Complainant

Respondent

Parties

Peter  Brennan

B.c. McGettigan Limited, The Address Connolly (Formerly North Star Hotel)

Representatives

In person.

Terence O'Sullivan Terence J O'Sullivan Solicitors

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-00042313-001

04/02/2021

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00044794-001

25/06/2021

The Complainant was employed from 5th February 2018 until 1st February 2021, he was employed by the Respondent as General Manager in a hotel.

The Complaint submitted under s.8 of the Unfair Dismissals Act, 1977 was received by the Workplace Relations Commission on 04/02/2021.

The Complaint submitted under s.6 of the Payment of Wages Act ,1991 was received by the Workplace Relations Commission on 25/06/2021.

The Complainant was appointed to the position of General Manager of the Respondent’s hotel on 5th February 2018.

The Covid 19 pandemic first had an impact on the operation of the hotel in 2020 when the hotel was first closed in accordance with Government and HSE guidelines on 21st March 2020. This closure lasted more than three months.

The hotel re-opened on 29th June 2020 subject to Covid Level 2 restrictions e.g. physical distancing, table service only, cleaning regimes and noise control measures. Such restrictions severely impacted the hotel’s financial turnover.

From 20th September 2020 the country was placed in Covid Level 3 restrictions. In compliance with these restrictions food and beverage was only permitted to remain open for outdoor dining to an absolute maximum of 15 persons. The hotel did not have outdoor dining facilities and as such, all food and beverage services were at that point temporarily suspended.

From 4th December 2020, in line with Government restrictions, the hotel was permitted to reopen its food and beverage facility. Due to the lack of demand for hotel accommodation the food and beverage facility only opened for Fridays and Saturdays on three weekends leading to Christmas 2020.

From 27th December 2020 Ireland was placed on Covid Level 5 restrictions of the Living with Covid – 19 framework and this level was in place until 5th April 2021. Under these restrictions, the hotel is currently only open for essential travel, non-tourist and non- leisure purposes. As such a minimal, restricted service is being provided by the hotel. From 27th December 2020, to date, all food and beverage services have been temporarily suspended.

The effects of Covid – 19 have led to the drastic reduction in turnover of the hotel. Numbers were supplied that show a reduction in revenue of almost 94% for the periods March to February 2020/21 as against March to February 2019/20.

The hotel owner was acutely aware that drastic action was required in order for the hotel to survive the pandemic going forward, like all hotels a lay – off for employees was required.

Staff numbers were radically reduced. As of the 29th February 2020 the hotel headcount was 115, on 5th April 2020 the headcount had been reduced to 25 and by 31st January 2021 the headcount had been further reduced to 12. These numbers were achieved through the temporary lay-off of staff. The Respondent contends that this is the context in which the Complainant was laid off and subsequently made redundant.

The Complainant was laid off from 1st October 2020 and remained on lay – off until the termination of his employment by way of redundancy on 1st February 2021.

In or about January 2021, after full consideration by the Respondent of whether there were suitable alternative roles, consideration had then to turn to the Complainant’s position, and whether the role was by then redundant. The Complainant was invited to attend a meeting scheduled for 18th January 2021 attended by the hotel owner and the hotel HR Manager. The Respondent asks that due regard be given to the fact the minutes of said meeting, taken by the Complainant, are not agreed and are merely his recollection of what was said during that meeting.

On 18th January 2021 the Respondent issued a letter to the Complainant confirming that the role of General Manager of the hotel was redundant. The Complainant received all due notice and entitlements and his employment ended on 1st February 2021.

The Law.

The role of General Manager is redundant, and the employee is dismissed by reason of redundancy as his dismissal is attributable wholly or mainly to: -

A reduction in the requirements of the business, pursuant to s.7(2) of the Redundancy Payments Acts, that is, that the fact that the requirements of that business for employees to carry out work of a particular in the place where he was so employed have ceased or diminished or are expected to cease or diminish

and /or

A diminution in the required number of employees pursuant to s.7(2)(c) of the Redundancy Payments Acts, that is , 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.

