Complainant

Respondent

Parties

Amanda  McKeown

Retro Fit Design Limited

Representatives

 Mr. Brian Sugrue BL instructed by Cashell Solicitors

Dundun  Callanan LLP

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00054079-001

09/12/2022

The Complainant was employed primarily in Accounts and was also a shareholder, the Company Secretary and a Director of the Company. She was employed from 20/5/2013 to 25/11/2022 when her role was made redundant and the Complainant alleged the termination of her employment was an unfair dismissal.

The Complainant was employed by the Respondent in a bookkeeping/accounts role from the 20th of May 2013 until the 25th of November 2022, when she was purportedly made redundant by the Respondent.  The Complainant disputed that a genuine redundancy situation existed in relation to her role and contended that she was unfairly dismissed within the meaning of the Unfair Dismissals Act, 1977 as amended.

As of the date of termination of her employment the Complainant was in receipt of a yearly salary of €36,524 (approx. €702 per week) in addition to yearly pension contribution of €3,600 (€300 per month). In addition to being an employee of the Respondent, the Complainant is a 50% shareholder of the company along with her now-estranged husband, David McKeown, with whom she established the business in 2009. The Complainant was also a Director and the Company Secretary of the company until her removal from those positions (without her agreement and without any prior notification) by the Respondent’s General Manager, Mr Scanlon, in August 2021.  

The Complainant contends that her removal from these positions, and the subsequent declaration of a redundancy situation in relation to her role, were motivated by and instigated on foot of the breakdown of her marriage with Mr McKeown.  The Complainant alleged she was subjected to a gradual and deliberate exclusion from the workplace which culminated in her ultimate dismissal and was not voluntarily absent from her workplace.

The Complainant contended that her role was not subject to a legitimate redundancy situation.  The Complainant further and alternatively contended that in selecting her role for redundancy, regard was not had to the duration of her prior service, her capability for upskilling if required, and the existence of alternative work/duties to which she could have been assigned.  The Complainant contended that elements of her role were allocated to another, more recently recruited, employee so as to create a situation in which the purported redundancy could be justified after the event.

The Complainant received the statutory redundancy amount of 23.22 weeks x €600 (capped figure) totalling €13,932.00.  

The Respondent has set out a narrative of events in its submissions.  The Complainant took issue with the following points and assertions made in those submissions as follows:

The description of the Complainant’s role is accepted.  Additionally, the Complainant was exclusively involved in the uploading of information to the Sage system, as she possessed the laptop upon which that software was installed.

It is correct that both the Complainant and Ms S. were placed on temporary lay-off in March 2020 due to the Covid pandemic.  However, at no point did the Complainant tell the Respondent that she wished to remain at home to look after children, or for any other reason.  It was only in September 2021 that the Complainant was forced to take up alternative part-time work in a local shop, as by then she had still not been given any indication by the Respondent as to when the temporary lay-off would conclude.  At this time she was also under considerable financial strain due to the cessation of PUP benefit, and the lack of any financial support from her husband as their marriage deteriorated over the latter part of 2021.

The Complainant was aware that whilst Ms S. was brought back by the Respondent to work part-time in July 2020, the Complainant received no communication whatsoever from the Respondent with regard to the continuation of her own temporary lay-off.  Neither was she informed of or consulted about any apparent restructuring of Mr Scanlon’s and Ms S.’s roles. The Complainant refuted the inferences that she remained completely uninvolved in the Respondent’s business for a two-year period.  She continued to receive work-related emails and correspondence, which she replied to.  From August 2020 the Complainant received email queries from Ms S. in relation to various issues, invoices and bank statements, and also requests from Mr Scanlon to provide him with paperwork.   The Complainant was also still a signatory on the company AIB account.  Accordingly, notwithstanding that she was not being paid during this time, the Complainant felt that she was working remotely for the Respondent and assisting in its survival post-Covid.   

The Complainant took issue with the assertion that, during her two-year absence, it was found that her role could be jointly performed by Mr Scanlon and Ms S..  No consultative process was ever engaged by the Respondent in which this was discussed or decided.  On the 29th of June 2021 the Complainant spoke directly to Mr Scanlon about when she was returning to work, only to receive no adequate explanation.  The Complainant also had reason to believe, from interactions with third parties, that her exit from the company was being discussed around this time.  

On the 1st of August 2021, unbeknownst to the Complainant, Mr Scanlon lodged forms with the Companies Registration Office to remove the Complainant as both Company Secretary and Director of the Respondent.  The Complainant is still unaware as to how Mr Scanlon purported to do so in the absence of Companies Act procedures being followed, such as a resolution passed by the existing directors or an EGM being called.  The Complainant can only conclude that Mr Scanlon received his instructions to do so from the other Director, David McKeown, the Complainant’s husband.  In September 2021, the Respondent changed the locks on its office premises, which she only discovered when trying to deliver company-related correspondence received at her home address.

The Complainant heard nothing more from the Respondent until April 2022, some ten months after her conversation with Mr Scanlon the previous June.  Whilst the Respondent represented that a redundancy situation had arisen concerning the Complainant’s role, it was not accepted that any genuine efforts were made to find an alternative to making the Complainant redundant.  The Complainant alleged how various aspects of work, currently outsourced by the Respondent, could have been undertaken by the Complainant.  Furthermore, the Complainant contended that any so-called collaborative process in relation to the proposed redundancy post-dated the Respondent’s decision to begin allocating the Complainant’s duties to other employees.  Whilst the Respondent purported to hold a further consultation meeting on the 12th of August 2022, it had already (and again without notifying the Complainant) removed her as a mandated bank account signatory on the 24th of June 2022.

The Respondent relied on section 7(2)(e) of the Redundancy Payments Act, 1967 as being “especially applicable” to the Complainant’s situation, and as the rationale for her selection for redundancy.  This provides for redundancy where:

“[The] employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should hence forward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.”

It was submitted that the Respondent has failed to identify the “other work”, as referred to in the above section, which it is alleged that the Complainant was not sufficiently trained or qualified to do.  Furthermore, prior to the allocation of her duties to Ms S., the Complainant was never asked whether she could carry out such other work (whatever that may have been) nor was she required to undergo any appraisal of her ability to do so.  Accordingly, it was submitted that the Respondent cannot rely on this section as justifying the Complainant’s redundancy ex post facto.

 It was submitted that the Respondent cannot validly rely on provisions (b) and (c) of section 7(2), being:

“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.

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 “

It was submitted that in relation to (b), the “work of a particular kind” which comprised the Complainant’s role was still obviously required at the Respondent’s office.  In relation to (c), there does not seem to have been a decision formally taken by which a reduction of employees was planned, prior to the Complainant’s duties being farmed out between Ms S. and Mr Scanlon.  The Respondent has tried to justify the selection of the Complainant for redundancy by a retrospective application of section (c) to the situation it had already created in the Complainant’s absence and without her knowledge.

The Complainant submitted that she has endeavoured to mitigate her loss to the best of her ability. On the 4th of September 2021 she obtained part-time work in the local shop at weekends and two mornings per week, working there until the 11th of August 2022.  The Complainant received €318.00 net per week.

The Complainant has been subjected to significant financial hardship by the actions of the Respondent, not least by the lack of any communication regarding a potential return to work from the Covid temporary lay-off, up to April 2022.  The purported redundancy was thereafter only formally confirmed on the 12th of October 2022.  The Complainant was unpaid by the Respondent throughout all of this period.  During her lay-off the Complainant up-skilled at her own volition and expense, completing a 14 week Payroll Manual and Computerised level 5 course online from September to December 2022.   From April 2023 to October 2023 the Complainant has spent every day searching online for a job for which she is qualified and which would enable her to collect her children from school.   The Complainant has secured a place on a CE Scheme for 19.5 hours a week, in a payroll and accounting position commencing 6th November 2023.  This scheme is paid through the Department of Social Protection, with the Complainant receiving €318 per week. 

