CORRECTION ORDER
ISSUED PURSUANT TO SECTION 41 OF THE WORKPLACE RELATIONS ACT 2015
This Order corrects a typographical error in the original Decision ADJ 39343 issued on July 26th, 2023 in respect of legal representation of the parties and should be read in conjunction with that Decision.
Adjudication Reference: ADJ-00039343
Parties:
| Complainant | Respondent |
Parties | Fiona Norris | KCMG Engineering Limited |
Representatives | Eoin O’Connor B.L instructed by Powderly Solicitors | Rory Treanor B.L instructed by Crushell & Co, Solicitors |
Complaints:
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-00051049-001 | 08/06/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00051049-002 | 08/06/2022 |
Date of Adjudication Hearing: 08/02/2023 and 10/05/2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
Background:
The respondent is an engineering company established in 2017 and has a staff of twenty-two. It works primarily in commercial construction projects and data centre developments. Turnover in 2022 was approximately €2.5 million.
The complainant was made redundant and claims unfair dismissal. The respondent raises a preliminary issue regarding the jurisdiction of the WRC to hear the complaint. This was first raised only at the first hearing on February 8th, 2023, and the hearing was adjourned to give the parties an opportunity to make further, written submissions on the matter.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives an Adjudicator of jurisdiction to determine the matter due to the family connection between the parties.
The complainant submits that the section does not apply but as this aspect of the matter was raised for the first time at the hearing it sought the opportunity to make further submissions and did so.
This now arises as a preliminary matter.
The submissions by each party on the preliminary issues are set out first, below, followed by the submissions on the substantive issues.
Similarly, the Decision first addresses the preliminary issue and then proceeds to review and decide on the substantive issue. |
Summary of Respondent’s Case:
Respondent Preliminary Issue
The complainant was married to Mr Martin McGrath who is a director and 50% owner of the respondent. The complainant was employed by Mr McGrath. It was through the complainant’s relationship to Mr McGrath that the complainant became employed by the respondent.
The complainant’s primary contact within the respondent business was Mr McGrath; in interactions between the complainant and respondent there was a clear intermingling of the relationship of employer and employee and of the marital relationship.
s.2 Unfair Dismissals Act 1977 (as amended) provides for certain exclusions from the application of 1977 Act. s.2(1)(c) 1977 Act (as amended) provides:
2.—(1) Except in so far as any provision of this Act otherwise provides this Act shall not apply in relation to any of the following persons:… …(c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
By operation of s.2(1)(c) 1977 Act (as amended) the complainant is not entitled to a finding pursuant to s.6 1977 Act (as amended), redress pursuant to s.7 1977 Act (as amended), or a determination pursuant to s.8 1977 Act (as amended).
In Cian Carlin v. Celtic Working Platforms Ltd. ADJ-00030417 the complainant’s father was the sole owner of the respondent company. The exclusion available under s.2(1)(c) does not seem to have been raised by either party at hearing. Nonetheless, the WRC determined that the exclusion under s.2(1)(c) was found to apply. The complainant’s claim was dismissed.
The complainant appealed to the Labour Court (UD2264) where again the respondent did not rely upon the exclusions under s.2(1)(c). As neither party raised any jurisdictional issues in relation to the Complainant’s locus standi relating to Section 2(1) of the Act, the Court proceeded to hear the complaint as a de novo appeal.
The Labour Court varied the decision of the Workplace Relations Commission, finding for the respondent, though on grounds other than s.2(1)(c).
UD2264 is authority for the proposition that the WRC and Labour Court may not of their own motion make a finding in relation to s.2(1)(c). This decision does not offer clear guidance as to how the WRC or Labour Court should treat a circumstance where the employer is a company wholly or partially owned by a person related to an employee excluded pursuant to s.2(1)(c) 1977 Act (as amended).
By operation of s.2(1)(c) 1977 Act (as amended) the complainant’s claim pursuant to s.8 1977 Act should be dismissed.
Respondent Substantive Issue
The complainant was formerly married to one of the founders of the company and she was hired in July 2020 but had only a number of very limited duties. These included submitting weekly hours to the accountant and preparing the wage run but she had no access to banking or other accounting data and her role was confined to wages preparation.
The personal relationship between the complainant and her husband began to deteriorate in October 2021 and they are currently finalising divorce proceedings.
The business was very adversely affected as a result of COVID-19, specifically as in April 2020 the construction industry come to a standstill.
Despite some improvement in the meantime, the financial position of the respondent was quite serious resulting in the need for virtually all employees at some stage to be placed on the lay off or made redundant.
Further details were provided on specific difficulties facing the company.
The respondent was very reluctant to consider the complainant for redundancy primarily because of the marital difficulties between the couple but it became clear that the complainant was underutilised. The respondent had to change the methods of work undertaken by the complainant as the requirements of the business for her services had diminished or were expected to.
On February 23rd the respondent wrote to the complainant regarding her level of activity and indicating that it was considering making her role redundant but pointing out that no decision had yet been made.
She was invited to a meeting on March 1st to discuss her role, all the work she might be able to undertake, and any other potential actions of the company may take to avoid the possibility of terminating her employment. She refused to attend that meeting and on March 1st the respondent wrote again to her outlining the same concerns as in this earlier letter and wrote again some days later questioning her participation in a consultation process.
The complainant was unable to attend the second meeting and a further meeting was arranged on March 4th and on this occasion, it was pointed out that her failure to participate in the process might lead to a decision being made in any event.
The complainant claimed that she was working approximately thirty hours a week although this came as a surprise to the respondent. Further details were sought but she responded that all her work has been taken away from her.
At this stage the respondent was operating with a reduced level of staff and many administrative an accounting tasks had been or were to be outsourced to third party providers. On March 22nd the respondent wrote again to the complainant indicating that as no alternatives to redundancy had been found that her employment would terminate by reason of redundancy on April 1st.
The respondent offered an enhanced severance package which the complainant rejected and sought significant improvements, but these were not acceptable to the respondent.
On April 13 the respondent renewed its ex-gratia offer should the complainant accepted by April 22. However, this offer was also rejected.
For the avoidance of doubt, the respondent concedes that there was failure to provide a statement in writing in compliance with s.3 Terms of Employment (Information) Act 1994 (as amended). |
Summary of Complainant’s Case:
Complainant Preliminary Issue
The Respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The Complainant submits that the section does not apply.
Section 2 is headed ‘Exclusions’ and states:
2. —(1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 3. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The use of mandatory language: ‘This Act shall not apply…’ makes it clear that if the exclusion contained in section 2 applies the Adjudicator cannot determine the matter.
The complainant submits that the exclusion in the section does not apply to her. For the section to apply, the complainant must be a person ‘who is employed by his spouse’. The complainant accepts she was employed by her spouse and does not dispute that fact.
However, the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship.
The section lists out a number of relationships that are separated by a comma, then the section states ‘is a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’ (Emphasis added). The use of the word ‘and’, instead of a full stop, for example, means that the clauses in the sentence should be read together. If the drafters had intended that the section should have been construed disjunctively, the word ‘or’ would have been employed where ‘and’ is used.
In interpreting the section, three things are required for the exclusion to apply, namely: a) The complainant was employed by her spouse. b) The complainant was a member of her employer’s household. c) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
Examining these three requirements in turn, as already indicated, it is admitted that the complainant was employed by her spouse. Therefore, requirement a) is satisfied.
Thecomplainantwasnotamemberofherhusband’shousehold andleftthehousethey sharedinNovember2021.Thatispleadedinherwrittensubmissionsand isnotdisputedbytherespondent.Therefore,thecomplainantwasnotamemberofher employer’shousehold.
Furthermore, the language in section 2 is in the present tense as it refers to an employee who is a member of the employer’s household and does not refer to the employee having been a member of the household in the past or some such.
Therefore, the exclusion does not apply if the employee was a member of the employer’s household. Thus, requirement b) is not satisfied.
Requirement c) refers to a place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside. The complainant’s place of employment was with her employer. It was not a place in which both the employee and employer reside. Thus, requirement c) cannot be satisfied. In the circumstances, the exclusion as set out in the section cannot apply to the Complainant’s employment.
Further and in the alternative, the complainant relies on Article 30 of the Charter of Fundamental Rights of the European Union which states:
‘Every worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws and practices.’ The European Charter enjoys the same status as the treaties and therefore enjoys direct effect and by virtue of the doctrine of supremacy, overrides Irish law where Irish and EU law conflict.
Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) is contrary to EU law and Article 30 EU Charter insofar as it precludes a worker the right to protection from unjustified dismissal.
The CJEU stated in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 at [38]:
‘As the Court has repeatedly held, that duty to disapply national legislation that is contrary to EU law is owed not only by national courts, but also by all organs of the State — including administrative authorities — called upon, within the exercise of their respective powers, to apply EU law’.
The Court held at [47]: ‘Furthermore, in so far as the Workplace Relations Commission must be considered to be a ‘court or tribunal’ within the meaning of Article 267, it may refer to the Court, pursuant to that article, questions of interpretation of relevant provisions of EU law and, as it is bound by the judgment in which the Court gives a preliminary ruling, it must forthwith apply that judgment, disapplying, if necessary, of its own motion conflicting provisions of national legislation.’ Thus, the effect of the decision in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 is that the Workplace Relations Commission must disapply national legislation that conflicts with EU law. The section conflicts with the rights guaranteed by Article 30 of the EU Charter. Therefore, the Workplace Relations Commission has no option but to disapply the section.
Alternatively, the Workplace Relations Commission can refer the question of whether the relevant section conflicts with EU law to the CJEU pursuant to Article 267 TFEU.
In light of the above, the complainant submits:
a) Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) does not apply, as the conditions necessary for its application cannot be satisfied.
b) Alternatively, the Adjudicator should disapply section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) as it conflicts with Article 30 of the EU Charter.
c) Or seek guidance from the CJEU on the validity of section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) with reference to EU law and seek a preliminary reference.
Complainant substantive submission
The complainant was dismissed after an unfairredundancy process and is seeking compensation for bothunfair dismissal (CA-00051049-001) and for breaches of the Terms of Employment(Information)Act1994(CA-00051049-002).
She formally commenced working with the respondent on a date in July 2020. She was employed as an accounts assistant and her duties included looking after payroll, timesheets, documenting holidays, and general company administrative work. She typically worked thirty hours a week, but this could vary.
