Complainant

Respondent

Parties

Mr Gerry  Kavanagh, an Operations Manager.

Autocare Motor Parts & Accessories Ltd

Complainant

Respondent

Representatives

Mary Kirwan ,  HR Consultant

A. Whelan BL instructed by Kerrie Dunne, Solicitor of Collins Crowley 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-00041163-001

20/11/2020

The issue in contention concerns the alleged Unfair Dismissal, by means of a purported Redundancy, of an Operations Manager by a Motor Parts Supply Company.

The employment had commenced on the 14/07/2014 and ended on the 30/09/2020.

The rate of Pay was €1,307 per week for a 40-hour week.

The Complainant relied on a substantial written statement and lengthy direct Oral evidence from the Complainant.

He stated that he had been unfairly selected for Redundancy with no effort made to retain his service or offer suitable alternative employment. A Consultation process has been arranged which was followed in Form rather than Substance with a pre-determined outcome. The Redundancy was purely personal rather than anything that could be justified in terms of the strategic needs of the Employment.

The Complainant began in July 2014 as Branch Manager for Naas and was promoted Operations Manager in June 2017. The Complainant continued in a Dual role as Manager for Naas and as overall Operations Manager for the Group. In January 2019 a rival Company was taken over and four additional Branches were added. A new position of Group Stock Controller was created and filled by a colleague in late October 2019.

On or about the 22nd November 2019, in a meeting in Dun Laoghaire, the two Owner/Directors unexpectedly raised the issues of the Complainant taking pay cut, reducing his hours or taking Redundancy. This was completely unexpected, and the Complainant was shocked and stressed. An exchange of e-mails followed, with a discussion document produced by the Company, as the Complainant sought clarification as to what was going on.

The Complainant went on Sick leave for the month of December (1st December to the 6th January) A meeting took place on the 8th January 2020 where the Employer informed the Complainant that all Director issues / concerns had been resolved and he was to work as normal. The newly appointed Group Stock Controller was as this stage on suspension pending investigation. The Complainant believed, that if the Stock Controller position had not run into difficulties, his own exit process would have continued. It was his belief that the Group Stock Controller appointment in October 2019 was a precursor to his own proposed Redundancy and had been planned as such by the Company.

In March 2020 the Covid 19 crisis began. The Complainant was now working from home. On the 3rd of April the Complainant was laid off from work. The Complainant, none the less, continued working and sent monthly figures to the Directors on the 5th May 2020. Almost immediately he was contacted and directed to return his company Laptop PC to the Company. On the 18th May a large number of staff were brought back to work. The Complainant, by e mail, queried when he might be coming back but was told that the Company was not ready for him.

The Naas Branch Manager position became vacant at the end of May and was advertised in early June. This position had been occupied by the Complainant for a number of years prior to 2019 and was a very suitable alternative position for him if he was going to be made redundant as Operations Manager.  He maintained that was never offered this vacancy at any stage of the process. A colleague was appointed on the 1st July 2020 – (Mr. NB).

On the 30th June the Complainant e mailed the Owner /Director, Mr. RD, requesting a Return to Work date. On the 1st July Mr RD replied stating that the Company had engaged Graphite HR to handle the situation with the Complainant. Ms. Baxter, Ms. B, of Graphite contacted him to arrange a meeting for the 8th July 2020.  At this meeting the Complainant was advised of his “At risk of Redundancy situation”. The Complainant had queried why he was not formally advised to bring a companion to the meeting seeing as it was a very serious issue for him. Ms. B replied that it was an informal meeting. A series of meetings followed until a final meeting on the 3rd September 2020 where the Redundancy was confirmed. The Responded justified their decision on the basis of the alleged drastic fall off in revenues during the Covid period and the fact that a review of the Organisation had identified that the position of Operations Manager was now unnecessary. The Complainant challenged the financial figures. The Government subsidies and other business aids had resulted in the financial figures being in a healthy position and offered no financial justification for his redundancy. The reference periods (April /June2020) used were intentionally designed to make the situation look bad for the Company. Different figures show that the profits were in fact ahead of previous years.

The Naas position had been filled by Mr NB in July and was never a truthful offer to the Complainant.

The Complainant Appealed the Redundancy decision and an Appeal was heard by Mr. Nolan of Graphite on the 5th October 2020. The Redundancy was confirmed.

