Complainant

Respondent

Parties

Rui  Oliveira

Ubiqube (Ireland) Limited

Representatives

Self

 Byrne Wallace

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-00039119-001

10/08/2020

The Complainant was employed by the Respondent from 3 March 2017 until 29 June 2020.  He was paid €7,333.33 per month. His employment ended on grounds of redundancy. The Complainant asserts that his redundancy was not genuine and that he was unfairly dismissed.  The Respondent rejects the complaint.

The Respondent submits as follows:

The Respondent provides ICT products and services to other businesses. The Respondent's business was severely affected by Covid-19. New projects which would otherwise have been commissioned by the Respondent's clients have been suspended or delayed and existing projects have been curtailed or delayed.

As part of its response to this crisis, the Respondent has taken appropriate actions to stabilise its business and protect the maximum possible amount of employment in Ireland. These actions included making the Complainant redundant. The Complainant was lawfully dismissed on grounds of redundancy. In addition to making the Complainant redundant, the Respondent has taken a number of other measures to stabilise its business, including by ceasing recruitment; by non-replacement of employees who have left the business; by termination of agreements with external contractors; and by reducing costs such as software service subscriptions. The Respondent's business was affected so negatively by the crisis that it qualified for, and has availed of, the Temporary Wage Subsidy Scheme and the Employment Wage Subsidy Scheme.  The Respondent had 21 employees at the start of 2020. By the date of the second hearing this had been reduced to 8. 

On 20 May 2020 the Complainant's manager, the Respondent's Chief Technical Officer, wrote to the Complainant by email to inform him that his role was being considered for redundancy. The Chief Technical Officer wrote the following:

"Because of the exceptional Covid 19 crisis and its direct impact on our operations and finance we are considering your role for redundancy.

[The Respondent] has incurred a dramatic impact on its Q1 and Q2 revenue which already indicate that we will not be able to meet our 2020 budget, putting [the Respondent] at great financial risk.

Your expertise was required to handle a large number of large scale and complex projects, yet the recent crisis Is resulting in the cancelation of those projects we were hoping to win. The few left are at high risk with insufficient future revenue forecastable.

At current visibility and considering the exceptional financial difficulties the company is facing because of the Covid crisis, and, despite the measures we have taken, we believe the only way to preserve the business is to consider other means of reducing operational expenses including, where appropriate, reducing our staffing level and eliminate any redundant roles."

On 25 May 2020 the Chief Technical Officer and the Administrative and Financial Director, met the Complainant remotely to consult with him. The minutes of the meeting reflect the discussion at that meeting as follows:

"[The Chief Technical Officer] started the meeting by explaining to [the Complainant] that he called for this consultation as the Company was considering [the Complainant’s] role for redundancy because of the exceptional COVID19 crisis and its direct impact on the Company operations and finance.

[The Chief Technical Officer] reminded that it was still on a proposal stage and they were here to discuss it and hear [the Complainant].

[The Chief Technical Officer] explained that [the Complainant’s] expertise was required to handle complex and large scale projects but with the crisis, several projects we were hoping to win were cancelled. He also explained that there was a reduced demand for Project Management expertise and the only few projects left were postponed and are at high risk in terms of future revenue visibility.

[The Complainant] asked about the financial reasons invoked for this redundancy consultation as in his view, and relying on what he had understood from the VP of Engineering on a previous meeting, the Company was secure, had cash in the bank and had solid projects.

[The Chief Technical Officer] replied that both himself and the VP of Engineering did not have the detailed numbers but that they were having this discussion for real financial difficulty reasons faced by the Company.

[The Complainant] also wanted to talk about his role and expertise, as he sees plenty of project management work to do in the current projects. He also mentioned that for the 2 projects he is involved with [a client] he feels that for the 3 to 4 coming months they will still have issues to address and a lot of work to do.

And [the Complainant] asked if these 2 projects were at risk.

[The Chief Technical Officer] replied that he will look at these 2 projects based on this feedback and that the news from our customers/partners in Japan is that they were impacted by the C0VID19 crisis.

Furthermore, [the Complainant] wanted to explain that he was also working with the support team and the engineering team to improve product stability and that improvements were made on the project delivery side. And if his role was made redundant he feels it would be demanded again once normal activities resume and new projects are won.

[The Complainant] concluded that he understands the Company challenges but it was important to be on the same page on what his role is.

[The Chief Technical Officer] confirmed that he understood the role but enforced that the topic was brought for financial reasons.

[The Complainant] also asked whether [the Chief Technical Officer] had a plan for Project Management.