The Complainant was dismissed by purported redundancy, effective as of the 25th of  November 2022.  However, she was effectively unwaged since March 2020, when the covid temporary lay-off was commenced. The Complainant contended that her actual dismissal was contrived (or a process began whereby her dismissal was being contemplated) at a much earlier date.  It is submitted that the Respondent’s unilateral actions in allocating the Complainant’s duties to other employees from August 2020 onwards is indicative of the dismissal process being commenced around that time.  It was submitted that the Adjudicator ought have regard to the fact that the Complainant’s dismissal therefore occurred, in real terms, around that earlier time as opposed to when it elected for formally declare her redundant in October 2022.

The Complainant, despite her efforts as set forth above, has not secured any alternative employment since her dismissal (save for the 11 month period spent working at the local shop from September 2021 to August 2022).  Accordingly, the Complainant is suffering an ongoing loss of €702 gross a week, which she would have earned had she continued in her previous role with the Respondent. The Complainant has also suffered a loss of her pension contribution, which was €300 per month.

The Complainant asked the Adjudicator to exercise their jurisdiction to award compensation up to the equivalent value of two years the Complainant’s previous salary with the Respondent, being €36,524 (plus €3,600 pension contributions) per annum. The Complainant was not fairly selected for redundancy, nor did an actual redundancy situation exist.  Her dismissal was instigated for reasons other than permissible under the Redundancy Payments Acts and/or the Unfair Dismissals Act.

No bona fide consultative process was initiated by the Respondent in relation to the proposed redundancy.  The evidence shows that the restructuring which apparently rendered the Complainant’s role surplus to requirement was contemplated and carried out prior to any engagement with the Complainant or even notification being given to her.

The Respondent failed/refused to give proper, or any, consideration to possible alternatives by the Complainant could have remained in a role in the company. 

The Complainant stated her financial loss was as a result of her unfair dismissal by the Respondent.

The Complainant gave evidence to the Hearing. She advised she commenced in May 2014 and the firm changed from a sole trader to a limited company. She advised her role was accounts, bookkeeping and creditors reconciled to trial balance stage. She advised she graduated as an Accounting Technician in 2006 and worked for a large firm for 6 years and for a large Hotel for a number of years and had 20 years accounting experience. She advised she was a 50% shareholder in the business since 2014 and was Company Secretary also. She advised her role as Director was to ensure the business was run well and she was an authorised signatory on the two main bank accounts. She stated that prior to Ms. S commencing work she would work with the GM booking invoices into the system and doing accounting to a trial balance stage and it was a full time job. She advised Ms. S was hired to do the projects, examine their efficiency and margins. She advised they worked well as colleagues. She advised she was laid off due to Covid and up to June 2021 she worked along with colleagues doing the work remotely. She advised she does not recollect saying she did not want to be a Director. She advised she was never called to an AGM in April 2020. She advised she was asked to come into the office in July 2021 and she requested a return to work and was informed her role was two days a week. She went home to reflect on this and felt her role was gone and she had to figure out what had happened to her role. She advised she was told about a restructuring in April 2022 and had not been told about this before. She advised there was no communications from the company between September 2021 and April 2022. She was advised to discuss her job with the GM by her husband. She felt in June 2021 something was not right and her role could be taken off her. In reply to the statement from Mr. Scanlon that the Complainant informed him she was content at home she did not recall any conversation to that effect. She understood she was working remotely during this time. She advised she was removed as a Director on August 1st 2021 and the office was locked in September 2021 to her. She advised she only found out that the Director role was gone when she was made redundant. The Complainant advised she was removed as a bank signatory in August 2022 and was never told about this. The Complainant advised she was never invited to a Directors meeting regarding a restructuring. She advised Ms. S contacted her in April 2022 and asked her for her impression of her situation and wanted to have a conversation about a voluntary restructuring. The Complainant made a number of proposals and stated Mr. Scanlon was a good manager and believed he could delegate more and free him up for other work. The Complainant believed her suggestions were dismissed and minds were made up. The Complainant stated she thought the offer of operative roles in Cork was highly insulting and there was not acceptable communications at the time. The Complainant felt time sheet work could have been taken off the GM and this would have increased her role. The Complainant felt that if the review process was external that a full or part time role was viable for her. She advised she was unaware of what communications were taking place at work and this caused problems at home. The Complainant advised she took up a part time role in a local supermarket two mornings a week as she had no income and after her husband left the home but still considered herself employed by the Respondent. She advised this was not feasible after June 2022 as she could not see her children. The Complainant advised she was on PUP from March 2020 to September 2021 and went to work in July 2022 and was on illness benefit for 6 months. She advised she attended a payroll course from September to December 2022. She advised she got a job for a period for 19 hours a week and it was very difficult to get a job due to travel distances to locations where jobs could be.

The Complainant was cross examined about her remote work and she advised she was the same as other colleagues at the time and was sending emails from home and downloading bank statements and reconciling accounts. She was questioned about the receipt of the PUP payment during this time and she advised she felt she was working remotely doing emails. It was put to the Complainant that she was only answering the odd question and she agreed she was not working full time but disagreed there was no work for her. It was put to the Complainant that she was happy with the way the company was moving forward and the Complainant stated she had no information as a shareholder and she was not made aware of the redundancies directly. The Complainant was questioned did she know the company were in difficult circumstances and she advised she asked for information at the first meeting regarding pricing and quotes. The Complainant was asked in the two year period before the redundancies did she ever ask for information and she advised the GM would brief her. She advised she felt locked out of the company in September 2021 after her husband left the home but agreed she never raised the issue at the time. She advised she engaged with colleagues from April 2020 to September 2021 but then communications reduced. The Complainant accepted the GM made the redundancy decision and there was a redundancy process and stated she raised issues re another role and stated she was not given the opportunity to do another role. She advised the outsourced payroll could have been brought inhouse to retain her job. The Complainant was questioned about her efforts to mitigate her loss and seeking other employment and did not have detail available for the Hearing.

The Respondent is a company which provides retrofitting construction services to make existing buildings more energy efficient. Those services are provided to local authorities. The Company employs approximately 13 people, but the numbers vary (12-25) depending on contracts being awarded by local authorities. Originally, the director/shareholders of the Company were husband and wife, David McKeown (50% shareholder) and his wife, the Complainant, Amanda McKeown (50% shareholder).

In May 2013 Mr. Chris Scanlon was appointed General Manager. This was due to the company being in dire financial difficulty due to bad debts and poor management, including serious staff issues. Since then, Chris Scanlon has had authority to make management decisions and all decisions relating to employees in the company. The Company works with an independent HR consultant, Elaine Ryan of Elaine Ryan & Associates Limited. Since 2013, David McKeown is involved in project management out in the field. He is not usually in the office. It is Chris Scanlon who manages the day to-day operation of the company.

The Complainant was employed in an accounts role since 2013. As at 2019 she was working as an account assistant at a salary of €36,524. She did data entry, and made bank payments, uploading information to Sage. The Complainant's usual working hours were 9:30am/l1Oam to 4pm/5pm, Monday to Friday. In November 2018 the Respondent hired Ms.. S. to provide financial support to Management. Ms S. has an accounting qualification and an MBA from the University of Limerick. From then until March 2020 the Complainant and Ms S. worked together. As well as accounts work, Mr S. was qualified to carry out work in ISO, Health and Safety, and Sub Contracts.