In summary the Complainant maintained that the decision to make him Redundant had been taken as early as mid-2019. The plan had been delayed by the difficulties with the Group Stock Controller in Dec/Jan 2020. However, the Covid 19 situation had allowed the Respondent to reactivate it in the Spring of 2020. The figures used were massaged to give a dubious justification and no realistic alternative positions had been offered. The entire Graphite consultation exercise had been cleverly constructed to give a pre-determined outcome. Extensive documentation and record of meetings were exhibited to demonstrate the contradictions in the Employer case.

The dismissal was unfair on the basis of a spurious, artificially constructed Redundancy situation.

The Respondent submitted a detailed written submission and gave extensive oral Evidence from Mr. RD, Managing Director. This was open to full cross examination by the Complainant Representative.

In summary, the Redundancy was a necessary and justified response to the business situation facing the Company. The situation was compounded by the catastrophic impact of the Covid situation. Full and fair procedures were followed including the engagement of an outside, completely independent, HR Consultancy firm to handle the redundancy process. Offers of alternative positions, albeit at a more junior level, were made. These offers were not accepted which it they had been would have obviated the need to make the Redundancy.

In detail the Complainant had a new standalone role which had duties that the Directors realised, were probably unnecessary from a business case viewpoint. This view was reinforced when it became clear during the Covid crisis, the duties could easily be taken back by them. It was a business survival period and a full review of the business was necessary. The situation had been camouflaged before this by the fact that the Complainant had continued as a Branch Manger in his early period in the new Operations position.

Revenues were down by some €711k from April to June 2020 which had an enormous impact on the business. All directors took substantial cuts to their Renumeration during this period.

To ensure objectivity an outside HR Company - Graphite HR was engaged to carry out the Redundancy process.

The Respondent referred to significant legal precedents to point out that Tribunals or Adjudicators are not changed with re taking or re running legitimate Management Redundancy decisions but rather should only seek to ensure that Natural Justice and Fair Procedures are followed by the Employer. In this context the parallel duties on the employee to consider suitable Alternative Duties/Employments (in this case two other jobs) was highlighted.

The Respondent made much of the offers of two other roles in the Organisation. The Respondent pointed to meetings minutes where the Complainant obfuscated and refused to answer directly questions about his interest in these other roles. The Naas Branch Manager job was particularly discussed- the Complainant stated that there was no vacancy, but the Respondent maintained there was. The vacancy was confirmed in correspondence especially the letter of the 5th August 2020.

The Respondent Legal Representative, in cross examination, asked the question as to why the Complainant did not accept the job offers, “call the Company’s bluff” so to speak but continued to “beat around the bush”.  The Respondent asserted that no adequate reply was given by the Complainant other than a restatement of the assertion that no vacancy existed and that no real information was provided to him.

Eventually the Redundancy was confirmed on the 3rd September 2020.

A full and completely Independent review as part of an Appeal of the Redundancy decision on the 5th October 2020 was carried out by Mr. Nolan of Graphite HR. The Appeal was not upheld.

This review was carried out strictly in keeping with the rules of Natural Justice. The Complainant had failed to properly engage in the Consultation process and his behaviour had been unreasonable. The Naas position was always open to him if he wanted to avoid being made redundant.

In verbal evidence (and Complainant Representative cross examination), from Mr. RD, Owner/Director it was conceded that there had been issues in late 2019 involving the Complainant. The meeting in Dun Laoghaire at the end of November 2019 where his role had been discussed was acknowledged. It was true that there had been issues with the Complainant’s allegedly excessive personal use of the company telephone facilities and the perception by the Directors that he had “lost focus” on the business.

His going on a month’s sick leave in December 2019, on the basis of a text message to the Directors, had not impressed as proper behaviour by a Senior Manager. However, it was emphasised that at a Management review meeting in early January 2020, on his return from sick leave, a full exchange had taken place and matters were satisfactorily resolved. There was no suggestion that issues in late 2019 were a “Hidden agenda” and that the Covid crisis allowed a pre-determined management to avail of as a “flag of convenience”.

The need for the senior role of Operations Manager was not supported by a good business case.

The Redundancy was legitimate. The Employer no longer had, by 2020, a sustainable business case for an Operations Manager and when a suitable alternative, albeit junior position was offered and declined, Redundancy was, regrettably, the only option for the Complainant.

3:1          The Legal position.

Relevant legislation is the Unfair Dismissals Act,1977 and specifically Section 6(4) where Redundancy is allowed as a legitimate defence against an Unfair Dismissal complaint.

