Complainant

Respondent

Parties

Patrick Troy

Flynn Management & Contractors Limited

Representatives

Alan Ledwith BL

Loughlin Deegan, Byrne Wallace Solicitors

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 28 of the Safety, Health & Welfare at Work Act, 2005

CA-00036578-001

Withdrawn

09/06/2020

Complaint seeking adjudication by the Workplace Relations Commission under Schedule 2 of the Protected Disclosures Act, 2014

CA-00036578-002

Withdrawn

09/06/2020

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00036578-003

09/06/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00036578-004

09/06/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00036578-005

09/06/2020

The respondent manages large construction projects in Ireland, the UK and Northern Europe.  The complainant joined the company in October 2018, having been identified by the directors as a suitable candidate for the job of their first Group HR Director.  The complainant completed his probation in April 2019 and no issue was raised with him regarding his conduct or performance.  In November 2019, his salary was increased by 10% to €110,000.

Following the onset of the Covid-19 pandemic in March 2020, the respondent was forced to close some of its sites and other work was stopped or cancelled.  Government supports were availed of and salary cuts were imposed on employees not permitted to attend work due to the lockdown.  Having assessed the impact of the Covid-19 pandemic on their business, the directors decided that the job of a Group HR Director was no longer required.

On April 29th 2020, the complainant was invited to attend a meeting the following day to discuss the redundancy of his job.  Although he was advised that he could be accompanied by a colleague, he attended the meeting on his own.  Mr Murphy, the finance director, and Mr Flynn, the operations director, attended the meeting for the employer.  The respondent’s submission refers to this meeting as being “wide-ranging and comprehensive” and a transcribed note was included in the complainant’s book of papers at the hearing.  The two directors planned to revert to the complainant with a decision a few days later, but he asked for an early response. 

On Friday, May 1st, the complainant was issued with notice that his job would be made redundant and that his employment would be terminated.  He was given three months’ notice, with the effect that his employment ended on August 1st.  He was paid in full for the period of his notice and he was not subject to the pay reductions imposed on other employees.  As he had less than two years of service with the respondent, he was not entitled to a redundancy payment.

The complainant argues that his dismissal was unfair and that circumstances leading to the decision to make his job redundant were not transparent and lacked credibility.  He claims that the directors made the decision to eliminate his job for personal reasons and that the procedure that ended with his dismissal was “a box-ticking exercise.”

Summary of the Written Submissions

In January 2021, on behalf of the respondent, Mr Deegan submitted a written response to the complainant’s claim that he was unfairly dismissed (and in response to the other four claims, two of which have been withdrawn).  Further submissions were provided on October 1st 2021, and a final document was provided on November 3rd 2021, in advance of the first proper hearing day on November 5th.  Below is a summary of the employer’s response to the complaint under the Unfair Dismissals Act.

In October 2018, when the complainant joined the company, 153 people were employed.  By the end of 2020, this number was reduced to 134, and 18 jobs, equivalent to 12% of the workforce were made redundant.  It is the respondent’s case that the complainant’s employment was terminated on the ground of redundancy, arising from the severe financial hardship caused to the company by the Covid-19 crisis.  The complainant was the only Group HR Director employed and therefore, there was no issue around selection.  The complainant has not been replaced and the group’s HR functions are being carried out by a reduced HR team.  Before he was dismissed, the respondent consulted with the complainant about possible alternatives to redundancy, but no alternatives were identified.

In his submission, Mr Deegan said that the size of the respondent’s business, with 153 employees, did not merit the recruitment of a HR Director.  Until 2018, the HR function had been carried out by more junior HR staff.  As they had ambitions to grow, the respondent decided that HR merited a high-level, strategic focus, so that it could be developed, alongside the other important functions of the business, to fit the larger structure that was envisaged.

While he was not a company director in the official sense, in the company’s hierarchy, as head of the group HR function, the complainant was a director, alongside other heads of functions.  From the beginning of his employment in October 2018, the respondent expected the complainant to ensure that the company was compliant with its HR requirements, including working time requirements.  It is the respondent’s case that they supported the complainant regarding the challenges associated with his role, including the perennial challenge of recruitment and retention of staff.

As a construction company, the respondent was particularly hard-hit by the pandemic.  Several of its sites were closed due to lockdowns; some clients stopped work on projects and others cancelled projects that were scheduled to start.  Mr Deegan provided examples of the effect of the pandemic on the respondent’s business:

a)              The respondent’s plans for 2020 onwards was based on its confidence that its largest client, Dublin Airport Authority (DAA), would provide significant work from tenders won for the delivery of its Strategic Infrastructure Plan (SIP).  The SIP was expected to have a value of €1.5 - €2.0bn over a period of years and the respondent expected to secure 10% of the work, business worth in the range of €150 - €200m.  Due to the effect of Covid-19 on the airline industry, the SIP was put on hold by the DAA and by April 2020, the respondent could not rely on getting any major new projects from the DAA for the foreseeable future.

b)             Separate to the SIP, a project valued at €8m for Dublin Airport’s retail operators which the respondent had expected to commence in 2020 was postponed indefinitely.

c)              A project worth €10.7m on the upgrading of the baggage-handling facility at Shannon Airport was suspended in April 2020, with no clarity regarding a re-commencement date.

d)             An office development project in London, worth €4m to the respondent, was cancelled, with only a small element of the work carried out so far paid for.

The respondent’s business had, to a large extent, been stopped due to the government restrictions.  There was no certainty regarding what would happen in the future, although further restrictions seemed inevitable.  The company revised its forecast for turnover for 2020 from €150m to €90m.  In response to the crisis, measures were taken to stabilise the financial situation:

 i.               The company availed of financial supports such as the Temporary Wage Subsidy Scheme (TWSS) and later, the Employee Wage Subsidy Scheme (EWSS).

ii.              Discretionary expenditure on IT, fleet hire, telecoms fees and plant hire were reviewed and reduced.  Other overheads were also reduced to save costs.

iii.              Salary increases due to be paid in April 2020 were not paid, and instead, wages were reduced and employees were instructed to reduce their working hours.  These measures varied from month to month, depending on the extent of the Covid-19 restrictions.  In March 2020, directors’ salaries were reduced by 20%.  In April and May, all staff apart from a group working on certain HSE sites that continued operating, were subject to a reduction in wages of 40%.  In June 2020, wages were reduced by 20%.  In July 2020, as government restrictions on construction sites were relaxed, salaries were restored to 100%.

iv.              Discretionary bonuses due in respect of work done in 2019 were not paid.       

The complainant attended directors’ meetings from the onset of the pandemic and he was acquainted with the extent of the crisis and the measures being taken to address the fall-out on the business.  On April 28th 2020, he wrote a lengthy email in which he set out his opinion that redundancies should be considered before salary reductions, describing redundancy as “the ‘cleanest’ way of rightsizing the business for our expected annual turnover.”  By late April 2020, it was evident that, despite the salary reductions and other measures to reduce costs, a significant number of redundancies was likely to be required.

It was also immediately evident that the company would not be expanding, but instead, would be shrinking.  The rationale for having a HR Director in a business of less than 150 employees was questionable.  The respondent therefore commenced a redundancy consultation process with the complainant.  This process commenced on April 29th and ended two days later, on May 1st 2020, when the complainant was issued with three months’ notice of the termination of his employment.

The Respondent’s Case that the Dismissal of the Complainant was not Unfair

Referring to section 6(4) of the Unfair Dismissals Act 1977 and the provision that a dismissal will not be unfair if it results from redundancy, Mr Deegan said that the complainant’s role was clearly redundant.  He referred to the definition of redundancy as section 7(2)(b) and (c) of the Redundancy Payments Act 1967 and he submitted that the respondent fairly decided that the business no longer had a requirement to carry out the work of the particular kind for which the complainant was employed, namely the senior strategic HR function carried out by a Group HR Director.  The respondent also decided to carry out its business with fewer employees, as is evident from the fact that the complainant was one of 18 people made redundant in 2020.

Because the complainant was the only person in the role of Group HR Director, no issue of selection for redundancy arose.  Mr Deegan referred to section 6(3) of the RP Act, where it is provided that selection for redundancy arises where the circumstances constituting the redundancy,

“…apply equally to one or more other employees in similar employment with the same employer who have not been dismissed.”

Mr Deegan said that the evidence will show that the decision to make the complainant’s job redundant was impersonal and not related to the employee concerned.  In this regard, he asked me to consider the decision of the High Court in JVC Europe Limited v Panisi [1].

Mr Deegan asserted that the process followed by the respondent in making the complainant’s job redundant was a fair process.  Two of the directors met the complainant and had extensive engagement with him about the proposal to make his job redundant.  The complainant was well-acquainted with all the issues, having participated in directors’ meetings and having recommended that redundancy was the most efficient way of dealing with the challenges to the business and the reduced turnover.  At the meeting on April 29th, the complainant requested that a decision be made the following day, and this request was granted.

Mr Deegan said that had it not been for the unprecedented economic emergency that was triggered by Covid-19, the complainant would have continued in his job.