From March 2020, company activity was significantly reduced due to the Covid 19 Pandemic. Both the Complainant and Ms S. were on lay-off. The Complainant said she wanted to stay on lay-off at this time because she was at home looking after her children. During some of her lay-off period, the Complainant took up alternative work.

Ms S. came back to work part time (3 days/ week) in July 2020, which continued until March 2023 (when she returned to her original full-time hours). It was found that Mr Scanlon and Ms S. between them were capable of taking over the duties that had previously been carried out by the Complainant. Mr. Scanlon took over banking payment and some elements of payroll (he had already been doing the majority of work for payroll) and Ms S. was able to carry out the data entry previously done by the Complainant.

As a result of the pandemic and cost pressures as inflation rose in 2021 (CPI

2.4%) and 2022 (7.8%), profit margins were badly squeezed. Redundancies were necessary and in 2021/ 2022 the following staff were made redundant: Project Manager (23 October 2021); Carpenter (26 November 2021); General Operative (21 June 2022). The Complainant had not been at work for two years and Mr Scanlon and Ms S. between them were able to carry out all of the duties previously done by the Complainant. It was in these circumstances that in April 2022 Mr Scanlon, together with the Company HR Consultant Elaine Ryan, commenced a redundancy process in respect of the Complainants role.

It is important to mention that by this time unhappy differences had arisen between the Complainant and her husband, the other Director and Shareholder, David McKeown. However, that was not relevant to the redundancy process. Other staff were also made redundant. The company was in difficult financial circumstances. The Complainant had not been working in the company for a period of 2 years and her previous role had effectively been subsumed into the work being carried out by Mr Scanlon and Ms S.. The decision to make the Complainant's role redundant was made by Mr Scanlon and the Complainant's husband was not at all involved in that process.

There was an initial consultation meeting on 4 April 2022 at which the Complainant attended together with Chris Scanlon. That was followed by a confirmation letter dated 5 April 2022.The first substantive consultation meeting was on 24 April 2022 when there was a long discussion about the reasons for the redundancy of the role and whether any alternatives to termination for redundancy were available. There were attempts to have a follow-up consultation meeting in May and June, but the Complainant was not available for the proposed meetings and second meeting therefore did not take place until August 2022.

A second formal consultation meeting was held on 12 August 2022. At this point it was clear that the role would be made redundant and that there was no feasible alternative. The possibility of agreed terms of termination was discussed, but no agreement was reached and that section of the meeting notes has been redacted on the basis that this was a without prejudice discussion. Formal notice of redundancy was given by letter dated 12 October 2022.

The dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy: Section 6 (4)(c). The definition of "redundancy" is set out in Section 7 (2) of the Redundancy Payments Act, 1967. In this case, paragraph (e) is especially applicable:

"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 hence forward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained'.

Paragraphs (b) and (c) also appear to be applicable.

Since the dismissal was due to a genuine redundancy situation, where the Complainant had not been attending work for the last two years and where the role she had formerly occupied was no longer required, there is no unfair dismissal. If there is found to be an unfair dismissal (which the company denied) the issue of mitigation arises. There is a duty on the Complainant to mitigate her loss. This is provided for in Section 7(2) of the Unfair Dismissal Act which provides that in determining the amount of compensation regard must be had to:

"(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."

There is a legal duty on employees to mitigate their financial loss by taking diligent steps to secure comparable alternative employment. In Burke v Superior Express Limited UD 1227/2014 the EAT held that the standard required is a high one and the complainant must establish that they actively sought alternative employment following their dismissal.

In Sheehan v Continental Administration Co. Limited UD858/1999 the EAT held that:

"A complainant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work. The time that a Respondent finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss'

Notwithstanding and without prejudice to the fact that it is submitted that the Complainant was fairly dismissed on the grounds of redundancy, the Complainant is put on full proof that she has mitigated her loss, to the full extent. A redundancy payment of €13,932 was made to the Complainant, which would have to be taken into account and off-set in the event of any compensation being awarded to the Complainant.

Mr. Scanlon gave evidence to the Hearing that he was the General Manager since 2013 and had full control of the day to day operations of the business. He advised the Complainant asked to be removed as  Director in 2017.He advised the business can run effectively with 4 office staff and all staff were laid off due to Covid in March 2020. He advised there were only 2 projects to be cleared off and there was minimal hours for staff. He advised Ms. S came back to work and did some minimal accounting work and they tried to clear off the projects. He advised Ms. S did some project work from July 2020 and the Complainant did not return to work. After July 2020 the GM became more familiar with the payroll and the organisation adjusted to the new situation. He advised the Complainant would pop in now and then with post. He advised the company was not great financially due to Brexit, inflation and had cashflow issues and he was not feeling great about the company. He advised the target margin aim were reduced from 10% to between 1% to 3%.  He advised they implemented other redundancies as the position was not long term sustainable. He advised he looked at the Complainants situation first in late 2021/January 2022 and looked at the work flow, financial situation and issues affecting the role. He advised the Complainants husband was fully aware of what he was considering but had no part in the decision. The GM first met the Complainant in April 2022 regarding her role. He again met the Complainant in August 2022.He advised options considered were reduced hours and a job on site in Cork. He advised short time working was not available and the Complainant advised the role in Cork was not suitable. He advised the Complainant was formally advised her role was redundant in October 2022 and the statutory redundancy payment was paid. Mr. Scanlon confirmed the lock of the premises was changed and stated this was due to a worker breaking the lock.

Mr. Scanlon was cross examined by Mr. Sugrue for the Complainant. Mr. Sugrue queried had the Complainant ever requested in writing to be removed as a Director and how he was asked to take on the Company Secretary role an asked was he aware of any Board resolution to terminate the Complainant as a Director and Mr. Scanlon advised he was informed by the Managing Director and the Accountant took care of the formalities. Mr. Scanlon was asked about return to work of staff and advised Ms. S was brought back first and the Complainant was outside the 5k limit at the time. Mr. Scanlon was queried about the impression he gave that the Complainant was out of the office for two years and he stated the Complainant was not involved in any significant way and he had only about seven or nine emails from her during this time. Mr. Scanlon advised the Complainants work was absorbed by him and Ms. S during this time. Mr. Scanlon was queried about what communications he had with the Complainants husband during this time and Mr. Scanlon advised the Complainants husband was not involved but was aware of what was happening and agreed he did not communicate to the Complainant her work was being absorbed at the time. Mr. Scanlon was questioned as to why he felt no need to formally communicate with the Complainant at the time and he advised he had no reason to consider the information was not being relayed to the Complainant by her husband at the time. Mr. Scanlon stated he understood the Complainant was home schooling her children but agreed the Complainant never told him she did not want to return to work. Mr. Scanlon agreed the Complainant did come into the office for 2 days but stated there was nothing for her to do. Mr. Scanlon advised the Complainant came into the office in July 2020 and alleged she was aware her role was surplus to requirements. Mr. Scanlon was questioned as to why the Complainant was not being kept up todate and not given a key when the lock was changed and he replied he never contacted the Complainant at home. It was put to Mr. Scanlon he made his mind up that the Complainants role was surplus to requirements in August 2020 and Mr. Scanlon confirmed he considered the Complainant was an employee on lay off and was aware the Complainant had taken up a part time role elsewhere and he had no reason to think the relationship was finished and he advised this was not common knowledge in the office and Mr. Mc Keown did not mention it to him and he advised what happened in peoples private lives did not come into his role. Mr. Scanlon was questioned why there was no communication for 11 months with the Complainant and he advised the redundancy process was delayed as he was not sure what was happening with the business and advised he was telling the MD that the work was being done evenly by him and Ms. S.. Mr. Scanlon was questioned as to why he did not communicate with their employee, the Complainant, every few months and he understood that the MD was communicating with the Complainant at this time. Mr. Scanlon was queried about the only roles being available in Cork at the time were for a Carpenter and General Operative and how these were unsuitable for the Complainant and he advised these were the only roles available at the time. Mr. Scanlon was queried about the outsourcing of the payroll function and why it was not considered being brought back inhouse and he advised this was only an hours work and was working effectively as it was. Mr. Scanlon was queried was he aware that the Complainant had been removed as a bank signatory around the same date of the second redundancy meeting and he advised yes but that it had come from the Accountants.. Mr. Scanlon stated that he had no role in replying to the Complainants solicitors correspondence regarding these matters and it was a matter for the MD or the Accountants.

