Complainant

Respondent

Parties

Karen  Moloney

T M Blinds Ltd

Representatives

Fergal T. Fitzgerald Doyle BL instructed by  Francis B Taafe & CO

Áine Curran of O'Mara Geraghty McCourt

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-00056666-001

11/05/2023

The Complainant first joined the Respondent blind manufacturer on the 3rd of October 1994. She stayed with the Respondent throughout her career and worked in a variety of roles. She had worked as customer service rep, then a receptionist, as well as quality control manager and a customer service manager. In recent years she had been assigned to the “projects” end of the business which focused on direct sales to builders contracted to fit out office blocks and other large construction projects. 

In July 2022 the Respondent began a review of its business which resulted in a determination to close the projects section. They notified the Complainant and the other affected colleague in early November 2022. Following a series of meetings with the Complainant she was made redundant on the 24th of November 2022.

The Complainant submitted a complaint to the WRC alleging unfair dismissal on the 11th of May 2023 and a hearing was held on the 5th of October 2023.

The Complainant attended the hearing and gave evidence under affirmation.

Mr. Conor Brady, the Respondent’s MD, and Mr. Philip Casey CFO both attended and  gave evidence under affirmation.

The Complainant attended the hearing and gave evidence. Her barrister made oral submissions.

The Complainant worked for the company for 28 years and had seen it grow. At the time of her dismissal she was one of about a hundred employees.

When she was notified of her department closing, she was shocked. She was extremely upset that the Respondent couldn’t find a place for her in the business after 28 years. She expressed that dismay, but she did not opt for redundancy as the Respondent now alleges.

It was for the Respondent to identify that there was no other position suitable for the Complainant before making her redundant. The Complainant had worked had under a variety of different roles. The Respondent didn’t investigate what alternatives were available to them despite the ample notice they had of the change to their business which was entirely voluntary.

The Complainant’s Evidence

The Complainant worked in a variety of roles over her 28 years at the Respondent.

Since she had worked in projects much of her role involved dealing with contractors and pricing and administering their orders.  

While it was a different area of the business there was very little difference between that and some of her previous roles. She relied on the same knowledge, experience and cop on as she had in the other roles. She was not unique.

She was aware there were questions regarding bad debt and the projects side of the business but when she did not expect that area to be shut down and certainly did not expect to be made redundant after so many years.

She was in shock when she was told. She didn’t see it coming and was very upset.  She wasn’t able to cope with the whole situation and wasn’t able to take it all in. She met with Mr Casey after the meeting when she was notified and explained her shock. She couldn’t believe they were in a situation where she had no job and people with temporary contracts have jobs.

She didn’t see anyone take a note of these meetings.

On the 9th of November, Mr Conor Brady did all the talking. She felt like she was being treated in a very blasé way.  Despite the seriousness of the situation he was slouching in his chair.

Mr Brady asked her  if she saw any alternatives her response was that if management can’t see where I fit in a company 28 years and I think that’s where your answer is. She also outlined that any of the outstanding work would be given to her colleague Mr Haughey who had a young family so that he could be retained longer.   

The Complainant does not know why she could not be moved again as she had before on many occasions before. At the time there was a girl working in accounts on a temporary contract who was being let go.  She could have been considered for that role and would have taken a drop in wages to stay there. She was paid €37,000 per year at the time of her termination.

She didn’t say that she would prefer a redundancy package.  No alternative was role offered to her. She would have considered any role. She is not sure what she would have taken.

The Respondent were clearly in a process and didn’t want her to stay. The first meeting was 10 minutes long and the second consultation meeting was only 5 minutes long.

She felt that the Respondent didn’t care about her upset and her history working for them. In the past she had worked Saturdays for free, she had worked overtime voluntarily. She was always willing to help people. She didn’t get that loyalty back from the company.

She didn’t appeal the redundancy outcome decision because she was so hurt.

When the decision was issued to her she was brought into the office and Mr Brady read through letter with her. She wanted to go quietly and didn’t want a fuss. She was really embarrassed by the situation. Mr Brady wanted to put on a presentation in board room for her leaving but she didn’t want that.

The Complainant was cross examined by Ms Curran for the Respondent.

The Complainant did contracting work for both retail and business customers. She did not work exclusively for contractors.

The Complainant explained that the TM blinds main business is in retail. Pricing for those retail clients pricing would come through her as well. She would generally do all large blind orders pricing, enter orders, get it to production. Even after the projects business was shut down this work was still being done by other people in the organisation.  Ms Curran took instructions and outlined that this work had in fact been automated going forward and was not performed by anyone.

She didn’t look for alternative roles because she was really upset by the fact they had told they didn’t know where she could fit in. She didn’t want to risk going in with suggestions for her role and being ridiculed and shot down. She was influenced by this and how management had acted. She had the impression that they wanted to see the back her.

While she didn’t say any of this to Mr Brady she did explain her position to Mr Casey.

She believes she should have been moved. There are always vacancies, the Respondent can’t keep staff.

She accepts that perhaps she couldn’t see the wood from the trees and that maybe she jumped the gun, acting out of hurt or disappointment.

She was a single person paying a mortgage. She had never worked anywhere else. She had never even interviewed for a job.

She could not remember the option to appeal. Her head was in a mess.

She does not believe the notes the Respondent have produced are an accurate reflection of the meetings. Mr Brady was slouched in his chair talking to her. So much so that he could not have been taking notes.

The Respondent provided detailed written and oral submissions.

The company decided to cease operating in the projects market. There were two roles in that department. The Complainant was one of them. She was told that she was at risk of redundancy on the 9th of November 2022.

On the 14th of November 2022 the Complainant attended a consultation meeting. She was invited to bring a colleague. In this meeting she indicated that she wanted to redundancy package.

The terms of the redundancy were set out in writing. They offered her an appeal. She did not lodge one.

Mr Conor Brady gave evidence under affirmation.

He is the managing director and has been with the Respondent for 11 years. The Respondent was founded in 1978 and independently owned until 1998 when it was acquired by Hunter group.

Traditionally it has been a trade supplier.

The projects department, where the Complainant worked, was a different area of the business. This involved the supply and installation directly to large construction projects such as hospitals, schools and public buildings.

Ms Maloney was employed in that team working along side a sales manager. She was back office support.

In 2022 the Respondent dealt with the non-payment of a significant debt of €77,000 involving a project. This led them to consider wider options. It has been extremely difficult to recover debts in that area generally. The projects department had lower profit margins of 11% which was low for them. This went down to 7%. Ultimately their work accounted for only 5% of the sales income so over the Summer of 2022 they determined that it wasn’t worth the risk and decided to cease trading in that space.

Between September and November there were overlapping holidays between key management figures and the two employees in projects. They couldn’t tell one and not the other.

They organised a meeting for 9th November 2022 and told both the Complainant and the sales manager that they had closed the department, and their roles were at risk.

Mr Brady took a note of the meeting. In the note he outlined the view that the roles were unique. He explained that this was because they were self-contained roles which were unique within the building. He outlined from the outset that there were not any obvious alternatives but that he was still willing to look at alternative roles.

They explained in a follow up letter that there was no need to undergo a selection pool as it was the department being shut down as such there is no need to conduct a broader selection exercise involving other roles.

Mr Brady believes that the Complainant’s role was very unique within the business and there were no obvious roles in the rest of the company except another role which was much lower paid.

There was a follow up meeting on the 14th of November 2022. He met with the Complainant and Mr Casey.

He opened the meeting by apologising for the situation. The Complainant said she was disheartened. Did not want to be consider for an alternative role and if there was one she would rather it go to the sales manager who has a young family.

Mr Brady decided to respect her wishes and proceeded to organise termination letter and the redundancy payment.

He looked across the entire company for available alternative roles. There was nothing obvious. Neither role was replaced.

Mr Brady was cross examined by Mr Fitzgerald for the Complainant. 

He answered questions about the meetings held over the summer to decide to shut down the projects department. He isn’t sure of the exact dates.

They considered relocating the Complainant to any of the different departments in the business and were open to considering any potential roles.

There was no selection criteria discussed as there were no pool however alternative roles were discussed quite a lot.

It was the Complainant’s role to do quality control, arrange repairs and liaise with clients.

Mr Fitzgerald put it to Mr Brady that the customer service department did everything the Complainant did but they didn’t have to do pricing. Mr Brady disagreed with this. The customer service roles were much lower paid and involved a different sales channel. The Complainant had much greater responsibility in her role. The customer service staff were less experienced and made no commercial decisions unlike the Complainant.  

Mr Brady accepted that his notes were not agreed after either of the meetings.

Mr Fitzgerald argued that the Respondent didn’t seriously consider alternatives to redundancy. Mr Brady is clear that they didn’t have any and that the Complainant didn’t identify any.

Philip Casey gave evidence under affirmation

He has been with the Company for over 20 years and knew the Complainant throughout this time.