On Thursday 14/01/21 the Complainant was asked by the HR manager to come into the hotel on Monday 18/01/21 at 3pm to meet with the owner. No agenda or other details were given.

The Complainant attended the hotel as scheduled and was brought into a meeting room where the hotel owner and the HR Manager were present.

In the space of 5 minutes the Complainant was informed that the decision to make him and his position redundant had been taken.

No offer of representation was given to the Complainant, before during or after the meeting. - No consultation process was allowed.  No means of appeal was offered to the Complainant.  No

selection criteria were mentioned other than his salary was too expensive, trading was not improving because of Covid and the owner would complete the duties of GM going forward.

No opportunity was given to discuss alternatives to redundancy or dismissal. - No other team members or roles were considered for redundancy (to the best of the Complainant’s knowledge as GM).

In conclusion the Complainant feels that the decision was taken prior to the meeting.

The Complainant contends that he was denied natural justice making this an unfair dismissal.

CA – 00042313 – 001. Complaint submitted under s.8 of the Unfair Dismissals Act, 1977.

The definition of redundancy is set out in the Redundancy Payments Act, 1967 and amended by the Redundancy Payments Act 1971 and 2003 –

An employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to –

a)     the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by hi, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

b)     the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

c)      the fact that his employer has decided to carry on the business with fewer or no employees. Whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

d)     the fact that his employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

e)     the fact that his employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

There are two critical factors to be gleaned from the definition above:

1.      The Redundancy should arise from the doing away with the job, not the person. The feature of impersonality is necessary in a genuine redundancy situation.

2.      Change – Any change must arise as a result of change in the workplace which might range from closing down of the business to a simple reduction in number of employees.

In the instant case the Complainant was contacted in or around the 14th January 2021 and requested to attend a meeting on Monday 18th January 2021 with the hotel owner. I note that the Complainant was given no idea of the subject matter of the proposed meeting. Present at the meeting on 18th January were the Complainant, the hotel owner and the hotel HR Manager. It is the contention of the Complainant that this meeting did not last much longer than five minutes. The hotel owner was of the opinion that it lasted between twenty and twenty-five minutes.

It is the opinion of the Complainant that this process was flawed due to:

·        No right to be accompanied at this meeting was extended to him. I note that both the Respondent’s Grievance Procedure and Disciplinary Procedure contain clauses that the employee may be accompanied by a colleague.

·        No right of appeal was offered to him when he was informed that his position was to be made redundant.

·        No alternatives were considered or indeed the opportunity to offer alternatives to redundancy were not asked of him.

·        The Complainant believes the decision to make his position redundant had already been made prior to any meeting taking place.

·        The Complainant as far as he knows was the only employee made redundant from this hotel. This fact was confirmed by the HR manager at the hearing of the complaint.

The question to be asked is – Were these the actions of an employer acting in a reasonable manner?

An important factor of influence in this regard is s 6(7) of the 1977 Act inserted by the amending 1993 Act which permits the WRC, in determining if a dismissal is unfair, to have regard if “appropriate to do so” to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal.  The EAT remarked in Barton v NewsfastFreight Ltd(UD 1269 / 2005) that the claimant would have failed “except for the provision”.  While it understood the trading difficulties of the employer, it took the view that it had kept the employee claimant in the dark and had handled the dismissal badly.

