Complainant

Respondent

Parties

Stephen Cullen

Designer Group Engineering Contractors Limited

Representatives

Orla Canavan, Hatstone Solicitors

Jean Winters, Construction Industry Federation

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-00041982-001

Withdrawn

14/01/2021

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

CA-00041983-001

14/01/2021

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

CA-00041983-002

14/01/2021

The complainant joined the respondent’s engineering contracting business on August 26th 2019.  He is a building services engineering technician and he was employed as a mechanical estimator on an annual salary of €65,000.  The complainant was laid off on March 27th 2020 when the government announced the closure of the construction sector due to the Covid-19 pandemic.  Some employees were brought back to work in June 2020, but the complainant was not brought back and on October  16th 2020, he was given four weeks’ notice of redundancy.  The complainant argues that this was not a genuine redundancy, that recruitment was ongoing when he was made redundant and that his dismissal was unfair.

The respondent is a leading global engineering contractor specialising in the design, supply and installation of utilities.  Its headquarters is in Dublin and it has regional offices in Limerick, the UK and Africa.  Approximately 1,000 people are employed and, of these, 319 work in Ireland.  The complainant was based in the head office in Dublin along with 113 others.  The remaining employees in Ireland are electricians, fitters, plumbers and site supervisors who work on client sites.

At the beginning of March 2020, the estimating department was comprised of the following:

§   One manager

§   Three mechanical estimators

§   Four electrical estimators

§   One bid coordinator

§   One estimating coordinator

All except the manger, one of the electrical estimators and the bid coordinator were laid off on March 27th 2020.  On April 17th, the most senior mechanical estimator was recalled from lay-off to work on a new tender.  On April 22nd, the complainant was informed that he would continue on lay-off indefinitely.  

In a comprehensive submission sent to the WRC in advance of the hearing, Ms Winters outlined the rationale for the redundancy of the complainant’s job as a mechanical estimator.  She said that the role was “significantly diminished” due to the cancellation or deferment of projects as a result of the Covid-19 pandemic.  Combined with this impact on the respondent’s business, in September 2020, the head of the estimating department resigned and the new head commenced a review of the department.  Ms Winters said that “there had been a view for some time that restructuring the Estimation Department was required.”  The restructuring resulted in work being done in a different manner to ensure that the company could tender for work in a highly competitive market.  The complainant’s role changed substantially, with estimation and costing comprising a smaller element and with a new requirement to follow projects from the award stage to the final handover.  This required the job-holder to perform a commercial and engineering lead role, with the need to be a qualified engineer or quantity surveyor (QS).  This complainant hadn’t got these qualifications and a business decision was made that his job was redundant.

Ms Winters outlined the process followed by the respondent that ended with the dismissal of the complainant on the ground of redundancy.  He first met with the HR director on September 28th 2020, followed by another meeting on October 13th.  Ms Winters said that the HR director could not identify an alternative role for the complainant and, on October 16th, he was informed that his employment would be terminated on November 16th.  On October 22nd, the complainant’s solicitor wrote to the HR director to appeal against the decision to dismiss him; however, on November 11th, the CFO reached the same conclusion and the appeal was unsuccessful.

The complainant was paid four weeks’ wages in lieu of notice.  His was one of three jobs made redundant in 2020.  The other two were in procurement and finance.

Legal Precedents

In support of the respondent’s position, Ms Winters referred to the following precedents:

A School Employee and A School[1]

In this decision of the WRC, the adjudication officer referred to section 7(2)(d) of the Redundancy Payments Act 1967 (“the RP Act”) and noted that the school employee was “not sufficiently qualified or trained” to do the job which needed to be done in a different manner to that in which it had been done before.

St Ledger v Frontline Distributors Ireland Limited[2]

In this case heard by the former Employment Appeals Tribunal (EAT) in 1994, the Tribunal focussed on the characteristics of impersonality and change which are features of the five definitions of redundancy in the RP Act.

Lefever v The Trustees of the Irish Wheelchair Association[3]

In considering the appellant’s suitability for a third temporary contract, the Tribunal considered the qualifications and training required for the role as more important than personal qualities.

Edward Byrne v Trackline Crane Hire Limited[4]

The respondent purchased a new crane which Mr Byrne was not qualified to operate and he was made redundant.  The Tribunal accepted that his position “no longer existed, as the greater part of his employment with the company had been driving one particular type of crane, which had to be sold.”

Component Distributors (CD Ireland) Limited v Brigid (Beatrice) Burns[5]

Here, the Labour Court held that “the Respondent was entitled to restructure its business and reduce its workforce if necessary.”  It commented however, that its right in this respect “is not unfettered” and that the right of the complainant to remain in employment must also be considered.