She was offered a full-time position but chose to work part time in light of the difficulties securing childcare and because Mr. McGrath was working between Ireland and Germany. She was paid €325.60 and was paid weekly. She did not receive a written contract of employment. There has been a breakdown in marital relations and Mr. McGrath left the family home he had previously shared with the complainant on the November 20th, 2021. On December 6th, 2021, Mr. McGrath messaged the complainant to say that her job was always going to be there. By message dated 22nd of December 2021 Mr. McGrath informed Ms. Norris that he would no longer pay her health insurance. She replied and said that it formed part of her remuneration, which was denied by Mr. McGrath. By message dated the 10th of January 2022 Mr McGrath offered the complainant redundancy amounting to one year’s salary, specifically saying: ‘I can offer redundancy package of 1 years salary as a good will gesture which will be in the region of 18k in a one-off payment should be more less tax free which should give you time to find a job … Come back to me on this.’ Ms. Norris indicated that she was taking legal advice on the offer. She followed up about the proposed redundancy and Mr. McGrath said to ‘leave it to solicitors’. By email dated 2nd February 2022 the complainant followed up regarding her redundancy and seeking an improved offer. There was further interaction between the parties, but no agreement was reached.
ByletterdatedFebruary23rd, 2022,Ms.Norriswasadvisedthatherpositionmaybeatriskof redundancy, and she was invited to a meeting on March 1st, to discuss it. That letter stated that her role was ‘at risk’ of redundancy and statedthat‘[a]decisionhasyettobemadeinrespectofthisproposal’. However, an email indicates that: ‘We do have an official redundancy offer in place we need to talk about your position in the company.’ It is submitted that this shows that the meeting and process was a sham, for the company already had a redundancy offer in place. Therefore, the invitation to discuss any potential redundancy was pointless as the decision had already been made.
The complainant asked that a HR person be present at the redundancy meeting but was informed by Mr. McGrath that the company did not have a HR person and in any case a HR person was not required nor was any additional representation required. The complainant attended the meeting on the 4th of March 2022. According to the minutes of the meeting, the complainant and Mr. McGrath discussed her role, the amount of work she did and what alternative roles she considered herself able to do. By letter dated March 28th 2022 Ms Norris was informed that her position would be terminated from April 1st, 2022 on the grounds of redundancy. Redundancy will provide a lawful basis for the termination of employment under the Unfair Dismissals Act, 1977 as amended.
Section 7(2) of the Redundancy Payments Acts 1967 to 2007 provides the legislative basis for assessing redundancies and a valid redundancy situation is deemed to have occurred where a dismissal occurs ‘wholly or mainly’ from the situations set out in the section.
Section 6 of the Unfair Dismissals Act 1977 as amended provides that the dismissal of an employee shall be deemed to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal. In addition, section 6(3) provides that where an employee has been unfairly selected for redundancy it will be an unfair dismissal.
Redundancy will not be a valid defence to a claim for unfair dismissal in circumstances where either the employee was unfairly selected for redundancy, it was a sham redundancy, or where an employee alleges that they have been unfairly selected for redundancy and therefore the onus of proving fair selection and therefore a fair dismissal rests with the employer.
When the law is applied to the facts it is submitted that the redundancy process was a sham.
The termination of the complainant’s position only arose after the breakdown of the relationship between the complainant and the director of the respondent.
The decision to make her redundant was confirmed as early as January 10th 2022:
‘Employment I can offer redundancy package of 1 years’ salary as a good will gesture which will be in the region of 18k in a one of payment should be more less tax free which should give you time to find a job if you don’t want to be minding the children anymore’
This objectively shows that the decision to make the make the complainant redundant had been made at that stage.
Furthermore, Mr. McGrath also stated that he had received legal advice on this issue. The letter dated 23rd February 2022informing the complainant that her positionwasat risk of redundancyandthat she wasinvitedtodiscuss thematter withher employer was simply a device to make it appear as if the respondent was fairly dealing with any potential redundancy.
The fact is that the decision to make the complainant redundant had already been made at that point.
The complainant lost access to her work computer and email in December 2021. This was a precursor to her being dismissed and it further supports the fact the intention was to remove the complainant from her position.
In Mulligan v J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy, the tribunal stated:
‘In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.’
In this case, the complainant’s access to her work email and computer were withdrawn in December2022.
In January 2022 a redundancy package of 1 year was offered. In addition, by email dated 25th February 2022 the respondent stated that an ‘official redundancy offer was already in place’, before any consultation had taken place. The words of the respondent in that email are unambiguous: a redundancy offer was in place because the complainant was to be made redundant. Similarly, in Worker v an Employer (UD206/2011), the Tribunal held that the decision to make the employee redundant had been made before the consultation took place rendered the dismissal unfair.
In A Worker v A Construction Company (ADJ-00022128) the Tribunal stated: ‘The complainant was not advised of his right to appeal the termination of his employment. In all these circumstances I find that the manner of this dismissal was procedurally unfair, and that the Complainant was unfairly dismissed.’
More recently, in Walsh v Econocom ADJ-00029093 the Adjudicator held in relation to redundancy: ‘In the absence of an agreed procedure, the respondent was required to ensure that the fair procedures that apply in the case of any dismissal were afforded to the complainant. These include the right to notice, the right to be represented at meetings, the right of the employee to respond to the employer’s decision to make his job redundant and the right of appeal.
In the present case, the complainant was not advised of her right to appeal the termination of her employment. She was not permitted representation at the meeting and was told ‘This is an internal process; lawyers will not be permitted to attend.’ For these reasons the decision to make her redundant was procedurally unfair.
Alternatively, even if the Tribunal were to find that a genuine redundancy situation had arisen (which is denied) that does not absolve the respondent.
In Cronin v RPS Group, Tallaght (UD 2348/2009) the Employment Appeal Tribunal accepted that a genuine redundancy situation existed but concluded that the employer did not act reasonably when it came to selecting the claimant for redundancy.
It cited the following grounds for upholding the claim:
a. Failure to advise the claimant of the criteria to be applied for redundancy. b. Failure to give her the opportunity to make representations on her own behalf in respect of those criteria. c. Failure to provide an appeal mechanism for the complainant. d. the company adhered rigidly to a system of selection that did not provide for any consideration of redeployment.
e. Failure to have regard to the claimant’s length of service.
In the present case, the criteria that were applied were not disclosed to the Complainant; she was therefore not in a position to make any representations on her own behalf in respect of those criteria, there was no appeal mechanism, there was no consideration of redeployment, and no account was taken of her length of service. In the circumstances, even if there was a genuine redundancy situation the process was unfair.
The respondent may argue that the complainant did have an opportunity to make representations. The minutes of the meeting state at point 4: ‘What alternative solutions do you have to redundancy? I’d like to keep my role as above).’ This does not amount to an opportunity to make a representation on the criteria used, as the criteria were not disclosed, and is simply a wish by the complainant that her role remained. Fairness and consultation in a redundancy situation requires more than a question asking the employee what he or she wants, as most employees will obviously want to keep their jobs.
In addition, the complainant never received a written contract of employment, and pursuant to the Terms of Employment (Information) Act 1994, employees are to be provided with the essential terms of their employment.
Section 3 of the 1994 Act is drafted in mandatory terms; the employer shall provide the employee with the specified details.
The complainant was not provided with such information as required. The respondent may argue that this amounts to a mere technical breach of the legislation. In Torres v Sitting Tree Limited T/A Harbour Bar (TE/22/44) a similar technical breach argument was made to the Labour Court. The argument was rejected by the Labour Court in a decision delivered in November 2022. The complainant is seeking compensation for breaches of her rights under the 1977 and 1994 Acts.
An employee who has been dismissed is under a duty to mitigate his or her loss. Section 7(2)(c) of the Unfair Dismissals Act 1977 (as amended) refers to: ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’. As the Employment Appeals Tribunal made clear in Burke v Superior Express Ltd UD1227/2014: ‘The onus on the claimant in this regard is a high one.’
The complainant was previously earning €325.60 per week. The complainant is also claiming for the difference between €538.46 and €325.60 per week, namely €212.86, which formed part of her remuneration. The complainant’s car tax, insurance and diesel formed part of her remuneration package. She also received an annual Christmas bonus in the sum of €500 and which can be seen on her December 2021 pay slip. [Pay slip submitted].
Regarding financial losses, the complainant was dismissed on April 1st, 2022, and has been out of work since then. As of the date of the hearing, 8th of February 2023 her total financial losses amount to €30,848.17 (in respect of which a detailed breakdown was submitted.)
The complainant gave evidence on affirmation and stated that she had been constantly looking for work, but that her childcare responsibilities greatly inhibited her in doing so. She said she has applied for positions but has not been successful in her job search.
In response to questions, she confirmed April 1st as the date of her termination but that she had only applied for twenty-seven or twenty-nine jobs in that period of thirteen months.
She also stated that her only sources of income were social welfare and from child minding
In conclusion, she seeks compensation for unfair dismissal and breaches of the Terms of Employment (Information) Act 1994 for the reasons hereinbefore described. |
Findings and Conclusions:
Preliminary Issue
The submissions of the parties on the preliminary issue of jurisdiction are set out above.
The respondent raised this argument for the first time on the morning of the hearing and the parties were facilitated with the opportunity to make further submissions on the point and both did.
While late submissions are an unfortunate feature of WRC hearings, the introduction of such a significant argument after the hearing has commenced is most definitely a form of ambush and it is disrespectful to the process and the parties for any practitioner to do so.
It required an adjournment of the proceedings to enable the complainant to reply.
It is also an unusual argument, perhaps reflecting the infrequency in which these facts present themselves.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The complainant submits that the section does not apply.
Put simply, the respondent submits that the fact that the parties were married to each other means that they are covered by the exclusions.
What Section 2 of the Unfair Dismissals Act says is as follows.
4. — (1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 5. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
This means that that if the exclusion contained in section 2 applies a WRC Adjudicator cannot determine the matter. However, the complainant responds that the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship and was employed by her husband and does not apply to her.
The complainant submits that in addition to these two requirements, viz that they are married, and one is employed by the other, the section continues to require that a complainant be ‘a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’
She further submits above that, in interpreting the section, three things are required for the exclusion to apply, namely: d) The complainant was employed by her spouse. e) The complainant was a member of her employer’s household. f) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The complainant also says that she was not a member of her husband’s household, and left the house they shared in November 2021, and neither was she employed in ‘a private dwelling house or a farm in which they both resided. The complainant worked in a place of business and therefore she submits that this requirement is not satisfied either.
I agree with her and find that, on the ordinary and obvious reading of the section, the exclusion contained in section 2 does not apply to the complainant and her complaint is within jurisdiction.
Turning to the substantive complaint, it is especially important to look at the narrative of events, and to consider the interaction of various episodes within it, in this case.
The complainant was first employed in July 2020.