[The Chief Technical Officer] replied that he does not have any and that we are now focused on going through C0VID19 situation and that he understood all the points made by [the Complainant]. He also said that they will now be discussed internally with the CEO and CFO and that he will ask the Head of Sales in Japan for some light In relation to Japan business projects.

[The Complainant] made a suggestion that, in his point of view, Project Management has been reinforcing and helping to improve the process for the entire organization and he would expect, even though the Company is reducing costs, that Project Management would be helpful to increase productivity.

[The Chief Technical Officer] replied that he would consider that suggestion as well.

Finally, [the Complainant] asked about the communication he should make to the other Project Manager resource reporting to him, as the resource asked him about this consultation meeting.

[The Chief Technical Officer] replied that there was no need to communicate anything to the other Project Manager as this was only an initial consultation proposal and we were just considering it."

The Chief Technical Officer considered the points raised at the meeting. On 29 May 2020, he wrote to the Complainant in the following terms.

"In relation to [the Respondent’s] financial difficulties, let me give you more details.

·        As explained, for the first 3 months of this year, our Revenue achieved was 35% less than in the some period in 2019. Moreover, we expect that our Revenue for full 2020 could be reduced by 20-25% compared to the Budget.

·        Also among 5 of our biggest projects expected for this year, 3 of them have been cancelled and 2 are delayed with no visibility whether or not they will be cancelled.

In relation to your role, I understood from our discussion that you are working with the engineering team and the support team on some global improvements and it should be considered relevant to the potential redundancy of your project manager role, in my view, both the engineering team and the support team have managers and skilled resources to handle such work within the existing teams, with reduced or even zero project management oversight

My view is that the reduction in Revenue and major projects has a direct impact on your role. Having considered alt of the issues, I have decided that the Company does not need a senior project management role at your level. I regret to say that this means that your role is redundant.

I have considered whether there are alternative roles available to which you could be redeployed. In light of your seniority and the reduction in business activity, there are no such roles. Therefore I now give you notice of termination of your employment on grounds of redundancy."

The Complainant was provided with one month's notice in accordance with his contract of employment.

The Respondent contended that it was not its position that all the requirement for a project management function had disappeared but that it had greatly reduced.  The senior project manager role was no longer required. To sustain such a role, new projects needed to be coming down the pipeline but this was not happening.  Once the Complainant had left, the Chief Technical Officer assumed responsibility for project management and the Complainant’s direct report, the Technical Project Manager, supported him.  The Respondent contended that it would have been grossly unfair to the Technical Project Manager if she had been made redundant (“bumped”) so that the Complainant could have taken over her role.

Direct Evidence of the Chief Technical Officer

The Chief Technical Officer said that the Technical Project Manager who reported to the Complainant was not on the same level and that she handled smaller projects.  He said the roles of the Complainant and the Technical Project Manager were not really interchangeable as the Technical Project Manager was not skilled enough to handle big projects.  The Chief Technical Officer confirmed that the Technical Project Manager had left the Respondent organisation at the end of summer 2020 and that neither project management vacancy ha been filled.

The Complainant asked the Chief Technical Officer why, if his role and the Technical Project Manager’s role were so different, had the Technical Project Manager been asked to take the lead on one of his projects three days after he had left the company.  In reply, the Chief Technical Officer said that he was leading the project and that project management was handled initially by him, with the assistance of the Technical Project Manager, and then by engineering. 

The Complainant also asked if the difference in his salary and the salary of the Technical Project Manager was a criteria in the selection for redundancy.  The Chief Technical Officer responded that “it was more about looking at positions”.

The Complainant asked if the Technical Project Manager was considered for redundancy after he left.  The Chief Technical Officer confirmed that the Technical Project Manager was not considered for redundancy.

Direct Evidence of the Chief Financial Officer

The Chief Financial Officer said that the Respondent had experienced a drop in revenue since spring 2020.  At that time, the Respondent started hearing from customers that they had been impacted by the pandemic.  The Respondent had no visibility on any new projects.  As a result, the Respondent became loss-making and became eligible for Government supports.  The Respondent also entered into negotiations with its landlord which resulted in it getting a two-month rent break and modifications to its existing lease.  The Respondent looked at all its costs and reduced or eliminated all possible expenditure. 

The Chief Financial Officer said that at the outset of the pandemic the Respondent had 21 employees in Ireland.  This had reduced to 8 by the date of the second hearing.  None of the departing employees had been replaced. 

The Chief Financial Officer said that she asked senior management to see if any positions could be made redundant.  She confirmed that the Complainant’s redundancy was the first redundancy in the company’s history.

In response to questioning from the Complainant, the Chief Financial Officer, confirmed that at time the Complainant was made redundant, he was the only member of staff who was made redundant.  The Chief Financial Officer said that since so many staff left the company, the Respondent did not have to consider others for redundancy. 

