Complainant

Respondent

Parties

Orla  Sheehy

Megagen Implants UK LTD

Representatives

Ms. C McGrady BL instructed by Aileen Fleming,  Solicitor of Daniel Spring & Company

Mr Barry Crushell , Solicitor of, Crushell & Co 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-00041144-001

19/11/2020

The issue in contention concerns an alleged Unfair Dismissal of a Sales / Territory Manager by a Dental Supplies Company. The ground cited was an alleged bogus redundancy.

The employment commenced on the 27th of October 2017 and ended on the 20th September 2020.

 The rate of pay was stated to be € 83,000 which was inclusive of a Sales Bonus of 25K and a Car Allowance of €7,000 for a 40-hour week. The Respondent’s pointed out that the Sales Bonus was not guaranteed, and that the Complainant was taking a very generous view of her salary.

The Complainant was represented by Ms C McGrady BL and gave an extensive Oral testimony. She was fully cross examined by Mr. Crushell, Solicitor for the Respondents.  Ms McGrady BL opened by stating that in a case of this nature the Burden of Proof was on the Respondents.

The Complainant began with the Respondent in October 2017 as a Territory Manager for R of I, NI and Scotland. There were 5 other Territory Managers spread through Wales and England.

The Complainant was a very successful employee and grew sales in her region by approximately 25/28% per annum. In December 2019 she supported a colleague in a Bullying complaint. Immediately afterwards she felt that the attitude of Senior Management towards her had changed, and she was “Frozen out” of the Organisation.

Covid 19 hit in March 2020 with a complete shut down of all Dental practices. The Complainant was laid off and availed of the PUP. This was later changed to the TWSS Scheme.  Various correspondences passed between the Parties at this time. On the 8th of May 2020 a formal Agreement was made between the Parties regarding Lay Off and associated conditions. Dental Surgeries re opened on the 18th May 2020 but the Complainant was continued on Lay Off.

Customers contacted her regarding supplies. She contacted the Respondent regarding a Return to Work. Initially this was scheduled for the 1st July 2020 but did not happen. Colleagues in other Regions were back by this stage. Efforts to clarify her situation proved fruitless.

By Respondent email letter of the 3rd August 2020 the Complainant was advised that the position of Territory manager Ireland, North and South, would be removed from the Organisation. Loss of Revenue from pre-Lock Down levels were cited and the inability of the Respondent to identify other work opportunities for the Complainant made a Redundancy situation impossible to avoid. A purported consultation meeting, by telephone conference call, with the MD, Mr C, was arranged for the 6th August 2020. This took place but was in the view of the Complainant a box ticking exercise for a decision that had already been taken. Mr. C, it was alleged, simply read from a prepared script and refused to realistically engage with the Complainant. Suggestions as to other work, reduced hours etc were ignored. A further Conference call took place on the 19th August with a similar outcome. The 19th August meeting ended abruptly with the Complainant being advised that she was dismissed with effect from the 20th September 2020.

Minutes of both meetings were provided by the Respondent but were heavily challenged by the Complainant as selective and completely inaccurate. The Complainant queries as to the Redundancy selection process between Territory Managers were ignored as were her suggestions of realistic alternatives. The actual Work continued North and South. The Complainant was approached by a Selection Agency seeking candidates for her position which had allegedly been removed from the Organisation.

In additional arguments Ms. McGrady BL pointed out that the purported sales Revenue figures were from the Covid lock down period and as such completely unrealistic. The Complainant had been prevented from returning to work when the Dental industry had resumed in May. Naturally the figures were going to look bad. The Complainant/Respondent was receiving substantial support under the Government TWSS. There was no logic to a redundancy in this scenario. The Government subsidy also rendered the Respondent Salary Costs argument very questionable.

The Consultation process had been completely artificial and rushed. The offer of an Appeal to a Manager junior to the MD was symptomatic of a completely flawed process. The issue of the Selection process between Territory Managers was equally flawed. The Complainant was well versed in working in Scotland and or by extension England or Wales. It was totally artificial to identify her as a unique “outlier” in the R of I. Other Territory Managers in these Territories had shorter service. Furthermore, the Respondent had never properly honoured the Terms of the May Lay Off agreement in particular the clauses regarding Return to Work or proper consideration of Alternatives such as Short Time work or Reduced Hours/Lesser Pay.

In her Oral testimony the Complainant reiterated the points made above by Ms McGrady BL. She presented as a professional Sales Manager quite capable of a multi-Territory/Jurisdiction brief. She reiterated, in her Oral testimony, her view that she had been unfairly targeted for dismissal as a result of her involvement in support of her colleague in the Bullying matters of late 2019.

