Complainant

Respondent

Parties

Philip  Traynor

Fondy It Dev And Research Limited

Representatives

  Self Represented

 McInnes Dunne 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-00040206-001

01/10/2020

The Complainant alleged he was unfairly dismissed.

The Complainant was hired as COO and demoted to Sales Manager. He was given no reason for his dismissal.

He was asked to resign and refused. He was told the company was changing the Organisation structure and he was not needed. 

The Complainant asked for the reason for his dismissal to be given in writing but this never happened.

The Complainant was hired to bring in new business, attend conferences and exhibitions and build relationships. He was later told to make cold calls and he could not do both.

He was given a target of 3ml euros sales per month and this was not achievable and targets were never discussed with him when he was hired.

He prepared a 27 page report on the market and got no reply from the CEO to the report.

He asked for training on the company products and got none.

He wanted a new CRM as he felt the existing one was not up to scratch and he was told to just use the existing one.

He was invited to be a Director of the company  and then one month later he was demoted.

When he dd get merchants to sign up there were operational issues with the system leading to issues with the Merchant.

He was prodded in the side by the CEO at an Exhibition in front of colleagues and he felt this was bullying.

When he took Paternity leave there were issues with payments and he was sacked a week afterwards.

He felt the CEO did not like him personally.

There were issues with his phone bill payment and getting his holiday entitments.

The Respondent is part of the Fondy Group of companies. The Group was established in 2016. Fondy is a payment platform whose main function is to provide internet acquiring. This means processing online payments via websites, mobile applications and other devices connected to the internet. Fondy also offers cloud-based white-label solutions for banks and internet payment service providers.  The Fondy Group has offices in London, Ireland, and Ukraine. Fondy established a presence in Ireland in 2019 and has an office at the Mill Enterprise Centre, Drogheda, Co. Louth.

The Complainant was initially employed by the Respondent as Commercial Director pursuant to an employment agreement dated 8 July 2019. The Complainant was dismissed by reason of redundancy on 30 September 2020. Ms. Valeriia Vahorovska, CEO sent an email on 1 September 2020 to the Complainant confirming the decision to terminate his employment. This email was sent following a discussion between the Complainant and Mr. Rob McEwen, a former employee of the Fondy Group based in the UK. 

In his complaint form, the Complainant refers to an amendment to his contract of employment in March 2020. The Complainant asserted that he was demoted from his position as Commercial Director without notice and without agreement. The amendment to the Complainant’s employment agreement dated 31 March 2020 set out agreed changes to his role, responsibilities, and remuneration.  The amendment is signed by both parties. It was the Respondent’s position that the amendment of 31 March 2020 was agreed by the Complainant. The Complainant was offered the role of Sales Manager as an alternative to potentially facing dismissal by reason of redundancy in March 2020 as the Respondent had determined that there was no ongoing requirement for the position of Commercial Director based in Ireland. The Complainant raised no objection to the amendment at the time or subsequently. The first time that any objection was raised to the amendment to his terms and conditions of employment was following his dismissal in September 2020.

Ms. Vahorovska, who is the CEO and founder of the Fondy Group, gave evidence of the severe adverse impact of the Covid-19 pandemic on the business in Ireland. As a result of the negative impact of the Covid-19 pandemic on the economy, the Respondent’s sales activities in Ireland did not progress to the extent hoped, resulting in only a small number of Irish clients, few of which generated meaningful profit. When the Respondent was established in Ireland, it was expected that it would generate significant revenue from new clients. It was also intended to establish a regulated entity in Ireland subject to the jurisdiction of the Central Bank of Ireland. It was intended that the employment of the Complainant and other employees would transfer to that regulated entity when established. Regrettably, none of the Respondent’s plans have come to fruition. The process of establishing a regulated entity has been abandoned and the Respondent is no longer pursuing sales in Ireland. The Respondent’s activities now consist of IT development for the Group and providing support for the Group’s UK company in the areas of finance (one employee), compliance (two employees) and client support (one employee). 