In response to further questioning from the Complainant, the Chief Financial Officer said that the Complainant’s role was the most important consideration when making the decision to make him redundant and not his salary.  She further clarified that because the Respondent was facing financial difficulties, it was felt that his senior level role was no longer required.  The Chief Financial Officer said that it all went together – the type of role and the remuneration package. 

The Complainant asked the Chief Financial Officer if his subordinate, the Technical Project Manager, had been considered for redundancy.  The Chief Financial Officer confirmed that she had not as she was not dealing with the same projects.  The Chief Financial Officer said that after the Complainant’s departure, the Technical Project Manager worked with the Chief Technical Officer who assumed the lead project manager role.

The Complainant submits as follows:

On the 20 May 2020, the Complainant received an email from his manager, the Chief Technical Officer informing him that his role was being considered for redundancy. A consultancy meeting to discuss the redundancy took place on 25 May 2020 between the Complainant, the Chief Technical Officer and the Administrative and Financial Director.

On the 29 May 2020, the Complainant received a redundancy confirmation letter via email from the Chief Technical Officer. The reasons stated for redundancy were company financial difficulties and that the Complainant’s work as a project manager was no longer required due to the cancellation of some expected projects.

The Complainant considers the redundancy to be an unfair dismissal for the following reasons:

1)     There was no selection criteria defined for the redundancy, namely the selection between the Complainant and the Technical Project Manager

2)     The Technical Project Manager was asked to continue the work the Complainant was doing (managing the projects to which he was assigned as project manager), so it was not fair to say that his role was redundant.

3)     Besides the project manager role, the Complainant had the role of manager of the project management group which involved directly managing other employees.  The Complainant contends that no reason was given for the manager role to be made redundant.

Direct evidence of the Complainant

In response to questioning from the Respondent’s representative, the Complainant confirmed that his role was on a completely different level to that of the Technical Project Manager.  He asserted, however, that this did not mean that a selection  exercise should not have been carried out between the two roles as the main difference was that one had more responsibility than the other but there were lots of similarities between them.

Mitigation of Loss

The Complainant said that he applied for a several jobs and commenced a new role on 24th August 2020 on an annual salary of €85,000 for 11 months, after which his annual salary increased to €100,000.  The Complainant contends that he suffered a loss as he would have been promoted in July 2020 if he had remained in employment with the Respondent and his salary would have increased. 

Relevant legislation

Section 6(4) of the Unfair Dismissals Act, 1977 provides as follows:

(4) 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.

Section 7(2) of the Redundancy Payments Act, 1967 states as follows:

(2) For the purposes of subsection (1), 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,

In order for the dismissal due to redundancy to be adjudged to be not unfair, redundancy must be the main reason for the dismissal.  From the totality of the evidence adduced by the Respondent, I accept that the Respondent’s business was adversely affected by Covid-19. I am particularly struck by the decrease in employment from 21 at the start of 2020 to only 8 by the time of the second hearing in September 2021.  I also note that of the Respondent’s five biggest projects for 2020, three were cancelled and the other two were delayed.  I further note that the Respondent availed of the Temporary Wage Subsidy Scheme and the Employment Wage Subsidy Scheme which were mitigating measures put in place by the Government to assist businesses which had been impacted by Covid-19. 

The Respondent wrote to the Complainant on 20 May 2020 to inform him that it was considering making his role redundant.  The Respondent then engaged in a consultation meeting with the Complainant at which the Complainant made a number of suggestions as to how he could continue in employment with the Respondent.  The Respondent considered these but ultimately came to the conclusion that, in light of the reduction in revenue as a result of Covid-19, it no longer needed a senior Project Manager role.  All of the discussions which the Respondent had with the Complainant in regard to his redundancy revolved around the impact of Covid-19 on the business and how, as a result, there was no longer a need for his role. 

I note that the Complainant’s direct report, the Technical Project Manager, terminated her employment with the Respondent two months after the Complainant was made redundant and was not replaced, thereby eliminating all the dedicated project management roles in the Respondent organisation.

From the evidence adduced by both parties, it is clear that the role of the Complainant was very different to that of his direct report, the Technical Project Manager.  It was clear that her responsibilities and skillset was more limited than his and that she operated at a more junior level.  I find that it would not have been appropriate to establish a redundancy selection matrix based on the Complainant’s role and the Technical Project Manager role.

Having given careful consideration to all the evidence adduced in this case, I am satisfied that the Complainant’s redundancy was genuine and that he was not unfairly dismissed.

I have decided that this complaint is not well founded.

Unfair Dismissal – redundancy – not unfair