Complainant

Respondent

Parties

Barbara Coyle

The Blackdog Communications Ltd

Representatives

Self-represented 

Wendy Doyle Solicitors

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-00038405-001

28/06/2020

The complainant worked for the respondent between 2006 and the ending of her employment in May 2020. The complainant was paid €4,088 per month. She had been on lay-off since October 2019. The complainant asserts that the dismissal was unfair. The respondent is a telecoms company and denies the claim of unfair dismissal.

The respondent made submissions that this was a fair redundancy arising from financial difficulties faced by the respondent. It had closed the office and Mr Wilson took over the running of the company. Others were made redundant. It referred to financial misappropriation with monies being taken from the company without authorisation. It submitted that the complainant had not provided alternatives to redundancies. It submitted that this was a genuine redundancy, and all fair procedures were followed.

Mr Wilson gave evidence on affirmation that the respondent company had not been functioning and he did not have access to the bank accounts. The unauthorised payments had caused the financial difficulties and led to the lay-offs. They had messaged clients to say that there was a dispute. He said that he did not take a salary.

The complainant gave evidence on affirmation of her employment with the respondent and that she had been removed as a director in a premeditated way. She had been placed on lay-off so that she would resign and lose the value of her shareholding. Her role was not redundant as it was still being done. She said that most of her clients were based in the UK. In respect of mitigation, the complainant said that her employment ended during the pandemic, and she returned to college in September 2020. She was looking for work and said that the technology sector she worked in was small.

This is a complaint of unfair dismissal. The complainant’s employment ended by reason of redundancy on the 20th May 2020, albeit the complainant asserts that her role was not redundant. The respondent outlined that the complainant’s role was redundant and that fair procedures had been applied.

The case is marked by its complexity and acrimony. The complainant and a number of colleagues, including the claimant in ADJ-00028973 bought out the director and his spouse in 2010, who remained as shareholders. The respondent is a mobile telecoms business, which fared well until 2015. Due to technological and regulatory changes, the business then did not grow. In 2019, there were discussions between the then directors, including the complainant and the respondent director in this claim about one side buying out the other.

Matters then took a turn, and much of what happened is greatly disputed. It is not disputed that the director ousted the complainant as a director on the 1st October 2019. One side asserts that the director sought to acquire exclusive access to bank accounts, while the other side asserts that the complainant had misappropriated monies from the account and had excluded the director from the account.

The documentation refers to interactions by the sides to this dispute with clients of the respondent and other third parties. The bank emails on the 19th July 2019 regarding interactions with the director about the respondent’s account. In September 2019, a UK-based client emails about contact from the director. In an email to a client of the 11th October 2019, the director states ‘unfortunately we have a breach off security within the firm and this has led to banking fraud potentially by the two people you named … this is being dealt with by the fraud department in [bank].’ The client forwarded this email to the complainant, commenting that it was outrageous.

On the 14th October 2019, the complainant and four other staff members emailed the respondent regarding not being paid on the 4th and 11th October. The other staff members left and received redundancy lump sum payments.

These cases were marked by palpable interpersonal acrimony amongst the parties. What is also striking is the intermingled corporate relationships of the parties. The complainant was part of a management buyout and was ousted as a director in 2019. The evidence refers to the director operating other companies in fields similar to the business of the respondent and sharing office space. The businesses operate in Ireland and the UK. I note the 2021 District Court proceedings taken by the respondent against another company, of which the complainant is a director, arising from the management buy-out of the respondent.

This is the background to the ending of the complainant’s employment in May 2020, purportedly on grounds of redundancy.

Statutory background

Section 6(1) of the Unfair Dismissals Act provides that a dismissal shall be deemed unfair, unless there are substantial grounds justifying the dismissal.

Section 6(2) sets out circumstances where a dismissal will be automatically unfair if the dismissal was wholly or mainly due to those circumstances. Section 6(4) provides that a dismissal will not be an unfair dismissal if it was wholly or mainly due to the ‘redundancy of the employee’. It is well-established that redundancy has the essential characteristics of being impersonal and relating to change (see St Ledger v Frontline Distributors Ireland UD56/1994). Section 6(6) makes it clear that the burden of proof in section 6(4) is on the employer.

Section 6(7) allows for regard to be had to the reasonableness of the employer’s conduct and the employer’s adherence to any rules or Code of Practice. There is no specific Code of Practice addressing redundancies.

Application of the law to the facts

As I have said, this case is marked by its acrimony and the sharp division in the evidence of the parties. The question to be decided is whether the complainant’s role was redundant. After all, three staff members were made redundant in October 2019. The parties agree that the respondent faced some challenging circumstances, through technological changes and regulatory restrictions. They do not agree as to the gravity of the challenges faced by the company, with the respondent saying that they were on the brink while the complainant had a more positive outlook.

The complainant and the remaining other employee were laid off in late November 2019 and the redundancy completed by May 2020. The lay-off would have had significant wage savings for the respondent by May 2020. While the respondent shut its offices, by May 2020, people were working from home because of the pandemic and the complainant offered to work from home. After all, this is a technological business that conducts its affairs in Ireland and the UK online. 

As noted, the central characteristics of redundancy are ‘impersonality’ and ‘change’. With respect to ‘change’, it was established in cross-examination that the director was paid consultancy fees for his involvement in the running of the respondent business following the ousting of the complainant and her fellow director. There was, therefore, no ‘change’; the respondent was expending funds on its management, to the director as opposed to the complainant. In respect of ‘impersonality’, given the animosity in this case, little can be said to be ‘impersonal’. From the 1st October 2019, the employees, including the complainant, were no longer paid; she was then formally put on lay-off. Very serious allegations were levelled against the complainant and communicated to clients, but this alleged wrongdoing was never substantiated by an investigation. The complainant’s dismissal was certainly not on the basis of any wrongdoing. If there was wrongdoing it was up to the respondent to substantiate the allegation, but there was no such substantiation in this case.

As of the date the complainant was informed of her pending dismissal, the respondent was working with clients in Ireland and the UK. There was this established business and perhaps, opportunities for growth. While the director was retained by the respondent as a consultant, there remained the question of how the respondent could get best value from either its employees or a consultant. The complainant, as employee, was replaced by the director, as consultant. There was, however, no process to support this transition, in particular in accordance with the ‘impersonality’’ required of a redundancy dismissal.

Everything about this case points to this being a ‘personal’ dismissal as opposed to an ‘impersonal’ decision. It is not my role to comment on the rights and wrongs of the parties; it is to decide whether the employer has dislodged the presumption in law of unfair dismissal.

As of April/May 2020, the respondent was not in liquidation or examinership, and in this sense, a viable business which continues to trade as normal. Between October 2019 and May 2020, it had no wage costs. It has an established body of clients, as evidenced by the emails. During the redundancy process, the complainant indicated that she wished to resume work. She had an established client base. The ‘impersonality’ of a redundancy requires objective consideration, for example of the value to the company of keeping the complainant and her client base. Instead, the decision was purely personal. The complainant was ousted as director, then laid off and dismissed as an employee. It follows from the above that the complainant was unfairly dismissed from her employment.

Redress for unfair dismissal

The complainant outlined that she had not worked since the ending of this employment. She undertook a college course. She said that her name had been tarnished in the industry, but this would not be evident from the client emails referenced above, which are supportive of her and not the director. The complainant received her redundancy lump sum entitlement, so I do not make an award for ‘the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973’ [section 7]. Applying section 7, I award redress for actual and prospective loss that is just and equitable. To the extent that the complainant mitigated her loss, I award just and equitable compensation of €25,000.

CA-00038405-001

I decide that the complainant was unfairly dismissed, and the respondent shall pay to the complainant just and equitable compensation of €25,000.

Unfair Dismissals Act / impersonality and change