Complainant

Respondent

Parties

Michael  Browne

Maguire Mechanical Limited

Representatives

John Douglas , Spireconsultancy9

 Rita Gaynor, Financial Controller and Office Director.

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-00046599-001

08/10/2021

The complainant was employed as a general operative by the respondent.  While on a period of lay off in 2021 he was dismissed by the respondent for reasons of redundancy on 26/05/2021.  He was paid €702 gross per week and worked a 39-hour week.

The complainant commenced employment with the respondent on 16/08/2018.  He was informed on 15/02/2021 that he was being laid off due to the Covid-19 restrictions.  The complainant did not have any update from the respondent while on lay off.  At the beginning of May 2021, he became aware that other employees of the respondent were back at work, and he sent an e-mail to the respondent on 10/5/2021 asking for an update.  He received a reply to this email on the same day and was informed that the respondent had resumed “partial trading” but was not yet in a position to take the complainant back to work as it was anticipated that it would be some time before they would return to normal trading.

On 12/05/2021 the complainant received a letter from the respondent to state that his position was being made redundant and details of his redundancy payments were provided. The complainant then engaged Mr Douglas to represent him.  The respondent was advised that he intended to appeal the decision to dismiss him by reason of redundancy.

The letter of appeal was submitted on 25/06/2021.  The respondent’s advised the complainant on 02/07/2021 that his appeal was rejected.

It was submitted on behalf of the complainant that he was made redundant two days after he made the enquiries in relation to his position.  The respondent did not engage with the complainant either to consult with him in relation to the redundancy, the reasons for the redundancy or to engage with the complainant in relation to alternatives to redundancy.  In that context the respondent failed to follow its own redundancy policy - a policy which was only given to the complainant after he was made redundant. 

It was also submitted on behalf of the complainant that the Redundancy Payments Acts 1967-2007 provided the legislative basis for assessing redundancies, but it is noted that redundancy is not a valid defence to an unfair dismissal in circumstances where the employee was unfairly selected for redundancy or was selected for redundancy in a manner which is inconsistent with his/her contract of employment.

The complainant submits that the case of ADJ-00028929 noted that the Covid-19 pandemic did not provide an exemption from the core principles of employment law and in particular “the underlying and fundamental obligations to apply fair procedures in matters affecting a person’s rights”.

The complainant’s representative also opened  the case of Williams v CompAir, [1982] ICR 156 which outlined the generally accepted principles governing how a reasonable employer would act in a redundancy situation.  These were summarised as follows and include:

1.       The employer to give as much warning as possible of the impending redundancies so as to enable both the union and the affected employees to take early steps to inform themselves of the relevant facts, consider any alternative solutions and, if appropriate, find alternative employment either in the same business or elsewhere.

2.       Consult with the union …  In particular the employer should seek to agree selection criteria and to consider whether the selection was made in accordance with the established criteria.

3.       The selection criteria should be objective and not depend solely upon the person making the selection.

4.       Fair selection in accordance with established criteria.

5.       The employer should consider whether instead of dismissing an employee, it could offer him alternative employment.

The complainant’s case can be succinctly summarised:  There was no fair, transparent or meaningful engagement by the respondent with the complainant prior to the decision to make the complainant redundancy.  As a consequence of this the complainant’s dismissal was unfair.

The complainant gave evidence on oath in relation to his dates of employment.  The complainant confirmed that he was employed as a general operative.  He was provided with a van and worked on refrigeration work during his employment.     This involved dealing with service calls and work associated with that work.  On a typical day he would be involved in general site duties and fitting ducting. 

The complainant gave evidence that the first time he became aware of that his job was at risk was when he received an e mail with a letter on 10/05/2021 which told him that he was being made redundant.  The complainant confirmed that he had no discussion with the respondent in relation to this redundancy.

The complainant gave evidence that he commenced employment with a metal fabrication company on 29/01/2022.  He is currently paid €680 per week gross (net €530).  The complainant also gave evidence that the was on unemployment benefit since his dismissal until he took up this role.  The complainant undertook to submit details of his attempts to obtain alternative work to mitigate his loss after the hearing and the respondent would be given an opportunity to review this.  The WRC was notified that there was a delay in providing this information and in any event the information was provided two days later that the date assigned by the Adjudicator.  The respondent was notified of the delay and the respondent’s representative contacted the WRC and submitted that the complaint should be “dismissed with immediate effect” because of the delay in the submission of this information and that no extension of time should be facilitated. The complainant copied three of the respondent’s representatives with this information.  The respondent confirmed that they did not wish to make any comment on the information provided.

The complainant commenced employment with the respondent on 16/08/2018 as a general operative.  This was a sole position within the company, and he was initially paid €16.00 per hour.  After a period of three months his pay was increased to €17.00 per hour.  The respondent outlined that the company underwent a complete restructuring in 2019 and a transfer to a Limited Trading company took place on 03/09/2019.  As a result of this the complainant was issued with his new terms and conditions of employment on 17/09/2019 and his pay was increased to €18.00 per hour.

The respondent implemented many changes as a result of the restructure.   With the arrival of the Covid-19 pandemic the respondent did its utmost to retain all staff on the payroll and avoid lay-off and at that stage payments equal to 85% of wages were paid while the restrictions were in place.

The impact of the pandemic was that the many of the projects the respondent was involved in were delayed or rescheduled.  The respondent continued to trade whenever permitted to do so.

The complainant received all his holiday entitlements for 2020.

The respondent was due to reopen on 04/01/2021 but the restrictions where then in place did not allow this to happen.  It was hoped that his would be short term.  As this did not happen the complainant was laid off on 15/02/2021.

There was some easing of the restrictions on 04/04/2021 and this resulted in a phased reopening of one of their major projects.  This resulted in a partial return of some of their employees

The complainant remained on lay-off and he contacted the respondent on 10/05/2021.  This was the first contact between the complainant and the respondent since the lay-off commenced on 15/02/2021.

The respondent held a management meeting on 11/05/2021 at which the overall position of the company was reviewed.  Central to this meeting were the review of the projects the company was seeking to acquire.  The company was hoping to acquire a major project and there was a stipulation that only qualified trades people and apprentices who were registered with Solas could work on this site.

The complainant was the only person in a general operative role and all the other employees were trade qualified or Solas registered apprentices.

In this context the respondent could not see where the general operative role fitted in.  A decision was made to terminate the position.  The respondent was anxious that the complainant would not remain a position of uncertainty and so he was immediately notified about the decision and confirmed that all entitlements, including public holidays, annual leave and pay in lieu of notice, would be paid to him.

The complainant did not revert to the respondent in relation to the decision to dismiss him.

The complainant’s representative contacted the respondent, but the respondent decided not to engage with his representative until such time as the complainant provided written authorisation to the respondent to provide information to his representative.

The respondent was notified by the complainant on 18/06/2021 that he wished to appeal the decision to dismiss him by reason of redundancy.  The grounds of appeal were submitted on 25/06/2021 and a final version was submitted on 29/06/2021.

The managing director held a management meeting on 02/07/2021 and the matters raised in the complainant’s appeal were discussed.  The appeal was not upheld, and the complainant was advised on 02/07/2021 that the decision to make him redundant stood and was given verification of the redundancy payment.

Ms Gaynor gave evidence on oath that she is the Financial Controller and Officer Director with the respondent since January 2014.  She was familiar with the complainant since his commencement and outlined that she had a good relationship with him during his employment.  Ms Gaynor gave evidence that they treat people with the utmost respect and care at all times.  She gave details of the complainant’s employment history with the respondent.  Ms Gaynor gave a rationale for the changes to the company restructure in 2019 and this was required to ensure that they could apply to a specific client base and Government listing for projects within their area of expertise.  Ms Gaynor gave evidence that the restructure resulted in a transfer of service only.

The Covid-19 pandemic affected the company and they had to comply with the Government restrictions.

Ms Gaynor gave evidence that she attended the meeting on 11 May 2021 which was also attended by Mr Paul Maguire, Managing Director and Mr Noel Craven Office Manager and the accountancy firm.  This meeting was held to review where the company was currently at in terms of its restructure, project awards and other matters.  There was consideration of a cost reduction plan due to Covid-19 and the fact that they were not successful in being awarded certain projects. 

Ms Gaynor confirmed that a decision was made to make the position of general operative redundant.  The reasons for this were that it was a stand-alone role, and their current projects had a contract stipulation that required qualified certified trades people and registered apprentices.  These projects are the subject of regular audits.  All the other employees with the respondent are qualified and certified or registered apprentices.

