ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00035738

Parties:

Complaints:

Date of Adjudication Hearing:  21st July 2022 and 22/03/2023

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 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 Complainant was employed by the Respondent as General Manager in a Hotel.  He contends that he was unfairly dismissed by way of redundancy which was not a genuine redundancy.  He further claims that the Respondent failed to pay him for annual leave accrued in the last six months of his employment.

Summary of Respondent’s Case:

The Complainant was employed by the Respondent in the role of General Manager on 16th September 2019, his employment ceased on 9th June 2021.

The Covid pandemic struck Ireland in March 2020 and the Hotel operated by the Respondent was closed for business. The situation continued thus throughout 2021, and up to 2022, leading to great uncertainty throughout that period. Any business the Respondent was permitted to undertake was on a very much reduced scale even when it was open e.g the numbers of guests it could accommodate at a wedding was so limited that in most cases the wedding receptions was cancelled or at the very least postponed. This is a venue which depends a great deal on wedding events and dining by non-residents.  The Respondent faced a very uncertain future whilst the pandemic forced the closure of its business. It is located on an island, is very old and even though the Government gave certain level of assistance in respect of staff retained for work, the costs of maintaining the premises and the property upon which the Hotel is located meant than the Company lost money on a continuing basis.  Faced with mounting uncertainty, the management of the Company continually reviewed the position of the Company, and after consideration of the various roles withing the facility, concluded that as a significant step to safeguard the Company’s business and the welfare of its employees, a restructuring of the management roles within the Company would be necessary.

This review by the Directors of the Company concluded that the role formerly that of General Manager should be made redundant and the functions formerly undertaken or supervised by that role would be undertaken instead by the various heads of department within the hotel, so that in future the Hotel would not require a General Manager.  The review by the directors of the functions withing the organisation concluded that this role would be discharged effectively and efficiently in a manner other than had been previous operated and reorganised the management structure accordingly – which is the way it continues to so operate. The Company does not have a general manager.  Accordingly having concluded its review of the Company’s precarious position and with a view to safeguarding the Company’s business and the livelihoods of all its employees the reluctant decision was taken to make the role of General Manager Redundant.  The decision of the Directors was communicated to the Complainant on 9th June 2021 when the directors met with him and told him of the conclusions that had been reached. He was informed of the reasons behind the decision to make the role of General Manager redundant.  The employment of the Complainant was terminated on 9th June 2021, the Complainant was paid all his entitlements including an ex gratia payment.

The Unfair Dismissals Act provides that an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributed wholly or mainly to the following reasons:

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

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

In the instant case the employer had reached the almost inevitable conclusion that it could not continue as heretofore with the employees it had and it sought the best way to ensure the viability of the Company and the jobs of as many of its employees as possible. In those circumstances the Employer re-organised the work within the hotel in such a manner that the role previous undertaken by the Complainant was no longer in existence.

The employer took steps to reorganise the workplace and the work done within the workplace in a manner which it was entitled or indeed was obliged to do given the hiatus it was facing. The role of General Manager ceased to exist and has not been replaced. Indeed, the hotel now operates with some 12 to 15 personnel less that it did heretofore.

No element of the process of selection of the Complainant’s role for reorganisation and ultimate redundancy was unfair. The duties of the general manager are now divided and undertaken by other management personnel within the Hotel so that the role has become redundant. It was the inevitable position that the position of General Manger would cease when the reorganisation was undertaken.

It is entirely reasonable for an employer to reorganise it’s workforce so as to enable it to complete the work formerly done by it’s employees to be completed by a lesser number, and such was the case in this instance.

It is respectfully submitted than the Complainant’s complaint should not succeed on the facts as presented – the role has ceased, it no longer exists and has not been replaced either directly or indirectly by the employer taking on another person to fulfil the duties formerly undertaken by the Complainant.

It is the Respondent’s position that the Complainant was paid fully all entitlements including any salary due, holiday pay or otherwise.

Sworn evidence was given by the Financial Controller of the Respondent as to the precarious financial position the Respondent was in throughout the period and the steps it took to mitigate so far as it could the detriment it was facing and to safeguard the business so that it could have a future.  The history of the financial situation and grounds for the redundancy was set out by the Financial Controller in her evidence.    She disputed the Complainant’s contention that he could have taken on some other job in the Hotel, and that other staff were brought in when he was being made redundant.  She emphasised the precarious financial situation which faced the Hotel, with drastically reducing revenues during Covid lockdowns.

