ADJ-00030058

Complainant

Respondent

Parties

Clodagh  Coyne

Reddington Child Care Centres Ltd

Representatives

Barnaba Dorda SIPTU

Barry O’Mahony BL instructed by  Arag Legal Protection Limited

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-00040044-001

24/09/2020

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

CA-00040044-002

24/09/2020

The Complainant commenced employment with the Respondent on 8 October 2018 as a child care practitioner. The Complainant earned €600 gross; €505.89 net for a 39-hour week.   She submits she was made redundant with no consultation nor warning on 17 June 2020, which she claims, amounts to unfair selection for redundancy. The Complainant also asserts that she did not receive a copy of her terms of employment during the currency of her employment. The Respondent denies both claims. The Respondent asserts that the Redundancy was fair in all circumstances. The Respondent claims that the terms of employment claim is out of time, and without prejudice to a finding that declares otherwise, the circumstances are such that no compensation should be awarded in that the Complainant suffered no detriment.

CA-00040044-001: Unfair Dismissal

The following is a summary of the evidence of a Director of the Respondent (hereinafter ‘the Director):

The Respondent had four creches in operation and each one was treated as a separate entity, though there have been occasions where staff interchanged between locations to facilitate holidays and illnesses.

The Respondent increased wages in 2019 by €2 an hour with a corresponding increase in fees at the creches for parents. The Respondent was advised that the business was struggling due to a drop-out of parents and she proposed to staff at a meeting on 25 February 2020 that wages would need to be cut by €1 per hour. Forty-eight workers accepted this pay cut, but the 6 workers in the Dunmore creche, including the Complainant, refused to do so. Staff were informed at this meeting that while it was the intention to avoid redundancies, redundancies would be considered as a last resort.

In March 2020 the Covid-pandemic struck, forcing the Respondent to close temporarily on 12 March 2020. Staff received the Pandemic Unemployment Payment initially and were then moved to the Temporary Wage Subsidy Scheme (TWSS).

On 2 June 2020 the Director sent an email to all staff outlining the financial difficulties being encountered in the business. The Director learnt that she would only have around 20 children in the creche where the Complainant worked, which was an untenable economic situation. The Director had no option but to decide to make the Complainant redundant. The Respondent used the ‘Last-In First Out’ system (LIFO) in a single job redundancy in the past. The Director met the Complainant on 16 June 2020 to discuss the Redundancy.  During the meeting the situation was explained to the Complainant and at the conclusion of the meeting, the Director gave the Complainant a letter confirming written notice of her redundancy. The Director helped the Complainant in seeking further employment.

Cross- Examination:

The Director accepted that she was unhappy with the fact that the Complainant did not accept the pay cut, but she agreed that the Complainant had a right to disagree. The Director accepted that she did not ask the Complainant as to how her redundancy might be avoided at the 16 June meeting.

The Director accepted that an employee who had gone to the United Stated approximately 12 months earlier had subsequently been re-employed in August 2020. She also accepted that there were advertisements placed on Facebook advertising for positions with the Respondent, but she asserts these positions were in other creches in the organisation and were mainly part-time in nature. The Director accepted that persons in the organisation with less service than the Complainant   may have been retained but she stated that each creche was treated as a separate entity within the Respondent company and that redundancies were unique only to a particular location.

Legal Argument.

The Respondent submits that the redundancy was fair in all the circumstances. The Respondent referred to Section 6 of the Unfair Dismissals Act 1977 as amended, (the Act) where it showed that redundancy of an employee was a fair and substantial ground for dismissal.

With regard to fair selection for redundancy, the Respondent relies on Section 6(3) of the Act in that the LIFO selection process, as utilised by the Respondent, was an objectively fair process. The Complainant was amongst the last employees hired and was therefore validly selected for redundancy.

Regarding consultation, an email was sent to the Complainant on 2 June 2020 outlining how it was going to be difficult to sustain the business. The Respondent further submits that there were no alternatives to redundancy available at the time of the redundancy. The Respondent submits, that without prejudice to its overall position, it acted fairly at all times, that if there is fault found with regard to the processes invoked by the Respondent with regard to the Redundancy, that any said defects did not affect the outcome of the procedure, which it submits, in all the circumstances would have resulted in the Complainant’s redundancy in any event.