The Complainant’s Case that his Dismissal was for Personal Reasons

In his submission, Mr Ledwith asserted that the process leading to the selection of the complainant for redundancy was a sham and amounted to a procedural, “box-ticking” exercise in circumstances where the pre-determined selection process meant that nothing could have been done by the complainant to overturn his selection.

The selection of the complainant for redundancy was on personal grounds when,

 i.               It occurred at a time of enforced redundancy when it was universally the position that senior HR personnel were the busiest and their skill sets were in high demand.  At a meeting with the directors, the complainant had indicated a need to hire new HR staff to deal with the flood of work that was overwhelming his department.  He was required to work well beyond his contractual obligations and, up to the time of his departure, he was required to work at weekends.

ii.              The operations director, Mr Mick Flynn had frequently expressed dissatisfaction with the actions and conduct of the complainant.

iii.              There was no consideration by the respondent of options other than the dismissal of the complainant.  They had no regard to options such as annual leave, salary reduction with short-time working, temporary lay-off or re-organisation of the HR function. 

The first person to be made redundant in the company was the HR Director.  Mr Ledwith submitted that this was extraordinary and that it pointed to a clear targeting and singling out of the complainant.  Mr Ledwith suggested that he did not fit into the established culture of the respondent’s company, and that he was a dissenting voice highlighting human resources issues that were a concern.  Mr Ledwith said that, at the meeting with the complainant on April 30th 2020, Mr Flynn conceded that the complainant’s was being made redundant at a time when there was a shortage of staff in the HR department.  It is apparent from the transcribed note of that meeting that Mr Flynn did not acknowledge that there was a shortage of staff in the HR department, but he acknowledged that the complainant had looked for additional staff.

In his new role as Group HR Director for the respondent, the complainant was a member of the leadership team, referred to in the respondent’s submission as the “Director Team.”  He understood that the position would be secure and he accepted the job on the basis that he would have his own office and that he would report through the finance director, Mr Murphy, to the four executive directors.  Mr Ledwith said that at all material times it was understood that the role of HR Director would be independent and that there would be no interference in the function by others.  Before he joined the company, due to the significant workload to be undertaken, the complainant recruited a HR generalist and this person started work two weeks before the complainant.

Having commenced in the job on October 22nd 2018, around February the following year, the complainant presented a three-page HR summary report to the directors.  In the report, he showed that the attrition rate had been previously under-reported by 10% and that, in 2018, the attrition rate was 36% and not 26% as had been envisaged.

For the work that the respondent was involved in at Dublin Airport, access permits were required which necessitated five-year background checks on employees working on the site.  The complainant refused to write a letter to the DAA to confirm that the background checks had been carried out, because, it was his opinion that no checks had been carried out.  The complainant informed the director responsible for projects that he wouldn’t write the letters and, from then on, he wasn’t involved in the vetting process.  The complainant claims that this created a conflict and a sharp change in the respondent’s attitude towards him.

In February 2019, a staff room and office were allocated to the complainant, as had been agreed at his interview.  In addition to the four executive directors, the company has an advisory board which comprises the executive directors and three external non-executive directors.  The complainant attended a meeting of the advisory board on February 28th 2019, at which he suggested that the company would benefit from having a HR strategy.  The complainant’s submission states that “he had become very quickly an integral part of the business as is seen by the Directors meeting of 21st March 2019 and subsequent director meeting notes which heavily involve the complainant.”  He was under pressure around this time to prepare training plans and the HR strategy.  The time constraints meant that it was unreasonable to expect the training plans and a HR strategy at the same time.  The complainant made this case at the March directors’ meeting but he was instructed by Mr Murphy to complete both assignments.

Following the March meeting, the complainant was approached by Mr Flynn and told that when he was asked by Mr Murphy to do something, then he was to do it and not challenge a director again.  The complainant informed Mr Flynn that he did not report to Mr Murphy on HR matters and that this was agreed with Mr Murphy before he joined the company.  The complainant said that this created conflict.

Over two weekends around Easter 2019, the complainant worked on the HR strategy.  Notwithstanding his expectation that the HR function would be independent, the complainant said that Mr Murphy and Mr Flynn told him what should be included in the strategy.  He sent a draft to Mr Murphy for circulation to the executive board.

In this document, the complainant identified several problems which he considered were evidence of a very stressed work environment.  These included feedback from the Great Places to Work Institute, exit interviews, accumulated annual leave, high attrition and staff complaining about being under stress.  As one of his first strategic priorities, he suggested that his focus should be on making the working environment “a happier, less stressful and psychologically safer place to work.”  He received very negative feedback regarding the draft strategy, with Mr Murphy advising him that the managing director, Kevin Flynn was livid about the contents.  He claims that Mr Murphy advised him that if he was the right person for the job, and if he was to continue in the organisation, he “needed to get on board with the Flynns.”  The complainant felt that the minutes of the meeting did not accurately reflect the discussion that had taken place and that they were written to protect the company from a legal perspective.

The complainant’s submission notes that on May 7th 2019, Mr Murphy phoned him and asked him if he had given consideration to the previous week’s meeting and if he was sure he wanted to be the HR Director going forward.

In his submission, the complainant asserts that, because of the negative attitude towards him, he had to move from his office to a shared office.  He didn’t get a salary increase, which he claims he was offered as an incentive when he was recruited.  He claims that he was told by the advisory board members that the only reason he wasn’t dismissed was because any new HR Director would probably tell the directors the same thing.  In July 2019, Mr Murphy informed the complainant that the HR strategy was “shelved.”

Three weeks after their return from a weekend away in September 2019, Mr Murphy confronted the complainant about homophobic comments he made when they were in a pub on the Friday night.  He gave evidence about this incident at the hearing on March 2nd 2022.

The complainant was concerned about some employees working long hours and he put this on the agenda of his monthly HR report.  In his submission, he said that the managing director, Mr Flynn disputed that there was a pattern of long working hours compared to previous years and he decided that this matter should be discussed at operations meetings and not directors’ meeting.

On October 10th 2019, the company interviewed a project manager without the complainant’s involvement.  He claims that this undermined his position as the HR Director.  On October 23rd, he was informed that a key agenda item for the quarterly senior management meeting on November 7th would be the issue of staff turnover.  He claims that he was not consulted about this key people issue.  At a meeting on October 30th to prepare a business plan for 2020 to present to the advisory board, he claims that Mr Murphy, and the projects director, Mr Cormac McKenna, manipulated his document containing explanations for employees leaving, resulting in a distorted version of the cause of attrition.  When he challenged Mr Murphy and Mr McKenna, he claims that he was accused of being dictatorial.  He was concerned that this would result in false information being presented to the advisory board.

The complainant’s submission notes that he met with Mr Murphy, although no specific date is mentioned, and that he advised him that he had “taken all the blows he was going to take” in respect of what he considered to be harassment, the undermining of his role, his office move, under-resourcing of the HR function and being remonstrated with over remarks he made at the weekend away.  He suggested that, without increasing the payroll costs, an extra administration person could be employed in the HR department if he reduced his working week to four days.

When he wasn’t given the opportunity to make a presentation to the directors and to the advisory board in November 2019, the complainant felt that his role had been undermined.  On January 24th 2020, he wasn’t included in a meeting to discuss training, a core element of his role.  He claims that he was working every weekend at this stage.  At a meeting on January 31st 2020, he was instructed by Mr Murphy to remove the issue of long working hours from his HR reports in future.  The complainant argued that he had a statutory responsibility regarding working time, but he said that Mr Murphy said that this was the reason the topic was to be removed.  He claims that Mr Murphy said that the company needed to be clever and to be able to deny that they were aware of long working hours.

At a meeting in February 2020, the complainant disagreed with the directors’ proposal to pay out lower bonuses than had been anticipated.  Following the meeting, the operations director, Mr Flynn, told the complainant that he had never seen a manager go against the consensus in the manner in which the complainant had objected to the directors’ proposals regarding the bonus.  The complainant advised Mr Flynn that he was concerned that the staff would be angry and disappointed and that the company couldn’t expect to be taken seriously if they were telling employees that 2019 was a great year, but when it came to paying the bonus, they were telling them that their performance was poor.  The complainant’s submission notes that he told Mr Flynn that this impacted adversely on trust in the management.  

On March 5th 2020, the complainant had an argument with Mr Flynn regarding his assertion that the HR department was to be described as “impartial.”  It is the complainant’s case that his adherence to his independent duty as a HR director set him at odds with the other directors.  Further conflict arose when he refused to concede to the deduction of two days’ statutory annual leave from employees during the Covid-19 pandemic.  The day after the complainant objected to how the company was using the TWSS, he was called to a meeting to discuss his redundancy.  He argues that the respondent terminated his employment “under a guise of Covid by way of a sham redundancy.”  He claims that the true reason for making his job redundant was personal, amounting to dissatisfaction with his performance, and the manner in which he carried out the “independent HR director functions attracting the clear discord of the Respondent agents.”

