Complainant

Respondent

Parties

Karen  Arkins

Gno Plas Teoranta Gno Plas Teo

Representatives

O'Reilly Doherty & Co

 Conor Rock B.L instructed by Maurice O’Driscoll, solicitor

Act

Complaint Reference No.

Date of Receipt

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

CA-00048540-001

08/02/2022

The complainant commenced employment with the respondent in November 2018 as a bookkeeper and worked part-time. The respondent is a manufacturing company in Coolock, Dublin 17. She was paid €400.40 gross on a weekly basis.

On January 11th, 2022, the complainant was informed that her role with the respondent was being outsourced and that her position was being made redundant, and the following day received a letter confirming that her employment was being outsourced.

On January 20th, 2022, her employment with the respondent was terminated.

The respondent said that the complainant had been employed on a part-time basis as a bookkeeper for two days per week for a period of three years. During this time, she had taken nine months maternity leave and her work was outsourced to the respondent’s auditors.

The company employs four people and managed to keep payment to revenue up to date.

However, it has significant debts for ground rent for which a schedule of payments has been agreed with the local authority. Then in January 2022 the company decided to outsource the work again and to concentrate its administration on sales.

Mr. Larry Dolan, Managing Director of the company give evidence on affirmation.

He said that he had been running the company for about forty years and other employees included a production manager and two others. The employees work a forty-hour week.

Only one person had been employed as a bookkeeper administrator and that was the complainant. She was employed for two days a week although these days could vary. During her maternity leave her work was outsourced to the company’s accountancy practice which also carried out its annual audit.

In January the company decided to make this arrangement permanent, and this required making the complainant redundant. The respondent did not dispute the sequence of events set out below in the complainant’s submission.

Under cross-examination, the witness said that he had not been happy with the limited hours worked by the complainant and that he could now ring the auditors at any time on any day.

He confirms that the complainant had not been told that she was at risk of redundancy and also, he accepted that no consultation had taken place with her.

He also confirmed that he had not considered any alternative roles for the complainant, nor did he invite a response from her in relation to alternatives. He said that he had been asked about alternatives but that there was only one phone call which arrived while he was having lunch and he did not return the call.

He accepted that no procedure has been followed.

The respondent submits that the dismissal was a bona fide redundancy, that the decision to outsource was reasonable and not arbitrary, although it was accepted that the procedure followed was ‘not perfect’.

The complainant had in excess of three years’ service with the respondent at the time of the termination of her employment.

In November 2020, she went on maternity leave and before doing so, she sourced an accountancy firm on behalf of the respondent to take up her bookkeeping role during her absence. This was to assist the respondent despite her having no obligation to do so.

She returned from maternity leave in May 2021,(and did not take nine months’ leave as asserted by the respondent)  and it became clear that her work prior to her maternity leave had been outsourced to the same accountancy firm which she had identified. This led to a significant reduction in the number of days that the complainant worked for the respondent.

On January 11th, 2022, the complainant was informed, by way of telephone call, that her role with the respondent was being outsourced and that her position was now redundant. The following day she received a letter which had been left on her desk notifying her that her role was being made redundant.

On January 20th, 2022, the complainant’s employment with the respondent was terminated.

It is submitted on behalf of the complainant that her position with the respondent was at no point redundant. The respondent, as is clear from the correspondence,“decided”tomakethecomplainant’spositionredundant.Adecision tomakeapositionredundant,asoutlinedbelow,isnotconsistentwithfairprocedures andisnotconsistentwiththelegalprinciplesrelatedtoredundancies.

It would appear that the respondent took exception to the complainant taking maternity law, which is protected under statute. The reduction in her working hours and subsequent termination coincided with her return from maternity leave.

The complainant was taken aback by the nature in which the respondent communicated this information to her and did not expect to be treated in such a manner by the respondent in light of her loyal service with the respondent and what she understood to be a good working relationship.

At no point did the respondent warn the complainant that her role was at a risk of redundancy, consider alternative roles for the complainant or have any type of consultation process with the complainant.

The respondent continues to outsource the work that the complainant carried out with the respondent.

The complainant give evidence on affirmation.

She described her role which included accounts and all administration and said that although she worked only two days, she was contactable five days a week and the company often did. She felt she had a good working relationship with the company and when she went on maternity leave, she took only six months preferring to return to work.

She stated that she received a phone call from the owner’s son and then a second call from the owner himself. The witness asked him why she was being made redundant but got no reply.

She had arranged with the auditors to take over her role during her maternity leave and had to go see that the price with them for doing so.

