Complainant

Respondent

Parties

Eddie  Lyons

Servecentric Limited

Representatives

Alastair Purdy Alastair Purdy & Co. Solicitors

Dillon Eustace

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-00044004-001

11/05/2021

Mr Eddie Lyons, the Complainant commenced employment on 3 July 2003 and was made redundant on 15 May 2020 after 12 years’ service. He held the position of Chief Executive Officer.  On 1 May 2021 a new CEO was appointed, and the Complainant is claiming he was unfairly dismissed.

The claim was submitted after the 6-month period from the date of contravention but within the 12-month extended time allowable by the adjudicator.  I considered same during the hearing also.

On the 15 May 2020, the Claimant’s role of Chief Executive Officer, was terminated by Servecentric Limited, Respondent by way of redundancy. As part of the Claimant’s termination, he was offered a redundancy package in the amount of €50,000 (inclusive of statutory entitlements) and an additional €6,000 as part of a consultancy arrangement for the subsequent six months following termination. As part of the redundancy package, the Claimant was expected to enter into a Termination Agreement.

Mr Alistair Purdy, Complainant’s Solicitor stated under Section 13 of the Unfair Dismissals Acts 1977 (as amended), any contractual provision seeking to exclude or limit the application of the 1977 Act, shall be deemed void. However, it is accepted where an employee has been in receipt of independent legal advice and has entered into the agreement in full knowledge of the legal position leading up to the making of the agreement, his or her rights may be lawfully compromised by way of settlement. In any such circumstance, the rule of contra proferentum shall apply, in that the agreement shall be construed against the company whereby each clause must be carefully examined in light of the employee’s rights and entitlements.

The Complainant Solicitor referred to the decision seminal decision in Hurley v the Royal Yacht Club [1997] ELR 225, whereby Buckley J determined the following: “I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice, I find the agreement to be void”. This stringent position was recently adopted by the Labour Court in Keelings v Haskiya (2020) UD/19/96. Here the Labour Court referred to the decision Sunday Newspapers –v- Kinsella and Bradley FTD6/2002[2006] ELR 227 when examining the enforceability of such agreements. Here the Court was tasked with distinguishing between an agreement which is lawful and enforceable as distinct from an agreement which is void and of no effect. The following factors were outlined as indicative of distinguishing the former from the latter:

·       “The terms of any waiver must be construed against the party from whom it emanated. Where there is doubt the course of negotiations between the parties should be examined so as to ascertain what was intended.

·       An agreement to waive statutory rights must be supported by consideration.

·       The waiver should list the various Acts being taken into account.

·       The waiver is only valid if it is based on a free and informed consent given by a person with full knowledge of their legal rights.

·       It is for the employer to ensure that the worker is capable of giving informed consent and the employer should normally advise the worker in writing to obtain professional advice before inviting him or her to sign a waiver.”

The Complainant Solicitor said in consideration of the foregoing, at no stage prior to the signing of the Agreement, did the Respondent encourage or advise the Claimant (verbally or in writing) to seek independent legal advice on the terms thereunder. Furthermore, nowhere throughout the Agreement, is independent legal advice cited or recommended. In consideration of the foregoing and in circumstances where the Claimant was afforded less than 24 hours to review the Agreement, we state that the waiver of rights contained within the Agreement is not binding. As such, his complaint pursuant to Section 8 of the Unfair Dismissals Acts, 1977 (as amended) should stand.

The Complainant Solicitor stated that on the 1 May 2021, the Respondent appointed a CEO, the Claimant’s former colleague, to the role of Chief Executive Officer (“CEO”).  Prior to this appointment, the Claimant understood that the reason for his termination was by virtue of the role of CEO being redundant. At the time, the Claimant did not dispute the fact of redundancy as he had no reason not to trust the Respondent. However, upon discovery of the CEO’s appointment, the Claimant at that point in time realised that the role of CEO still existed and remained operative. As a direct consequence of this, redundancy was no longer deemed to the “wholly or main” reason for his termination. Upon obtaining legal advice, a complaint of unfair dismissal was lodged on behalf of the Claimant without delay.

The complainant’s solicitor stated that whilst it is accepted that the lodgement of the WRC Complaint is outside of the 6-month time period, the Claimant seeks to rely upon the extension provided for under Section 42 (8) of the Workplace Relations Acts 2015 (as amended). This provision provides for the following:

“An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that

the failure to present the complaint or refer the dispute within that period was due to reasonable cause.”

In other words, an adjudicator may permit the hearing of a complaint, provided the complaint is submitted within 12 months of the dismissal and where reasonable cause exists. The test to be applied in extension of time applications under the Acts, was that formulated by the Labour Court in Cementation Skanska (Formerly Kvaerner Cementation) v Carrol Determination DWT 03382 (otherwise referred to as the “Explain and Excuse” Test”):

“It is the Court’s view that in considering if reasonable cause exists, it is for the claimant to show that there are reasons which both explain the delay and afford an excuse for the delay. The explanation must be reasonable, that is to say it must make sense, be agreeable to reason and not be irrational or absurd. In the context in which the expression reasonable cause appears in the statute it suggests an objective standard, but it must be applied to the facts and circumstances known to the claimant at the material time. The claimant’s failure to present the claim within the six-month time limit must have been due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the claimant should satisfy the Court, as a matter of probability, that had those circumstances not been present he would have initiated the claim in time.