As Covid, and its implications for the respondent’s business and the complainant’s redundancy played a significant part in the respondent’s defence of the complaint it is important to note that this was some three months after the outbreak of the pandemic and the closure of sites in April 2020.
On November 20th, 2021, unfortunate problems in the relationship between the complainant and her husband, also her employer appear to have come to a crisis point and he left the family home on that date.
There was evidence that, a month later, on December 22nd he assured the complainant that her employment was secure and that her job was safe.
However, within a short period, on January 10th (a very short period having regard to the Christmas and New Year period), everything had apparently changed, and the respondent was offering a severance or redundancy package to the complainant. It included an ex-gratia payment of €18,000.00 and the complainant sought an increase in this to €35.000.
Admittedly, some elements of the matrimonial separation appear to be present in this.
So far this represents the background to the more formal redundancy which then followed. The offer above was rejected by the complainant and further interaction between the parties did not result in agreement. It appears though, that the issue between the parties was not so much the principle, as the price, although the gap between them was significant.
The complainant has laid emphasis on the January 10th offer as evidence of a prior decision on the redundancy having been made, and which rendered the subsequent process a ‘sham’. I return to this argument below. The process thereafter commenced with a letter to the complainant on February 23rd querying her level of activity and indicating that she was at risk of redundancy.
Interestingly, this letter made a reference to the fact that ‘for some time, the level of work available to you has been a matter of concern’. This is not entirely consistent with the commitment given to her on December 22nd that her position was secure, and the basis for this concern was not explained.
She declined to attend a meeting scheduled for March 1st but did attend one on March 4th. There was even disagreement between the parties as to what her working hours were, but no agreement was reached. Three weeks later she was issued with the notice of redundancy.
There are some obvious contradictions in the narrative above.
Take the reliance on the impact of Covid.
As can be seen the complainant was hired three months after the lockdown in the construction industry in April 2020, which in itself must be regarded as surprising and the first expression of concern about ‘the level of work available to her’ appears some seventeen months later in February 2022. Even that followed an assurance to her almost exactly two months earlier that her position was secure.
There were vague references to layoffs and redundancies, but no details were supplied as to when these took place.
To say that there is an uncomfortable proximity between the breakdown of the marriage of the main parties and the redundancy process is obvious, and it requires one to look at this by reference to a central principle governing redundancy; that of impersonality.
As to the process, the respondent submits that the work undertaken by the complainant had to be outsourced (and it did lend itself to outsourcing). There may be a case therefore that, in principle, the decision falls within the definitions in section 7 of the Act.
The respondent submitted that there was a degree of reticence in making the complainant redundant due to the status of their relationship.
This is understandable but unfortunately the correspondence in relation to the March meeting in respect of the complainant’s right to be accompanied at the meeting showed less reticence, or indeed the necessary degree of respect for the complainant’s rights.
The complainant had sought the opportunity to take legal advice before the meeting (it is not clear whether she wished to be accompanied at the meeting by her solicitor). In any event the respondent replied ‘This is an internal process; lawyers will not be permitted to attend’
While, strictly speaking it is true that lawyers do not have a right of audience in a workplace process, the respondent had an obligation to ensure that the complainant’s rights to a representative were vindicated, even on the basis of the provisions of SI 146/2000.
That is especially the case in these very particular circumstances; it would have been at least prudent to ensure that the complainant had a supporting person of her choosing in attendance, even if not a lawyer.
The power imbalance in such a meeting put her at a very significant disadvantage, (even indeed in respect of how to manage any offer of settlement which, strictly in terms of a redundancy was relatively generous).
I referred above to the complainant’s contention that the initial severance offer provides evidence of pre-judgment in respect of the decision to make the complainant redundant.
This could be looked at in two ways. The first is the complainant’s view just referred to. The second is that it is not uncommon to seek a voluntary solution before applying a formal redundancy process and I am not sure that, of itself, this can be interpreted in the manner submitted by the complainant.
If it was followed by a process that fully complied with the requirements of a redundancy fair procedure, such an approach is suggestive, but not necessarily decisive evidence of a decision having been made (and I accept that the voluntary redundancy analogy is not entirely on all fours with this situation).
In any event there are too many other aspects of the case which suggest that the twin requirements of impersonality and a fair selection procedure were not met.
To repeat them, there is the proximity between the departure from the matrimonial home and the redundancy is deeply suspicious, despite the respondent’s protestations of reluctance, the alleged connection with and reliance on Covid is flimsy and lacking in credibility, the sudden triggering of a process a few weeks after the assurance that her position was secure is also curious and inexplicable; what deterioration in the respondent’s position had occurred in the meantime?
Finally, the process was one in which the complainant’s weaker position put her at a serious disadvantage and while the respondent had no obligation to permit legal representation, he should have ensured that the complainant had a companion to support her in the process. His attempt to diminish the significance of what was happening ‘as an internal process’ has the appearance of a deliberate attempt to deprive her of the necessary support in the meeting.
It can sometimes be difficult to distinguish between a process that superficially ‘ticks the boxes’ required for a lawful redundancy but which may not have fulfilled the verification that should precede this.
This can create difficulty in reaching a reliable conclusion about whether the underlying fairness, impersonality which are required to be the hallmarks of the process were properly applied, despite superficial appearances that they had.
This is such a case, and some elements of the required process might be said to have been applied.
However, the cumulative impact of the concerns set out above, and what they reveal about the process provide more than sufficient grounds to conclude that the dismissal was unfair.
It is not saved by the redundancy provisions on either of the key grounds that it was a genuine redundancy or compliance with the procedural standards required.
I also take into account the general principles that are set out in Cronin v RPS Group, Tallaght (UD 2348/2009) and the other cases defining the general obligations placed on an employer in a redundancy situation.
In respect of a remedy for the complainant her annual earnings were €16,931.20. In respect of the obligation to mitigate her losses, her efforts left something to be desired by reference to the normal criteria.
Section 7 (2) (c) of the Act makes it clear that in determining the amount of any compensation consideration must be given to ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’….
In Sheehan v Continental Administration Co Ltd UD 858/1999.the Employment Appeals Tribunal considered the efforts to mitigate in pursuant to Section 2(1) of the Unfair Dismissals Act 1977.
In the judgement it was held: - “A Complainant 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 Complainant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.”
The complainant made a strong case that her capacity to meet such demanding criteria was adversely affected by her parenting responsibilities.
The amount of time that she ‘found on her hands’ was not her own in a somewhat different sense to that referred to in Sheehan. It was a good deal more limited in that many complainants who previously worked in a full-time job, but now had all that time to look for work to mitigate their losses, were probably doing so without the responsibility of parenting faced by the complainant in this case.
That said, while, I accept that her submission on this point should be considered favourably and considered in part mitigation of her failure to do more, and I have done so the complainant’s efforts were still insufficient. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
I uphold complaint CA 51049-001 and award the complainant €17,500.
I uphold complaint CA 51049-002 under the Terms of Employment (Information) Act and award the complainant two weeks wages in the amount of €651.20 |
Dated: 26-July-2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Key Words:
Redundancy, selection, fair procedure |
ADJUDICATION OFFICER DECISION/RECOMMENDATION
Adjudication Reference: ADJ-00039343
Parties:
| Complainant | Respondent |
Parties | Fiona Norris | KCMG Engineering Limited |
Representatives | Rory Treanor B.L. instructed by Powderly Solicitors LLP | Eoin O’Connor B.L. instructed by Crushell & Co Solicitors |
Complaints:
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-00051049-001 | 08/06/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00051049-002 | 08/06/2022 |
Date of Adjudication Hearing: 08/02/2023 and 10/05/2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
Background:
The respondent is an engineering company established in 2017 and has a staff of twenty-two. It works primarily in commercial construction projects and data centre developments. Turnover in 2022 was approximately €2.5 million. The complainant was made redundant and claims unfair dismissal. The respondent raises a preliminary issue regarding the jurisdiction of the WRC to hear the complaint. This was first raised only at the first hearing on February 8th, 2023, and the hearing was adjourned to give the parties an opportunity to make further, written submissions on the matter.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives an Adjudicator of jurisdiction to determine the matter due to the family connection between the parties.
The complainant submits that the section does not apply but as this aspect of the matter was raised for the first time at the hearing it sought the opportunity to make further submissions and did so.
This now arises as a preliminary matter.
The submissions by each party on the preliminary issues are set out first, below, followed by the submissions on the substantive issues.
Similarly, the Decision first addresses the preliminary issue and then proceeds to review and decide on the substantive issue. |
Summary of Respondent’s Case:
Respondent Preliminary Issue
The complainant was married to Mr Martin McGrath who is a director and 50% owner of the respondent. The complainant was employed by Mr McGrath. It was through the complainant’s relationship to Mr McGrath that the complainant became employed by the respondent.
The complainant’s primary contact within the respondent business was Mr McGrath; in interactions between the complainant and respondent there was a clear intermingling of the relationship of employer and employee and of the marital relationship.
s.2 Unfair Dismissals Act 1977 (as amended) provides for certain exclusions from the application of 1977 Act. s.2(1)(c) 1977 Act (as amended) provides:
2.—(1) Except in so far as any provision of this Act otherwise provides this Act shall not apply in relation to any of the following persons:… …(c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
By operation of s.2(1)(c) 1977 Act (as amended) the complainant is not entitled to a finding pursuant to s.6 1977 Act (as amended), redress pursuant to s.7 1977 Act (as amended), or a determination pursuant to s.8 1977 Act (as amended).
In Cian Carlin v. Celtic Working Platforms Ltd. ADJ-00030417 the complainant’s father was the sole owner of the respondent company. The exclusion available under s.2(1)(c) does not seem to have been raised by either party at hearing. Nonetheless, the WRC determined that the exclusion under s.2(1)(c) was found to apply. The complainant’s claim was dismissed.
The complainant appealed to the Labour Court (UD2264) where again the respondent did not rely upon the exclusions under s.2(1)(c). As neither party raised any jurisdictional issues in relation to the Complainant’s locus standi relating to Section 2(1) of the Act, the Court proceeded to hear the complaint as a de novo appeal.
The Labour Court varied the decision of the Workplace Relations Commission, finding for the respondent, though on grounds other than s.2(1)(c).
UD2264 is authority for the proposition that the WRC and Labour Court may not of their own motion make a finding in relation to s.2(1)(c). This decision does not offer clear guidance as to how the WRC or Labour Court should treat a circumstance where the employer is a company wholly or partially owned by a person related to an employee excluded pursuant to s.2(1)(c) 1977 Act (as amended).
By operation of s.2(1)(c) 1977 Act (as amended) the complainant’s claim pursuant to s.8 1977 Act should be dismissed.
