ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00028355

Parties:

Complaints:

Date of Adjudication Hearing:  30/05/2023

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Procedure:

These complaints were referred to the Workplace Relations Commission (hereinafter ‘WRC’) under Section 8 of the Unfair Dismissals Acts 1977-2015 and Section 41 of the Workplace Relations Act 2015.  The complaints under Section 27 of the Organisation of Working Time Act 1997 and Section 7 of the Terms of Employment (Information) Act 1994 were referred on 21st May 2020.  The complaint of unfair dismissal was referred on 21st October 2020 arising from the subsequent termination of the Complainant’s employment.  Following delegation to me by the Director, I inquired into these complaints together and gave the Parties an opportunity to be heard and to present any relevant evidence.  There were numerous adjournments to facilitate both Parties.  Ultimately, these complaints were heard in Lansdowne House on 30th May 2023.  The Complainant was represented by Michael Kinsley BL instructed by Keans Solicitors and the Respondent was represented by Peninsula.  The Complainant was in attendance with his two brothers (Philip Hanley and David Hanley) and his father (Padraic Hanley), hereinafter also referred to as ‘the Hanley family’.  A Director, Mr H attended on behalf of the Respondent.  Written submissions and extensive documentation was received on behalf of both Parties.  At the outset, the changes to procedure under the Workplace Relations (Miscellaneous Provisions) Act 2021 were outlined.  The hearing was held in public and evidence was taken on oath.  The Parties were also made aware that their names would be published within this decision.  All of the evidence, submissions and documentation submitted have been fully considered. 

At the outset, several preliminary issues were aired.  It was noted that the Complainant sought to rely upon decisions of the WRC in favour of his two brothers, Philip Hanley (ADJ-00031598) and David Hanley (ADJ-00031892) on identical facts and delivered by different Adjudication Officers.  These decisions were under appeal to the Labour Court.  This Adjudication Officer confirmed that a fully independent hearing and decision would ensue in relation to these complaints.  Complaint Refs: CA-00036277-005, CA-00036277-006, CA-00036278-001 and CA-00036278-002 were withdrawn as being duplicated.  The Respondent’s Representative confirmed that the fact that Peninsula had previously advised the Hanley family on HR issues did not give rise to any conflict of interest in terms of representing the Respondent herein.

Background:

The Respondent operated a number of restaurants in the Dublin area including Ouzos Restaurant in Dalkey, Kelly & Coopers Gastropub in Blackrock, Fish Shack restaurants at Sandycove, Malahide and Parliament Street, the Fish Shack takeaway on Dun Laoghaire’s East Pier, and a fish processing plant in Northern Ireland.  Padraic Hanley had founded the company in 2008 and was the former CEO, Director and main shareholder.  He had been joined in the business by his three sons, the Complainant, Philip Hanley and David Hanley who held various managerial roles as employees.  The Respondent had operated as a successful business for over ten years before it experienced financial difficulties and went into examinership on 28th August 2019.  A Scheme of Arrangement to save the business was approved by the High Court on 9th December 2019 and the Respondent exited examinership.  Under this Arrangement, an Investor refinanced the business and became the main shareholder, Padraic Hanley relinquished his directorship and shareholding and Mr H and Mr P became new Directors.  The Hanley family remained on as employees with the three Hanley brothers retaining their accrued service (Padraic Hanley as the General Manager, the Complainant as Operations Manager, Philip Hanley as a Floating Manager and David Hanley as a Restaurant Manager).  The Respondent retained the Fish Shack outlets and the remaining two restaurants were sold to other investors.  A verbal agreement between the Directors and the Hanley family as to the future operation of the business had not been committed to writing before the Respondent exited examinership.  In January 2020, the Directors’ Solicitors had furnished the Hanley family with a ‘Performance Incentive Plan’ which they had refused to sign contending that it was at variance with what had been verbally agreed.  Following Covid-19 and Government restrictions in March 2020, the Hanley family and other staff were placed on unpaid layoff.  The Hanley family members subsequently had their employment terminated in August 2020 by reason of redundancy.  At the material time, the Complainant was earning €892 gross for a 55-hour working week.  He claims that he was unfairly dismissed, subjected to excessive working hours and had not been provided with a written statement of terms of his employment and seeks compensation in respect of same.  The Respondent disputes all three complaints and contends that the Complainant was subject to a genuine and fair redundancy process, that he had responsibility for and control over his working hours and that Padraic Hanley was responsible for renewing contracts.

CA-00036277-004 - Complaint under Section 8 of the Unfair Dismissals Act 1977 - Unfair Dismissal

Summary of Respondent’s Case:

The Respondent was already in a financially vulnerable position having just exited examinership before the Covid-19 Pandemic hit in March 2020.  Arising from Government lockdown restrictions, the restaurants had to be closed and on 20th March 2020, along with other staff, the Complainant was placed on unpaid temporary layoff and in receipt of Pandemic Unemployment Payment (PUP).  Throughout this period, the Respondent suffered financially.  Two independent Reports were commissioned to review the impact of Covid-19 on the operation of the business.  Based upon their findings, the Respondent created a Business Case for potential redundancies arising from a necessity to restructure the business to make the requisite savings for its survival.  The Complainant’s role along with the roles held by Padraic Hanley, Philip Hanley, David Hanley and the Floor Manager in Parliament Street were identified as being at risk of redundancy.  Thereafter, a consultation process ensued entailing the following interactions between the Parties:

- On 9th July 2020, Mr H invited the Complainant to a Zoom meeting regarding the status of the business.

- On 10th July 2020, the Complainant attended a Zoom meeting with the Directors where he was informed that his role was at risk of redundancy owing to the financial difficulties faced by the Respondent due to the Covid-19 Pandemic necessitating restructuring of the business into standalone units.  The Complainant was asked whether he wished to volunteer for redundancy.  On the same date, the Directors wrote to the Complainant confirming that his role was at risk of redundancy and explaining the consultation process.

- On 13th July 2020, Mr H invited the Complainant to a Zoom consultation meeting the following week and on 14th July 2020, the Complainant sought confirmation that Padraic Hanley could attend in his place.

- On 15th July 2020, the Complainant emailed the Directors informing them that he was on certified sick leave and had commenced proceedings with the WRC and PIAB.  He further advised that as he was not in a position to attend any meetings, the Directors should engage with him by email and/or with his Solicitor.

- On 16th July 2020, Mr H emailed the Complainant to confirm that the Respondent could only engage directly with him in relation to the redundancy consultation process but would allow him the opportunity to do this through his Solicitor.  Mr H also asked the Complainant what accommodations he required.  The Complainant opted to have the redundancy consultation process conducted by email due to his sick leave.

- On 20th July 2020, Mr H emailed the Complainant with an invitation to apply for the role of ‘Restaurant Operations Manager’ based in Malahide at €14 per hour.  The email also asked him to make any suggestions in relation to alternatives and confirm whether he wished to avail of voluntary redundancy. 

- On 22nd July 2020, the Complainant emailed Mr H (copying in his Solicitor and Mr P) raising issues with his selection for ongoing layoff and the legitimacy of the redundancy process and creation of the ‘Restaurant Operations Manager’ role, requesting that the process be abandoned.  On 23rd July 2020, Mr H replied.

- On 5th August 2020, the Complainant emailed Mr H asking for an update on the redundancy process and whether a decision had been made and if so, when he would receive his statutory lump sum payment.  On 6th August 2020, Mr H replied confirming that no decisions had been made yet regarding any redundancies.

- On 7th August 2020, the Complainant emailed Mr H stating that his queries remained unanswered, confirming that he would not be applying for the “new role” and seeking either reinstatement to his position or an expeditious conclusion to the redundancy process which he did not regard as legitimate.

- On 10th August 2020, Mr H emailed the Complainant and his Solicitor seeking confirmation of any suggestions or alternatives they had, noting that the Complainant was not applying for the new role and stating: “This is a business based decision and does not reflect any personal or subjective point of view.”

- Thereafter ensued a further exchange between the Parties reiterating their respective positions.