Having quickly secured a lesser paid position she was claiming substantial compensation.

Substantial case law precedents were cited by Ms. McGrady BL. These included Doyle v Granby Adj 30243, SU Commercial Services v Traynor Adj 30526, Walsh v Econocom Digital Finance Ltd Adj 29093, Production Line Lead v Employer Adj 24721 and Sheehan v Vintners Federation In Ms McGrady’s view all precedents supported the absolute need for fair procedures and proper consideration of a Redundancy as a legitimate proper business decision rather than a covet mechanism for a Dismissal.

The Respondent submitted a detailed written submission supported by extensive oral testimony from Ms RW, the Operations Director, of the Respondent. The Respondent was represented by Mr. Barry Crushell, Solicitor.

The Respondent Company had been active in the Irish Market since 2013. During Covid 19 the revenue base suffered a catastrophic decline both in the UK and Ireland. Almost all staff were laid off and or furloughed. The Respondent was forced to make major business survival decisions one of which, unfortunately, was to withdraw from the Irish market.

The Complainant was the only Irish based employee and was selected for Redundancy. She was unique to Ireland and had no realistic comparators. Territory Managers in the UK were not comparable.

Following the layoffs in April, the Complainant had requested “Parity” in terms of her off work entitlements with UK based colleagues. This was a serious misunderstanding, by the Complainant, of the differences in approaches being taken by the UK and R of I Governments as regards employee supports. None the less an agreement was reached in May 2020 that the Respondent would effectively top up the Complainant’s’ salary in addition to supports from the Irish TWSS. Detailed exchanges of e mails etc between the Parties were exhibited.

On the 3rd August the Respondent wrote to the Complainant notifying her of her “at risk” status. Meeting by phone followed on the 6th August (covid restrictions) and was carefully minuted. Representation was offered from a colleague or a Trade Union officer. Neither option was chosen. The MD, Mr C, outlined the serious business situation and the possible need to make the Complainant redundant. All her representations were listened to, and the minutes are an accurate record. The Complainant was a stand-alone Irish employee with little connection to UK based colleagues. Suggestions that the Redundancy should have been based on UK & Ireland total headcount were not realistic or practical.

A further meeting took place by Phone on the 19th August 2020 and issues of concern were addressed by Mr. C. A very comprehensive letter was issued to the Complainant on the 27th of  August setting out the Respondent rationale and giving the Complainant full notice of the ending of her employment from the 20th September 2020.

The process had been fair and open. The Complainant was the only Irish based Employee and with the Respondent withdrawal from Ireland her redundancy had been an unfortunate necessity.

Mr Crushell cited the relevant Sections of the Unfair Dismissals Act,1977 which allow for a redundancy dismissal to be seen as fair. In addition, he cited the landmark JVC Europe v Panisi [2011] IEHC case and quoted from Justice Charelton regarding the need for Redundancies to be “Impersonal” and at all times guided by fair procedures. The case of St Ledger v Frontline Distributors Ireland [1995] ELR 160 was also cited in support of an impersonal decision making and fair procedures especially as regards a full consideration of all possible alternatives.

As regards any selection processes Mr Crushell cited Gillian Free v Oxigen Environmental, UD 206/2011 to support the arguments that as the Complainant was the only Irish Employee no selection consideration of other employees was possible as none existed.

Ms RW gave an extensive Oral testimony in support of the above. She was rigorously cross examined by Ms McGrady BL for the Complainant. It was recognised that she had not been the ultimate decision maker, this being the MD, Mr.C. None the less Mr C had always acted on her advice. Mr C was unable to attend the Adjudication Hearing due to prior business commitments.

Under pressure from Ms McGrady, Ms RW became, understandably a little vague on some of the details, particularly the various Wage subsidy schemes in operation between the UK and the RoI prior to May. There was also some uncertainty as regards whether or not the Respondent had actually withdrawn from the North of Ireland and what arrangements were now in place as regards the South. It was agreed that a new Salesperson was now based in Belfast as most of the major customers were in that area.

However, she was clear cut on the financial position of the Respondent and the stand-alone nature of the Complainant’s Irish operation. The Redundancy process had been inevitable and was carried out professionally. It was linked to the Irish market Sales & Revenue situation. Furthermore, no suggestions of external factors, late 2019 Bullying cases etc as implied by the Complainant had any merit. Suggestions of comparing the Complainant with English based Territory Mangers had no merit as they were in a completely different arrangement.