Summary of Complainant’s Case:

The Complainant gave sworn evidence.  He stated that he was initially employed in September 2019 as Assistant General Manager and then was appointed General Manager in December 2019.  He earned €65,000 per annum. He had no issues in his employment from September 2019 until he was made redundant without notice in June 2021.  When Covid closed the Hotel, he offered to take a pay cut.  In early December 2020, he went on sick leave, having had to have blood tests done and a period in hospital.  He was asked by Payroll did he want to take annual leave in December and as far as he was concerned, he was employed, and not laid off in December or January 2021. He had been in email contact with the Financial Officer about his situation and the hotel situation and redundancy or redundancies was never mentioned.  When he was fit to return to work and anxious to start as soon as the hotel re-opened, he was asked by the Financial Officer to come in on 9th June 2021 “to go through matters”.  He was shocked to be told by her and the Owner that he was being made redundant effective immediately at that date.   His contention is that Covid was used as an excuse to “get rid” of him.  He produced figures and names of people taken on since Covid.  He believes that the reason he was made redundant was that he got sick and he stood up for himself.

Findings and Conclusions:

CA-00046630-001            Unfair Dismissals Act 1977

The Respondent argues that the position of General Manager in the Hotel was made redundant and that it was not the Complainant who was made redundant  but the position. 

In terms of considering whether or not the Complainant was unfairly selected for redundancy, I am obliged to take cognisance of the provisions of the legislation.

Section 6 (4) of the Act provides that the dismissal of an employee shall be deemed not to be an unfair dismissal if it results wholly or mainly from the redundancy of the employee.

The contractual entitlement to a defined procedure in terms of the selection of candidates for redundancy is provided for in Section 6 (3) of the Unfair Dismissals Act 1977 which states that:

“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.”

I have not been presented with any evidence to suggest that there was either any trade union agreement or any custom or practice in operation within the company in relation to the manner in which candidates should be selected for redundancy. I also find that the selection of the Complainant for redundancy did not result wholly or mainly from any of the matters specified in subsection (2) of Section 6 of the Act. In the circumstances, I find that the Respondent did not act contrary to the provisions of Section 6 (3) in terms of the manner in which the Complainant’s redundancy was effected.

However, notwithstanding the foregoing, in considering the fairness or otherwise of the Complainant’s selection for redundancy, I am also obliged to take cognisance of the provisions of Section 6 (7) of the Unfair Dismissals Act 1977 (as amended 1 August 2016), which provides that:

“Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so:

(a) to the reasonableness or otherwise of the conduct (whether by act or mission) of the employer in relation to the dismissal”.

This provision provides that the reasonableness of the employer’s conduct is an essential factor to be considered in the context of deciding on the fairness or otherwise of a dismissal and it places an obligation on an employer to act reasonably in taking a decision to dismiss an employee on the grounds of redundancy. In this regard, I note that the Employment Appeals Tribunal held in the case of Gillian Free –v- Oxigen Environmental  [UD206/2011]: “When an employer is making an employee redundant, while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy. The employer must follow the agreed procedure when making the selection. Where there is no agreed procedure in relation to selection for redundancy, as in this case, then the employer must act fairly and reasonably.”.

Having regard to the totality of the evidence adduced in the present case, I find that the Respondent did not act fairly or reasonably and did not apply fair procedures in terms of the manner in which the Complainant was selected for redundancy. In coming to this conclusion, I have taken into consideration the following factors:

The Respondent failed to engage in any meaningful process of consultation with the Complainant prior to informing him that his employment was being terminated.  There were a number of emails exchanged between the Complainant and the Respondent in the months and weeks leading up to the re-opening of the hotel, and no mention of redundancy or a redundancy process was made by the Respondent in those emails.

There appeared to be no attempt or sufficient efforts made on the part of the Respondent to consider other alternatives rather than making the Complainant redundant.  I note the Complainant at one point had offered to take a pay cut.  I note there were a number of positions the Complainant identified that he could have filled and the Respondent dismissed these out of hand.

The Complainant was not afforded any opportunity to appeal the Respondent’s decision to select him for redundancy or the selection criteria upon which the decision was based.   The basic right of appeal is common fair procedure where an employee is effectively losing his livelihood.

For the reasons outlined, I find that the Complainant was unfairly dismissed.  I consider the remedies of re-instatement or re-engagement not to be appropriate due to the breakdown of trust from the Complainant’s part.  I award compensation in the sum of €12,000 being the loss incurred by the Complainant until he found another position.

CA-00046630-002            Organisation of Working Time Act 1997

Section 19 of the Act provides:

The Act provides for payment for annual leave accrued and not taken. I note that the Complainant was given paid annual leave in December and January.  However, no account was taken of the annual leave accrued in the period January 2021 to July 2021.  I find the complaint to be well founded and I require the Respondent to pay to the Complainant the sum of €2,500 being the monetary value of 11 days payment for annual leave.

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.

CA-00046630-001            Unfair Dismissals Act 1977

I have decided that the Complainant was unfairly dismissed and I award compensation in the sum of €12,000.

CA-00046630-002            Organisation of Working Time Act 1997

I have decided that the complaint is well founded and I require the Respondent to pay to the Complainant the sum of €2,500.

Dated: 17th May, 2023

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

Key Words: