ADJ-00035706

Complainant

Respondent

Parties

Vincent  Smith

Transway Trailers Limited Fleet Solutions

Representatives

Seán Costello Solicitors

 Management Support Services (Ireland) Ltd

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-00046848-001

26/10/2021

The complainant began work as a sales representative on a three-day week contract in February 2017. He remained employed on this basis. 

During 2020 the respondent business was closed due to the COVID-19 pandemic and the complainant received the wage subsidy payment during this period. In late 2020 the complainant discussed with the respondent whether he would be interested in going onto a full-time contract and it was agreed that this would come into effect in early 2021 and did so in January of that year. 

In May the complainant took leave of absence due to surgery that was not work-related. 

Following a review of the quarter one 2021 figures the company decided that there was no longer a requirement for an additional sales representative.  The decision was made to make the complainant redundant as he was the ‘last in’ of the sales representative team. 

On July 20th the complainant was invited to a formal meeting to discuss his employment and this took place on July 27th. At this meeting it was explained that while the respondent held him in high regard his role was no longer necessary, and he was being made redundant. 

It was also discussed that if alternative employment arose in the near future, he would be offered such a role. He received his final statutory notice requirement of two weeks from August 3, 2021, and statutory redundancy pay was paid in August 26 of €5988, along with other entitlements. 

No further sales representatives have been hired by the company following the complainant’s redundancy. 

The respondent says that the termination of the complainant’s employment was due to redundancy as a result of the company’s decision to carry on its business with fewer employees in accordance with the definition of redundancy set out in the Redundancy Payments Acts. 

It says that there is no specific format required to be followed in a redundancy situation as long as it retains the characteristics of a fair process. The main requirement is that a respondent act reasonably and in a fair manner, which in this case it did. 

Brian Balfe, Managing Director of the respondent gave evidence on oath for the respondent. He outlined the nature of the company’s business which was fleet maintenance and said that the complainant was recruited initially on a part-time role because he was a perfect fit for the business. 

The witness said he enjoyed a good relationship with the complainant, but that business had been poor in 2019. Then a contract which the complainant had negotiated was lost in July 2020. 

The witness was asked whether at the meeting on July 27th there had been a reference to redundancy, and he accepted that there may not have been a specific reference to redundancy but both parties knew how difficult the business situation was. 

The witness said that the complainant had walked away from the meeting, but he (the complainant) fully understood the business challenges faced by the respondent. 

In response to questions under cross-examination about when the decision was made to make the complainant redundant, the witness said that he was aware since 2020 that the business faced trading challenges, but he had hopes that things would turn around. 

He made the actual decision about redundancy in April and, although he did not tell the complainant at that stage, it was clear towards the end of the complainant’s period of working from home that no new business was coming in. 

In fact, he told the complainant as soon as he could and that was on July 27th. The delay in doing so was partly attributable to a bereavement in the complainant’s family and his own annual leave. The witness stated that while there was no reference to an RP1 being provided both parties knew what the situation was. 

This was meant to be a preliminary, informal meeting at which he would look the complainant in the eye and apologise for what he had to do but the complainant walked away from it. 

The witness said that there were no other options but accepted that he had not followed formal policies and procedures. 

The witness was asked about a number of other recruits to the company, but he said that these were not replacements for the complainant, although the roles were not offered to him. 

Laura Nicholson, the respondent’s management accountant gave evidence on affirmation. 

She stated that the five-day week was not working well with the complainant as there had been no serious increase in sales and his future was being discussed in April and May. She took advice from their trade association on what steps should be followed but accepted that while alternatives to redundancy were considered other steps in the process were to be discussed at the formal meeting. 

However, this was frustrated by the complainant’s reaction to the preliminary meeting with the complainant. 

The respondent submits that the termination was due to a redundancy and the decision not to continue its business without the post occupied by the complainant. 

It submits that there is no fixed process by which a redundancy must be processed, and the process allows for a flexible approach. While there are requirements that are indicative of a pair process there can be exceptions and the only requirement is that an employer act reasonably and fairly. 

In this case the complainant was fully award of the trading position of the respondent, it was mentioned to him at the meeting on June 25th, and every effort was made to find an alternative position.

The complainant gave evidence on affirmation. 

He had a surgical procedure on April 1st, 2021, following which it was agreed he would work from home, but he was also trying to claim social welfare. 

About four weeks later there was an issue regarding a client who would not sign a new contract this resulted in a heated discussion with the Sales Director, Mr McCann. 

A couple of days later Mr McCann took over the contract that the complainant had been working on. 

About a day later he was notified that his sick pay was going to be discontinued. He remained unable to return to work for six weeks until June 25th when he was certified fit to return to work. He notified the respondent of his intention to return on the 20th and that he would be back on the payroll from that date. 

At this point he became aware of a proposal to make him redundant. This arose in the course of a conversation with John McCann who was under the impression that the complainant had been aware of the proposal to make him redundant.

He was removed from the company WhatsApp group and on June 20th he raised the matter with the company. He was invited to a meeting on July 3rd which was delayed, and further engagement took place on July 27th which he regarded as inconclusive, but he was told of the termination of his employment on July 30th.

On August 3rd he was given formal notification of his redundancy. 

He questions whether there was a genuine redundancy and says there was not and that this is clear from the respondent on submission. He also says that there was no fair process, no documentation was provided and that he only found out about his proposed redundancy for the first time on August 3rd. 

In response to questions under cross examination he accepted that the ‘365’ project was not really growing but he had a broader role than simply that. 

He accepted that a conversation had taken place with John McCann on July 25th but the meeting on July 27th was not a redundancy meeting. 