Legal Arguments

For the complainant, Mr Ledwith submitted that a question of causation arises which requires me to decide, on the balance of probability, whether or not the dismissal of the complainant was attributable wholly or mainly to a redundancy situation.  He referred to the decisions of the former Employment Appeals Tribunal (EAT) in Davis v Blarney Woolen Mills[2] and Mulligan v JE Global (Ireland) Limited[3], as examples where a conclusion was reached that redundancy was not the cause of dismissal, but that some other issue prevailed. 

Referring to section 7(2) of the Redundancy Payments Act and the five specific circumstances in which a redundancy may occur, Mr Ledwith argued that the respondent failed to specify which of the five circumstances applies to the redundancy of the complainant’s job.  He referred to the decision of the EAT in St Ledger v Frontline Distributors Limited[4] where the Tribunal referred to the two important characteristics in a redundancy, of impersonality and change in the workplace:

“Impersonality runs throughout the five definitions in the Act.  Redundancy impacts on the job and only as a consequence of the redundancy does the person lose his job.” 

Mr Ledwith submitted that, as set out in the findings in McGeehan v Park Developments,[5] the onus is on the employer to establish that the work is no longer carried out in the workplace.  He argued that the respondent continues to perform the work of the complainant. 

Like Mr Deegan, Mr Ledwith also referred to the High Court decision in JVC Europe Limited v Panisi (footnote 1), which he said, provides clear guidance for me to identify “sham redundancies.”  He specifically selected paragraph 5 of the judgement, where the Court held that,

“It is made abundantly clear by that legislation that redundancy, while it is dismissal, is not unfair.  A dismissal, however, can be disguised as redundancy; that is not lawful. Upon dismissal an employer can simply say that the employee was not dismissed for a reason specific to that person but that, instead, his or her services were no longer required, pointing to apparently genuine reasons for dispensing with the services of the employee.”

The concluding sentences of paragraph 5 of the Panisi decision highlights the onus that is on the employer of proving that the dismissal of an employee is not unfair:

“In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite.  Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights.  Redundancy is impersonal.  Instead, it must result from, as s.7(2) of the Redundancy Payments Act 1967, as amended, provides, ‘reasons not related to the employee concerned.’  Redundancy, cannot, therefore be used as cloak for the weeding out of those employees who are regarded as less competent than others or who appear to have health or age-related issues. If that is the reason for letting an employee go, then it is not a redundancy, but a dismissal.”

It is apparent therefore, that the High Court has warned against redundancy being used to avoid an employee’s right to have a real issue fairly addressed.  The respondent sought to avoid applying selection criteria to the complainant’s role, although others were also made redundant.  The selection of an employee for redundancy must be justified as objectively as possible and, in this regard, Mr Ledwith asked that I consider all the facts that led the to the dismissal of the complainant.

Section 6(3) of the Unfair Dismissals Act provides that, in order to demonstrate that an employee was unfairly selected for redundancy, it must be shown that the circumstances constituting the redundancy applied to one or more employees in the organisation in similar employment who were not made redundant.  Mr Ledwith submitted that the respondent simply picked the complainant for redundancy, not following any procedure or putting any other person at director level in a pool or a category for potential selection.  Mr Ledwith submitted that the leading Irish case in relation to selection is that of Boucher v Irish Productivity Centre.[6]

In O’Kelly v Excsil Limited,[7] the EAT held that the complainant was unfairly dismissed and that the employer did not act reasonably or fairly.  The Tribunal had regard to the fact that there were no adequate discussions about the criteria used to select the complainant in that case, and no discussion with him regarding an alternative job in the company.

In Fennell v Resource Facilities Support Limited,[8] the EAT accepted the respondent’s case that the claimant’s job was redundant, but criticised the company’s failure to consult or engage with the claimant before the company was restructured.  The Tribunal found that the employer had acted unfairly by:-

a)              Failing to properly consult with the claimant on the redundancy procedures;

b)             Implementing the procedures without giving the claimant an opportunity to consider them;

c)              Not informing the claimant of his right to appeal against the redundancy of his job.

 Mr Ledwith referred to these points as “guiding principles” that should be met by an employer to avoid a finding of unfair dismissal.  He referred also to Hickey v Eastern Health Board[9] and the general acceptance that an employee should be provided with a fair procedure and treated reasonably before a final decision is made with regard to redundancy.

With regard to the standard of reasonableness set out at section 6(7) of the Unfair Dismissals Act, Mr Ledwith referred to the decision of the EAT in Sheehan & O’Brien v Vintners Association of Ireland,[10] where the Tribunal emphasised the importance both of engaging with employees in a meaningful way as part of a consultation process and allow them to apply for alternative positions that may be available.  He said that this process must include consideration of alternatives to dismissal, including being allowed to compete for any other job in the organisation.

It is the complainant’s case that an application of the law to the relevant facts demonstrates that his dismissal was unfair.  Mr Ledwith submitted that the respondent failed to carry out its necessary duties and obligations to show that the redundancy of the complainant was genuine, that the selection of his job for redundancy was reasonable and that he was afforded fair and reasonable procedures.  On this basis, Mr Ledwith asked me to find that the dismissal of the complainant was unfair.

Direct Evidence of Mr Murphy

Mr Murphy said that the company was established in 2009 and is one of the larger of the small contractors in Ireland.  At the date of the hearing, November 5th 2021, they had 130 employees, down from 154 in early 2020.  He said that the company is managed by four executive directors, and four or five “directors in name.”  This group meets once a month and fortnightly operations meetings also take place, headed by Mick Flynn, the operations director.  Mr Murphy said that he prepares the papers for the monthly directors’ meetings.  Reports are submitted from those responsible for health and safety, HR, finance, projects / commercial, tendering, marketing and regional reports regarding work in the UK or the west of Ireland.

For the past five years, Mr Murphy said that the company has an external advisory committee of three experienced individuals.  He said that their expertise was a huge help, particularly during the pandemic.  He said that, for the last four years, the company has been nominated by Deloitte in the category of best managed companies.

Mr Deegan asked Mr Murphy about the complainant’s statement that the tone at directors’ meeting was inappropriate.  Mr Murphy said that the atmosphere at the meetings is challenging, but never unprofessional.  He said that no one claims to have all the answers.

Mr Murphy referred to the company’s requirement to work under contracts known as “bonded projects.”  When the company takes on a project, the client will ask for a performance bond.  For a project worth €10m, the bond is 10% – 15% of the value, or between €1m and €1.5m.  The bonds are issued by UK insurers such as Zurich and AIG and remain in place for a year to 18 months.  Around 90% of the company’s work involves bonded projects.  At any one time, the company might hold 13 or 14 bonds, some up to the value of €4m or €5m.  The company must report monthly financial results to the bond providers and once a year, they have a meeting with the providers.

Following the onset of the Covid-19 pandemic, in April 2020, Mr Murphy said that he sought advice from their bond brokers.  The advice was to maintain the company’s balance sheet, to maintain reserves and not to be “in the red” at the end of the year.  If a company is in the red, it is impossible to get a “blue-chip” client.  The company must hold a high cash balance to be eligible for a bond issuing.

Mr Murphy said that the standard value of a project is around €10m and that 90% of the cost is associated with the cost of sub-contracting.  He said that theirs is a small profit business, with tight margins.  Mr Murphy said that the impact of the pandemic resulted in the company tendering for less business, winning less business and making smaller margins.

Referring to the recruitment of the complainant, Mr Murphy said that the company has a history of recruiting people before they are needed.  In 2018, they were at the end of three years of strong growth and they had one HR manager.  He said that staffing was a constant issue.

Mr Murphy said that he and Mr Flynn met the complainant over a long meeting.  They thought he was interested in working with them and they liked what was saying.  He said that they didn’t interview anyone else.  They had a follow-up meeting when the managing director, Kevin Flynn met the complainant.  Mr Murphy said that there was a lot of “back and forth” regarding the complainant’s remuneration, and they agreed that there would be a salary review after six months.

The complainant joined the company in October 2018.  The HR manager left around the same time and the complainant put together a new team, comprising a HR manager, a generalist and another administrator on a temporary contract.  The complainant lives in the Midlands, but the company is based in Glasnevin.  They agreed that his hours of work were from Monday to Friday from 7.30am to 4.30pm.  Over time, Mr Murphy said that he came in at 9.30am and stayed later.  On an odd day, he worked from home. 

Mr Murphy said that people were working long hours and that the company was paying overtime to around 20 weekly-paid general operatives.  With regard to the salaried employees, Mr Murphy said that some were working longer hours than they should have been.  The pattern with construction projects is that they are generally very busy towards the end of the project and then there is an opportunity for time off.  Mr Murphy said that when the industry was booming, people were working excessive hours.  He said that the company never shied away from this and that they consistently tried to reduce hours.  Some project managers worked long hours and this made junior staff follow their example.  He said that they told senior managers to go home.

Mr Murphy said that the complainant was part of helping the company to change the culture of long working hours.  He said that he did not say what the complainant claims that he said about not recording the problem of long hours.  He said that the company had visibility of the problem for the hourly-paid staff and they dealt with it.