Ms. Elaine Ryan, HR Consultant gave evidence to the Hearing she first became involved with the Company in 2014. She advised she was involved in the redundancy processes and confirmed to the Respondents solicitor that the MD was not party to the restructuring but had been involved in previous redundancies. It was put to Ms. Ryan by the Complainants Representative was it not best practice to keep employees formally informed during a lay off process and she agreed but understood there was informal communications going on with the Complainant. She advised alternative roles were looked at for the Complainant but her skill set was not suitable and that the GM stated the operation was functioning fine without the Complainants role and advised she was not privy to discussions about absorbing the Complainants role organically and she had a long relationship with the GM and trusted his judgement. Ms. Ryan was queried on whether any independent analysis was completed and she replied the assessment requirement was of a basic nature and the payroll work was not a lot of work and the GM had run large scale payroll before.

The Law.

“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:

(a) the capability, competence or qualifications of the employee for performing work of a kind which he was employed by the Employer to do.

(b) the conduct of the Employee

(c) the redundancy of the employee and

(d) the employee being unable to work or continue to work in a position which he held without contravention by him or by his employer of a duty or restriction imposed by or under any statute or instrument under statute.

A number of judgements were considered by the Adjudicator in arriving at my decision.

Mainly, the Looney v Looney, UD83/1984 in which the Eat referred to its role as “to consider, against the facts, what a reasonable employer would have done”.

Secondly, Bunyan v United Dominions Trust (1982) ILRM 404 that states “the fairness or unfairness of a dismissal is to be judged by the objective standard of the way in which a reasonable employer in those circumstances in that line of business, would have behaved”.

There are a number of issues to consider, in the round, in the assessment of this complaint. Firstly, did a genuine redundancy exist, secondly the possible influence of the marital breakdown on the redundancy, thirdly the fact the Complainant was a 50% shareholder in the company and her rights in this regard, fourth the removal of the Complainant without her consent as a Director and Company Secretary and signatory to bank accounts and finally the Complainants efforts to mitigate her loss.

I am satisfied from the evidence that the possibility of a genuine redundancy of the Complainants position was a business requirement. I am also satisfied that the Mr. Scanlan acted in a bona fide way in assessing the situation and coming to the conclusion the business could survive by consolidating the Complainants role into his and Ms S’s role. I am also satisfied that the Respondent engaged in a professional redundancy process. However, the fact that the Complainant was the equal joint owner of the business and a Director of the Company bring different elements into the consideration of this complaint. Also, what must be considered is that both joint owners are married but now are in the process of separation/divorce. Also, it appears the Complainant was removed as Director and Company Secretary without her knowledge or consent. The Complainant was the only person formally employed in the Accounts Department prior to the hire of Ms. S and had been employed for nearly 10 years without any apparent incident or disciplinary action.

Mr. Scanlon, GM reported to the Complainants husband, a director of the Company. The Respondents position was that the Complainant was made redundant solely by a decision of Mr. Scanlon. It is inconceivable to the Adjudicator that the redundancy of a 50% shareholder and Director of the business was not debated and agreed upon at a Board Meeting or in the absence of that meeting taking place, with the other major shareholder. Being equal joint shareholders, the Complainant would have been able to veto this decision if it had been brought up at a Board meeting. No formal record of a Board meeting giving Mr. Scanlon the authority to make redundancy decisions regarding the Complainant was produced to the Hearing. In effect, Mr. Scanlon was making an owner of the business employing him redundant. The Adjudicator finds it very difficult to accept that the Complainants husband had no involvement or knowledge of this happening.

While the WRC is not empowered to deal with family law issues, the Complainant was made redundant with very little income and had to take care of two young children and this impacted her ability to seek or get work in a small rural area. She found work in a local shop and got childminding sorted out during her employment/lay off with the Respondent and now seems to be taking on a new career. The Complainant was given the opportunity to show what efforts she made to seek employment since being made redundant but provided very little information to this effect. While totally understandable, this serious lack of effort to mitigate loss has to be a consideration in the analysis of this complaint.

The two shareholders were involved in a separation process at the time of the redundancy and again it is difficult to accept, on a practical level, that this had no bearing on the Complainants redundancy. The point of all the above is that while the redundancy may have been warranted the Board process to make the decision was flawed, due to the unique situation that the Complainant was a joint equal shareholder and Director. The Complainant advised the Hearing that she was removed by an action of Mr. Scanlon as a Director and Company Secretary in August 2021. No Board resolution to effect that change was passed by the Board. No direction was given by the Complainant to Mr. Scanlan to effect that change. The only logical conclusion is that Mr. Scanlon was acting on Mr. Mc Keown’s instructions to remove the Complainant as a Director and Company Secretary. This action took place prior to the Complainants termination of employment. No logical reasons were given to the Hearing for this action and the logical conclusion is the other Director, the Complainants husband, gave the direction to Mr. Scanlon to remove the Complainant as a Director. The purpose of this analysis is to show that Mr. Scanlan was acting, to a degree, under the instructions of Mr. Mc Keown in relation to the Complainant, albeit not transparently.

In summary, a possible redundancy situation did exist and in normal circumstances may well result in a fair dismissal outcome but no reasonable efforts were made to find alternative roles or reduced hours etc to enable the Complainant to remain in employment. From the actions of the Respondent regarding the removal of the Complainant as Director and Company Secretary I conclude that the marital breakdown had a significant part to play in selecting the Complainants role for redundancy. It is difficult to imagine, if there were no marital breakdown, that the Complainant, being an equal shareholder and wife of the only other shareholder, would have been made redundant. The logical outcome of this is that the marital breakdown situation contributed to some degree to the termination of the Complainants employment but this has to be weighed against the possibility that her role was no longer required and could have amounted to a lawful redundancy in other more normal situations. The Complainant sought compensation of two years salary (approximately 72,000 Euros) for unfair dismissal. In assessing the situation, I have taken a number of issues into consideration, and while I determine that the Complainant was unfairly dismissed due to the marital breakdown,  the amount of her compensation has to be significantly reduced due to the possibility, in normal circumstances, the redundancy might be justified, her lack of efforts to seek new employment (understandably given her personal circumstances) and the fact she has now gained new employment.  In considering the amount of the award I have taken these factors into consideration and note the Complainant will possibly earn around 33,000 Euros during the next two years. I award the Complainant 25,000 Euros compensation less the amount received from her redundancy.

I find the Complainant was unfairly dismissed and award her 25,000 Euros compensation FOR BREACH OF HER EMPLOYMENT RIGHTS UNDER EMPLOYMENT LEGISLATION less the amount received from her redundancy.

