Complainant

Respondent

Parties

Thomas  Randall

Ecofix Limited Ecofix

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-00041692-001

23/12/2020

The complainant was employed by the respondent from March 2018 on a part-time basis until March 2019 when he was given a full-time contract.

He was made redundant in May 2020 and complains he was unfairly dismissed.

The respondent company operates in the construction sector.

During an earlier lockdown there was great uncertainty as to the future of the business and like most in this sector we examined ways of cutting costs to ensure survival.

After a review of resources and given that office space was shared with a sister company, a decision was made to merge certain roles in both organisations.

In an effort to reduce costs it was decided that the financial controller in the sister company would assume a dual role in both Ecofix Limited, the respondent and combine this with his existing role, and the business administrator in the sister company would assist in invoice processing.

This resulted in the complainant’s role as company accountant becoming redundant.

The respondent’s turnover halved in 2019 as a direct result of the pandemic. The company has been closed for the first three months of 2021.

While there has been some good news about the reopening of residential sites great uncertainty still surrounds the industry, but this year we expect turnover around 2019 levels.

In light of this current dramatic fall off in turnover the redundancy was justified and the complainant's ground for complaint based on the company‘s profitability, is not a valid one.

Furthermore, the respondent had committed to buy out EIS shareholders and a founder shareholder in 2020 which significantly reduced its reserves; thus, underlining the need for cost cutting measures in the business.

Regarding the complainant's comments that he had not received notification of the directors’ plan, each employee received a letter at the beginning of the first lockdown period notifying them of our intention to avail of the TWSS scheme.

Employees were advised that due to the continuing uncertainty related to the pandemic future redundancies could not be ruled out.

The complainant was made redundant in the course of an online meeting, which is regrettable, but sadly this was necessitated by public health guidelines.

The complainant states that he had not received an employee handbook. He had been working at the company for some time before being made permanent and as a result It may have been an oversight on our behalf not to send him a copy of the employee handbook.

He could at any time during his employment or during the redundancy process have requested the handbook.

In summary, while any redundancy is regrettable, this was necessary to ensure the survival of the respondent business. Had we adopted a ‘wait and see’ approach as suggested by the complainant the redundancy would have happened in due course the same given our industry remains closed to this moment.

The complainant was taken on as ‘Financial Accountant’ on a three day per week contract on March 1st, 2018 and held this position until February 28th, 2019.

He was then offered a full-time position as company accountant on March 1st, 2019 and made redundant on June 30th, 2020.

He had accepted a 10% reduction in salary in order to secure the full-time position and as a result of being a full-time employee was not able to take on extra work external to the respondent.

The company made good profits in 2018 and substantial profits in 2019 and Quarter 1 of 2020 was also a profitable period.

The company started remote working in mid-March 2020 and had a healthy cash position. Salaries were reduced for the month of April 2020 only. Company reviews were held in May 2020 and the complainant’s review took place on the May 14th, 2020.

The company sites re-opened on the 18th May 2020 and employees were notified on that date that all were being re-instated to full pay effective 1st May. The complainant was then notified of an online call for the 27th May 2020 and was told during this call that his position was being made redundant.

This was followed by a letter on the 28th May 2020 giving one month’s notice of the termination.

He was never given an employee handbook and there was no prior discussion with him in his capacity as company accountant about company plans. It was confusing to receive confirmation of restoration to full pay and then to be made redundant nine days later.

He also feels that no time was given to see how the Covid-19 pandemic would impact on the business given that the sites were only closed for six weeks.

His position has been merged with a sister company despite the fact that the respondent is a more profitable company than it and so it does not make sense to transfer the financial cost of company accountant to it.

The complainant did request consideration of a part time position given that his original position was on a three day per week contract, but he was told that this was not possible.

It is important to note that at his review on the 14th May 2020 (thirteen days before the redundancy) there was no indication of any plans to make his role redundant.

At the time the complaint was made all construction sites had remained open and were only closed for the initial lockdown.

As can be seen from the submission of the parties, the narrative of events is not in dispute, although the complainant contests the necessity for his redundancy.

The company operates in the construction sector which was one of those on which the pandemic and the associated public health restrictions had a severe impact.

The complainant suggested that the company had sufficient reserves from previous years to retain him in employment and said that its position was healthy in mid-March 2020.

The respondent gave persuasive details of the collapse in its income in the year in question that would justify the review of overheads which it undertook. Bear in mind that the impact of the pandemic began to be felt in mid-March, so the cash flow difficulty would have arisen later.

Section 7 of the Redundancy Payments Act 1967 provides for this sort of reorganisation as a basis for a valid redundancy, where an 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.

The complainant understandably drew attention to the speed with which things moved in May between his review in the middle of the month and the decision to make him redundant two weeks later. However, this, if anything confirms the impersonality of the selection and the credibility of the respondent’s stated reasons for acting.

The complainant was in a stand-alone role and therefore issues related to an unfair selection do not arise.

I find that the redundancy was made within the criteria set out in the Redundancy Payments Act 1967 and that the dismissal was not an unfair one.

Complaint CA-00041692-001 is not well founded and the dismissal was fair.

Unfair dismissal, redundancy.