Asked about the complainant’s performance during the first six months when he was on probation, Mr Murphy said that there were no concerns about his performance.

Late in 2019, Mr Murphy said that the complainant approached him about the possibility of working for the company as a consultant.  He said that the complainant suggested that they could increase HR resources and reduce costs.  He proposed working four days a week in this independent capacity.  Mr Murphy said that he had two short meetings about this with the complainant, and in the end, he told him that it wouldn’t work.

In November 2019, the complainant’s annual salary was increased from €100,000 to €110,000. 

Mr Murphy referred to an email he received from the complainant, asking for time off to work on the HR strategy.  He said that he replied telling him that he shouldn’t have to take holidays to do work.  Apart from the three or four weeks after the beginning of the pandemic, Mr Murphy said that he didn’t get emails from the complainant outside normal working hours.

Mr Murphy was asked about the business planning process that occurs in November and December each year.  He said that this involves a look-back at the financial results of the previous year, tendering win-rates, attrition, a review of the market and what competitors are doing and a look at sectors such as the airports and office fit-outs.  He said that they set targets for the following year and look at key issues such as people and diversification into other sectors.  This results in a document that is presented to senior managers, involving a look back and a look forward.

Late in 2019, Mr Murphy said that work to the value of €66m was secured for the following year and their overall target for 2020 was around €160m, comprised of €150m worth of business in Ireland and €10m in the UK.

Recalling the onset of Covid-19 in March 2020, Mr Murphy said that this was the most difficult time he experienced in his working life.  When the country went into lockdown in March, they expected to be up and running again my mid-April, then it was to be mid-May.  The company was involved in around 20 live projects and in mid-March, he asked the commercial teams to prepare reports on each of the projects.  At a directors’ meeting on April 2nd, the managing director, Kevin Flynn, asked the team to speak to their peers in the construction industry.  They didn’t want to be out of step.  It was apparent that the pandemic was having a huge impact across all sectors. 

The company had been working with the DAA for more than 10 years.  They worked for several clients at Dublin Airport and they anticipated winning business worth between €150m and €200m.  He said that from €25m a year, they are now down to business worth €1m to €1.5m at the airport.  A project worth €40m to renovate the retail stores was cancelled.  A baggage-handling project in Shannon worth €10.5m was cancelled, although it re-commenced nine months later.  An office fit-out in London was cancelled.  A project to re-develop a keg line for Diageo worth €10m was cancelled.  Since the opening up of construction again, Mr Murphy said that the company has won business worth about €35m.  He said that there is now less work, it is more costly to get it done and it takes longer.

Mr Deegan referred to the email the complainant sent to the directors on March 16th 2020 and his advice that redundancies should be a last resort.  Mr Murphy said that the company did different things.  They paid their employees who were permitted to work, and they laid off others and didn’t pay them.  The company had to consider the safety of those who could come to work and the risk that, if staff weren’t paid, they might leave.  In April and May 2020, wages were reduced.

Mr Murphy referred to an update email to all staff from the managing director, Kevin Flynn, on March 20th 2020.  In the email, Mr Flynn referred to a number of projects for which the company had just submitted tenders.  The company didn’t win any of the tenders.

On March 29th, Mr Murphy sent an email to the complainant to ask him to explore the possibility of suspending pension contributions for employees and the employer.  Travel allowances were suspended and consideration was given to cancelling vehicle leases.

Mr Deegan referred to an email dated April 1st 2020 that Mr Murphy sent to eight directors and associate directors in the company, setting out a summary of cost reductions for discussion at a meeting the following day.  This included paying wages at 60% of normal rates, including the TWSS, apart from the wages of those who could continue to work.  He also proposed suspending pension contributions and motor allowances.  He proposed cancelling three days off known as “well-being days” and consideration was given to not accruing holidays for employees who were not working.  A note of the meeting of directors on April 2nd was included in the complainant’s book of documents.  This shows that it was agreed that actions around “right-sizing” the business wasn’t appropriate for now.  Wages reductions based on a three-day week and 60% of normal wages and the other cost-savings were agreed.

The complainant was on holidays when the directors met again on April 24th.  It is apparent from the note of that meeting that Mr Murphy presented a forecast turnover of €90m for 2020, with a margin of 3.5% - 4%, a significant reduction on recent margins of 6.5%.  All the roles in “Central Supports,” comprising finance, IT and HR, were to be reviewed.  Mr Murphy said that roles in these departments are not costed to projects, but are direct overheads.

Mr Murphy said that he prepared an overhead review for a meeting on April 27th 2020.  Salaries had been reduced to 60%, including the TWSS.  The complainant attended that meeting and, the following day, he sent an email to Mr Murphy in which he expressed shock about the pay reductions and his concern about any proposal to implement redundancies while the company was availing of the TWSS.  He said that redundancies should be deferred until June or July 2020.   He also said that he could see no basis for the salary reductions being continued beyond May 2020, and he expressed his view that redundancy would be the “cleanest” way of right-sizing the business at that point.

On May 28th, Mr Murphy said that the executive directors met the advisory committee and their considered view was that the directors should not prevaricate and that they had to deal with things.  Mr Murphy said that six or seven people from the central supports function were considered for redundancy.  The view of the directors was that the company no longer required the strategic guidance normally provided by a HR Director.  Turnover had been reduced by 40% or 50% and the company had to build for the future.

Mr Deegan asked Mr Murphy about the complainant’s advice that redundancies shouldn’t be implemented while wages were being supplemented by the TWSS.  Mr Murphy said that he had a different view and that he consulted with their tax advisors and with peers in the industry.  Ultimately, the Revenue Commissioners had no issue with the company implementing redundancies and also supplementing wages with the TWSS.

Mr Murphy set out the jobs that were identified for redundancy.  These were in finance, procurement, reception, marketing and middle management.  Asked why the complainant’s job was selected first, Mr Murphy said that he and the other directors felt that it would be disingenuous to talk to the complainant about implementing redundancies, while his own job was at risk.

On April 30th, the complainant attended a meeting over MS Teams with Mick Flynn, Kevin Flynn and Mr Murphy.  At his request, the meeting was recorded.  Mr Murphy said that they explained to the complainant that, before the pandemic, they were building a business and they felt that they had to step up to take on the responsibilities associated with a growing workforce.  HE said that they no longer needed the strategic guidance that the complainant was recruited to provide.  Mr Murphy said that the complainant wasn’t qualified for any other role in the company.

On May 1st, the operations director, Mick Flynn, wrote to the complainant.  He told him that the directors “no longer feel we can afford a HR Director for the smaller business we will now become.”  He was advised that his role was redundant with immediate effect and that his employment would terminate in three months, on August 1st 2020.

Mr Murphy said that a HR manager and a generalist remained in the business, both of whom were very operational, with day-to-day responsibilities.  Mr Murphy said that the directors felt that this was what was needed for the next couple of years.  By the end of May 2020, 10 or 12 more jobs were made redundant, and by the end of the year, 18 jobs had been cut.

Mr Deegan asked Mr Murphy about the complainant’s suggestion that there were other reasons for letting him go.  He referred to the HR strategy that the complainant presented after he was in the company for six months.  Mr Murphy said that when the complainant presented the draft strategy to the directors, the sentiment in the room was that it was overly negative.  The owners were taken aback about the views he expressed about their company.  Mr Murphy said that the complainant presented data that was out of date and he only referred to negative comments made at exit interviews.  Mr Murphy said that the complainant hadn’t got a sense of the “essence” of the business.

After the strategic presentation in April 2019, Mr Murphy said that their view was that the complainant didn’t understand the business and they suggested that he should move offices so that he would be closer to two directors.  The complainant was reluctant to move and he ended up not spending a lot of time there.  He would go back to his old office, or he worked from home.  Mr Murphy said that this isn’t the reason he was made redundant.

Mr Murphy said that he wasn’t aware of the issue with the permits for staff working on the DAA site.

Mr Deegan asked Mr Murphy about the comment the homophobic remark the complainant made when the directors were in a pub at a weekend away in September 2019.  About two weeks later, having discussed it with his wife, Kevin Flynn and one of the external advisors, he said that he called the complainant into a room, and he told him that what he had said was inappropriate. He said that he told him that he wasn’t making it a formal issue.  He said that the complainant came back to him later and said that he was disappointed at being challenged about what he had said.  Mr Murphy said that this issue was not related to the decision to make the complainant’s job redundant.

In November 2019, Mr Murphy said that the complainant got a pay increase.  When he was on notice from May 1st until August 1st 2020, he received 100% of his wages, despite the fact that most other employees were on 60% of wages.

Cross-examining of Mr Murphy

Mr Ledwith referred to an early meeting that Mr Murphy had with the complainant, when the complainant expressed his view that there is an independent function to the role of a HR Director.  Mr Murphy didn’t recall such a discussion.  Mr Ledwith suggested that it is unusual for a HR Director to report to a finance director.  Mr Murphy said that the managers in each department in central supports report to him.  Mr Ledwith referred to the complainant’s request to have an office of his own.  Mr Murphy didn’t recall the complainant looking for an office.

