Complainant

Respondent

Parties

David  Hanley

Pbr Restaurants Ltd Fish Shack Cafe

Representatives

Dr. Gerald Kean, Keans Solicitors

Gavin Cumiskey, Peninsula

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-00041102-001

17/11/2020

The Complainant was employed by the Respondent from 21 November 2016 until 27th August 2020 when his employment was terminated by reason of redundancy.  The complainant disputes that it was a genuine redundancy situation.  When the employment ended the Complainant was employed as a Unit Manager in the Malahide restaurant.  The respondent contends that the complainant’s employment ended due to a genuine redundancy situation and that he was at the time employed as a Floor Manager.

This complaint was received by the Workplace Relations Commission on 17th of November 2020.

The Respondent operates a restaurant group in Co Dublin.  The Complainant commenced employment with the Respondent on 21/11/2016.  At this time, it was a family run business owned in majority by the complainant’s father.

 On 27th August 2020 the Complainant’s contract of employment was terminated by reason of redundancy following a restructure of the business during the Covid 19 pandemic.    At the time of his redundancy the complainant was employed as a Floor Manager in the respondent’s premises in Malahide

On 17th of November 2020 the Complainant lodged a complaint with the Workplace Relations Commission citing a breach of the Unfair Dismissals Acts.    The Respondent position may be summarised as follows:

a)       The Respondent was faced with a genuine redundancy situation following a reduction in restaurants from 5 premises to 3 and the Covid 19 pandemic.

b)      The decision to dismiss the Complainant was procedurally fair in all the circumstances.

c)       Any procedural defects alleged by the Complainant did not serve to imperil his right to a fair consultation process.

Factual Background

PBR Restaurants Ltd was incorporated by the complainant’s father in or around August 2008. The Claimant was employed by PBR Restaurants Ltd on the 21st of November 2016. The Company entered examinership on 28 August 2019 and remained in this state to the 5th of December 2019

The Respondent prior to examinership was made up of five restaurants and a mobile catering unit on Dun Laoghaire Pier.    Two restaurants were sold to separate investors and the current Respondents purchased the four remaining units in Sandycove, Parliament Street, Malahide and The East Pier, Dun Laoghaire.

The investors placed two directors into the company, Mr Ian Higgins, and Mr Colin Pardy.  The Respondent retained all staff, including the previous owner, Mr Padraic Hanley.  Mr Hanley Snr and his three sons were employed in management roles within the company.  Mr Hanley Snr was employed as a new employee having previously been a Class S Self Employed person.  Philip Hanley, Stephen Hanley, and David Hanley retained their length of service as employees. 

The new investors provided these parties with a “performance incentive plan”.  This plan would allow for the expansion of units within the company and would create a class of non-voting share in the share capital of each new venture for the previous owners amongst other clauses.  This was not agreed to by the recipients.

The Company ran as normal between December 2019 and March 2020.  In March 2020 the Covid 19 pandemic hit Ireland.  Business in the hospitality industry were hit exceptionally hard and were forced to close due to a governmentally imposed lockdown.  Naturally, as a newly acquired business owners, the Respondents wished for their business to remain open to being to generate a profit.  Unfortunately, this was not the case with government guidelines.

 On the 04 of June 2020 McStay Luby Accountants compiled an independent business review report which set out, inter alia, “[a] redundancy programme together with optimization of staff rotas should be considered in order to reduce costs.”

The Respondent also commissioned an independent report be done on the business.  It was found that “The Jan/Feb results suggest that the Company might be on-track for a 2020 loss of at least €200k”.  This independent report outlined the necessity for a “Survival Plan”.  This plan included 10 ideas which would potentially save up to €290k.  The first suggestion on this plan was “the possibility of restructuring and streamlining the Head Office function which could generate annualised savings of c. €140k”.

The Respondent saw the need to restructure the business going forward.  On 18th June the Respondents created a business case for proposed redundancies.  The Respondent proposed “a reorganisation of the business, delegating significant responsibilities to in restaurant staff, elimination of central office roles, introduction of performance-based management”.

The Respondent noted six potential roles which would be at risk of redundancy.  It was laid out that “The business is advised that without reduction of fixed costs and aggressive efficiency efforts, the company may need to close.  This is a material step in that process”.

The Respondent initiated the redundancy process by holding “at risk meetings” with members of the pool of management outlined above.

The Respondent held an “At Risk” meeting with the Claimant on the 10th of July 2020. This meeting was held with Mr Ian Higgins and Mr Colin Pardy.  On the 11th of July 2020 the Respondent wrote to the Claimant and confirmed that his role would be at risk of redundancy due to a restructure. The Respondent sought to consult with the Claimant the following week and gave the Claimant a copy of their redundancy policy.  On the 15th of July 2020 the Respondent wrote to the Claimant and arranged a consultation meeting for the 21st of July 2020 via zoom.   The Respondent made the Claimant aware of the “Restaurant Manager” role on the 21st of July and invited the Claimant to apply for same.   On the 14th of August the Respondent emailed the Claimant to resume the consultation process.    The Claimant had previously requested the consultations continue by email.     In this email the Respondent asked the Claimant to put forward any proposals of suitable alternatives.    On the 20th of August the Claimant was informed by letter that his job was at risk of redundancy.    On the 27th of August the Claimant was sent his Formal Redundancy Notice and received his redundancy payment in full to the sum of €5,172.00 along with PILON of €1,414.02.  The Claimant appealed his Redundancy via email on the 1st of September.  The Appeal was heard on the 17th of September 2020.  The outcome of the Appeal was issued to the Claimant on the 15th of October 2020 upholding the redundancy as fair. The claimant has raised allegations in respect of the impartiality of the Appeals officer in his employment with Graphite HRM which is categorically denied.