The Respondent cites Section 7(2) of the Redundancy Payment Act 1967 where it states that the redundancy falls within 7(2)(b) and 7(2)(c) where an employer no longer carries out work in a place and/or the work remains but is carried out by fewer employees.

The Respondent cites Atkinson v Cope Foundation (UD483/2015) to show that a defect in procedures invoked does not necessarily render a dismissal unfair.

On the duty to mitigate loss, the Respondent submits that the Complainant immediately obtained alternative full-time employment as a childcare worker and she therefore suffered no losses. The Respondent relies on Synergy Security Solutions v Paul Dusa UDD1911 in support of the argument that the compensation should be nil, in the event that it is found that there was an unfair dismissal.  

CA-00040044-002: Terms of Employment

The Director gave evidence that the Complainant signed her contract of employment on 13 February 2019, after she (the Director) read the terms and conditions to the Complainant. She also stated that the Complainant had the opportunity to pick up a copy of her contract.

Legal Argument:

On a preliminary point, the Respondent submits that the Complainant lodged her complaint under the Terms of Employment (Information) Act 1994, on 24 September 2020 which was 6 months outside of the 6 months period as provided for under Section 41(6) of the Workplace Relations Act 2015.

The Respondent submits that, without prejudice to the foregoing, if it is found that it has breached the Act, the breach is of a trivial nature in that it did not cause harm, loss or any other prejudice to the Complainant. If there was a technical breach of the Act, this was a breach as a result of an oversight rather than a deliberate and conscious breach.

The Complainant was at all times fully aware of the terms of her employment and was fully aware that she had signed a contract of employment having reviewed the terms of that contract.

The Respondent submits that there are sufficient mitigating factors. It cites Irish Water v Hall [2016] 27 E.L.R. 61 where the Labour Court found that the deviations which had occurred from the strict application of section 3 of the Act were “…so trivial, technical, peripheral or otherwise so insubstantial as to come within the de minimis rule”.

The Respondent further relies on Natalie Smith v Celestine Café Bar TED 2013 where the Labour Court indicated that while a failure to provide the statement at all within the time period was not a trivial breach, providing it late only attracted an award of €100.

CA-00040044-001: Unfair Dismissal:

The following is a summary of the evidence of the Complainant:

Staff were informed about a downturn in the business early in 2020 which resulted in the Respondent seeking a wage cut from employees. The Complainant consulted with her trade union at that stage and was advised that there was no obligation on her to accept a cut in pay. She communicated this advice to the Director. There was no indication at any stage that the question of redundancies was on the table.

On 12 March 2020 the Respondent’s Dunmore creche, where she worked, was closed because of the Covid-19 public health emergency. On 20 April 2020 the Respondent availed of the Temporary Wage Subsidy Scheme in respect of the Complainant and her colleagues.

The Complainant received an e-mail on 12 June 2020 asking her to attend a staff meeting on 16 June, ahead of re-opening on 29 June. At that meeting, the Complainant was given a letter of dismissal. The employment terminated on 2 July 2020.

The Complainant sought work immediately and commenced employment as a childcare worker with a new employer on 30 July 2020. The Complainant denies that the Director helped her in any way in locating further employment.

Cross-Examination:

The Complainant denied that she was consulted in advance, along with her colleagues, about the possibility of redundancies in an email sent by the Director on 2 June 2020. While she does not recall receiving the email she states that upon seeing a copy subsequently she notes that there is no reference to redundancies in the communication.

Legal argument:

The Complainant cited section 6(7) of the Unfair Dismissals Act 1977, as amended, (the Act) with regard to the obligation on an employer to act reasonably when contemplating and carrying out the dismissal of an employee. The Complainant submits the onus is on the Respondent to demonstrate that it dismissed the Complainant for redundancy, a potentially fair ground for dismissal, and that it acted reasonably in relation to the selection for dismissal for redundancy.

The Complainant cites the Employment Appeal Tribunal (EAT) case in Employee v Employer UD206/2011 where the Tribunal considered the fairness and reasonableness of dismissal for redundancy and found in that case that the employer had not behaved reasonably and that the dismissal was therefore not fair. The Complainant asserts the EAT gave several reasons for its decision, two of which the Complainant cites:

1. The decision to make the claimant redundant was taken on a date prior to the

employee being informed of the possibility of redundancy.

