FULL RECOMMENDATION
SECTION 8A, UNFAIR DISMISSAL ACTS, 1977 TO 2015 PARTIES : WALLACE MYERS INTERNATIONAL LIMITED (REPRESENTED BY CARLEY & CONNELLAN LLP, SOLICITORS) - AND - MR SEAN FITZGERALD (REPRESENTED BY KEN STAFFORD MANAGEMENT CONSULTANCY SERVICES) DIVISION:
SUBJECT: 1.Appeal Of Adjudication Officer Decision No(S) ADJ-00029095, CA-00038757-001. It is common case that there was a very significant downturn in the Respondent’s business following the outbreak of the Covid-19 pandemic in March 2020 as the majority of the Respondent’s business clients delayed or ceased recruitment activity. The Respondent placed all of its eighteen staff on temporary lay-off with effect from 23 March 2020. This was rescinded following the introduction of the Temporary Wage Subsidy Scheme (‘TWSS’) on 26 March 2020. The Respondent paid the Complainant the TWSS payment plus €1,600.00 for the month of March 2020, the TWSS payment plus €300.00 in April 2020 and the TWSS only for the remainder of his employment. By letter dated 22 May 2020, the Respondent put all members of the Accounting and Finance Team on notice of potential redundancy. The Complainant was invited to attend a meeting (by Zoom) on 25 May 2020 “to discuss the situation in more detail and how it will affect [him]”. Following the aforementioned meeting, the Complainant was notified in writing that his position was at risk of redundancy “due to lack of business activities”. He was also provided with minutes from the meeting of 25 May 2020 and invited to a further meeting arranged for 28 May 2020 at which he would have an opportunity to make submissions regarding alternatives to redundancy. The Complainant was advised again of the Respondent’s financial situation and the downturn in its business at this meeting. He was also advised that no decision had been taken at that stage in relation to his future employment. A further meeting took place with the Complainant on 2 June 2020, via Zoom. The Complainant was once again advised of the downturn in the Respondent’s business in general and the business being handled by its Accounting and Finance Team, in particular. He was also advised that the consultation process would conclude by 5 June 2020 and a decision would then be taken in relation to redundancies. At the outcome meeting on 5 June 2020, the Complainant was advised that no means of avoiding his redundancy had been identified and that his redundancy would take effect, therefore, on 12 June 2020. Formal written notice of redundancy issued to the Complainant on 5 June 2020 in which he was also advised of his right to appeal the decision to dismiss him. The Complainant availed himself of the right of appeal. The appeal was heard by an external Human Resources Consultant on 18 June 2020 via telephone. The external Consultant issued his appeal outcome letter upholding the Complainant’s dismissal by reason of redundancy on 17 July 2020. It is common case that a second consultant in the Respondent’s Accounting and Finance Team was also made redundant on 12 June 2020. A third consultant in the Team resigned his employment in August 2020, leaving only the Manager of the Team in situ. None of the three consultants had been replaced as of the date of hearing of the within appeal. The Complainant secured alternative employment and commenced his new job on 14 September 2020, the starting salary for which was €47,000.00 per annum. He is claiming a loss of earnings totalling €18,898.62 arising from his dismissal. Evidence of Ms Pooja Sawant The witness told the Court that she was initially employed by the Respondent as an Administrative Officer but was promoted to Human Resources and Operations Manager in February 2020. She outlined the nature of the Respondent’s business and the make-up of its Accounting and Finance Team as it was in March 2020. She told the Court that the Respondent’s business declined significantly in April 2020 and subsequently. For example, she said, the principal CRM database used by the Respondent (Bullhorn) recorded receipt of only one placement order for the Accounting and Finance Team in each of the months of April and May 2020. According to the witness, Management had concluded by early May that it was imperative to reduce overheads if the business was to have a future. She said that all outgoings and overheads were reviewed and new contracts at lower tariffs were negotiated where possible. The witness then outlined the process of consultation with staff in the Accounting and Finance Team that took place about potential redundancies. The Respondent focused on this Team as it was the only one staffed by more than one consultant, she said. Relevant correspondence and minutes of the meetings referred to above were opened to the Court. The witness referred to an issue that the Complainant had raised with the Respondent’s Managing Director, Mr Harbourne, by email on 24 April 2020 regarding the manner in which the Respondent was operating the TWSS. It appears that the Complainant withdrew his complaint by email dated 30 April 2020 and expressed his satisfaction with the detailed explanation of the workings of the Scheme Mr Harbourne had provided to him in a letter dated 29 April 2020. Finally, the witness referred to a request she received from the Complainant on 17 April 2020 for a letter confirming his earnings in support of a mortgage application. According to the witness, the manner in which she worded that letter – notwithstanding that the Complainant had no earnings other than the TWSS (plus €300.00) in April 2020 – is a clear indication that the Respondent was not in any way negatively disposed to him. At the Complainant’s request, the witness drafted a letter on his behalf confirming that neither his salary nor his earnings would be affected by Covid-19. The witness was asked in cross-examination by Mr Stafford if the desired savings and reduction in overheads could have been achieved had the Respondent chosen to place the Complainant on extended lay-off instead of making him redundant. She replied in the negative and said that all data in relation to the Consultant’s