The Claimant has alleged that he was unfairly dismissed by way of redundancy.  The Respondent relies on section 6 of the 1977 Act which states as follows: (1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal…. (2) ……. (3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either

(a) The selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or (b). He was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal. (4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following: …. (c) The redundancy of the employee, …. (5) ….. (6) In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal. (7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so. To the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal

The Respondent relies on the EAT decision in Nigrell -v- Graham UD690/2013 where the EAT stated: “The Respondent’s representative accepted that there was a valid redundancy situation and that the Respondent’s complaints related to a failing on the employer’s part in affording fair procedures.

The Tribunal was not persuaded by the Respondent’s arguments that in all instances an employer must

(a) Afford the affected employee an opportunity to respond to the proposed redundancy or

(b) Facilitate the employee by having a representative present or to have the employee’s views on the redundancy fairly and impartially considered or

(c) Have a right to appeal the decision to make the employee redundant”.

“Such may be good and prudent practice and is probably found in larger enterprises. However, the tribunal is not persuaded that such prudent practices are mandatory with automatic consequences for employers who do not follow them. Such practices may be negotiated or contractually provided for but in the instant case they are not legally required to be recognised such that a failure to do so recognise would result in a genuine redundancy being considered as an unfair dismissal”.

For that reason, the Tribunal disagrees with the findings of the Rights Commission and determines that the employee was lawfully dismissed by reason of redundancy”.

Further to the above, the Respondent relies on the WRC decision in Senior Customer Service Representative -v- Customer Call Centre Service (ADJ-00021532). In the decision of the WRC, the Adjudication Officer cited with approval the EAT decision in Nigrell and concluded as follows:

“I am required to consider if in accordance with section 5 of the revised Act, the process by which the redundancy was effected was so flawed as to render the dismissal to be unfair…The complainant submits that the unreasonableness of his employer in executing the redundancy is mirrored in the authorities cited by him in support of his complaint and must therefore lead to a conclusion that he was unfairly dismissed….”

The Employment Appeals Tribunal in Nigrell -v- Graham UD 690 (2013) held that there was a genuine redundancy and that the absence of an appeal and the right to representation at the consultation stage (facilities which are not legally required) did not render the dismissal to be unfair. “Having carefully considered all the evidence adduced in this case and the authorities cited, I find that the respondent did not act so unreasonably as to render the dismissal to be unfair”.  It remains the Respondents position that the Claimant in this case was dismissed by reason of redundancy and that the redundancy was genuine and in keeping with the definitions set out above in the Redundancy Payments Acts.

 The Claimant in this case has also raised allegations regarding the impartiality of the Appeals Officer in his employment with Graphite HRM. The Supreme Court concluded in Mooney -v- An Post [1998] 2 ELR 238 that “the principle of nemo iudex in sua causa seldom applies in relation to a contract of employment where the employer judges the issue and is an interested party”.  In the case of Kelleher -v- A Post [2013] IEHC 328, for example, a dismissed employee argued that the procedure was unfair as the Disciplinary Officer “was privy to communications… before the investigation had been completed and that he intervened in the ongoing process by having discussions with the Investigating Officer before he made his decision to terminate the employee’s contract”.

The High Court disagreed, stating that “… in any event, as has been made clear by Barrington J. in Mooney, the nemo judex rule cannot apply in all its glory to all situations in the area of employment law. It is inevitable that often during an internal or in-house investigation leading to a dismissal the decision-maker and some or all of the investigators will have some form of contact, and that there may be communication of some kind about the issues involved.”

 The Respondent submits that if it is legally valid for an employer to conduct an entirely inhouse investigation, disciplinary, and appeals process, where everyone was employed by the company, then it cannot be unfair for an independent third party to conduct it. In the UK case of Walker -v- Respondent Way Ahead Support,(Case Number 1303947/15) the Employment Tribunal summarised the issue as follows: “The claimant’s initial objection to Peninsula’s conducting the investigatory meeting was that the respondent paying for the service would have an impact on the impartiality of any outcome but in the event, it was conducted by Mrs Yardley-Bennett.   When on 6 May 2015 the claimant was informed that an impartial ‘HRFace2Face’ consultant from Peninsula would conduct the disciplinary hearing she replied that she wanted the meeting to be chaired in a transparent impartial and independent way ‘free from direct or indirect subterfuge’… There was no evidence on which we could conclude that [the F2F Consultant] had any previous knowledge whatsoever of the case regarding the claimant.

