Complainant

Respondent

Anonymised Parties

A Studio Assistant

 An Artistic Company

Representatives

Marge Lysaght, Cork City South Citizens Information Service

Rory Treanor, Peninsula Group Limited

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00035317-001

18/03/2020

This matter was heard by way of remote hearing pursuant to Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and SI 359/2020, which designates the WRC as a body empowered to hold remote hearings.

This is a claim for unfair dismissal on grounds of unfair selection for Redundancy on 2 October 2019. The claim is contested by the Respondent.

The Complainant, a Studio assistant, was represented by the Citizens Information Service, who filed a written submission on his behalf.

The Respondent, an Artistic Company, was represented by Peninsula Group, who also filed a written submission on behalf of the company.

At the hearing, the respondent placed a single page on the shared screen and I requested sight of that page for my inquiry and to share with the Complainant. I received a copy of this page, accompanied by many others. My Inquiry sought access to one page and I have confined my Inquiry to that one page, which was a note of a meeting, November 2018.

The Respondent representative outlined that the Respondent operated a Yarn making business and had been trading since 2017. The Respondent submitted that the complainant’s dismissal arose from a genuine redundancy and was managed fairly and reasonably set against a challenging trading environment. Employee number had reduced from 40 to 20 within a two-year time frame.

In November 2018, the Respondent experienced financial difficulties and made the complainants position as a Studio Assistant redundant. The Complainant was redeployed to the role of Yarn Twister. However, Financial difficulties persisted at the business and broad restructuring followed.

On 12 September 2019, the Respondent held an “at risk of redundancy “meeting with all staff. This was followed by a One to One Consultation meeting with the Complainant the next day.

On 26 September 2019, a second consultation meeting occurred.

On 2 October 2019, the Respondent informed the Complainant that his role was being made redundant and there was no alternative to this outcome. The complainant received €2,787.70 as statutory redundancy. He also received payment in lieu of notice along with a gratuity of €2,000.

The Respondent offered an appeal of the decision, but the complainant failed, refused or neglected to submit an appeal of the decision to dismiss him.

The Respondent representative argued that the failure to mount an appeal must be viewed as fatal in the claim for unfair dismissal as the complainant was obliged to exhaust available internal procedures and failed to do so.

There was no animus between the parties and an appeal was offered by the company in good faith.

The Respondent submitted that a genuine redundancy had existed at the company and the respondent had engaged in elaborate consultation with staff. The Complainant did not raise his unease with the selection criteria or transparency during his employment, when it was clearly open for him to do so. The Appeal process was outlined in the staff handbook.

The Respondent sought that the claim be dismissed.

Evidence of the Proprietor. MS A.

Ms A recalled introducing the staff handbook but was unclear on date of origin. She recalled the first Redundancy process conducted through LIFO in 2018. At that time, the complainant changed his role and maintained his salary.

The Company experienced significant trading difficulties during 2019. There was a 30% reduction in business and while this detail was not openly shared with employees, everyone knew.

The Respondent made the decision to close one of two factories. The objective was to keep best team to fight for survival. Four roles were considered for Redundancy as a result.

As a first step, costs were cut, and overtime ceased. On 13 September all staff were informed that they were affected by the merger of two factories into one. Duplicate roles were in existence.

The deliberative process continued through to September 26. this included an exploration of alternative roles.

By 2 October 2020, the downsizing process had concluded, and 4 redundancies were confirmed.

1 Dyer

2 Production supervisors

3 IT Technician

4 Studio Assistant

The staff now stands at 20 with a large number placed on Covid related lay off.

Ms A told the hearing that the company had taken external advice on the composition of the 4-point matrix relied on to identify redundancies. However, this turned out to be inconclusive.

During cross examination, Ms A confirmed that the complainant had been provided with the selection criteria prior to dismissal. He was not afforded an input in their application as the Supervisor undertook the scoring mechanism.

Ms A confirmed that the complainant did not emerge as the best performer as the Supervisor had submitted her opinion on who was stronger. Ms A stood over the decision made.

Ms A told the hearing that the Appeal would have been managed by their External advisors. The Complainant had not signed a Compromise Agreement. The exercise of marking against the selection criteria was undertaken by the Operation Manager but conceded that she had been in attendance.

She submitted that the company was faced with having to release 4 employees to redundancy and a decision was not possible on the strict application of the initial 4 criteria. Two further criteria were added to the selection criteria, which yielded a defined outcome. This led to confirmation of 4 redundancies at the company.

The Respondent representative re-affirmed that the redundancy had been genuine and managed fairly. The absence of recourse to appeal must be judged as fatal to the case. The complainant’s reliance on “personal circumstances “as a basis to be excused from appealing the decision were not enough to deviate from the Appeal offered. Matters raised by the Complainant post his Redundancy were misplaced and not determinative in his dismissal.