Mr Ledwith referred to the presentation the complainant made to the directors after Easter 2019.  Mr Murphy described the presentation as “overly negative.”  He said that one of those present commented that he didn’t recognise the company that the complainant had described in his report.  Mr Ledwith referred to the complainant’s submission and his note in his HR report of September 2019 in which he identified 14 employees working between 50 and 69 hours a week.  Mr Murphy said that the company was addressing this.  Mr Murphy said that they could not deny their knowledge of this problem.

Mr Ledwith referred to an email from the HR manager to the complainant on March 23rd 2020., in which she sent the complainant a draft of the HR report for March.  She said that she “…left out the Hours Worked section as per Derek.”  Mr Murphy replied that he didn’t ask the HR manager to omit this information.  Mr Murphy replied that Mr Ledwith was “100% incorrect” when he suggested that he attempted to suppress reasons for leaving given by employees that indicated that workload and management support was an issue.

Mr Ledwith suggested to Mr Murphy that there was a conflation between Covid-19 and the redundancy of the complainant’s role.  Mr Murphy said that their projections were based on live projects and they were clear that their 2020 forecast was down from €150m to €90m.  The redundancy of the complainant’s role was underpinned by these projections.

Referring to the Revenue conditions for paying the TWSS, Mr Ledwith said that eligible employers must retain their employees on the payroll.  Mr Murphy said that the company sought advice from tax and legal consultants about this issue.  He disagreed that they were prevented from making employees redundant while availing of the TWSS.  Mr Murphy said that the Revenue Commissioners “see everything” and they did not raise an issue.  Mr Murphy said that wages were reduced by 40% in April and by 20% in June.  By July, everyone was back on 100% of wages and the company was not eligible for the TWSS after June 30th.

Mr Murphy disagreed that the contribution of a strategic HR Director is required during a crisis such as Covid-19.  He said that the directors looked back at the company’s performance in 2016 and 2017 when they hadn’t got a HR Director.  They concluded that, with reduced revenues, they couldn’t afford the role.  When he was asked if other directors were made redundant, he replied, “we needed people to deliver the work on the books.”  Apart from the 18 employees that were made redundant, he said that they didn’t take on new people.

Mr Ledwith asked Mr Murphy about the retention of two people on the payroll who he suggested, “didn’t work.”  Mr Murphy said that the two people do carry out work.  One is the Company Secretary and the two individuals work on administration and client events.  He didn’t know what hours they worked, but he said that they were not in the office five days a week. 

Mr Ledwith asked Mr Murphy about the meeting on April 30th where the complainant was informed that his job was redundant.  Mr Murphy said that the complainant didn’t put forward a proposal to avoid his dismissal.  He said that the “HR team we had was sufficient.”  Mr Ledwith said that, before the pandemic, the complainant’s view was that the department was short-staffed.    Mr Murphy replied that the directors did not support the need for more staff in the HR department.

Mr Murphy agreed that the complainant was not advised of his right to appeal against his dismissal.  He said that, as he was dismissed by the directors, there was no one to appeal to. 

Direct Evidence of the Complainant

The complainant said that he worked as a HR manager in the textile, managed services and medical devices sector and with around five construction companies.  Before his move to work with the respondent, he was an employee relations executive in IBEC.  He said that he was approached by a member of the respondent’s advisory board and then he met the operations director, Mick Flynn and the finance director, Derek Murphy.  The company had a HR manager and they were looking for a HR Director. 

As a young, dynamic company, the complainant said that he thought he could make a difference to the business.  He said that he would never have agreed to report to a finance director, but he thought he could work with Mr Murphy.  He agreed on a salary of €100,000, which was increased a year later to €110,000.  He was to be paid a bonus of 25% of salary.  He also had a generous pension, health insurance and a commercial vehicle that didn’t attract much benefit in kind tax.  He said that this was worth in the region of €20,000 a year and that he wouldn’t have taken the job if this hadn’t been part of his package.

The complainant said that he didn’t report to Mr Murphy on HR matters.  He said that it was agreed that he would have his own office and that he wouldn’t be over-ruled on matters of HR.  He agreed that his hours of work would be 7.30am to 4.30pm, which he thought was “a bit heavy.”  He said that he was prepared to be “flexible within reason” and he generally worked more hours than his contract hours.

When he was dismissed on May 1st 2020, the complainant said that he was put on garden leave for his notice period of three months.  He started a new job on September 10th.

Before he joined the company, the complainant recruited a HR generalist.  Within a couple of weeks of him joining the business in October 2018, the complainant said that the HR manager left. 

The complainant described the management structure in the company, which has already been set out by Mr Murphy in his evidence.  The complainant was a member of the directors’ team that met monthly.  Each department head was required to produce a report.  The complainant said that the HR report that he produced “wasn’t what Derek required.”

The complainant outlined some of the changes he made when he joined the company, such as changing the application of pay increases to a specific date every year, instead of on the anniversary of an employee joining the company.  He said that there were a lot of issues with staff.  People were complaining, and the attrition rate was high, by his estimate, at around 40%.

In January 2019, the complainant produced his first HR report.  He said that there were “systemic problems” due to huge growth over the previous three years.  He said that there was a lot of pressure on inexperienced staff and that the company had difficulty attracting people with experience.  In his view, there was a lack of trust between management and staff.  The complainant said that it was only when he brought up the issue of staff attrition, that the issue became a “bone of contention.”

After the January meeting, the complainant said that Mr Murphy advised him to do a “deep dive” on one or two issues and to come up with solutions, which, he said, is exactly what he did.  He said that he included in his HR strategy his observation that managers were working very long hours and that the workforce was very stressed.  He said that he thinks that Kevin Flynn had a problem with his reports and he thinks that that he would have been dismissed if it hadn’t been for Mr Murphy.  In April 2019, the complainant presented a HR strategy to the executive board.  At a meeting on May 2nd, he said that Mr Murphy “went through me for a short cut” regarding his statement that the company was “a psychologically unsafe place to work.”  Mr Murphy reminded him that the company had been nominated by the “Great Places to Work” organisation and that his report wasn’t balanced.  When he received a follow-up email on May 8th or 9th, he said that he contacted his solicitor. 

The complainant was advised to talk to other directors.  He was instructed to move out of his office and then he said, “the pressure came off me.”  He revised the report and he removed the “psychologically unsafe” remark.  He included the details on long hours. 

At the September directors’ meeting, the complainant said that he reported again on the long working hours.  His reports in October, November and December also included details on long hours.  In January, he said that Mr Murphy told him to take the issue off the agenda.

Referring to the weekend away for the directors in Galway in September 2019, the complainant said that “he didn’t trust Kevin Flynn at all” and that he was being “very careful.”  He recounted to one of his colleagues something he heard about homosexuals.  He said that the conversation happened in a pub at around 1.30am.  He said that Mr Murphy spoke to him about it when they were both in the office in Dublin. 

Between November 2019 and March 2020, the complainant said that he put a huge amount of work into a performance management system.  Then, when Covid hit, he was dealing with employee relations issues.  He was working 16-hour days and at weekends.  He said that no one was qualified to do what was required except him.

At the end of April, the complainant said that Mick Flynn phoned him and said that he wanted to have a meeting.  He then sent him an invitation on MS Teams for the following day.  At the meeting, he was told that the company couldn’t afford to keep him on and that they no longer needed a strategic HR person.  He said that he reminded Mr Flynn and Mr Murphy that he had looked for another person in the HR department.  He said that he argued that, based on the workload, the role wasn’t redundant.  He said that most of his job was operational HR, but that he could do anything.  He said that no alternative was proposed, such as short-time working and he wasn’t offered any other job.  Although he said that he was invited to come up with some alternative to his redundancy, he said that “it wouldn’t have mattered what I said.”

Referring to Revenue’s Frequently Asked Questions on the TWSS, the complainant said that a directors’ meeting took place on April 24th when he was on holidays.  He said that he had indicated to the directors that Revenue might have an issue with the company making people redundant while it was in receipt of the TWSS.  He said his salary was subsidised by the TWSS.

The complainant said that he was not offered an opportunity to appeal against the decision to make his job redundant.  Having been issued with notice on May 1st he said that he put a huge effort into finding another job.  He started in a new role on September 9th 2020, but on a lower salary than what he earned with the respondent.

Cross-examining of the Complainant

Mr Deegan referred to the role of Group Head of HR that the complainant had with BAM Construction.  Mr Deegan said that BAM currently employs around 3,000 people, directly and indirectly; however, the complainant said that much of that cohort is associated with the construction of the new children’s hospital.  He agreed that BAM is a bigger company than the respondent and that when he worked there, the turnover was between €400m and €500m.