In respect of any alternatives nothing was discussed including the possibility of more flexible working.

This concluded the evidence of the complainant.

Pursuant to section 6 of the Unfair Dismissals Act 1977, as amended, a dismissal of an employee is deemed to be unfair unless the employer can demonstrate substantial grounds for that dismissal. Section 6(1) of the 1977 Act provides:

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.

In addition, section 6(3) of the 1977 Act addresses redundancy situations specifically and provides that in cases where employees purport to attribute a dismissal of an employee to redundancy, the dismissal will be deemed unfair if the selection process was unfair or if fair procedures were not followed:

(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.

The burden is squarely on the shoulders of the respondent to demonstrate that the criteria for a genuine redundancy were present, and that the complainant was fairly selected for redundancy. The respondent cannot discharge that burden in this case.

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

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to

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

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

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

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

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

It is clear upon the reading of s.7(2) of the 1967 Act above that an employer is required to indicate the specific subsection of the provision in that section upon which it relies. This is evident by the legislature’s inclusion of the word “or”, as emphasised above.

The respondent has failed to do so and cannot simply rely upon the entire s.7(2) provision in the absence of indicating the specific subsection upon which it relies.

If the Adjudication Officer finds that the reason for the complainant’s dismissal is something other than redundancy, then it must find that the dismissal was not as a result of redundancy and was not a genuine redundancy. Boucher v. Irish Productivity Centre [1994] ELR 205 has previously held that selection criteria for redundancy should be assessed:

“By the objective standard of the way in which a reasonable employer in these circumstances, in that line of business, at that time would have behaved.”

It is evident from the case law that the WRC is willing to re-in state employees who have been unfairly dismissed by way of a purported redundancy. In the Colin Dominic Kearns v Ata Tools (ADJ-00030876), December 2021 the Adjudication Officer found that:

“Allowing for the circumstances of this case it would be unjust not to reinstate as the conduct of the employer in this case has created the wrong and in all the circumstances the interests of justice so require”.

The Adjudication Officer relied upon Redmond on Dismissal in this regard and stated:

“Reinstatement requires an employer to treat an employee in all respects as if he had not been dismissed. The remedy is granted, as a general rule, where the employee is found not to have contributed to the dismissal in any significant way and/or where the interests of justice so require…

Reinstatement can impose significant costs upon a respondent. However, the Tribunal is satisfied that a claimant ought not be deprived of the appropriate remedy through no fault of the claimant and further that a respondent who unfairly deprives a claimant of his employment does so at his own risk ... An employer who refuses to remedy the continuing wrong done to an unfairly dismissed employee by refusing to readmit to employment a willing employee until ordered by a Tribunal exacerbates this liability by the continuing wrong done to the employee until the order is made”.

It need not be emphasised that a serious consideration by an employer of alternative roles for an employee is critical in a redundancy process.

In this case the respondent did not adequately consider alternative roles for the Complainant. If it is found that the respondent did not give serious consideration to other roles, including the complainant in this process, then the dismissal must be found unfair, as the EAT found in O’Connor v Power Securities Ltd UD 344/89.

In Modern Injections Moulds Ltd v Price [1976] ICR 370) it was noted that an employer must provide all of the relevant information regarding a proposed alternative role to the employee for him to consider.

An employer must prove that (i) a genuine redundancy situation existed and (ii) the redundancy was the primary reason for an employee’s dismissal. In McDonnell v The Drawing Centre Ltd UD 715/1993 the Tribunal noted that the respondent must provide strict proof of this. In O’Kelly v Xsil Ltd reinstatement was considered the most appropriate redress where the employer in that case failed to produce documentary evidence of the downturn in the company’s finances that necessitated the redundancy of the employee in question.

The selection criteria relied upon by the respondent employer cannot be subjective or personal (Graham v ABF [1986] IRLR 90; Panisi v JVC Europe Ltd [2012] ELR 70) and a criterion should be able to be independently verified (Williams v Comp Air Maxim [1982] IRLR 83).

The respondent has failed to provide any information whatsoever in relation to selection criteria and/or selection pool in the redundancy process. As regards the selection criteria, it needs not be stated here that the selection criteria relied upon by the respondent must be entirely objective.

As regards to the selection pool, there is a strict obligation on the respondent to demonstrate that the net was cast sufficiently wide notwithstanding an employee works in a particular role.

In Dowling v. Whole food Wholesale Ltd (UD 95/2006) it was held that the pool chosen by the employer was too narrow and should have included more than the employee in question, the employer should have considered employees in other areas in which the employee worked.

