Complainant

Respondent

Parties

Rachel  Ahearne – an Administrator

Acorn Brokerage Ltd  - Insurance Brokers.

Complainant

Respondent

Representatives

 Ann Fahy , Solicitor of McInerney Solicitors

Kilfeather & Company , Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00041164-001

20/11/2020

The issue in contention was the alleged Unfair Dismissal of the Complainant by the Respondent on the allegedly spurious grounds of a false Redundancy.

The employment had commenced on the 3rd September 2019 and ended on the 31st July 2022.  The Complainant had 12 months, she stated, prior reckonable service from the 28th August 2018, to enable her to qualify for the UD Act,1977.

The rate of pay was €991.47 per month for a 20-hour week.

The Complainant gave a written statement supported by Oral Testimony. She had worked primarily as a Data Entry person on a 20 hour a week permanent contract. She was a single mother on a Social Welfare arrangement for the remaining hours of the week.

She had been made redundant on the 31st July 2020. She had been asked to stay at home, as were all other colleagues, due to Covid on the 18th March 2020 but was paid until a formal lay off on the 8th April 2020. Little communication followed. However, it was necessary for the Complainant to call to the Offices in relation to Social Welfare matters on the 18th June 2020. She met with Ms CM. The recollection of meeting was contested but the uncertain nature of her position going forward was raised by Ms.CM. The issue of whether or not Trade Stands (a means of canvassing new business at Public events) would continue was raised. 

On the 9th July 2020 Ms.CM again met the Complainant and effectively strongly pressurised the Complainant to sign a Termination Agreement. A further meeting took place on or about the 15th July where Mr.B.O’S and Ms CM again pressurised her to sign. Effectively she was harassed into signing a five-page document without Legal advice or the assistance of a colleague. The Respondent had even called to her house to get the document.  The Complainant refused to sign the Termination document. The matters were then taken up by her Solicitor.

The Complainnat alleged that she had been unfairly singled out for Redundancy, other staff members with lesser employment service and on temporary contracts were continued on. She was effectively given no advance warning that her permanent job was in jeopardy.  

No effort was made to see if other work could be found for her in the business -she was completely flexible, most conscientious and very customer focused. There had never been any complaints about her work.

 In the Oral evidence the question of whether or not she could do work other than Data Entry was discussed. The Complainant maintained that she could work as a “Telephone Dialler” and had indeed done so on occasions. No Respondent effort was made to see if this or other options were possible. Her Redundancy was pre-determined prior to the 9th July meeting and was grossly unfair.

The Respondent submitted a Written statement and gave extensive Oral testimony.

The dates cited by the Complainant were not contested.

The Complainant had been employed by the Respondent as a full time “Data Enterer” -effectively entering on the IT system the details of a contacts generated by the Respondent Trade Stands at major Shows, Race Meetings etc. The contacts would then be used by the “Telephone Diallers” to solicit new business. The Complainant was the only permanent “Data Enterer” in the Company and worked a 20-hour week.

With the COVID Pandemic in March 2020 all Trade Stands were discontinued and the Complainant was asked to stay at home. By the 8th April it was clear that Trade Stands were not likely to resume for some considerable time and the Trade Stands Manager, Mr.DD, was also laid off. In July it was decided by the Respondent to completely discontinue Trade Stands as a means of generating new business and MR.DD and the Complainant were made redundant.

The Respondent had carefully considered all other work options for the Complainant but as her skills set was limited effectively to Data Entry there were no possible realistic opportunities. Other staff had a range of Insurance Qualifications which made them more flexible across the business. Despite her statements the Complainant had never been involved in an Dialling or Customer Canvassing by Telephone.  

In discussion with the Complainant she seemed, to the Respondent, to have accepted that her position was Redundant. She could not realistically claim that the redundancy came “out of the blue” as she had been warned by Ms.CM on the 18th June of the very possible end of Trade Stands This was confirmed by the 9th July 2020 meeting.

In summary the Respondent maintained that a genuine redundancy situation had arisen from the decision to end the Trade Stands. Section 6(4)(c) of the 1977 Act refers where Redundancy is identified as a genuine or “Fair” reason for a dismissal.

As regards other staff members identified by the Complainant these staff were not Data Enterers and some had insurance qualifications. They were not comparable to the Complainant. It was accepted that the Complainant had a permanent employment contract as opposed to other staff staff on temporary contracts who were not made redundant. However, the key issue was the fact that work such as Data Entry linked to Trade Shows/Stands had ceased with little prospect of resumption. The Trade Show Manager Mr.DD, an employee of some 7 years standing had been made redundant and without Trade Shows generating contacts for data entry there was no possible work for the Complainant.

The business was in survival mode due to the Covid fallout and all measures including reductions in payroll costs had to be taken to ensure survival.

In final submissions the Respondent cited extensive case law and Redmond on Dismissal Law to support their arguments above. A main point advanced was that in a Dismissal involving a contested redundancy the entire context had to be looked at. Redundancy does not automatically equate to an Unfair Dismissal.

In this case the work had ceased, and the Redundancy was perfectly genuine if regrettable.

3:1        The Legal position.  Section 6(1) of the Unfair Dismissals Act 1977 provides that: -

• 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.

Section 6(4)(c) of the 1977 Act provides that: -

• 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 ... the redundancy of the employee...

Section 6(7) of the 1977 Act provides that: -

• Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so-
  • (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal.
  • (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.”

