Complainant

Respondent

Parties

Gerard Hoary

Charles Hurst (Dublin) Limited t/a Usedirect Ireland

Complainant

Respondent

Anonymised Parties

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Representatives

Patrick Marron BL  instructed by  Aaron McKenna Solicitors

MP Guinness BL instructed by  Eversheds Sutherland

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00041612-001

18/12/2020

The complainant was an employee of the respondent company between 01 September 2015 and 12 November 2020.  He was initially employed as a technician and was promoted to Service Manager in May 2017.  As Service Manager he worked 40 hours per week and his monthly salary was €4167 gross.

The complainant was dismissed during a restructuring of the business when his role was declared redundant. His last day at work was 09 October 2020.  It is the complainant’s case that no genuine redundancy situation existed, that the redundancy process was unfairly undertaken, and that he was unfairly selected for redundancy and therefore unfairly dismissed.  The complainant’s complainant of unfair dismissal was received by the WRC on 18 December 2020. 

The respondent company sells used multi-franchise vehicles.  Its parent company is a leading UK motor retail and aftersales group.  Trading across the groups of companies was difficult in 2020 due to a downturn in the market and economy because of the Covid-19 pandemic.  By June 2020 there was a need to reduce direct and operating costs to protect the future of the business. 

It is the respondent’s case that a genuine redundancy situation existed and that it followed a fair redundancy process.  It asserts that the complainant was dismissed by reason of redundancy and was not unfairly dismissed.

Background

The respondent sells used multi-franchise vehicles.  The parent company is a leading UK motor retail and aftersales group.  Trading across the group of companies was difficult in 2020, arising from impact of the Covid-19 pandemic.  Due to the downturn in business, with sales being down 62% on the previous year, it was decided that there was a need to reduce direct and operating costs.  The intention was to reduce cost to protect the future of the business.

The actions taken to reduce costs included relocating the business from Kingswood, Dublin to the respondent’s Audi Dealership in Sandyford Industrial Estate.  The Audi Dealership is a separately managed business unit within the respondent.  The relocation, in June 2020, gave a projected saving of approximately €220,000 p.a. on rent and rates. 

In addition to the relocation of the business several roles were made redundant.  These included receptionist, cleaner and sales executives.  Three sales executives and one Business Manager resigned and were not replaced.  The number of sales executives reduced from five to one.

The complainant as Service Manager was responsible for managing the performance of the respondent’s workshop.  Along with the Service Manager there were two vehicle technicians employed in the workshop.  Their work consisted of prepping, servicing, and repairing used multi-franchise vehicles for sale by the respondent.  As a result of a substantial decrease in the number of vehicles being processed through the workshop there was a diminished need for a dedicated Service Manager.

Redundancy Process

21 September 2020 –

The respondent notified the complainant that it proposed to restructure the team at Usedirect Ireland and that his role as Service Manager was “at risk” of redundancy.  The complainant was informed that it was proposed to eliminate the Service Manager position and absorb the duties within the wider Usedirect Ireland team.  The respondent confirmed that this was a preliminary decision.  The respondent wished to consult the complainant about ways in which a redundancy situation might be avoided, including trying to identify any alternative positions withing the respondent that might be appropriate for him.

25 September 2020 –

The complainant was invited to a consultation meeting with Colin Byrne and Donal Duggan.  The complainant was notified of his right to be accompanied at the meeting; he chose to attend alone.  The restructuring proposal was discussed.  The complainant was given the opportunity to ask questions.  The complainant was also invited to put forward any proposals he wished to make concerning the cost reduction.  The complainant was informed that he could apply for internal vacancies via the URecruit Career Centre.  The complainant indicated that he wished to be considered for different types of work, but he was not sure what work would be of interest to him.  The complainant was informed that if the Service Manager role was declared redundant, he would be eligible for a statutory redundancy payment, which was outlined to him.

30 September 2020 –

The complainant attended a further consultation meeting.  The Financial Controller, Leon McSherry, attended the meeting.  The complainant was notified that he could be accompanied at the meeting but had attended alone.  The complainant stated that he did not have time to arrange to have someone attend with him.  The complainant declined an offer to postpone the meeting, indicating he was happy to continue with the meeting.   During the meeting the complainant suggested developing the service part of the business, employing more staff, and expanding to facilitate external service business.  Mr Byrne explained that the reason redundancies were being considered was to reduce costs.  Expansion of the service business would increase costs and defeat the objective of reducing costs.  The complainant was advised to check the respondent’s recruitment website for vacancies.  The complainant was offered outplacement support to assist him in obtaining alternative employment.  As the complainant indicated he was interested in outplacement support the respondent passed his name to the external outplacement company.

09 October 2020 –

The complainant attended a final meeting with Colin Byrne and Leon McSherry.  The complainant was not accompanied but he had been advised of his right to be accompanied at the meeting.  There was a recap of the previous meetings and an opportunity for the complainant to put forward any comments.  As no alternative to redundancy had been identified the complainant was informed that the role of Service Manager was redundant.  The complainant was informed that he was not required to work his notice period and that he would be paid in lieu of notice.