The length of the delay should be taken into account. A short delay may require only a slight explanation whereas a long delay may require more cogent reasons. Where reasonable cause is shown the Court must still consider if it is appropriate in the circumstances to exercise its discretion in favour of granting an extension of time. Here the Court should consider if the respondent has suffered prejudice by the delay and should also consider if the claimant has a good arguable case.”

Subsequently, the Labour Court in Salesforce.com v Leech EDA1615 noted the following:

“It is clear from the authorities that the test places the onus on the applicant for an extension of time to identify the reason for the delay and to establish that the reason relied upon provides a justifiable excuse for the actual delay.

Secondly, the onus is on the applicant to establish a causal connection between the reason proffered for the delay and his or her failure to present the complaint in time.

Thirdly, the Court must be satisfied, as a matter of probability, that the complaint would have been presented the complaint in time were it not for the intervention of the factors relied upon as constituting reasonable cause. It is the actual delay that must be explained and justified. Hence, if the factors relied upon to explain the delay ceased to operate before the complaint was presented, that may undermine a claim that those factors were the actual cause of the delay.

Often failure for to demonstrate “reasonable cause” is by reason of “ignorance of the person’s legal rights, as opposed to the facts giving rise to the complaint”. In other words, where facts are the operative reason for delay (as distinct from an applicant sitting on their hands in full knowledge of the circumstances and nature of dismissal), an application seeking extension shall be granted. To that end we note the following:

a)       The reason for dismissal was not in dispute by the Claimant between the 15 May 2020 and 30 April 2021.

b)      For the Claimant, the dispute only arose on the 1 May 2021, upon becoming aware that the role of CEO had been filled by the Respondent and that the position itself remained in full operation thus calling into question the validity of his dismissal.

c)       Whilst it is accepted that this was 11 months after his termination, the Claimant upon realising same proceeded to lodge a complaint immediately.

d)      The Claimant submits had he had known that there was no valid redundancy, he would have lodged a complaint sooner. However, knowledge of the fact, only arose on the 11th month post termination.

The Complainant Solicitor commented in consideration of the foregoing, we respectfully request that an extension be granted, and the Respondent be placed on full proof that the Claimant’s termination arose by virtue of redundancy pursuant to Section 6 (4) of the Unfair Dismissals Acts, 1977 (as amended).

Mr Alistair Purdy, Complainant Solicitor, confirmed on the 21 July 2003, the Claimant commenced employment with Servecentric Limited, Respondent. In accordance with his terms of employment, the Claimant was initially employed as an operations Manager. The Claimant was subsequently appointed to the role of Acting Chief Executive Officer on the 1 April 2013. In satisfaction of his duties thereunder, the Claimant was entitled to €112,600 (inclusive of benefits) per annum.

The Complainant Solicitor stated in the early months of 2020, the Respondent was trading poorly and began looking at staff layoffs and methods to cut overheads. Specifically, whether a calculation could be conducted in respect of redundancy and notice payments. On the 2 April 2020 and External Adviser costed the redundancies of its employees including the Claimant.

The Complainant Solicitor stated on the 7 April 2020, the Claimant wrote to the directors of the Respondent proposing that he and other member of the senior management team take a 20% reduction in his salary.

The Complainant Solicitor stated on the 27 April 2020, in a directors meeting, the Managing Director stated his belief that “more actions were required by the management team to reduce company overheads” and that the Claimant’s salary reduction did not provide “sufficient headroom”.

The Complainant Solicitor stated on 1 May 2020, Mr Eddie Lyons attended a Microsoft Teams meeting with the directors of the company. This meeting began with discussing current overheads of the company and to explore possible cost saving measures. Per the meeting minutes, the Managing Director asked the Claimant whether he “could see any other savings possible” to which the Claimant stated, “he could not”.

The Complainant Solicitor stated at this point in time, the Managing Director stated that the directors had considered the matter earlier in the week and were now considering making the CEO role redundant as it was a “significant cost” and a Director could provide some assistance to the company one day a week if needed on a no cost basis. The Managing Director noted that no decision would be made until the Claimant had provided his feedback to which the Claimant appropriately stated that he would consider the position, “albeit turkeys never vote for Christmas”. The Managing Director continued by stating that he wanted the Claimant to take the next few days to consider this and to determine what essential functions the CEO was carrying out in the company, before a decision could be made.

The Complainant Solicitor confirmed on the 8 May, Mr Eddie Lyons emailed the directors of the Respondent. The Claimant noted the following:

“Unfortunately, I do not have a counter proposal which gives the company a better financial position in the short term than terminating a salaried employee and having their workload taken on pro bono by a shareholder”.

As such the Claimant listed a number of functions, he was responsible for in advance of the meeting scheduled later that day.