Unfair Dismissal

Complainant

Respondent

Parties

Amanda  McKeown

Retro Fit Design Limited

Representatives

 Mr. Brian Sugrue BL instructed by Cashell Solicitors

Dundun  Callanan LLP

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00054079-001

09/12/2022

The Complainant was employed primarily in Accounts and was also a shareholder, the Company Secretary and a Director of the Company. She was employed from 20/5/2013 to 25/11/2022 when her role was made redundant and the Complainant alleged the termination of her employment was an unfair dismissal.

The Complainant was employed by the Respondent in a bookkeeping/accounts role from the 20th of May 2013 until the 25th of November 2022, when she was purportedly made redundant by the Respondent.  The Complainant disputed that a genuine redundancy situation existed in relation to her role and contended that she was unfairly dismissed within the meaning of the Unfair Dismissals Act, 1977 as amended.

As of the date of termination of her employment the Complainant was in receipt of a yearly salary of €36,524 (approx. €702 per week) in addition to yearly pension contribution of €3,600 (€300 per month). In addition to being an employee of the Respondent, the Complainant is a 50% shareholder of the company along with her now-estranged husband, David McKeown, with whom she established the business in 2009. The Complainant was also a Director and the Company Secretary of the company until her removal from those positions (without her agreement and without any prior notification) by the Respondent’s General Manager, Mr Scanlon, in August 2021.  

The Complainant contends that her removal from these positions, and the subsequent declaration of a redundancy situation in relation to her role, were motivated by and instigated on foot of the breakdown of her marriage with Mr McKeown.  The Complainant alleged she was subjected to a gradual and deliberate exclusion from the workplace which culminated in her ultimate dismissal and was not voluntarily absent from her workplace.

The Complainant contended that her role was not subject to a legitimate redundancy situation.  The Complainant further and alternatively contended that in selecting her role for redundancy, regard was not had to the duration of her prior service, her capability for upskilling if required, and the existence of alternative work/duties to which she could have been assigned.  The Complainant contended that elements of her role were allocated to another, more recently recruited, employee so as to create a situation in which the purported redundancy could be justified after the event.

The Complainant received the statutory redundancy amount of 23.22 weeks x €600 (capped figure) totalling €13,932.00.  

The Respondent has set out a narrative of events in its submissions.  The Complainant took issue with the following points and assertions made in those submissions as follows:

The description of the Complainant’s role is accepted.  Additionally, the Complainant was exclusively involved in the uploading of information to the Sage system, as she possessed the laptop upon which that software was installed.

It is correct that both the Complainant and Ms S. were placed on temporary lay-off in March 2020 due to the Covid pandemic.  However, at no point did the Complainant tell the Respondent that she wished to remain at home to look after children, or for any other reason.  It was only in September 2021 that the Complainant was forced to take up alternative part-time work in a local shop, as by then she had still not been given any indication by the Respondent as to when the temporary lay-off would conclude.  At this time she was also under considerable financial strain due to the cessation of PUP benefit, and the lack of any financial support from her husband as their marriage deteriorated over the latter part of 2021.

The Complainant was aware that whilst Ms S. was brought back by the Respondent to work part-time in July 2020, the Complainant received no communication whatsoever from the Respondent with regard to the continuation of her own temporary lay-off.  Neither was she informed of or consulted about any apparent restructuring of Mr Scanlon’s and Ms S.’s roles. The Complainant refuted the inferences that she remained completely uninvolved in the Respondent’s business for a two-year period.  She continued to receive work-related emails and correspondence, which she replied to.  From August 2020 the Complainant received email queries from Ms S. in relation to various issues, invoices and bank statements, and also requests from Mr Scanlon to provide him with paperwork.   The Complainant was also still a signatory on the company AIB account.  Accordingly, notwithstanding that she was not being paid during this time, the Complainant felt that she was working remotely for the Respondent and assisting in its survival post-Covid.   

The Complainant took issue with the assertion that, during her two-year absence, it was found that her role could be jointly performed by Mr Scanlon and Ms S..  No consultative process was ever engaged by the Respondent in which this was discussed or decided.  On the 29th of June 2021 the Complainant spoke directly to Mr Scanlon about when she was returning to work, only to receive no adequate explanation.  The Complainant also had reason to believe, from interactions with third parties, that her exit from the company was being discussed around this time.  

On the 1st of August 2021, unbeknownst to the Complainant, Mr Scanlon lodged forms with the Companies Registration Office to remove the Complainant as both Company Secretary and Director of the Respondent.  The Complainant is still unaware as to how Mr Scanlon purported to do so in the absence of Companies Act procedures being followed, such as a resolution passed by the existing directors or an EGM being called.  The Complainant can only conclude that Mr Scanlon received his instructions to do so from the other Director, David McKeown, the Complainant’s husband.  In September 2021, the Respondent changed the locks on its office premises, which she only discovered when trying to deliver company-related correspondence received at her home address.

The Complainant heard nothing more from the Respondent until April 2022, some ten months after her conversation with Mr Scanlon the previous June.  Whilst the Respondent represented that a redundancy situation had arisen concerning the Complainant’s role, it was not accepted that any genuine efforts were made to find an alternative to making the Complainant redundant.  The Complainant alleged how various aspects of work, currently outsourced by the Respondent, could have been undertaken by the Complainant.  Furthermore, the Complainant contended that any so-called collaborative process in relation to the proposed redundancy post-dated the Respondent’s decision to begin allocating the Complainant’s duties to other employees.  Whilst the Respondent purported to hold a further consultation meeting on the 12th of August 2022, it had already (and again without notifying the Complainant) removed her as a mandated bank account signatory on the 24th of June 2022.

The Respondent relied on section 7(2)(e) of the Redundancy Payments Act, 1967 as being “especially applicable” to the Complainant’s situation, and as the rationale for her selection for redundancy.  This provides for redundancy where:

“[The] employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should hence forward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.”

It was submitted that the Respondent has failed to identify the “other work”, as referred to in the above section, which it is alleged that the Complainant was not sufficiently trained or qualified to do.  Furthermore, prior to the allocation of her duties to Ms S., the Complainant was never asked whether she could carry out such other work (whatever that may have been) nor was she required to undergo any appraisal of her ability to do so.  Accordingly, it was submitted that the Respondent cannot rely on this section as justifying the Complainant’s redundancy ex post facto.

 It was submitted that the Respondent cannot validly rely on provisions (b) and (c) of section 7(2), being:

“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.

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 “

It was submitted that in relation to (b), the “work of a particular kind” which comprised the Complainant’s role was still obviously required at the Respondent’s office.  In relation to (c), there does not seem to have been a decision formally taken by which a reduction of employees was planned, prior to the Complainant’s duties being farmed out between Ms S. and Mr Scanlon.  The Respondent has tried to justify the selection of the Complainant for redundancy by a retrospective application of section (c) to the situation it had already created in the Complainant’s absence and without her knowledge.

The Complainant submitted that she has endeavoured to mitigate her loss to the best of her ability. On the 4th of September 2021 she obtained part-time work in the local shop at weekends and two mornings per week, working there until the 11th of August 2022.  The Complainant received €318.00 net per week.

The Complainant has been subjected to significant financial hardship by the actions of the Respondent, not least by the lack of any communication regarding a potential return to work from the Covid temporary lay-off, up to April 2022.  The purported redundancy was thereafter only formally confirmed on the 12th of October 2022.  The Complainant was unpaid by the Respondent throughout all of this period.  During her lay-off the Complainant up-skilled at her own volition and expense, completing a 14 week Payroll Manual and Computerised level 5 course online from September to December 2022.   From April 2023 to October 2023 the Complainant has spent every day searching online for a job for which she is qualified and which would enable her to collect her children from school.   The Complainant has secured a place on a CE Scheme for 19.5 hours a week, in a payroll and accounting position commencing 6th November 2023.  This scheme is paid through the Department of Social Protection, with the Complainant receiving €318 per week. 

