Complainant

Respondent

Parties

John  McCormack

A & G Couriers Limited

Representatives

Terry Gorry, Terry Gorry & Co Solicitors

Mary Fay B.L., instructed by Pembroke 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-00039114-001

10/08/2020

The complainant was employed as a Sales Representative by the respondent who operates a nationwide courier business with a commencement date of employment of 15 October 2018.  The respondent acquired the company by which the complainant was employed, and which had operated as a franchise in June 2019 and the complainant’s employment transferred according to the TUPE regulations.  The complainant’s employment terminated with effect from 4 August 2020 by reason of redundancy.  The complainant disputes the need for redundancy and the process by which he was selected for termination of employment.

This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020, and S.I. No. 359/2020 which designates the WRC as a body empowered to hold remote hearings.

The witnesses elected to give evidence under affirmation.

The redundancy was not genuine as the respondent employed new business development representatives around the same time as the termination of the complainant’s employment.

The process utilised by the respondent was unfair.

The complainant was selected for redundancy without any rational basis or matrix of objective factors.

The respondent did not seriously consider any alternatives to redundancy.

The respondent operates a nationwide courier operation.  The region in which the complainant was employed was under-performing.  This was accentuated by the arrival of Covid-19.

There were two persons employed as Sales Representatives in the region and a decision was made to reduce this number to one.

The respondent’s handbook states that in such circumstances and all other factors being equal the principle of “last-in, first-out” (LIFO) would apply.

The other Sales Representative had considerably more service than the complainant and therefore the LIFO principle was applied which was objective reasonable and fair.

The new employees referred to by the complainant were taken on in 2019.  The role the complainant performed in his region has not been replaced.

There were no suitable positions or vacancies within the respondent organisation at the time of the complainant’s redundancy.

The respondent operates a nationwide courier business.  In the past each region operated by way of regional franchise with these franchises being independently owned and operated.  The complainant cited two entities in his complaint form, Fastway Couriers and Napier Couriers in respect of the respondent.  The respondent clarified that the address given for Napier Couriers is also the registered address for A & G Couriers Limited and that the correct respondent is A & G Couriers.  It was agreed to amend the respondent’s name accordingly.

 The complainant had worked for a number of these franchises and in 2018 began employment as a sales representative with the independent company then operating the midlands franchise.  There was already one other sales representative employed in the region at that time.  This franchise was experiencing operational issues and was not performing and consequently, in or around June 2019, it was acquired by the respondent which at that time owned three other regional franchises.  As a result of the transfer of undertaking the respondent took over the employment of the existing employees of the midland area franchise including that of the complainant.  The performance of this region continued to cause concern and, according to the respondent, sales were down 4% for 2019 compared to the previous year and Q1 of 2020 showed a drop of 12% on the same period in 2019.

The impact of Covid-19 had a further deteriorating effect on the respondent’s business and the need arose to take immediate action.  The respondent placed 45 – 48 employees on temporary lay-off including the complainant.  A review of the business generally was undertaken and, according to the respondent, in looking at the midlands region it was decided that its size and potential turnover did not warrant employing two sales representatives.  It was emphasised by the respondent that, whilst the advent of Covid-19 may well have precipitated this decision, the underlying performance issue within the region meant that this was not a situation that could be addressed by interim solutions such as the one to put staff on temporary lay-off.  

The respondent’s Commercial Sales Director in his evidence stated that an emergency management meeting took place on 18 March 2020 which reviewed every aspect of the respondent’s business.  Arising from this it was decided that a number of staff would have to be made redundant and, in particular, that there was not a requirement for two sales representatives in the Midland region.  The witness was aware that the other sales representative was close to retiring age and decided to meet with that member of staff first on 16 July.  The other sales representative did not opt for retirement.  The witness then met with the complainant later on the same day.  The witness informed the complainant that there was only a requirement for one sales representative in the region and that consequently the complainant was being made redundant and that this decision was based on the principle of “last-in, first-out”.  This principle was incorporated as a policy in the Staff Handbook.