It is important that employers identify and explore the feasibility of pursuing less drastic measures to redundancy.  Failure to do so may result in a dismissal in the alleged redundancy situation being deemed unfair.  This is illustrated, for example, in the approach of the EAT in Keogh v MentroyLimited (UD 209 / 2009). There the claimant was promoted from his position as sales assistant to that of manager in the employer’s store.  A downturn in business demand prompted the decision to make the position of manager redundant, as this position was the most financially costly for the employer.  The employer had also received complaints from other staff members about the employee and his management style.  The employee was not given the option of returning to his former role.  In the days immediately following the employee’s redundancy another staff member resigned and a notice advertising full or part-time positions was placed in the employer’s shop window.  The EAT held that in deciding to make the employee redundant the employer had taken into account factors other than the decline in business, namely the complaints from other staff members.  The EAT also found, however, that the employer did not adequately consider other alternatives to redundancy and that the reasons given by him were not in fact the reasons for the dismissal.  Accordingly, the EAT found that the employee had been unfairly dismissed.

In Sheehan and O’Brien v Vintners Federation of Ireland Ltd [2009] ELR 155, the EAT held that the claimants had been unfairly dismissed even though the redundancy was found to be genuine.  The employees provided proposals to the company on how their jobs could be retained and the company did not take these into consideration.  The tribunal was critical of, inter alia, the employer’s failure to “consider earnestly the claimants’ proposals regarding the reorganisation of the work which would have realised significant savings”.

CA-00044794-001 – Complaint submitted under s.6 of the Payment of Wages Act, 1991.

The Complainant contends that the calculation of his outstanding holiday pay, payment for Public Holidays and the amount paid to him as a redundancy lump sum have been calculated incorrectly.

Looking at the redundancy payment, I believe the Respondent has calculated this by using the maximum ceiling for weekly pay i.e. €600 per week (in accordance with the Redundancy Payments Act, 1967). I calculated the amount through the Department of Employment Affairs and Social Protection on-line calculator, this resulted in a figure of €4.188.00.

The Respondent HR Manager, by letter dated 19th January 2021, has stated the following:

“Relative to your three years of service with the company, you will receive a payment of seven weeks pay, two weeks for each year of service and one additional week”.

This wording is open to interpretation and I believe that the Complainant has calculated the amount based on his contractual rate of pay i.e. €90,000 per annum.

The calculation of the statutory amount due to the Complainant is correct.

In relation to outstanding holiday pay and payment for Public Holidays the Respondent, in their book of documents have included a copy of section 23 of the Organisation of Working Time Act, 1997 and also a copy of Statutory Instrument 475 /1997 – Organisation of Working Time (Determination of Pay for Holidays) Regulations, 1997.

The calculations completed by the Respondent are based on a daily rate of pay of €192.00. This would result in an annual salary of €49,920 and I believe this to be the level of salary paid to the Complainant at the termination of his employment. The Respondent’s calculations comply with legislation.

The Complainant also raised the subject of his employer’s contribution to his pension/PRSA.

The Respondent ceased these contributions in September 2020, the Complainant was not aware of this.

As per the Payment of Wages Act, 1991 the following is contained in section 1 of the Act:

“wages” in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including –

a)     Any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

b)     Any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office.

There is no jurisdiction under this enactment to address the issue of an employer’s pension contribution.

Mitigation.

The Complainant informed the hearing that he had applied for 29 positions and then re-trained as a driving instructor. As a driving instructor he earns approximately €500 per week.

CA – 00042313 – 001.Complaint submitted under s.8 of the Unfair Dismissals Act, 1977.

For the reasons outlined above I have decided that the actions of the Respondent were not the actions of a reasonable employer and I therefore decide that the complaint as submitted under s.8 of the Unfair Dismissals Act is well founded and I now order the Respondent to pay compensation in the sum of €27,760 gross to the Complainant. I have arrived at this figure by awarding 4 weeks pay plus the loss in earnings for a period of one year.

CA-00044794-001 – Complaint submitted under s.6 of the Payment of Wages Act, 1991.

The complaints submitted under s.6 of the Payment of Wages Act, 1991 are not well founded.

The payment awarded should be made to the Complainant within 42 days from the date of this decision.

Unfair Dismissal; Redundancy. Payment of Wages Act.