In conclusion the complainant says that there was no engagement with him about his redundancy, no discussion of alternatives and that the termination of his employment was unfair.

As will be seen from the accounts of the parties there are a number of phases in the narrative. 

The complainant was unable to work following surgery in April 2021 and it was agreed that he would work from home. About four weeks later a problem arose when a client declined to enter into a new contract with the respondent, and for which the complainant had business responsibility. 

This was followed by that client’s contract essentially being taken over by the Sales Director of the respondent. 

Whether coincidentally or not, the complainant who had been on paid sick leave was notified that payment would be discontinued a day later. He continued to be on sick leave and then on June 25th notified the respondent of his intention to return to work on the 28th. 

This was the point at which a manager to whom the complainant spoke let it be known inadvertently that the complainant had been targeted for redundancy based on his assumption that the complainant had been told about it by Mr Brian Balfe. In fact, he had not. 

Although the respondent intended to follow up on the matter nothing happened for about a month as the complainant had a family bereavement but thereafter events moved rapidly. 

The complainant was contacted by the respondent and invited to a meeting on July 27th which, whatever plan there may have been for it, it did not go to plan. The evidence of Mr Balfe referred to above was that he arranged to meet the complainant but asked him to have an informal word before it started from which the complainant ‘walked away’. 

In his evidence Mr Balfe was unclear about whether there had been a specific reference to redundancy but felt they ‘both knew’ what the purpose of the conversation was. 

The complainant’s evidence on this was different; he says the only reference to redundancy was in the course of his call with Mr McGann on June 25th but that it did not come up in this conversation. 

The respondent says he then followed up on July 30th to ‘conclude the consultation’. The complainant says that this was the first time he was told his employment was being terminated (since his conversation with Mr McCann on June 25th, at least). 

Following this he received correspondence on August 3rd formally advising him that his employment was being terminated. 

There was a good deal of discussion in the course of the evidence about when exactly a decision was made to make the complainant redundant. Mr Balfe’s evidence was that he had been considering this for quite some time, possibly from late 2020, as trading difficulties persisted, and he finally made his mind up sometime in April 2021, but he did not tell the complainant at that stage. 

He said that July 27th was the first opportunity he had to speak to the complainant about it. Looking at the sequence of events there is some evidence for this given the complainant’s sick leave and then his family bereavement. 

The problem with that is that he did not actually speak to the complainant about it on July 27th, or at least did not do so in a recognisable form. 

Even in his own evidence, Mr Balfe accepted that ‘perhaps there had not been a specific reference to redundancy’. This was a ‘personal chat’ and that both parties knew the purpose of it and there was some vague reference to trying to find alternatives. 

The complainant is clearer. He says that while there had been references to the company’s financial problems there had been no specific reference to redundancy. 

But the fact is that this meeting was abortive and at its height, as described by the respondent, does not meet the requirements for a proper (or any) consultation that could, and did, lead to the termination of a person’s employment in very short order. 

There was some discussion about follow-up meetings but three days later, on July 30th the complainant received a brief phone call telling him that his employment was being terminated with two weeks’ notice, and this was followed up by formal written notice on August 30th. 

The respondent submitted above that there is no fixed process by which a redundancy must be managed, and that the process allows for a flexible approach. It was suggested that ‘while there are requirements that are indicative of a fair process there can be exceptions and the only requirement is that an employer act reasonably and fairly’.

The respondent made further submissions after the hearing on authorities relevant to this point and on authorities submitted by the complainant which I have fully reviewed, and I note in particular dicta from the Labour Court on this latter point that the employer need only act ‘reasonably and fairly’. 

While this is accepted, I find that whatever the outer limits of that flexibility in relation to acting ‘reasonably and fairly’ may be, the actions of the respondent in this case fell well outside them, wherever they may lie. 

Indeed, there was nothing resembling a fair, or indeed any process in this case. 

Whether or not the proposed termination falls within the criteria at Section 7(2) of the Redundancy Payments Acts 1967-2003, and it may well have done so, Section 6(7) of the 1977 Redundancy Payments Act (as inserted by section 5(g) of the 1993 Act) requires that the employer act reasonably in terminating on the grounds of redundancy. 

The obligation to conduct a fair process is of considerable significance in determining the fairness of any termination and, specifically in this case the minimum that is required is some form of properly convened and conducted meeting with the worker in question at which the proposed redundancy and the reasons for it, as well as the manner in which it is intended to be processed will be put in a clear and intelligible fashion. 

An informal, well-intentioned conversation, comprising ‘nods and winks’ at which nothing is really said, followed by a final decision within three days do not meet these, or any criteria of fairness as envisaged in the various Labour Court decisions. 

The dismissal is rendered unfair by this total lack of procedural propriety and the complaint is well-founded. 

In respect of the complainant’s losses, he submits that he was out of work between the date of his termination on August 17th, 2021, until January 24th, 2022, when he secured employment but at a reduced level of earning of some €5,000.00 per annum. His losses in the interim twenty-two-week period were stated to be €750.00 per week. 

The respondent has challenged whether the complainant’s efforts to mitigate his loss meet the requirements of both the legislation and the case law. I accept that they do not. 

I take into account, therefore, in making my award that the complainant only made five applications in the period which falls very far short of meeting that obligation to mitigate his loss. 

I therefore reduce my award by 50% and award him compensation for losses attributable to the termination of €9,500.00.

The complainant was unfairly dismissed, and I uphold the compliant. I award him €9,500.00 in compensation for the losses attributable to the dismissal, taking into account his failure to sufficiently mitigate his losses.

Unfair Dismissal, Mitigation of loss