The Complainant Solicitor confirmed on the same date, a further Microsoft Teams meeting had been arranged between the Claimant and the directors of the Respondent. The purpose of the meeting was to discuss the Claimant’s role, his duties and his email received by the directors that day. When asked about his thoughts of making the role redundant, the Claimant stated that from an optics point of view, making the CEO redundant during a period of financial “turmoil” was not promising. Furthermore, the Claimant noted that the projections after September 2021 were positive, in that the Respondent was expected to return to “reasonable profitability”. No response was issued in respect of his statement.

In addition, the Claimant confirmed his tasks as CEO were reviewing customer contracts, authorising payments, reporting on the monthly power usage, liaising with customers, having oversight of vendors and researching the IT sector. The Claimant also noted that in the current environment he was operating at around 50% capacity.

Mr Alistair Purdy, Complainant Solicitor stated on the 11 May 2021, a board meeting was held between the directors of the Respondent, on this occasion including another member. The Claimant was not in attendance. When discussing the Claimant, it was queried what “savings would be made if the CEO position was terminated”. It was explained that his statutory redundancy was €21,000 and his notice was €28,000. As such it was agreed amongst the directors to make the CEO position redundant. The directors also noted that they were satisfied that the company’s operations could continue to “operate satisfactorily with the current technical team in place, CEO”.

The Complainant Solicitor stated on the 15 May 2020 it was confirmed in writing that the Claimant’s role was to be made redundant. The Claimant was presented with a letter of redundancy wherein he was offered a redundancy package to the sum of €50,000 (inclusive of statutory benefits). As outlined in the preliminary points, a condition to accepting the redundancy package, the Claimant was required to sign a compromise agreement without being advised or encouraged to obtain any legal advice.

The Complainant Solicitor stated on the 1 May 2021 the Respondent appointed a CEO.

The Complainant Solicitor stated on the 24 September 2021, the Claimant commenced employment with a new employer. The Claimant received a specific purpose contract.

The Claimant submits that he was unfairly dismissed by the Respondent on the 15 May 2020. Whilst the Respondent contends that the Claimant was lawfully dismissed by reason of Section 6 (4) (c) of the 1977 Act - the Claimant states that redundancy was merely used as a mechanism to remove him from employment. Matters are further compounded for the Respondent in circumstances where the alleged redundant role was restored a mere 11 months later following the appointment of the CEO on the 1 May 2021, thus calling into question the genuine nature of the purported redundancy.

The Complainant Solicitor stated notwithstanding the invalid nature of the redundancy for the purposes of the Redundancy Payment Acts 1967 (“RPA”), the Claimant submits that the process adopted by the Respondent was flawed and devoid of any procedural fairness contrary to Section 6 (7) of the 1977 Act7. This is evidenced by the following:

·       No meaningful consultation process.

·       No genuine attempt to explore alternatives to redundancy.

·       The Claimant’s right to representation was not facilitated.

·       No selection matrix was utilised by the Respondent other the fact that the Claimant was a high earner.

·       No analysis of the Claimant’s skillset was conducted by the Respondent when assessing whether there was any transferability of his ability in respect of alternatives.

·       His years of service were not taken into account.

The Complainant Solicitor commented as the adjudicator is aware, Unfair Dismissal is defined under Section 6 (1) of the UDA. It provides that the dismissal of an employee shall be deemed, for the purposes of the UDA, to be an unfair dismissal unless, having regard to all the circumstances, and whether substantial grounds in existence at the time of the dismissal justifying same. Under Section 6 (4) (c) of the UDA, an employee’s termination is not deemed to be an unfair dismissal in circumstances were said dismissal results “wholly or mainly” from the redundancy of the employee. To that end, the Respondent is placed on strict proof to demonstrate that the Claimant’s termination resulted wholly or mainly from the redundancy.

The Complainant Solicitor commented when considering whether the defence of redundancy is to apply and whether same resulted “wholly or mainly” from the Claimant’s redundancy, the Respondent is required to satisfy that the redundancy was genuine and not used a “disguise” to terminate the employee.

Mr Alastair Purdy, Complainant Solicitor stated when determining whether a redundancy was in fact genuine, regard must be had to Section 7 (2) (a) of the RPA. A redundancy is deemed to have occurred where the dismissal of an employee results “wholly or mainly” by virtue of the employees work requirements having been diminished and/or that the remaining work can be conducted by other employees or that part of a business ceases. Therefore, we call upon the Respondent to demonstrate such in light of the role of CEO on the 1 May 2021. In that regard, we beg to refer to the decision in St Ledger v Frontline Distribution Ltd, whereby the Court remarked that redundancy “has two important characteristics, namely, impersonality and change”.