2. There was no serious or worthwhile consultation with the claimant.

The Complainant contends that the decision to dismiss was taken by the respondent before the Complainant was informed of the possibility of redundancy and that there was not even the semblance of a consultation exercise carried out. The Complainant argues that failure to consult the Complainant in this case was unreasonable and renders the dismissal unfair.

The Complainant submits that no there was no fair application of objective selection criteria. The Complainant cites the Labour Court in Students Union Commercial Services & Traynor UDD1726 where the Court held that, in a genuine redundancy situation, ‘the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly’.

The Complainant accepts that the ‘LIFO’ criterion cited by the Respondent in its letter dated 17 June 2020 to the Complainant is, on the face of it, capable of fulfilling this fairness requirement. However, the Complainant contends that such criteria was not applied fairly across the board. Evidence showed that a member of staff who had left the employment in February 2019, to travel to the United States, was re-employed after the Complainant’s dismissal.

The Complainant further submits that there was no valid redundancy. The Complainant submits that the Act refers to section 7(2) of the Redundancy Payments Act 1967 for a definition of redundancy. The Complainant submits that the section provides that a dismissal wholly or mainly attributable to either 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 ‘the fact that his employer has decided to carry on the business with fewer or no employees’ shall be taken as being dismissal for redundancy. However, in this case, the respondent began advertising for part-time staff via Facebook as soon as 30 July 2020 less than a month after her dismissal. On 7 August, another Facebook advertisement for what appears to be a full-time position was posted. The Complainant submits that these advertisements are relevant for two reasons: firstly, because it casts doubt on the stated reason for dismissal (i.e. redundancy), which is not ultimately about the dismissal of a person, but the termination of a position. Secondly, as the EAT put it in the case of Mulcahy v Kelly [1993] ELR 35,‘it is well established that there is an obligation on an employer to look for an alternative to redundancy’. The Complainant argues that the Respondent cannot contend that it sought an alternative to redundancy in respect of the complainant so shortly before it began a process of recruiting new staff. If the stated reason for dismissal was not the real reason, the Complainant submits that   statutory presumption in section 6(1) of the 1977 Act that a dismissal is unfair in the absence of ‘substantial grounds’ operates to deem this dismissal unfair. If the Respondent failed in its obligation to seek an alternative to redundancy, the Complainant then contends that the conduct of the employer in relation to the dismissal was unfair and unreasonable.

CA-00040044-002: Terms of Employment

 The complainant gave evidence that although she was asked to sign a statement of terms and conditions in February 2019, she was not provided with a copy of same.

The Complainant submits that statutory duty of an employer under section 3(1) of the Terms of Employment (Information) Act 1994 Act is to ‘give or cause to be given’ the statement of terms and conditions. The Complainant contends It follows that the mere existence of a signed statement is insufficient. Moreover, the main purpose of the above Act is to implement Directive 91/533/EEC on the employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship.

CA-00040044-001: Unfair Dismissal:

The Applicable law:

Section 6(1) of the Unfair Dismissals Act 1977 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)(c) of the 1977 Act 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 ... the redundancy of the employee...

Section 6(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, 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, and

(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14(1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7(2) of this Act.

Section 7(2) of the Redundancy Payments Act 1967, as amended, provides in Section 7(2)(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 being doing before his dismissal) to be done by other employees or otherwise.

Charleton J. in the High Court case of   JVC Europe v Jerome Ponisi [2012] 23 E.L.R. 70 stated:

           “That it may be prudent, and a mark of a genuine redundancy, that an employer prior to making an employee redundant examine alternatives to letting that employee go and conduct a fair selection procedure. As a matter of contract where selection processes for redundancy or a consultation process to discover alternatives to redundancy are contained in a collective agreement or an individual employment contract, these should be followed. That a fair procedure may be used to disguise deceptive conduct and followed in form only in order to mask an ulterior motive.”             