On 20 July the complainant sent an email to management requesting a written statement as to the reason for the termination of his employment and received a response later that day from the Sales Director stating that an email detailing the reasons discussed at the meeting would be forwarded to the complainant shortly and noting that the second Sales Representative’s role in the region was being made redundant leaving the other Sales Representative managing the region in its entirety.  On 27 July a letter was emailed to the complainant from the respondent’s HR Manager listing the reasons for his position being made redundant.  These reasons were an increased focus by the parent company on external markets, the decline in the sales performance of the region, the size of the region which meant that it could be covered by one Sales Representative and the cost of maintaining a Sales Representative in the region.  The letter went on to state that the complainant’s employment would terminate on 3 August and requesting that he return company property such as car, fuel card, phone and laptop.  Later that day the complainant responded with an email to the HR Manager in which he stated that it was normal HR best practice in making cutbacks to effect same on the basis of “first-in, last-out” and, given that 3 new reps. had been recruited since he joined the company, seeking clarification as to why his employment was terminated and not one of those reps.  The complainant’s employment terminated as per his notice.  The complainant lodged his complaint with the WRC on 10 August 2020.

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

For the purpose 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 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 requirement of that business for employees to carry outwork 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)    N/A

(e)    N/A

I note that the respondent made a number of other employees redundant in the period between 24 April 2020 and 24 August 2020.  Having regard to the above it is clear that the respondent made a decision to carry on the business using fewer employees and in that regard a redundancy situation existed.  There is a further requirement for an employer to act reasonably and fairly in deciding which employee is selected for redundancy.

The issue of fair selection has been the subject of scrutiny by the various legal bodies.  As set out in the case of St Ledger v Frontline Distributors Ireland Limited, (1995) ELR 160, “impersonality runs through the five definitions in the Acts.  Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job.”

 In general, an employer when affecting redundancies should engage with employees that are likely to be affected and provide information at the earliest opportunity possible so as to afford the employees reasonable time to consider the proposed redundancies.  The employer should explore all alternatives to redundancy including redeployment to any alternative position within the organisation.  In addition, the employer should consider any proposals put forward by an employee concerned and finally the employee should have the right of appeal against a decision to terminate his or her employment.

These matters were considered by the Employment Appeals Tribunal (EAT) in the case of Cronin v RPS Group, (UD2348 / 2009).  In that case the employer deployed a matrix based on six criteria.  In their determination the EAT accepted that a genuine redundancy situation existed but found for the claimant on the following grounds:

Failure to advise the claimant of the criteria to be applied for redundancy

Failure to give the employee the opportunity to make representations on her own behalf

Failure to provide an appeal mechanism to the claimant

Failure to consider redeployment as an alternative to redundancy

Failure to consider the claimants service record.

The case before me contains similar elements to that case.  The Commercial Sales Director in his evidence said that he arranged to meet with both Sales Representatives in the region on 16 July.  He met with the other Representative first as he wished to ascertain if that employee wished to take early retirement.  The Sales Director stated that if that employee had indicated acceptance of the proposed retirement, then he would have had a different conversation with the complainant than the one that transpired.  Once the other employee stated that he was not interested in that proposition the decision was made to make the complainant redundant and the subsequent meeting confirmed that decision.  The two employees were effectively treated differently with the other employee being given the choice of voluntary retirement or continued employment. 

The meeting between the Sales Director and the complainant was therefore not a consultation regarding a possible redundancy.  The complainant had not been advised regarding representation at the meeting.  It is obvious, and this was confirmed by the Sales Director, that no matrix was involved and that the only criteria used was that of “last-in, first-out” (LIFO).  The reasons for the redundancy were subsequently supplied in correspondence to the complainant after a request for same.  The principle of LIFO was not included in that letter.