- On 27th August 2020, Mr H wrote to the Complainant to confirm his dismissal by reason of redundancy.

- On 31st August 2020, the Complainant appealed against this decision on a number of grounds.  Thereafter ensued an exchange of emails regarding the independence of the Consultant appointed to hear the appeal in circumstances where he was employed by Graphite HRM, an associate company of Peninsula.

- On 17th September 2020, the Complainant attended an appeal hearing with the Consultant. 

- On 13th October 2020, the Consultant issued a Report upholding his dismissal by reason of redundancy.

Direct Evidence of Mr H, Director

Mr H outlined his extensive business and financial experience as a qualified Financial Advisor and Director of various companies.  He had been involved in a number of large-scale insolvencies working for a high-profile Liquidator and also has HR expertise.  Given his experience, he was approached by a private Investor (currently the majority shareholder) and Mr P, the other Director, with a view to devising a business plan for investment in the Respondent which was in financial difficulty and substantially insolvent.  This entailed engagement with the Hanley family and examinership parties and an agreement was reached to buy out the shareholding of the Fish Shack outlets for €600,000.  The remaining two restaurants were sold to other investors.  The goal was to grow the business into a sustainable nationwide chain.  Apart from the profiles provided by the Hanley family, there had only been a verbal agreement in relation to their roles following the takeover.  It was agreed that the Hanley family would be backed by the Directors to expand the Fish Shack business and would restate their positions in fresh contracts including additional responsibilities.  In return, the Investor acquired the shareholding in the current units and for any future units, the investors and operators would put forward a business plan and provide the capital.  Upon repayment of that capital, Padraic Hanley would own the units (as individual limited companies) on a 50/50 basis with the shareholders of the Respondent.  Whilst the Directors had put this in writing in a draft ‘Performance Incentive Plan’ furnished to the Hanley family, there had been no final signed agreement between the Parties.  Under new management and owing to the restructuring and renegotiation of rents, the Respondent had posted a small profit in 2020 and 2021 and is currently a profitable going concern. 

Mr H outlined the operation of the Respondent’s business under the new management after the takeover.  The day-to-day operations had remained with the existing management whom the Directors relied upon to “grow out the business and rehabilitate some of the bad practices that existed”.  This entailed taking on a new mandate to expand multiple units with different offerings.  As General Manager, Padraic Hanley retained responsibility for daily HR management including time management and employment contracts with interplay from the Operations Managers.  As demonstrated in the correspondence, whenever the Hanleys had brought any issue such as illness to the Directors’ attention, their instructions had been to “down tools” and ensure that they had sufficient time off and managed their time appropriately. 

Having previously worked within a Pandemic, Mr H was sensitive to the potential impact of Covid-19 at an early stage.  He had asked Padraic and Stephen Hanley to devise a plan for a skeleton crew but as this was ineffective, he had to step in and engineer a plan to keep the business operational during the Covid-19 Pandemic.  The Respondent had been trading at an ongoing loss and was now in the jaws of a Pandemic so a fundamental change in the business model was required to keep cashflow and the business going.  To this end, a Governance Report dated 14th April 2020 (‘the first Report’) was commissioned from two Consultants whom the Directors regarded as having the requisite expertise.  The Hanleys were invited to participate but declined on the basis that they did not regard the Consultants to be qualified as confirmed in correspondence.  This Report was opened at the hearing and recommended a Survival Plan providing possible annualised savings of €290,000 with ten short term cost-cutting possibilities for the Board to consider.  The first recommendation was: “the possibility of restructuring and streamlining the Head Office function which could generate annualised cost-savings amongst non-staff costs of c. €140k.”  Whilst the individuals were not named, the Head Office function was being undertaken by the Complainant, Padraic Hanley and one other staff member.  Restructuring and streamlining required an examination of each role for their operational necessity resulting in possible layoff or a change in responsibilities and costs mandate. 

In meeting their various responsibilities, the Directors felt that at this stage, an independent Business Review was required to ensure that they were taking the correct action.  To this end, they commissioned a second Report (‘the second Report’) dated 4th June 2020 from an Insolvency Expert which was also opened at the hearing.  Based upon a trading loss of €60,000 in the first four months to 30th April 2020 and a forecast of a trading loss of €220k for 2020, it endorsed the first Report and amongst its main findings stated: “It is imperative that the Company immediately implements an aggressive cost saving plan to manage fixed and administrative overhead(s) including but not limited to the 10 point plan as set out on page fifteen of the (first Report).” and “A restructuring programme should focus on the most material costs of the business including: Payroll – A redundancy programme together with optimisation of staff rotas should be considered in order to reduce payroll costs.  Rents – Engage with Landlords to renegotiate lease terms where possible, consider the requirement for the Head Office currently rented in Stillorgan at €1,000 per month.”  Based upon the two Reports, the Directors authorised a document entitled ‘Business Case for Proposed Redundancies PBR Restaurants Ltd’ dated 18th June 2020 giving the business reasons behind the potential redundancies/business change as: “The business faces significant challenges from COVID-19 related impact to trading and it’s cost base is not sustainable.”  The key driving forces were identified as “COVID 19, a reduction in restaurants from 5 to 3 without any alteration in management overhead(s).”  The alternatives that had been considered included: “Temporary layoff, shuttering of certain units, negotiation with landlords and other creditors.”  The proposed changes included: “…a reorganisation of the business, delegating significant responsibilities to in restaurant staff, elimination of central office roles, introduction of performance based management.”  The Directors were confirmed as having oversight of the process.  Under the heading: ‘Who is affected?  Which particular posts/jobs are at risk?’, the following were listed:

• Head Office – General Manager – Padraic Hanley
• Head Office – Operations Manager – Stephen Hanley
• Floor Manager – Malahide – David Hanley
• Floating Relief Manager – Philip Hanley
• Floor Manager – Parliament St. – AB

Their salaries, start dates and the terms and conditions of their employment were outlined.  Under the heading: “Any other key considerations?”, the Report noted: “Padraic and Stephen have variously submitted medical certs for stress and medical illness.” and “Padraic, Stephen, David and Philip Hanley have set out multiple grievances – copies can be provided.”  Vacancies for “an enhanced floor manager position encompassing responsibility for the performance of restaurants in conjunction with the head chef in each outlet” and “junior chef positions” were identified.  The timescale for the proposed changes was specified: “As soon as prudent – note the enhanced manager role should be contemporaneous with reopening the Malahide unit which we had to close as it was loss making.  Target opening date is 29th June”. 

Thereafter ensued a consultation process as outlined above including a Zoom meeting on 10th July 2020 between the Directors and the Complainant wherein the financial circumstances of the Respondent were outlined.  A further meeting was arranged but as the Complainant went on sick leave, the consultation process progressed by email including an invitation to apply for the new role of ‘Restaurant Operations Manager’.  It was publicly advertised as the responsibilities were entirely different to any subsisting role.  Philip Hanley and David Hanley had also been invited to apply for this role.  Mr H had not seen the Complainant demonstrate the requisite skillset required to be slotted straight into the role but had considered him to be potentially suitable.  The Complainant declined to apply and following an open competition it was filled by an Operations Manager from a competitor.  There were no other suitable available roles which could have been offered to the Complainant.  Other than stating that he wanted to return to his role, the Complainant had not suggested any alternatives.  The Directors had answered all his queries regarding the redundancy process.  Accordingly, the Complainant was dismissed by reason of redundancy and was paid his €13,800 statutory entitlement.  This decision was upheld on appeal heard by a Consultant from Graphite HRM, who was confirmed as being unavailable to give evidence at the hearing.

Mr H confirmed that only the four Hanley family members were made redundant and as Parliament Street had re-opened, the Floor Manager had not been subject to a redundancy process and subsequently resigned.  This Adjudication Officer asked Mr H how these redundancies could be justified during the peak of the Covid-19 Pandemic at a time of uncertainty when in fact all the Hanley family members were unpaid and in receipt of PUP and thus of minimal financial burden to the Respondent.  Mr H replied that they were still an ongoing liability to the Respondent which resulting from Covid-19 had “moved to a model that did not foresee them in the future.”  This was the recommended model and was already operating successfully.  Mr H confirmed that before the takeover, the Respondent had 16 staff and after Covid-19, there were less than 10 (with 8 working in Sandycove in a bubble) and at the date of the hearing, there were 31 employees.  (Note, the second Report states that the Respondent had retained circa 45 employees after the takeover.)