Mr Deegan suggested to the complainant that his role with the respondent was a bigger job than the job he had with BAM, although the company employed around 150 employees.  He said that the respondent’s aspiration was to become a bigger company.  The complainant said, “that’s not what was put to me.  They had a problem in HR that they wanted sorted.”  He agreed that the company had grown and that they had “out-stretched resources.”

Mr Deegan said that the company’s case is that the complainant was hired as a HR Director for the size of the company that they aspired to be.”  The complainant disagreed and said that “they needed a HR Director to deal with the issues they had.”

Mr Deegan referred to the complainant’s advice to Mr Murphy on March 16th 2020 when he said that “redundancies shouldn’t be an option at the moment.”  The complainant said that his view was that they should wait until they were at “the far side” of the lockdown and consider the redundancy option then.

Mr Deegan referred to an email from the managing director, Kevin Flynn to all staff in the company on March 20th 2020.  In response to the cancellation of projects and what he referred to as the “fluid nature of events,” Mr Flynn outlined the measures being taken by the company.  Normal wages would be paid for the month of March, although Directors were taking a 40% pay cut.

Mr Deegan then referred to an email from Mr Murphy to the directors and associate directors on April 1st 2020.  In the scenario in which “everything we allowed for and planned in 2020 is off the table,” Mr Murphy outlined proposals for further cost-cutting measures, including pay cuts across the board, suspension of pension contributions, cancellation of motoring allowances, non-accrual of holidays and cancellation of well-being days.  Mr Murphy said that all the economic data indicated that the difficulties will be on a par with those experienced in 2008.  The complainant disagreed with this assessment.   He said that the respondent was in better shape than other businesses and he counselled the company to wait and see what other companies were doing. 

Mr Deegan referred to this as “the single point of difference between you and Mr Murphy.”  He said that if the company can’t secure a bond, then they can’t win a project.  He said that the bond insurers control the flow of money.  Mr Deegan said that the company couldn’t “wait and see,” as recommended by the complainant.

Mr Deegan referred to a meeting on April 2nd 2020, a note of which was included in the complainant’s book of papers.  The complainant said that the meeting was to plan for the next three months and there was no discussion at this meeting about redundancies.  The note states:

“Actions around right sizing the business are not appropriate for now – these will follow revised business forecasting planning currently being undertaken by senior managers.” 

Mr Deegan referred to a letter of April 3rd 2020 from Kevin Flynn to all employees.  The letter detailed eight actions to be taken as measures to deal with the impact of Covid-19 on the business.  The complainant said that he got the job to write this letter and, from a HR perspective, he said that he “came at the situation from a different perspective.”  He said that the felt that the pay cuts were illegal and that he wasn’t involved in the final version of the letter.

Mr Deegan put it to the complainant that the letter demonstrates that the company did other things, and that they did everything possible, before redundancy was contemplated.  The complainant agreed that other options were exhausted before redundancies were considered; but, he said that other companies didn’t take such “penal action.”

Referring to the meeting of the directors’ team on April 24th, Mr Deegan highlighted a note on the meeting under the heading, “Business Planning:”

“All accepted that the focus now is to review all roles and requirements for the business going into this new market environment.  Our objective is to protect as many jobs as possible and in turn protect the company from the financial impact of this crisis.”

Mr Deegan pointed to one of the actions from the meeting which was to “review all roles within Central Support.”

The complainant was on holidays on April 24th and he said that he was very surprised that this meeting took place.

Mr Deegan then referred to a note of a meeting titled, “Overhead Review 27th April ’20.”  This note outlines the company’s plan to attempt to reduce overheads to €3.5m from the projected €4.1m, based on turnover in the region of €90m.  This was based on comparable overheads of €3.3m in 2016, when the turnover was €98m.  The complainant said that he thinks that the note of this meeting was written with the idea of making him redundant.  He said that HR was working flat out at the time.  Mr Deegan said that it is clear from the note of this meeting that consideration was being given to reducing jobs on the HR team.  The complainant agreed that, at the meeting, it was clear that Central Support was being looked at.  He said that he found this hard to believe.  The following Wednesday, he was told that he was redundant. 

Mr Deegan said that the plan was to reduce each department in Central Support by one person.  He referred to an email the complainant sent to Mr Murphy on April 28th, in which he disagreed with the proposed pay cuts and suggested that “redundancy is the ‘cleanest’ way of right-sizing the business for our expected annual turnover.”  In response, the complainant said that, at that time, redundancy didn’t make sense.  Asked why he referred to redundancy as the “cleanest” option, he said that what was being contemplated was that people would come back to work and work normal hours and be paid between 60% and 80% of wages.  He said that in circumstances when they were unsure of the facts, redundancy should be “the last tool in the company’s arsenal.”  He suggested that the company had money and could have waited until the end of June.  Challenged by Mr Deegan about his opposition to pay cuts and his recommendation that redundancy was the “cleanest” solution, the complainant said, “now wasn’t the time” for redundancies.       

The complainant was the first of 18 employees to be made redundant.  Mr Deegan said that, if he hadn’t been selected first, he would have been involved in making other people redundant, knowing that his own job was gone.  The complainant replied, “the company wanted me out” because he wouldn’t support the pay reductions.  He said that he doesn’t accept that other jobs were redundant.

Mr Deegan referred to the evidence of Mr Murphy when he said that the company hired a HR Director when it was in a growth phase.  By 2020, when it was in dire straits, he said the role was no longer required.  The complainant replied, “they needed a HR Director for the issues they had to address.” 

The complainant said that the first indication he got that his position was at risk was in January or February 2019, when he refused to write security letters for employees on the DAA site.  He said that “there was a sea-change from then on.”  Following his presentation of the HR strategy in April, he had to move out of his office.  He repeated that “Derek may have helped to save my job at that time.”

Mr Deegan suggested that the complainant’s version of events was “an absolute fantasy.”  He said that if the company was intent on getting rid of him, they would have dismissed him before October 2019, when he was still on probation.  He said “you sailed through probation” and got a 10% pay increase in November.  He suggested that the complainant highlighted issues he wasn’t happy about when the pandemic struck, but he claims that he was selected for redundancy because of issues that happened a year earlier.  The complainant replied that, if these issues hadn’t arisen, he would still be working for the company.  Mr Deegan said that neither Mr Murphy or Mr Flynn were aware of an issue with the DAA letters, but the complainant disputed this and said that Kevin Flynn knew.  Mr Deegan said, “you had no dealings with Kevin Flynn on a day-to-day basis,” to which the complainant agreed.

Regarding the pay increase he received in November 2019, the complainant said that he was paid less than an associate director.  In April 2019, he asked Derek Murphy for an increase, but he advised him that he needed to be a year in the job.  In November, he said that he told Mr Murphy that he had enough.  He put a proposal to him that he would work as a consultant and that the company could recruit another HR person.  Then, he got a pay increase.  Mr Deegan suggested that this is not consistent with the complainant’s case that there was an agenda against him.  He replied that, in November, he was close to resigning because of the undermining of his role.

The Relevant Law

The complainant’s case is that he was selected for redundancy because he took a different position to his employer on certain matters, aiming to operate independently and without interference.  His objective as a HR Director was to fulfil his statutory obligations and to promote the welfare and satisfaction of employees.  He claims that this put him at odds with the directors. 

The Unfair Dismissals Acts 1977 – 2015

Section 6(1) of the Unfair Dismissals Acts (“the UD Act”) provides that a dismissal is unfair, “unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”  The burden of proof rests with the respondent to provide evidence of the “substantial ground justifying the dismissal” of the complainant.  The respondent’s case is that the complainant’s role was a new function introduced to support significant growth and an increase in employees from 2018 onwards.  With the onset of the Covid-19 pandemic, the company anticipated that its turnover in 2020 would be around €90m, down from a forecasted turnover of €150m.  The directors’ position is that, arising from the constraints on their business because of Covid-19, they could not afford a HR Director on a salary of €110,000, and that they no longer needed the strategic contribution of a senior HR professional.

Section 6(4)(c) of the UD Act recognises the right of an employer to dismiss an employee due to redundancy: 

 “…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

(c) the redundancy of the employee.”

Subsections (a), (b) and (d) of this section are not relevant to this complaint.

We know from section 6(3) that this right is predicated on an obligation to select employees for redundancy on the basis of fairness and to adhere to an agreed procedure or a code of practice regarding dismissals.  Referring to the decision of the EAT in Sheehan v Vintners Association (footnote 10), Mr Ledwith highlighted the importance of section 6(7) of the UD Act which was inserted by the Unfair Dismissals (Amendment) Act 1993 and which expands further on the issue of reasonableness.  This 1993 addition to the UD Act provides that, when considering a complaint of unfair dismissal, I, as the adjudicator, may have regard,

“(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and 

“(b) to 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 section 14(1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7(2) of this Act.”