Clause 21.9 of the respondent’s Staff Handbook deals with redundancy.  In that clause it is stated that “the company reserves the right to use a “selection matrix”, where appropriate, in order to identify those individuals to be made redundant; the terms of the matrix will be outlined as part of the redundancy process and where this has been activated i.e., we will inform you of the criteria we intend to use.  All other factors being equal, and subject to the aforementioned retention of necessary skills and expertise required, the concept of last in, first out will apply.”

It appears to me that the respondent unilaterally decided not to employ a matrix in this situation and having made that decision proceeded to implement the policy of last-in, first-out as a default mechanism and to confine that process to the region.  In doing so the information and consultation process envisaged in the clause was by-passed.

I find therefore that the respondent failed to advise the complainant of the risk of redundancy and failed to offer him an opportunity to consider the matter and make representations prior to a decision being made.  There was also a failure to consider the possibility of re-deployment of the complainant.  In this regard I note that the complainant had considerable experience within the organisation as an owner of a franchise, as manager of different regions and also had some Dublin-based employment.  It would appear therefore that the complainant had displayed flexibility as regards his employment location and role.  Furthermore, the respondent did not offer the complainant the opportunity to appeal the redundancy decision.

Section 6(7) of the Unfair Dismissals Act, 1977, as amended, states.

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, consider 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)    N/A

Having regard to all the evidence and submissions before me I find that the selection process and the procedures utilised whereby the complainant was made redundant were unfair and that consequently the termination of his employment by the respondent was an unfair dismissal under the provisions of the Unfair Dismissal Acts, 1977 – 2015.

In terms of redress, I decide that compensation is the most appropriate form of redress in this case.  I note that the complainant initially accepted an opportunity to take on a distribution business on a self-employed basis.  That business is now in the process of being wound up as the complainant has taken up a sales position.  The complainant in evidence said that whilst the income from the distribution company was near the level of his income from the respondent, he had in fact to work 60 hours per week in order to achieve that level.

In addition, the respondent brought to the attention of the hearing the fact that the complainant had received a payment of €2,575.61 (gross) on 18 December 2020.  This payment was made in error and should have been paid to another employee with the same name as the complainant.  This error was discovered almost immediately and emails requesting a refund of this payment were then sent to the complainant.  The complainant for his part stated that he had been in dispute with the respondent regarding commission which he felt was due to him and he had assumed that this payment was connected with that matter.  No response had been received from the complainant and the money was not returned. 

I note that no written evidence of a dispute in regard to commission was submitted at the hearing.  Furthermore, if there was an issue then the complainant could have lodged a complaint in that regard under the appropriate legislation.  I shall therefore take into consideration the receipt of that amount by the complainant and the refusal of the complainant to refund that money to the respondent.

Section 7(3) of the Act has the following definitions:

“financial loss” in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation.

“remuneration” includes allowances in the nature of pay or benefits in lieu of or in addition to pay.

The complainant subsequent to the hearing submitted income figures for the period August 2020 until May 2021.  As noted, the complainant argued that he was working considerably longer hours in order to achieve a similar level of income from the distribution business.  It seems to me, however, that the reference in the Act is to “financial loss” and that is what I have to consider.  As I have not got evidence of an actual financial loss resulting from the dismissal, I shall apply the provisions of Section 7(1)(c)(ii) of the Act which states:

If the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances  

Complaint No. CA-00039114-001:

For the reasons outlined above I find that the complainant was unfairly dismissed under the provisions of the Unfair Dismissals Acts, 1977 – 2015.  As noted above, and in accordance with the relevant section of the Act, I order the respondent to pay to the complainant the sum of €2,808.00.  As the complainant has already received a payment of €2,575.61 from the respondent in error the amount actually due to the complainant is reduced by that sum, leaving a balance to be paid of €232.39.

Unfair Dismissals Acts 1977 – 2015        Selection for Redundancy     Fair Procedures