complainant and that the company never paid above statutory redundancy. An opportunity came up for the complainant to move to Location Y and she suggested it to the complainant as she knew that he had been undergoing stress working at Location X. The complainant had advised her he was happy working at Location Y and also advised that he would never drive past Location X as there were too many bad memories. Ms A submitted that the Branch Manager of Location X has been with them since 2015 and it would have been unfair to displace him. It was denied that she told the complainant he should not have talked to the Managing Director Mr C and she submitted that the complainant would raise a grievance about the least little thing.

Evidence of Mr D – Sales and Operations Director included that he got on well with the complainant and became aware that the complainant took the move to Location Z very personally and that it really upset the complainant which had never been the intention. When a position came up in Location Y it appeared to be a better fit for the complainant and that the complainant never raised any objection to this move. It was not the respondent’s policy to close branches as such a move does not instil confidence and so is a last resort and that each location is a separate entity although they do move people across sites regularly.

Evidence of Mr E – Area Manager submitted that he was not aware of a break clause for Location Y and that the complainant had told him before that he did not like driving past Location X but Mr E was not told what had happened there.

Case law included St Ledger v Frontline Distributors Ireland Ltd 1995 ELR 160, Flanagan v MW Wallpaper Specialists Ltd UD 156/1989,Ajai and Ajai Byrne UD 449/2004, William v Compare Maxam Ltd 1982 IRLR 83, Boucher v Irish Productivity Centre 1994 ELR 205, JVC Europe Ltd v Jerome Panisi 2011 IEHC 279, Richard O’Rourke v Advance Tyre Company Ltd UD1716/2013

The complainant submitted that his selection for redundancy was contrived owing to his poor relationship with the respondent which went back to 2016.   Back in April 2016 the complainant was advised that he was to be moved from Location X to Location Z, a distance of approximately 100km, for a 3-month period commencing 6th May 2016 as part of a Manager Exchange Project (MEP). The complainant set out at the time his unhappiness with this transfer as it was suggested that Location X had been performing poorly. The complainant was advised that after the MEP there would be monthly reviews to agree clear goals and KPIs. Through his solicitor the complainant requested time to consider the matter and heard nothing further until on 9th May 2016 when the HR Manager, Ms A advised him that he had failed to follow company procedure and purported to issue him a verbal warning. The parties resolved this matter and the complainant commenced work on 24th May 2016 at Location X and the verbal warning was withdrawn.

The complainant found that Location Z was very quiet compared to Location X and that he received no additional training during this MEP. When the Managing Director Mr C called to visit, the complainant expressed his unhappiness with the relocation and that he had learnt nothing from the transfer. Ms A contacted him the next day and advised him Mr C was very angry because of the complainant’s comments about the MEP and the complainant was also reprimanded by another manager speaking like that to Mr B.

The complainant returned after 3 months to Location X and contrary to what had been promised to him, and aside from a meeting in October 2016, there were no discussions about the MEP, no goals set and no KPIs agreed. On 23 August 2016 the complainant noticed discrepancies in stock and organised a full stock count and on the morning of the stock count he was shocked to see a letter from Mr C critical of the complainant’s failure to provide an explanation for the missing stock.

Around January 2017 a mechanic was transferred from Location X to Location Y and a manager, moved from Location Y to Location X to replace the mechanic.   It has been alleged that the complainant had spoken inappropriately to the mechanic D and the complainant was again reprimanded albeit the mechanic had spoken up for the complainant. The complainant moved to Location Y on 4th April 2017. In January 2018 at an annual conference, the viability of Location Y was discussed and it was announced that it would close at the end of the year and that a new branch would open in another location which the complainant would manage in his role as Branch Manager. It was further submitted that there was a break clause in the rental contract and the respondent was aware of this when they transferred the complainant to Location Y and used the break-clause to shut down Location Y and thereby terminated the employment of the complainant.

The complainant was advised in writing on 30th August 2018 of the closure of the Location Y and that the complainant’s role was at risk of redundancy. The complainant was advised that there was no alternative role as a Branch Manager available but there were other roles available including a qualified mechanic role at Location X. The complainant was advised that his redundancy would be statutory redundancy.   The complainant met with the respondent with his solicitor and also appealed the decision but was unsuccessful

The complainant submitted that the respondent became unhappy with the complainant from early 2016 and would not engage with the complainant to improve matters and contrived a situation so that he would be dismissed by reason of redundancy. The respondent required the complainant to move to a branch that the respondent knew would close, in order to create a redundancy situation and that a number of other branch manager roles were not offered to the complainant and the complainant was not informed about these alternative roles.

It was outlined that from 2016 the focus of the respondent’s attention appeared to be on the performance of the complainant, despite the complainant having had nearly 30 years of impeccable service. The respondent failed to inform the complainant of alternatives other than a position of mechanic on a lower salary and positions of Branch Manager were not offered to the complainant, including the Branch Manager role at Location X. The respondent in effect failed to engage on a meaningful level in relation to a potential redundancy and the respondent did not intend to find an alternative solution to making the complainant’s position redundant. The whole or main cause of the complainant’s dismissal did not arise from redundancy.

The complainant submitted that after his dismissed he was too upset to look for other work and although he did seek work in February, he was unsuccessful. In July 2019 the complainant secured a job but is uncertain about how long term this role will be. Evidence was given by the complainant of his losses to date.