As a member of the respondent’s associate director team, and a human resources professional with considerable experience, the complainant was an unusual candidate for redundancy.  In his previous roles, he had overseen redundancies and he advised employers on the procedure to be followed.  At the meeting on Thursday, April 30th 2020, noting that he was attending alone and unrepresented, he argued that he was entitled to be treated in accordance with the fair procedures that apply in the case of any dismissal.  This includes the right to notice, the right to be represented at meetings, the right of the employee to respond to the employer’s decision to make his job redundant and the right of appeal.  The respondent’s evidence is that the consultation period was shortened when they agreed to the complainant’s request for a decision on Friday, May 1st, so that he wouldn’t be left waiting over the weekend of the public holiday.

The Redundancy Payments Acts 1967 – 2014

On behalf of the respondent, Mr Deegan argued that the decision to terminate the complainant’s employment falls within the definitions of redundancy as section 7(2)(b) and (c) of the Redundancy Payments Act 1967 (“the RP Act”):

…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—  

(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[.]

The respondent’s case is that they no longer required the strategic input of a HR Director and they also decided to carry out their HR function with fewer employees.  My task now is to consider if the decision to dismiss the complainant was a genuine redundancy or if, as he argues, he was dismissed because he was in conflict with the directors.

Wholly or Mainly Due to Redundancy

During the three days of evidence on this complaint, there was a good deal of argument concerning the respondent’s decision to dispense with the role of the HR Director.  Since he started in the role, the complainant said that he was busy, working very long days, although by April 2020, he was back to relatively normal nine-hour days.  He disputed the evidence of Mr Murphy that he was recruited to provide a strategic focus, saying that he was hired to resolve some HR issues, although he gave no details about what those issues were.  Having considered the evidence, it is apparent to me that the complainant was recruited to provide a level of HR expertise and strategy that was not available within the organisation.  As a professional in the HR arena and with some years of experience, particularly in the construction sector, it was reasonable for the directors to invest in this new position, and to anticipate that the complainant could add value and make a significant contribution to their business, particularly in a time of growth.

By April 2020, on a salary of €110,000 plus employer’s PRSI and significant benefits, the total cost of the complainant’s job was in the region of €150,000.  With a plan to reduce overheads by €600,000, from €4.1m to €3.5m, the complainant’s package accounted for 25% of that sum.   In the context of the financial challenges facing the company at the onset of the Covid-19 pandemic, the role of the HR Director was one that, reasonably, in my view, the directors decided they could live without.  Most organisations of the same size, around 150 employees, do not have the luxury of such a senior position, relying instead on a general HR manager and professional services for strategic advice when required.  In April 2020, the respondent decided that the HR resources they had in place – a manager and a generalist, were adequate for their needs and this arrangement was still in place on the final day of this hearing in March 2022.

The removal and the non-replacement of a job is a fundamental criterion when considering if a job is genuinely redundant.  The fact that the respondent has not replaced the complainant with a new HR Director, and, that they have not increased the numbers employed in the HR department, adds weight to their case that the role was and is redundant and that the redundancy meets the definitions at section 7(2)(b) and (c) of the RP Act.

At the hearing, the complainant set out to demonstrate that there could have been a variety of reasons for his dismissal.  His insistence on the independence of his job was a strange stance for a HR Director to assume, when, generally, this role is integral to the management team and provides a support to the achievement of business objectives.  He must have had a sense that his position was at risk, when, in May 2019, just seven months into his job, he consulted with his solicitor.  This was after he gave his opinion that the company was a “psychologically unsafe” place to work.  He said that he thinks he would have been fired then if it had not been for the intervention of Mr Murphy.  Despite his concerns, the complainant passed his probation and, November 2019, he got a 10% increase.  It is apparent therefore, that, by one year into his job, the respondent had no intention of dismissing the complainant.

Concerning the requirement for redundancy to be impersonal and related to the job and not the person, Mr Ledwith referred to the important decision of the EAT in St Ledger v Frontline Distributors (footnote 4).  The respondent in that case relied on the definitions of redundancy at sub-sections (d) and (e) of section 7 of the RP Act, concerning the decision of an employer to have a job done by a person with more or different qualifications compared to the person being made redundant.  While I accept entirely the authority of this decision regarding the requirement for redundancy to be impersonal, in the case we are considering, the respondent relied on the definitions at sub-sections (b) and (c).  They decided that the work that the complainant was employed to do would not be done in the future, or that some of his job would be done by another employee, in addition to her own job.  The complainant was not selected for redundancy instead of any other person.  He was selected because he was in a job that the respondent decided they could no longer afford and that they did not require in light of the medium-term prospects for their business.

Mr Ledwith pointed to the decision of Davis v Blarney Woolen Mills (footnote 2) where the claimant was found to have been dismissed, not because of a genuine redundancy, but because he was in conflict with his recently appointed manager.  This decision certainly demonstrates that it will be unfair to select someone for redundancy solely based on their poor relationship with their manager.  In his evidence however, the complainant, mentioned more than once that Mr Murphy supported him and, unlike Mr Davis, he was made redundant in the context of severe financial constraints facing the company at the beginning of the pandemic.

I accept the complainant’s evidence that he did not always find favour with the directors.  The only sanction he can point to however (if it could be regarded as such) is the instruction to move out of his personal office into an area where he would have contact with other directors at his level.  He was never disciplined, he cannot refer to a poor performance review and he received a 10% pay increase six months before he was made redundant.  His offer to remove himself to a more detached role as an external consultant was rebuffed in October 2019.  Considering the “impersonal” criterion that must apply, the question I must ask is, if there had been a different person in the job in April 2020, and, if that person had been in good stead with the directors, would they have been made redundant?  Based on the respondent’s need to cut costs, and based on the overheads that were reduced, I have to conclude that it is more likely than not that any other person in the job of HR Director would have been made redundant at that time.  I am satisfied therefore, that the complainant was dismissed, wholly or mainly because of redundancy and that the decision was not personal.

Was the Process Fair?

I have mentioned the unique position of the complainant when it comes to redundancy.  He is an expert on the subject, and more knowledgeable about the law and the technical application of the law than his former employer.  His status and expertise do not detract from his right to procedural fairness when it comes to how he was dismissed.  For clarity, I will very briefly summarise the process that ended with the complainant’s dismissal.

On April 29th 2020, the operations director, Mick Flynn phoned the complainant, telling him that he wanted to meet him over MS Teams the following day to discuss the possible redundancy of his job.  He followed this with an email, advising the complainant of the purpose of the meeting and telling him that he could be accompanied by a colleague.

The complainant attended the meeting on April 30th his own, saying that he got very short notice to invite someone to accompany him and that it would be unfair to ask a staff member to attend.  He didn’t propose that his solicitor would accompany him.  With the consent of the directors, he recorded the meeting and his transcribed note was included in his book of papers at this hearing.

It is apparent from this note that the directors were giving very serious consideration to making the complainant’s job redundant, but that they wanted to hear his views and they were prepared to give him some time to think about what was a disturbing prospect.  The complainant didn’t suggest any alternatives, such as the proposal he made in late 2019 that he could work for the company as a consultant.  He didn’t suggest that he could work part-time or that he could be laid off for a period.  He didn’t suggest a pay cut.  He said he was in shock, but he didn’t ask for time to consider what was being proposed and he pushed the directors to make up their minds.  Mr Flynn said that he would revert on Tuesday, after the public holiday.  The note of the meeting records that the complainant “…replied that the company ought to give their decision on the following day, and that he didn’t want to be sweating over a bank holiday weekend as to whether he had a job going forward.”

The next day, Friday, May 1st 2020, Mr Flynn wrote to the complainant, confirming the company’s decision to make his job redundant.  He was given three months’ notice, with the effect that his employment ended on August 1st.  He was not required to attend work during his notice period.

From a review of the case law submitted by Mr Ledwith, it is clear that engagement with the employee who is the target of redundancy is the cornerstone of reasonable treatment.  It is apparent that the time that might have been spent considering how to avoid redundancy was truncated at the complainant’s request.  Considering his knowledge of the law and of his rights, and his request for a speedy decision, I am satisfied that no unfairness arises from the fact that the confirmation by the respondent of the redundancy of the complainant’s job occurred within two days of him being invited to a meeting to discuss that possibility.  I think it is important to note also, that the complainant remained in employment for three months, until his notice expired, and he did not avail of the opportunity provided during that time to speak to his employer about some alternative to redundancy that might have been worked out. 

On May 6th, the complainant’s solicitor, Mr O’Sullivan, wrote to Mr Flynn and Mr Murphy.  In his letter, although he was strongly critical of the company’s decision to make his client’s job redundant, Mr O’Sullivan did not seek to appeal their decision, but suggested that “it is most important that any putative exit from your organisation is managed to the mutual satisfaction of both employee and employer parties here.”  There was further correspondence between the parties, but the complainant did not appeal against the redundancy of his job, and no settlement terms were agreed.

At the hearing, the complainant did not deny that he had a right to appeal against the decision to dismiss him, but he suggested that an appeal wouldn’t have made a difference.  If he was serious about his argument that his redundancy was a “sham,” as he suggested, and that the process was “a box-ticking exercise,” he had an obligation to test that assumption, but he did not do so.  The complainant got the job in 2018 when he was approached by a member of the company’s advisory board.  If he had been convinced of the unfairness of the respondent’s decision to make his job redundant, he could have reasonably appealed to that person to ask him to intervene with the directors on his behalf.

I am satisfied that the complainant was properly notified of the respondent’s decision to put his job at risk of redundancy.  I am satisfied that he was advised of his right to be represented and that he was given an opportunity to respond to the proposal and to suggest some alternative to redundancy.  He received proper notice and he was aware of his right to appeal.  Taking account of the complainant’s desire for a quick decision, his long period of notice when he was not required to work and his failure to appeal to any member of the non-executive board of directors, I am satisfied that he was treated fairly.

Conclusion

I have reviewed the precedents submitted by Mr Ledwith in support of the complainant’s case; however, I will refer here to those that I consider to be most relevant.  Panisi (footnote 1) and St Ledger (footnote 4) are authorities for finding that a decision about redundancy must be about the job and not the person.  I find that the complainant was dismissed because his job was more senior than what the respondent required in the early days of the Covid-19 pandemic and that it would not be required for some time.  O’Kelly v Excsil (footnote 7) and Fennell v Resource Facilities (footnote 8) and others are clear authorities for a finding that failure to consult with an employee at risk of redundancy is fatal to a conclusion that a process is fair.  However, in the very unusual circumstances of this case, I am satisfied that the complainant had an opportunity to consult with his employer about his redundancy and I find that the respondent’s action in reaching a decision without delay was not unfair. 

In conclusion, it is my view that, faced with similar financial challenges, most employers in the respondent’s circumstances would have concluded that they no longer required this senior HR position and would have made the complainant redundant.  I find therefore, that the termination of his employment was not unfair.

For the reasons set out above, I decide that this complaint under the Unfair Dismissals Act is not well founded.

In breach of section 23(1) of the Organisation of Working Time Act 1997 (“the OWT Act”), the complainant submits that he is owed one day of annual leave not taken when his employment ended on August 1st 2020.  He claims that, in respect of his service from October 22nd 2018 until July 31st 2020, he had an entitlement to 44.6 days of annual leave.  He claims that he took 29 days’ holidays and that he was paid in lieu of 14.6 days, giving him the benefit of 43.6 days.    

The complainant submitted that the respondent had a practice of giving a day off in lieu of working at weekends.  On this basis, he also claims 15 days’ pay in lieu of working 14 weekend days and on the public holiday on March 17th 2020.

In his submission, Mr Deegan included a copy of a letter from the HR manager issued to the complainant on July 31st 2020.  The letter shows that, in addition to his salary for the month of July, he received the sum of €6,129.77 gross, in respect of 14.6 days of annual leave not taken at the time of his departure.  Mr Deegan submitted that the complainant was paid the correct amount in lieu of his untaken holidays.

The complainant had a contractual entitlement to 25 days’ holidays.  As this is a complaint under the OWT Act, I am required to consider any breach of his entitlement to statutory holidays of 20 days per year.  I am satisfied that, at the cessation of his employment, the complainant received his full entitlement to statutory holidays and that he was paid in lieu of the statutory holidays that he had not taken at the termination of his employment.

From the date of commencement until the start of his notice on May 1st 2020, the complainant was employed for 78 weeks.  His submission notes that he worked for 14 days over nine weekends and that he worked on March 17th 2020.  As a senior manager starting out in his job, and, as an employee who could manage his own working time, I find this level of additional hours worked to be reasonably normal.

It is my view that compensation for working at weekends is not properly a complaint under the OWT Act, as the complaint relates to a claim that for payment of wages.

The 15 weekend days that the complainant claims that he worked were adequately compensated for when he was not required to attend work during his three months’ notice.

I decide that this complaint is not well founded.

Mr Ledwith submitted that, in breach of section 15(1) of the OWT Act, the complainant worked in excess of 48 hours, and on average, that he worked 55 hours per week from October 1st 2019 to March 31st 2020.  The complainant said that he brought the issue of his long working hours to the attention of the respondent several times.  He had a meeting with the finance director, Mr Murphy, in November 2019, to discuss getting more staff in the HR department.

In the documents he submitted in advance of the hearing, the complainant included a table of the months from October 2019 until March 2020, with details of the final email sent each evening.  In the months of October, November and December 2019, he sent five emails after 7.00pm.  In January 2020, he sent three emails, in February, he sent eight emails and in March, he sent 11 emails after 7.00pm.  

The complainant argues that the directors were aware that he was working long hours, and that the operations director, Mr Flynn, did not contest this at the meeting to discuss the redundancy of his job on April 30th 2020. 

In response to the claim of excessive working hours, Mr Deegan said that, as the respondent’s HR Director, apart from his contractual hours, the complainant determined his own working time.  Mr Deegan argued that, in accordance with section 3(2)(c) of the OWT Act, Part II of the Act did not apply to the complainant’s employment with the respondent.

The Relevant Law

Section 3(2)(c) of the OWT Act addresses the circumstances where certain executives can manage their own working time to such an extent that the provisions of Part II of the Act doesn’t apply, meaning that they are not subject to the minimum rest periods and the 48-hour maximum working week:

(2) Subject to subsection (4), Part II shall not apply to—

Subsections (a) and (b) are not relevant to this complaint.

(c) a person the duration of whose working time (saving any minimum period of such time that is stipulated by the employer) is determined by himself or herself, whether or not provision for the making of such determination by that person is made by his or her contract of employment.

Subsection (4) refers to the provision that the Minister for Enterprise, Trade and Employment may make an order that section 3(2) does not apply to a particular class of workers, but this provision is not relevant to this complainant.

It is apparent therefore, that the Act intends that there is a derogation from the provisions of Part II for employees who can determine their own working time.  The issue for consideration is, as a HR Director in a senior position in the respondent’s company, aside from his contractual hours of 7.30am to 4.30pm, did the complainant have the authority to determine his own working time, such that the provisions of Part II of the OWT Act do not apply to his role?

Findings

As the Group HR Director, the complainant was a member of the senior management team.  The level above him comprised the three executive directors, one of whom was his direct manager, the finance director.  Although he was the most senior manager in the HR department, and concerned about hours of work in the company, he did not maintain records of his working time, or at least, he did not produce such records at the hearing of this complaint. 

Included in the complainant’s book of documents is an email to the finance director dated October 14th 2019, sent at 4.27pm.  The complainant wrote:

“Derek

I have to take tomorrow off unexpectedly, so I won’t be at tomorrow morning’s meetings. 

Apologies for the late notice.  I’ll book it as a day’s a/l.

Pat.”

From this, it is apparent that the complainant had a degree of autonomy over his own time, as he didn’t request permission from Mr Murphy to take the day off, he simply informed him that he would be off.

In his evidence, Mr Murphy said that, when he joined the company, the complainant started work at 7.30am, but then, to avoid the morning traffic he came in at 9.30am and he stayed later.  He said that he worked “the odd day” from home.  Mr Murphy had no issue with the complainant changing his start or finish time, or his decision to work from home, even before Covid-19 made this the norm for most office-based workers. 

No evidence was given at the hearing by either party that the complainant was required to be at a particular place on a particular day, and it is apparent that he had the autonomy to organise his work himself.  From my observation of the emails he submitted, he was involved in a good deal of recruitment, even the early stages of recruitment, which is unusual for a HR Director.  It occurs to me that some of this work could have been delegated to the hiring managers, which must have been the practice before he joined the company.  As a HR Director, the complainant had authority to select the work that would require his attention, and the assignments that he could delegate to others.  He was the author of the strategic HR plan, meaning that he could decide when work would be done and when certain projects would be undertaken. 

From my perusal of the emails he submitted as examples of working late, is apparent that many are simply one-line replies to queries from colleagues, and, apart from some that list possible candidates for vacancies, most contain very little content that would have required much of the complainant’s time or attention taken time to compile.

I note that the months in which the complainant was engaged in the heaviest email traffic in the evenings were February and March 2020, when he sent eight and 11 emails respectively after 7.00pm.  I think I can say with certainty that most senior managers were busy during those months and I do not regard this level of correspondence as unusual.

Conclusion

The complainant was in a key position in the company, being a member of the director team.  His complaints regarding his hours of work are unusual for a person at his level of seniority, where he could determine the time at which he started and finished on any given day and he was responsible for ensuring that he did not work excessive hours to his own detriment.  For a person of his status and salary, I think that most reasonable people would accept that long hours and occasional weekend working is not out of the ordinary. 

The complainant submitted no evidence to show that he was constrained in his effort to determine his hours of work, and he provided no information to show that he was prevented from exercising the normal discretion of a senior manager to manage his own time.  It is my view that, as the HR Director, the complainant’s role was governed by section 3(2)(c) of the OWT Act and that he was capable of determining his own working time.  For this reason, I find that Part II of the OWT Act, in respect of hours of work, does not apply to the complainant’s job.

Based on my conclusion that the complainant’s role was not governed by Part II of the OWT Act in respect of hours of work, I decide that this complaint is not well founded.

Dismissal, redundancy, annual leave, hours of work