Complainant

Respondent

Parties

Jacqueline  Sullivan

Herbst Manufacturing Limited

Representatives

Vivian Cullen SIPTU-Trade Union

 Orson Herbst, C.E.O.

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-00035789-001

21/04/2020

The Complainant made one claim for unfair dismissal. Dismissal was not in dispute.

The matter was heard before me on the 7th of November 2022, the 13th of January 2023 and the 23rd of March 2023 at the offices of the W.R.C. Lansdowne House, Dublin 

The Respondent’s correct legal title is Herbst Manufacturing Limited and the title was amended by consent at the commencement of the hearing.

The Complainant  was represented by S.I.P.T.U. She provided detailed written submissions, and she gave evidence on affirmation.

The Complainant gave evidence regarding incidents which arose historically which she claimed established that the Respondent’s Managing Director had treated her unfairly and was in effect prejudiced against her.

The Complainant attended two meetings with the C.E.O of the Respondent, Mr. Orson Herbst and Mr. Sean Fitzgerald. The first meeting took place on the 21st of February and the second was on the 28th of February 2020. The Complainant was accompanied/represented at the second meeting by her trade union. No minutes of either of these meetings were available. However, it was agreed that at the meetings the Claimant was told that her position as Customer Liaison Officer was being discontinued.

The Complainant contended that although her designated role of Customer Liaison was abolished, the majority of the work which the position entailed did not cease to function following her dismissal. The technical duties of the role were taken on my two employees who were already working in support, so they took on the technical aspects of the role. The Complainant contended that she had better technical knowledge than both of them and they had less service than she. The remainder of the Complainant’s role which involved selling services, course and upselling modules went to the Sales Team. The Complainant said that she had sales experience and also had longer service than any employee in the Sales Team.

The Complainant refuted the Respondent’s assertion that her role disappeared. In March 2020 (prior to her dismissal in April 2020) the Respondent advertised vacancies for two account managers, one in Dublin and one in Cork, and IT Support role based in Wicklow. The Complainant said that with training in the internal systems, she could have attempted the Dublin-based account manager’s role or the IT Support Role. 

Another position was advertised in January 2020, the role of Innovation Project manager. This role was discussed in the meeting which the Complainant had with the Respondent before her dismissal but she was told that that role was not up for discussion. Eventually the role was filled from January 2020 until October 2022 by Mr. F.R. The Complainant argued that she would have been a very strong candidate for that role as she had set up her own company and she had strong organisational skills and experience but she was never considered for this role which was given directly to F.R.  and the Complainant said that she even had to help F.R. when he started in the role. This position too survived the pandemic and was not closed down.

Regarding the options suggested to the Complainant before she was dismissed, she said that she was told that she could have the Sales Lead Generation (S.L.G) role or she would be made redundant. She was told that the role that she was doing in February 2020 would be become more technical.

In the meeting on the 28th of February 2020 the Complainant made four proposals in relation to roles which she could take to avoid losing her employment:-

1. Technical Support;

2. Innovation and Project Manager/ Processes and Procedure;

3. Sales Logistics;

4. Account Manager.

In relation to the role of Liaison Officer the Complainant refuted the Respondent’s contention that this job was 100% closed down. She said that F.R.  had told her that V and G had been asked to take on the technical side of this role and the sales part of it was to be absorbed by the Sales Team.

The Complainant said that she could have done the role of Technical Support with only the same level of in-house training as a newly appointed external candidate would have required. She refuted the Respondent’s contention that this role was extinguished, and she contended that the Respondent had advertised Technical Support positions at the time of her dismissal.

Regarding the processes and procedures (Option 2 above) the Complainant accepted that Mr. F.R. was already doing this job in April 2020 and had been in the role since January of that year, she was never considered for this role and she would have been suited to it. Mr. F. R. had less service than she.

Regarding her third proposal (Option 3 above) a position in Sales Logistics, the Complainant said that this role would have been very similar to Sales Lead generation which she was doing at the time of the dismissal. The sales team was not functioning well and the Complainant devised a job description which she felt could have helped the sales team to run more efficiently and although this suggestion needed fine tuning she felt that it could have been viable as an alternative to her dismissal. The Complainant did not accept that there were no vacancies in sales as the Respondent was recruiting for sales staff when she was dismissed.