Respondent Substantive Issue
The complainant was formerly married to one of the founders of the company and she was hired in July 2020 but had only a number of very limited duties. These included submitting weekly hours to the accountant and preparing the wage run but she had no access to banking or other accounting data and her role was confined to wages preparation.
The personal relationship between the complainant and her husband began to deteriorate in October 2021 and they are currently finalising divorce proceedings.
The business was very adversely affected as a result of COVID-19, specifically as in April 2020 the construction industry come to a standstill.
Despite some improvement in the meantime, the financial position of the respondent was quite serious resulting in the need for virtually all employees at some stage to be placed on the lay off or made redundant.
Further details were provided on specific difficulties facing the company.
The respondent was very reluctant to consider the complainant for redundancy primarily because of the marital difficulties between the couple but it became clear that the complainant was underutilised. The respondent had to change the methods of work undertaken by the complainant as the requirements of the business for her services had diminished or were expected to.
On February 23rd the respondent wrote to the complainant regarding her level of activity and indicating that it was considering making her role redundant but pointing out that no decision had yet been made.
She was invited to a meeting on March 1st to discuss her role, all the work she might be able to undertake, and any other potential actions of the company may take to avoid the possibility of terminating her employment. She refused to attend that meeting and on March 1st the respondent wrote again to her outlining the same concerns as in this earlier letter and wrote again some days later questioning her participation in a consultation process.
The complainant was unable to attend the second meeting and a further meeting was arranged on March 4th and on this occasion, it was pointed out that her failure to participate in the process might lead to a decision being made in any event.
The complainant claimed that she was working approximately thirty hours a week although this came as a surprise to the respondent. Further details were sought but she responded that all her work has been taken away from her.
At this stage the respondent was operating with a reduced level of staff and many administrative an accounting tasks had been or were to be outsourced to third party providers. On March 22nd the respondent wrote again to the complainant indicating that as no alternatives to redundancy had been found that her employment would terminate by reason of redundancy on April 1st.
The respondent offered an enhanced severance package which the complainant rejected and sought significant improvements, but these were not acceptable to the respondent.
On April 13 the respondent renewed its ex-gratia offer should the complainant accepted by April 22. However, this offer was also rejected.
For the avoidance of doubt, the respondent concedes that there was failure to provide a statement in writing in compliance with s.3 Terms of Employment (Information) Act 1994 (as amended). |
Summary of Complainant’s Case:
Complainant Preliminary Issue
The Respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The Complainant submits that the section does not apply.
Section 2 is headed ‘Exclusions’ and states:
2. —(1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 3. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The use of mandatory language: ‘This Act shall not apply…’ makes it clear that if the exclusion contained in section 2 applies the Adjudicator cannot determine the matter.
The complainant submits that the exclusion in the section does not apply to her. For the section to apply, the complainant must be a person ‘who is employed by his spouse’. The complainant accepts she was employed by her spouse and does not dispute that fact.
However, the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship.
The section lists out a number of relationships that are separated by a comma, then the section states ‘is a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’ (Emphasis added). The use of the word ‘and’, instead of a full stop, for example, means that the clauses in the sentence should be read together. If the drafters had intended that the section should have been construed disjunctively, the word ‘or’ would have been employed where ‘and’ is used.
In interpreting the section, three things are required for the exclusion to apply, namely: a) The complainant was employed by her spouse. b) The complainant was a member of her employer’s household. c) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
Examining these three requirements in turn, as already indicated, it is admitted that the complainant was employed by her spouse. Therefore, requirement a) is satisfied.
Thecomplainantwasnotamemberofherhusband’shousehold andleftthehousethey sharedinNovember2021.Thatispleadedinherwrittensubmissionsand isnotdisputedbytherespondent.Therefore,thecomplainantwasnotamemberofher employer’shousehold.
Furthermore, the language in section 2 is in the present tense as it refers to an employee who is a member of the employer’s household and does not refer to the employee having been a member of the household in the past or some such.
Therefore, the exclusion does not apply if the employee was a member of the employer’s household. Thus, requirement b) is not satisfied.
Requirement c) refers to a place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside. The complainant’s place of employment was with her employer. It was not a place in which both the employee and employer reside. Thus, requirement c) cannot be satisfied. In the circumstances, the exclusion as set out in the section cannot apply to the Complainant’s employment.
Further and in the alternative, the complainant relies on Article 30 of the Charter of Fundamental Rights of the European Union which states:
‘Every worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws and practices.’ The European Charter enjoys the same status as the treaties and therefore enjoys direct effect and by virtue of the doctrine of supremacy, overrides Irish law where Irish and EU law conflict.
Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) is contrary to EU law and Article 30 EU Charter insofar as it precludes a worker the right to protection from unjustified dismissal.
The CJEU stated in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 at [38]:
‘As the Court has repeatedly held, that duty to disapply national legislation that is contrary to EU law is owed not only by national courts, but also by all organs of the State — including administrative authorities — called upon, within the exercise of their respective powers, to apply EU law’.
The Court held at [47]: ‘Furthermore, in so far as the Workplace Relations Commission must be considered to be a ‘court or tribunal’ within the meaning of Article 267, it may refer to the Court, pursuant to that article, questions of interpretation of relevant provisions of EU law and, as it is bound by the judgment in which the Court gives a preliminary ruling, it must forthwith apply that judgment, disapplying, if necessary, of its own motion conflicting provisions of national legislation.’ Thus, the effect of the decision in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 is that the Workplace Relations Commission must disapply national legislation that conflicts with EU law. The section conflicts with the rights guaranteed by Article 30 of the EU Charter. Therefore, the Workplace Relations Commission has no option but to disapply the section.
Alternatively, the Workplace Relations Commission can refer the question of whether the relevant section conflicts with EU law to the CJEU pursuant to Article 267 TFEU.
In light of the above, the complainant submits:
a) Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) does not apply, as the conditions necessary for its application cannot be satisfied.
b) Alternatively, the Adjudicator should disapply section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) as it conflicts with Article 30 of the EU Charter.
c) Or seek guidance from the CJEU on the validity of section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) with reference to EU law and seek a preliminary reference.
Complainant substantive submission
The complainant was dismissed after an unfairredundancy process and is seeking compensation for bothunfair dismissal (CA-00051049-001) and for breaches of the Terms of Employment(Information)Act1994(CA-00051049-002).
She formally commenced working with the respondent on a date in July 2020. She was employed as an accounts assistant and her duties included looking after payroll, timesheets, documenting holidays, and general company administrative work. She typically worked thirty hours a week, but this could vary.
She was offered a full-time position but chose to work part time in light of the difficulties securing childcare and because Mr. McGrath was working between Ireland and Germany. She was paid €325.60 and was paid weekly. She did not receive a written contract of employment. There has been a breakdown in marital relations and Mr. McGrath left the family home he had previously shared with the complainant on the November 20th, 2021. On December 6th, 2021, Mr. McGrath messaged the complainant to say that her job was always going to be there. By message dated 22nd of December 2021 Mr. McGrath informed Ms. Norris that he would no longer pay her health insurance. She replied and said that it formed part of her remuneration, which was denied by Mr. McGrath. By message dated the 10th of January 2022 Mr McGrath offered the complainant redundancy amounting to one year’s salary, specifically saying: ‘I can offer redundancy package of 1 years salary as a good will gesture which will be in the region of 18k in a one-off payment should be more less tax free which should give you time to find a job … Come back to me on this.’ Ms. Norris indicated that she was taking legal advice on the offer. She followed up about the proposed redundancy and Mr. McGrath said to ‘leave it to solicitors’. By email dated 2nd February 2022 the complainant followed up regarding her redundancy and seeking an improved offer. There was further interaction between the parties, but no agreement was reached.
ByletterdatedFebruary23rd, 2022,Ms.Norriswasadvisedthatherpositionmaybeatriskof redundancy, and she was invited to a meeting on March 1st, to discuss it. That letter stated that her role was ‘at risk’ of redundancy and statedthat‘[a]decisionhasyettobemadeinrespectofthisproposal’. However, an email indicates that: ‘We do have an official redundancy offer in place we need to talk about your position in the company.’ It is submitted that this shows that the meeting and process was a sham, for the company already had a redundancy offer in place. Therefore, the invitation to discuss any potential redundancy was pointless as the decision had already been made.
The complainant asked that a HR person be present at the redundancy meeting but was informed by Mr. McGrath that the company did not have a HR person and in any case a HR person was not required nor was any additional representation required. The complainant attended the meeting on the 4th of March 2022. According to the minutes of the meeting, the complainant and Mr. McGrath discussed her role, the amount of work she did and what alternative roles she considered herself able to do. By letter dated March 28th 2022 Ms Norris was informed that her position would be terminated from April 1st, 2022 on the grounds of redundancy. Redundancy will provide a lawful basis for the termination of employment under the Unfair Dismissals Act, 1977 as amended.
Section 7(2) of the Redundancy Payments Acts 1967 to 2007 provides the legislative basis for assessing redundancies and a valid redundancy situation is deemed to have occurred where a dismissal occurs ‘wholly or mainly’ from the situations set out in the section.
Section 6 of the Unfair Dismissals Act 1977 as amended provides that the dismissal of an employee shall be deemed to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal. In addition, section 6(3) provides that where an employee has been unfairly selected for redundancy it will be an unfair dismissal.
Redundancy will not be a valid defence to a claim for unfair dismissal in circumstances where either the employee was unfairly selected for redundancy, it was a sham redundancy, or where an employee alleges that they have been unfairly selected for redundancy and therefore the onus of proving fair selection and therefore a fair dismissal rests with the employer.
When the law is applied to the facts it is submitted that the redundancy process was a sham.
The termination of the complainant’s position only arose after the breakdown of the relationship between the complainant and the director of the respondent.
The decision to make her redundant was confirmed as early as January 10th 2022:
‘Employment I can offer redundancy package of 1 years’ salary as a good will gesture which will be in the region of 18k in a one of payment should be more less tax free which should give you time to find a job if you don’t want to be minding the children anymore’
This objectively shows that the decision to make the make the complainant redundant had been made at that stage.
Furthermore, Mr. McGrath also stated that he had received legal advice on this issue. The letter dated 23rd February 2022informing the complainant that her positionwasat risk of redundancyandthat she wasinvitedtodiscuss thematter withher employer was simply a device to make it appear as if the respondent was fairly dealing with any potential redundancy.
The fact is that the decision to make the complainant redundant had already been made at that point.
The complainant lost access to her work computer and email in December 2021. This was a precursor to her being dismissed and it further supports the fact the intention was to remove the complainant from her position.
In Mulligan v J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy, the tribunal stated:
‘In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.’
In this case, the complainant’s access to her work email and computer were withdrawn in December2022.
In January 2022 a redundancy package of 1 year was offered. In addition, by email dated 25th February 2022 the respondent stated that an ‘official redundancy offer was already in place’, before any consultation had taken place. The words of the respondent in that email are unambiguous: a redundancy offer was in place because the complainant was to be made redundant. Similarly, in Worker v an Employer (UD206/2011), the Tribunal held that the decision to make the employee redundant had been made before the consultation took place rendered the dismissal unfair.
In A Worker v A Construction Company (ADJ-00022128) the Tribunal stated: ‘The complainant was not advised of his right to appeal the termination of his employment. In all these circumstances I find that the manner of this dismissal was procedurally unfair, and that the Complainant was unfairly dismissed.’
More recently, in Walsh v Econocom ADJ-00029093 the Adjudicator held in relation to redundancy: ‘In the absence of an agreed procedure, the respondent was required to ensure that the fair procedures that apply in the case of any dismissal were afforded to the complainant. These include the right to notice, the right to be represented at meetings, the right of the employee to respond to the employer’s decision to make his job redundant and the right of appeal.
In the present case, the complainant was not advised of her right to appeal the termination of her employment. She was not permitted representation at the meeting and was told ‘This is an internal process; lawyers will not be permitted to attend.’ For these reasons the decision to make her redundant was procedurally unfair.
Alternatively, even if the Tribunal were to find that a genuine redundancy situation had arisen (which is denied) that does not absolve the respondent.
In Cronin v RPS Group, Tallaght (UD 2348/2009) the Employment Appeal Tribunal accepted that a genuine redundancy situation existed but concluded that the employer did not act reasonably when it came to selecting the claimant for redundancy.
It cited the following grounds for upholding the claim:
a. Failure to advise the claimant of the criteria to be applied for redundancy. b. Failure to give her the opportunity to make representations on her own behalf in respect of those criteria. c. Failure to provide an appeal mechanism for the complainant. d. the company adhered rigidly to a system of selection that did not provide for any consideration of redeployment.
e. Failure to have regard to the claimant’s length of service.
In the present case, the criteria that were applied were not disclosed to the Complainant; she was therefore not in a position to make any representations on her own behalf in respect of those criteria, there was no appeal mechanism, there was no consideration of redeployment, and no account was taken of her length of service. In the circumstances, even if there was a genuine redundancy situation the process was unfair.
The respondent may argue that the complainant did have an opportunity to make representations. The minutes of the meeting state at point 4: ‘What alternative solutions do you have to redundancy? I’d like to keep my role as above).’ This does not amount to an opportunity to make a representation on the criteria used, as the criteria were not disclosed, and is simply a wish by the complainant that her role remained. Fairness and consultation in a redundancy situation requires more than a question asking the employee what he or she wants, as most employees will obviously want to keep their jobs.
In addition, the complainant never received a written contract of employment, and pursuant to the Terms of Employment (Information) Act 1994, employees are to be provided with the essential terms of their employment.
Section 3 of the 1994 Act is drafted in mandatory terms; the employer shall provide the employee with the specified details.
The complainant was not provided with such information as required. The respondent may argue that this amounts to a mere technical breach of the legislation. In Torres v Sitting Tree Limited T/A Harbour Bar (TE/22/44) a similar technical breach argument was made to the Labour Court. The argument was rejected by the Labour Court in a decision delivered in November 2022. The complainant is seeking compensation for breaches of her rights under the 1977 and 1994 Acts.
An employee who has been dismissed is under a duty to mitigate his or her loss. Section 7(2)(c) of the Unfair Dismissals Act 1977 (as amended) refers to: ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’. As the Employment Appeals Tribunal made clear in Burke v Superior Express Ltd UD1227/2014: ‘The onus on the claimant in this regard is a high one.’
The complainant was previously earning €325.60 per week. The complainant is also claiming for the difference between €538.46 and €325.60 per week, namely €212.86, which formed part of her remuneration. The complainant’s car tax, insurance and diesel formed part of her remuneration package. She also received an annual Christmas bonus in the sum of €500 and which can be seen on her December 2021 pay slip. [Pay slip submitted].
Regarding financial losses, the complainant was dismissed on April 1st, 2022, and has been out of work since then. As of the date of the hearing, 8th of February 2023 her total financial losses amount to €30,848.17 (in respect of which a detailed breakdown was submitted.)
The complainant gave evidence on affirmation and stated that she had been constantly looking for work, but that her childcare responsibilities greatly inhibited her in doing so. She said she has applied for positions but has not been successful in her job search.
In response to questions, she confirmed April 1st as the date of her termination but that she had only applied for twenty-seven or twenty-nine jobs in that period of thirteen months.
She also stated that her only sources of income were social welfare and from child minding
In conclusion, she seeks compensation for unfair dismissal and breaches of the Terms of Employment (Information) Act 1994 for the reasons hereinbefore described. |
Findings and Conclusions:
Preliminary Issue
The submissions of the parties on the preliminary issue of jurisdiction are set out above.
The respondent raised this argument for the first time on the morning of the hearing and the parties were facilitated with the opportunity to make further submissions on the point and both did.
While late submissions are an unfortunate feature of WRC hearings, the introduction of such a significant argument after the hearing has commenced is most definitely a form of ambush and it is disrespectful to the process and the parties for any practitioner to do so.
It required an adjournment of the proceedings to enable the complainant to reply.
It is also an unusual argument, perhaps reflecting the infrequency in which these facts present themselves.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The complainant submits that the section does not apply.
Put simply, the respondent submits that the fact that the parties were married to each other means that they are covered by the exclusions.
What Section 2 of the Unfair Dismissals Act says is as follows.
4. — (1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 5. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
This means that that if the exclusion contained in section 2 applies a WRC Adjudicator cannot determine the matter. However, the complainant responds that the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship and was employed by her husband and does not apply to her.
The complainant submits that in addition to these two requirements, viz that they are married, and one is employed by the other, the section continues to require that a complainant be ‘a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’
She further submits above that, in interpreting the section, three things are required for the exclusion to apply, namely: d) The complainant was employed by her spouse. e) The complainant was a member of her employer’s household. f) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The complainant also says that she was not a member of her husband’s household, and left the house they shared in November 2021, and neither was she employed in ‘a private dwelling house or a farm in which they both resided. The complainant worked in a place of business and therefore she submits that this requirement is not satisfied either.
I agree with her and find that, on the ordinary and obvious reading of the section, the exclusion contained in section 2 does not apply to the complainant and her complaint is within jurisdiction.
Turning to the substantive complaint, it is especially important to look at the narrative of events, and to consider the interaction of various episodes within it, in this case.
The complainant was first employed in July 2020.
As Covid, and its implications for the respondent’s business and the complainant’s redundancy played a significant part in the respondent’s defence of the complaint it is important to note that this was some three months after the outbreak of the pandemic and the closure of sites in April 2020.
On November 20th, 2021, unfortunate problems in the relationship between the complainant and her husband, also her employer appear to have come to a crisis point and he left the family home on that date.
There was evidence that, a month later, on December 22nd he assured the complainant that her employment was secure and that her job was safe.
However, within a short period, on January 10th (a very short period having regard to the Christmas and New Year period), everything had apparently changed, and the respondent was offering a severance or redundancy package to the complainant. It included an ex-gratia payment of €18,000.00 and the complainant sought an increase in this to €35.000.
Admittedly, some elements of the matrimonial separation appear to be present in this.
So far this represents the background to the more formal redundancy which then followed. The offer above was rejected by the complainant and further interaction between the parties did not result in agreement. It appears though, that the issue between the parties was not so much the principle, as the price, although the gap between them was significant.
The complainant has laid emphasis on the January 10th offer as evidence of a prior decision on the redundancy having been made, and which rendered the subsequent process a ‘sham’. I return to this argument below. The process thereafter commenced with a letter to the complainant on February 23rd querying her level of activity and indicating that she was at risk of redundancy.
Interestingly, this letter made a reference to the fact that ‘for some time, the level of work available to you has been a matter of concern’. This is not entirely consistent with the commitment given to her on December 22nd that her position was secure, and the basis for this concern was not explained.
She declined to attend a meeting scheduled for March 1st but did attend one on March 4th. There was even disagreement between the parties as to what her working hours were, but no agreement was reached. Three weeks later she was issued with the notice of redundancy.
There are some obvious contradictions in the narrative above.
Take the reliance on the impact of Covid.
As can be seen the complainant was hired three months after the lockdown in the construction industry in April 2020, which in itself must be regarded as surprising and the first expression of concern about ‘the level of work available to her’ appears some seventeen months later in February 2022. Even that followed an assurance to her almost exactly two months earlier that her position was secure.
There were vague references to layoffs and redundancies, but no details were supplied as to when these took place.
To say that there is an uncomfortable proximity between the breakdown of the marriage of the main parties and the redundancy process is obvious, and it requires one to look at this by reference to a central principle governing redundancy; that of impersonality.
As to the process, the respondent submits that the work undertaken by the complainant had to be outsourced (and it did lend itself to outsourcing). There may be a case therefore that, in principle, the decision falls within the definitions in section 7 of the Act.
The respondent submitted that there was a degree of reticence in making the complainant redundant due to the status of their relationship.
This is understandable but unfortunately the correspondence in relation to the March meeting in respect of the complainant’s right to be accompanied at the meeting showed less reticence, or indeed the necessary degree of respect for the complainant’s rights.
The complainant had sought the opportunity to take legal advice before the meeting (it is not clear whether she wished to be accompanied at the meeting by her solicitor). In any event the respondent replied ‘This is an internal process; lawyers will not be permitted to attend’
While, strictly speaking it is true that lawyers do not have a right of audience in a workplace process, the respondent had an obligation to ensure that the complainant’s rights to a representative were vindicated, even on the basis of the provisions of SI 146/2000.
That is especially the case in these very particular circumstances; it would have been at least prudent to ensure that the complainant had a supporting person of her choosing in attendance, even if not a lawyer.
The power imbalance in such a meeting put her at a very significant disadvantage, (even indeed in respect of how to manage any offer of settlement which, strictly in terms of a redundancy was relatively generous).
I referred above to the complainant’s contention that the initial severance offer provides evidence of pre-judgment in respect of the decision to make the complainant redundant.
This could be looked at in two ways. The first is the complainant’s view just referred to. The second is that it is not uncommon to seek a voluntary solution before applying a formal redundancy process and I am not sure that, of itself, this can be interpreted in the manner submitted by the complainant.
If it was followed by a process that fully complied with the requirements of a redundancy fair procedure, such an approach is suggestive, but not necessarily decisive evidence of a decision having been made (and I accept that the voluntary redundancy analogy is not entirely on all fours with this situation).