Mr H referred to the numerous issues and grievances raised by the Hanley family as contained in copious email exchanges including allegations that the Directors had stated that they would be removed from the business and had discriminated against the family thereby causing them stress and illness.  In this respect, he said there had been a pattern of misrepresentation of communications which the Directors had repeatedly sought to correct.  There would be inevitable bumpy periods during a takeover which had to be managed.  Reflecting upon this takeover, he said that in all of his takeovers this had been a unique experience for him and “taking over the operation of Ukrainian assets during the Crimean war was easier.”  However, he characterised the Directors’ personal relationship with the Hanley family as being amicable.

Cross-examination of Mr H, Director

The Complainant’s position was put to Mr H, being that by late January 2020, relations had broken down between the Directors and the Hanley family.  Email exchanges in this respect were opened at the hearing and put to Mr H.  They may be summarised as the Hanley family asserting that the Directors had reneged on the deal thereby taking their business and were undermining their roles with the Directors refuting same.  Mr H accepted that the Complainant had complained about various matters but his understanding of the agreement was fundamentally flawed.  It was put to Mr H that the relevant issue was not what had been agreed but rather that there was a significant dispute around the deal and the Directors’ behaviour towards the Hanley family.  Mr H maintained that the relationship between the Parties was an “amicable relationship” without any interpersonal issues and that takeovers can be bumpy with points of friction.  This was a commercial situation and business relationship with differing expectations not beyond remedy.  The Directors had sought to remedy and assist with the issues raised by the Complainant but had to repeatedly ask him to reread their emails.  They had also provided the Hanleys with coaching in relation to the business plan in a bid to get the Respondent out of insolvency as was their duty and entitlement. 

It was put to Mr H that relations had been anything but amicable as evidenced by a further email of 11th March 2020 from the Complainant to the Directors outlining a number of concerns including the “enormous amount of stress in work” he was under arising from the dramatic difference in what had been agreed between the Parties in December 2019 and what they were now asserting; his employment being threatened by Mr P whom he alleged had said that he would “clear house” at a heated meeting on 14th January 2020 and in a telephone conversation with Padraic Hanley on 22nd January 2020, had said about the Complainant’s discontent with the situation: “if Stephen doesn’t like it, then maybe Stephen will have to go”; his view that Mr P was eroding his role as Operations Manager and had undermined him in front of another member of staff; and being put under pressure to open the Dun Laoghaire East Pier takeaway unit during the offseason in stormy unsafe conditions.  Mr H replied that his “goal is not to be Stephen Hanley’s friend, it is to set out the expectations of the Company”.  In a further email of 22nd March 2020 to Mr P regarding his layoff, the Complainant further stated: “You have not addressed any of my concerns relating to the fact that on two occasions you talked about sacking me or the fact that I addressed the issue with (Mr H) after the directors meeting only for my concerns to be dismissed.  It seems now that you have used the covid 19 crisis as an opportunity to do exactly what you said you were going to do i.e. “clear house”.  Mr H maintained that he had responded in detail and addressed all of the Complainant’s concerns throughout. 

When pressed on whether he regarded the aforesaid as constituting a dispute, Mr H replied that this was “noise” associated with the takeover and had no bearing on the business decision to make the Complainant and the other three Hanley family members redundant.  It was put to him that to the contrary, he had had enough of the Hanleys and their grievances and had engineered a redundancy process to dismiss them.  Whilst accepting that there were ongoing disputes, he maintained they were commercial matters as opposed to interpersonal issues.  He had also been at the meeting on 14th January 2020 and denied that Mr P had referred to “clearing house”.  However, he accepted that raised voices and bad language had been used by all concerned at the meeting.  He considered this part of the takeover process.  When asked whether he had sought any third-party assistance to deal with the Parties’ differences such as mediation, he replied that business survival took precedence over a commercial dispute.  Their roles as Directors were to ensure that the Company survives and is hopefully profitable for the shareholders but at least can discharge its creditors.  It was put to Mr H that the Complainant had never been consulted or given written justification for his layoff without pay during the Covid-19 period until his dismissal.  Mr H maintained that there had been no role for him at the time and did not think that he had any obligation to respond to his concerns in this respect.  The Complainant and Padraic Hanley had in fact been asked to produce a skeleton crew but had not done so.  It was put to Mr H that by 7th May 2020, relations had deteriorated such that the Complainant had emailed Mr H copying in the Investor and his Solicitor: “I don’t know why you behave the way you do or how you think it is ok.  Since yourself and (Mr P) came into the business in December you have caused me an enormous amount of stress.  I have been bullied, humiliated and intimidated by both you and (Mr P).  It got so bad, I haven’t had a proper night’s sleep in months, I can’t eat, I’m losing weight, I’ve been to my doctor and now I’m awaiting an appointment with a counsellor.  I was temporarily laid off in March and you have continued to bully me via email, can you please stop, or (Investor) can you please intervene and put a stop to (Mr H’s) behaviour towards me…”  Mr H had responded on the same date empathising with the Complainant’s position but not accepting his characterisation of the situation.  It was put to him that these allegations of bullying, humiliation and intimidation was extremely serious.  Mr H denied any wrongdoing on the part of the Directors and viewed this “as a man on layoff under pressure”. 

Mr H was questioned about the two Reports used to justify the redundancy process.  He was asked why the projected loss used was based upon offseason (January-February 2020) figures without reference to the Government Covid-19 financial supports.  He replied that Covid-19 financial supports were not yet in place at the time.  At this juncture, it was clarified that the Fish Shack outlets had been the profitable part of the business and the projected loss requiring redundancies was directly as a result of the impact of Covid-19.  It was put to Mr H that seven of the ten recommended cost-cutting possibilities had been redacted in the first Report furnished to the Complainant asking for his comment, thereby placing him at a significant disadvantage.  Mr H accepted that the redactions had been made but contended that the redacted portion had not been relevant to him and in any event, was contained in the body of the Report.  It was put to Mr H that management had provided all the information for the first Report including the projected loss leading to the recommendation of a redundancy process as endorsed by the second Report.  Mr H responded that no decision had been made to make the Hanleys redundant before the second Report.  In this respect, it was put to Mr H that the second Report did not recommend anyone’s redundancy, least of all the Hanleys. 

Mr H was asked about the efforts made to find alternatives to redundancy including consideration of voluntary redundancy in accordance with its redundancy policy before making the Hanleys redundant.  In this respect, the existing Employee Handbook stated: “If redundancies cannot be avoided, consideration may be given to applications for voluntary redundancy, where appropriate.  It may not be possible to accept every application for voluntary redundancies depending on the requirements of the business.  If the selection of employees for redundancy becomes necessary, any criteria for selection will be discussed with you at the time where possible.  At all times the overriding consideration will be the future viability of the business and we reserve the right to deviate from this policy where deemed necessary.”  Mr H maintained that restructuring had been the only available course.  He denied that the only selection criteria used was the fact that the Complainant was a Hanley.  He was asked how a redundancy situation could occur in tandem with the Respondent hiring staff including the ‘Restaurant Operations Manager’ role.  He replied that this was an entirely different role.  Once again, it was put to him that there was a very personal dispute between the Parties evidenced by the fact that the Directors had a disputed car seized from Padraic Hanley during a Labour Court hearing between the Parties.  He rejected the suggestion that they had similarly used the Covid-19 Pandemic in an opportunistic way to get rid of the Hanleys under the cloak of redundancy.