The claimant has not pointed to any findings made by him which indicate any appearance of or actual bias or partiality in his conduct of the hearings or the outcome. The respondent is a small organisation which used a discrete part of the company it used to provide it with HR advice to chair the hearings in question having done so on contractual terms which make it clear the process would be conducted on an impartial basis with no warranty of any particular recommendation. We conclude that in the circumstances we have set out above the respondent had reasonable and proper cause to have the meetings chaired by … a consultant of HRFace2face, a division of Peninsula.”

 However, in this instance it was not Peninsula that held the appeal. The appeal was heard by Graphite HRM, who are a separate limited company to Peninsula Business Services Ireland Ltd. The Respondent submits that this further creates a gap of impartiality.

 In the Alternate / Mitigation of Losses:

 Should the Adjudication Officer find that the Claimant was unfairly dismissed, which is denied, the Claimant lodged his claim on the 17th of November 2020 and is obliged as per Section 7(2)(c) of the Act to mitigate his loss. 

The Respondent refers to the decision of Coad v Eurobase (UD1138/2013) where the Tribunal noted, “In calculating the level of compensation the Tribunal took into consideration the efforts of the claimant to mitigate his losses and finds that these efforts do not meet the standard as set out by the Tribunal is Sheehan v Continental Administration Cp.Ltd. (UD858/1999) that a claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. It is not enough to infirm agencies that you are available for work nor merely to post an application to various companies seeking work…the time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.” 

PBR Restaurants Limited was a family run business, established in 2008 and run by the Hanley family. It was comprised of five restaurants and a mobile catering unit on Dun Laoghaire Pier.

In August 2019 the company was experiencing financial difficulties and in order to save the company and the jobs of its 90+ staff it was put into Examinership.

In December 2019 the company successfully exited Examinership, and all the jobs were saved. A new investor took over the company through a British Virgin Island offshore company. Two of the Restaurants were sold during Examinership to two separate investors, leaving the company with four Fish Shack Café units (Sandycove, Parliament Street, Malahide and The East Pier, Dun Laoghaire).

The new investor appointed two non-executive directors (Colin Pardy & Ian Higgins) to the board of PBR Restaurants Ltd.   All members of the Hanley family continued in their existing roles. The family were told that neither of the non-executive directors would be involved in the day-today operations as they had no experience in the Restaurant business.

While a deal had been agreed with Padraic Hanley and Colin Pardy on behalf of the investor regarding the family's position in the company post examinership, the investor subsequently reneged on that deal and in February 2020 a "Term Sheet" was produced by the company which demanded that each member of the Hanley Family sign within 14 days. The terminology used by the company solicitor was blunt and very telling, "each member of the Hanley family will enter into a new employment contract on terms acceptable to the majority shareholder and "We note the plan will terminate if not signed by all parties on or before 14 February 2020". The complainant believes this "Term Sheet" was a clear threat to his employment.

The Complainant states that he was simply an employee, but this document attempted to put him into a group they now referred to as “The Hanleys” and thereby attempted to deny him of his statutory employment rights.  Following legal advice, the Complainant along with the other members of his family refused to sign the term sheet. 

Four weeks later, in March 2020, the company set about laying off three of the four Hanleys without pay using Covid-19 as the justification.  The complainant was kept on the books, paid the TWSS payment of €350 and for five months the directors refused to give him hours. After being messed about for 5 months, in August 2020 all four of the family members were then made redundant. No other staff members out of a total of 50 were selected for this redundancy process or treated in this manner.

Unfair Dismissal

The complainant was employed by PBR Restaurants Ltd ("the Company") from 21/1 1/2016.  His employment was terminated by the Company on the 27/08/2020.  He had over 3 years and 9 months continuous service with the company.

The complainant submits that he was trained in all areas of the business.  He started as a kitchen porter and worked his way up through the kitchen as a prep chef, a barman, a waiter and on to become a unit manager in Malahide. As the restaurant manager, he had full responsibility to monitor HACCP compliance, food quality and consistency and service quality and consistency in the Malahide restaurant.

The reason given by the company for the termination of his employment was "Redundancy". However, it is clear from the attached documentation that this was never a legitimate redundancy. His employment was unlawfully terminated by the company simply because he was a member of the Hanley family who were the previous owners of the company.

No other employees, out of a total staff of 50 apart from the Complainant and the three other members of his family were selected for this purported redundancy process.  This was clearly a targeted campaign against the Complainant and his family and was never a genuine redundancy situation.

In addition to the obvious ulterior motive the lead up to the termination of his employment was completely inappropriate and lacked any due process or fair procedure.

On 26th March 2020, the complainant had been feeling very unwell and attended his doctor. He was advised to take three weeks off and was suffering from work related stress. When he contacted the company about returning to work on the 16 the April, he was told there was no work. On 19th April he was asked to work 2 days a week to keep an eye on the Malahide premises.

In May 2020, Malahide reopened for 3 weeks and was then shut down again in June.  The complainant did receive an email informing him of this on the 10th of June, When he emailed back for clarity on his and the jobs of the employees he was managing in Malahide, he did not receive a reply.