14 October 2020 –

The respondent wrote to the complainant confirming the redundancy and the complainant’s statutory entitlements.  The complainant was to be paid €6,780 statutory redundancy pay and €4,166.67 in lieu of notice.  The complainant was informed that he had a right of appeal against the redundancy decision. 

The complainant did not appeal the decision to terminate his employment by reason of redundancy.

18 November 2020 –

The respondent advertised vehicle technician posts in the respondent’s Audi Centre.  This advertisement was to replace two technicians who had left the Audi Centre in June/July 2020.  Approval to advertise the posts was provided on 16 November 2020.  The complainant did not apply for these posts. 

01 February 2021 –

An email was sent to the complainant inviting him to apply for the vehicle technician post.  The complainant did not apply for this post.

Legal Submission

Redundancy is a lawful basis for the termination of employment under the Unfair Dismissals Act, 1977.

The Redundancy Payments Acts 1967 to 2007 provides the legislative basis for assessing redundancy situations.  The respondent submits that due to a substantial decrease in the number of vehicles being processed through the workshop, the requirement for the complainant to carry out this work had diminished and the duties he performed could be assumed by other employees.

The respondent submits that the redundancy was a genuine redundancy due to the steep decline in car sales leading to a substantial fall off in the requirement to have cars prepared for sale and as such there was no longer a requirement to have a dedicated Service Manager post.

The respondent submits it followed a fair redundancy process and considered alternatives to redundancy, including the proposal put forward by the complainant.

The complainant had a right of appeal, but he chose not to avail himself of this right.  The complainant failed to mitigate his losses.  He did not apply for the Service Technician post when advertised in November 2020 or when he was invited to apply in February 2021.

The respondent submits that the complainant is not entitled to the relief claimed or any relief.

Summary of oral evidence

Mr Leon McSherry, Financial Controller, outlined the decline in business in 2020.  The respondent sells used vehicles.  In 2019 the business unit profit was €174,000 but in 2020 it recorded a loss of €474,000.  The decline in business was mainly a result of the effect of the Covid-19 pandemic and the public health restrictions, particularly between March and June 2020, when the business was closed.  The decision was taken to close the premises on the Nass Road and move the service work to the respondent’s premises in Sandyford. 

Mr McSherry stated the service business in September 2020 was less than half what it had been in 2019.  The costs had to be reduced, including redundancies.  With the move to Sandyford several roles were made redundant, including reception, cleaning and sales positions.  Due to the reduction in the service business the Service Manager position was deemed to be at risk of redundancy.

Mr McSherry attended the consultation meeting with the complainant on 30 September 2020.  The complainant had suggested expanding the service business.  Mr McSherry stated that this proposal was not realistic at that time.  Mr McSherry stated that vacancies in the organisation were advertised on the company intranet and the complainant was advised of this at the meeting.  He recalled that the complainant stated he was interested in the outplacement support on offer.  He also recalled that the complainant stated that the statutory redundancy payment was an insult.  The complainant was encouraged to apply for vacancies through the respondent’s intranet.

Mr McSherry attended the meeting with the complainant on 09 October 2020.  The complainant had not applied for any internal vacancy.  The complainant was informed that the position of Service Manager was redundant.  Mr McSherry stated that this decision was not predetermined but no alternative to redundancy had been identified.  Mr McSherry stated that in 2021 and 2022 the business was still on track to lose money.  The role of Service Manager had not been replaced and one service technician had left and not been replaced.

Under cross examination Mr McSherry stated that he was not the complainant’s manager, but he had been consulted before he attended the consultation meetings. 

Mr Colin Byrne, Business Manager, described the complainant’s role as Service Manager of the workshop working with two technicians.  Mr Byrne attended the meeting of 25 September 2020 along with Mr Donal Duggan, Audi Head of Business.  (Mr Duggan no longer works for the respondent and did not attend the hearing.)  Mr Byrne took notes at the meeting.  He stated that in the discussion with the complainant Mr Duggan responded that the role of Service Manager was up for consideration.  Mr Byrne stated that he did not know what the redundancy package was and that he did not make a comment about “a nice lump sum”.  Mr Byrne did not recall any issue about the complainant being accompanied at the meeting.  The complainant had been advised in the letter of 23 September 2020 that he could be accompanied but the issue was not raised at the meeting.

Mr Byrne stated that at the meeting of 25 September 2020 he followed the notes from HR, and he was not permitted to negotiate any redundancy package.  Mr Byrne categorically denied the comments contained in the complainant’s notes (page 38 of submission) about a payment higher than statutory redundancy or mentioning €20,000.

Mr Byrne stated that he attended the meeting with the complainant on 30 September 2020.  He took the notes at that meeting, and he confirmed that the notes were correct.  Mr Byrne also attended the meeting of 09 October 2020, again took the notes and he confirmed the notes were correct.

Mr Byrne was not aware of the complainant submitting an appeal of the final decision.  Mr Byrne stated that the role of Service Manager was not replaced.  The business now had just one technician as there was a much-reduced level of cares being processed.  Mr Byrne stated that the complainant was management and he had not indicated any interest in the role of technician.

Concerning the redundancy process Mr Byrne stated that he had followed the directions he received from HR.