The Complainant was dismissed by purported redundancy, effective as of the 25th of  November 2022.  However, she was effectively unwaged since March 2020, when the covid temporary lay-off was commenced. The Complainant contended that her actual dismissal was contrived (or a process began whereby her dismissal was being contemplated) at a much earlier date.  It is submitted that the Respondent’s unilateral actions in allocating the Complainant’s duties to other employees from August 2020 onwards is indicative of the dismissal process being commenced around that time.  It was submitted that the Adjudicator ought have regard to the fact that the Complainant’s dismissal therefore occurred, in real terms, around that earlier time as opposed to when it elected for formally declare her redundant in October 2022.

The Complainant, despite her efforts as set forth above, has not secured any alternative employment since her dismissal (save for the 11 month period spent working at the local shop from September 2021 to August 2022).  Accordingly, the Complainant is suffering an ongoing loss of €702 gross a week, which she would have earned had she continued in her previous role with the Respondent. The Complainant has also suffered a loss of her pension contribution, which was €300 per month.

The Complainant asked the Adjudicator to exercise their jurisdiction to award compensation up to the equivalent value of two years the Complainant’s previous salary with the Respondent, being €36,524 (plus €3,600 pension contributions) per annum. The Complainant was not fairly selected for redundancy, nor did an actual redundancy situation exist.  Her dismissal was instigated for reasons other than permissible under the Redundancy Payments Acts and/or the Unfair Dismissals Act.

No bona fide consultative process was initiated by the Respondent in relation to the proposed redundancy.  The evidence shows that the restructuring which apparently rendered the Complainant’s role surplus to requirement was contemplated and carried out prior to any engagement with the Complainant or even notification being given to her.

The Respondent failed/refused to give proper, or any, consideration to possible alternatives by the Complainant could have remained in a role in the company. 

The Complainant stated her financial loss was as a result of her unfair dismissal by the Respondent.

The Complainant gave evidence to the Hearing. She advised she commenced in May 2014 and the firm changed from a sole trader to a limited company. She advised her role was accounts, bookkeeping and creditors reconciled to trial balance stage. She advised she graduated as an Accounting Technician in 2006 and worked for a large firm for 6 years and for a large Hotel for a number of years and had 20 years accounting experience. She advised she was a 50% shareholder in the business since 2014 and was Company Secretary also. She advised her role as Director was to ensure the business was run well and she was an authorised signatory on the two main bank accounts. She stated that prior to Ms. S commencing work she would work with the GM booking invoices into the system and doing accounting to a trial balance stage and it was a full time job. She advised Ms. S was hired to do the projects, examine their efficiency and margins. She advised they worked well as colleagues. She advised she was laid off due to Covid and up to June 2021 she worked along with colleagues doing the work remotely. She advised she does not recollect saying she did not want to be a Director. She advised she was never called to an AGM in April 2020. She advised she was asked to come into the office in July 2021 and she requested a return to work and was informed her role was two days a week. She went home to reflect on this and felt her role was gone and she had to figure out what had happened to her role. She advised she was told about a restructuring in April 2022 and had not been told about this before. She advised there was no communications from the company between September 2021 and April 2022. She was advised to discuss her job with the GM by her husband. She felt in June 2021 something was not right and her role could be taken off her. In reply to the statement from Mr. Scanlon that the Complainant informed him she was content at home she did not recall any conversation to that effect. She understood she was working remotely during this time. She advised she was removed as a Director on August 1st 2021 and the office was locked in September 2021 to her. She advised she only found out that the Director role was gone when she was made redundant. The Complainant advised she was removed as a bank signatory in August 2022 and was never told about this. The Complainant advised she was never invited to a Directors meeting regarding a restructuring. She advised Ms. S contacted her in April 2022 and asked her for her impression of her situation and wanted to have a conversation about a voluntary restructuring. The Complainant made a number of proposals and stated Mr. Scanlon was a good manager and believed he could delegate more and free him up for other work. The Complainant believed her suggestions were dismissed and minds were made up. The Complainant stated she thought the offer of operative roles in Cork was highly insulting and there was not acceptable communications at the time. The Complainant felt time sheet work could have been taken off the GM and this would have increased her role. The Complainant felt that if the review process was external that a full or part time role was viable for her. She advised she was unaware of what communications were taking place at work and this caused problems at home. The Complainant advised she took up a part time role in a local supermarket two mornings a week as she had no income and after her husband left the home but still considered herself employed by the Respondent. She advised this was not feasible after June 2022 as she could not see her children. The Complainant advised she was on PUP from March 2020 to September 2021 and went to work in July 2022 and was on illness benefit for 6 months. She advised she attended a payroll course from September to December 2022. She advised she got a job for a period for 19 hours a week and it was very difficult to get a job due to travel distances to locations where jobs could be.

The Complainant was cross examined about her remote work and she advised she was the same as other colleagues at the time and was sending emails from home and downloading bank statements and reconciling accounts. She was questioned about the receipt of the PUP payment during this time and she advised she felt she was working remotely doing emails. It was put to the Complainant that she was only answering the odd question and she agreed she was not working full time but disagreed there was no work for her. It was put to the Complainant that she was happy with the way the company was moving forward and the Complainant stated she had no information as a shareholder and she was not made aware of the redundancies directly. The Complainant was questioned did she know the company were in difficult circumstances and she advised she asked for information at the first meeting regarding pricing and quotes. The Complainant was asked in the two year period before the redundancies did she ever ask for information and she advised the GM would brief her. She advised she felt locked out of the company in September 2021 after her husband left the home but agreed she never raised the issue at the time. She advised she engaged with colleagues from April 2020 to September 2021 but then communications reduced. The Complainant accepted the GM made the redundancy decision and there was a redundancy process and stated she raised issues re another role and stated she was not given the opportunity to do another role. She advised the outsourced payroll could have been brought inhouse to retain her job. The Complainant was questioned about her efforts to mitigate her loss and seeking other employment and did not have detail available for the Hearing.

The Respondent is a company which provides retrofitting construction services to make existing buildings more energy efficient. Those services are provided to local authorities. The Company employs approximately 13 people, but the numbers vary (12-25) depending on contracts being awarded by local authorities. Originally, the director/shareholders of the Company were husband and wife, David McKeown (50% shareholder) and his wife, the Complainant, Amanda McKeown (50% shareholder).

In May 2013 Mr. Chris Scanlon was appointed General Manager. This was due to the company being in dire financial difficulty due to bad debts and poor management, including serious staff issues. Since then, Chris Scanlon has had authority to make management decisions and all decisions relating to employees in the company. The Company works with an independent HR consultant, Elaine Ryan of Elaine Ryan & Associates Limited. Since 2013, David McKeown is involved in project management out in the field. He is not usually in the office. It is Chris Scanlon who manages the day to-day operation of the company.

The Complainant was employed in an accounts role since 2013. As at 2019 she was working as an account assistant at a salary of €36,524. She did data entry, and made bank payments, uploading information to Sage. The Complainant's usual working hours were 9:30am/l1Oam to 4pm/5pm, Monday to Friday. In November 2018 the Respondent hired Ms.. S. to provide financial support to Management. Ms S. has an accounting qualification and an MBA from the University of Limerick. From then until March 2020 the Complainant and Ms S. worked together. As well as accounts work, Mr S. was qualified to carry out work in ISO, Health and Safety, and Sub Contracts.