JVC Europe Limited v Panisi[6]

In this decision of the High Court, Mr Justice Charleton referred to the EAT case of St Ledger v Frontline Distributors Limited and remarked that alternatives to redundancy should be examined and that a fair selection procedure may indicate an honest approach to redundancy.

Summarising the case law, Ms Winters said that an employer has a right to restructure their business in accordance with section 7(2)(d) of the RP Act, which provides that an employee may be dismissed on the grounds of redundancy when their employer decides that they work that they were employed to do should be done in a different way by someone with different qualifications.  She said that, in the case of the complainant, there was a “significant qualitative change in the requirements of the role and impersonality as required by section 7(2)(d) of the Redundancy Payments Act 1967.”  She said that the respondent consulted with the complainant and explored alternatives to redundancy, but that no alternatives were available.

Summarising the respondent’s position, Ms Winters said that this was a fair redundancy, resulting from a fair procedure consisting of two meetings and the opportunity for the complainant to appeal against the decision to make his job redundant.

Ms Winters asked me to consider the six cases which she referred to in connection with redundancy, all of which focus on the fact that a redundancy must be based on the two criteria of impersonality and change.  She submitted that the respondent’s company was going through substantial change and the decision to make the complainant’s job redundant was based on a business need.

Ms Winters said that the complainant passed his probation and that there were no performance issues associated with the decision to terminate his employment.

Evidence of the Head of the Estimating Department

The Head of the Estimating Department (“HOE) said that he worked in the company for six years before he was appointed to the role in September 2020.  He said that the department was disjointed, and that a prolonged handover from the estimating section to operations did not help in the start-up phase of new projects.

The complainant was employed as a mechanical estimator.  He was laid off in March 2020.  The previous HOE resigned and this provided an opportunity to review the operation of the department.  The HOE said that he established a new team that would be cyclical between a combined team of mechanical and electrical estimators.  He said that the senior mechanical and electrical estimators have experience of engineering.  The teams now comprise the following roles:

§    Head of estimating

§    A senior mechanical estimator

§    A senior electrical estimator

§    A mechanical estimator

§    An electrical estimator

§    A junior mechanical estimator

§    A junior electrical estimator

Responding to questions from Ms Winters, the HOE said that qualifications were essential for each of the roles.  He said that the team is now more flexible. 

Ms Winters asked the HOE why the complainant wasn’t recalled from lay-off after March 2020 and he said that this was because of the reduced workload and a slowdown in business.

Cross-examining of the Head of Estimating

Ms Canavan asked the HOE about the qualifications of a mechanical estimator who joined the company in February 2021.  The HOE said that this new recruit had a level 8 qualification.  He said that the senior mechanical estimator is a qualified QS.  The senior mechanical estimator did his own job and the job of the mechanical estimator between September 2020 and February 2021, when the new person joined the company.

Ms Canavan asked the HOE about the difference between the job that the complainant did and the job of the new mechanical estimator.  He said that the new role is client-facing, that the person is capable of using specific software and that he deputises for him.  He said that he is able to manage his own workload and that he is self-sufficient in this regard.

Ms Canavan asked if the complainant could have been trained to do this job and the HOE said that the expertise comes with experience and confidence.

The HOE said that he made a proposal to senior management about how the structure of the department should be changed.  This was communicated to the complainant at a meeting on September 28th 2020.  Ms Canavan asked for evidence regarding how the decision was arrived at to make the complainant’s job redundant.  She said that it was important to establish the objective criteria and the impersonality of the decision.  For the respondent, Ms Winters said that the HOE has provided an explanation of the need to restructure the Estimating Department.

Evidence of the Director of Human Resources

In her direct evidence, the director of HR said that, between the meeting on September 28th and October 13th, she investigated the open roles in the company.  On October 8th 2020, the HR director said that she asked the complainant if he wanted to discuss any of the vacancies.  She said that their subsidiary business had a freeze on recruitment, but that they were recruiting again in November 2020 and that the HR manager there contacted her to discuss the roles that were available.

In response to questions from me, the HR director said that they employ people with the same qualifications as the complainant, a level 6 building services qualification.  She said that people in these roles are generally matched with a site manager if they have hands-on site experience.  She said that they now require mechanical estimators to be qualified as engineers or QSs.

Ms Canavan pointed to the fact that the complainant also has a level 7 qualification in data analytics and she asked why he couldn’t be trained to do a job with the company.

Evidence of the Chief Financial Officer

The CFO said that from the start of the pandemic in March 2020, the company reviewed on a weekly basis who was required to keep the business going.  In April 2020, he said that the company had an income of €3m, instead of a forecasted €8m, and this was followed in May with an income of €1.5m instead of a predicted €9m.  This downturn continued in the following months and employees who returned to work were subject to a reduction in wages of between 5% and 15%.