Under cross examination Mr Byrne stated that he had been a General Manager since October 2019.  He stated that he had no previous experience of dealing with a redundancy situation.  He had not been involved with the other redundancies that had taken place when the business relocated to Sandyford.

Mr Byrne could not confirm when the letter of 23 September 2020 was provided to the complainant.  He confirmed that his notes were the only notes of the meeting of 23 September 2020.  He stated that the meeting lasted about ten minutes.  Mr Byrne stated that he did speak with the complainant after the first meeting but only about the next meeting, not about the proposed redundancy.  Mr Byrne stated that the decision on redundancy was not pre-determined.

Mr Byrne, in reply to a question about consideration of alternatives to redundancy, stated that the complainant held a stand-alone position as Service Manager.  There was no consideration of the complainant being a technician.  Mr Byrne confirmed that the complainant’s redundancy process was his only experience of a redundancy process.  After the Service Manager position was made redundant a technician left employment and was not replaced.  Mr Byrne stated he did not recall participating in the redundancies of the cleaner, receptionist or sales positions,

Concerning the decision about the redundancy of the role of Service Manager Mr Byrne stated that there was a group decision on the need for redundancy.  Mr Byrne stated that he took the decision to make the Service Manager role redundant.

On re-examination Mr Byrne stated he did not have conversations with the complainant between meetings about a redundancy payment.  He stated that the other positions made redundant were identified by Head Quarters in Belfast.

Ms Rose Mary Chapman, HR Manager, stated that most of the redundancies in the respondent were in Northern Ireland.  Usedirect Ireland had ten employees in the business unit and the respondent needed to reduce costs.  The decision was taken to re-locate to Sandyford to reduce costs.  All the staff were notified of the move.  The reception and cleaning staff declined to move location and those roles were made redundant.  Some of the sales staff left and were not replaced. 

Ms Chapman stated that any vacant positions were logged on the internal site and had to be authorised by the Directors.  At the time the Service Manager position was made redundant all available vacancies were posted on the internal system.

Ms Chapman confirmed that the complainant did not appeal the decision to make his position redundant.

Under cross examination Ms Chapman stated that the respondent when trying to reduce costs looked at each business unit.  The business unit where the complainant was employed had ten employees.  Most of the redundancies were in Northern Ireland and the consultation period was three to five weeks.  In the Usedirect Ireland unit the first announcement was on 21 September 2020 and the consultation period was three weeks.  She stated that there was an ongoing review of the business units, including relocation and natural attrition.  It had been hoped the business would improve resulting in fewer redundancies.

Conclusion

The respondent submits that the redundancy was a genuine redundancy due to the steep decline in car sales leading to a substantial fall off in the requirement to have cars prepared for sale and as such there was no longer a requirement to have a dedicated Service Manager post.

The respondent submits it followed a fair redundancy process and considered alternatives to redundancy, including the proposal put forward by the complainant.

Supplemental Submission – Mitigation of Loss

The respondent referred to section 7(1)(c)(i) and (2)(c) of the Unfair Dismissals Acts:

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

7(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to—

(a) …

(b) …

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

The respondent contended that the Labour Court in recent times has been critical of people who have failed to provide proper documentation to support alleged attempts to seek alternative employment and thereby mitigate their loss of income.  The Labour Court has consistently relied on the decision of the E.A.T. in Sheehan v Continental Administration Company Limited UD858/1999 in which the following was stated:

“A claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work…  The time that a Claimant finds on his hands is not his own, unless he chooses it to be, but rather lime to be profitably employed in seeking to mitigate his loss.”

The respondent cited the decision of the Labour Court in Access IT CLG / Access IT  v Galgey UDD2242 where, referring to the complainant, the Court stated that “She told the Court that she applied for hundreds of positions but, in the absence of any documentary evidence of same being produced to the Court to substantiate this statement, the Court has no option but to disregard it and to proceed to make its decision based on the documentary evidence given to it.”

The respondent also cited the decisions in St John of God Hospital Limited v McDowell UDD2238 and Doyles Veg Prep Limited v Fodor UDD2237 in support of the claim that documentary evidence should be provided by a complainant of their efforts to mitigate their loss.

The respondent submits that the complainant provided documentation of four job applications between 05 July 2021 and 16 August 2021 and no further documentary proof of mitigation.  In addition, the complainant did not apply for the technician role with the respondent in February 2021.

It is submitted that the complainant has failed to satisfy the test for mitigating his loss and that any award if made should reflect the fact that no documentary proof has been provided at all in relation his mitigation of loss.

Background

The complainant commenced employment with the respondent company on 01 September 2015.  He was employed as a technician and was later promoted to Service Manager in May 2017.  In 2020 his salary was €50,000 per annum and he was provided with a company car.

On 21 September 2020 the respondent’s General Manager, Mr Colin Byrne, asked the complainant to attend a meeting with himself and Mr Donal Duggan, Audi Head of Business.  At the meeting Mr Duggan informed the complainant that the role of Service Manager was to be made redundant.  The complainant asked was the decision final and Mr Duggan replied that it was.  Mr Byrne asked that a follow-up meeting be scheduled as soon as possible.  The complainant did not receive minutes of this meeting.

