ADJ-00030122

Complainant

Respondent

Parties

Terence  Farquharson

A.R.B Underwriting Limited

Complainant

Respondent

Anonymised Parties

Employee

Employer

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-00040140-001

28/09/2020

The Complainant is seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 and has submitted that he was unfairly selected for redundancy (CA-00038987-001)

The Complainant commenced employment with the Respondent on the 20th November 2017. The Complainant was employed as a pre litigation claims manager and his gross pay was €2,708.33 per month (€2,267.89 net) for 36.5 hours worked per week.

Whilst in the course of his employment, the Complainant was informed by the Managing Director on the 10th March 2020 that due to the Respondent companies current situation with the los of business and the lack of new contracts his position was being made redundant and he was entitled to a four week notice period and his employment would cease on the 6th April 2020.

The Complainant was informed that he would receive a monetary payment along with references from both the Managing Director and his manager. Further, he was informed that once the company was in a better situation they would reinstate him to his former position.

The Complainant received a letter, dated the 10th March 2020, on the 13th March 2020 which was a formal notice of dismissal due to redundancy. This letter informed him that he was entitled to a notice period, a statutory redundancy payment and the right to appeal said decision within ten days of notice of redundancy.

The Complainant submitted that the appeals process was virtually impossible to undertake as it needed to be appealed to a different director who was currently not in the jurisdiction and had not been present in the office for several months.

In the course of his notice period, the Complainant was informed by a senior colleague that the Respondent Company had conducted a redundancy process in 2017. However, this process involved all staff being informed how the process would be conducted. The Complainant submitted that he found this redundancy process distressing as it appeared to be personal in nature and there was no due process. The Complainant’s colleagues were unaware that there was any redundancy process in place or that he had been made redundant.

The Complainant submitted that he believed there had been an improvement in the Respondents contract situation but he had not received any proposals in regard to reinstatement or reengagement. 

The Complainant took up alternative employment on or about the 8th June 2020.

This complaint was received by the Workplace Relations Commission on the 31st July 2020.

The Respondent accepts the background facts and timeline in relation to the Complainant’s employment.

The Respondent Company is an insurance intermediary (broker) which acts a wholesale broker to other retail brokers in the Irish market. In or about February 2020 the company consisted of 19 employees and they were divided into claims, finance, IT and underwriting apartments.

Between 2019 and 2020 the Respondent company lost a number of significant contracts and despite strenuous efforts to find a replacement market the Respondent submitted they were forced to take corrective action and to reduce its cost base and this would necessitate making employees redundant across all the various departments.

Accordingly, the Respondent submitted a detailed matrix was created identifying the expertise, role and experience of all staff. This was then scored and/or weighted in order to inform the Respondent Company decision and determine its process of selection. The Respondent submitted that due to the small number of employees there was a lack of flexibility afforded in order to ensure the correct skills sets were retained and therefore there was no option to consult with staff. In that regard, the Managing Director confirmed in the course of the hearing of this matter that there “couldn’t be a consultation process.” 

Further, in the course of the hearing of this matter, the Managing Director confirmed there had been a redundancy process in 2017 where there was a consultation process but it was a very different situation to this current process due to, amongst other matters, the pandemic.

Ultimately, the Respondent submitted that a number of employees were selected for redundancy and the Complainant was informed by the Managing Director that his position was being made redundant.

The Respondent submitted the Complainant worked out his notice period without any apparent concern or availing of the appeal process. Following the Complainant being made redundant, the Respondent Company received confirmation they had secured a replacement market for some of their products and submitted they would consider re-employing the Complainant if he so desired..

It is the Respondents position that the Complainant was not unfairly selected for redundancy in the circumstances of this matter.

I have carefully listened to the evidence tendered and submissions made in the course of this hearing by both parties.

The Complainant submitted that he was unfairly selected for redundancy where no genuine redundancy situation existed.

The statutory definition of redundancy is located in the Redundancy Payments Act 1967, Section 7 (2) as amended which provides that:

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—

a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or 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, or

(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, or

(e) 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 by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained

The lawful reasons for dismissal are set out in Section 6 (4) of the Unfair Dismissals Act 1977 which provides:

“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 one or more of the following:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.”

Under Section 6(3) of the 1977 Act there may be a finding of unfair selection for redundancy where an employee is dismissed but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have 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.” 