However, notwithstanding the above legal situation and the considerable body of supporting case law cited all cases rest on their own facts and evidence. These must be considered below. 3:2         Review of the evidence both Oral and Written presented and subject to cross examination. In a case of this nature the burden of proof rests with the Respondent to establish that the dismissal was wholly redundancy connected and must justify the selection process whereby the Complainant was selected for redundancy. Having considered the submissions made the evidence clearly pointed to the fact  the Respondent was faced with having to reduce costs. The decision to make two employees redundant, the Trade Show Manager, MR DD and the Complainant, in early 2020 was taken for economic and business reasons.  The decision on business grounds to discontinue the Trade Show business model as a means of canvassing new business was probably already under consideration but was accelerated by the severe the impact of the Covid Pandemic on the entire business sector.

Therefore, the evidence points to a genuine redundancy situation

However, in circumstances where redundancy is unavoidable, the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly. Therefore, the Adjudicator must examine why the Complainant was selected for redundancy. In Mulcahy  v  Kelly[1993] E.L.R. 35, , the EAT held that “it is well established that there is an obligation on an employer to look for an alternative to redundancy”. It held: -

• “Having heard the evidence presented the Tribunal is satisfied that a redundancy situation existed in September 1990 when the decision was made to terminate the claimant's employment. It is our opinion that the claimant's dismissal resulted wholly or mainly from reasons of redundancy. 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.”

This duty may involve locating alternative work within the organisation even it this involves dismissing another employee with shorter service. In Thomas & Beets Manufacturing Limited v Harding [1980] IRLR 255, the English EAT found the Complainant’s dismissal unfair because she could have found work as a packer even though this would have meant dismissing a recently employed packer. In its determination in Gillian Free v Oxigen Environmental UD 206/2011, the Employment Appeals Tribunal noted that

“when an employer is making an employee redundant while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy…. where there is no agreed procedure in relation to selection for redundancy…. then the employer must act fairly and reasonably”.

The provisions of Section 6(7) of the Act (as amended) in relevant part as follows: -

• (7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so—
  • (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(2) of this Act.”

In the instant case, the evidence presented points to the Respondent following an information/ consultation process with the Complainant to inform her that her role in the Company was being considered for redundancy. The exact nature of this Consultation was contested by the Complainant.  The meeting of the 18th of June with Ms. CM was clearly one where the ending of Trade Stands was very obviously flagged as a real possibility. This decision was later confirmed on the 9th of July 2020. An Ex Gratia severance offer was made to the Complainant

The almost immediate follow up with a lengthy (five close typed pages) very legal language Termination agreement did not appear to have allowed much space for the Complainant to have made any realistic input to the decision. It was clear that the Complainant, quite legitimately, found the Termination document quite intimidatory.

In all legal precedents and Codes of Practice, consultation, in a Redundancy situation has to be genuine and open to full consideration of employee suggestions. Five-page Termination documents issued days after a meeting do not really fit his requirement.

Her Solicitor – McInerney Solicitors -wrote on the 21st July and the 29th of July 2020 seeking further explanations especially as regards other staff, on temporary contracts, being retained while the Complainant on a Permanent contract was made redundant. The somewhat aggressive nature of the withdrawal of the ex gratia offer by the Respondent was probably not helpful to proceedings.

The situation was complicated by the fact that the Complainant was the only Data Enterer and was effectively part time at 20 hours a week. Her skill set appeared to be limited to the Data Entry role and without any formal Insurance qualifications her transferability to other aspects of the business was clearly limited. She did not realistically have any “Comparators”.

In Redmond on Dismissal Law (Third Edition) at Page 395 Section 17.25 the learned author Mr. Des Ryan argues that

“The WRC should adopt a balanced assessment of the overall interactions between the Parties surrounding the Redundancy process. Thus, even where the employer can be criticised for some elements of its interactions with the individual whose role is ultimately made redundant, the redundancy when looked at in its totality may not necessarily amount to an unfair dismissal”

Ryan discusses the issue at length and references key case law such as the landmark Boucher v IPC UD882/1992 and Philipps v International Health Benefits (IRL) UD331/1993. Theessence of the debate and Ryan does acknowledge that Legal precedent is varied, is how Unfair is a badly handled Redundancy where there is a substantial economic case in support.  On balance it appears that unless the Employer acts absolutely perversely and egregiously towards the Complainant the Redundancy will not be deemed an Unfair Dismissal. The economic case will carry the day.

In this overall context examination, a key factor was that the Trade Stand business was being wound up. The Trade Stand Manager, Mr.DD, was also made Redundant. In the Oral discussion and testimony, it was clear that Mr.DD effectively ran the Trade Show operation and in his absence the input of work for the Complainant had realistically ceased. In somewhat figurative language the departure of Mr.DD effectively marked the “Going out of the tide” for the work role of the Complainant.

The Respondent, in Oral testimony, referred to considerations of other work. The evidence and subject to cross examination did not point to other options. Insurance qualifications and experience were crucial factors. Some of the other temporary staff had such qualifications/experience.

However, the Respondent pointed out that in a Covid crisis the Management priority was the survival of the business. This economic imperative really limited options for the Complainant that might have been open in better times.

On overall consideration the actions of the Respondent particularly around the 9th July meeting clearly indicated a decision already made but this has to be balanced by the obvious economic imperative of Covid and the shutdown of the Trade Show operation.

3: 3          Conclusions

Having considered all the evidence and bearing in mind the legal balancing questions of the Burden of Proof in a case of this nature the overall evidence has to be that the case for an Unfair dismissal due to a flawed or bogus Redundancy has not been made.

As stated above in Redmond on Dismissal Law (3rd Edition 2017) making a genuine economic Redundancy into an Unfair Dismissal requires a high burden of proof of grievous Employer malpractice. The questionable Consultations and the five page Termination Document, issued days after the July meeting , were heavy handed but not in themselves sufficient to overweigh the basic economic arguments.

Trade Shows had ended, and the work was no longer there for the Complainant. No Unfair Dismissal took place – a genuine Redundancy existed even if quite badly handled.

Redundancy, Unfair Dismissal