The complainant received a letter, dated 23 September 2020, confirming the contents of the meeting of 21 September 2020.  However, the letter stressed that no final decision on the redundancy had been made.  Mr Byrne indicated to the complainant that he would be leaving with a nice lump sum and that there would be generous redundancy terms on offer.

A follow-up meeting took place on 25 September 2020.  Mr Byrne and Mr Duggan attended the meeting.  At the meeting the complainant was informed that he could be accompanied by a colleague or trade union representative.  Throughout the meeting Mr Byrne read from a document, asked the complainant a series of questions from the document and noted the answers on the document in the spaces provided.

The complainant was asked If he understood what redundancy meant, and whether he had identified other roles in the company in which he might be interested.  The complainant asked if Mr Byrne or Mr Duggan knew of roles which might be available to him.  Both answered that they did not know of any such roles.

The complainant was shocked when he was told that the redundancy payment would be the minimum statutory payment.  The complainant was asked to select a date for a second consultation meeting.  The second meeting was arranged for 02 October 2020.  The complainant was provided with a copy of the document which Mr Byrne had read from, but only after he requested same.

At no stage during the meeting was the complainant informed that any other employee was included in the selection process for redundancy.  The complainant was not informed of any selection criteria that would be applied to the selection process.

No consideration was given to the complainant switching to a different role and a more junior employee being considered in the selection process.   The complainant had worked as a technician before he was promoted to Service Manager.

After the meeting of 25 September 2020 Mr Byrne asked that the second consultation meeting be re-scheduled from 02 October 2020 to an earlier date.  It was agreed to move the meeting to 30 September 2020. 

On Tuesday 29 September 2020 the complainant was shocked to learn, from the two technicians who reported to him, that Mr Byrne had informed them that the complainant would be leaving.  The second consultation meeting took place the following day.

The second consultation meeting on 30 September 2020 was attended by Mr Byrne and Mr Leon McSherry, Financial Controller.  The meeting followed the same format as the first meeting.  Mr Byrne read from a document, asked questions and filled in the relevant boxes with an abridged version of the complainant’s answers.  There was no discussion about other employees being included in the selection process and no discussion about the criteria which were applied in selecting the complainant for redundancy.

The final meeting was scheduled for Friday 09 October 2020.  Two days before that Mr Byrne asked the complainant to cease processing customer service queries and to commence handing over responsibilities to him.  On Thursday 08 October 2020 Mr Byrne asked the complainant to pack up his personal effects so that he could leave immediately after the final consultation meeting.

The final consultation meeting took place on Friday 09 October 2020.  The redundancy was confirmed.  The meeting followed the same format as the first two meetings.

Legal Submission

The complainant was an employee of the respondent by virtue of his contract of employment and his ongoing employment since 01 September 2015.  He falls within the definition of employee contained in section 1 of the Unfair Dismissals Act and does not fall within any of the exclusions contained in section 2 of the Act.

The complainant’s employment was terminated by the respondent on 09 October 2020.  The onus is on the respondent to demonstrate the dismissal of the complainant was fair and reasonable.  It is submitted that the dismissal of the complainant was neither fair nor reasonable.

It is submitted that under section 6(3) of the Act there may be a finding of unfair selection for redundancy where the circumstances set out in that section apply.  Where such circumstances do not apply consideration may be given to the fairness or otherwise of selection for redundancy under section 6(1) and 6(6) of the Act.  The decision of the Employment Appeals Tribunal in Boucher v Irish Productivity Centre UD882/92 was cited.

It is submitted that section 6(4)(c) of the Act provides a defence to a claim of unfair dismissal by reason of the “redundancy of the employee”.   Where the dismissal is due wholly or mainly to redundancy an employer is entitled to dismiss an employee but for such dismissal to be fair several requirements must be fulfilled.  Section 6(7) of the Act provides that regard may be had to the reasonableness or otherwise of the conduct of the employer in relation to the dismissal and to the extent, if any, of the compliance or failure to comply by the employer with the procedure referred to in section 14(1) of the Act.  Therefore, the decision must be non-personal to the employee and be based on an objective decision.  The selection process must be fair, and the employer’s conduct must be reasonable.

The complainant cited the decision of Charleton J in JVC Europe Ltd v Panisi [2011] IEHC 279 in which it was found that there had been no genuine redundancy where a new position created included practically the same duties as the old job.  It is the complainant’s position that no genuine redundancy situation existed. 

Even in circumstances where a genuine redundancy situation exists, which is not accepted by the complainant herein, an unfair selection for redundancy will amount to an unfair dismissal.  The respondent must be able to objectively justify why the complainant was selected for redundancy as opposed to another employee based on independent, objective, and verifiable criteria.

The complainant cited the decision of the Employment Appeals Tribunal in Mulqueen v Prometric Ireland Ltd UD1259/2012 as highlighting the importance of fair procedures during the consultation process.  The complainant also cited the decision in Boucher v Irish Productivity Centre UD882/92 which held that the onus was on the employer to establish they acted fairly and to establish that reasonable criteria are applied to all employees where assessments are used as a means of selection.  The complainant submits that at no stage of the consultation process did the respondent present to him any criteria upon which they would base the decision to select him for redundancy.  The complainant asserts that from the outset all communications from the respondent’s management, and specifically Mr Byrne, indicated that the decision to select him personally was pre-determined.