As regards her being the Redundancy Appeal Person she had always acted perfectly professionally and would have done so in this case if the Complainant had lodged an Appeal. As regards the Agreement of the 5th May in relation to Return to Work clauses this had to be seen in the overall context of the dental market with Covid still a feature and the very uncertain future prospects / nature of actual Dental surgery work. Guarantees were impossible.

In final summary Mr Crushell stated that the Complainant had been a unique Irish employee. The Respondent had decided to withdraw from the Irish market. The Redundancy had been most unfortunate but carried out perfectly transparently and in keeping with all proper procedures.

3:1        The Leagl context – Section Six (4) of the Unfair Dismissals Act,1977

For convenience it is set out below.

(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:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.

Section c above is the critical reference.

For definition reference has to be made to the Redundancy Payments Act,1967. Section 7 (2) outlines the requirements to qualify as a Redundancy.

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if  for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,

The High Court case of Panisi v JVC Europe Ltd [2012] ELR 70 afforded Mr Justice Charleton the opportunity to set out key legal aspects. This were that the Buren of Proof is on the Employer, the facts of the Redundancy have to be clear, the Redundancy has to be “impersonal” i.e., not connected in any way to the person involved, it is the position or employment that is being made redundant and critically a Redundancy cannot be a disguise for other agendas relating to the employee such as discipline or other matters. There are also considerable legal precedents in this context. The issue of change in a workplace was also clearly set out in St. Ledger v Frontline Distribution Ltd. [1995] ELR 160.

The bottom line in plain English is that a Redundancy has to be “real” and cannot be used as a disguise for other less overt agendas.

However, it is most important to note that Employers have the Right to make Redundancies and in the vast majority of cases the Redundancies proceed without any issue.

None the less a Redundancy has to be handled by a procedure of real and meaningful consultation with the impacted employee or employees.

The Legal precedent cases cited in the Hearing  (Doyle v Granby Adj 30243, SU Commercial Services v Traynor Adj 30526, Walsh v Econocom Digital Finance Ltd  Adj 29093, Production Line Lead v Employer Adj 24721 and Sheehan v Vintners Federation , Keogh v Mentroy Ltd UD209/2009 and Gillian Free v Oxigen Environmental UD 206/2011 emphasised in addition the need for careful consideration of alternative work proposals submitted by an employee.

However as in all complaints and with Legal precedents carefully noted a case really relies on a careful examination of the particular evidence and written & Oral testimony presented.

3:2         Consideration of the Evidence and Cross Examination of same.

3:2:1        Overall Point of Principles in reviewing evidence.

The key question in this case was, at first glance, quite straightforward. Was the Redundancy of the Complainant a “genuine” Redundancy or was it a dissimulation for an Employer dismissal.?

To begin with a point of principle, the Unfair Dismissals Act,1977 and the Redundancy Payments Act,1967 allow for Redundancies. As stated above there are four clearly defined Grounds in the 1977 Act – redundancy being at Sub Section c as quoted above.

All Legal precedent clearly states that, particularly in an Unfair Dismissal Act case, the role of the Tribunal or in this case an Adjudicator is not to impose or suggest their own view but rather to over see Natural Justice and to consider the Reasonableness of a Dismissal – the phrase “Band of Reasonableness” applies , in other word what would a similar and reasonable employer in a similar industry deem appropriate.

It is also necessary to note Leagl precedents that caution an Adjudicator or Tribunal from taking an overly prescriptive approach to Regulations – in other word some flexibility over minor details can be allowed in a Reasonable situation.

3:2:2         The evidence presented

Two key oral Testimonies were presented, the Complainant and Ms RW, the Operations Manager. A key piece of correspondence was the lengthy letter of the Respondent on the 27th August 2020 confirming the dismissal.

Financial Issues

The first issue was the Financial arguments. No one could contest that the revenue/sales volumes of the Respondent were down dramatically during 2020. However, this was the case for myriad businesses across every sector of the economy both in the UK and Ireland. It was the main reason behind the TWSS in the R of I and similar Government Employer /Business support schemes in the UK. To base a Redundancy decision on this loss of Sales Revenue requires some careful justification. Dentists re-opened in late May and the Oral testimony of the Complainant was that her former customers were ringing her for assistance.

The Oral evidence of Ms RW was that the Complainant was not brought back to work on the 1st July (leaving a family bereavement aside) as the entire situation “was under review and completely uncertain”. It was agreed that most English based colleagues were back at work by July. Bearing in mind that the TWSS supports were available, not allowing the Complainant to return to work even in a reduced capacity seemed unusual from an Adjudication perspective.

However, it has to be stated that no Independent Financial/Accountancy advice was put forward by either side. The assumptions regarding business demands from Dentists, reopening their practices following lockdown had to be only that -assumptions.