The Complainant Solicitor said critical to the notion of change, is to ensure no other employee is to be appointed to that role subsequent to its redundancy. As such, it is a key principle of the law of redundancy that the job no longer exists. Therefore, where an employer subsequently appoints a replacement to a redundant role or where the “new” role is consistent with the claimant’s former role or duties, the genuine nature of the redundancy is called into question.  As found in Collins v Excel Services Limited, the EAT stated that there was no redundancy situation for a cleaner where the requirement for the school to be cleaned remained operative post termination. Furthermore, in Melroy v Floraville Nurseries Ltd the EAT was not satisfied on the evidence that a genuine redundancy existed. Whilst a particular part of the employee’s duties had diminished, the remaining areas of work where she was employed, and for which other employees were hired on a part-time basis, continued. In Kenny v Beacain (Rea na Doire) Teo a company made an employee redundant and replaced him with a new worker. The company stated that it was making losses and needed to reduce the number of staff. However, by virtue of the subsequent appointment, the EAT found that a genuine redundancy did not exist.

The Complainant Solicitor said separate to the above, once a decision is taken by the employer as to the precise reason for the dismissal of employee within the statutory definition of redundancy, the next hurdle is that of selection. In accordance with Section 6 (3) of the UDA, when qualifying whether the dismissal “wholly or mainly” related to the redundancy, regard should also be had the selection and criteria and process applied when selecting the Claimant. In other words, the redundancy must be impersonal in nature16. This requirement of “impersonality” is strengthened under Section 7 (2) of the RPA which requires employers to implement an objective approach. This provision makes it clear, that when ascertaining the impersonal nature of the redundancy, i.e. that it did not concern any subjective element pertaining to the individual and that the selection of the employee for redundancy was “for one or more reasons not related to the employee concerned”.

The Complainant Solicitor stated whilst the RPA does not prescribe a set procedure when engaging in redundancy, the UDA, specifically Section 6 (7) (b) thereunder, states that an adjudicator may have regard process which followed the implementation of the redundancy. There are a number of guiding principles have also been established by the former Employment Appeals Tribunal to supplement an employee’s right to fair procedures and natural justice when subject to a redundancy scenario.

The Complainant Solicitor stated when determining whether a lawful termination exists, irrespective of whether it is a genuine redundancy, regard should also be had to Section 6 (7) of the UDA. This provision permits the WRC, in determining if a dismissal is unfair to have regard, if appropriate to do so, to the reasonableness or otherwise the conduct (whether by act or omission) of the employer in relation to the dismissal and the fairness of the procedures applied. “The crucial thing then is to follow a reasonable procedure, including consulting the affected employees, applying a fair selection process and considering alternative employment.”

The Complainant Solicitor stated when affecting an employee’s dismissal, the employer is required to ensure fairness when implementing the redundancy. Despite the lack of statutory guidance, the extent of procedures to be applied shall depend on the prevailing circumstances of each case. Through case law, a crucial element of fairness in the redundancy procedures is that of a meaningful consultation process. This concept of a meaningful consultation process was reinforced in Mulligan v J2 Global (Ireland) Ltd:

“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 that 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.”.

The Complainant Solicitor stated it is important for employers to identify and explore the feasibility of pursuing less drastic measures. In essence this principle invites employers to “consider earnestly” alternatives to redundancy. In a recent decision, the WRC Production Line Lead v Employer ADJ-00024721 determined that an unfair dismissal occurred by virtue of the fact the consultation process engaged in was not real or substantial with no genuine attempt to identify a suitable alternative post for the Complainant.

The Complainant Solicitor said if the Respondent intends to rely upon COVID-19 as a justification for any short falls in the application of fair procedures, we beg to refer to the recent decision in A Service Technician v A Ventilation Company. Here, the Adjudication Officer accepted that the COVID-19 pandemic may have had a considerable adverse effect on the respondent. However, the Adjudication Officer noted that this did not absolve the respondent from adhering to its employment law obligations, observing that “one thing that has not changed is the applicability of the core principles of our employment laws and, most notably, and perhaps most importantly, the underlying and fundamental obligation to apply fair procedure in matters affecting a person’s rights. The pandemic provides no exemption from its writ”.

The Complainant Solicitor said to that end, the Claimant submits no alternatives were discussed, explored or proposed by Servecentric Ltd, Respondent prior to his termination. Furthermore, that the consultation process had “all the appearances of having been drafted for the purposes of the hearing but without any apparent insight as to what the requirements of such a process are”. In circumstances where finances were the main concern, the Claimant also notes that short time lay off or unpaid were not considered. This point was addressed recently in the decision A Transport Manager v A Tourist Event Company ADJ-00029991. Here the adjudicator had regard to the respondent’s failure to consider lay off or unpaid leave in circumstances where the role of transport manager remained “intact and needed to be done as soon as the business was back up and running”. Furthermore, in the decision in Aoife Murphy v The Sims Clinic Limited ADJ-00032561 the adjudicator found that the reasonableness of the decision to dismiss the complainant was called into question and it was held that the onus is on the respondent company to ensure all alternative positions and options are both considered and offered to the employee before a decision to dismiss is taken. The adjudicator included the option of unpaid leave or a career break in the options that should have been considered. The adjudicator put particular weight on the complainant’s transferrable skillset and the ease with which she could have taken on another role. She also noted the potential ulterior basis for not making more efforts to offer the complainant alternative roles. The adjudicator awarded a sum equivalent to 9 months’ pay.