Additional Submission on Behalf of the Respondent

On August 12th 2021, Ms Winters submitted further correspondence concerning the respondent’s case.  She included an email from the HOE dated September 29th 2020, setting out his proposal to restructure the Estimation Department.  In this document, the HOE confirmed his intention to have in place a senior estimator with a high level of experience, an intermediate estimator, qualified as an engineer or a QS and a junior, who would be a newly qualified engineer or a QS.  Ms Winters’ correspondence also included the curriculum vitae of the person recruited in February 2021 for the intermediate role, who is an engineer and a QS.  The final document submitted by Ms Winters on August 12th are the minutes of a meeting with the HOE, the CFO and another director, at which the status of current tendering projects were discussed.   

The events leading to the complainant’s dismissal were set out in the submission provided by Ms Canavan to the WRC in advance of the hearing and are not in conflict with the facts presented by the respondent.

Ms Canavan said that although a significant number of employees returned to work in June 2020, the complainant never returned from the lay-off which commenced on March 27th 2020.  When he asked why he wasn’t brought back to work, he was informed by the HR director that each department manager determined the roles that were needed and brought staff back on that basis.

At the first consultation meeting on September 28th, the complainant was informed that the department was being restructured and that a level 8 qualification would be required for his job.  As he hadn’t got this qualification, his role was at risk of redundancy.  The complainant referred to roles that were advertised online at the time and asked if he would be redeployed. 

At a meeting on October 13th, the complainant was informed that his skills and qualifications did not meet the requirements of the job.  On October 16th, the HR director confirmed that his job was redundant.

The respondent did not provide any documentation to support its case that the redundancy of the complainant’s job was due to a departmental restructure.  No selection criteria were presented.  The respondent provided a list of vacancies, a “cross functional team visual” and a revised job specification.  There is no evidence that the respondent made a genuine attempt to consider alternatives to redundancy.

Ms Canavan submitted that the complainant’s position is that the redundancy of his role was selective.  The HR director confirmed that each department head decided who to bring back in May 2020.  She claims that this indicates that the complainant’s redundancy was selective.

For the complainant, Ms Canavan said that she disputes the genuineness of the consultation process.  With regard to the consideration of alternatives to redundancy, she referred to the decision of my colleague adjudicator, Maria Kelly, in A Production Line Lead v an Employer[7].  Here, Ms Kelly found that no proper consideration was given to the possibility that the complainant could have been suitable for an alternative role and she decided that his dismissal on the ground of redundancy was unfair. 

After the complainant was dismissed, he applied for a role in a subsidiary of the respondent’s business and he was interviewed in January 2021, but was not offered the job.

Summarising the complainant’s position, Ms Canavan said that, in its decision to make the complainant’s role redundant, the respondent was obliged to follow a fair procedure.  She argued that there are no objective criteria that show that the selection was not based on the complainant alone.  It appears that there was no intention of bringing him back to work after lay-off, and the decision to restructure the Estimating Department resulted in the elimination of his job.

Ms Canavan referred to the decision of my colleague, Pat Brady, in A Sales Director v An IT Consultant[8] which mirror the predicament of this complainant, where the pool of candidates for redundancy consisted of just one employee.  Ms Canavan said that there is no documentary evidence that any alternative to the redundancy of the complainant’s job was considered and she submitted that it is not credible that another role could not have been identified for which he might have been suitable.

Legal Precedents

Ms Canavan referred to the following case law in support of her case that the dismissal of the complainant on the ground of redundancy was unfair:

Students Union Commercial Services Limited v Alan Traynor[9]

In this decision of the Labour Court, it was held that,

“In circumstances where redundancy is unavoidable, the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly.”

Ms Canavan also referred to the St Leger v Frontline Distributors decision which was quoted by Ms Winters in respect of the requirement of the decision to be based on the twin criteria of impersonality and change.

A Sales Director v An IT Company[10]

Finding in favour of the complainant in this decision of April 2021, the adjudicator, Pat Brady, stated that, where an individual who is in a standalone position and in “a pool of one” in their role,

“It is necessary to show that there is something very specific about the skillset of the person holding the position that renders her unsuitable for other positions, and something equally specific about the requirements of the position.”

Bunyan v United Dominion Trust[11]

In this decision of the former EAT almost 40 years ago, the Tribunal held that the fairness of a decision to dismiss an employee is to be judged by the objective standard of how a reasonable employer in a particular industry would behave. 

Evidence of the Complainant

In his evidence, the complainant said that he looked at the jobs that were available before he was dismissed.  He said that there were seven or eight vacancies and he asked, “why not bring me in and try me out?”  He said that he could have done a job if he had been given the opportunity. 

The complainant said that he was on lay-off from March 2020, knowing that everyone else was back at work.  He said it was “baffling” why he was left on lay-off when work was available.  Around the end of August or early September, he said that he phoned his department head to find that he had left.