Over the course of 2020, as the impact of the Covid-19 pandemic intensified, the Respondent was forced to radically reconsider its sales presence in Ireland with a view to saving costs. At the time the Complainant was made redundant, the Respondent employed two Sales Managers focused on generating sales in Ireland, the Complainant and one other employee. It was envisaged that the Complainant would also be able to generate sales from the UK, but this proved very difficult due to the pandemic. It was decided that, at most, only one such Sales Manager position was supportable going forward. The Respondent recognised that, unless the sales climate improved significantly and rapidly, no Sales Manager position would be viable. Due to the fact that, at the time the initial redundancy decision was made, the other Sales Manager had new clients undergoing the process of integration with the Fondy Gateway whereas the Complainant did not, it was decided to first terminate the Complainant’s employment by reason of redundancy rather than that of the other Sales Manager. 

As matters transpired, it became necessary to terminate the employment of the other Sales Manager, also by reason of redundancy, in early 2021. The Respondent currently has no Sales Managers focused on identifying and landing new clients in this jurisdiction and does not intend to create any such positions in the foreseeable future. 

The Respondent employed a third employee whose contractual title was, and is, that of Sales Manager. However, that employee’s role was at the time of the redundancies, and remains, substantially different to the role held by the Complainant. It was, and remains, a support role, the primary function of which is to support and deal with incoming enquiries from potential clients from English speaking countries which themselves located Fondy by internet search or word of mouth. This contrasts with the role of a traditional Sales Manager, such as the Complainant and the other terminated Sales Manager, which is to proactively identify and land new clients which have not contacted Fondy. 

The Complainant was informed of the decision to terminate his employment by Mr. McEwen in a telephone conversation on 1 September 2020. Mr McEwen was engaged by the Fondy Group for several months in 2020 as Chief Commercial Officer with responsibility for all its operations in Europe excluding Ukraine. The Complainant asserts that Mr. McEwen replaced him in his previous role. This is not correct as the scope of Mr. McEwen’s role was much wider than that of the role previously held by the Complainant. It is also irrelevant given the agreed change to the Complainant’s terms and conditions of employment in March 2020. 

As the Complainant asserts, Mr. McEwen advised him that a decision had been made to change the organisation and that his position was no longer required. This decision was later confirmed to the Complainant by Ms. Vahorovska during a phone call on 2 September 2020. 

In his complaint form, the Complainant cites a litany of complaints against Ms. Vahorovska relating to issues that allegedly arose during his employment. Ms. Vahorovska gave evidence to the WRC of her relationship with the Complainant. In her evidence she denied that she did not support the Complainant, did assess his project plan (which the Complainant had asserted she did not) and gave replies to same and did not recall pushing into him at a Conference, which the Complainant asserted she did.

The various allegations made by the Complainant were rejected by the Respondent. The Respondent advised that at no point during his employment, did the Complainant make any complaint regarding any aspect of his employment. The Respondent acknowledges the Complainant’s hard work in establishing the presence of the Group in Ireland. That was not in dispute. No one could have foretold the Covid-19 pandemic, and no one could have predicted the significant adverse impact the pandemic would have on the Respondent’s business. 

The Respondent stated that it was clear from the facts outlined in the preceding section of this submission that a genuine redundancy existed within the Respondent. 

The Respondent stated that the Complainant’s dismissal was fair, and based on a bona fide redundancy situation  in the company, and as such was compliant with the provisions of section 6 of UD Act.

The Respondent introduced the law and case law to support its position and stated the relevant portions of section 6 of the UD Act, provide as follows:

“(1) 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…

(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:

(c) the redundancy of the employee,

(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 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,”

Section 7(2) of the Redundancy Payments Act, 1967 (as amended) provides that a person who is dismissed shall be deemed to have been dismissed by reason of redundancy if his dismissal results “wholly or mainly” from one of the following: -

“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.”

It was submitted that this is precisely what occurred in the instant case. 

In St Ledger v Frontline Distributors Ireland Limited, UD 56/1994 the Employment Appeals Tribunal (“EAT”) remarked that redundancy “has two important characteristics, namely, impersonality and change.”  In that case, Dermot MacCarthy S.C., as chairman of the EAT, made the following comment  

“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.”

The Respondent acknowledged that the process of communication with the Complainant regarding his redundancy could have been improved. However, it was submitted that any failures of process do not invalidate the genuine nature of the redundancy.