Further, an onus is placed on the employer by Section 6 (6) of the Unfair Dismissals Act  1977 which provides

“In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal”

Under Section 6(4) redundancy is a substantial ground and once the redundancy is established the employer has discharged the onus. However, an employee may meet a redundancy defence by claiming the unfair selection under Section 6 (3).

In Williams –v- Comp Air (1982) 1 ICR 156, Browne-Wilkinson J in considering the issue of fair selection, identified the following as generally accepted principles governing how reasonable employers will typically act:  

1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. 

2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria. 

3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service. 

4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection. 

5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment.

In Boucher –v- Irish Productivity Centre (1994) ELR 2005, this was an illustration of an unfair selection process. In this case, no agreement was reached as to the method of selection for redundancy. The selection process was carried out by without any consultation or interviews In describing this selection procedure as unfair and holding that the claimants has been unfairly dismissed the Employment Appeals Tribunal emphasized that those in the group likely to be dismissed should be made aware that such assessment is being made and they should be given an opportunity to give their views which should be considered.

InMulligan –v- J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy the tribunal stated:

“In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases thate may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.”

In JVC Europe v Panasi (2011) IEHC 279, Charleton J stated:

“ It is made abundantly clear by that legislation that redundancy, while it is dismissal, is not unfair. A dismissal, however, can be disguised as redundancy; that is not lawful. Upon dismissal an employer can simply say that the employee was not dismissed for a reason specific to that person but that, instead, his or her services were no longer required, pointing to apparently genuine reasons for dispensing with the services of the employee. In all cases of dismissal, whether by reason of redundancy or for substantial grounds justifying dismissal, the burden of proof rests on the employer to demonstrate that the termination of employment came within a lawful reason.”

“The comment on the nature of redundancy made inSt. Leger v. Frontline Distributors Ireland Ltd., [1995] E.L.R. 160 at 161 to 162 by Dermot MacCarthy S.C., as chairman of the Employment Appeals Tribunal, is apposite:- 

“Impersonality runs throughout the five definitions in the Act. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job. It is worthy of note that the E.C. Directive on Collective Redundancies uses a shorter and simpler definition: ‘one or more reasons not related to the individual workers concerned'.

Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a reduction in numbers. Definition (d) and (e) involve change in the way the work is done or some other form of change in the nature of the job. Under these two definitions change in the job must mean qualitative change. Definition (e) must involve, partly at least, work of a different kind, and that is the only meaning we can put on the words ‘other work'. More work or less work of the same kind does not mean ‘other work' and is only quantitative change.” 

Justice Charleton also remarks that “It may be prudent, and a mark of a genuine redundancy, that alternatives to letting an employee go, should be examined”. 

He also comments 

“As a matter of contract, where selection procedures for redundancy, or a consultation process to seek to discover alternatives to redundancy, are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed. 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. 

As with much else, an apparently fair procedure can be used as a cloak for deceptive conduct. It may be followed in form only so as to mask an ulterior motive or with no intention of fulfilling its purpose, even should the best of reasons for not proceeding to redundancy arise during its course. 

In the circumstances of this case, I accept on behalf of the Respondent Company that from a business and operational point of view and in light of the economic downturn that there was some evidence of a genuine redundancy situation. However, this does not absolve the Respondent from affording the Complainant fair procedures in relation to consultations or exploring alternatives.

In that respect, it was noted that the Managing Director confirmed both in submissions and in the course of the hearing of this matter that there was no consultation process. The Complainant was asked to attend a meeting on the 10th March 2022 wherein he was informed he was being made redundant.   This meeting cannot be regarded as an adequate part of the consultation process. On the balance of probabilities and in consideration of the  evidence presented at the hearing and noting the respective position of the parties I have  concluded that there was no or any adequate consultation process and the onus was on the Respondent Company to carry out such a process.

Accordingly, having considered the evidence heard along with the relevant legislation and case law, I have concluded that the claimant was unfairly selected for redundancy and find that the Complainant is entitled to the sum of €8,000.00 which said figure includes the Complainant’s statutory entitlement of €3,456.00.

I find that the Complaint (CA-00040140-001) made pursuant to Section 8 of the Unfair Dismissals Act, 1977 succeeds and find that the Respondent pay the Complainant the balance of  € 4,544.00.

Unfair Dismissal - Redunancy