In June 2020 the Complainant was stunned when he discovered that the company had taken on a new full-time employee who was added as an Administrator on Go-Forms (The Company HACCP sheet recording APP).  This person was a friend of Colin Pardy.

 In the thread of PBR Restaurant Ltd emails, this new employee can be seen to have been employed in a management position at a time when the complainant was being refused working hours. This new manager was later put in charge of the Parliament street unit which was changed from Fish Shack Café to "The Blue Oyster"

On 1 st July, the complainant had been trying to contact the directors to find out what their plan was for Malahide. After a month of his calls and messages being ignored, he was left not knowing what was going on, he received a phone call from Colin Pardy to tell me Malahide was opening the following weekend.

Between April and August 2020, the complainant continually contacted the directors regarding his return to work. While he was kept on the books, he was being refused hours, paid €350 a week, which was the TWSS claimed by the company and he was aware that numerous other staff members were being actively recruited, being offered hours, and even being offered incentives such as travel expenses while he was being ignored.

During email correspondence with the company between 20/05/2020 and 07/07/2020, the complainant pointed out that other staff were being offered hours, and in one case, travel expenses to come back to work, while he was disregarded and left out in the cold.  Colin Pardy denied offering one of the other employee’s hours and then went on to confirm that the travel expenses he offered to this employee were in fact to cover her Dart ticket from Malahide to Sandycove.

Redundancy Process

The Complainant was put through a protracted consultation process where, he feels, the odds were very clearly stacked against him.  He (the Complainant) engaged fully in each and every stage of the purported consultation process as he fought to save his job.  However, (in the opinion of the Complainant) this process turned out to be nothing more than a box ticking exercise orchestrated for legal cover in a blatant attempt to lawfully terminate his employment.

The first redundancy consultation meeting took place on 10th July 2020.  The second redundancy consultation took place on the 21st of July 2020.  The Complainant was sent the job spec for a new role “Restaurant Operations Manager” that was being created by the company on 23rd July 2020.

The final redundancy consultation meeting took place almost a month later on 14th August 2020.

The Complainant received a letter from Ian Higgins warning that his job was at risk on 20th August 2020.   The Complainant received a formal redundancy notice on 27th August 2020.

The redundancy process was dragged out for six weeks.  Between mid-July and mid-August, the process stopped with little or no communication for four weeks.  The Complainant understands that one or both of the directors went on holiday during that time.

The Complainant believes that the Covid-19 pandemic was used by the directors to lay employees off without pay, with no contractual right to do so and to drag out a sham redundancy process for as long as they liked at no cost to the company. The complainant believes that the directors took full advantage of a global pandemic to unfairly dismiss him under the cover of Covid-19.

The complainant submits that there was a complete absence of any transparent or fair selection criteria in relation to selecting his role for redundancy.  Furthermore, part of the purported basis for his redundancy cited at the appeal stage referred to a “report” which was never shared with the complainant at any stage during the consultation process.

In addition, he was not offered any alternative to redundancy even though his skill set, and experience would have been easily adapted to other roles.

When the company announced they were creating a new manager role for the unit in Malahide, they Called it "Restaurant Operations Manager" and later called it the "Enhanced Manager's Role". The Job Spec was the same as the complainant’s job and While he claims he should have been offered this job, he wasn't, and was told he would have to interview for it.

In addition, the new Role "Restaurant Operations Manager" had been created and filled by the company before the complainant’s redundancy process was complete. This was further compounded by statements made by colleagues that one of the directors of the company (Colin Pardy) had told staff in Malahide, while the redundancy process was still ongoing, that "The Hanleys are gone". This the complainant submits clearly shows that the termination of his employment and indeed that of all the Hanleys was pre-determined, and the redundancy was in fact a sham redundancy.

The Appeal

The complainant asserts that the company then tried to rubber stamp their sham redundancy process by appearing to afford him the right to Appeal, he did so in writing via email on 31/08/2020.

On 8th September 2020, the Complainant received an email from a Mr Rob Nolan of Graphite HRM informing him that he was given the right to appeal. 

In his introduction letter Mr Nolan claimed to be external and impartial.“PBR Restaurants feels it is in the best interests of all parties to engage the services of an external and impartial HR consultant to conduct this Appeal process, and to issue a decision in respect of it.  Therefore, they have engaged the services of Graphite HRM for this purpose”.

Being a manager in PBR Restaurants Ltd, the Complainant knew that Peninsula were a long time HR consultant to the company.  He was also aware that Graphite HRM was part of Peninsula.

The Complainant attended the Appeal Hearing on 17th September 2020 presided over by Mr Rob Nolan.  At the start of the hearing, he was asked if there was a statement he would like to make and have recorded in the minutes.  The Complainant stated for the record that he did not believe Mr Nolan’s claim to be external and impartial.  Mr Nolan replied "OK I obviously appreciate that yes. Look I suppose to answer it quickly. Graphite is a separate entity. I take where you are coming from. But Graphite is a separate entity from Peninsula but look you guys you did want it on the record?" He then brushed over the subject and ignored the question.