The Complainant Solicitor stated in consideration of the above principles, we submit that no procedure was applied whatsoever by the Respondent. At no stage prior to the decision being taken, was the Claimant subject to a redundancy procedure as no genuine consultation process was applied by the Respondent; no selection criteria were presented to Mr Eddie Lyons; no exploration of alternatives was conducted by the Respondent. Lastly and quite critically, no appeals process was facilitated by Servecentric Ltd, Respondent.

The Complainant Solicitor asked to refer to wherein the Claimant’s efforts to mitigate his financial loss post the 15 May 2020 are demonstrated.

The Complainant stated they do not believe there was valid compromise agreement in place. 

Mr Eddie Lyons, the Complainant believes they have reasonable cause and state they only found about the role being reappointed therefore was not a valid dismissal hence the reason the delay in putting in their claim outside of 6 months but within the 12 months. The Complainant commented that if this was allowed by the Adjudicator it influences the overall substantive matter to be an unfair dismissal.

Complainant’s Evidence

Mr Eddie Lyons, Complainant gave evidence and stated he did not get any legal advice.  He advised he did not remember fully the meeting of 1 May.  He stated someone else drafted the minutes and he does not remember anyone telling him to get advice.

The Complainant said he signed a compromise agreement as the company no longer required him to fill the role and having terminated two other employees previously, he felt it was safest to accede to the termination.  The Complainant confirmed he received it on Thursday pm and had a meeting on the Friday to sign it off. The meta data stated it was the new CEO subsequently appointed who drafted the document.

The Complainant said the environment in early 2020 was financially challenging for the company.  The company was under pressure to find new business to address cost savings to get to the end of September 2021.

The Complainant confirmed it was early April when he had been spoken to reference redundancy and he made proposals to the Board but it was too big a financial gap to bridge. On 27 April the Complainant stated he had first formal teams meeting with reference to his redundancy.

The Complainant confirmed the next meeting occurred on 8 May where his counter proposals were discussed which he had submitted in advance of the meeting.  He stated he was not able to come up with a better financial position than making his role redundant which would be covered by a board director who had planned to do work pro bono. The Complainant advised Servecentric Ltd, Respondent he would take on other work.

The Complainant alleges not everyone was working at full capacity but likely working more than he was.  He accepted there was financial pressure on cash at the time up to September 2021. The Complainant stated he was earning more than the person appointed as CEO subsequently but he had more earning potential due to his commission.  When the Complainant was made redundant, he expected that the senior management team would report to the board instead of to the CEO. There was no indication there would be another CEO appointed.

The Complainant said he was not sure how the termination agreement figure was broken down.

The Complainant stated the agreement was that he was to be available for consultancy work and he was paid for same.

The Complainant said he made extensive efforts to get another job and made 20 applications and in May 2021 he got a role starting 21 September on a less salary.

The Complainant alleges he became aware in early May via Linkedin the CEO role was reappointed. He stated he was gobsmacked and he contacted his Solicitor immediately so there was no delay contacting WRC in a claim.

The Complainant said he felt the fact the role was replaced was difficult in terms of progressing other roles.

The Complainant said even if the role changed since he was in the CEO role the title was the same.

The Complainant said lay off or short time were not discussed with him nor was a career break etc.

Cross Examination

Mr Eddie Lyons, Complainant stated he believed it was 10 May 2021 when he became aware of the new CEO appointment via Linkedin.

The Complainant confirmed he acknowledged the difficulty the company was experiencing but Covid had little to do with it, it was a lease issue which was there until September 2021. The Complainant confirmed the board instructed him to make two other engineers redundant at the same time. The board had discussed same including redundancy agreement with the company Solicitors. He was aware of the concept of compromise agreement but that wasn’t given to engineers.

The Complainant stated he received advice on behalf of their terminations. It was very different to getting advice for himself and his termination.  He confirmed an employee from their Solicitor’s company drafted the agreement and was his liaison on the termination of the two engineers terminated 6 weeks previously. The Complainant stated the savings made by making his position redundant were not going to make any significant difference to the financial situation the company was in.

Mr Lyons, Complainant confirmed €50,000 (including €21,000 statutory redundancy) was agreed in the settlement agreement and the company accepted same. The company suggested the consultancy agreement.

The Complainant stated he did not remember reference to legal advice by anyone.  The Complainant stated he accepted he was told to get advice verbally, but it was non-specific.

The Complainant confirmed he did not accept even if the company said the new CEO’s role was different to his. He had not seen the job specification so could not say, however, he expected the key elements of any CEO role had to be the role of CEO and does not accept he is doing 80% commercial responsibilities.

The Complainant said in relation to mitigating loss and job hunting he started looking for work in June 2020.  He did a part-time master’s course in cyber security which was spring board funded two evenings per week in September 2020.

Servecentric Ltd, the Respondent stated the Complainant had not made any efforts of trying to find employment, however, he said the pandemic made it more difficult and the number of suitable jobs were limited.