It is the complainant’s position that the respondent failed to make any meaningful effort to assess if there was any alternative position available for him in the company.  The respondent gave no consideration to the option of having a selection process with other employees which may have resulted in the complainant being redeployed in a more junior or different role (e.g., the role of service technician).  The complainant cited the decision of the Labour Court in Students Union Commercial Service Ltd v Alan Traynor UDD1726 as confirming the obligation of an employer to look for an alternative to redundancy.

The complainant submits the following points should be considered in deciding whether there was a genuine redundancy and / or whether the complainant was fairly selected for redundancy.

·        The respondent has not provided sufficient detailed evidence which indicates that its financial situation was such that it justified making the position of Service Manager redundant.

·        The respondent sought to implement the entire purported redundancy process with undue haste.

·        There was no meaningful discussion or consultation of alternative employment possibilities.  No consideration was given to the redeployment of the complainant into his previous role or any other position.

·        The complainant was not given an opportunity to make any case against his selection for redundancy.

Remedies

The complainant submits that having regard to all the circumstances the appropriate redress for the complainant is re-instatement on the terms and conditions on which he was employed before his dismissal.

In the alternative compensation as provided for in section 7 of the Act of up to two years remuneration.

Summary of Oral Evidence

Mr Hoary described his work stating he was involved in prepping cars for sale.  He used his own tools which were kept in the workshop.  He had started his employment with the respondent as a technician in 2015.  At the end of 2016 the respondent took on another technician.  Then in April 2017 another technician was taken on and Mr Hoary was prompted to Service Manager in May 2017.  He then had two technicians reporting to him and as well as being a manager he continued to work on cars.

In September 2020 Mr Byrne asked him to attend a meeting.  He met with Mr Byrne and Mr Duggan.  He was informed by Mr Duggan that his job was at risk.  He was told a further meeting would be arranged.  Mr Hoary believed his job was gone.  Mr Byrne took notes but did not provide a copy to Mr Hoary.

The next meeting took place on 25 September 2020.  Mr Hoary stated that he did not receive the letter, dated 23 September 2020, inviting him to the meeting on 25 September 2020, until after the meeting took place.  He was not informed he could be accompanied to the meeting.  The meeting was attended by Mr Duggan and Mr Byrne.  Mr Hoary was informed that his job was at risk, due to cost cutting.  Mr Hoary stated that Mr Duggan told him his job would be going.  Mr Hoary stated the meeting took about five minutes and a further meeting was to be arranged.  Mr Byrne had read from a document and filled in some notes.  Mr Hoary was not provided with notes of the meeting until he asked for the notes.

Mr Hoary stated that he did make a proposal about an alternative to redundancy.  He was unclear about whether this was at the meeting of 25 or 30 September 2020 but more likely it was on 30 September 2020.  The meeting of 30 September was again short, being five to ten minutes.  Mr Burke read from a document and filled in notes.  Mr Hoary stated he did not sign any notes of the meeting.  However, he made his own notes which he copied on email to send to himself.

At the final meeting, on 09 October 2020, Mr Hoary stated he was told his position had been made redundant.  The meeting was short and he was told to leave and take a car other than his usual company car.  He had the use of this car until 25 October 2020.

Mr Hoary recalled other meetings with Mr Byrne in between the scheduled meetings.  Mr Byrne had called into Mr Hoary’s office and had asked if he had anything “lined up”.  Mr Hoary replied he had not.  Mr Byrne indicated that there would be a generous offer on redundancy.  On another day Mr Hoary went into Mr Byrne’s office to access the safe.  Mr Hoary stated that Mr Byrne wanted to bring forward the next scheduled meeting as it would be best to “rip the plaster off” and move forward.  The next meeting was rescheduled from 02 October to 30 September 2020.

Mr Hoary stated that he believed that the two people who reported to him as Service Manager were informed that his employment was terminated before the consultation meetings were concluded.

Mr Hoary stated that on 08 October 2020, the day before his final meeting, Mr Byrne came into his office and instructed him to take all his tools and personal belongings away that day using a Toyota Jeep to transport the items.  Mr Hoary did remove his tools and personal belongings that day, Mr Hoary stated that Mr Byrne had indicated it would be better to remove these items so that there would not be a difficult position after the meeting the following day, Friday 09 October 2020.

Mr Hoary confirmed he did not appeal the decision to make him redundant as it did not make sense to him.  The decision had been made by the respondent.  Mr Hoary stated he did not apply for the technician position with Audi in February 2021 as he felt the respondent didn’t want him.

Mr Hoary stated that he had not worked since he was made redundant but he expected to start work at the end of November 2022.  He stated that he had applied to nearly every garage in the Naas Road / Inchicore area by calling in with a copy of his CV.  When he didn’t hear back, he called in again.

Under cross examination Mr Hoary accepted he could be confused about some of the dates after two years.  He stated he was sure about removing his own tools before the final meeting. 

Mr Hoary accepted that there is no longer a Service Manager position in the business unit.  Mr Hoary stated that Mr Byrne was not very fond of him, he had a personal issue with him.  Replying to questions about alternatives to redundancy he stated that there were opportunities for him as a technician but these were not offered to him.  Mr Hoary confirmed he had not applied for any positions that were advertised on the company intranet.  This was because there were no vacancies in Dublin.  Any positions advertised were in Northern Ireland.