Cases relied on:

Pungor V MBCC Foods (Ireland) ltd UD/548/2015

Aryzta Bakeries v Vilinius Cacs UD/17/106

Allen v Independent Newspapers [2002] ELR 84

On 18 March 2020, the complainant submitted a complaint of unfair dismissal to the WRC. He outlined that he had worked for the respondent from 18 April 2017 to the date of his notice on 2 October 2019. His gross pay was €2,000 monthly for a 40-hour week.

During his tenure, he had filled two roles, inclusive of Dyer and Studio Assistant.

The Complainant had been present at the business during an earlier redundancy programme in 2018 and had been saved at that time.

From March 2019 to September 2019, Compulsory redundancies were flagged by the Management. Selection criteria was to rest on:

1 Length of service

2 sickness

3 lateness

4 disputes

The Complainant was selected for redundancy on 2 October 2019 and was dissatisfied at Management responses on “why I was the person selected for redundancy “

He accepted that there was a genuine need for redundancies at the business.

Some months post cessation of employment, the complainant emailed the Respondent seeking further details of his selection for redundancy. He discovered that a decision to select him for redundancy had been made on an expanded set of criteria, which he judged to be subjective. He contended that he had been unfairly selected for redundancy and had struggled to find comparable employment status since his dismissal.

The Complainants representative outlined that the decision to dismiss the complainant was overly personal when it should have been impersonal. The Respondent deviated from the declaration on the selection criteria, causing a lack of transparency and deviation from the application of   fair procedures. The complainant was not permitted an input into the scoring criteria and no suitable alternatives were considered. The Respondent reliance on “teamwork “in the matrix was overly subjective.

The Respondent had completed the complainant’s performance review at the end of May 2019, which had gone well, but the complainant had not been furnished with a record as the Respondent signalled they did not retain such documents.

The decision to dismiss the complainant had been prefaced by “final decision “, therefore appeal was not a viable option for him. By then, the process which had led to the complainant’s dismissal had been void of fair procedures. An appeal would not have been capable of rectifying this within the company and may have hampered his future employment references. The Complainant had no faith in an internal appeal.

 The Complainant had struggled with the process and did not have recourse to legal advice. The Complainants Supervisor had been asked to identify the “strongest personality “on the team and this in turn informed the decision to dismiss the complainant. The representative argued this was unfair.

The Complainants representative outlined that on his quest for discovery of documents in early 2020, the complainant discovered that another employee had expressed some concerns about him via an Incident Report. This had never been brought to the complainant’s attention and he understandably attributed this document as causing him to be reflected in a bad light at the company and thus, vulnerable for redundancy.

The Complainant had been offered a reference for his period of employment.

The Complainant representative submitted that the complainant had been unfairly dismissed and sought the remedy of compensation. He received payment in lieu of notice along with a statutory redundancy on 25 October 2019.

Cases referred to:

Margaret Griffin v Spicer and Company, Navan UD 1938/2009

Boucher v Irish Productivity centre [1994] ELR 205

Kirwan v Iona National Airways ltd UD 156/87  

Jim Dowdall v Oxygen Environmental UD 207/2011

Evidence of the Complainant

The Complainant told the hearing that Redundancies were anticipated at the business during 2019. He was shocked to be selected and his was not clear. He needed more information and was very stressed at the prospect of Redundancy. He submitted that his family circumstances were known at the business and the redundancy had been a” direct personal action against him”.

He had secured a new job shortly after leaving.

During cross examination, the complainant accepted that the business was in difficulty at the time of the dismissal. He had requested reasons for his selection but could not get an answer. His last day of work was a half day on October 2, 2019.

He told the respondent representative that “I just didn’t understand “He understood that he had longer service than those who were retained. He submitted that his priority was to find new work, rather than submitting an appeal.

This was his first Organisational awareness of Redundancy at the business, as he had been saved in an earlier redundancy. He confirmed that he had not suggested any alternatives to redundancy.

The complainant’s representative concluded that the claim for unfair dismissal stood as the appeal offered was not viable due to the defects in the selection process. The dismissal procedures reflected a departure from the principles of natural justice. The Complainant had only found sporadic work since dismissal which was not comparable to the position he lost through redundancy.

This is a claim for Unfair Dismissal due to a submitted unfair selection for redundancy on 2 October 2019. In arriving at my decision in this case I have considered the written and oral submissions of the parties. I have also considered the accompanying documents submitted in the case.

The Law on Unfair Dismissal is contained in Section 6 of the Unfair Dismissals Act, 1977, as amended. The burden of proof in this case rests on the Respondent.

Unfair dismissal.

6.— (1) 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.