Servecentric Ltd, Respondent stated it was accepted by the Complainant, Mr Lyons that his claim was lodged outside the six-month period prescribed in the legislation. The Respondent submitted that there were no circumstances which could possibly justify the granting of an extension of the time beyond the six-month limit and that, accordingly, the WRC had no jurisdiction to hear the claim. The Respondent refers the Adjudication Officer to the Labour Court’s Decision in Cementation Skanska (Formerly Kvaerner Cementation Limited) v Carroll DWT0338 and refers, in particular, to the following passages from that decision:

“It is the Court's view that in considering if reasonable cause exists, it is for the claimant to show that there are reasons which both explain the delay and afford an excuse for the delay. The explanation must be reasonable, that is to say it must make sense, be agreeable to reason and not be irrational or absurd. In the context in which the expression reasonable cause appears in the statute it suggests an objective standard, but it must be applied to the facts and circumstances known to the claimant at the material time. The claimant’s failure to present the claim within the six-month time limit must have been due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the claimant should satisfy the Court, as a matter of probability, that had those circumstances not been present he would have initiated the claim in time”.

The Respondent stated the length of the delay should be taken into account. A short delay may require only a slight explanation whereas a long delay may require more cogent reasons. Where reasonable cause is shown the Court must still consider if it is appropriate in the circumstances to exercise its discretion in favour of granting an extension of time. Here the Court should consider if the respondent had suffered prejudice by the delay and should also consider if the claimant had a good arguable case.”

The Respondent stated that the Complainant’s arguments (as set out in his Complaint Form) that he lodged his claim out of time and that his redundancy was ‘a sham and no way genuine’ because he discovered that his role had been filled approximately a year after his dismissal are without any foundation.

It is submitted on behalf of the Respondent that the relevant date is the date of dismissal at which time the Complainant, having been consulted with and having been aware of all of the relevant considerations regarding his potential redundancy, agreed that his role was redundant. It was submitted that the Respondent was fully entitled to regulate its affairs in response to prevailing or changing circumstances. Whether an individual was appointed to the role of CEO almost 12 months after the dismissal of the Complainant and whether that role was similar to the role held by the Complainant prior to his dismissal were not proper matters to be considered in determining the preliminary issue raised by the Respondent or in determining the substantive issue. It was submitted that the Complainant fails to satisfy any of the conditions for a time extension.

The Respondent submitted without prejudice to the submission, that Mr Lyons, the Complainant was precluded from pursuing his claim by virtue of him having, for good consideration, compromised any claims he may have had (which claims are denied by the Respondent). The Compromise is evidenced by letter dated 15 May 2020 signed by the Complainant.

The Respondent submitted that by virtue of his immediately prior involvement with and implementation of a redundancy programme in the Respondent, the Complainant was well aware of and understood the rights which he was waiving in signing the letter.

The Respondent stated further, contemporaneously with the signing of the Compromise Letter on 15 May 2020, the Complainant entered into a Consultancy Agreement the Respondent one of the express purposes of which was to evidence the fact that the parties remained on amicable terms notwithstanding the Respondent’s need to have made the Complainant’s role redundant.

The Respondent submits that without prejudice to the submissions the dismissal of the Complainant was not unfair.

The Respondent confirmed that in 2019 and 2020 they encountered significant and potentially devastating financial difficulties which threatened the very existence of the Respondent. The Complainant, in his capacity as CEO of the Respondent, was intimately aware of the details of these difficulties which were considered in detail at multiple meetings as solutions were sought as to how to increase revenue and reduce costs. Over the early months of 2020 the directors of the Respondent, including the Complainant, closely monitored the Respondent’s deteriorating finances and decided that a significant programme of cost-cutting was essential to save the Respondent from extinction.

The Respondent confirmed as part of these measures, several employees, including the Complainant, agreed to take significant pay cuts, up to 20%. In addition, the Respondent regrettably had to make two employees redundant. The Complainant oversaw and implemented these cost-cutting measures including the redundancies.

The Respondent confirmed unfortunately, despite the measures referred to above, further measures were required. From 1 May 2020, the directors of the Respondent engaged in a series of discussions with the Complainant regarding his level of capacity and the Complainant indicated that he was only 50% occupied. The directors and the Complainant discussed the constituent parts of the Complainant’s role and whether those components could be distributed amongst other employees and / or whether the Complainant could suggest any other savings, which he could not. As a result of these discussions, it was ultimately agreed between the Respondent and the Complainant that the Complainant’s employment would be terminated by reason of redundancy with effect from 15 May 2020, a date nominated by the Complainant. A Redundancy package, together with the Consultancy Agreement referred to at 2 above, were negotiated and agreed.

It is submitted that the Complainant was, at all material times, intimately aware of all of the details of the Respondent’s precarious financial position and that the Complainant’s redundancy was discussed and agreed with the Complainant as a necessary measure as part of an overall suite of measures designed to ensure the continued existence of the Respondent.

The Respondent submitted for the reasons set out above, that the dismissal of the Complainant resulted wholly from the redundancy of the Complainant and accordingly is deemed not to be an unfair dismissal and the Respondent relies on Section 6 (4) (1) of the Unfair Dismissals Act, 1977.