Mr Hoary confirmed that the did not take up the offer of outplacement.  This was because he didn’t know what it was.  He stated he would have been interested but he had help with his C.V. and he had sent out many copies.

Mr Hoary confirmed that he did not appeal the decision to make his position redundant as there was no point.  The decision had already been taken.

Concerning the issue of mitigation of loss Mr Hoary acknowledged that he did not apply for the technician position with Audi in February 2021.  He stated he had tried to obtain employment and apart from a technician post he had tried for jobs in parts and driving.  He agreed that he had not tried for jobs in other areas such as supermarkets, cleaning etc.  Mr Hoary stated that he applied for jobs he would be good at and had sent out his C.V. and called into many garages and dealerships.

Supplemental Submission – Mitigation of Loss

It is accepted that this tribunal is obliged to consider the complainant’s efforts to mitigate his losses.  It is further accepted that the Labour Court decision in Sheehan v Continental Administration Company Limited UD858/1999 has been consistently followed.  However, it is submitted that the application of the decision in Sheehan consistently results in a deduction in the level of compensation awarded to varying degrees.

The decision in Access IT CLG / Access IT v Galgey UDD2242 resulted in a reduction of 15.5% of the award of compensation. 

In Keelings Logistics Solutions v Toth UDD1921 the Labour Court increased the award of compensation from €10,000 to €15,000 while stating “The Court in arriving at its decision has taken into account what it regards as the Complainant’s inadequate efforts to secure alternative employment in a period of near full employment and his unreasonable decision to confine his job applications to a very confined geographical area and to a restricted range of occupations.”

Section 7(1) (c) of the Act requires that regard should be had to “all the circumstances” when determining an appropriate level of compensation.  In this case the circumstances must include the Covid-19 pandemic and the health and safety restrictions introduced in 2020 and 2021.  Level 5 restrictions were introduced soon after the complainant’s employment was terminated, and they remained in place until 05 April 2021.  The restriction on travel resulted in a reduction in the need for mechanical services in the motor trade.

The complainant gave evidence of applying for work at numerous car dealerships during 2021.  He gave evidence that he did this in person and frequently did not get a response. The complainant’s evidence was that he applied to almost every car dealer in the Naas Road area of Dublin, not in the Naas area.  This is relevant insofar as the Naas Road area of Dublin is the epicentre of the new and used car trade in the country, where dozens of car dealerships carry on business.

It is submitted that there are deficiencies in the extent to which the complainant can vouch his mitigation of loss by way of documentary evidence.  However, due regard should be given to the exceptional circumstances which pertained in the period of his unemployment and that if an award of compensation is made any discount would be modest.

CA-00041612-001

Complaint submitted under section 8 of the Unfair Dismissals Act, 1977.

Legislation

Section 6 of the Act provide the following in respect of unfair dismissal and redundancy:

6.— (1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.

(2) …

(3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

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

(b) the conduct of the employee,

(c) the redundancy of the employee, and

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

It is the complainant’s position that no genuine redundancy situation existed.  It is also submitted that the respondent has failed to objectively justify why the complainant was selected for redundancy as opposed to another employee based on independent, objective and verifiable criteria.  The complainant submits that the redundancy selection process was unfair and unreasonable.

It is the respondent’s position that the complainant’s dismissal resulted from a genuine redundancy situation due to a steep decline in car sales and a fall off in the requirement to have cars prepared for sale.  Further, it is the respondent’s position that the redundancy process was fair.

I must first decide if a genuine redundancy situation existed.  Then, if there was a genuine redundancy situation was the selection process fair and reasonable.

It is common knowledge that in 2020 the Covid-19 pandemic had a significant negative impact on many businesses.  The health and safety restrictions introduced in March 2020 caused many businesses to close temporarily, including the respondent.  The respondent wrote to the complainant on 04 June 2020 informing him that trading in 2019 and the first quarter of 2020 had been difficult, and it concluded that it would not recover its financial position within the year.  Consequently, a decision had been taken to reduce costs by closing the premises at Naas Road and transferring to Bracken Road, Sandyford.  The complainant was asked to return to work at the new location.  Mr McSherry in his evidence stated that the 2019 profit was in the order of €174,000 and the loss in 2020 was €474,000.  The saving on rent and rates by closing the Usedirect premises on the Naas Road and moving the business to Sandyford was approximately €220,000.  In addition to that savings in payroll were made as reception, cleaning and sales staff left or were made redundant and not replaced.

Based on the evidence presented I am satisfied that the business was in difficulty and needed to further reduce costs.  However, there was no evidence presented about the level of further cost reductions required to make the business viable or return to profitability.  An employer may decide to carry on business with fewer employees, but the employer is also required to act reasonably.

Section 7 (2) (c) of the Redundancy Payments Act 1967 provides:

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

(a) …

(b) …

(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 employed the complainant and two technicians in the workshop prepping, servicing, and repairing used vehicles for sale.  It was Mr McSherry’s evidence that the amount of work for the workshop in 2020 was less than half that before the pandemic.  On the evidence presented I am satisfied that a redundancy situation did exist in 2020 and the respondent took a decision to carry on business with fewer employees.