Legal precedent has clearly established the cardinal principle that a “fair” Redundancy has to be completely “impersonal”. It is the Position that is being made Redundant not the Person who happens to hold the job concerned. All reasonable employment opportunities in the Organisation have to examined as possible alternatives and full consultation and sharing of all relevant information, financials, business plans etc is an absolute requirement. Suggestions made by staff, at risk of Redundancy, have to be carefully discussed and evaluated as possible alternatives.

In relation to the alleged and probably main ground of a “Sham” Redundancy situation as advanced by the Complainant in this case, Meenan, Employment Law (First Edition 2015 -Section 20 -142) is worth noting.

 In St Ledger v Frontline Distribution Ltd,211 the tribunal stated that redundancy is “impersonal and it involves change … Impersonality runs through the five definitions in the Act … change also runs through the five definitions”. A re-organisation must be genuine.  In a number of cases, the employee has successfully maintained that statutory redundancy as a reason for dismissal was a “sham” or a “cloak”. One particular case, Edwards v Aerials and Electronics (Ireland) Ltd, highlights this issue. This case shows the problem of making an employee redundant within the context of a re-organisation. …………………..

Furthermore, at Paragraph 2-144 the Author continues

20-144

This decision demonstrates that if an employee is made redundant, it must be based on genuine grounds for redundancy and not as a “cloak” for some other reason. In other words, if a company wishes to have a reorganisation, it must show the requirements for same and not use it as a vehicle for dismissal for any other reason, such as incompetence.

However, Legal precedents aside, all cases rest on their own facts and evidence and these are considered below.

3:2          Key Adjudication Questions for this case

3:2:1       Was this a “Sham” Redundancy?

The evidence given both Orally and in Writing from the Respondent indicated that the Directors had come to the view by late 2019 (Dun Laoghaire meeting of 22nd November) that there was no longer a valid business case or certainly existed a major business question mark over the position of Operations Manager. Arising from the Covid 19 Emergency the Directors had reviewed the business and found that their existing views were confirmed.

This is the fundamental decision that bases this case. The Covid 19 situation, from the evidence presented, highlighted a situation that already existed. Reviewing the very extensive Oral Evidence from Mr RD, the principal Owner/Director and the Complainant in reply this is the only conclusion that appears sustainable.

There is no doubt that the Complainant had not enhanced his reputation with the Directors by the late 2019 phone difficulties and his somewhat off hand (in the Director’s eyes) approach to taking four weeks “stress” leave by a simple text message. However, in the Oral evidence of Mr RD which was subject to full cross examination there was no reference to the Respondent’s taking a route of Disciplinary action against the Complainant. This was a course that they were already taking in regard to the Group Stock Controller position at that time.

The Return to work meeting with the Complainant on the 8th January appeared to have been productive and had maintained or re-established a good relationship between the parties.

The Oral evidence from Mr. RD was professional and persuasive – a genuine Redundancy for the position of Operations Manager had developed by mid-2020 was the conclusion the evidence pointed to.

It was not a “sham” redundancy.

3:2:2      Was the Redundancy process that developed from June 2020 “fair” and in keeping with Natural Justice.?

The legal precedents, as quoted by the Respondent, that the EAT or latterly an Adjudication Officer does not have the role of substituting their own views for those of a “reasonable” employer have to be borne in mind.

In this context Judge Linnane in Allied Irish Banks v. Purcell [2012] 23 ELR 189, commented (at p. 4):

“Reference is made to the decision of the Court of Appeal in British Leyland UK Ltd v. Swift [1981] IRLR 91 and the following statement of Lord Denning MR at page 93:

‘The correct test is: was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view.”’

It is clear that it is not for the EAT or this court to ask whether it would dismiss in the circumstances or substitute its view for the employers view but to ask was it reasonably open to the Respondent to make the decision it made rather than necessarily the one the EAT or the court would have taken.”

Accordingly, to consider the “Fairness” question extensive reliance has to be placed on a detailed examination of a considerable amount of written evidence, meeting minutes and follow up correspondence that was exhibited in evidence. The process of the Redundancy was handled by Graphite HR Consultants -primarily by Ms B.

An “informal” meeting took place on the 8th July followed by a first Formal Meeting on the 15th July 2020. The process continued until the conclusion of the Appeal by Mr. Nolan of Graphite on the 5th October 2020. From a close reading of the correspondence and meeting minutes (over a series of meetings) with Ms. Baxter of Graphite HR it was not possible, on the evidence, to see where the rules of Natural Justice were not observed.