On 6th October 2020 the Complainant received the transcript of his appeal hearing.  On 15th October 2020 the Complainant received the Appeal Outcome.  During the appeal hearing he had informed Mr Nolan that he had never received a selection criterion from the company, even after asking the company to produce this document several times.  In his decision, however Mr Nolan relies heavily on a report commissioned by a company and compiled by Messrs Dolan & Dunne on PBR Restaurants Ltd in April 2020 and claimed that this report was the selection criteria used by the company to make the complainant redundant.  This report was never mentioned to the Complainant by the Directors as a selection criterion for his redundancy and was never mentioned by Mr Nolan during the appeal hearing.

The complainant states that this report did not relate to him or his role and could never have been used as a selection criterion to justify his redundancy.

In his appeal outcome document Mr Nolan not only depends on this report but attempts to rubber stamp the independence and expertise of the writers.

Conclusion

It is submitted that PBR restaurants Ltd have shown a cavalier disregard for due process throughout this purported redundancy process and continued to behave as if employment law does not apply to them.

The complainant’s employment with the Company was terminated on 27th of August 2020. At the date of termination of employment, he had over three years' continuous service with the Company. He had also worked in the business during his school and college years and had returned in November 2016 to help expand the Fish Shack Café brand.  Over the years he had worked in all areas of the business from Kitchen to Floor and returned to work as Unit Manager in 2016. More recently his role was that of Unit Manager of the Malahide Restaurant.

The complainant submits that it is clear that his employment was unlawfully terminated by the Company due to their desire to get him out of the business because of the fact that he is a member of the Hanley family, i.e., the owners of the Company until 9"' December 2019 when the Company exited Examinership and was taken over by new investors. Only the four members of the Hanley family were selected to be put through this protracted Sham Redundancy process and eventually sacked.

This was nothing more than a Sham Redundancy carried out in a ruthless and dishonest manner without a single thought for the personal damage the company inflicted on him.  This process took over 6 weeks to conclude, during which time both company directors went on annual leave and left the complainant in limbo while refusing to give him a timeline for the process to come to a conclusion.

Between March 2020 and August 2020, the complainant was kept on the books and paid the TWSS (€350) the company was claiming from the state.  He was continually refused hours while other members of staff were being actively recruited and even being offered incentives to come back to work.

Ignoring his enormous amount of experience in his then current role, the directors decided to rename his role and told him he would have to apply for it.    When the complainant said he would apply for the job, they quickly reminded him that they had stopped paying his travel expenses and told him to take that into consideration before he applied for the "New Role".   The complainant concluded that he was never going to be offered that role and therefore chose to withdraw his application rather than put himself through further stress and humiliation and for the good of his mental health.

In addition, he was not offered retraining and was not offered any reasonable alternatives to redundancy even though his skill set, and experience would have been easily adaptable to other roles.

After he was made redundant on 27/08/2020 he was offered the right to appeal. This process was nothing more than the directors cynical attempt to rubberstamp their Sham Redundancy.  The complainant submits that Mr. Nolan's claim to be an external and independent adjudicator was in fact a lie and that can be clearly seen in the submission above. Furthermore, the complainant believes that Mr. Nolan knew himself that this was a Sham Redundancy and even said it himself, with his Freudian Slip at the end of the appeal hearing where he said,

"I have been through this, I have seen what it is, I have been on both sides of the thing. So, I appreciate that there is a lot of emotion that goes with these things. < Yeah> Even like in my situation which was perfectly legitimate what the company were doing so, but even with that it was tough to hear "

Mitigation of loss

The complainant submits that his life was quite literally turned upside down, at a time when the hospitality sector was in such turmoil so that securing another job at the same level in such circumstances was impossible.  The complainant submits s that he was renting an apartment with his partner in Dublin at the time that was costing €1850 per month and were at the time forced to make the quick decision to move in with his partners parents in Dundalk, Co. Louth as they could no longer afford to stay in Dublin.

The complainant submits that he immediately started looking for a restaurant job in Dundalk and quickly realised there were no jobs in the hospitality sector at that time.  He contacted an old boss he had worked for in Carlingford and started back to work in December 2020. Unfortunately, he had to start at the bottom again as the only job they had was for a general worker.

In addition, the complainant submits that he had made efforts to find alternative employment at a higher rate of pay but that these efforts were unsuccessful.  The complainant advised that he had however since been promoted in his new job and so his losses had continued at a lower rate since being promoted.   The complainant in calculating his losses also included an amount for loss of earnings in the period March to August 2020 when the respondent did not provide him with hours.  I note however that the complainant at this time was in receipt of the TWSS wage subsidy and that the premises in which the complainant had worked had remained closed for much of this period as did most restaurants due to the Covid pandemic.   The complainant submits that other employees were getting some hours and being paid for them during this time while he was not.

Legal Submission:

Pursuant to Section 6(3) of the Unfair Dismissals Acts, the Workplace Relations Commission that the Claimant was dismissed redundancy by proving

(a)         that a redundancy situation arose and

(b)         that the redundancy was the main reason for his dismissal.

 If the Respondent cannot prove both aspects of Section 6(3) then the dismissal is unfair.