In any event there are too many other aspects of the case which suggest that the twin requirements of impersonality and a fair selection procedure were not met.
To repeat them, there is the proximity between the departure from the matrimonial home and the redundancy is deeply suspicious, despite the respondent’s protestations of reluctance, the alleged connection with and reliance on Covid is flimsy and lacking in credibility, the sudden triggering of a process a few weeks after the assurance that her position was secure is also curious and inexplicable; what deterioration in the respondent’s position had occurred in the meantime?
Finally, the process was one in which the complainant’s weaker position put her at a serious disadvantage and while the respondent had no obligation to permit legal representation, he should have ensured that the complainant had a companion to support her in the process. His attempt to diminish the significance of what was happening ‘as an internal process’ has the appearance of a deliberate attempt to deprive her of the necessary support in the meeting.
It can sometimes be difficult to distinguish between a process that superficially ‘ticks the boxes’ required for a lawful redundancy but which may not have fulfilled the verification that should precede this.
This can create difficulty in reaching a reliable conclusion about whether the underlying fairness, impersonality which are required to be the hallmarks of the process were properly applied, despite superficial appearances that they had.
This is such a case, and some elements of the required process might be said to have been applied.
However, the cumulative impact of the concerns set out above, and what they reveal about the process provide more than sufficient grounds to conclude that the dismissal was unfair.
It is not saved by the redundancy provisions on either of the key grounds that it was a genuine redundancy or compliance with the procedural standards required.
I also take into account the general principles that are set out in Cronin v RPS Group, Tallaght (UD 2348/2009) and the other cases defining the general obligations placed on an employer in a redundancy situation.
In respect of a remedy for the complainant her annual earnings were €16,931.20. In respect of the obligation to mitigate her losses, her efforts left something to be desired by reference to the normal criteria.
Section 7 (2) (c) of the Act makes it clear that in determining the amount of any compensation consideration must be given to ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’….
In Sheehan v Continental Administration Co Ltd UD 858/1999.the Employment Appeals Tribunal considered the efforts to mitigate in pursuant to Section 2(1) of the Unfair Dismissals Act 1977.
In the judgement it was held: - “A Complainant 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 Complainant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.”
The complainant made a strong case that her capacity to meet such demanding criteria was adversely affected by her parenting responsibilities.
The amount of time that she ‘found on her hands’ was not her own in a somewhat different sense to that referred to in Sheehan. It was a good deal more limited in that many complainants who previously worked in a full-time job, but now had all that time to look for work to mitigate their losses, were probably doing so without the responsibility of parenting faced by the complainant in this case.
That said, while, I accept that her submission on this point should be considered favourably and considered in part mitigation of her failure to do more, and I have done so the complainant’s efforts were still insufficient. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
I uphold complaint CA 51048-001 and award the complainant €17,500.
I uphold complaint CA 51048-002 under the Terms of Employment (Information) Act and award the complainant two weeks wages in the amount of €651.20 |
Dated: 26-July-2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Key Words:
Redundancy, selection, fair procedure |
ADJUDICATION OFFICER DECISION/RECOMMENDATION
Adjudication Reference: ADJ-00039343
Parties:
| Complainant | Respondent |
Parties | Fiona Norris | KCMG Engineering Limited |
Representatives | Rory Treanor B.L. instructed by Powderly Solicitors LLP | Eoin O’Connor B.L. instructed by Crushell & Co Solicitors |
Complaints:
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-00051049-001 | 08/06/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00051049-002 | 08/06/2022 |
Date of Adjudication Hearing: 08/02/2023 and 10/05/2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
Background:
The respondent is an engineering company established in 2017 and has a staff of twenty-two. It works primarily in commercial construction projects and data centre developments. Turnover in 2022 was approximately €2.5 million. The complainant was made redundant and claims unfair dismissal. The respondent raises a preliminary issue regarding the jurisdiction of the WRC to hear the complaint. This was first raised only at the first hearing on February 8th, 2023, and the hearing was adjourned to give the parties an opportunity to make further, written submissions on the matter.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives an Adjudicator of jurisdiction to determine the matter due to the family connection between the parties.
The complainant submits that the section does not apply but as this aspect of the matter was raised for the first time at the hearing it sought the opportunity to make further submissions and did so.
This now arises as a preliminary matter.
The submissions by each party on the preliminary issues are set out first, below, followed by the submissions on the substantive issues.
Similarly, the Decision first addresses the preliminary issue and then proceeds to review and decide on the substantive issue. |
Summary of Respondent’s Case:
Respondent Preliminary Issue
The complainant was married to Mr Martin McGrath who is a director and 50% owner of the respondent. The complainant was employed by Mr McGrath. It was through the complainant’s relationship to Mr McGrath that the complainant became employed by the respondent.
The complainant’s primary contact within the respondent business was Mr McGrath; in interactions between the complainant and respondent there was a clear intermingling of the relationship of employer and employee and of the marital relationship.
s.2 Unfair Dismissals Act 1977 (as amended) provides for certain exclusions from the application of 1977 Act. s.2(1)(c) 1977 Act (as amended) provides:
2.—(1) Except in so far as any provision of this Act otherwise provides this Act shall not apply in relation to any of the following persons:… …(c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
By operation of s.2(1)(c) 1977 Act (as amended) the complainant is not entitled to a finding pursuant to s.6 1977 Act (as amended), redress pursuant to s.7 1977 Act (as amended), or a determination pursuant to s.8 1977 Act (as amended).
In Cian Carlin v. Celtic Working Platforms Ltd. ADJ-00030417 the complainant’s father was the sole owner of the respondent company. The exclusion available under s.2(1)(c) does not seem to have been raised by either party at hearing. Nonetheless, the WRC determined that the exclusion under s.2(1)(c) was found to apply. The complainant’s claim was dismissed.
The complainant appealed to the Labour Court (UD2264) where again the respondent did not rely upon the exclusions under s.2(1)(c). As neither party raised any jurisdictional issues in relation to the Complainant’s locus standi relating to Section 2(1) of the Act, the Court proceeded to hear the complaint as a de novo appeal.
The Labour Court varied the decision of the Workplace Relations Commission, finding for the respondent, though on grounds other than s.2(1)(c).
UD2264 is authority for the proposition that the WRC and Labour Court may not of their own motion make a finding in relation to s.2(1)(c). This decision does not offer clear guidance as to how the WRC or Labour Court should treat a circumstance where the employer is a company wholly or partially owned by a person related to an employee excluded pursuant to s.2(1)(c) 1977 Act (as amended).
By operation of s.2(1)(c) 1977 Act (as amended) the complainant’s claim pursuant to s.8 1977 Act should be dismissed.
Respondent Substantive Issue
The complainant was formerly married to one of the founders of the company and she was hired in July 2020 but had only a number of very limited duties. These included submitting weekly hours to the accountant and preparing the wage run but she had no access to banking or other accounting data and her role was confined to wages preparation.
The personal relationship between the complainant and her husband began to deteriorate in October 2021 and they are currently finalising divorce proceedings.
The business was very adversely affected as a result of COVID-19, specifically as in April 2020 the construction industry come to a standstill.
Despite some improvement in the meantime, the financial position of the respondent was quite serious resulting in the need for virtually all employees at some stage to be placed on the lay off or made redundant.
Further details were provided on specific difficulties facing the company.
The respondent was very reluctant to consider the complainant for redundancy primarily because of the marital difficulties between the couple but it became clear that the complainant was underutilised. The respondent had to change the methods of work undertaken by the complainant as the requirements of the business for her services had diminished or were expected to.
On February 23rd the respondent wrote to the complainant regarding her level of activity and indicating that it was considering making her role redundant but pointing out that no decision had yet been made.
She was invited to a meeting on March 1st to discuss her role, all the work she might be able to undertake, and any other potential actions of the company may take to avoid the possibility of terminating her employment. She refused to attend that meeting and on March 1st the respondent wrote again to her outlining the same concerns as in this earlier letter and wrote again some days later questioning her participation in a consultation process.
The complainant was unable to attend the second meeting and a further meeting was arranged on March 4th and on this occasion, it was pointed out that her failure to participate in the process might lead to a decision being made in any event.
The complainant claimed that she was working approximately thirty hours a week although this came as a surprise to the respondent. Further details were sought but she responded that all her work has been taken away from her.
At this stage the respondent was operating with a reduced level of staff and many administrative an accounting tasks had been or were to be outsourced to third party providers. On March 22nd the respondent wrote again to the complainant indicating that as no alternatives to redundancy had been found that her employment would terminate by reason of redundancy on April 1st.
The respondent offered an enhanced severance package which the complainant rejected and sought significant improvements, but these were not acceptable to the respondent.
On April 13 the respondent renewed its ex-gratia offer should the complainant accepted by April 22. However, this offer was also rejected.
For the avoidance of doubt, the respondent concedes that there was failure to provide a statement in writing in compliance with s.3 Terms of Employment (Information) Act 1994 (as amended). |
Summary of Complainant’s Case:
Complainant Preliminary Issue
The Respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The Complainant submits that the section does not apply.
Section 2 is headed ‘Exclusions’ and states:
2. —(1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 3. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The use of mandatory language: ‘This Act shall not apply…’ makes it clear that if the exclusion contained in section 2 applies the Adjudicator cannot determine the matter.
The complainant submits that the exclusion in the section does not apply to her. For the section to apply, the complainant must be a person ‘who is employed by his spouse’. The complainant accepts she was employed by her spouse and does not dispute that fact.
However, the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship.
The section lists out a number of relationships that are separated by a comma, then the section states ‘is a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’ (Emphasis added). The use of the word ‘and’, instead of a full stop, for example, means that the clauses in the sentence should be read together. If the drafters had intended that the section should have been construed disjunctively, the word ‘or’ would have been employed where ‘and’ is used.
In interpreting the section, three things are required for the exclusion to apply, namely: a) The complainant was employed by her spouse. b) The complainant was a member of her employer’s household. c) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
Examining these three requirements in turn, as already indicated, it is admitted that the complainant was employed by her spouse. Therefore, requirement a) is satisfied.
Thecomplainantwasnotamemberofherhusband’shousehold andleftthehousethey sharedinNovember2021.Thatispleadedinherwrittensubmissionsand isnotdisputedbytherespondent.Therefore,thecomplainantwasnotamemberofher employer’shousehold.
Furthermore, the language in section 2 is in the present tense as it refers to an employee who is a member of the employer’s household and does not refer to the employee having been a member of the household in the past or some such.
Therefore, the exclusion does not apply if the employee was a member of the employer’s household. Thus, requirement b) is not satisfied.