He outlined the meetings held over the Summer regarding the projects team. There were a number of informal meetings and one specific management meeting. The projects part of the business was relatively small and it was difficult to get paid in it.

There are five  departments in the company. It didn’t appear that there were any alternative roles. They were aware from the start that any options would have to put to the affected employees.

They had one to one consultations with both Ms Moloney and her colleague. They told them they were at risk.  It was a shock to them.  

The consultation meeting on Monday the 14th was quite short.  The Complainant said that she  didn’t see an alternative to redundancy and was going to take it. She said if there was any alternative it should be given to her colleague.

Mr Brady was taking notes in the meeting.

Mr Casey was cross examined by Mr Fitzgerald for the Complainant. 

He recounted that there was one formal management meeting regarding Ms Maloney’s role before they met with her.  He couldn’t remember the date but it was probably 2 or 3 weeks before. There was no decision made in the meeting. There was a discussion on what roles might be out there and about the various roles she had done in the past. Mr Brady led the meeting.  

Mr Casey was asked about why he considered her role to be unique. He explained that it involved  not just administration but pricing and costing and arranging installation. The Complainant has significant knowledge about the product and about the business. She liaised with the installers. None of the rest of the Company did this and operates on a business to business basis.

The Law

Section 6(1) of the Unfair Dismissals Act 1977 provides that:-

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.

As such the burden is on the Respondent to establish that this dismissal was permitted under the act. The Respondent submits that in this case dismissal was allowed as per Section 6(4)(c) which states that:

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 ... the redundancy of the employee...

It is important to note that Section 6(7) provides that:-

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

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

The Respondent’s solicitor referred to the decision of the Labour Court in Component Distributors Limited -v- Bridget Burns. Noting that they had achieved the requirements set out by the Court in that case.  That is to establish “where an employee is dismissed by reason of redundancy, the Court must be satisfied that a genuine redundancy situation existed and that redundancy was the  main reason for the dismissal”.

The Complainant’s barrister referred to a number of cases but in particular Students Union Commercial Services Ltd and Alan Traynor. In this case the Labour Court went much further than the Burns case and placed a high bar on any Respondent employer seeking to rely on the redundancy ground to justify dismissal.

The following conclusions from that case are pertinent.

The Court notes that the Complainant had almost twelve years’ service. The Respondent had a number of business units and had fluctuating numbers of staff employed. The Court was presented with no information to demonstrate that the Respondent carried out a thorough exercise to consider alternative options/suggestions. The Court can accept that had such an exercise being carried out it may not have identified any alternative positions suitable to the Complainant, however, it seems clear that no such exercise was engaged in. On that basis the Court finds that the approach adopted by the Respondent was somewhat arbitrary and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair.

In this decision I am following the Court in the Traynor decision and assessing not just whether a business change happened in which a genuine redundancy could occur but also considering whether the Respondent carried out a thorough exercise to avert redundancy.

The Complainant’s Role

In the hearing there were a variety of views regarding the Complainant’s role and its uniqueness. However, there was little dispute as to the substance of the role. The Complainant worked in a senior admin role. At the time of her dismissal this role was specific to one part of the business, but she took up that position following a long career in the company engaged in a variety of administrative and customer support work. Any “uniqueness” that can be ascribed to her role is regarding the fact that she is experienced and had worked in projects for a time.  This should not confuse her with a task specific technical or professional worker who cannot be easily moved. The Complainant’s history in the company demonstrates otherwise.

The Decision to Make the Complainant’s Role Redundant

The Respondent’s evidence was that there were meetings over the summer of 2023 where management discussed the potential options for the business and the Complainant’s role. At this time the Complainant was serving as an administrator in a profitable business and was engaged in a function that was profitable. She had history of doing many roles within the Company. 

In such circumstances a Respondent is faced with a very high bar in justifying a redundancy as necessary.

The Respondent witnesses provided evidence that they began to view the projects side of the business as a hinderance. It involved a cost exposure and there were significant issues in getting paid. The resulting profit margin wasn’t particularly attractive when compared with the rest of the business and the revenue it brought in was relatively small.

While they have established the rationale for this pivot in the business, they failed to establish why the Complainant could not fit into this new strategy. She had worked in a variety of jobs in the Company and was clearly capable. The decision to close this part of the business was not a cut back necessitated by a harsh economic environment but a business decision to focus elsewhere. Presumably this move was justified by some level of expansion of other parts of the business.

Even without an expansion elsewhere there were both accounts and customer support roles potentially available to the Complainant and a relatively high turnover in these departments. These options appear to have been ignored as the Complainant’s salary was too high, but they should have been considered and put to the Complainant, even on a temporary or part-time basis.

The Consultation Process

The Complainant provided clear and convincing evidence of her experience of dealing with the Respondent’s MD during the consultation process. The Complainant evidence referred to the fact that in the first meeting on the 9th of November Mr Brady was slouched in a chair when he told her role was being discontinued and that she was at risk of redundancy and that he communicated with her in a blasé fashion.

Making a worker, who has served twenty-eight years in the business, redundant is a serious business. Adopting a blasé manner at that moment is not just hurtful, it has an obvious impact on a reasonable workers reaction to news and their faith in any process that follows.

On the 14th of November the Complainant attended a further consultation meeting. At this time, she took the view that if after twenty-eight years the Respondent could see no place for her then that was it. I am satisfied that she said words to this effect and that it was understood as her opting for redundancy by Mr Brady and Mr Casey and the same being recorded in the summary minutes of the meeting.

While it may have been preferable for the Complainant to suggest alternatives roles it remained the Respondent’s duty to try and identify alternatives to redundancy.  I believe it was reasonably foreseeable that an employee treated the way the Complainant was would not expose themselves to humiliation or stress by suggesting roles, when they had no faith in that making any difference.

My view on the Complainant’s failure to engage also applies to her lack of appeal.  While I note the Respondent’s referral to the EAT’s decision of Pungor and MBCC Foods Ltd in this regard I believe the facts of the case set it apart.

Conclusion

Having regard to the above circumstances I am not satisfied that that the Respondent carried out a thorough exercise to consider alternative options to redundancy. In the circumstances they have failed to establish that the dismissal was permitted under Section 6 of the Act.

Award -Redundancy/ Superannuation

Section 7(c) of the Unfair Dismissals Act outlines that as an alternative to reinstatement or reengagement the I can award compensation to the Complainant, if the employee incurred any financial loss attributable to the dismissal.

The Complainant received a redundancy lump sum when she was terminated.

The legislation provides an extremely clear definition of what is financial loss. “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;

From the above it is clear that income and accrued statutory redundancy rights are different elements of financial loss. The Complainant’s case is a very good illustration of why this makes sense. The Complainant had 28 years of service with the Respondent, she now has a few months service with her new employer. If this new employer experienced a downturn in business or decided they needed to restructure, and the Complainant was made redundant she would have absolutely no entitlement to a statutory redundancy payment. She has lost an entitlement, derived from long service with the Respondent, which would provide a degree of financial security in the face of future economic changes. This is a financial loss separate and distinct to her being out of work following the termination. 

It is clear to me that the act envisages redress for both elements of financial loss. That is actual/prospective loss of income and the value of any loss or diminution of statutory redundancy rights.

As the Respondent has already paid the Complainant her full statutory redundancy entitlement I do not need to examine whether a payment needs to be made the Complainant in this case relating to that element of loss.

Award -Income

I must consider what payment there is owing to the Complainant for any actual loss and any estimated prospective loss of income attributable to the dismissal.

The Complainant was dismissed in November 2022. Her evidence was that she sought work immediately and was offered a job in January 2023 but it fell through. She was employed in May 2023 and is on a lower salary of €31,200. 

The Complainant identified loss of €6030 at the hearing. The Complainant deducted the social welfare payments she received from her own figures regarding financial loss. However Section 7 (2)Aof the Unfair Dismissals Act requires me to disregard these payments and not deduct them from any award. As such the calculation for loss in this period is €9990.

Her ongoing loss is calculated to be €5800 per year.

As the Respondent points out the Complainant has a duty to mitigate her losses and demonstrate the same. She has provided limited evidence of her efforts between November 2022 and May 2023. As such I am not satisfied that she made sufficient efforts to mitigate her losses. She obviously sought an applied for some jobs, but I cannot be sure how many and when.

For the purposes of calculating this award I believe it is appropriate to reduce the €9990 figure identified as accruing at the time of hearing to €5000.

While the Complainant would need a significant pay increase in her new job to meet the salary of her old job, approximately 18%, it would be reasonable to expect that gap salary to narrow over time.

In the circumstances I believe a payment of €11,600, that is two years prospective loss from the date of the hearing is reasonable.

In the circumstances I believe total compensation of €16,600 is just and equitable having regard to all the circumstances.

I find that the complaint is well founded and direct the Respondent to pay the Complainant €16,600.