Regarding the 4th suggestion made by the Complainant , for a role of Account Manager, she said that Mr. F.R. did seek to explore this with her. However she was unclear when discussing the role with him whether it was that of a sales lead generation role or pure sales. When she met with F. R., on the  6th of March 2020 the latter informed the Complainant that she was being interviewed then and there for what he said was a sales role. In response she said that she was not ready to be interviewed as she did not have a clear description of the role at that time. She suggested that the interview be postponed pending clarity on this issue. She denied that she refused to meet F. R. but yet she was issued with a verbal warning by the Respondent’s C.E.O after this meeting even though the C.E.O. did not allow her an opportunity to explain her account of the meeting and the way it had ended. In a further meeting on the 13th of March 2020 the Respondent informed the Complainant that the only possible role available for her was to resume her former role as S.L.G. on a reduced salary and that if this was not accepted the Complainant would be dismissed by way of redundancy. The Complainant was given until the 20th of March 2020 to indicate her acceptance of the role. She queried certain aspects of the role including the applicable salary by email of the 18th of March 2020. Before an agreement was reached on this alternative role the Respondent decided to dismiss the Complainant and this was communicated in a telephone call and followed up by a letter dated the 30th of March 2020 notifying the Complainant that the work of Liaison Officer was to be done in a different manner and that the S.L.G. position was no longer an option. The letter stated that “Due to repercussions of the virus epidemic management has decided to carry on the business with fewer staff resulting in the closure of the S.L.G. department”. The Complainant appealed the decision internally, but the decision was upheld, Her employment ended on the 30th of April 2020.

On behalf of the Complainant, it was alleged that the Respondent conducted “a calibrated and orchestrated effort to unfairly dismiss [her] by means of an unfair selection for redundancy, by design deliberately, which was highly biased and personalised”. The Complainant received a warning without access to fair procedures. There was no genuine effort made to retain her. It was contended that the Respondent could not rely on the Covid 19 pandemic to justify what was a personal decision to dismiss for reasons other than redundancy. It was contended that overall, the Respondent had not acted fairly and reasonably by objective standards.

Summary of Respondent’s Case

The Respondent was represented by its C.E.O., Mr. Orson Herbst who was also the only witness called by the Respondent. Mr. Herbst made written representations and gave his evidence on affirmation.

The Respondent provides services in the form of business solutions and support to its customers. It employs some 20 to 25 individuals. In early 2019 the Respondent’s business was affected adversely by a number of factors including the ‘Brexit’ process and a re-organisation was contemplated and discussed generally amongst the staff with a view to rationalising the business.

In February 2020 the Complainant held the position of Customer Liaison Officer. The Respondent decided to change this role such that the Complainant was to revert to a purely or mostly sales orientated role know as Sales Lead Generation (‘S.L.G.’). The Complainant was informed that the position of Customer Liaison Officer was no longer continuing and an offer was made for her to revert to the ‘S.L.G.’ role which she held previously. Redundancy was also offered but the Complainant’s own suggestions were sought as to how to address the issue to avoid redundancy. A process of engagement with the Complainant continued throughout the month of March 2020. A role in S.L.G. was offered but before this role was finalised the COVID 19 Pandemic struck in late March 2020.

The Pandemic had a drastic affect on the Respondent’s business in the areas of Sales, Marketing and Customer Liaison. In the weeks prior to the emergence of the Pandemic the ‘S.L.G.’ role had been  a possibility but after the Pandemic even this option was unviable and there were no remaining options. The Complainant was notified on the 1st of April 2020 that she would be dismissed by reason of redundancy and her employment with the Respondent ended on the 30th of April 2020. Three other staff members were also made redundant at this time. 

Applicable Statutory Provisions and Case Law

The Definition of Redundancy

This definition of redundancy is contained in Section 7 subsection (2) of the Redundancy Payments Act 1967 as amended (hereafter “the RPA”) which provides as follows:

“(2) 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 concernedthe dismissal is attributable wholly or mainly to—

(a) the fact that his 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…”

The definition looks to the job not the person. Its two important characteristics are impersonality and change (St. Ledger v. Frontline Distributors (Ireland) Limited [1995] E.L.R. 160). In JVC v. Panisi [2011] IEHC 279, Charleton J. described the process as the “economic or technical reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner.”

Unfair Dismissals Acts 1977-2015 (“the UDA”) Provisions

Section 6 Subsection (1) is the primary provision which states as follows:

(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.

A non-exhaustive list of substantial grounds is provided for in subsection (4) (where relevant to the present case) as follows:

(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:…

…(c) the redundancy of the employee,

If the Respondent cannot prove that the dismissal complies with Section 7 Subsection (2) of the Redundancy payments Act 1967 (as amended); if it fails this fundamental test, then it is not a redundancy and it will be deemed an unfair dismissal under Section 6 subsection (1). In considering the overall fairness of the redundancy, Section 6 subsection (6) is also of relevance in that the employer must show that the decision resulted “wholly or mainly” from redundancy if that is the ground relied on, as in this case. The combined effect of Subsections (1) and (6) is to reverse the onus of proof which requires the employer to prove that the dismissal was fair.