The Respondent confirmed Mr Lyons, Complainant was in a unique position as CEO as he was involved in drawing up agreements for other staff.

1.       The Respondent said there was an agreed agreement and that it was not drafted by the subsequent CEO.  They stated the minutes of meetings showed that the Complainant was clear of legal implications of agreement and changes taking place there were minutes of meetings and he was told to get legal advice.

2.       The Respondent said that the complaint if not within the time limit, they need to demonstrate why not. They did not give detailed reasons why the claim was submitted outside of 6 months which was required by WRC procedures. They stated the Complainant knew on 1 May a new CEO was appointed but waited another 10 days to submit a claim. The Respondent stated the extension of time and whether it was a fair termination are separate matters.

3.       The Respondent stated it was a valid redundancy and the Complainant was involved in the process.  The position of CEO was filled 12 months later but it is now a completely different role and 80% of the role involved Commercial Director role, unlike the Complainants role which did not involve Commercial Director role.  The Respondent confirmed a lot had changed in the interim period and business needs changed also. In April the business needed a CEO role which resulted in the new CEO role. The Respondent stated that the Complainant accepted in his role prior to the redundancy he was only at 50% capacity. Complainant also suggested the figure of settlement for redundancy, and he was retained as a consultant after that and was paid accordingly.

The Respondent stated they wanted to draw attention to a particular page of the submission – minutes of meeting on 1 May where the Complainant was told to get whatever advice he wanted, and he said legal advice and will give evidence to reflect that.

Witnesses on behalf of Respondent

Mr Aidan Harrison, Director, the Witness gave evidence on behalf of the company.  He was a director and shareholder. He explained the financial position was dire and would have run out of money due to lease.  He stated he received Solicitor advice reference making staff redundant and drafted the letters. They stated they got legal advice to do it and this was legally right.  The Complainant was involved in this process. 

Shortly after that the CEO’s role was considered to be made redundant.  When Mr Harrison said it to the Mr Lyons reference possible redundancy, he wasn’t happy about it and they agreed to give him €50,000 and consultancy work due to his service with the company.

The Director confirmed Mr Paul Wise (company accountant) kept the notes of all the meetings.

The Director confirmed he gave the Complainant time and advised him to get advice and asked him to revert with other options.  He could not remember if he said legal advice or just advice, but he meant legal advice.

The Director stated the decision was taken a week later to make his role redundant and give him consultancy and ex gratia to total €50,000 including redundancy.  Another Director took over the role to assist running the company on pro bono basis.

The Director stated the company made savings in 2021 and they did lease negotiations and up to September 2021 those savings including redundancies prevented the company running out of money.

The Director confirmed in April/May 2021 they decided to appoint a new CEO as the person doing pro bono role got easier. The role of CEO was felt it would be important meeting customers.  The Director stated the role of CEO was a different role now as Mr Brian Roe, new CEO as does the role of Sales & Commercial Director and even though he has the title of CEO it is for only external people to see they have CEO.   His role had not changed, and no one took his previous role then.

Cross Examination of Witness (Aidan Harrison, Director)

Mr Harrison, Director confirmed in late February (23rd) he received confirmation on the CEO’s salary and role.

The Director confirmed in a meeting end March (31st) he said he started to consider at a board meeting the role of CEO and possible redundancy of the role.  They didn’t discuss it with the CEO. At that time, he considered if someone else could take part of the role.

In April he confirmed his statutory notice periods and statutory redundancy.

The Director confirmed on 1 May they met the Mr Eddie Lyons, Complainant to say his job was being made redundant.

The Director confirmed they looked at all cost saving options before that and trying to drive sales.  They confirmed they could not make the sales/commercial director role redundant as they needed a salesperson. When asked the Director confirmed they had considered could the CEO do sales but didn’t think that was the best option.

The Director confirmed the reason he was made redundant was that the role was no longer needed and financially not necessary either.

The Director confirmed the letter of 15 May was drafted by his Solicitor reference the redundancy letter for both the CEO and the two other who were made redundant.

The Director stated he didn’t look at 3-day week options but asked the CEO for options also.

The Director confirmed the previous salesperson left in 2013 and the CEO took it over while she was absent and when she left until the new Commercial Director was appointed.

Witness for Company – Mr Brian Roe, CEO

This witness, Mr Brian Roe is the company’s previous Commercial Director and had been appointed as CEO in May 2021.   He stated he only sent a letter head to the Solicitor for the initial two employee’s redundancies and same for Complainant, but he had no involvement in drafting same.  He confirmed he had zero involvement in the letter.

The witness confirmed his role is still doing the role of Commercial Director. Mr Roe confirmed he is CEO figure head role.  He runs management meetings and attends board meeting for the role. He confirmed his role differs completely to the Complainant. His role was operations and board.  The operations part of the role was divested to the management team. He stated 80% of his role differed to the Complainant.

Cross Examination

Mr Brian Roe, CEO confirmed there was only 20% same responsibilities as the Complainant in his current role and the roles are very different.

The CEO confirmed he was asked to be CEO officially end April but started discussions in early April 2021 with the Director.