Requirement c) refers to a place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside. The complainant’s place of employment was with her employer. It was not a place in which both the employee and employer reside. Thus, requirement c) cannot be satisfied. In the circumstances, the exclusion as set out in the section cannot apply to the Complainant’s employment.
Further and in the alternative, the complainant relies on Article 30 of the Charter of Fundamental Rights of the European Union which states:
‘Every worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws and practices.’ The European Charter enjoys the same status as the treaties and therefore enjoys direct effect and by virtue of the doctrine of supremacy, overrides Irish law where Irish and EU law conflict.
Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) is contrary to EU law and Article 30 EU Charter insofar as it precludes a worker the right to protection from unjustified dismissal.
The CJEU stated in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 at [38]:
‘As the Court has repeatedly held, that duty to disapply national legislation that is contrary to EU law is owed not only by national courts, but also by all organs of the State — including administrative authorities — called upon, within the exercise of their respective powers, to apply EU law’.
The Court held at [47]: ‘Furthermore, in so far as the Workplace Relations Commission must be considered to be a ‘court or tribunal’ within the meaning of Article 267, it may refer to the Court, pursuant to that article, questions of interpretation of relevant provisions of EU law and, as it is bound by the judgment in which the Court gives a preliminary ruling, it must forthwith apply that judgment, disapplying, if necessary, of its own motion conflicting provisions of national legislation.’ Thus, the effect of the decision in Minister for Justice and Equality v Commissioner of An Garda Síochána Case C-378/17 is that the Workplace Relations Commission must disapply national legislation that conflicts with EU law. The section conflicts with the rights guaranteed by Article 30 of the EU Charter. Therefore, the Workplace Relations Commission has no option but to disapply the section.
Alternatively, the Workplace Relations Commission can refer the question of whether the relevant section conflicts with EU law to the CJEU pursuant to Article 267 TFEU.
In light of the above, the complainant submits:
a) Section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) does not apply, as the conditions necessary for its application cannot be satisfied.
b) Alternatively, the Adjudicator should disapply section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) as it conflicts with Article 30 of the EU Charter.
c) Or seek guidance from the CJEU on the validity of section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) with reference to EU law and seek a preliminary reference.
Complainant substantive submission
The complainant was dismissed after an unfairredundancy process and is seeking compensation for bothunfair dismissal (CA-00051049-001) and for breaches of the Terms of Employment(Information)Act1994(CA-00051049-002).
She formally commenced working with the respondent on a date in July 2020. She was employed as an accounts assistant and her duties included looking after payroll, timesheets, documenting holidays, and general company administrative work. She typically worked thirty hours a week, but this could vary.
She was offered a full-time position but chose to work part time in light of the difficulties securing childcare and because Mr. McGrath was working between Ireland and Germany. She was paid €325.60 and was paid weekly. She did not receive a written contract of employment. There has been a breakdown in marital relations and Mr. McGrath left the family home he had previously shared with the complainant on the November 20th, 2021. On December 6th, 2021, Mr. McGrath messaged the complainant to say that her job was always going to be there. By message dated 22nd of December 2021 Mr. McGrath informed Ms. Norris that he would no longer pay her health insurance. She replied and said that it formed part of her remuneration, which was denied by Mr. McGrath. By message dated the 10th of January 2022 Mr McGrath offered the complainant redundancy amounting to one year’s salary, specifically saying: ‘I can offer redundancy package of 1 years salary as a good will gesture which will be in the region of 18k in a one-off payment should be more less tax free which should give you time to find a job … Come back to me on this.’ Ms. Norris indicated that she was taking legal advice on the offer. She followed up about the proposed redundancy and Mr. McGrath said to ‘leave it to solicitors’. By email dated 2nd February 2022 the complainant followed up regarding her redundancy and seeking an improved offer. There was further interaction between the parties, but no agreement was reached.
ByletterdatedFebruary23rd, 2022,Ms.Norriswasadvisedthatherpositionmaybeatriskof redundancy, and she was invited to a meeting on March 1st, to discuss it. That letter stated that her role was ‘at risk’ of redundancy and statedthat‘[a]decisionhasyettobemadeinrespectofthisproposal’. However, an email indicates that: ‘We do have an official redundancy offer in place we need to talk about your position in the company.’ It is submitted that this shows that the meeting and process was a sham, for the company already had a redundancy offer in place. Therefore, the invitation to discuss any potential redundancy was pointless as the decision had already been made.
The complainant asked that a HR person be present at the redundancy meeting but was informed by Mr. McGrath that the company did not have a HR person and in any case a HR person was not required nor was any additional representation required. The complainant attended the meeting on the 4th of March 2022. According to the minutes of the meeting, the complainant and Mr. McGrath discussed her role, the amount of work she did and what alternative roles she considered herself able to do. By letter dated March 28th 2022 Ms Norris was informed that her position would be terminated from April 1st, 2022 on the grounds of redundancy. Redundancy will provide a lawful basis for the termination of employment under the Unfair Dismissals Act, 1977 as amended.
Section 7(2) of the Redundancy Payments Acts 1967 to 2007 provides the legislative basis for assessing redundancies and a valid redundancy situation is deemed to have occurred where a dismissal occurs ‘wholly or mainly’ from the situations set out in the section.
Section 6 of the Unfair Dismissals Act 1977 as amended provides that the dismissal of an employee shall be deemed to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal. In addition, section 6(3) provides that where an employee has been unfairly selected for redundancy it will be an unfair dismissal.
Redundancy will not be a valid defence to a claim for unfair dismissal in circumstances where either the employee was unfairly selected for redundancy, it was a sham redundancy, or where an employee alleges that they have been unfairly selected for redundancy and therefore the onus of proving fair selection and therefore a fair dismissal rests with the employer.
When the law is applied to the facts it is submitted that the redundancy process was a sham.
The termination of the complainant’s position only arose after the breakdown of the relationship between the complainant and the director of the respondent.
The decision to make her redundant was confirmed as early as January 10th 2022:
‘Employment I can offer redundancy package of 1 years’ salary as a good will gesture which will be in the region of 18k in a one of payment should be more less tax free which should give you time to find a job if you don’t want to be minding the children anymore’
This objectively shows that the decision to make the make the complainant redundant had been made at that stage.
Furthermore, Mr. McGrath also stated that he had received legal advice on this issue. The letter dated 23rd February 2022informing the complainant that her positionwasat risk of redundancyandthat she wasinvitedtodiscuss thematter withher employer was simply a device to make it appear as if the respondent was fairly dealing with any potential redundancy.
The fact is that the decision to make the complainant redundant had already been made at that point.
The complainant lost access to her work computer and email in December 2021. This was a precursor to her being dismissed and it further supports the fact the intention was to remove the complainant from her position.
In Mulligan v J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy, the tribunal stated:
‘In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.’
In this case, the complainant’s access to her work email and computer were withdrawn in December2022.
In January 2022 a redundancy package of 1 year was offered. In addition, by email dated 25th February 2022 the respondent stated that an ‘official redundancy offer was already in place’, before any consultation had taken place. The words of the respondent in that email are unambiguous: a redundancy offer was in place because the complainant was to be made redundant. Similarly, in Worker v an Employer (UD206/2011), the Tribunal held that the decision to make the employee redundant had been made before the consultation took place rendered the dismissal unfair.
In A Worker v A Construction Company (ADJ-00022128) the Tribunal stated: ‘The complainant was not advised of his right to appeal the termination of his employment. In all these circumstances I find that the manner of this dismissal was procedurally unfair, and that the Complainant was unfairly dismissed.’
More recently, in Walsh v Econocom ADJ-00029093 the Adjudicator held in relation to redundancy: ‘In the absence of an agreed procedure, the respondent was required to ensure that the fair procedures that apply in the case of any dismissal were afforded to the complainant. These include the right to notice, the right to be represented at meetings, the right of the employee to respond to the employer’s decision to make his job redundant and the right of appeal.
In the present case, the complainant was not advised of her right to appeal the termination of her employment. She was not permitted representation at the meeting and was told ‘This is an internal process; lawyers will not be permitted to attend.’ For these reasons the decision to make her redundant was procedurally unfair.
Alternatively, even if the Tribunal were to find that a genuine redundancy situation had arisen (which is denied) that does not absolve the respondent.
In Cronin v RPS Group, Tallaght (UD 2348/2009) the Employment Appeal Tribunal accepted that a genuine redundancy situation existed but concluded that the employer did not act reasonably when it came to selecting the claimant for redundancy.
It cited the following grounds for upholding the claim:
a. Failure to advise the claimant of the criteria to be applied for redundancy. b. Failure to give her the opportunity to make representations on her own behalf in respect of those criteria. c. Failure to provide an appeal mechanism for the complainant. d. the company adhered rigidly to a system of selection that did not provide for any consideration of redeployment.
e. Failure to have regard to the claimant’s length of service.
In the present case, the criteria that were applied were not disclosed to the Complainant; she was therefore not in a position to make any representations on her own behalf in respect of those criteria, there was no appeal mechanism, there was no consideration of redeployment, and no account was taken of her length of service. In the circumstances, even if there was a genuine redundancy situation the process was unfair.
The respondent may argue that the complainant did have an opportunity to make representations. The minutes of the meeting state at point 4: ‘What alternative solutions do you have to redundancy? I’d like to keep my role as above).’ This does not amount to an opportunity to make a representation on the criteria used, as the criteria were not disclosed, and is simply a wish by the complainant that her role remained. Fairness and consultation in a redundancy situation requires more than a question asking the employee what he or she wants, as most employees will obviously want to keep their jobs.
In addition, the complainant never received a written contract of employment, and pursuant to the Terms of Employment (Information) Act 1994, employees are to be provided with the essential terms of their employment.
Section 3 of the 1994 Act is drafted in mandatory terms; the employer shall provide the employee with the specified details.
The complainant was not provided with such information as required. The respondent may argue that this amounts to a mere technical breach of the legislation. In Torres v Sitting Tree Limited T/A Harbour Bar (TE/22/44) a similar technical breach argument was made to the Labour Court. The argument was rejected by the Labour Court in a decision delivered in November 2022. The complainant is seeking compensation for breaches of her rights under the 1977 and 1994 Acts.
An employee who has been dismissed is under a duty to mitigate his or her loss. Section 7(2)(c) of the Unfair Dismissals Act 1977 (as amended) refers to: ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’. As the Employment Appeals Tribunal made clear in Burke v Superior Express Ltd UD1227/2014: ‘The onus on the claimant in this regard is a high one.’