From March 2020, company activity was significantly reduced due to the Covid 19 Pandemic. Both the Complainant and Ms S. were on lay-off. The Complainant said she wanted to stay on lay-off at this time because she was at home looking after her children. During some of her lay-off period, the Complainant took up alternative work.

Ms S. came back to work part time (3 days/ week) in July 2020, which continued until March 2023 (when she returned to her original full-time hours). It was found that Mr Scanlon and Ms S. between them were capable of taking over the duties that had previously been carried out by the Complainant. Mr. Scanlon took over banking payment and some elements of payroll (he had already been doing the majority of work for payroll) and Ms S. was able to carry out the data entry previously done by the Complainant.

As a result of the pandemic and cost pressures as inflation rose in 2021 (CPI

2.4%) and 2022 (7.8%), profit margins were badly squeezed. Redundancies were necessary and in 2021/ 2022 the following staff were made redundant: Project Manager (23 October 2021); Carpenter (26 November 2021); General Operative (21 June 2022). The Complainant had not been at work for two years and Mr Scanlon and Ms S. between them were able to carry out all of the duties previously done by the Complainant. It was in these circumstances that in April 2022 Mr Scanlon, together with the Company HR Consultant Elaine Ryan, commenced a redundancy process in respect of the Complainants role.

It is important to mention that by this time unhappy differences had arisen between the Complainant and her husband, the other Director and Shareholder, David McKeown. However, that was not relevant to the redundancy process. Other staff were also made redundant. The company was in difficult financial circumstances. The Complainant had not been working in the company for a period of 2 years and her previous role had effectively been subsumed into the work being carried out by Mr Scanlon and Ms S.. The decision to make the Complainant's role redundant was made by Mr Scanlon and the Complainant's husband was not at all involved in that process.

There was an initial consultation meeting on 4 April 2022 at which the Complainant attended together with Chris Scanlon. That was followed by a confirmation letter dated 5 April 2022.The first substantive consultation meeting was on 24 April 2022 when there was a long discussion about the reasons for the redundancy of the role and whether any alternatives to termination for redundancy were available. There were attempts to have a follow-up consultation meeting in May and June, but the Complainant was not available for the proposed meetings and second meeting therefore did not take place until August 2022.

A second formal consultation meeting was held on 12 August 2022. At this point it was clear that the role would be made redundant and that there was no feasible alternative. The possibility of agreed terms of termination was discussed, but no agreement was reached and that section of the meeting notes has been redacted on the basis that this was a without prejudice discussion. Formal notice of redundancy was given by letter dated 12 October 2022.

The dismissal of an employee is deemed not to be unfair if it results wholly or mainly from redundancy: Section 6 (4)(c). The definition of "redundancy" is set out in Section 7 (2) of the Redundancy Payments Act, 1967. In this case, paragraph (e) is especially applicable:

"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 hence forward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained'.

Paragraphs (b) and (c) also appear to be applicable.

Since the dismissal was due to a genuine redundancy situation, where the Complainant had not been attending work for the last two years and where the role she had formerly occupied was no longer required, there is no unfair dismissal. If there is found to be an unfair dismissal (which the company denied) the issue of mitigation arises. There is a duty on the Complainant to mitigate her loss. This is provided for in Section 7(2) of the Unfair Dismissal Act which provides that in determining the amount of compensation regard must be had to:

"(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."

There is a legal duty on employees to mitigate their financial loss by taking diligent steps to secure comparable alternative employment. In Burke v Superior Express Limited UD 1227/2014 the EAT held that the standard required is a high one and the complainant must establish that they actively sought alternative employment following their dismissal.

In Sheehan v Continental Administration Co. Limited UD858/1999 the EAT held that:

"A complainant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work. The time that a Respondent finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss'

Notwithstanding and without prejudice to the fact that it is submitted that the Complainant was fairly dismissed on the grounds of redundancy, the Complainant is put on full proof that she has mitigated her loss, to the full extent. A redundancy payment of €13,932 was made to the Complainant, which would have to be taken into account and off-set in the event of any compensation being awarded to the Complainant.

Mr. Scanlon gave evidence to the Hearing that he was the General Manager since 2013 and had full control of the day to day operations of the business. He advised the Complainant asked to be removed as  Director in 2017.He advised the business can run effectively with 4 office staff and all staff were laid off due to Covid in March 2020. He advised there were only 2 projects to be cleared off and there was minimal hours for staff. He advised Ms. S came back to work and did some minimal accounting work and they tried to clear off the projects. He advised Ms. S did some project work from July 2020 and the Complainant did not return to work. After July 2020 the GM became more familiar with the payroll and the organisation adjusted to the new situation. He advised the Complainant would pop in now and then with post. He advised the company was not great financially due to Brexit, inflation and had cashflow issues and he was not feeling great about the company. He advised the target margin aim were reduced from 10% to between 1% to 3%.  He advised they implemented other redundancies as the position was not long term sustainable. He advised he looked at the Complainants situation first in late 2021/January 2022 and looked at the work flow, financial situation and issues affecting the role. He advised the Complainants husband was fully aware of what he was considering but had no part in the decision. The GM first met the Complainant in April 2022 regarding her role. He again met the Complainant in August 2022.He advised options considered were reduced hours and a job on site in Cork. He advised short time working was not available and the Complainant advised the role in Cork was not suitable. He advised the Complainant was formally advised her role was redundant in October 2022 and the statutory redundancy payment was paid. Mr. Scanlon confirmed the lock of the premises was changed and stated this was due to a worker breaking the lock.

Mr. Scanlon was cross examined by Mr. Sugrue for the Complainant. Mr. Sugrue queried had the Complainant ever requested in writing to be removed as a Director and how he was asked to take on the Company Secretary role an asked was he aware of any Board resolution to terminate the Complainant as a Director and Mr. Scanlon advised he was informed by the Managing Director and the Accountant took care of the formalities. Mr. Scanlon was asked about return to work of staff and advised Ms. S was brought back first and the Complainant was outside the 5k limit at the time. Mr. Scanlon was queried about the impression he gave that the Complainant was out of the office for two years and he stated the Complainant was not involved in any significant way and he had only about seven or nine emails from her during this time. Mr. Scanlon advised the Complainants work was absorbed by him and Ms. S during this time. Mr. Scanlon was queried about what communications he had with the Complainants husband during this time and Mr. Scanlon advised the Complainants husband was not involved but was aware of what was happening and agreed he did not communicate to the Complainant her work was being absorbed at the time. Mr. Scanlon was questioned as to why he felt no need to formally communicate with the Complainant at the time and he advised he had no reason to consider the information was not being relayed to the Complainant by her husband at the time. Mr. Scanlon stated he understood the Complainant was home schooling her children but agreed the Complainant never told him she did not want to return to work. Mr. Scanlon agreed the Complainant did come into the office for 2 days but stated there was nothing for her to do. Mr. Scanlon advised the Complainant came into the office in July 2020 and alleged she was aware her role was surplus to requirements. Mr. Scanlon was questioned as to why the Complainant was not being kept up todate and not given a key when the lock was changed and he replied he never contacted the Complainant at home. It was put to Mr. Scanlon he made his mind up that the Complainants role was surplus to requirements in August 2020 and Mr. Scanlon confirmed he considered the Complainant was an employee on lay off and was aware the Complainant had taken up a part time role elsewhere and he had no reason to think the relationship was finished and he advised this was not common knowledge in the office and Mr. Mc Keown did not mention it to him and he advised what happened in peoples private lives did not come into his role. Mr. Scanlon was questioned why there was no communication for 11 months with the Complainant and he advised the redundancy process was delayed as he was not sure what was happening with the business and advised he was telling the MD that the work was being done evenly by him and Ms. S.. Mr. Scanlon was questioned as to why he did not communicate with their employee, the Complainant, every few months and he understood that the MD was communicating with the Complainant at this time. Mr. Scanlon was queried about the only roles being available in Cork at the time were for a Carpenter and General Operative and how these were unsuitable for the Complainant and he advised these were the only roles available at the time. Mr. Scanlon was queried about the outsourcing of the payroll function and why it was not considered being brought back inhouse and he advised this was only an hours work and was working effectively as it was. Mr. Scanlon was queried was he aware that the Complainant had been removed as a bank signatory around the same date of the second redundancy meeting and he advised yes but that it had come from the Accountants.. Mr. Scanlon stated that he had no role in replying to the Complainants solicitors correspondence regarding these matters and it was a matter for the MD or the Accountants.