The facts are well set out in the submissions of the parties and are not in dispute.

Indeed, they do not take a lot of summarising insofar as they are relevant to this decision and can all be located within a very short timeframe.

The complainant returned from her maternity leave in May 2021 and discovered that the firm of accountants she had arranged or, at least recommended, to do her work in her absence were continuing to do it following he return. This had an obvious impact on the work available for her.

Then, on January 11th, 2022, she got a phone call from the business owner’s son to say, effectively that the arrangement was being made permanent and she was being made redundant.

This was followed up the next day in a letter which was left for her on her desk, and which read as follows.

Dear Karen,

The company has decided to make your position redundant and to outsource the work week commencing 23rd. Thank you for your co-operation over the past few years.

Yours truly, Larry Dolan

There was a second call with the owner during which she asked why she was being made redundant, but she says she got no answer. She made another attempt to contact the owner who was having his lunch at the time and said he would ring her back, but he did not do so.

The respondent’s evidence given on affirmation and set out above does not offer any rebuttal of the stark nature of these communications.

Under cross-examination the respondent said that he had not been happy with the limited hours worked by the complainant and that, with the new arrangement he could now ring the auditors at any time on any day.

He confirmed that the complainant had not been told that she was at risk of redundancy and also, he accepted that no consultation had taken place with her.

He said that he had not considered any alternative roles for the complainant, nor did he invite a response from her in relation to alternatives. He said that he had been asked about alternatives but that there was only one phone call which arrived while he was having lunch and he did not return the call.

He accepted that no procedure has been followed, (or, as his representative somewhat economically put it, it was accepted that the procedure was ‘not perfect’).

The first question to consider is whether a genuine redundancy situation existed.

I find on the above facts that the proposed outsourcing of the work falls within the provisions of section7 (2) (b) and/or (c).

However, a termination of employment by reason of redundancy is a termination nonetheless and meeting the requirements of the definition referred to is not the end of the matter. The well-established requirements to conduct a fair procedure may take a different form in relation to redundancy because of its nature, and involve some level of consultation and prior notice, a fair selection process, the consideration of alternatives etc.

While these requirements will vary from case to case, they place an obligation on an employer to conduct the process with what might be described in non-legal terms as some degree of respect and courtesy which was entirely lacking here.

Most challenges to redundancy are brought under the Unfair Dismissals Act for that reason; that they are alleged to have breached these principles of fairness to some degree or another.

As has been noted.

The combined effects of the Redundancy Payments Acts and the Unfair Dismissals Act is that an employer, when contemplating a dismissal on grounds of redundancy,          must first ensure that the relevant circumstances fall within the definition of redundancy set out in the redundancy payments acts. Once this is the case that employer must then ensure that the procedures whereby an employee is selected for redundancy are transparent objective and fair. In all cases the employer must ensure that he conducts himself reasonably.

 ‘Employment Law’ Murphy Regan eds, Second Edition at 19.05, p776

This expresses well the crossover between the two pieces of legislation and puts paid to any idea that redundancy may be effected as some sort of administrative step, to which the generally accepted principles underpinning Irish employment law do not apply.

It emphasises that even where the proposed termination falls within the statutory definition of redundancy, it must also meet the requirements of fairness, or as it is put above, of reasonableness. While this may seem a somewhat vague, or subjective notion it will often be more discernable by its absence and that is most certainly the case here.  

In this case the respondent falls a long way short of these requirements of fairness and reasonableness. A good example is to be found where the complainant made it clear in her evidence that she had capacity to be more flexible, for example. This may not have fully met the respondent‘s requirements but he had an obligation to explore it and failed to do so.

In general, and on the basis of his own evidence, his conduct was discourteous and disrespectful to the complainant, to a quite extraordinary degree, and, as already noted, fell very short of the obligations to conduct a fair procedure.

He confirmed that the complainant had not been told that she was at risk of redundancy, and that there had been no consultation or discussion of alternatives.

I therefore have no difficulty in finding that the dismissal was, by reference to these facts and the applicable law, an unfair dismissal.

The complainant, who is a qualified Chartered Accountant had losses of €18,000.00 attributable to the termination of her employment.

There is a very strict obligation on a complainant to make every effort to mitigate their losses following a termination, and on the basis of her evidence to the hearing this complainant’s efforts to do so fell well short of what is required.  

This is reflected in my award of compensation.

I uphold complaint CA-00048540-001 and find that the complainant was unfairly dismissed. For the reasons set out above I award her €7,500.00

Unfair dismissal, redundancy, fair procedure.