Cross-examining of the Complainant

For the respondent, Ms Winters referred to the fact that by September 2020, 20% of the employees who had been laid off in March had not returned to work.  However, the complainant said that everyone in his department had returned.  He said that there was plenty of work to be done, and that the senior mechanical estimator was doing all the work.  He said that he phoned his department  head during the summer, but he couldn’t get an explanation for why he wasn’t back at work.  He said that he was in the middle of a project when he was told to stop work.

Ms Winters asked the complainant why he didn’t suggest an alternative role for himself, rather than redundancy.  He agreed that he didn’t put forward any alternatives.  When he was asked about the offer of an outplacement service provided by the respondent at the time of his dismissal, the complainant said that he forgot about the offer.  Following the termination of his employment, he said that he applied for dozens of jobs in construction and related industries.  He started working again on May 10th 2021, on a salary of €48,000.

Response to the Submission of August 12th 2021

On August 13th, on behalf of the complainant, Ms Canavan submitted a response to the additional correspondence sent by Ms Winters after the hearing.  She noted that this correspondence contained no reference to a requirement to implement redundancies in the Estimating Department, nor has a written record been provided of the decision to make the complainant’s job redundant.  She also argued that evidence was not provided that the respondents used a fair and objective process to select the complainant for redundancy. 

In her letter, Ms Canavan referred to the minutes of the meeting of October 5th 2020 with the HOE, the CFO and another director, which, she said, indicate that a recruitment drive was in progress while the complainant was laid off.

The Relevant Law

As this complaint of unfair dismissal is grounded on an allegation of unfair selection for redundancy, the relevant legislation is the Unfair Dismissals Acts 1977 - 2015 and the Redundancy Payments Acts 1967 - 2014.

The Unfair Dismissals Acts 1977 - 2015

Section 6(1) of the Unfair Dismissals Acts (“the UD Act”) 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 provide evidence of the “substantial ground justifying the dismissal” of the complainant.  Their case is that, when the Estimation Department was restructured in October 2020, the job of mechanical estimator needed to be done differently by someone who could also do other work and who was more qualified than the complainant. 

Section 6(3) of the UD Act provides that a dismissal will be unfair where an employer acts unfairly in the selection of an employee for redundancy or, where an agreed procedure for implementing redundancies is not followed:

“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.”

“Subsection (2)” referred to here is subsection 6(2) which addresses the termination of employment for reasons related to trade union membership, religious or political opinions or for having made a protected disclosure and other matters that are not relevant to the complainant in this case.

In the case under consideration, “the circumstances constituting the redundancy” was the restructuring of the Estimation Department to facilitate “a more integrated and cross-functional approach” and to achieve greater efficiency in the use of resources so that the business could be more competitive in its tendering activities.   

Section 6(4) of the UD Act recognises the right of an employer to dismiss an employee due to redundancy: 

 “…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

(c) the redundancy of the employee.”

Subsections (a), (b) and (d) of this section are not relevant to this complaint.

We know from section 6(3) that this right is predicated on an obligation to select employees for redundancy on the basis of fairness, and to adhere to an agreed procedure or a code of practice regarding dismissals.  Section 6(7) expands further on the issue of reasonableness and provides that, in considering a complaint of unfair dismissal, I 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 

“(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.”

In the case of this former employee, he was not a member of a trade union and no evidence was submitted regarding an agreed procedure for how redundancies were to be implemented.  In the absence of an agreed procedure, the respondent was required to ensure that the fair procedures that apply in the case of any dismissal were afforded to the complainant.  These include the right to notice, the right to be represented at meetings and the right of the employee to respond to the employer’s decision to make his job redundant. 

The Redundancy Payments Acts 1967 - 2014

The starting point for a consideration of the respondent’s position is the definition of redundancy at section 7 of the Redundancy Payments Acts (“the RP Act”).  Section 7(2) sets out five definitions of redundancy and, for our purpose here, we need to concern ourselves only with subsection (d):

“…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—  

(d) the fact that his employer has decided that the work for which the employee had 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[.]”

Considering the explanation given by the HOE that he decided to restructure the Estimation Department, to establish two cyclical teams and to improve the flow of work between the Estimation Department and the team that goes onto a site at the start of a project, it would appear that the dismissal of the complainant falls within the definition of redundancy set out at section 7(2)(d) above.  I will explore this further later.

Was the Complainant’s Job Redundant?