The Respondent stated that the EAT, in the case of O’Rourke v. Valcroft Limited [2015] ELR 209, criticised an employer for several procedural failings in the redundancy process. The consultation process in that case had consisted of only one meeting with the employee. That meeting took place on the employee’s first day back from long-term sick leave and was described by the EAT as “heavy handed.” Nevertheless, the EAT ruled that those “flaws” did not undermine the genuineness of the redundancy or the fairness of the dismissal. Similarly, in A Hotel Manager v. A Hotel and Spa Resort ADJ-00015257 (20 February 2019), the WRC quoted the following passage of Ryan’s “Redmond on Dismissal Law”, 3rd Ed., Bloomsbury, 2017, with approval “The WRC should adopt a balanced assessment of the overall interactions between the parties surrounding the redundancy process. Thus, even where an 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.”

The Respondent submitted that the Adjudication Officer should follow the guidance of Dr Ryan, implemented by the WRC in A Hotel Manager, and look at the fairness of the process in its totality. The Respondent submits that means that any objective analysis must find that the process was fair.

The fact that the rationale for his redundancy was not shared with the Complainant does not, of itself, render the dismissal procedurally unfair. This contention was contradicted by well-established precedent from the EAT. In the case of Behan v. Castletown Press UD402/2013 the EAT held that the employee “was not unfairly selected for redundancy” in spite of the fact that the specific details of the selection process had not been shared with him.

Similarly, in McNamee v. Irish Hospital Supplies UD1955/2010, the EAT made a direct and unequivocal finding that the sharing of the details of redundancy criteria was not required in order for a dismissal to have been conducted reasonably and fairly “A company is perfectly within their rights to establish whatever criteria they need to meet the objective of their exercise... The fact that the employees were not made aware of the selection process does not automatically render it unfair. Someone's knowledge of the process/selection criteria doesn't affect the fairness or unfairness of it.”

In the case of Cousins v. Condron Concrete Ltd. UD/2228/2010, the EAT refused to find a dismissal of an employee by reason of redundancy was unfair because the redundancy selection criteria had not been shared with him. The Tribunal made the following remark “…the [redundancy] criteria were applied in an objective manner, although the lack of transparency in their application was not ideal.”

The EAT has held in in the case of White v. Yenom Ltd. [2010] 2JIEC 2501, inter alia, that consultation of any kind is not always necessarily a prerequisite in redundancy cases“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 there 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 Acts as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place. In this case there was no consultation good, bad, or indifferent and despite the respondent's protestations the way it dealt with the claimant was anything but compassionate. This long-standing employee deserved better treatment, and his redundancy was dealt with in a formalistic and insensitive manner. Despite the above the Tribunal accepts the respondent's evidence which cogently showed that the claimant's redundancy was genuine, and that there was no unfair selection for redundancy. Accordingly, the claim under the Unfair Dismissals Acts, 1977 to 2007 fails.”

Similarly, in Nigrell v Graham UD/690/2013, the EAT also determined that, although many procedural accommodations might be considered desirable in a redundancy process, none are absolute legal requirements “The respondent’s complaints related to a failing on the employer’s part in affording fair procedures. The Tribunal was not persuaded by the respondent’s arguments that in all instances an employer must afford the affected employee an

opportunity to respond to the proposed redundancy… [The Tribunal was] not persuaded that such prudent practices are mandatory with automatic consequences for employers who do not follow them. Such practices may be negotiated or contractually provided for but in the instant case they are not legally required to be recognised, such that a failure to do so would result in a genuine redundancy being considered as an unfair dismissal. For that reason, the Tribunal disagrees with the findings of the Rights Commissioner and determines that the employee was lawfully dismissed by reason of redundancy.”

At the date of termination of his employment, the Complainant’s salary with the Respondent was €55,000 per annum. The Complainant correctly records this figure in in his WRC complaint form. In that form, the Complainant makes the following assertion “What I want from this is one year of my original full salary of €100,000 from Fondy as I have loss of earnings from March 2020 at which time she cut my wages by 45%”.

In a subsequent email sent to the WRC of 13 July 2021, the Complainant stated as follows “And to be clear the sum I’m looking for is €100K after tax….”

With respect to the Complainant, he appears to misunderstand the jurisdiction of the WRC in respect of awards of compensation under the UD Act. Section 7(1) of the UD Act states as follows

“Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer or the Labour Court, as the case may be, considers appropriate having regard to all the circumstances…. 