The Complainant was accompanied, after the first meeting, by a Representative and all Respondent information sought appeared to have been provided.

It is worth observing that Ms. B, from the notes of the meetings, especially those of the 15/07/2020 and the 29/07/2020, appeared to have some difficulty in getting direct answers to some of her question especially in relation to offers of alternative positions. The Respondent pointed out that in letters of the 21st July and the 28th July they had confirmed the existence of the vacancy.

The Appeal Hearing by Mr. Nolan, a senior HR Consultant, appeared professional and fair. Five grounds of Appeal as submitted by the Complainant were considered and a substantial decision issued.

Again as stated above in the quote from Judge Linnane in Allied Irish Banks v. Purcell [2012] 23 ELR  the Adjudication Officerdoes not re run or “second guess” Redundancy of other Unfair Dismissal Act,1977 cases once Fair Procedures and the Rules of Natural Justice are seem to have been observed.

As regards Information provided to the Complainant the minutes of the Graphite/Ms B series of interviews indicated that all necessary information was made available and where possible discussed. In addition, the Complainant appeared to have access to much information from former colleagues -all of which added to his knowledge base.

To reiterate the point made above and based on a careful review of all written and oral evidence Fair Procedures were followed and the Redundancy Process of the Operations Manager position was, from the evidence available, in keeping with Natural Justice.

3:2:3          Was Alternative Employment available / Properly Offered?

This was a matter of considerable contention between the Parties especially as it referred to the Naas Branch Manager position. The principal Respondent oral witness, Mr. RD, the Owner/Director who was giving his evidence under an Affirmation/Oath was clear that this position was available. He acknowledged that the position had been filled temporarily and the e mail of early July to staff was to communicate, for business management reasons, the filling of the position. He accepted that he had not stated that the job was filled “Temporarily”. The Complainant equally under Oath maintained that it had already been filled on a permanent basis. The minutes, across a number of meetings, from Ms. B of Graphite indicated that the Complainant was difficult in his answers to her questions as to the Complainant’s definitive position on acceptance/rejection of this alleged job vacancy.

The Respondent Legal Representative asked the valid question of the Complainant why he did not, in his language “call the employer’s bluff” and accept the position. The Complainant was unclear in his answer other than to repeat his view, based on local knowledge, that no vacancy existed. The issue was again explored at length in the Mr. Nolan chaired Appeal hearing.

On the Balance of Probability and bearing in mind that the Employer was in a better position to know where vacancies existed and what their status /Permanent/Temporary was, the only conclusion, on the balance of probability, from the evidence, is that a vacancy existed.

Legal precedent is strong on the issue of the onus on an employee to seek to avoid redundancy by accepting alternative employment where it is available.

3:2:4         Was the Complainant treated Unfairly or “Unreasonably”, in a Unfair Dismissal /Constructive Dismissals sense in the period from Layoff to end of Employment?

The Complainant raised the issue of his extended period on Layoff when colleagues were back at work, the Employer request that he return his Laptop computer and the alleged off hand manner towards him.

In his Oral evidence the Owner/Director pointed out that the Complainant had a minor medical condition that made him more vulnerable to Covid and for this reason he was left on lay off longer. All the other incidents referred to while unpleasant at the time, would not, in any reasonable examination, qualify as “Unreasonable” employer behaviour if for example, a case of Constructive Dismissal was being considered.

3:3         Summary Conclusions

Having reviewed all the evidence, both Oral from the Owner /Director Mr. RD and the Complainant supported by lengthy written submissions, the Adjudication conclusion had to be that the Redundancy was genuine and arose as a result of a business review. From the evidence it appeared that the position of Operations Manager was under review from late 2019. The Covid 19 emergency simply highlighted the business case underlying the decision further.

In the Redundancy Process the evidence pointed to good standards of Natural Justice being observed. Consultation and Appeal processes were in keeping with good standards.

Comprehensive Information was available. Alternative employment, albeit at a lower grade, as a Branch Manager was available.

There was no, as was alleged, management campaign to undermine the Complainant while he was on lay off during 2020.

3:4        Final Conclusion.

Having reviewed all the evidence and in particular the Oral evidence but also closely examining the extensive written materials provided the final conclusion has to be that the Redundancy was genuine.

No Unfair Dismissal took place.

Contrived Redundancy, Unfair Selection, Unfair Dismissals.