The respondent did not present evidence as to how just one position out of three was considered for redundancy.  The complainant had been a technician before being promoted to Service Manager.  While the position of Service Manager was an individual position there was no evidence that the complainant was not capable of working as a technician.  By letter dated 23 September 2020 the complainant was informed that “It is proposed that we remove the Service Manager position held by you and absorb these duties within the wider UDI team.”  The complainant was informed that his position was at risk and “at this stage this is a provisional decision only”. 

It was further stated that the respondent “will continue to try to identify ways by which your redundancy might be avoided.”  The complainant was invited to a consultation meeting 25 September 2020 as the respondent wished to consult him and listen to his views. 

Mr Burke was the General Manager and he confirmed in his evidence that the complainant did carry out work on cars.  Mr Burke did not explain how the decision to select the position of Service Manager for redundancy was made.  He did not present any criteria that had been used to select that position.  In his evidence Mr Burke stated that he made the decision to make the position of Service Manager redundant.

In his evidence Mr Burke stated that he followed the directions from HR and that he followed the notes from HR.  This evidence is consistent with the complainant’s evidence that at the consultation meetings Mr Burke read from a document and filled in notes on the document.  Under cross examination Mr Burke stated that he had no previous experience of a redundancy or a redundancy process.  No evidence was presented of any alternative to redundancy being proposed by the respondent during the consultation process. 

The complainant’s counsel cited the decision of the Labour Court in Students Union Commercial Service Ltd v Traynor UDD1726 where the Court held:

“In circumstances where redundancy is unavoidable, the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly.  …

In Mulcahy  v  Kelly [1993] E.L.R. 35, , the EAT held that “it is well established that there is an obligation on an employer to look for an alternative to redundancy”. It held: -

“Having heard the evidence presented the Tribunal is satisfied that a redundancy situation existed in September 1990 when the decision was made to terminate the claimant's employment. It is our opinion that the claimant's dismissal resulted wholly or mainly from reasons of redundancy.Notwithstanding that the claimant's selection for redundancy was not in contravention of a procedure or an established custom and practice of the employment relating to redundancy, there is an obligation on an employer to look at all employees as possible candidates for redundancy.”

This duty may involve locating alternative work within the organisation even it this involves dismissing another employee with shorter service. In Thomas & Beets Manufacturing Limited v Harding [1980] IRLR 255, the English EAT found the complainant’s dismissal unfair because she could have found work as a packer even though this would have meant dismissing a recently employed packer.”

There was no evidence of consideration being given to part-time work, reduced hours, voluntary redundancy, work as a technician, or any other cost reducing measures.  The complainant in his evidence stated he proposed an expansion of the service.  This proposal was considered not to be realistic and was dismissed immediately in a short meeting.

I am satisfied that Mr Burke had no experience of managing a redundancy process and that he followed the HR notes without any genuine consideration being given to alternatives to redundancy.  The complainant was consistent in his evidence about conversations with Mr Byrne between the arranged consultation meetings.  I accept the evidence of the complainant that Mr Byrne engaged in conversations with him outside the arranged consultation meetings that indicated to him the decision had been made to make his position redundant before the consultation process had been completed.  In addition, I note that the complainant was asked by Mr Burke to remove his tools from the premises before the final meeting.  On the evidence presented I am satisfied that the consultation process was not a genuine attempt to consult the complainant about alternatives to redundancy.  I find the selection process was unfair to the complainant.   

An employer is required to act reasonably when dealing with the dismissal of an employee.  Section 6 (7) of the Act provides:

“Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if (the adjudication officer or the Labour Court], as the case may be, considers it appropriate to do so—

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

Having carefully considered the evidence presented I am satisfied that a genuine redundancy situation did exist in 2020.  However, I find the respondent did not consider alternatives to redundancy.   I am satisfied the selection process was unfair and unreasonable.  I find the complainant was unfairly selected for redundancy and therefore was unfairly dismissed.

Redress

Section 7 of the Act provides three types of redress where an employee has been unfairly dismissed:

o   Re-instatement

o   Re-engagement

o   Compensation for financial loss attributable to the dismissal

The complainant on his complaint form selected re-instatement and compensation as the form of redress.  Under cross examination the complainant accepted that the position of Service Manager no longer existed.  In all the circumstances I am satisfied that compensation is the correct form of redress.

The Act provides:

S7 (1) (c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances, …

The complainant submitted a timeline for the period from October 2020 to October 2022.  From the date of dismissal to the date of the hearing the complainant had only obtained paid work between 06 and 17 December 2021.  The complainant suffered a broken finger in March 2022 and had surgery on April 2022, a period of two months when he was unavailable for work.

Section 7 (2) of the Act sets out issues to be considered when deciding the amount of compensation.

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

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

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

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

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

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

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

The respondent submitted that the complainant failed to meet the standard of effort required to mitigate his losses.  This submission was based on the fact that he did not apply for the post of technician when it was advertised in November 2020 or when he was invited to apply in February 2021 and the lack documentary evidence of applications for other positions.  In addition, the complainant stated in his evidence that he had only applied for “jobs that he would be good at" and that he had taken time out to home school his children.  The documentary evidence of applications for job consisted of letters dated, 05 July 2021, 16 July 2021, 16 August 2021 (two letters). 