Reasonableness and Consultation

The foregoing provisions are supplemented by the general provision contained in subsection (7) - as inserted by Section 5 of the Unfair Dismissals (Amendment) Act1993 - which provides

“(7) 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,”

In considering this provision the Labour Court, in Kohinoor Ltd. v. Ali  UDD1629 Labour Court (November 2016) provided the following guidance:

“Employers must act reasonably in taking a decision to dismiss an employee on the grounds of redundancy. Section 5 of the Unfair Dismissal Act 1993 (as amended) provides that the reasonableness of the employer’s conduct is now an essential factor to be considered in the context of all dismissals…

…In its determination in Gillian Free v Oxigen Environmental UD 206/2011, the Employment Appeals Tribunal noted that “when an employer is making an employee redundant while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy. Where there is no agreed procedure in relation to selection for redundancy, then the employer must act fairly and reasonably”.

Unfair Selection Generally   

Section 6 subsection (3) provides that an otherwise valid redundancy can nonetheless be an unfair dismissal in the following circumstances:

(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.

In the case of JVC Europe Ltd v Panisi [2011] IEHC 279, Charleton J stated;

“In all cases of dismissal, whether by reason of redundancy or for substantial grounds justifying dismissal, the burden of proof rests on the employer to demonstrate that the termination of employment came within a lawful reason. In cases of misconduct, a fair procedure must be followed whereby an employee is given an entitlement to explain what otherwise might amount to a finding of real seriousness against his or her character. 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 section 7(2) of the Redundancy Payments Act 1967, as amended, provides, “reasons not related to the employee concerned”. Redundancy, cannot, therefore be used as a 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.”   

Charleton J. also noted in the same judgement that it is “prudent and a mark of genuine redundancy, that alternatives to letting an employee go should be examined” and that “a fair selection procedure may indicate an honest approach to redundancy by an employer”

Findings

The Complainant commenced employment with the Respondent on the 1st of May 2013. From that time until January 2018, she held the position of Sales Lead Generator (abbreviated by the Respondent to “S.L.G.”). In January 2020 the Claimant took up the position of Customer Liaison Officer which position she held until her dismissal which took effect on the 30th of April of April 2020. Her salary at that time was €36,400.

The Respondent was under pressure to rationalise even before the Pandemic struck on in March 2020. Prior to the onset of the Pandemic, the Respondent had commenced a process of consultation with the Complainant whose position was identified as at risk of redundancy due to the changes which were then contemplated, which at that time involved the abolition of the role of Customer Liaison Officer. Given the planned closure of the Complainant’s ‘department’, efforts were being made to explore other positions which either existed or could be created to avoid the Complainant’s dismissal.

No record or minutes were produced by the Respondent in relation to any of the consultation meetings with the Complainant. The evidence establishes that a series of meetings took place in February and March of 2020 before the onset of the pandemic. Initially a possibility of a sales related role was identified but there is a conflict of evidence as to how the consultation process progressed as regards this role. The Respondent’s evidence was that the task of concluding an agreement with the Complainant was delegated to a manager, Mr. F.R. who was instructed to meet the Complainant and to listen to what she had to say about the role. This meeting did not go well. The Complainant said that she was taken by surprise at this meeting and there was a misunderstanding regarding its purpose. She said that Mr. F.R. told her that he was there to interview her for a sales position. She asked F.R. if this was to be a Sales Lead Generation role and he said that he did not know.  The Complainant said that she needed time to prepare for an interview and she also requested a job description. She said that she could not go ahead with the proposed interview until she had this information and she suggested that the meeting be postponed because she was not ready to proceed with it without the information. Mr. F.R. made a verbal report after the meeting to Mr. Herbst but no minute or other record of this meeting was made and Mr. F.R. did not give evidence. Mr. Herbst spoke to the Complainant after the meeting and put to her that she had refused to meet with F.R. and that the meeting needed to take place. The complainant said that she needed a job description and that she and F.R. had arranged to meet on another date. Mr. Herbst issued the Complainant with a verbal warning for refusing to meet with F.R. The Complainant took issue with this warning. In his evidence Mr. Herbst said that he could not recall exactly what he said during this encounter, but he accepted that he did issue a verbal warning. He said that he moved on after that and that nothing came of the warning.

In the absence of any evidence from the other party to the meeting with the Complainant, Mr. F.R. , in the absence of any written communications preceding the meeting regarding its parameters, in the absence of any minute or record of the meeting prepared by F.R., and in the absence of any note taken by Mr. Herbst of the account of the meeting given to him by Mr. F.R. or of his own discussions with the Complainant, I find as a fact that the account given by the Complainant is more likely to be correct. I also find that the Mr. Herbst lost his patience with the Complainant which in turn led him to issue the verbal warning to the Complainant without following basic fair procedures by convening a disciplinary meeting and giving her a chance to defend herself and if appropriate to avail of union representation. 