(c)(i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances…”

Section 17(1) of the 1977 Act states as follows: -

“The Minister may make regulations for the purposes of sections 7(1)(c) and 8 (8) of this Act and for the purpose of enabling any other provisions of this Act to have full effect”. 

The Unfair Dismissals (Calculation of Weekly Remuneration) Regulations 1977 were enacted pursuant the provisions of section 17 of the 1977 Act. The regulations set out the basis of calculating an employee’s remuneration for the purposes of calculating any award of compensation that may be due pursuant to a finding of an unfair dismissal in accordance with the provisions of Section 7(1)(c)(i) of the UD Act.  The regulations provide as follows: - 

“3(a) A week's remuneration of an employee in respect of an employment shall be calculated for the purposes of section 7 (1) (c) of the Act in accordance with these Regulations.”

In the case of an employee who is wholly remunerated in respect of the relevant employment at an hourly time rate or by a fixed wage or salary… his weekly remuneration in respect of the relevant employment shall be his earnings in respect of that employment (including any regular bonus or allowance which does not vary having regard to the amount of work done and any payment in kind) in the latest week before the date of the relevant dismissal in which he worked for the number of hours that was normal for the employment together with, if he was normally required to work overtime in the relevant employment, his average weekly overtime earnings in the relevant employment as determined in accordance with Regulation 5 of these Regulations.”

The Complainant was wholly remunerated by a fixed salary. 

The Respondent stated that it was clear that the Complainant’s remuneration for the purposes of UD Act is that which was paid to him in his last week before the date of his dismissal. That remuneration was an annual fixed salary of €55,000. It was submitted that the Adjudicator had no jurisdiction to have regard to any other remuneration paid to the Complainant at any time during his employment save that which was paid in the last week prior to his dismissal. The Respondent alleged that the Complainant’s assertion that his loss should be based on his original salary was misconceived and without merit. 

The Respondent submitted that the breakdown of loss suffered provided by the Complainant in his Replies to Particulars dated 13 July 2021 is incorrect in several respects, including the fact that he is seeking compensation for the reduction in salary which took place in March 2020, some 6 months prior to the termination of this employment. It is wrong for the Complainant to calculate his loss of income from the termination of his employment with the Respondent on the 30 September 2020 to the commencement of his new employment with TransferMate on 29 March 2021 based on his original salary of €100,000 per annum. 

The Respondent stated that they regret that it was necessary to terminate the Complainant’s employment. The Respondent asserted that based on its submission and evidence that the Complainant’s dismissal was fair. Even if the Adjudicator held that the process embarked upon by the Respondent was inadequate, that does not alter the fairness of the dismissal for the reasons outlined above. 

The Complainant had three main grounds for his claim. One was how he was treated by the CEO. Second, that another employee was kept on while he was not and finally that he was replaced by a Sales Support person. It is very important to note that the Respondent has ceased to try get Merchant business in Ireland and has stopped its application for a Central Bank licence to operate with a licence in Ireland.

The interactions between the Complainant and the CEO were disputed at the Hearing and really have no effect on the Decision in this case as it did not appear to significantly influence the redundancy/termination decision. Secondly, the Respondent argued that the reason the other Sales Manager was kept on, albeit for a short period, was that they had existing clients and sales opportunities. This for a business, struggling to establish itself in a pandemic environment, is a key and reasonable selection criteria in the selection matrix of who was to be made redundant.

Finally, the Complainant asserted that the Sales Support Person was now describing himself on Linked-In as the County Manager for the Respondent in Ireland (which was completely denied by the Respondent) was not supported by any evidence. From the evidence to the Hearing that person seemed to have a completely different role than the Respondent and was servicing the English speaking European part of their business. No evidence to the contrary was provided to the Hearing.

In summary, none of the grounds put forward by the Complainant alleging he was unfairly dismissed were substantiated at the Hearing. Under Section 6 (4) c of the Unfair dismissals Act 1977 the redundancy of an employee is not deemed to be an unfair dismissal.

Having considered the written and oral submissions I find that the Complainant was not unfairly dismissed and his employment was terminated because of a genuine redundancy situation.

Unfair Dismissal