Proof of Redundancy Situation:

The onus of proof in this regard rests on the Respondent and strict proof is required in order to determine same. As per Charleton J. in Panisi v JVC Europe Ltd [2012] ELR 70 (and subsequently followed in Employee v Adrian Lee Services Ltd UD 2073/2009 and A Housing Aid Manager v A Local Partnership Development Company ADJ00004920 (11 July 2017)):

"In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy is impersonal, Instead, it must result from, as s 7(2) of the

Redundancy Payments Act 1967, as amended, provides, "reasons not related to the employee concerned. " Redundancy, cannot, therefore be used as cloak for the weeding out of those employees who are regarded as less competent than others or who appear to have health or age-related issues. If that is the reason for letting an employee go, then it is not a redundancy, but a dismissal". [emphasis added]

It is submitted that the Respondent's description of the purported "new role" was vague and for all intents and purposes the same as the Claimant's role and the reason for the termination of the Claimant's employment was due to his connection to the Hanley family.

Furthermore, it is noteworthy that there was a significant overlap between the Claimant's duties and those of the "enhanced manager role". In Melroy v Floraville Nurseries Ltd UD 703/1993, the then Employment Appeals Tribunal was not satisfied on the evidence that a genuine redundancy existed. A particular service which was part of the employee's duties had diminished but the remaining areas of work where she was employed, and for which other employees were recruited on a part-time basis, continued. Accordingly, the purported redundancy was found in fact to be an unfair dismissal.

Redundancy Arising Mainly from Dismissal:

It is respectfully submitted that the WRC must ask itself two questions in determining whether the Claimant's situation was a sham redundancy:

(a) was the redundancy genuine, or did the dismissal take place under the cloak of redundancy? And

(b) was there a cause-and-effect relationship between the redundancy and the dismissal?

In Daly v Hanson Industries Ltd, UD 719/1986 (followed in A Cookery Retail Manager v A Cookery Retailer ADJ-00004428 (25 April 2017), the then EAT found that while there was 'a redundancy element' in the circumstances before it but the dismissal did not result 'mainly' from it. The proximate cause of the claimant's dismissal lay elsewhere. The facts revealed that the employee had been dismissed on the morning after she had given evidence before another division of the EAT in the hearing of a claim by the former general manager of the company.

The EAT went on to note that under Section 6(4) of the Unfair Dismissals Acts (which provides, inter alia, for the redundancy defence, is expressed to be 'without prejudice to the generality of subs (1) [of s 61 1 . Therefore, even if a cause-and-effect relationship had been shown the WRC is still required to have 'regard to all the circumstances' in considering whether the dismissal is unfair.

It is therefore submitted that if the WRC finds that a redundancy situation arose, it cannot look at this in isolation but must also look at the background circumstances of the case, including the 2019 examinership of the company, the fact that the four of the family members that previously owned the company worked there (and were purportedly made redundant) and that the Claimant was a member of that family.

In Edwards v Aerials and Electronics (Ireland) Ltd. UD 236/1985 the claimant was managing director of the Irish subsidiary of a company based in Belfast. The Dublin company was experiencing losses. It was decided to cut the latter's overheads by removing a layer of management and running the company from Belfast. The managing director gave evidence of disagreements at board level and of other matters regarding attitude and disregard of his authority. He succeeded in convincing the EAT that there were 'major doubts' as to whether the redundancy was genuine.

It said:

'We recognise that the function of a full-time managing director no longer exists, but we must direct our minds to the cause-and-effect relationship between redundancy and dismissal ... In other words, was the reorganisation a cause or a consequence? On balance, we are inclined to the latter view.,

The above passage was described as "thought provoking" in An Employee v An Employer ADJ-00002352 (25 November 2016).

Redmond on Dismissal Low notes (at para 17.12) that "When advising a company on a reorganisation, it is essential to know whether there may be other background factors regarding employees whose jobs will become redundant. If so, this will probably result in a company failing the cause-and-effect test". It is submitted that the Respondent fails the test in this regard.

Claim of Sham Redundancy:

The Claimant submits that the Redundancy was a sham on a number of grounds

The convoluted, ambiguous, and drawn-out redundancy consultation process where no effort was made by the Respondent to find alternative roles within the company for the Claimant (despite hours evidently being available) and despite the Claimant making suggestions jn regard to same.

-. -In Sheehan and O'Brien v Vintners Federation of Ireland Ltd [2009] ELR 155 the then EAT held that the claimants had been unfairly dismissed even though the redundancy was found to be genuine. The employees provided proposals to the company on how their jobs could be retained and the company did not take these into consideration. The tribunal was critical of, inter alia, the employer's failure to 'consider earnestly the claimants' proposals regarding the reorganisation of the work which would have realised significant savings'.

There were no objective criteria identified by the Respondent for selecting the Claimant for redundancy. Redmond notes at para 21.46 that "Employers will be required (where appropriate) to have thought about the problem of redundancy in good time so as to have formulated a policy. They will be required to have identified factors crucial to selection in their particular circumstances. " However as is apparent from appendices 1 and 2 no such criteria were disclosed to the Claimant.