Ms Gaynor gave evidence that the complainant has always been treated in a fair and respectful manner.  The position of general operative was made redundant, and the role will not be reinstated as they continue to require qualified trades persons and registered apprentices.  The respondent refutes that it did not act in a fair manner regarding the selection of this role for redundancy. 

In response to some questions from the Adjudicator Ms Gaynor confirmed that there was no contact or consultation with the complainant prior to the decision.  Ms Gaynor also confirmed that there was no consideration of alternatives as the complainant did not have any trade qualifications and was not a registered apprentice.  Ms Gaynor also confirmed that the complainant was not given an opportunity to have any input into alternatives such as remaining on lay or unpaid leave.

Responding to cross examination Ms Gaynor confirmed that here were some employees back on one of their projects in early April 2021. Those employees were qualified persons.  Ms Gaynor also confirmed that it was not possible to assign the complainant to one of their main projects as he was involved in a project which was 95% complete and that the reopening of this project did not have any duties which could be undertaken by a general operative role.  The opening of this project began on a gradual basis from 24th May 2021.

The managing director, Mr Paul Maguire, also gave evidence on oath.  Mr Maguire established the company in 2010 as a sole trader.  He was worked in the business for 25 years and is aware of the requirements of an employee and as an employer.  He holds a 100% directorship in the company and submits that this is an honourable company with a good reputation.  This is the first complaint that that has been submitted to the WRC and this is a testament to the structure and procedures which are followed by the respondent. Mr Maguire said that this complaint came as a complete shock to him and his team as he always held the complainant in high regard and had an extremely good relationship with him.

While undergoing the restructure process, which the complainant was fully aware of, there were many changes taking place and the Covid-19 pandemic did impact on the business to the extent that further changes were required in order to ensure that the company remained as a going concern.  The respondent appointed a Business Development Manager and Contracts Manger to re-evaluate the company position and the effects and impact of the pandemic on the business.

Mr Maguire gave evidence that the final decision to make the complainant redundant was made by him.  This decision was made after reviewing the current projects and the projects which were shelved.  The requirement of a general operative across any of the projects could not be sustained and the main reasoning behind the decision was that projects which were now awarded to the company, or which were in the process of finalisation had stipulations that the work would be carried out by qualified trades and registered apprentices. 

Mr Maguire denied that the complainant was unfairly treated.  The position of general operative was a sole position within the company.  The complainant was the only person ever employed in that role and there are no plans to take on such a role again.

Mr Maguire said that he wished to strongly deny that he or the company ever treated the complainant unfairly.  His priority is to ensure that all employees are treated with the utmost respect and that they are part of a positive working environment at all times.

In response to a question from the Adjudicator Mr Maguire confirmed that the total number of employees in the company was eight, inclusive of himself and management team.

Responding to cross examination Mr Maguire confirmed that all the other employees were qualified.

Mr Noel Craven, Office Manager / Business Development Manager gave evidence.  He commenced in this role on 04/05/2021.  Mr Craven confirmed that he attended the meeting on 11/05/2021 which dealt with many aspects of the business including the effects of Covid-19 and the organisational restructure.  A decision was made to terminate the general operative position as this was a sole position, and it was no longer permitted within their current scope of works.  Mr Craven outlined that if other general operatives were employed at the time, they also would have been made redundant.

Mr Craven confirmed that the decision was not made lightly.  It was not made for any reason connected with the complainant or his work.  It was a purely business decision.  Mr Craven said that he did not know the complainant or never met him.

Following the decision to make the complainant redundant Mr Craven confirmed that he made the decision to notify the complainant immediately as he had been on temporary lay-off and also to ensure that there was minimum inconvenience caused to the complainant.

It is not disputed that the complainant was dismissed by reason of redundancy on 26/05/2021.   Having carefully considered all the evidence adduced and the respective submissions of the parties, the complainant contends that there an unfair selection process and lack of consultation, the respondent submitted that the termination of the complainant’s employment constituted a dismissal by reason of redundancy.

I have to consider the Complainant’s claim of unfair dismissal in the context of a redundancy scenario.

Section 6 (1) of the Unfair Dismissals Act, 1977 states 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 are substantial grounds justifying the dismissal.”