On day 3, evidence was given from an accountant Mr F, who submitted that the complainant’s losses as per the information Mr F had received from the complainant, were purported to be over €55,000.

Case law cited included O’Connor v Power securities Ltd UD344/98, Barton v Newscast Freight Ltd UD331/1993 and Sheehan & O’Brien v Vintners Federation of Ireland Ltd UD169/2005, Edwards v Aerials and Electronic (Ireland) Ltd UD236/1985.

The complainant submits that he was unfairly selected for redundancy and that the redundancy was contrived as a result of issues that had transpired in 2016 between the complainant and the respondent.   The complainant submitted also that there were other roles available which were not offered to him. The respondent refuted all the allegations and submitted that the complainant was treated fairly.

Section 6(1) provides that

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

Section 6 (4) provides that “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:

( c) the redundancy of the employee…

Section 7 provides that “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…..

In a claim of unfair dismissal, the burden of proof rests with the Respondent to establish that the dismissal was wholly redundancy connected and must justify the selection process whereby the Complainant was selected for redundancy.

I have considered all the submissions and I note that the complainant had been clearly extremely upset by the decision in 2016 to move him for a period of time to Location Z which was perhaps not dealt with as sensitively as it could have been by the respondent. I further note that the complainant did not raise any objection when he was relocated to Location Y and that he had engaged his solicitor previously to assist in any work-related issues that arose and did not do so on that occasion.   I am also satisfied that although it was an unusual business decision by the respondent to close a site, they did so following difficulties securing rent agreement for Location Y and a failure to secure an alternative site location. I find, therefore, no evidence to suggest that the decision to shut Location Y was contrived to dismiss the complainant and I further note that the complainant had been happy with the move to Location Y. I am satisfied, therefore, that a genuine redundancy situation existed at the time.

In circumstances where redundancy is unavoidable, there is an onus on the respondent to establish reasonable and objective criteria for selection and must apply such criteria fairly.

In Mulcahy  v  Kelly [1993] E.L.R. 35, , the EAT held that “it is well established that there is an obligation on an employer to look for an alternative to redundancy”. It held:-

“Having heard the evidence presented the Tribunal is satisfied that a redundancy situation existed in September 1990 when the decision was made to terminate the claimant's employment. It is our opinion that the claimant's dismissal resulted wholly or mainly from reasons of redundancy.Notwithstanding that the claimant's selection for redundancy was not in contravention of a procedure or an established custom and practice of the employment relating to redundancy, there is an obligation on an employer to look at all employees as possible candidates for redundancy.”

This duty may involve locating alternative work within the organisation even if this involves dismissing another employee with shorter service. Location X and Y were within reasonably close proximity to each other, and it had been a regular occurrence to move employees from one site to another. In Thomas & Beets Manufacturing Limited v Harding[1980] IRLR 255, the English EAT found the complainant’s dismissal was unfair because she could have found work as a packer even though this would have meant dismissing a recently employed packer. In its determination in Gillian Free v Oxigen Environmental UD 206/2011, the Employment Appeals Tribunal noted that “when an employer is making an employee redundant while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy….where there is no agreed procedure in relation to selection for redundancy….then the employer must act fairly and reasonably”. The provisions of Section 6(7) of the Act as referred to above provides that:

Section 7 provides that “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…..

The respondent did carry out a consultation process to inform the complainant that his role was at risk for redundancy and the respondent set out in their letter dated 30th August 2018 that the complainant and respondent would

“1) consider open positions for your role as Branch Manager in other locations”

2) consider alternative employment in other locations; and

3) Consider voluntary redundancy”

There is a notable mention of “alternative (my emphasis) employment in other locations…” and “open positions (my emphasis) for your role as Branch Manager” as clearly the respondent did not intend to look at displacing another employee. The company’s redundancy policy refers to six important principles which will apply when implementing a redundancy plan which includes “in each case, the possibility of suitable alternative employment will be investigated”. On 10th September 2018 the complainant’s solicitor advised that “our client is going to have to be relocated to the Location X and be made branch manager at this branch” and the complainant was advised on 28th September 2018 that “you then asked the company to dismiss an employee who holds the role of Branch Manager in the Location X in order to employ you in that role” and that they also looked at all options but that the complainant’s role of Branch Manager was now redundant. While I note that the complainant had never expressed any wish to return to Location X prior to the redundancy, however, the Respondent failed to explore offering this role of Branch Manager at Location X as an alternative employment to the complainant; who had significantly greater service than the employee already holding that position. The complainant had almost 30 years’ service with the respondent and it had been common place to move employees from one location to another and Location X and Location Y are within close proximity of each other; yet the respondent failed to apply their own procedure of “suitable alternative employment”. I find that the process applied by the respondent was unfair and that the complainant was unfairly dismissed.

There were significant submissions from parties regarding mitigation and financial loss including substantial differences between what the losses were, if any. The respondent submitted when all of the factors were taken in it its entirety there had been no loss and the complainant submitted the losses at approximately €55,000. Taking into consideration all of the submissions including what has been paid to the complainant already by way of redundancy, the lack of evidence by the complainant of his efforts to secure employment until July 2018, the lack of security regarding the complainant’s currents role and that some of the complainant’s own direct evidence with regard to losses, lacked credibility, I find it just and equitable to order the complainant to pay to the complainant €3,200.

I find the dismissal was unfair and I order the respondent to pay to the complainant the sum of €3,200 which I find is just and equitable in all of the circumstances.

Unfair dismissal, redundancy