The CEO stated he never sent the letterhead to the Solicitors. It was a person in Accounts who sent the letterhead. He saw the request for it from the Solicitor and saw her sending it in.

There are a number of key elements to this case which I need to consider and address as follows: -

1.       Issue reference Timeline of the claim being submitted, threshold of reasonable cause: this claim was outside of 6 months, but the complainant believes they have reasonable cause for submitting it when they found out about the new appointment at that time.

2.       Was it fair redundancy or unfair dismissal due to the fact a person was appointed into the role 11 months later?  And were the roles the same or was the Complainants role made redundant.

3.       Issue reference Waiver signed and consultancy agreement.  Complainant stated he was not advised to get legal advice in the waiver agreement.

Firstly, I will consider the issue associated with the timeframe of the complaint being submitted outside of the 6 months period which was accepted that the lodgement of the WRC Complaint was outside of the 6-month time period, the Claimant sought to rely upon the extension provided for under Section 42 (8) of the Workplace Relations Acts 2015 (as amended). This provision provides for the following:

 “An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause.”

In other words, an adjudicator may permit the hearing of a complaint, provided the complaint is submitted within 12 months of the dismissal and where reasonable cause exists.   I find that the fact the complainant only became aware of the appointment into his role after the 6 months as reasonable cause and therefore I allow the complaint to be heard in line with the relevant legislation.

Next, I am doing to consider the allegation of Unfair Dismissal in line with Section 6(1) of the Unfair Dismissals Act 1977 which provides that:

“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.”

The burden of proof rests with the respondent to establish the substantial grounds justifying the dismissal of the complainant in this case due to redundancy. A redundancy is deemed to have occurred where the dismissal of an employee results “wholly or mainly” by virtue of the employees work requirements having been diminished and/or that the remaining work can be conducted by other employees or that part of a business ceases.  They presented evidence to state that his position was made redundant and during the consultation process the Complainant accepted that to be the case at the time as his role was to be filled by a non-paid Director until 11 months later when the position was reinstated.  I therefore accept that consultation did occur, and no other suitable roles were available at that time and the position was legitimately redundant.  I find that the 11-month time line between the redundancy resulted in different business requirements and needs and I find based on the written and oral evidence presented that this was a fair termination due to the reason of redundancy at the time of redundancy.

Accordingly, I have considered Bunyan v United Dominions Trust (1982) ILRM 404 which states “the fairness or unfairness of a dismissal is to be judged by the objective standard of the way in which a reasonable employer in those circumstances in that line of business, would have behaved”.  I find that to have been the case in relation to this role and termination by way of redundancy.

In relation to the waiver that was signed at the time of termination the Complainants Solicitor referred to the decision seminal decision in Hurley v the Royal Yacht Club [1997] ELR 225, whereby Buckley J determined the following: “I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice, I find the agreement to be void”.   I also considered the position that was adopted by the Labour Court in Keelings v Haskiya (2020) UD/19/96. Here the Labour Court referred to the decision Sunday Newspapers –v- Kinsella and Bradley FTD6/2002[2006] ELR 227 when examining the enforceability of such agreements. Here the Court was tasked with distinguishing between an agreement which is lawful and enforceable as distinct from an agreement which is void and of no effect. The following factors were outlined as indicative of distinguishing the former from the latter:

·       “The terms of any waiver must be construed against the party from whom it emanated. Where there is doubt the course of negotiations between the parties should be examined so as to ascertain what was intended.

·       An agreement to waive statutory rights must be supported by consideration.

·       The waiver should list the various Acts being taken into account.

·       The waiver is only valid if it is based on a free and informed consent given by a person with full knowledge of their legal rights.

·       It is for the employer to ensure that the worker is capable of giving informed consent and the employer should normally advise the worker in writing to obtain professional advice before inviting him or her to sign a waiver.”

The Complainant Solicitor said in consideration of the foregoing, at no stage prior to the signing of the Agreement, did the Respondent encourage or advise the Claimant (verbally or in writing) to seek independent legal advice on the terms thereunder. Furthermore, nowhere throughout the Agreement, is independent legal advice cited or recommended. In consideration of the foregoing and in circumstances where the Claimant was afforded less than 24 hours to review the Agreement, we state that the waiver of rights contained within the Agreement is not binding.

I find considering all the oral and written evidence and relevant case law that this waiver agreement was entered into by both parties being clear in relation to the intent and that additional compensation was given to the employee and a consultation agreement in return for the signing of the waiver.  I also find that the Complainant was clear in signing this document which he would have been party to with other employees, that it was so in the knowledge of his legal rights, and he was free to sign it or not at the time.  The employer did not state that he should get legal advice prior to signing same but I am satisfied based on the above that he did know that this option was open to him should he wish to do so, and he did not do so at the time in this knowledge.

Therefore, having reviewed the above and taken into account all of the relevant legislation, the evidence both written and oral that was presented and the relevant case law, I am satisfied that the dismissal was fair.

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

The claim is not well founded based on the evidence provided. I find in this case based on the written and oral evidence presented and all relevant legislation and case law that the employee was fairly dismissed.