Section 4 (3) (c) of the Unfair Dismissals Act, 1977 further clarifies the situation in relation to redundancy by stating, inter alia, that:

“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 ... the redundancy of the employee…”

Section 6 (7) of the Act states as follows:

“Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the Adjudication Officer, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so –

(a)    To the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal…”

On the basis of the legal position as set out above, the dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy.  Arising from this, the burden of proof rests with the respondent to establish, in the first place, that the dismissal was wholly connected to redundancy, and having done so, to justify the selection process whereby the employee in question was selected for redundancy. 

There is a considerable amount of case law in relation to the reasonableness of the employer in relation to the fair and objective selection of employees for redundancy.  In Boucher v Irish Productivity Centre [1994 EL 205] the Tribunal enunciated the burden on an employer to: “establish that he acted fairly in the selection of each individual employee for redundancy and that, where assessments are clearly involved and used as a means of selection, that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made.”

In the within case the redundancy proposed by the respondent would see the complainant’s role removed and as the evidence presented indicates that this was a stand-alone role within the respondent’s company.

The function of the Adjudicator is to assess what a reasonable employer, in the respondent’s position and circumstances, might have done.  This is the standard by which the respondent’s actions must be judged against.  The Act places the burden of proof on the employer to demonstrate that the dismissal was fair.  As part of exercising this burden of proof the respondent needs to show that fair process and procedures were applied when conducting the redundancy process.

I also have to have regard to the Employment Appeals Tribunal in the matter of Gillian Free v Oxigen Environmental UD 206/2011, where it was noted that:

“when an employer is making an employee redundant while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy … and where there is no agreed procedure in relation to selection for redundancy … then the employer must act fairly and reasonably”.

I accept that the respondent is entitled at any stage to restructure its business model in order to maintain its position and ensure efficiencies. I must have regard to the provisions of Section 6(7) of the Act (as amended) and consider whether the conduct of the respondent in relation to the dismissal was reasonable.  In making a decision on this, I have examined firstly the process surrounding the notification and whether or not there was a meaningful consultation process.

S.I. No 146/2000 which is more commonly cited as the “Code of Practice on Grievance and Disciplinary Procedures” sets out the basic procedure which a respondent should follow prior to dismissing an employee.  In simple terms these include: putting any allegations to the complainant in advance of a hearing, allowing the complainant the opportunity to properly defend himself at a hearing, permitting the appropriate right of representation and allowing an internal appeal of any decision to dismiss.  These are not complex principles and while this instant case does not relate to misconduct on the part of the complainant, the respondent is still obliged to adhere to the principles outlined.

While the respondent had business concerns to address and these may have necessitated cost saving measures, the obligation to follow basic principles is not revoked in such circumstances.

In the matter of Bank of Ireland v Reilly [2015] IEHC 241, Noonan J. approved the following extract:

“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.”

Having regard to the foregoing points and the totality of the evidence as presented I find that the respondent has not provided any evidence that the dismissal by redundancy was substantially and procedurally fair. The respondent has not provided evidence of fair selection for redundancy. The evidence from the respondent’s representatives that they held the complainant in high regard and that “the complainant has at all times since commencement of his employment been treated in a fair and respectful manner” seems to have evaporated when the period of lay off commenced on 15/02/2021.  When the complainant became aware that some colleagues were back at work, he contacted the respondent on 10/05/2021 seeking an update.  It is noteworthy that he was advised on 12/05/2021 that he would be dismissed by reason of redundancy.  The respondent made no contact with the complainant during the lay-off period and did not make any contact with him to advise that his role with the respondent was at risk or to have any contact or consultation with him.  The respondent’s witnesses confirmed on oath that this was correct.  It is difficult to understand the respondent’s view that because the complainant occupied a stand-alone role, they were not obliged to have any engagement with the complainant.  The appeals process undertaken by the respondent was, by any analysis, fundamentally flawed.  I accept the respondent’s evidence that the ultimate decision was made by the Managing Director.  The factual situation is that the management team who reviewed the complainant’s grounds of appeal were the same management team who were party to the original decision.  It is not particularly surprising that they confirmed their original decision. 

The respondent’s approach to this dismissal is also at variance with the complainant’s contract of employment:  This contract states: “Changes in the terms and conditions of this contract will be notified to you, following consultation and agreement, before the date of the proposed change.  Please acknowledge acceptance of these terms of employment as stated by signing and returning below the original of this letter”.  In response to a question from the Adjudicator the respondent’s representative agreed that a dismissal was the ultimate change to a contract of employment and accepted that on this occasion there was no consultation with the complainant. 