Legal Submissions

The relevant statutory provisions under Section 6 of the Unfair Dismissals Act 1977 and Section 7 of the Redundancy Payments Act 1967 were set out on behalf of the Respondent and to avoid repetition are set out in the findings and conclusions herein.  Reliance was placed upon the leading High Court Judgment in Ponisi -v- JVC Europe Ltd (2011) IEHC 279 where it was held: “Redundancy is not however, a personal choice.  It is, in essence, the external or internal economic or technological reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner.  As such redundancy is entirely impersonal.  Dismissal, on the other hand, is a decision targeted at an individual.”  It was submitted that a genuine redundancy situation had arisen directly as a consequence of an external factor, being the financial impact of Covid-19 following examinership.  Management was also top-heavy requiring restructuring which had to happen at some stage.  The redundancy of the Operations Manager role held by the Complainant was impersonal and the Respondent had sought to retain him by way of consultation and invitation to apply for an alternative role.  It was contended that the Respondent had also complied with the requirements for a fair redundancy as set out in St. Ledger -v- Frontline Distribution Ireland Ltd 1995 E.L.R. 160, Boucher & Others-v- Irish Productivity Centre 1994 E.L.R. 205, Jeffers -v- DCC Ireland Ltd UD169/2000 and Cambridge & District Cooperative Society Ltd -v- Ruse 1993 I.R.L.R. 156.  Regarding the issues raised by the Complainant with the Reports, it was submitted that the redundancy process was solid and the authors of the Reports are highly regarded.  There was no obligation to show the Reports to the Complainant beforehand so long as he was appraised of the situation.  Regardless, the Hanley family had complete knowledge of the Respondent’s operation.  Overall, the Complainant had been properly and fairly made redundant arising from a genuine redundancy situation. 

It was further submitted that without prejudice to the Respondent’s position, there was very little verifiable evidence to support the Complainant’s efforts to mitigate his losses in accordance with Section 7(2)(c) of the Unfair Dismissals Act 1977.  There would have been positions available within the retail business which was booming throughout Covid-19.  In this respect, reliance was placed on the EAT decision in Coad -v- Eurobase (UD1138/2013)in terms of the efforts that an employee should make to mitigate their losses.

Summary of Complainant’s Case:

It is the Complainant’s position that from the very commencement of new management following the Respondent’s exit from examinership, unhappy differences arose between the Directors and the Hanley family.  There was a difference of understanding in relation to what had been verbally agreed regarding the future operation of the Respondent.  Thereafter followed a number of heated meetings between the Parties wherein Mr P made comments appearing to suggest that the Complainant’s tenure was insecure.  The Hanley family took issue with what they regarded as aggressive and unprofessional behaviour by the Directors towards them.  This had caused the Complainant to become stressed and unwell and raise a number of grievances by email which were never addressed.  By March 2020 and the arrival of Covid-19, relations between the Parties had reached crisis-point.  The Hanley family were placed on layoff along with other staff but the Complainant was not permitted to return to work without any justification and in circumstances where a new person had been hired to undertake some of his duties.  The Directors had utilised the Covid-19 Pandemic and its impact on business to embark upon a process to dismiss the Hanley family, relying upon two flawed Reports which they had commissioned.  The first Report was conducted by unqualified persons, contained a number of errors, did not afford the Complainant an adequate opportunity to engage and seven of the ten recommended cost-cutting possibilities were redacted.  The second Report was procured to support a business case to dismiss the Hanley family under the guise of redundancy.  The Complainant and the other Hanley family members were not afforded an opportunity to provide any input or to consider its contents and it was first furnished after referral of this complaint. 

During the same period, the Respondent had hired other staff and continued to expand.  Furthermore, a new role entitled ‘Restaurant Operations Manager’ with similar duties undertaken by the Complainant was also created on lesser pay and he was invited to apply for that position as opposed to simply being offered the role.  It is noted that the advertisement for this role stated: “Fish Shack is a successful chain of family friendly seafood restaurants.  Having opened outlets in Sandycove, Malahide, Parliament Street and on Dun Laoghaire Pier, Fish Shack is a growing and dynamic business and is currently seeking a new Restaurant and Operations Manager to join the Malahide restaurant in Malahide village.”  The profile required: “An experienced manager who has proven progressive management experience along with some multi site experience within the Catering/Hospitality/Food Industry – A minimum of 3-5 years experience would be an advantage.”  The Complainant along with the other three Hanley family members were the only staff members out of approximately 45 remaining staff to be made redundant in August 2020.  The appeal which upheld the decision was presented as external and impartial but was conducted by a Consultant from an associate company of Peninsula.  It was the Complainant’s case that his redundancy was a sham redundancy devised to remove the Hanley family from the business and there had been no fair procedures resulting in his unfair dismissal.  In particular, it was submitted that the Respondent had failed to (1) properly inform the Complainant regarding the need for redundancies; (2) provide any selection criteria; (3) provide a proper consultation process including replying to his requests for information regarding the redundancy process; (4) engage properly with the Complainant regarding alternatives to redundancy or offer an alternative role and (5) afford the Complainant a proper appeal by an independent body.

Direct Evidence of the Complainant

The Complainant commenced employment with the Respondent, being his family’s restaurant business, as a part-time waiter whilst still at school on 14th November 2008.  He worked during weekends and holidays whilst at college and having secured an Honours Business Degree, became permanent in 2012.  Having worked in all areas of the business he eventually became the Operations Manager.  He earned €892 gross per week at the material time of these complaints.  By 2019, the Respondent had circa 100 employees. 

Owing to financial difficulties, the Complainant’s father, Padraig Hanley had put the Respondent into examinership in August 2019.  The entire family had worked hard to ensure that it successfully exited examinership in December 2019.  Following examinership, the Respondent was taken over by new management under the directorship of Mr H and Mr P on foot of a verbal agreement with the family.  However, relations immediately deteriorated owing to a disagreement as to what deal had been agreed as evidenced by the exchanges of emails opened at the hearing and as set out above.  The Complainant had understood that as founders, it was agreed that the Hanleys would continue to work in the business, with Padraic Hanley relinquishing his directorship and becoming an employee.  Once the investment had been repaid, the family would return to a 50% shareholding of the business and not just of the new units as contended by the Directors.  The Hanleys had tried to get the agreement in writing in advance of the High Court Order approving the Scheme of Arrangement on 9th December 2019.  However, Mr P had stalled this until after exiting examinership and when the Hanleys pressed for heads of terms to be committed to writing, reneged on the deal.  This immediately put a strain on the relationship between the Parties.  The Directors were also being unprofessional and aggressive in their dealings with the Hanley family.  The Complainant had tried to remain positive and look for a way forward given that his family had built up the business over the previous twelve years.  However, at a heated meeting about the deal with the Directors on 14th January 2020, bad language had been used and Mr P had shouted that they would have to “clear house”.  At the same time the Complainant was being put under enormous pressure to open the Dun Laoghaire East Pier unit which was historically closed during the winter months for health and safety reasons.  It seemed that no matter what he did he was being criticised by the Directors and was beginning to find the stress unbearable.  By late January 2020, the Directors’ treatment of him was “horrendous” and his job had been threatened a few times and from thereon, he put everything in email.  Following a Board meeting with the Investor on 4th March 2020, Mr P had been aggressive towards him again.  The Directors had refused to accept his characterisation of the issues and made no efforts to resolve matters.  None of his grievances had ever been investigated.  He could not sleep or go out and was struggling to eat.  He attended his GP who prescribed him sleeping medication and he also had to avail of counselling. 

This situation persisted and following Covid-19 reaching Ireland, there were differences of opinion between the Complainant and the Directors as to what was feasible and legal in terms of keeping the business open.  Thereafter, the Directors went behind their backs and decided to run the business themselves, placing the Hanley family on layoff.  On 19th March 2020, the Complainant heard that he was to be laid off without any consultation whatsoever when such a decision would have been within his remit.  He had also questioned the decision to lay off the most senior staff as this did not make any sense at a time of crisis.  He was told that he was “far too expensive” to be kept on and was placed on unpaid layoff from 20th March 2020 until his dismissal.  He learned that an acquaintance of Mr P was hired to take over several of his responsibilities.  He felt discriminated against owing to being a member of the Hanley family and was of the view that because of the continuous strife, the Directors had used the Covid-19 crisis as an opportunity to get rid of the Hanleys.  The terse exchanges of emails setting out the Parties’ differences were opened at the hearing.

On 26th March 2020 and whilst on layoff, the Complainant received an email from Mr P requesting that he liaise with two external Consultants to “help us identify how to make the Fish Shack a viable business in the short-term and thereafter in the medium-to-long term.”  He had voiced his concerns about their qualifications, particularly as they had no prior experience in the restaurant business.  The Directors had refused to provide any information about the Consultants and he began to receive unsolicited contact from one of them seeking to interview him.  He requested the list of questions to be asked but was denied same.  He had serious reservations about the intent behind their appointment and felt extremely intimidated.  He asked to engage by email which was refused and later held against him.  He was called to a meeting to discuss the Report and asked for a copy beforehand which was also denied.  The meeting did not take place and the Hanleys provided their feedback setting out their concerns by email.  The Complainant had taken issue with the contents of the Report, the most glaring inaccuracy being that it was based upon there being six staff in the Head Office team when there was just three.  Additionally, the figures relied upon had been taken from the off-season period to extrapolate potential losses which was entirely inaccurate.  The Fish Shack outlets had been the profitable part of the business and the two restaurants sold to the other investors had been dragging it down.  The Complainant also took issue with the redaction of the possible cost-cutting possibilities.  He had sought the unredacted version numerous times from the Directors but the only information he received was that this portion did not pertain to his redundancy.  He first received the unredacted version within the documentation appended to the Respondent’s submissions to the WRC. 

The Complainant learned that a second Report had been commissioned from an Insolvency Expert.  He had requested the Report numerous times but had never been provided with a copy until it was included within the submissions to the WRC.  Meanwhile, the acrimonious situation persisted throughout this period and the Complainant was diagnosed with Acute Stress Disorder.  He was receiving emails from Mr P late at night and had to ask him to stop.  In July 2020, he was informed that his role was at risk of redundancy and repeatedly sought information regarding the selection criteria used but none was provided.  A redundancy consultation meeting had gone ahead on 10th July 2020 without his having sight of the unredacted version of the first Report or the second Report.  The minutes were short and there had been no discussion of what could be done to avoid his redundancy.  He was not offered any alternative roles and was simply asked to give a reason as to why he should not be made redundant.  Regarding the ‘Restaurant Operations Manager’ role he was invited to apply for, he contended that it was wholly unrealistic to pay €14 per hour (notably increased when advertised) for what the role entailed.  As the Operations Manager with oversight for 100 staff in five restaurants, he would have had the requisite skillset.  As the position was based in Malahide it was also have been too difficult to travel back to his home in Stillorgan at night having lost the use of a company van.  As it had already been advertised, the decision to replace him had already been made in any event.  There had been no consideration of offering voluntary redundancy to the other staff in accordance with the Respondent’s policy.  The process had been dragged out for a period of months and paused whilst the Directors were on holidays.  Along with the other three members of the Hanley family, he was dismissed purportedly by reason of redundancy on 27th August 2020.  None of the other circa 45 employees had been made redundant and indeed new employees were recruited before and after his redundancy.

The Complainant appealed against this decision but it was upheld.  The appeal was conducted by a Consultant from a company called Graphite HRM who had been presented as external and impartial despite being from an associate company of Peninsula.  The Directors had not been forthright about this connection and it was through his own enquiries that he had discovered that the two companies had the same Director and phone number.  Whilst he had felt that he had received a good hearing, he was disappointed that the Report had omitted to consider his evidence of his grievances including threats by the Directors to sack him and relied heavily upon the first Report.  He was of the view that only the four Hanley family members had been made redundant because the Directors felt they were difficult.  It was easier to get rid of them and ‘kick the can down the road’ and deal with the consequences at a later stage.

The Complainant sought compensation by way of remedy.  He had earned €46,385 or €892 gross per week and received €13,800 in statutory redundancy payment.  He had been unemployed and on PUP for a further 11 months until obtaining employment in a new family restaurant business on a salary of €38,532.  He sought compensation in respect of his financial loss to date plus ongoing future loss of earnings in circumstances where his current salary had an annual shortfall of €7,853 on his salary with the Respondent.  In relation to the redundancy payment, reliance was placed upon a WRC decision finding that there was no provision for set-off between a statutory redundancy payment and compensation for financial loss.  In terms of mitigation, the Complainant said that at the time, he had not been thinking about having to prove that he was seeking alternative employment.  He had also been limited to seeking local employment owing to the loss of his transport via the company van.  He had made extensive efforts to seek employment from all the restaurants within commuting distance by calling into them in person as being the best way of obtaining work within the business.  However, he had been unable to secure employment because they were operating at a limited capacity owing to Covid-19.  He had also considered changing his career and applied for several facility manager jobs.  He provided a list of his online and in-person job applications.

Cross-examination of the Complainant

The Complainant was asked what he meant by a ‘dragged-out’ redundancy process.  He replied that the Directors had been away on holidays in July and August.  It was put to him that it had only lasted between 9th July and 27th August 2021, during which time there had been a number of consultation meetings.  It was put to him that the ‘Restaurant Operations Manager’ role was not a Head Office role.  He agreed that he had been invited to apply for the role but repeated that it would have been completely unsuitable and financially unfeasible.  It was put to him that he had not made any suggestions for alternatives.  Whilst he accepted that he had not been involved in a redundancy process previously he said he was able to recognise that it had been handled badly including the purported independent appeals process.  The Complainant rejected the contention that a narrative had been created around the four Hanleys’ redundancies to the effect that the Directors had been ‘clearing house’ when in fact the Directors had taken over a top-heavy company with higher salaries than could be justified.  He refuted the contention that business decisions had to be made on behalf of the Respondent and that is why he had been made redundant.  In relation to mitigation, the Complainant was questioned regarding the absence of vouching confirming his applications for alternative employment.  It was also put to him that an examinership followed by the Covid-19 Pandemic would be stressful and there was an absence of medical evidence.

Direct Evidence of Padraic Hanley

Mr Hanley outlined the history of the Respondent’s business which he had founded in 2008 and its acquisition of various restaurant outlets.  In the Summer of 2019, the company had overextended itself and found itself in financial difficulty.  Although the Fish Shack side of the business had been extremely profitable, the other two restaurants had been dragging it down.  He had put the Respondent into examinership himself in a bid to save the company and jobs.  There had been lengthy talks with the new Directors regarding the future operation of the Respondent and Mr Hanley had drawn up heads of terms.  However, and despite repeatedly asking Mr P to draw up an agreement in the days before exiting examinership, this was stalled.  Mr Hanley had no alternative but to let the examinership go through without a written agreement between the Parties as the whole company would have fallen otherwise. Thereafter, relations rapidly deteriorated as evidenced by their terse exchanges of correspondence with Mr Hanley asserting that the Directors had gone back on the deal and taken his business.  The two Directors would give Mr Hanley conflicting instructions – one would tell him to do one thing whilst the other would threaten to sack him if he did it.  Amongst a myriad of issues arising, there was an argument over a payment due to him and a refusal to reinstate his salary after the examinership.  He did not regard these differences as normal bumps associated with a takeover and maintained that the family were treated extremely harshly.  He expressed the view that far from being the promised ‘white knight’, the Directors had wanted the Hanleys out of the business, being the only reason they had been selected for redundancy.

Legal Submissions

Section 6 of the Unfair Dismissals Act 1977 and Section 7 of the Redundancy Payments Act 1967 were set out on behalf of the Complainant and to avoid repetition, are set out in the findings and conclusions herein.  It was submitted that where the fact of dismissal is accepted as in the case herein, the burden of proof shifts to the Respondent to prove that the dismissal was fair and based upon a substantive ground under Section 6 of the Act.  In terms of the heavy burden upon an employer to demonstrate that fair procedures were used in arriving at a decision to dismiss, reliance was placed upon the Supreme Court Judgement in Glover -v- BLN (1973) IR 388 and the Labour Court Determination in Kilsaran International Ltd -v- Vitalie Vet (2016) 27 E.L.R. 237.  It was submitted that the Complainant was entitled to the same level of procedural fairness in determining whether his role had been made redundant, whether he should have been selected for redundancy and in determining whether alternative employment or other alternatives to redundancy were available.  In assessing the fairness of the Respondent’s actions, regard should also be had to the size and nature of the Respondent as well as to the position and length of service of the Complainant. 

Specifically in relation to a dismissal on the ground of redundancy, reliance was placed on a decision of the EAT in Boucher & Others -v- Irish Productivity Centre 1995 E.L.R. 205.  The EAT held that in the absence of an agreed procedure for selection for redundancy under Section 6(3)(b) of the Unfair Dismissals Act 1977, the employer is obliged to act fairly in relation to the criteria to be applied.  It confirmed that the onus of proof is on the employer to establish that it acted fairly in the selection of an employee for redundancy and the fairness or unfairness of the dismissal is to be judged by an objective standard of the way in which a reasonable employer in those circumstances in that line of business and at that time would have behaved.  Where the employee’s contribution or versatility is considered in relation to any assessment for selection, the EAT held that they should be afforded an opportunity to give and have their input considered.  In Cusack -v- Dejay Royale Alarms Ltd 2006 17 E.L.R. 51, the EAT held that an employee was entitled to be provided with reasonable notice of an impending redundancy situation, to be provided with an opportunity to engage with their employer regarding alternatives to redundancy and to make genuine efforts to find alternative employment for an employee.  In the instant case, it was submitted that the Respondent had not discharged its obligations in this respect representing a fundamental breach of fair procedures.  In Ebay -v- Iona National Airways UD873/91, the EAT held that a purported redundancy dismissal was unfair as whilst a general redundancy situation may have been said to exist, this did not justify the dismissal of the claimant.  It also relied upon the fact that the Respondent had taken on new employees since the claimant’s dismissal.  In Sheehan & O’Brien -v- Vintners Federation of Ireland Limited 2009 E.L.R. 155,the EAT held that albeit that a redundancy situation existed, deficiencies in the process of dismissing two employees by reason of redundancy rendered the dismissal unfair.  In that case, the EAT was critical of the employer’s failure to give genuine consideration to proposals put forward, offer any training or properly consider either of them for a role in Head Office.  In Walshe -v- Stauntons Intersports t/a Elverys Sports Limited 2000E.L.R. 94, theEAT heldthat the dismissal of the claimant by reason of redundancy was unfair in circumstances where she had been expressly told that her job was secure after a takeover.  When this turned out not to be the case no effort was made to consider suitable alternatives before her dismissal.

It was submitted that the process engaged in by the Directors of the Respondent to dismiss the Complainant was biased and prejudged.  Far from being amicable as contended by Mr H, there was a pre-existing bitter and acrimonious relationship between the Directors and the Hanley family as outlined in evidence.  Covid-19 was used as an opportunity to get rid of the four members of the Hanley family under the guise of redundancy.  This was evident given that solely members of the Hanley family were made redundant.  To this end, the two Reports were pre-engineered to show that there had to be redundancies at management level, the Respondent had not adhered to its own policy to consider voluntary redundancy first and the contention that a redundancy situation was in existence in relation to senior management whilst at the same time recruiting a senior manager or hire a cheaper alternative was not stateable.

It was pointed out that as the Consultant who conducted the appeal was not available to give evidence, he could not be cross-examined in relation to the appeals process and his decision to uphold the Complainant’s redundancy.  In the absence of such evidence, it was contended that the Respondent could not discharge the burden of proving that the appeals process was fair.  It was submitted that the appeal was central to the upholding of the decision and in this respect, reliance was placed upon ADJ-00000381.

Findings and Conclusions:

The Complainant contends that he was unfairly dismissed in a sham redundancy process to rid him and his family from the Respondent following a takeover and in the absence of any fair procedures.  The Respondent maintains that the Complainant was properly and fairly made redundant.  I am therefore required to determine whether the Complainant has been fairly dismissed by reason of redundancy. 

It is firstly necessary to set out the requisite statutory provisions pertaining to this complaint.  The applicable portions of Section 6 of the Unfair Dismissals Act 1977 (as amended) provide as follows:

“6(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…

(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, and…

(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so- (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and…”

It is further noted that Section 6(3) provides for specific circumstances where a redundancy is deemed to be automatically unfair subject to the generality of Section 6(1), none of which apply in the instant case.

Redundancy is defined by Section 7(2) of the Redundancy Payments Act 1967 (as amended) as follows:

“(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concernedthe dismissal is attributable wholly or mainly to-

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

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

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

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,…”

Subject to the generality of Section 6(1), Section 6(4)(c) of the Unfair Dismissals Act 1977 provides that the dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy.  As observed by Charlton J. in the leading case of JVC Europe Ltd -v- Ponisi (2012) E.L.R. 70: “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.”  The legislation as interpreted by caselaw including that cited above requires the employer to (1) establish that a genuine redundancy situation existed and if so, that the dismissal resulted wholly or mainly from redundancy and (2) conduct itself reasonably throughout including adherence to fair procedures.  This includes a fair selection process and the taking of reasonable steps to identify alternative employment.  Invariably, these requirements will be inextricably linked.  Where an employer has no agreed redundancy selection policy, it is well-established in caselaw that the employer must act fairly and reasonably. 

In the instant case, the Hanley family had founded and run what had been a successful family business.  After overextending itself and running into financial difficulty in Summer 2019, the Respondent had successfully exited examinership under new management in December 2019 only to be met with the global Covid-19 Pandemic in March 2020 and the unprecedented challenges it posed.  It is noted that whilst the Parties have diametrically opposing views, much of the evidence is not in dispute.  The main factual issues are whether there was a pre-existing dispute between the Parties and whether Mr P had referred to the removal of the Complainant before Covid-19 and the ensuing redundancy process.  This lends support to the Complainant’s contention that there was an ulterior motive for making only the Hanley family members redundant.  In this respect, Mr H sought to dismiss and downplay differences between the Directors and the Hanley family as “noise” in his evidence to suggest that their differences had nothing to do with the decision to make them redundant which was a “business decision”.  Having reviewed the inter partes correspondence, I am satisfied that there had been a very troubled relationship between the Parties from the outset.  This primarily arose from the absence of a clear written agreement as to the future operation of the business and the new management style.  The lack of delineation between the Hanleys’ roles and the Directors’ roles also caused issue as apparent from the correspondence.  I find the issue of whether the dispute was interpersonal or commercial to be wholly academic particularly in the context of a family business takeover.  For the purposes of this investigation, it matters not what the agreement was but rather how the Parties’ differences were handled.  With Padraic Hanley having had to relinquish his shareholding, the family were already in a weakened position.  Naturally, the Directors were driven to make a success of the business and realise a return.  However, when differences arose, unfortunately, no efforts were made to ultilise the company grievance procedures or seek third-party intervention such as mediation to address them.  The Directors’ responses to the family’s grievances which can be summarised as a refusal to accept their characterisation can at best be described as ‘lip service’ and their total disregard for the welfare of the Complainant whilst on sick-leave for work-related stress is quite staggering.  In the absence of any direct evidence from Mr P to the contrary, I prefer the Complainant’s evidence that there had been references to his leaving the Respondent prior to Covid-19 and the ensuing redundancy process.  Thus, the Parties had already embarked upon a trajectory towards a complete breakdown in relations, potential litigation and an inevitable parting of ways before Covid-19 hit thereby creating a perfect storm. 

Having considered all of the evidence, I must reach the inescapable conclusion that the new management utilised the Covid-19 Pandemic to embark upon a blinkered cynical process to make the Complainant and the other three members of the Hanley family redundant in a sham redundancy process as evidenced by:

(1)  Whatever about their selection for layoff, no rationale was provided for retaining them on layoff until they were made redundant whilst at the same time, allowing other members of staff to return to work.

(2)  No rationale was provided for bypassing its own policy to offer voluntary redundancy as a first resort.

(3)  The Respondent’s position that it intended to scale back the business not only as a temporary response to the Covid-19 Pandemic but also into the future is inconsistent with the reality of the situation and its original plan to expand the business.  It is not disputed that the Respondent was advertising for staff in tandem with the process of making the Hanleys redundant and notably the advertisement for the ‘Restaurant Operations Manager’ role referred to the Respondent as “a growing and dynamic business”.  Although differing figures were provided, Mr H confirmed that the Respondent’s staff had since grown.

(4)  A cursory examination of the two Reports relied upon to support the Hanleys’ redundancy indicates that they were skewed towards presenting a financial forecast that supported a redundancy programme involving cutting management.  In this respect it is acknowledged that no expert would have been able to predict the financial impact of Covid-19.  However, both Reports relied upon off-season figures to indicate a future loss when in fact it is common case that the Fish Shack side of the business had been profitable and the successful Dun Laoghaire Pier unit was only open during the Summer months.  The Reports were compiled early into the Pandemic and as such, did not factor in Government financial supports.  The first Report as endorsed by the second Report was critical of the manner in which the business had been run and emphasised the removal of management as representing a significant cost saving e.g. “In ‘ordinary’ circumstances, a ‘Head Office’ management staff of six people costing an estimated €350k p.a. (including motor and other expenses) for a relatively-modest restaurant business might be deemed to be very high.” and “The Board should consider if it is appropriate to introduce a new, lean Management Structure, which could target annualised cost savings of c.€140k.”  The first Report was also based upon an erroneous assumption that the Head Office function was being conducted by six persons when in fact it was being conducted by three persons at the time.  The covert manner in which both Reports were compiled and withheld copper fastens my views.  In particular, seven of the ten cost-cutting possibilities in the first Report were redacted until referral of this complaint, and the Hanleys who had a wealth of knowledge and experience in the business were not consulted in relation to the second Report or provided with same.

(5)  Based upon the two Reports, the Directors authorised a ‘Business Case for Redundancies…’.  Notwithstanding the bias towards making management redundant exhibited in the two Reports, this made the further leap of identifying only the roles held by the four Hanley family members along with one other Floor Manager role in Parliament Street as being at risk of redundancy when other managerial roles and none of the other circa 45 employees were included without any rationale for their exclusion.  Notably, the person holding the other Floor Manager role in Parliament Street was not subject to a redundancy process.  The Business Case also cited the fact that Padraic Hanley and the Complainant had submitted certificates for stress and medical illness and the Hanleys’ “multiple grievances” as other key considerations. 

(6)  The Complainant was not offered any alternative roles within the Respondent and was only invited to apply for the role of Restaurant Operations Manager when it was a role well within his capacity.  I am doubtful that this was a bona fide new role given that David Hanley (also made redundant) had held the Manager role for Malahide.  Even if the new role was genuine, given the Complainant’s vast experience within the business, I find that it was unreasonable to invite him to apply for the position instead of simply offering him the role.  I am further of the view that the position was deliberately presented as being unattractive at a reduced salary of €14ph (without confirmation of bonuses) and not in line with a managerial position within the business.  If the restructuring of the Respondent was genuine, a reasonable employer would have negotiated and redeployed the Hanley family members within the new structure. 

(7)  The Complainant and the other Hanley family members were unpaid and in receipt of PUP whilst on layoff and as such were not a significant liability to the Respondent.  By August 2021, Government financial supports and a legislative freeze on employees enforcing redundancy had been introduced to prevent job losses.  I am of the view that a reasonable employer would have considered waiting at least until the end of the emergency period on 30th September 2021 to afford an opportunity for financial conditions to improve.  However, this had not been considered within the two Reports or discussed with the Complainant and instead, management had opted for the permanency of redundancy at a time of considerable uncertainty. 

Arising from the finding that a genuine redundancy situation did not arise in the instant case such as to justify placing the Complainant’s role at risk of redundancy, it follows that the fairness of the procedures adopted thereafter are largely irrelevant.  However, and for the sake of completeness, I am further of the view that whilst the redundancy process adopted had a veneer of legitimacy it does not take much probing to conclude that the Complainant’s redundancy was a fait accompli from the outset.  In particular, there was no meaningful engagement on the part of the Directors to discuss alternatives to redundancy such as restructuring the Hanley members’ roles within the business.  Furthermore, the appeal was conducted by an associate company of Peninsula who advised the Respondent on the redundancy process and thus cannot on any objective view be regarded as being external and impartial as presented to the Complainant.  Most notably, the Report did not consider the Complainant’s evidence underlying his concern that he was targeted for redundancy as a member of the Hanley family and instead took the first Report at face value.

For the aforesaid reasons, I find that the Respondent has not discharged the burden of proving that the Complainant’s dismissal was substantially and procedurally fair by reason of redundancy or otherwise.

Decision:

Section 8 of the Unfair Dismissals Acts 1977-2015 requires that I make a decision in relation to a complaint of unfair dismissal in accordance with the relevant redress provisions.  For the aforesaid reasons, I find that the Complainant was unfairly dismissed by the Respondent through no fault of his own.  Once a complaint has been declared well-founded, Section 7(1) sets out the various forms of available redress including reinstatement, re-engagement and financial compensation as the Adjudication Officer “as the case may be, considers appropriate having regard to all the circumstances.”  Section 7(1)(c) provides for compensation of up to 104 weeks remuneration in respect of the employment from which an employee was dismissed for financial loss attributable to the dismissal and up to 4 weeks if no financial loss was incurred.  Section 7(2) sets out the various factors to be considered in determining the amount of compensation payable under Section 7(1) including applicable to this case: “(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer, (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,….  Section 7(3) further provides that: ““financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;”

In terms of mitigation, it is noted that there would have been very few suitable alternative management positions within the restaurant business available to the Complainant during the Covid-19 Pandemic.  I find his evidence of seeking alternative employment in this area to be wholly credible.  Given the manner in which he had been treated by new management which had impacted upon his health along with the fact that he had worked his whole life in the family business and had lost his transport coupled with the lack of managerial positions in the hospitality business during the Pandemic, I do not consider eleven months to find alternative employment unreasonable.  To his credit and indicative of the family’s resilience, the Complainant has resumed work as a manager in a new family restaurant business earning €38,532 gross per annum.  Although this represents a shortfall in salary, given his experience, this is likely to be short-lived.  Weighing up all of the factors, I award the Complainant €46,385 (less any lawful deductions) in compensation as being appropriate having regard to all the circumstances and direct that this sum is paid by the Respondent to the Complainant.  This award equates to one year’s remuneration and for the avoidance of doubt, this award is additional to the statutory redundancy sum paid to the Complainant.

CA-00036277-001 – Complaint under Section 27 of the Organisation of Working Time Act 1997 – Excessive Working Hours

Summary of Complainant’s Case:

The Complainant contended that he had been required to work more than the maximum permitted hours (being 48 hours per week averaged across the applicable reference period) contrary to Section 15 of the Organisation of Working Time Act 1997.  The Directors had required him to work 12-hour days 5-6 days a week between December 2019 and March 2020 before his layoff.  From the outset, they had applied pressure to make changes to the company requiring an enormous amount of work.  The most difficult change entailed him working in the Dun Laoghaire East Pier unit along with his regular Operations Manager role which required simply managing it.  Mr P had insisted on having the unit open in January on weekends.  Consequently, he was required to work in the office during the week and in the Dun Laoghaire East Pier unit on weekends.  On his days off, he had also been required to work on his phone, answer emails and deal with issues arising.  On one occasion in January 2020, Mr P had praised him for the work which he felt obliged to do as the Directors had invested in the family.  There was no clocking-in system or system of recording hours in place for salaried employees with the result that he was not able to log his hours worked.  Accordingly, no working time records were available.  Whilst the Complainant acknowledged that this system was inherited by the Directors, he contended that they had imposed the excessive working hours.  When he had mentioned the issue of his excessive hours to them, nothing had been done about it. 