Every organisation must operate efficiently and make the best use of its human, material and financial resources.  Change and restructuring are part and parcel of the evolution of business, and no company can be criticised for making efforts to be more efficient and ultimately, more profitable.  Similarly, there can be no criticism of a manager who, observing sluggish or ineffective structures, takes on the task of getting the job done better.  In the case we are considering here, the Head of the Estimation Department observed that there was a requirement to bridge the gap between the tendering process and the start-up of work on client sites.  There was a need for the mechanical and electrical estimators – at least at the senior and intermediate level – to have more client-facing experience and to be qualified as quantity surveyors or engineers.  It is apparent therefore, that the company wanted someone more qualified to do the job of the intermediate level mechanical estimator and to be more capable of engaging professionally as an engineer or a QS on construction sites.  The complainant had a level six qualification as a building services technician and a level 7 degree in data analytics, and a decision was made that he was not suitably qualified for a job in the new structure. 

Findings

By deciding that, from October 2020 onwards, the complainant’s job would have to be done by someone more qualified than him, it would appear that his dismissal falls squarely within the definition of redundancy at section 7(2)(d) of the RP Act.  Because redundancy is generally associated with a reduction in the numbers employed, there are relatively few precedents where a redundancy based solely on lack of qualifications has been considered.  “Redmond on Dismissal Law” by Dr Desmond Ryan[12] at paragraph 15.43, notes that the case of Ryder and Byrne v The Commissioners of Irish Lights[13] was the first case under the UD Act to be appealed to the High Court.  Mssrs Ryder and Byrne were given a certain amount of time to gain new qualifications and when they failed to do so, they were dismissed.  Mr Justice Costello found that their dismissals were not unfair.  On the other hand, in 1996, the EAT, in its determination in Coyle v Dun Laoghaire VEC[14], found that Mr Coyle had not been given adequate time to get new qualifications, and his dismissal was found to be unfair.  In Peter Stellini v Quarry & Mining Equipment Ltd,[15] Mr Stellini was made redundant because he wasn’t a qualified fitter.  The Tribunal found that his dismissal was unfair and that he was not unfit to carry out the work associated with a new contract which his employer had taken on. 

These authorities point to the possibility that it may not be unfair to select someone for redundancy based on their lack of qualifications or their failure to obtain qualifications but they also show that, depending on the facts and circumstances, such a dismissal may be unfair.

As a starting point, I accept that the respondent was entitled to change the way of working in the Estimation Department by requiring the mechanical estimator to be a qualified engineer or QS.  I base this finding on the fact that, for some employers, it may be reasonable to change the qualifications required for a job and to remove the incumbent, while another employer would find a different way to address the skills deficit.  I accept that, by September 2020, the job that the complainant was recruited for in August 2019 had become a different job for which he wasn’t qualified, and that the job he was recruited for was redundant.  While this scenario meets the definition of redundancy at section 7(2)(d) of the RP Act, the precedents show that certain other facts must be considered to determine if his dismissal was reasonable.  My task now is to consider the fairness of the employer’s decision to dismiss the complainant, based on all the circumstances that prevailed at the time.

Ms Winters referred to the seminal case of JVC Europe Limited v Panisi in which Mr Justice Charleton noted the findings of St Ledger v Frontline Distributors Limited (both cases cited on page 4) and the criteria of impersonality and change which determine the validity of redundancy.  The circumstances of Panisi bear no resemblance to what occurred in the case we are considering.  St Ledger has some similarities, as the claimant there was made redundant for a combination of reasons associated with qualifications and the assertion that another employee could do St Ledger’s job as well as  his own.  In both cases, the dismissals were found to be unfair.

Considering the “impersonality and change” criteria; on the face of things, it would appear that the complainant was made redundant for no reason other than a requirement for a person in his job to be more qualified than him.  While this fits with the definition of redundancy, it is my view that it may not have been necessary to dismiss him and, considering the principles of reasonableness evoked in Bunyan (page 9), another employer in the same industry may have reached a different conclusion.

The complainant has a building qualification and he was employed in a construction company employing more than 300 people in Ireland and up to 1,000 abroad.  The HR director gave evidence that there were others in the company with the same level 6 building services qualification, so it is apparent that his skills were relevant.  However, no consideration was given to re-deploying him to a different job, where his skills could have been useful.  In a company of the size and calibre of the respondent’s, I find it difficult to understand why this did not happen, and it seems to me that the reason must have been personal and subjective, rather than a need to reduce the workforce by one.

In October 2020, the respondent was not seeking to reduce its workforce and, at that time, there were seven or eight vacancies.  The HR Director concluded that the complainant wasn’t suitable for any of these jobs; however, I find myself asking the question that he asked in his own evidence, why didn’t they try him out?  He may or may not have proved suitable for a different role, but it is my view that, as a person with a qualification and experience in construction, working in a construction-related company, it was incumbent on the employer to offer him a chance to try out an alternative job.  Even if, in October 2020, there was no exact match for his skills, the company was busy at that time and a job could have been found for him on a temporary basis until something more suitable emerged. 