The respondent’s redundancy policy, which did not form part of the contract of employment, and which was only given to the complainant after his dismissal states:

“Should circumstances arise where redundancy is seen as a possibility the Company will ensure it complies with relevant legislation and look where possible to:

·       Reduce overtime to a workable minimum, and

·       Investigate whether measures such as short-term working and lay off (without pay other than statutory guarantee pay) or a reduction in terms and conditions of employment are appropriate.

If redundancies cannot be avoided, consideration may be given to applications for voluntary redundancy, were appropriate.  It may not be possible to accept every application for voluntary redundancies depending on the requirements of the business.  If the selection of employees for redundancy becomes necessary, any criteria for selection will be discussed with you at the time where possible.  At all times the overriding consideration will be the future viability of the business and we reserve the right to deviate from the policy where deemed necessary.

All potentially affected employees will be notified of the company’s proposals and there will be full and meaningful consultations with the target groups concerned with selection entries.  No final decision will be made without every opportunity having been given to employees concerned to consult with Management and explore possible alternative positions.  If the selection of employees for redundancy becomes necessary, the criteria for selection will be discussed with you at the time”.

It is clear from the complainant’s contract of employment and the respondent’s redundancy policy quoted above that the respondent should have followed the process outlined.

I believe that no reasonable employer would have dismissed the complainant.  In the light of this conclusion, I find that the dismissal of the complainant by reason of redundancy was unfair for the purposes of the Acts and the complainant’s claim is well-founded. 

In relation to redress I believe that compensation is the appropriate redress in this case.  I note that the complainant is seeking compensation and the respondent confirmed at the hearing that reinstatement or reengagement are not realistic options.

The Complainant also confirmed that he is seeking compensation for unfair dismissal. It is incumbent upon the Complainant to give plausible evidence on mitigation of loss. Details of the complainant’s loss were submitted after the hearing.  Some evidence was also provided of the attempts to mitigate his loss in securing alternative employment.  These documents show that there were approximately 18 “cold call” applications for employment in the seven-month period from 26/05/2021 to the beginning of December 2021.

While he made some efforts to mitigate his loss, I am not satisfied that he approached this with the resolve that is set out in the case of the Employment Appeals Tribunal v Continental Administration Co Ltd (UD858/199) where it stated: “a claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work.  It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work.  The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.”  I accept that the Covid-19 pandemic created difficulties in seeking employment, but I do not accept that it is a barrier to a complainant seeking to mitigate his loss.

The complainant was offered a job in December 2021, and this was pushed out to the end of January 2022.  In this role he is paid €680.00 weekly gross (Net €530.00) and works a 40-hour week.  He continues to work in that role.

Section 7 (2) of the Act deals with compensation and mitigation of loss.

“(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to –

(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,

(b) the extent (if any) to which the said financial loss was attributable to an action, omission or conduct by or on behalf of the employee,

(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,

(d) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved by the Minister,

(e) the extent any) of the compliance or failure to comply by the employer, relation to the employee, with the said section 14, and

(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal”.

Section (2A) “In calculating financial loss for the purposes of subsection (1), payments to the employee –

(a)     in respect of any period following the dismissal concerned, or

(b)     Under the Income Tax Acts arising by reason of the dismissal,

shall be disregarded”.

(3) In this Section –

“financial loss” in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts 1967 to [2014], or in relation to superannuation;

“remuneration” includes allowances in the nature of pay and benefits in lieu or in addition to pay.”

Section 7 of the Unfair Dismissals Act, 1977 sets out the limitation of redress:

Section 7(1)(c) allows for compensation of financial loss:

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

I have found that compensation is the only practical remedy in this case.  The complainant has submitted evidence of mitigation of loss which I find is very low in detail.  The complainant was not employed for a period of approximately 8 months.  Having taken into account the limited detail in relation to the mitigation of loss I award the complainant a sum equivalent to two months pay in the amount of €6,084 as compensation.

I find that the complainant was unfairly dismissed by the respondent contrary to Section 6 of the Unfair Dismissals Acts.  I find the complaint is well founded.  I order the respondent to pay the complainant the sum of €6,084 as just and equitable compensation. For the avoidance of doubt this sum is in excess of the statutory redundancy payment already paid to the complainant.  I order the respondent to pay this amount within 42 days of the date of this decision.

Redundancy Selection.  Unfair Dismissal.