The respondent submits, citing the decision in Access IT CLG / Access IT v Galgey UDD2242, that in deciding the amount of compensation only the documentary evidence provided may be taken into consideration.  Further, it was submitted that in line with Sheehan v Continental Administration Company Limited UD858/1999 the onus is on the complainant to show that he spent a considerable amount of each that he was unemployed applying for alternative employment.

The complainant accepted that in deciding the amount of compensation consideration must be given to the efforts of the complainant to mitigate his losses.  It was submitted that the application of the decisions in Sheehan and Galgey results in a deduction in the level of compensation awarded to varying degrees.  The complainant cited the decision in Keelings Logistics Solutions v Toth UDD1921 noting that the Labour Court having considered “what it regarded as the complainant’s inadequate efforts to secure alternative employment in a period of near full employment and his unreasonable decision to confine his job applications to a very confined geographical area and to a restricted range of occupations” increased the compensation awarded at first instance.

The complainant submitted that section 7(1) (c) requires that regard should be had to “all the circumstances” when deciding the level of compensation.  In that context it was submitted that the circumstances included the fact that the country went into Level 5 Covid-19 restrictions soon after the complainant’s employment was terminated in 2020 and that those restrictions stayed in place until 05 April 2021.  In addition, the requirement to work from home unless necessary to attend in person was only relaxed in January 2022.  The complainant in his evidence stated he had applied to almost every car dealer in the Naas Road area, which is the centre for the new and used car trade.  It was submitted that due regard should be given to the exceptional circumstances pertaining in the period of unemployment.

I accept that the period from the date of termination in 2020 to early 2022 was exceptional due to the Covid-19 health and safety restrictions.  Those restrictions had an impact on the general commercial life in the country and reduced the opportunities for employment in the motor trade.  However, the legislation requires me to consider the measures taken by the complainant to mitigate his losses.

I note that in the Formal Notice of Redundancy letter, dated 14 October 2020, the complainant was informed that he had the right to appeal against the decision to confirm his role as redundant.  The complainant did not appeal this decision.  In his evidence he stated he didn’t appeal as he didn’t see there was a point because the decision had been made.  An appeal would have provided an opportunity to have another person consider the decision, but the complainant did not avail himself of this opportunity.

I note the complainant did not apply for the post of technician in November 2020 or when invited to apply in February 2021.  He had the qualifications and experience for this post, but he chose not to apply.

In his evidence the complainant stated that he started sending out his C.V in May 2021.  His evidence was that he visited almost every car dealer in the Naas Road area in person looking for work.  I acknowledge the position taken by the Labour Court about the requirement to provide documentary evidence of a person’s efforts to mitigate their losses.  In this case the complainant has only provided documentary evidence of four applications.   However, I am satisfied the complainant was truthful in stating he that he visited car dealers in person to find a new job.  But I must also note that the complainant did not consider applying for jobs in any sector other than the motor trade.  The complainant stated that he had applied for jobs he would be good at.  The complainant gave no evidence of applying for jobs outside the motor industry.  In a time of almost full employment that cannot be considered as an acceptable level of effort to mitigate his losses.  I consider the complainant’s efforts to mitigate his losses did not reach a reasonable standard, even considering the exceptional circumstances that existed in 2020 and 2021.

I note that for the first six months after his dismissal there was no evidence of any effort to mitigate his loss by making any job applications.  In deciding the level of compensation, I am satisfied that I cannot consider the first six months of loss after dismissal as there is no evidence of any effort by the complainant to mitigate his loss during that period.  In addition to that six-month period when the complainant did not apply for any job, he was unable to work for two months in 2022 due to an injury to his finger and the need for surgery.  Therefor the maximum period of loss I may consider is sixteen months. 

Having regard to all the circumstances, including the difficulties arising from the Covid-19 pandemic, the failure to appeal the decision, the failure to apply for the role of technician in February 2021, the lack of effort by the complainant to mitigate his loss for six months, the lack of documentary evidence of efforts to mitigate losses, I decide it is just and equitable to direct the respondent to pay the complainant compensation for unfair dismissal in the amount of €40,000.

CA-00041612-001

Complaint submitted under section 8 of the Unfair Dismissals Act, 1977.

Having carefully considered the evidence presented I am satisfied that a genuine redundancy situation did exist in 2020.  However, I find the respondent did not consider alternatives to redundancy.  I am satisfied the selection process was unfair and unreasonable.  I find the complainant was unfairly selected for redundancy and therefore was unfairly dismissed.

Having regard to all the circumstances, including the difficulties arising from the Covid-19 pandemic, the failure to appeal the decision, the failure to apply for the role of technician in February 2021, the lack of effort by the complainant to mitigate loss for six months, the lack of documentary evidence of efforts to mitigate losses, I decide it is just and equitable to direct the respondent to pay the complainant compensation for unfair dismissal in the amount of €40,000.

Redundancy

Unfair Selection for Redundancy

Redress

Compensation

Documentary Evidence