In his evidence, Mr. Herbst described what happened at the meeting between the Complainant and F.R. as a “missed opportunity” for the Complainant. He also described it as the last straw in his mind and from this I am driven to the conclusion that Mr. Herbst had lost patience with the consultation process with the Complainant. This is borne out by the manner in which the consultation process then developed. By the time the next consultation meeting took place on the 13th of March 2020, the options were limited to a single specific proposal; that the Complainant could accept a position in Sales Lead Generation on reduced pay or be dismissed. This proposal was more specific and less flexible than the sales related role which Mr. F.R. was delegated to explore with the Complainant but it did at least constitute a specific proposal with a specific job description which the Complainant was to reject or accept by the 20th of March 2020. On the 18th of March 2020 the Complainant raised a further query regarding the salary, but she did not specifically accept the position before the deadline set.

As it transpired the Covid19 Pandemic hit the country a few days later, on or about the 19th or 20th of March 2020. Within 10 days or so of this happening, the unilateral decision was taken to terminate the Complainant’s employment. The reason given was that a decision had been taken arising from the Pandemic, to abolish the role of Sales Lead Generation in addition to the role of Customer Liaison Officer which had already been abolished or was in the process of being abolished. Mr Herbst said that he made and took responsibility for this decision and that he did so in extreme emergency circumstances where the pandemic had wiped out any hope of redeploying the Complainant.

I have carefully examined the rationale behind the withdrawal of the S.L.G. role and I am not satisfied that there was no work left in this department. On the balance of probability, I find that there was residual work available in the Respondent’s undertaking arising from the abolition of the role of Customer Liaison Officer such that work was to be absorbed by the sales and the technical staff all of whom had less service than the Complainant. Moreover, I am not satisfied that enough had changed between the 13th of March and the 30th of March 2020 for Mr. Herbst reasonably to conclude that there was no possibility of re-deploying the Complainant to a sales related position even if the Sales Lead Generation role, as it had up to then been described, was also to be abolished. It is impossible to escape the conclusion that the decision to dismiss the Complainant when a process of consultation was in train was unnecessarily precipitous and did not have to be taken in the way it was, or possibly at all. Other options such as laying the Complainant off might have afforded the parties further time to continue the consultation process. Even if such a cost-neutral step had not been taken, there would have been very limited prejudice financially to the Respondent in continuing the Complainant’s employment for even a few more weeks to see if a solution could be found by further consultation.

I find in all of the circumstances, that the decision to dismiss the Complainant was coloured by subjectivity such that it lacked the essential character of impersonality necessary to establish a fair selection for redundancy. I conclude that the Respondent has failed to adduce sufficient evidence to establish the overall reasonableness of the decision to dismiss and has failed to establish an objectively verifiable criterion or criteria for the Complainant’s selection for redundancy. I therefore find that the Complainant was unfairly dismissed.

REDRESS

The parties were agreed that in the event of a finding of unfair dismissal, compensation was the preferred remedy. On that basis and given the fact that the Claimant has sourced alternative work, I find that compensation is the appropriate form of redress in this case.

The Complainant received a statutory redundancy lump sum in the sum of €9,000. She was out of work following her dismissal from the Respondent’s employment for 11 months before she took up her present employment (which she still holds) in March 2021. On the basis that the pandemic severely restricted the Complainant’s ability to obtain alternative employment I will allow the full losses claimed for this period less a full credit for the redundancy lump sum of €9,000 paid to the Complainant. This yields a sum of €24,366

In addition to those full losses the Complainant claimed a continuing loss based on lower overall remuneration in the present employment as compared to her former employment with the Respondent at the annual rate of €13,295 from March 2021 to date and continuing. I accept that the pandemic would have restricted the Complainant’s opportunities to seek better paid remuneration for a period after March 2021 but for the entire period since March 2021. In such circumstances I will allow a sum reflecting six months (or half) of the annual differential claimed which comes to a figure of €6,648.

The total award of compensation to the Complainant therefore is €31,014 and the Respondent is directed to pay this amount to the Complainant by way of compensation for Unfair Dismissal.

The Complainant was unfairly dismissed. The Respondent is directed to pay compensation to the Complainant in the sum of €31,104.

Redundancy – Unfair Dismissal – Redundany Payments Act Section 7 (2)  -  Unfair Dismissals Act 1977 Section 6 Subsections (1), (3), (4), (6) and (7) - JVC Europe Ltd v Panisi [2011] IEHC 279 - Kohinoor Ltd. v. Ali  UDD1629 - Gillian Free v Oxigen Environmental UD 206/2011 – Unfair Selection – - Consultation - Covid 19 - Selection Process – Whether objectively verifiable criteria – Impersonality - subjectivity