It is submitted that the vagueness of the selection criteria and reason behind the purported redundancy together with the similarity of the Claimant's role with that of the new "enhanced manager role" and the failure of the Respondent to engage with the Claimant in considering alternative ways in which he and his position could be retained cannot credibly lead an observer to conclude that a genuine redundancy arose.

CONCLUSION

PBR Restaurants Ltd have shown a cavalier disregard for due process throughout the redundancy process when they continued to behave as if employment law does not apply to them.

This was nothing more than a sham redundancy carried out in a ruthless and dishonest manner without a single thought for the personal damage the company inflicted on the Complainant.

The Complainant attended a meeting with the two directors on 10th July 2020. The purpose of this meeting was to discuss the financial situation in the company and to address this situation there would need to be a restructure in the company and that this potentially could lead to redundancies.

The First Redundancy Consultation meeting took place on the 10/07/2020 with the Second Redundancy Consultation on the 21/07/2020.  The complainant was sent the Job spec for a new role 'Restaurant Operations Manager" that was being created by the company on 23/07/2020.

A further meeting took place almost a month later on the 14/08/2020.  The complainant received a letter from Ian Higgins warning that his job was at risk on 20/08/2020 and received a Formal Redundancy Notice 27/08/2020.

The redundancy process was dragged out for six weeks. Between Mid-July and Mid-August, the process stopped with little or no communication for four weeks.  The complainant believes that both directors went holiday during this time.  

On 27th August 2020 the Complainant received formal written confirmation that his role was being made redundant. This letter also stated that due to the fact that there was currently no work for him he would receive payment in lieu of notice. The Redundancy was to take place with immediate effect. The Complainant was offered the right to appeal which he did.

On 1st September 2020 the Complainant appealed his redundancy.  The Complainant alleged that:

a)           The redundancy was a sham, and there was no bona fide consultation process.

b)           He was not offered an alternative role or any re-training.

c)           The decision to terminate his employment represented an Unfair Dismissal.

d)           The Respondent’s intention was to secure his dismissal because of who he was.

e)           He was being discriminated against due to who he was.

The Respondent employed Graphite HR to hear the appeal.  This was facilitated by a Mr Rob Nolan.  The Complainant was invited to an appeal hearing which took place on 17th September 2020.

By letter dated 8th September 2020 to the Complainant, a Mr Rob Nolan from Graphite HRM wrote to the Complainant. The following is an extract from this letter:

“I have been provided with a copy of your appeal email dated 1st September 2020 in which you detailed your appeal grounds.   In the circumstances, PBR Restaurants feels it is in the best interests of all parties to engage the services of an external and impartial HR Consultant to conduct this Appeal process, and to issue a decision in respect of it. Therefore, they have engaged the services of Graphite HRM for this purpose”.

The Complainant being a manager in PBR Restaurants Ltd knew that Peninsula were a long time HR consultant to the company.  He was also aware that Graphite HRM was part of Peninsula.

The Complainant attended the Appeal Hearing on 17th September 2020 presided over by Mr Rob Nolan from Graphite HRM.  At the start of the hearing, he was asked if there was a statement he would like to make and have recorded in the minutes.   The Complainant stated for the record that he did not believe Mr Nolan’s claim to be external and impartial.  Mr Nolan replied "OK I obviously appreciate that yes. Look I suppose to answer it quickly. Graphite is a separate entity. I take where you are coming from. But Graphite is a separate entity from Peninsula but look you guys you did want it on the record?" He then brushed over the subject and ignored the question.

On 6th October 2020 the Complainant received the transcript of his appeal hearing. On 15th October 2020 the Complainant received the Appeal Outcome.  During the appeal hearing the complainant had informed Mr Nolan that he had never received a selection criterion from the company, even after asking the company to produce this document several times.  In his decision, Mr Nolan relies heavily on a report commissioned by the company and compiled by Messrs Dolan & Dunne on PBR Restaurants Ltd in April 2020 and claimed that this report was the selection criteria used by the company to make the complainant redundant.  This report was never mentioned to the Complainant by the Directors as a selection criterion for his redundancy and was never mentioned by Mr Nolan during the appeal hearing.

In the post appeal hearing document compiled by Mr. Nolan he states the following:

Central to this matter is the report compiled by Messrs Dolan and Dunne. PBR restaurants commissioned this report. It gave life to the redundancy process, given that it recommends a new “lean” Head Office function, with, in particular, the roles and responsibilities of the General Manager and Operations Manager to be absorbed by a new “enhanced” manager at each of the sites. Further it impacted on the Floating Manager and Site Manager roles, in that these roles were no longer required, given the move to this “enhanced” manager role.

The Dolan / Dunne Report provides 10 short-term possibilities for the Board to consider, these are:

1.       The possibility of restructuring and streamlining the Head Office function which could generate annualised savings of c.€140k.

2.       Implementing a determined cost-reduction programme which could generate annualised cost savings amongst non-staff costs of c.€60k

3.       Empowering the Floor Managers and Head Chefs to put together cost-efficient rosters so that the business can achieve annualised staff savings of c.€90k

4.       Empowering Floor Managers and Head Chefs to produce their own local budgets (with the assistance and agreement of Head Office Management) and thereby have the opportunity to earn a significant quarterly Budget-achievement bonus.