The first issue that has to be addressed is whether there was a valid redundancy situation in the Respondent company. The burden of proof rests with the Respondent to establish that the dismissal was wholly redundancy connected. The Respondent must then justify the process whereby the Complainant was selected for redundancy, was fair and transparent in all respects.  Plausible evidence was submitted by the Director that there was a downturn in the business and that parent numbers had dropped significantly.  I am satisfied that the Respondent was faced with having to reduce costs and the decision to make the Complainant redundant was taken for economic reasons. I am therefore satisfied that a genuine redundancy situation existed at the time.

 In circumstances where redundancy is unavoidable, the Respondent is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly, as outlined by Charelton J. in Ponisi.  The Respondent relies on the email of 2 June 2020 to suggest that the contents therein amount to prior consultation to the Complainant of a possible redundancy. Any reasonable reading of the email shows that there was no reference to redundancies, nor could it be concluded by the Complainant that her particular job was at risk.

The Labour Court in Students Union Commercial Services Ltd v Traynor UDD 26/2017, which was opened by the Complainant, referred to Mulcahy  v  Kelly [1993] E.L.R. 35, on the point that the duty of a Respondent in a valid redundancy situation may involve locating alternative work within the organisation even it this involves dismissing another employee with shorter service. The Respondent gave evidence that she relied upon the ‘LIFO’ system, but it was common case that staff positions were advertised shortly after the Complainant’s redundancy and, furthermore, that a returning ex-employee was re-engaged. The Director stated that more junior staff may have been retained in other creches with the Respondent company but that she based her decision to terminate the Complainant’s employment on her seniority in the specific creche where she worked. I was not convinced by the Director’s evidence that when it came to staff issues that each creche was treated as a separate entity. The Director acknowledged that there was an element of interchangeability when it came to cover work during holidays and sick leave. Furthermore, when it came to proposed wage cuts, the Director gave an account of a multi-creche approach.

 The Director in evidence accepted that she had predetermined that the Complainant would be made redundant before a purported consultation meeting on 16 June 2020.  This position suggests that no fair selection process took place and that the purported consultation with the Complainant masked an already pre-determined decision.

The Respondent had a number of business units and had various members of staff employed in different locations. The Director presented no evidence to demonstrate that she carried out a thorough exercise to consider alternative options nor was there any meaningful consultation with the Complainant.  I conclude, on the balance of probabilities, that the result of such an exercise may well have identified alternative positions suitable to the Complainant in the greater organisation.

On that basis of the evidence and reasons outlined above I find that the approach adopted by the Respondent was arbitrary and unreasonable, and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair.

Redress:

Section 7 of the Act, in its relevant parts, provides:

7. Redress for unfair dismissal:  

(1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer or the Labour Court, as the case may be, considers appropriate having regard to all the circumstances:

…. (c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances, or

(ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid as is just and equitable having regard to all the circumstances,

and the reference in the foregoing paragraphs to an employer shall be construed, in a case where the ownership of the business of the employer changes after the dismissal, as references to the person who, by virtue of the change, becomes entitled to such ownership.

…. (3) In this section—

“financial loss”, in relation to the dismissal of an employee, includes any actual loss and 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 Payments Acts 1967 to [2014], or in relation to superannuation;

“remuneration” includes allowances pay and benefits in lieu of or in addition to pay.

The Complainant gave evidence that she had secured similar employment at a higher rate of pay within three weeks of being dismissed.  I find therefore that the Complainant successfully mitigated her loss and find that she had very little financial loss as a result of the dismissal. However, under section 7(1)(c)(ii) I order that the Respondent pay the Complainant the compensatory sum of €2,000 the equivalent of four weeks net salary, which I find is just and equitable having regard to all the circumstances.      

CA-00040044-002: Terms of Employment

Preliminary Issue:

On a preliminary point, the Respondent submits that the Complainant lodged her complaint under the Terms of Employment (Information) Act 1994, on 24 September 2020 which was 6 months outside of the 6 months period as provided for under Section 41(6) of the Workplace Relations Act 2015.