Of more relevance and surprisingly it was somewhat downplayed in the proceedings was the Salary level of the Complainant. To a reasonable observer it was substantial and was stated by the MD, at an early stage , as being a major burden for the Company. This was a very valid and simple ground for Redundancy which seemed to have got lost in the “shutting Irish operations” down arguments. To an observer, there may have been an element of leaving a key player “on the bench”.

 The Complainant stated that she offered to work for a reduced salary, but her offer was ignored. It was interesting to note that the Complainant quickly secured other work but at a reduced salary.

Procedural issues

The entire process took from the 3rd to the 19th of August 2020 and was conducted entirely by Telephone /Conference calls.

Ms.RW for the Respondent gave clear evidence of proper paperwork, notifications etc being utilised. Minutes were taken, albeit disputed, and shared. The Complainant in her evidence referred to the 5th May Agreement being largely overlooked and her inquiries regarding a return to work being largely ignored for most of June/July.

The meeting of the 6th August, following the letter of the 3rd of August was described as quite intimidating by the Complainant. The issue of Representation was discussed. The Complainant effectively had none – she could not call on a UK based colleague and was not in a Trade Union. The Respondent made it clear that their procedures precluded a Leagl advisor taking part. The Complainant described the MD,  Mr.C, “as reading from a prepared Script” and refusing to answer questions or consider any alternative suggestions. The same applied to the further meeting on the 19th August 2020. It was simply, in her view, box ticking to cover a pre-determined decision.

Mr. C, the MD, was unable to attend the Adjudication Hearing and the input from Ms RW, the Ops Manager, was hazy at some points of detail. However the overall Adjudicator impression from the Respondents written material and from Oral testimony from Ms RW, overall a good professional witness, was that a pre-ordained business decision had been taken.

Under Oath the Complainant strongly stated that she had made numerous suggestions to Mr.C which he had brushed aside. Her evidence was clearly given and had to deemed credible. Mr C, the MD, had not attended the Hearing and his interpretation of the conversations of the 6th and 19th August was not available save from the letter of the 27th August 2020 and Ms RW interpretations.

From an Adjudication Officer point of view the conclusion had to be that there was no impression or more importantly of strong evidence presented of any employment alternatives from the Complainant being considered.  This was a key procedural finding.

A further procedural issue was the question of an Appeal against the decision. Ms RW was proposed as the Appeal Person -clearly, she was subordinate to Mr C, the decision maker. An Appeal has to be to an Independent Person and in an organisation, normally hierarchically superior to the decision maker. This was also a serious Procedural flaw in the Respondent case.

Extraneous Factors

A major issue repeated by the Complainant, under Oath, was the allegation that she had been “Frozen Out” following her very public support of a former colleague who it was alleged had been the victim of a Bullying situation in November / December 2019.

Ms.RW for the Respondent, again under Oath, denied most emphatically that there had been any external or extraneous factors in the Redundancy decision. It was purely financial and organisational.

Ms. RW was not the Decision Maker and in the absence of Mr C, the MD, it was impossible to form an opinion on this. However, an Adjudicator can make inferences but in the absence of any real evidence other than the very divergent sworn testimony of the Parties the best that could be inferred would only be largely unsupported assumptions.

Reasonableness of the Decision.

In the Respondent’s arguments the case was consistently made that they were withdrawing from the Irish market in the Republic. The recent appointment (Spring 2022) of a new Manager based in Belfast did not add credibility to this. The Complainant had covered all of the Island of Ireland and Scotland.

The argument was that Northern Ireland had a few ”big clients” but it was very vague from Respondent  evidence how clients in the South were to be catered for. The Dublin Dental Hospital was mentioned by the Complainant as a major client on a par with anything in the North.

The Respondent was in receipt of financial support from the Irish Government.  To a reasonable observer the Redundancy decision appeared at best very premature for a “Reasonable” Employer.

3:3         Adjudication conclusion – The Burden of Proof.

The Burden of Proof, as stated in the Legal paragraphs above , in a case of the nature  rests on the former Employer. The former employer has to comprehensively demonstrate that the Dismissal was a “pure Redundancy” and was not “legally tainted” by other factors. The Legal Bar is high here.

On overall balance and having comprehensively considered all the materials submitted, the Legal case law cited and most importantly the Oral testimonies, the Adjudication conclusion has to be that this standard of proof for a Pure Redundancy was not achieved.

A finding of Unfair Dismissal has to be made.

Unfair Dismissal, Redundancy Grounds in Unfair Dismissal,