Ms. Elaine Ryan, HR Consultant gave evidence to the Hearing she first became involved with the Company in 2014. She advised she was involved in the redundancy processes and confirmed to the Respondents solicitor that the MD was not party to the restructuring but had been involved in previous redundancies. It was put to Ms. Ryan by the Complainants Representative was it not best practice to keep employees formally informed during a lay off process and she agreed but understood there was informal communications going on with the Complainant. She advised alternative roles were looked at for the Complainant but her skill set was not suitable and that the GM stated the operation was functioning fine without the Complainants role and advised she was not privy to discussions about absorbing the Complainants role organically and she had a long relationship with the GM and trusted his judgement. Ms. Ryan was queried on whether any independent analysis was completed and she replied the assessment requirement was of a basic nature and the payroll work was not a lot of work and the GM had run large scale payroll before.

The Law.

“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:

(a) the capability, competence or qualifications of the employee for performing work of a kind which he was employed by the Employer to do.

(b) the conduct of the Employee

(c) the redundancy of the employee and

(d) the employee being unable to work or continue to work in a position which he held without contravention by him or by his employer of a duty or restriction imposed by or under any statute or instrument under statute.

A number of judgements were considered by the Adjudicator in arriving at my decision.

Mainly, the Looney v Looney, UD83/1984 in which the Eat referred to its role as “to consider, against the facts, what a reasonable employer would have done”.

Secondly, Bunyan v United Dominions Trust (1982) ILRM 404 that states “the fairness or unfairness of a dismissal is to be judged by the objective standard of the way in which a reasonable employer in those circumstances in that line of business, would have behaved”.

There are a number of issues to consider, in the round, in the assessment of this complaint. Firstly, did a genuine redundancy exist, secondly the possible influence of the marital breakdown on the redundancy, thirdly the fact the Complainant was a 50% shareholder in the company and her rights in this regard, fourth the removal of the Complainant without her consent as a Director and Company Secretary and signatory to bank accounts and finally the Complainants efforts to mitigate her loss.

I am satisfied from the evidence that the possibility of a genuine redundancy of the Complainants position was a business requirement. I am also satisfied that the Mr. Scanlan acted in a bona fide way in assessing the situation and coming to the conclusion the business could survive by consolidating the Complainants role into his and Ms S’s role. I am also satisfied that the Respondent engaged in a professional redundancy process. However, the fact that the Complainant was the equal joint owner of the business and a Director of the Company bring different elements into the consideration of this complaint. Also, what must be considered is that both joint owners are married but now are in the process of separation/divorce. Also, it appears the Complainant was removed as Director and Company Secretary without her knowledge or consent. The Complainant was the only person formally employed in the Accounts Department prior to the hire of Ms. S and had been employed for nearly 10 years without any apparent incident or disciplinary action.

Mr. Scanlon, GM reported to the Complainants husband, a director of the Company. The Respondents position was that the Complainant was made redundant solely by a decision of Mr. Scanlon. It is inconceivable to the Adjudicator that the redundancy of a 50% shareholder and Director of the business was not debated and agreed upon at a Board Meeting or in the absence of that meeting taking place, with the other major shareholder. Being equal joint shareholders, the Complainant would have been able to veto this decision if it had been brought up at a Board meeting. No formal record of a Board meeting giving Mr. Scanlon the authority to make redundancy decisions regarding the Complainant was produced to the Hearing. In effect, Mr. Scanlon was making an owner of the business employing him redundant. The Adjudicator finds it very difficult to accept that the Complainants husband had no involvement or knowledge of this happening.

While the WRC is not empowered to deal with family law issues, the Complainant was made redundant with very little income and had to take care of two young children and this impacted her ability to seek or get work in a small rural area. She found work in a local shop and got childminding sorted out during her employment/lay off with the Respondent and now seems to be taking on a new career. The Complainant was given the opportunity to show what efforts she made to seek employment since being made redundant but provided very little information to this effect. While totally understandable, this serious lack of effort to mitigate loss has to be a consideration in the analysis of this complaint.

The two shareholders were involved in a separation process at the time of the redundancy and again it is difficult to accept, on a practical level, that this had no bearing on the Complainants redundancy. The point of all the above is that while the redundancy may have been warranted the Board process to make the decision was flawed, due to the unique situation that the Complainant was a joint equal shareholder and Director. The Complainant advised the Hearing that she was removed by an action of Mr. Scanlon as a Director and Company Secretary in August 2021. No Board resolution to effect that change was passed by the Board. No direction was given by the Complainant to Mr. Scanlan to effect that change. The only logical conclusion is that Mr. Scanlon was acting on Mr. Mc Keown’s instructions to remove the Complainant as a Director and Company Secretary. This action took place prior to the Complainants termination of employment. No logical reasons were given to the Hearing for this action and the logical conclusion is the other Director, the Complainants husband, gave the direction to Mr. Scanlon to remove the Complainant as a Director. The purpose of this analysis is to show that Mr. Scanlan was acting, to a degree, under the instructions of Mr. Mc Keown in relation to the Complainant, albeit not transparently.

In summary, a possible redundancy situation did exist and in normal circumstances may well result in a fair dismissal outcome but no reasonable efforts were made to find alternative roles or reduced hours etc to enable the Complainant to remain in employment. From the actions of the Respondent regarding the removal of the Complainant as Director and Company Secretary I conclude that the marital breakdown had a significant part to play in selecting the Complainants role for redundancy. It is difficult to imagine, if there were no marital breakdown, that the Complainant, being an equal shareholder and wife of the only other shareholder, would have been made redundant. The logical outcome of this is that the marital breakdown situation contributed to some degree to the termination of the Complainants employment but this has to be weighed against the possibility that her role was no longer required and could have amounted to a lawful redundancy in other more normal situations. The Complainant sought compensation of two years salary (approximately 72,000 Euros) for unfair dismissal. In assessing the situation, I have taken a number of issues into consideration, and while I determine that the Complainant was unfairly dismissed due to the marital breakdown,  the amount of her compensation has to be significantly reduced due to the possibility, in normal circumstances, the redundancy might be justified, her lack of efforts to seek new employment (understandably given her personal circumstances) and the fact she has now gained new employment.  In considering the amount of the award I have taken these factors into consideration and note the Complainant will possibly earn around 33,000 Euros during the next two years. I award the Complainant 25,000 Euros compensation less the amount received from her redundancy.

I find the Complainant was unfairly dismissed and award her 25,000 Euros compensation less the amount received from her redundancy.

Unfair Dismissal