The complainant was recruited in August 2019 and offered a job on a salary of €65,000.  This offer was based on the respondent’s assessment of his skills and experience at the time.  He passed his probation and no evidence was submitted to indicate that there were problems with his performance, or any other problem that would make him unsuitable for employment.  The minutes of the management meeting of October 5th 2020 show that the company was working on nine projects, some with multinational clients, and there were three upcoming tenders.  While I accept Ms Winters’ submission that the complainant’s role was significantly reduced from March 2020 due to Covid restrictions, it is evident from these minutes that there was a lot of work underway when he was made redundant in October.  This level of work indicates to me that that some position could have been identified where the complainant could have made a contribution, even at a more junior level and on a lower salary than the job he was recruited for.

In his evidence at the hearing, the HOE said that, apart from qualifications, experience and confidence are needed to do the job of mechanical estimator as it is envisaged in the new structure.  I would add that the same could be said for most jobs; confidence is gained through experience.  The complainant has two qualifications, that of building services technician and data analytics.  Having considered the respondent’s evidence, I find that no constructive effort was made to identify a job which the complainant could have done competently, with some training and experience. 

Between October 2020 and early 2021, the respondent implemented only three redundancies.  The complainant’s job was the only building-related job eliminated, leading me to conclude that everyone else was fully occupied.

The minutes of the management meeting of October 5th 2020 show that a recruitment drive was ongoing for a senior mechanical estimator and a senior electrical estimator.  From the documents submitted by the respondent after the hearing, I understand that a mechanical estimator was recruited in February 2021 and that this person was more qualified than the complainant.  A question arises regarding why the complainant couldn’t have been retained in the company until the new person was ready to start in the job.  In the four months between October 2020 and February 2021, a more suitable role might have emerged due to a resignation or a new project, and the complainant could have been directed to a possible alternative job rather than being dismissed.

All of this leads me to conclude that the complainant was selected for redundancy for reasons which were not divulged at the hearing.  It is my view that his dismissal on the grounds of redundancy was unreasonable in the circumstances in which he was a construction worker employed in a construction company with significant business on its books.

Consideration of the Case Law

I wish to examine some of the important precedents from the case law submitted by both sides.

It is clear from the decision of the Labour Court in the case of Brigid Burns and Component Distributors (referred to on page 4) that, while an employer “is entitled to restructure its business and reduce its workforce if necessary,” this right is “not unfettered” and is balanced against the requirement to act reasonably in relation to the job-holder.  The respondent recruited the complainant in August 2019 and a year later, made a decision that his qualifications were no longer suitable.  While the Labour Court found that Brigid Burns’ dismissal was not unfair, her employer offered her two alternative jobs which she rejected.  It is my view that, when the respondent made the decision to change the parameters of the job for which the complainant was recruited, he should have been offered an alternative option.

In Lefever v the Trustees of the Irish Wheelchair Association (page 4), the claimant was a supervisor on a community employment scheme who was dismissed when her employer decided that she was not qualified for her job when her contract came up for renewal for a third time.  In an examination of whether the changes in Ms Lefever’s job was qualitative or if there was more work to be done, the Tribunal remarked,

“It is also important that qualifications or training be the deciding factor rather than personal qualities.”

The Tribunal determined that Ms Lefever’s dismissal was unfair and that the appointment of the person who replaced her was based on personal qualities and not qualifications.  In the case we are considering here, I accept that the complainant was not qualified to do the changed job that the respondent decided needed to be done.  Having made this obviously “devastating”[16] decision, the reasonable next step was to identify a different role that matched the qualifications that he had.

The Labour Court Decision concerning the Students Union Commercial Services Limited and Alan Traynor (page 8) was referred to by Ms Canavan and is an important precedent concerning the obligation of an employer to consider an alternative to redundancy.  Mr Traynor was a chef and he worked in a bar on a college campus.  Accepting that the redundancy of his role was necessary, the Labour Court found that, even in the context of financial losses, the respondent had a duty to identify a role for him in one of its other business units.  Finding that his dismissal was unfair, the Court referred to the 1993 decision of Mulcahy v Kelly,[17] where it was held that:

“Notwithstanding that the claimant's selection for redundancy was not in contravention of a procedure or an established custom and practice of the employment relating to redundancy, there is an obligation on an employer to look at all employees as possible candidates for redundancy.”

The Court stated that this means finding alternative work in the organisation, even if this means dismissing another employee with shorter service.  In the context of the complaint under consideration, in circumstances where recruitment was ongoing, rather than dismissing the complainant (or any other worker), some ingenuity could have been applied to identifying a role where he could have been productive. 

Was the Process Fair?