5.       Encouraging the CEO to support the procurement manager to constantly persuade Head Chefs to be more flexible in their menus to exploit margin opportunities arising from variations in the cost of fish.

6.       Instigating weekly Zoom meetings with all Floor Managers and Head Chefs and THE Procurement Manager to review turnover, staff costs and input costs and any staff / customer issues.

7.       Re-negotiating rents for Malahide and Parliament Street and consider the closure of the Stillorgan Office with the relocation of the admin function to one of the restaurants.

8.       Boosting turnover by starting a continuous localised marketing drive, utilising the Gold Fish scheme, targeting the corporate market, and greater use of social media.

9.       Initiating modest improvements to restaurant appearance /infrastructure, e.g., Kitchen air conditioning, and inexpensive external improvements to the appearance of Sandycove.

10.   Reflecting on the possible re-opening of Malahide and Parliament Street, the Board should examine these operations in more detail and consider [a] the annual rent, [b] the staff costs, including the floor-staff costs, and [c] the reasons behind the low turnover.

There is nothing mentioned in this report about redundancies. Whilst there is a mention of lowering head office costs, It is notable that the Complainant was not considered as head office staff.

I must also take into account the comments made by the Complainant and his representative in relation to the impartiality of the appeal.    Questions were posed at the hearing regarding the ownership of Graphite and its relationship with Peninsula.  The discussion failed to clarify the position in relation to Graphite’s independence.   It also emerged that Peninsula and Graphite share a phone line while claiming to be independent.

I note that the complainant during the appeal hearing stated that he had not seen the report which his redundancy had allegedly arisen from and he the advised the appeals officer of this.

In relation to the appeal, I must conclude that the appeal was completed in a manner that I cannot consider to be professional and proper.

In relation to the process followed by the Respondent I conclude that there appears to be no evidence of any alternatives looked at by the Respondent in relation to the Complainant’s future.   At the time the Covid pandemic lockdown was in progress and there was a significant level of uncertainty in relation to how long this would continue.

I find that the complaint as presented under the Unfair Dismissals Act, 1977 is well founded and that the Complainant was unfairly dismissed from his employment.

Mitigation.

The common law rule of mitigation of damages applies to compensation for unfair dismissal. Questions of mitigation are questions of fact. The burden of proof lies on the party seeking to allege that another has failed to mitigate loss. Sir Joh Donaldson explained the duty in AG Bracey Ltd V Iles [1973] IRLR210:

‘The law is that it is the duty of a dismissed employee to act reasonably in order to mitigate his loss. It may not be reasonable to take the first job that comes along. It may be much more reasonable, in the interest of the employee and of the employer who has to pay compensation, that he should wait a little time. He must, off course, use the time well and seek a better paid job which will reduce this overall loss and the amount of compensation which the previous employer ultimately has to pay….’

It is clear that an employee must produce evidence at the hearing that he or she has made a ‘determined effort to find work’.

In Sheehan v Continental Administration Co LtdUD 858/1999 the EAT endorsed the following position:

‘[a] claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work…. The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather [is] to be profitably employed in seeking to mitigate his loss.

In the instant case the Complainant advised the hearing that he had applied for numerous jobs and that he had eventually secured employment in Carlingford Adventure Centre in December 2020 on a lower wage than that which he was previously on.  He stated that he had started at the bottom as a general worker.  The complainant at the hearing stated that he had applied for about 20 jobs prior to this and also after securing this job in a bid to earn a higher wage.  The complainant did not provide evidence of these job applications to the hearing but in post hearing submissions furnished details of 16 positions applied for in the period September to November 2020.  I note that this information was provided post hearing and that the complainant did not give direct evidence nor was he cross examined in relation to the details of these additional job applications.

Section 7 (1) of the Act of 1977 reads as follows:

(1)    Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer or the Labour Court, as the case may be, considers appropriate having regard to all the circumstances:

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

Section 7(2) then reads at subsection (c):

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

Whilst the Complainant in this case did secure employment in December 2020 albeit at a lower rate of pay, he had prior to this remained out of work for a period of three months.  In addition, the complainant submits that he had made efforts to find alternative employment at a higher rate of pay but that these efforts were unsuccessful.  The complainant also advised the hearing that he had however been promoted in his new job and so his losses had continued at a lower rate since being promoted.   The complainant in calculating his losses also included an amount for loss of earnings in the period March to August 2020 when the respondent did not provide him with hours.  I note however that the complainant at this time was in receipt of the TWSS wage subsidy and that the premises in which the complainant had worked had remained closed for much of this period as did most restaurants due to the Covid pandemic.  

In conclusion, I find that the complaint as presented is well found and taking all of the circumstances into account I now order the Respondent to pay the complainant compensation of €20,000.

This sum is in addition to any payments already made to the complainant and should be paid within 42 days from the date of this decision.

In conclusion I find that the complaint as presented is well found and now order the Respondent to pay compensation of €20,000.

This sum is in addition to any payments already made to the complainant and should be paid within 42 days from the date of this decision.