transactions and leads would have to have been retained and that meant that various licences would have to have been paid for on an ongoing basis for the duration of the lay-off. She also queried how long such a lay-off might have continued for as no new consultants have yet been recruited to replace the those who were made redundant or resigned in 2020. The witness was also asked if any consideration had been given to transferring the Complainant to another Division of the business rather than making him redundant. The witness said in reply that the redundancies were made in order to make the business leaner in the hope that it could survive while retaining one consultant per Division so as to be able to have a ‘fighting chance’ once the pandemic had subsided. Finally, the witness confirmed – in reply to a question from Mr Stafford – that the Complainant was only informed in the latter stages of the consultancy process that the selection criterion being used by the Respondent would be LIFO. According to the witness, the choice of criterion did not impact on the outcome of the process. Evidence of Mr Ken Harbourne The witness is the Managing Director of the Respondent company. He said in evidence that the queries raised by the Complainant about the Respondent’s operation of the TWSS had no bearing on his ultimate selection for redundancy. The witness described the perilous state of the Respondent’s business in May 2020. He said the business faced a ‘cliff edge’ and needed to reduce costs considerably. He referred to the Accounting and Finance Division which at the time comprised four consultants but was generating zero income. According to the witness, the Complainant – although afforded ample opportunity to do so – had not proposed any alternative to redundancy during the consultation process. The witness said that he was very familiar with the Complainant’s curriculum vitae and knew that the Complainant did not have an alternative area of recruitment expertise with a book of business that would have justified transferring him to a different Division. The witness said that he had offered a position to a potential new hire with expertise in Life Sciences and Pharma in March 2020 but delayed that person’s appointment until August 2020 and had proceeded then because she had an existing book of business and was considered a strategic hire. The Complainant’s Evidence The Complainant outlined his education, qualifications and employment history prior to commencing with the Respondent. He said that there had been no reference to his accrued experience during the consultation process and neither had he been offered the option of extended lay-off. He also told the Court that the data produced at the within hearing by the Respondent in relation its overhead costs per Consultant had not been shown to him nor discussed with him at that time. According to the witness, he had proposed that he take a salary reduction as an alternative to redundancy but that this was not acceptable to the Respondent. Under cross-examination, the Complainant gave details of his earnings since September 2020 in his new employment. He said he had recently been promoted to Assistant Manager level and his salary had increased to €57,000.00 per annum, plus a discretionary bonus. The Complainant told the Court that he made up to ten job applications per week after he had been made redundant and up until he was offered his current position. Discussion and Decision Having regard to the evidence presented to it in relation to the decline in the Respondent’s turnover in the months following the onset of the Covid-19 pandemic, the Court is satisfied that a genuine redundancy situation existed that entitled the Respondent to decide to carry on its business with fewer employees. It made that decision in tandem with taking concerted steps to reduce overheads and outgoings in other areas also. The Court was given a very cogent explanation as to why the Respondent confined the pool of potential redundancies to the division in which the Complainant was employed: it was the only Division that was staffed with more than one consultant. With a view to long-term survival, the Respondent’s plan was to maintain one consultant in each of its existing Divisions. The Respondent then undertook a structured and reasonable consultation process with each of the consultants, including the Complainant, employed in the Accounting and Finance Division. Ample opportunity was given to the Complainant to propose alternatives to redundancy during this consultation process. Ultimately, the Respondent made the decision to make him and one other colleague redundant with effect from 12 June 2020. The Complainant was afforded a right of appeal to an independent external person which he availed himself of. The appeal resulted in a decision to uphold his dismissal by reason of redundancy. The Complainant has submitted that the Respondent’s process is tainted by the fact that he had not been informed earlier in the process that the selection criterion that would be applied was LIFO. The Court accepts that that this information should ideally have been made available at the outset of the process. However, in the light of the fact that two of three non-managerial consultants (both with similar lengths of service) in the Accounting and Finance Division were made redundant on the same date – and the third resigned shortly thereafter, in August 2020 – the Court cannot see that any substantive unfairness was visited on the Complainant by reason of the Respondent’s oversight in this regard. It was also accepted on behalf of the Respondent that it would have been preferable to have communicated the selection criterion to employees at risk of redundancy at an early stage in the process. For the reasons outlined above, the Court finds that the Complainant’s dismissal by reason of redundancy was not unfair. The appeal, therefore, succeeds and the decision of the Adjudication Officer is set aside. The Court so determines.
NOTE Enquiries concerning this Determination should be addressed to Ian Kelly, Court Secretary. |