The process that ended with the complainant’s dismissal started with a consultation meeting on September 28th 2020 and ended on November 11th when the company refused to uphold his appeal.  From the perspective of communication, representation, notice, the right of reply and the right of appeal, all the components of fairness were present and the procedure followed an accepted sequence.  I note with caution however, the comments of Mr Justice Charleton in the Panisi case:

“Following what is on the surface a fair procedure does not necessarily demonstrate that the decision maker is taking an honest approach to a decision.”

Entirely absent from the process was a constructive engagement with the complainant and an exploration of ways to avoid his dismissal and this was unfair.  While a number of job opportunities were presented to him which the company was recruiting for, the complainant was not qualified to do any of those jobs.  In response to cross-examining, the complainant agreed that he didn’t suggest any alternatives.  It is my view that, as the party with the power to make decisions about the allocation of work, the responsibility for identifying an alternative to redundancy lies with the employer. 

Conclusion

Having considered all of the evidence presented and, having examined the case law, I find that, in contravention of section 6(7)(a) of the UD Act, the respondent failed to act reasonably by identifying an alternative role for the complainant to consider and to try out, in circumstances in which others with similar qualifications were employed in the company, and there was work to be done.  I find that the decision to dismiss him on the ground of redundancy was unfair.

I have decided that this complaint is well founded.  Of the redress options available, the complainant selected compensation.  No evidence was submitted that he made any contribution to his dismissal and, in terms of mitigation of his losses, he said that he started a new job in May 2021.  He was therefore unemployed for six months.  His salary in his new role is €48,000, compared to €65,000 which he earned with the respondent.

The CFO’s evidence was that employees were subject to a reduction of between 5% and 15% of wages when they returned to work after being laid off and the I have therefore calculated the amount to be awarded in compensation on the basis of a revised salary of €58,500, a 10% reduction on €65,000.  I have based my award on an assumption that, if he had remained in employment, his wages would have reverted to €65,000 in June 2021.  Deciding on the amount to be awarded, I have also taken account of the complainant’s short service with the respondent.

I decide that the respondent is to pay the complainant €46,250 in compensation.  I have based this amount on the complainant’s possible gross earnings with the respondent for six months (€29,250), plus the difference between €65,000 and €48,000 for 12 months (€17,000).  As this compensation is in the form of loss of earnings, it is subject to the normal statutory deductions.

On March 27th 2020, the complainant was placed on lay-off as a result of the restrictions imposed by the government at the start of the Corona virus pandemic.  It appears that some employees in his department were not laid off, others returned in April 2020 and the headquarters re-opened on May 18th.  By June, all his colleagues were back at work.  The complainant said that he was in the middle of a project when he was laid off.  He said that it was “baffling why I was left on lay-off” when there was work to be done.  He said that his senior colleague was doing all the work.  He said that he phoned his manager during the summer to ask about coming back to work but he was given no explanation about why he wasn’t back.  At the end of the summer, when he phoned again, he discovered that his manager had retired.

In her submission, Ms Canavan referred to the section 5(6) of the Payment of Wages Act which provides that an employer must not deduct wages that are “properly payable” to an employee.  She said that the non-payment of the complainant’s wages was not authorised by any statute or by any clause in his contract of employment.

Referring to the decision of the employer not to apply for the temporary wage subsidy scheme, Ms Canavan said that the specific intention of this scheme was to support employers to pay the wages of their employees during the difficult trading period of the pandemic.  She said that it does not seem credible that the employer did not avail of this scheme when they could have done so.

Ms Canavan referred to a number of precedents to support the complainant’s case that the deduction of his wages while he was on lay-off was illegal:

An Area Sales Manager v An Engineering Company[18]

Issued on January 14th 2021, my colleague, Mr Shay Henry decided that the deduction of the complainant’s wages for six days due to the Covid-19 pandemic was illegal.

Lawe v Irish Country Meats (Pig Meats) Limited[19]

In this case, the Circuit Court found that an employer may be entitled to lay-off an employee without pay in limited circumstances which may be established through custom or general usage, there was no general right to lay-off an employee from work without pay.

Petkevicius v Goode Concrete Limited[20]

In this appeal to the High Court regarding the entitlement of his employer to lay him off work without pay, it was held that the EAT had not erred when it concluded that,

“There was no general right to lay-off with pay. Lay-off without pay could occur where it was established that that was the custom and practice in the relevant trade.”

Ms Canavan argued that the respondent should not be allowed to rely on this precedent, because they re-opened their offices on May 18th 2020 and continued recruiting during the period that the complainant was laid off.  She also referred to the fact that Goode Concrete went into receivership and was in financial difficulties at the time that Mr Petkevicius was placed on lay-off.

In his evidence at the hearing, the HOE said that the complainant wasn’t brought back from lay-off because of a “slow-down in business across the board.”  He said that the company stopped working on tenders because of feedback from the construction industry that work was being cancelled.  He said that around 300 employees were laid off and that just under 60 were retained as a skeleton crew. 