The complainant was previously earning €325.60 per week. The complainant is also claiming for the difference between €538.46 and €325.60 per week, namely €212.86, which formed part of her remuneration. The complainant’s car tax, insurance and diesel formed part of her remuneration package. She also received an annual Christmas bonus in the sum of €500 and which can be seen on her December 2021 pay slip. [Pay slip submitted].
Regarding financial losses, the complainant was dismissed on April 1st, 2022, and has been out of work since then. As of the date of the hearing, 8th of February 2023 her total financial losses amount to €30,848.17 (in respect of which a detailed breakdown was submitted.)
The complainant gave evidence on affirmation and stated that she had been constantly looking for work, but that her childcare responsibilities greatly inhibited her in doing so. She said she has applied for positions but has not been successful in her job search.
In response to questions, she confirmed April 1st as the date of her termination but that she had only applied for twenty-seven or twenty-nine jobs in that period of thirteen months.
She also stated that her only sources of income were social welfare and from child minding
In conclusion, she seeks compensation for unfair dismissal and breaches of the Terms of Employment (Information) Act 1994 for the reasons hereinbefore described. |
Findings and Conclusions:
Preliminary Issue
The submissions of the parties on the preliminary issue of jurisdiction are set out above.
The respondent raised this argument for the first time on the morning of the hearing and the parties were facilitated with the opportunity to make further submissions on the point and both did.
While late submissions are an unfortunate feature of WRC hearings, the introduction of such a significant argument after the hearing has commenced is most definitely a form of ambush and it is disrespectful to the process and the parties for any practitioner to do so.
It required an adjournment of the proceedings to enable the complainant to reply.
It is also an unusual argument, perhaps reflecting the infrequency in which these facts present themselves.
The respondent argues that section 2(1)(c) of the Unfair Dismissals Act 1977 (as amended) deprives the Adjudicator of jurisdiction to determine the matter. The complainant submits that the section does not apply.
Put simply, the respondent submits that the fact that the parties were married to each other means that they are covered by the exclusions.
What Section 2 of the Unfair Dismissals Act says is as follows.
4. — (1) [Except in so far as any provision of this Act otherwise provides] This Act shall not apply in relation to any of the following persons: 5. (a) … (b) … (c) a person who is employed by his spouse, civil partner within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010] father, mother, grandfather, grandmother, step-father, step-mother, son, daughter, grandson, granddaughter, step-son, step-daughter, brother, sister, half-brother or half-sister, is a member of his employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
This means that that if the exclusion contained in section 2 applies a WRC Adjudicator cannot determine the matter. However, the complainant responds that the exclusion provided for by the section is not simply satisfied by establishing that the employee was in a marital relationship and was employed by her husband and does not apply to her.
The complainant submits that in addition to these two requirements, viz that they are married, and one is employed by the other, the section continues to require that a complainant be ‘a member of the employer’s household and whose place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.’
She further submits above that, in interpreting the section, three things are required for the exclusion to apply, namely: d) The complainant was employed by her spouse. e) The complainant was a member of her employer’s household. f) The complainant’s place of employment is a private dwellinghouse or a farm in or on which both the employee and the employer reside.
The complainant also says that she was not a member of her husband’s household, and left the house they shared in November 2021, and neither was she employed in ‘a private dwelling house or a farm in which they both resided. The complainant worked in a place of business and therefore she submits that this requirement is not satisfied either.
I agree with her and find that, on the ordinary and obvious reading of the section, the exclusion contained in section 2 does not apply to the complainant and her complaint is within jurisdiction.
Turning to the substantive complaint, it is especially important to look at the narrative of events, and to consider the interaction of various episodes within it, in this case.
The complainant was first employed in July 2020.
As Covid, and its implications for the respondent’s business and the complainant’s redundancy played a significant part in the respondent’s defence of the complaint it is important to note that this was some three months after the outbreak of the pandemic and the closure of sites in April 2020.
On November 20th, 2021, unfortunate problems in the relationship between the complainant and her husband, also her employer appear to have come to a crisis point and he left the family home on that date.
There was evidence that, a month later, on December 22nd he assured the complainant that her employment was secure and that her job was safe.
However, within a short period, on January 10th (a very short period having regard to the Christmas and New Year period), everything had apparently changed, and the respondent was offering a severance or redundancy package to the complainant. It included an ex-gratia payment of €18,000.00 and the complainant sought an increase in this to €35.000.
Admittedly, some elements of the matrimonial separation appear to be present in this.
So far this represents the background to the more formal redundancy which then followed. The offer above was rejected by the complainant and further interaction between the parties did not result in agreement. It appears though, that the issue between the parties was not so much the principle, as the price, although the gap between them was significant.
The complainant has laid emphasis on the January 10th offer as evidence of a prior decision on the redundancy having been made, and which rendered the subsequent process a ‘sham’. I return to this argument below. The process thereafter commenced with a letter to the complainant on February 23rd querying her level of activity and indicating that she was at risk of redundancy.
Interestingly, this letter made a reference to the fact that ‘for some time, the level of work available to you has been a matter of concern’. This is not entirely consistent with the commitment given to her on December 22nd that her position was secure, and the basis for this concern was not explained.
She declined to attend a meeting scheduled for March 1st but did attend one on March 4th. There was even disagreement between the parties as to what her working hours were, but no agreement was reached. Three weeks later she was issued with the notice of redundancy.
There are some obvious contradictions in the narrative above.
Take the reliance on the impact of Covid.
As can be seen the complainant was hired three months after the lockdown in the construction industry in April 2020, which in itself must be regarded as surprising and the first expression of concern about ‘the level of work available to her’ appears some seventeen months later in February 2022. Even that followed an assurance to her almost exactly two months earlier that her position was secure.
There were vague references to layoffs and redundancies, but no details were supplied as to when these took place.
To say that there is an uncomfortable proximity between the breakdown of the marriage of the main parties and the redundancy process is obvious, and it requires one to look at this by reference to a central principle governing redundancy; that of impersonality.
As to the process, the respondent submits that the work undertaken by the complainant had to be outsourced (and it did lend itself to outsourcing). There may be a case therefore that, in principle, the decision falls within the definitions in section 7 of the Act.
The respondent submitted that there was a degree of reticence in making the complainant redundant due to the status of their relationship.
This is understandable but unfortunately the correspondence in relation to the March meeting in respect of the complainant’s right to be accompanied at the meeting showed less reticence, or indeed the necessary degree of respect for the complainant’s rights.
The complainant had sought the opportunity to take legal advice before the meeting (it is not clear whether she wished to be accompanied at the meeting by her solicitor). In any event the respondent replied ‘This is an internal process; lawyers will not be permitted to attend’
While, strictly speaking it is true that lawyers do not have a right of audience in a workplace process, the respondent had an obligation to ensure that the complainant’s rights to a representative were vindicated, even on the basis of the provisions of SI 146/2000.
That is especially the case in these very particular circumstances; it would have been at least prudent to ensure that the complainant had a supporting person of her choosing in attendance, even if not a lawyer.
The power imbalance in such a meeting put her at a very significant disadvantage, (even indeed in respect of how to manage any offer of settlement which, strictly in terms of a redundancy was relatively generous).
I referred above to the complainant’s contention that the initial severance offer provides evidence of pre-judgment in respect of the decision to make the complainant redundant.
This could be looked at in two ways. The first is the complainant’s view just referred to. The second is that it is not uncommon to seek a voluntary solution before applying a formal redundancy process and I am not sure that, of itself, this can be interpreted in the manner submitted by the complainant.
If it was followed by a process that fully complied with the requirements of a redundancy fair procedure, such an approach is suggestive, but not necessarily decisive evidence of a decision having been made (and I accept that the voluntary redundancy analogy is not entirely on all fours with this situation).
In any event there are too many other aspects of the case which suggest that the twin requirements of impersonality and a fair selection procedure were not met.
To repeat them, there is the proximity between the departure from the matrimonial home and the redundancy is deeply suspicious, despite the respondent’s protestations of reluctance, the alleged connection with and reliance on Covid is flimsy and lacking in credibility, the sudden triggering of a process a few weeks after the assurance that her position was secure is also curious and inexplicable; what deterioration in the respondent’s position had occurred in the meantime?
Finally, the process was one in which the complainant’s weaker position put her at a serious disadvantage and while the respondent had no obligation to permit legal representation, he should have ensured that the complainant had a companion to support her in the process. His attempt to diminish the significance of what was happening ‘as an internal process’ has the appearance of a deliberate attempt to deprive her of the necessary support in the meeting.
It can sometimes be difficult to distinguish between a process that superficially ‘ticks the boxes’ required for a lawful redundancy but which may not have fulfilled the verification that should precede this.
This can create difficulty in reaching a reliable conclusion about whether the underlying fairness, impersonality which are required to be the hallmarks of the process were properly applied, despite superficial appearances that they had.
This is such a case, and some elements of the required process might be said to have been applied.
However, the cumulative impact of the concerns set out above, and what they reveal about the process provide more than sufficient grounds to conclude that the dismissal was unfair.
It is not saved by the redundancy provisions on either of the key grounds that it was a genuine redundancy or compliance with the procedural standards required.
I also take into account the general principles that are set out in Cronin v RPS Group, Tallaght (UD 2348/2009) and the other cases defining the general obligations placed on an employer in a redundancy situation.
In respect of a remedy for the complainant her annual earnings were €16,931.20. In respect of the obligation to mitigate her losses, her efforts left something to be desired by reference to the normal criteria.
Section 7 (2) (c) of the Act makes it clear that in determining the amount of any compensation consideration must be given to ‘the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid’….
In Sheehan v Continental Administration Co Ltd UD 858/1999.the Employment Appeals Tribunal considered the efforts to mitigate in pursuant to Section 2(1) of the Unfair Dismissals Act 1977.
In the judgement it was held: - “A Complainant 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 Complainant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.”
The complainant made a strong case that her capacity to meet such demanding criteria was adversely affected by her parenting responsibilities.
The amount of time that she ‘found on her hands’ was not her own in a somewhat different sense to that referred to in Sheehan. It was a good deal more limited in that many complainants who previously worked in a full-time job, but now had all that time to look for work to mitigate their losses, were probably doing so without the responsibility of parenting faced by the complainant in this case.
That said, while, I accept that her submission on this point should be considered favourably and considered in part mitigation of her failure to do more, and I have done so the complainant’s efforts were still insufficient. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
I uphold complaint CA 51048-001 and award the complainant €17,500.
I uphold complaint CA 51048-002 under the Terms of Employment (Information) Act and award the complainant two weeks wages in the amount of €651.20 |
Dated: 26-July-2023
Workplace Relations Commission Adjudication Officer: Pat Brady
Key Words:
Redundancy, selection, fair procedure |