I note the following quote from UCD Associate Professor Anthony Kerr S.C.  in his annotated Irish Employment Legislation regarding time limits under section 7 of the Terms of Employment (Information) Act 1994:

The issue as to “the date of contravention” arose in An Animal Carer v A Charity ADJ-00009820 (11 April 2018) and An Employee v A Company ADJ-00012491 (7 September 2018). Prior to its amendment by the Workplace Relations Act 2015, this section permitted a complaint to be made within six months from the date of termination of employment. In both cases, the employer submitted that a contravention of s.3 now occurred when the two-month period specified therein for giving the written statement of particulars expired and no statement was provided. The adjudication officers (Kevin Baneham BL and Niamh O'Carroll Kelly BL) did not believe that the legislature intended s.41(6) of the 2015 Act to restrict the limitation period for breaches of s.3. Nor did they believe that such an interpretation would be in conformity with Art.2 of the Directive and they both ruled that a contravention of s.3 was “a subsisting contravention that endures so long after the initial two-month period the employee remains an employee not in possession of a statement”. Once a statement was provided, time started to run. If no statement was provided at any stage during the employment relationship, and this came to an end, the employee could refer a complaint within six months from the last day of their employment.

It is common case that the Complainant did not receive a copy of her terms of employment during the currency of her employment, though it was accepted that she had initially signed a contract of employment. I find therefore that she was within the time limit of submitting a claim which was within the six months from the last day of her employment, on the principle of a subsisting contravention, as noted by Kerr in the foregoing passage.  

Substantive Issue:

The Terms of Employment (Information) Act, 1994 requires that an employer must provide his/her employee with a written statement of the particulars of the employee’s terms and conditions of employment. It was common case that the Respondent did not provide the Complainant with written terms in line with the Act therefore I find that the complaint was well founded.  

Redress in the Act is described as follows at Section 7(2):

 A decision of an adjudication officer under section 41of the Workplace Relations Act 2015 in relation to a complaint of a contravention of sections 3, 4, 5, 6or 6C shall do one or more of the following, namely—

(a) declare that the complaint was or, as the case may be, was not well founded,

 (d)in relation to a complaint of a contravention under change section 3, 4, 5, or 6, and without prejudice to any order made under paragraph (e)  order the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 4 weeks ’remuneration in respect of the employee’s employment calculated in accordance with regulations under section 17 of the Unfair Dismissals Act 1977.

 (e) in relation to a complaint of a contravention under section 6C, and without prejudice to any order made under paragraph (d), order the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 4 weeks ’remuneration in respect of the employee’s employment calculated in accordance with regulations under section 17of the Unfair Dismissals Act 1977.

In assessing the amount of compensation, account must be taken as to whether the failure to comply with the requirements of s.3 relates to matters that have a practical significance for the Complainant. The Respondent opened  Irish Water v Hall 2016] E.L.R. 61, in which  the Labour Court said that any deviations that had occurred from what the strict letter of s.3 prescribed were “so trivial, technical, peripheral or otherwise so insubstantial as to come within the de minimis rule”. However, that was in a case where a complainant had been given a copy of terms, but where the list of terms was neither sufficient nor accurate. The Respondent also opened Celestine Café Bar Ltd v Smith TED 13/2020 where the Labour Court stated that failure to comply at all with s.3, however, cannot be regarded as a “trivial or technical” matter warranting no compensation.  In that case the employer was two days late in providing the statement of particulars and the claimant was awarded €100 in compensation.

The Respondent submitted that if it is found that it has breached the Act, the breach is of a trivial nature in that it did not cause harm, loss or any other prejudice to the Complainant. If there was a technical breach of the Act, the Respondent further submitted, this was a breach as a result of an oversight rather than a deliberate and conscious breach. I am convinced that the Complainant did not suffer major harm nor prejudice in not receiving a written copy of her terms but neither can I class the breach, as in non-receipt as ‘trivial or technical’. In consideration of this, I order the Respondent to pay the Complainant a compensatory sum of €300.

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

CA-00040044-001:  I find that the Complainant was unfairly dismissed, and I order the Respondent to pay the Complainant the compensatory sum of €2,000, the equivalent of four weeks net salary, which I find is just and equitable having regard to all the circumstances.

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

CA-00040044-002: I find that the Complaint was well founded for the reasons outlined above and I order the Respondent to pay the Complainant a compensatory sum of €300.

Unfair Dismissals Act 1977, Unfair Selection for Redundancy, Terms of Employment (Information) Act 1994, LIFO.