Ms Winters said that all work stopped in March 2020.  She referred to a communication to employees from the managing director on April 30th 2020, in which he said that he didn’t expect that there wouldn’t be an immediate “V shaped” return to normal business.  By September 2020 however, 80% of the respondent’s employees had returned to work, although everyone in the Estimation Department had returned by that stage.

Referring to the financial impact of the Covid shut-down, the CFO said that, every week they reviewed who was required to keep the business going.  He said that they had to maintain a tight control on cash and that, when people came back to work, their wages were reduced by between 5% and 15%.

Ms Winters said that, as a construction-related business, the company is subject to boom and bust cycles and that lay-off is a common practice.  In support of this position, she cited the High Court decision in Petkevicius.  She also referred to the following case:

Zymslony v Platt and Reilly Drywall Limited[21]

Despite there being no reference to lay-off in the claimant’s contract of employment, the Tribunal followed the decision of the Rights Commissioner in this case and decided that Mr Zymslony had not established that he should be paid for the time he was on temporary lay-off.

The Relevant Law

The concept of lay-off is defined at section 11 of the Redundancy Payments Act 1967:

“(1)  Where an employee’s employment ceases by reason of his employer’s being unable to provide the work for which the employee was employed to do, and -

“(a)  it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and

“(b)  the employer gives notice to that effect to the employee prior to the cessation,

“that cessation of employment shall be regarded for the purposes of this Act as lay-off.”

I am satisfied that, even in the absence of an agreed provision in a contract of employment, where the reasons are genuine and related to the unavailability of work, it is legally permissible to place an employee on lay-off. 

The question of whether wages are payable in these circumstances is addressed at section 5(6) of the Payment of Wages Act 1991:

“Where –

“(a)  the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefore that fall to be made and are in accordance with this Act), or

“(b)  none of the wages that are properly payable to an employee by an employer on any occasion (after making any deductions as aforesaid) are paid to the employee,

“then, except insofar as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on that occasion.”

Findings

I accept the respondent’s rationale for laying staff off in March 2020 when the construction sector was closed due to Covid-19 restrictions.  I have some concern however, about the fact that the complainant was left on lay-off while the majority of employees were back at work from June 2020.  By late that summer, it is apparent that the all the members of the complainant’s department were back in their offices and that the senior mechanical estimator was doing more work than he normally did.  In her evidence, the HR director said that each department head brought back employees as they were needed, but she provided no satisfactory explanation about why the complainant was the only employee in his department who remained on lay-off until his employment was terminated in October 2020.

The subject of lay-off was addressed by the Labour Court in the case of William P Keeling & Sons Unlimited Company and Barbara Ciszewska[22].  The Court noted that Ms Ciszewska’s complaint was under the Payment of Wages Act and the issue for consideration was not the fairness or otherwise of the decision to lay her off, but whether there had been an illegal deduction from her wages.  In the absence of any proper explanation regarding why he remained laid off from work from June until October 2020, I find that this treatment of the complainant was unfair.  As this is a complaint under the Payment of Wages Act, as in Ciszewska, I must leave that aside and consider the complaint that the failure to pay him his wages during this period was an illegal deduction in contravention of section 5(6) of that Act.

Considering Ms Ciszewska’s claim, the Labour Court concluded that,

“There is no provision in the Payment of Wages Act that requires that wages be paid in periods of lay-off.”

Ms Ciszewska was a fruit picker and I note that her contract provided for the possibility that she may be laid off if there was no work in that seasonally-impacted business.  The case cited by Ms Canavan for the complainant, An Area Sales Manager v An Engineering Company (page 17) was predicated on the fact that, when the sales manager joined the company, his employer agreed to remove a provision in his contract that provided for lay-off and short-time.  The statutory entitlement of an employer to lay off an employee when there is no work is provided for at section 11 of the Redundancy Payments Act.  It is clear from the case law that there is no provision for the payment of wages during periods of lay-off.  I am satisfied that absence of a contractual provision for lay-off does not make it illegal not to pay the complainant when he was laid off.

Conclusion

It is my view that it was unfair to keep the complainant on lay-off when his colleagues returned to work from June 2020 onwards.  Having considered the respondent’s actions with respect to this former employee, I find that the failure to bring him back from lay-off was a pre-curser to the decision to dismiss him on the ground of redundancy, and I have made an award of compensation regarding that matter.

Returning to this complaint under the Payment of Wages Act, I have reviewed the case law and, it is clear to me that, during a period of lay-off, when an employee does no work for his or her employer, wages are not “properly payable,” and the failure to pay wages is not an illegal deduction.

I have decided that this complaint under the Payment of Wages Act is not well founded.

Lay-off, payment of wages, illegal deduction, redundancy, dismissal