(2) 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, to be an unfair dismissal if it results wholly or mainly from one or more of the following:

Section 6(3) of the Act provides

 (3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

( b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure,

then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

A dismissal is deemed to be fair if it results wholly or mainly from one or more of the provisions of Section 6(4) of the Act.

(4) 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:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.

The Respondent has relied on section Section 6(4) (c) in their defence of the case.

Section 6(7) of the Act permits me to have regard for  

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

In the High Court case of JVC Europe ltd and Jerome Panisi [2011] IEHC 279, Justice Charleton gave a preamble on a Redundancy, which has a place of reference in this case.

Redundancy can be a devastating blow. Where economic conditions are difficult, or where the employee who is let go has aged or is experiencing health difficulties, finding alternative employment may be impossible. Years of devotion to an employer count for nothing where technology overtakes the workforce, rendering the labour of those displaced unnecessary, where new methods of work are demanded from those who do not have the skills to respond, or where the product is deemed obsolete. All these are examples of a genuine redundancy. As ordinarily understood, redundancy means that a worker is no longer needed.

He went on to state that there are instances where Redundancy can be a legal outcome to a cessation of employment.

Having carefully considered the evidence adduced in the case, I am satisfied that the Respondent was met with very real financial challenges from 2018 onwards. I note that overtime had ceased at the company. It is clear that the business had seriously downsized from a staff of 40 to a staff of 20, many of whom remain on a continuum of Covid related financial supports. There have been no new hires.

Section 7(2) of the Redundancy Payments Act 1967, as amended provides in

S. 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 been doing before his dismissal) to be done by other employees or otherwise.

This commutes to a reflection of “impersonality and change “St Leger v Frontline Distributors Ireland ltd [1995] ELR 160. On that occasion, the EAT held that impersonality and changes traversed all 5 subsections of Section 7 of the Redundancy Payments Act.

The Complainant has submitted that he believed that he was targeted personally and weeded out for Redundancy in October 2019. If this was the case, it would be totally contrary to the spirit and intention of the Law.

I note that the mechanism to decide Redundancies in 2018 as (Last in first out) LIFO, differed from the mechanism of a Matrix relied on in 2019. There was no Trade Union presence at the company and the complainant was not represented during the process which led to his Redundancy.

Taking everything into consideration, I am satisfied that a genuine redundancy existed at the Respondent business in Autumn 2019 and in that regard, the Respondent may safely rely on the defence included in Section 6(4) (c) of the Act. Redundancy was the main reason for dismissal.

However, I must also be satisfied that the Respondent acted fairly and reasonably in how the dismissal was conducted. This requires that I probe the method of selection, application of selection criteria and presence of an appeal.

The parties had not concluded a severance agreement in this case.

I will address the matter of an appeal. I can appreciate that the Respondent is aggrieved at having to re-open the circumstances surrounding this case, when they understood that they had made a real time appeal open to the complainant. They had also added an enhanced gratuity, which included an open door on providing a reference. The Complainant holds a different view and told me in evidence that an appeal was not a priority for him when set against his immediate need to find new work. His representative expanded somewhat on this reasoning and pointed to the inconsistencies in the procedural framework on dismissal which were bound to render any appeal non-viable.

For my part, I note that the complainant finished work on the day he was notified that he had been selected for compulsory redundancy. This did not provide any time to resolve issues. I asked the complainant why he had pleaded that it was imperative that he remain at the business at the first “at risk meeting “? This stark comment had jumped up at me . The Complainant pointed to personal circumstances but did not elaborate. He did not submit any medical evidence to cover an illness.

For my part, I agree that the complainant was offered an appeal in the letter of dismissal.  However, this appeal was to the decision maker who had presided over the dismissal. When I asked Ms A who was charged with the Appeal? she told me that the external advisers would have managed it. However, this was not explicit and given the complainants clear demonstration of confusion at being selected for redundancy, I find that to introduce an appeal to the same decision maker was unreasonable and arguably nugatory. In my opinion, it goes as far as to excuse the complainant from would normally be an expected procedural framework of Appeal post dismissal.

However, I must offer an addendum. The Complainant presented at hearing as being residually traumatised by the decision to make him redundant. He had pleaded for his retention first day. He had been spared from the earlier redundancy of 2018, by redeployment.

 I find that the complainant may well have received some clarity on the redundancy process by exercising an appeal. He may not have agreed with what he heard, but it may have gone some way to restoring some peace of mind and avoiding an extended period of rumination. Because of this omission, in my opinion, he has carried an excess burden of unresolved issues related to the redundancy up to the day of hearing. I could see that he continued to experience associated distress at their recollection.

Based on these unique circumstances, I find that the lack of recourse to an appeal has not been fatal to the progression of the case.

As I stated earlier, the objective of a Redundancy is meant to be anchored by “impersonality and change” It is the job and not the person that is meant to be explored. All parties in this case concur that an umbrella of change formed the context and background to the redundancies which occurred in 2019. There was no agreed mechanism in identifying just who should go. That is why as I now engage in this retrospective analysis of the circumstances presented by both parties, I have had to probe the circumstances advanced systematically.

I found that the respondent approached the redundancies in 2019 by means of a “tangential thinking”. At one level, a decision had been made that certain employees were to be made redundant prior to enlisting external advice on just how that could be done. The Respondent  then varied between considering voluntary redundancies but did not put that out to plant application. The Respondent also raised an expectation when the complainant answered in the affirmative, when asked if he was prepared to relocate to a separate building? This was not pursued by either party as an alternative to redundancy. The prospect of voluntary redundancies remained as a common thread ,but was never actioned .

However, I found my greatest difficulty in this case was in relation to the application of the Matrix. While, I appreciate that the Respondent was under considerable pressure to manage a disintegrating business, the application of the matrix   was an exclusive process and not advised to the complainant in a consistent and timely manner. I found that he was informed that separate and distinct criteria were relied on at two different meetings and he did not have an opportunity to have an input in the scoring. As such, I must conclude that the composition of the matrix was far too subjective and overly random. I agree with the complainant that it could reasonably be perceived as personal. It ought to have had a far more systematic and scientific measurement focus.

 I found that faced with the inconsistent conclusion to the application of the first four criteria, Ms A moved and added two more subjective criteria to reach an outcome to secure the desired redundancies. In my opinion, this meant that the criteria were “not objectively applied in a fair manner “. Griffin applied

The Complainant has relied on Dowdall, however, the circumstances in that case vary somewhat, as the complainant in that case was notified of his redundancy, “without prior warning or notice”. In Griffin, the Complainant had no prior indication of the very serious financial situation but would have accepted a part time job.

In the instant case, the complainant was fully aware of the company’s trading difficulties and he clearly anticipated change. He just hoped that he would be spared the dismissal, as in 2018.  Suggestions of alternative work did not amount to an offer.

The Labour Court has considered Redundancy in a claim for unfair dismissal in Kohinoor ltd v Hussain Ali UDD 1629

In that case, the Respondent submitted that once the matrix was completed, the General Manager met with each person to seek their opinion on their scoring and discuss any grievances. The Complainant accepted his scores.

The Labour Court in finding that the claim for unfair dismissal was unsuccessful took guidance from the following

1 Matrix developed with the assistance of expert advice. Criteria were objective and fair.

2 Fair procedures through consultation with all affected employees and justification of why the complainant was selected for redundancy.

3 Employers conduct reasonable.

4 Complainant permitted input into scoring

5 Redundancy was genuine

In the instant case, I found the selection criteria to be both lacking in objectivity and fairness by their expansion post expert advice. I also found an inconsistency in their application as the complainant was given two different groups of criteria and not afforded an opportunity to input in any.

The Complainant has placed a defined emphasis on documents discovered through his requested discovery of documents in early 2020. He has not proved their causal connection to the decision made to dismiss him. I appreciate that the Respondents, Ms A had observed “something going on “with the complainant prior to his dismissal. It was not best practice to record a conversation with a staff member which placed the complainant in a bad light during the Consultation, without at least giving him a chance to defend himself and record a response.

A redundancy is a very difficult challenge for all parties. the Respondent here was seeking to re-organise and quickly. The Complainant, by his own admission was completely overwhelmed to be dismissed and confused by the process adopted. He has, as I stated, carried a residual trauma following this experience.

I can understand that he understood through performance review that he had worth and standing at the company. I found it less than best practice, that the respondent did not retain or refer to these reviews in the management of Redundancies.

I have found that the Respondent did not follow through on the complainant’s declaration that he was prepared to relocate to the “merged building”.  This amounted to a stuffiest regard for an active consideration of alternatives for redundancy. The selection criteria were flawed in application and elongation and did indeed overly personalise the difficult process of deciding a redundancy.

I found that the complainant was not permitted an active and inclusive participation in the consultation or application of the selection criteria. It may have assisted the parties to consider the mechanism of representation to assist in this process.

While the staff handbook contained a Policy on Redundancy, I found that the respondent deviated from the disclosure of the selection criteria to the complainant, without an apparent reason.

In these circumstances, I find that the complainant was not treated fairly or reasonably in the handling of this redundancy. I find that he was unfairly dismissed as a result.

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.

I find that compensation is the only practical remedy open to me in this case. I did not receive details of efforts made by the complainant to mitigate his loss. I note his work pattern post dismissal.

I order the Respondent to pay the Complainant €10,000 in compensation in respect of his economic loss. This amounts to a calculation of 5 months gross pay.

I would also recommend that the Respondent reviews and amends the Company Redundancy Policy.

Unfair Selection for Redundancy