Under cross-examination, it was put to the Complainant that he should have raised any time issues with his father, Padraic Hanley who was General Manager and his direct manager at the time.  He replied that the pressure to work excessive hours was coming from the Directors.  He had emailed Mr P to say that he was working far too many hours which had been expected of him.  It was put to him that during busy times in the past he would have worked long hours, and this was also a busy time with the changeover.  It was further put to him that the absence of a system for recording hours for salaried staff was an inherited issue.  He agreed that he had never requested time off in lieu of the alleged excessive hours worked. 

In submissions, reliance was placed upon the effect of the absence of working time records in light of Section 25(4) of the Organisation of Working Time Act 1997, being to impose the burden of proving compliance on the Respondent as per the Labour Court in Antanas -v- Nolan Transport 2011 E.L.R. 311.

Summary of Respondent’s Case:

Mr H confirmed the Respondent’s position that the Complainant had controlled his own hours as had been the case before the takeover.  He refuted the contention that he had been pressurised by the Directors to override his statutory hours.  He had only worked under the new management for less than 90 days and if there was any carryover of overtime, that calculation should have been flagged to the new management. 

In submissions, it was contended that the Complainant would have had the means to clock in/out in either a book, via an online system or a nearby restaurant premises to the Fish Shack unit on Dun Laoghaire East Pier.  Reliance was placed on Gino’s Italian Ice-cream Limited -v- Ewelina Gacek WTC/16/24 where the Labour Court dismissed a complaint on the basis that the Respondent’s responsibility for ensuring compliance with the Organisation of Working Time Act 1997 rested with the employee as store manager.  Likewise, in the instant case the Complainant was responsible for compliance as Operations Manager.

Findings and Conclusions:

Section 15 of the Organisation of Working Time Act 1997 provides: “An employer shall not permit an employee to work, in each period of 7 days, more than an average of 48 hours, that is to say an average of 48 hours calculated over a period (hereafter in this section referred to as a “reference period ”) that does not exceed- (a) 4 months, or (b) 6 months- (i) in the case of an employee employed in an activity referred to in paragraph 2, point 2.1. of Article 17 of the Council Directive, or (ii) where due to any matter referred to in section 5, it would not be practicable (if a reference period not exceeding 4 months were to apply in relation to the employee) for the employer to comply with this subsection, or Organisation of Working Time [1997.] Act 1997 PT. II S. 14 [No. 20.] 23 (c) such length of time as, in the case of an employee employed in an activity mentioned in subsection (5), is specified in a collective agreement referred to in that subsection.”  The Respondent has not contested the Complainant’s contention that he had worked excessive hours for the reference period in question (between 9th December 2019 and 20th March 2020) and opposes this complaint on the basis that as Operations Manager, he was responsible for and had control of his own hours.  Thus, the non-existence of working-time records is of little relevance to the determination of this issue.  Having considered the email correspondence from the new Directors clearly requiring the Complainant to undertake additional duties to his pre-existing role, on balance, I find that neither he nor indeed Padraic Hanley had retained any control over his hours.  As the Complainant was permitted to work excessive working hours, I find that the Respondent acted in contravention of Section 15 of the Act. 

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in accordance with the requisite redress provisions.  For the aforesaid reasons, I find this complaint to be well-founded.  Section 27(3) of the Organisation of Working Time Act 1997 provides: “A decision of an adjudication officer under Section 41 of the Workplace Relations Act 2015 in relation to a complaint of a contravention of a relevant provision shall do one or more of the following, namely: (a) declare that the complaint was or, as the case may be, was not well founded, (b) require the employer to comply with the relevant provision, (c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all of the circumstances, but not exceeding 2 years’ remuneration in respect of the employee’s employment.”  Noting that the Complainant worked approximately 13 weeks under the new management, I direct payment of the sum of €11,596 (equating to 13 weeks’ remuneration) by the Respondent to the Complainant in compensation for this breach as being just and equitable in all the circumstances.  I have made this award in keeping in Von Colson v Kamann (1984) ECR 1891 which requires that “sanctions for breaches of Community Rights must ensure that they are effective, proportionate and dissuasive”.

CA-00036277-002 – Complaint under Section 7 of the Terms of Employment (Information) Act 1994 – No Written Statement of Terms of Employment

Summary of Complainant’s Case:

The Complainant contends that he never received a written statement of terms of his employment after the change in management when he had been required to undertake additional duties contrary to Section 5 of the Terms of Employment (Information) Act 1994.  Although the Directors had sought to abdicate responsibility for renewed contracts to Padraic Hanley, he had not been in a position to draw up contracts as the Directors’ Solicitors had sent a draft ‘Performance Incentive Plan’ on 30th January 2020 stating: “As there are currently no written employment terms for the Hanley Family, each member of the Hanley Family will enter into a new employment contract on terms acceptable to the majority shareholder.”  The intended terms had never been provided to the Complainant or to any other member of the Hanley family.  On 11th August 2020 and after the referral of this complaint, Mr H had emailed the Complainant with a bundle of documentation including a contract which related to someone else, the old and new copies of the Employee Handbook and a statement of main terms of employment never presented previously.  An enclosed letter from Mr H stated that the Respondent had met in full its obligations in this respect.  The Complainant contended that this bundle had been furnished to cover the Directors before dismissing him.

Under cross-examination, it was put to the Complainant that the absence of contracts was an inherited issue which the Directors had made efforts to remedy and any failing for same rested with Padraic Hanley.

Summary of Respondent’s Case:

Mr H confirmed the Respondent’s position that the absence of contracts was an inherited issue.  The move to a Performance Incentive Plan had to be incorporated into the drawing up of new contracts.  This had been delegated by email to Padraic Hanley who was responsible for human resources as General Manager.  However, resulting from the breakdown in agreement, this was never actioned.  It was further contended that the Complainant had been in possession of a contract since 2008 and was provided with a copy of same under cover of email in August 2020.  In any event, there was limited prejudice to the Complainant.

Findings and Conclusions:

Section 5(1) of the Terms of Employment (Information) Act 1994 provides: “Subject to subsection (2), whenever a change is made or occurs in any of the particulars of the statement furnished by an employer under section 3, 4 or 6, the employer shall notify the employee in writing of the nature and date of the change as soon as may be thereafter, but not later than- (a) the day on which the change takes effect, or…”  Regardless of any inherited issues, it is undisputed that under the new management, the Complainant was required to undertake duties additional to his pre-existing role and was thus entitled to updated written terms of his employment.  Noting that regardless of whether his father, Padraic Hanley was responsible for drawing up same, the Respondent would still be liable, I am satisfied that this failing primarily rested with the Directors for insisting that new terms acceptable to the majority shareholders were drawn up.  This did not occur owing to the breakdown in relations between the Parties and the failure by the Directors to make any meaningful efforts to resolve their differences.  Accordingly, there was a contravention of Section 5 of the Terms of Employment (Information) Act 1994.  I am further satisfied that the Complainant was wholly disadvantaged in terms of enforcing his statutory rights in relation to his dismissal as a result. 

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in accordance with the requisite redress provisions.  For the aforesaid reasons, I find this complaint to be well-founded.  In addition to various remedies dealing with the provision / content of a written statement, Section 7(2) provides that an Adjudication Officer may “…order the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 4 weeks’ remuneration in respect of the employee’s employment calculated in accordance with the Regulations under section 17 of the Unfair Dismissals Act 1977.”  Noting the prejudice to the Complainant and the conduct of the Respondent in this respect, I direct a sum of €3,568 (4 weeks’ remuneration) in compensation for the breaches as being just and equitable in all the circumstances.

The total award directed to be paid by the Respondent to the Complainant herein is €61,549.

Dated:  18-04-2024

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Key Words: Sections 6(1) & 6(4)(c) of the Unfair Dismissals Act 1977 - dismissal by reason of redundancy constituted unfair dismissal – Section 15 of the Organisation of Working Time Act 1997 - excessive working hours – Section 3 of the Terms of Employment (Information) Act 1994 - no written terms of employment