Complainant

Respondent

Parties

Aidan  Cunningham

Jdm Specialist Cars Joe Duffy Mazda

Representatives

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-00039016-001

04/08/2020

The complainant was made redundant on 22/07/2020 after having worked for the respondent since 14/04/2014.  He believes that he was selected for redundancy as he refused to accept a permanent pay cut of 15%.  The respondent denies this and submits that the redundancy was clearly linked to a cost cutting and survival exercise resulting from a significant drop in market share of the brand the complainant was responsible for.  He was paid an average of €2,950 per month.  He submitted his complaint to the Workplace Relations Commission on 04/08/2020.

The complainant was employed in a sales role with the respondent since April 2014.  He was in the position of General Sales Manager at the time of his dismissal.  The first that he heard mention of redundancy was on 09/06/2020.  He was offered positions in Cork and Limerick which were well outside the area he lived in.  The initial offers were unreasonable.  The complainant received an e mail on 27/03/2020 which stated that managers were to have a temporary pay cut of 25% and this would be followed by permanent reduction of 15%.  There was no prior consultation with the complainant in relation to this.  After returning to the workplace in May 2020 the complainant informed his immediate supervisor that he was not willing to accept a permanent reduction in wages and wished to be restored to full pay.  This was denied.  After this the complainant received a reprimand in relation to attending a meeting late and being unprepared.  The complainant was not aware of any prerequisites for this meeting and it is the complainant’s position that this reprimand was unfair and nothing more than an attempt to undermine him.

It was put to the complainant that if he did not accept the pay cut he could be moved with the company.  However, he was not provided with any details of this and was instructed to consult his contract of employment.  He was not given a copy of his contract of employment and he believes that it did not exist.  He was approached on 10/06/2020 with an offer of €5,000 on the basis that he would sign a termination agreement.  He refused this and reiterated his wish to be restored to full pay.  For the month of June another manager was sent in to occupy a desk in his department and the complainant’s direct reports were questioned by this manager.

On 18/06/2020 the complainant was made a proposal consisting of €8,000 to leave voluntary.  He replied that he would not leave for anything less than his statutory entitlements and the absence of a termination agreement.   Later that afternoon he was invited to a meeting and he was informed that due to the Covid-19 situation his position within the company was being considered for redundancy and that a period of consultation would commence.  He would be offered alternative positions.  The complainant followed this up with an e mail confirming that he would only be wiling to accept a position with a salary and status commensurate with this present position.  He also outlined his intention to seek pay restoration of this salary.

A further meeting took place on 22/06/2020 at which a number of positions were outlined from the respondent’s website.  All roles offered were junior positions and in some cases were so far from the complainant’s home that they were not realistic.  He was informed that he would be made redundant and paid statutory redundancy with effect from 22/07/2020.

The complainant submitted that the Unfair Dismissals Act, 1977 that this was an unfair dismissal.  He was not given any indication that redundancy was a consideration until such time as he made his concerns known about the pay cut.  It was also submitted that the complainant did not have a contract of employment or any agreed procedure in relation to a redundancy procedure.  The complainant was never given an explanation as to why he was selected for redundancy over other potential candidates.

The complainant worked for six years for the respondent and progressed from a Junior Sales Executive to General Sales manager.  He never raised any formal grievance until the pay cuts were imposed and he was never the subject of any formal disciplinary procedures.  In that context it is clear that the dismissal of the complainant was as a result of his complaint regarding the unilateral reduction in pay.  There were no proper or prior agreed process and no explanations given for his selection for redundancy.

The complainant has obtained some work since his dismissal and following the hearing he submitted a bundle of documents which outlined his attempts to mitigate his loss and details of earnings since his dismissal. He was also engaged in some self-employed work.

The respondent is one of Ireland’s largest new and used car dealership network and represents number of major brands. The complainant commenced employment with the respondent on 14/04/2014.  He commenced as a Junior Sales Executive. He was issued with a contract of employment and an employee handbook.  In 2020 he was working in the position of General Sales Manager.  In January 2020 the complainant was given a salary increase of 11% which amounted to approximately €5,000.  In late January 2020 the respondent was concerned about the particular brand losing market share across the board.  There was a need to cut costs and ensure survival.  A number of positions, including a more senior manager, were made redundant. 

In March 2020 the Covid-19 Pandemic had a significant impact on the business and the subsequent requirement for a temporary closure also impacted on the business.  All employees were put on protective notice from 18/03/2020.  The implications of this were clearly outlined and included measures or a combination of measures that would ensue.  These included, temporary layoffs, reduced pay, shorter working hours, unpaid leave, statutory redundancy and other measures.  A further update was issued on 27/03/2020 and this outlined various pay cuts which would affect employees during the closed period and after the business reopened.

The complainant attended a meting on 09/06/2020 and he was informed that the company was working on a number of solutions to minimise job losses.  He was reminded that the brand he was assigned to was losing significant market share for some time before the Covid-19 pandemic.  He was advised that his role was one which had been considered for redundancy and the company would work with him over the next few weeks to look at options such as redeployment, other roles, reduced hours and relocation.  The complainant said that he was aware of at least one redundancy and the news did not come as a shock to him.  He said that he would make the decision easy and would volunteer for redundancy as he had an offer of another role which he described as time sensitive.  He informed the respondent representatives that he had reassess his life during lockdown and while the company had been good to him he did not want to leave of bad terms.  He confirmed that he understood that there would be a period of consultation and they would work with him.

A number of exchanges took place with the complainant and he wanted €12,000 tax free and pay in lieu of notice along with outstanding annual leave.  There were a number of positions offered to the complainant, but he would not consider any of these.  The complainant was made redundant 22/07/2020 and was paid statutory redundancy.

It was submitted on behalf of the respondent that all discussions with the complainant were always amicable.  He could have considered some of the positions on offer, but he had informed the respondent that he had an offer elsewhere in the trade.  While he made a proposal that was not accepted he was paid his entitlement. The complainant was not unfairly selected for redundancy and he was aware that it was part of a cost cutting measure.  The respondent submits they acted pragmatically and sensitively at all times. The fact that he confirmed that he was willing to accept redundancy must also be taken into consideration.

The facts of this case are not in dispute.  The complainant commenced employment with the respondent on 14/04/2014 and was dismissed by reason of redundancy on 22/07/2020. 

The role of the Adjudicator is to examine if, in terminating his employment, the respondent breached section (6)1 of the Unfair Dismissals Acts 1977-2015 (“the Act”) which provides that a dismissal is unfair, “unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”  The burden of proof rests with the respondent to set out the substantial grounds justifying the dismissal of the complainant.  The respondent submits that the job was made redundant as the particular brand was losing market share for some time.  The complainant’s case is that he was unfairly selected for redundancy after he refused to accept a permanent pay reduction of 15%.

Section 6(3) of the Act states:

“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 matters specified in subsection (2) of this section or another matter what would not be a ground justifying dismissal, or

(b)    He was selected for dismissal in contravention of a procedure (being a procedure that had been agreed upon by on  behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941-1971, representing him or has been established by the custom and practice of the employment concerned) relating to the 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.”

Section 6(2) referred to above as “subsection (2)” addresses the termination of employment for reasons related to trade union membership, religious or political opinions or for having submitted a protected disclosure and other matters which are not relevant to this complaint.

In this case “the circumstances constituting redundancy” was the decline in market share of a particular brand and the need to cut costs and ensure the survival of that part of the business.  Three were a number of other positions also selected for redundancy which included other more senior managers.

Section 6(7) of the Act provides that, in considering a complaint of unfair dismissal the adjudicator may have regard:

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

(c)     To the extend (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.”

The complainant in this case was not represented by a trade union and there was no evidence submitted regarding any agreed procedure in relation to how redundancies are to be implemented.  Looking at the procedure utilised by the respondentit is clear that they followed the recommended stages and advised the complainant that his job was at risk and providing for a period of consultation before confirming that his job was redundant and issuing him with the required notice to that effect.

The “reasonableness” of the decision to dismiss the complainant will be examined.  The definition of redundancy is set out in Section 7 of the Redundancy Payments Acts 1967-2014.  This is the starting point for my consideration of the respondent’s position.  Section 7(2) sets out five definitions of redundancy.  For the purposes of this complaint there are two relevant, subsection 7(2) (b) and (c):

“… 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 –

(b)…the fact that the requirements of that business for employees to carry out of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease and 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 [.]”

Th respondent invited the complainant to look at a number of other roles.  All of these were rejected.  It is clear that the complainant stated that he would only accept a role which had similar terms and status as his existing role. 

I note that the complainant was not surprised at the decision to select his role for redundancy.  He was aware of another role which was made redundant in March 2020.  As a manager he was also aware that there were concerns in relation to the decline in market share of the brand he was responsible for.  It is significant that the complainant stated that he would “volunteer” for redundancy if certain conditions were met.

Having considered the evidence adduced along with the various submissions from the parties I find that the decision to dismiss the complainant on the ground of redundancy was not unfair.

I find that the decision to dismiss the complainant on the ground of redundancy was not unfair.

Redundancy.