Complainant

Respondent

Parties

Kevin  Foley

Digital River Ireland Limited

Representatives

Anne O'Connell ,AOC solicitors

Ms Alison Fynes BL instructed by Mr Niall Pelly, GQ Littler.

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-00054332-001

03/01/2023

The Complainant was employed by the Respondent from 31st May 2021 until 19th October 2022. The Complainant was employed as a Senior Director of Sales.

This complaint was received by the Workplace Relations Commission on 3rd January 2023.

INTRODUCTION

1.     The Complainant was employed as a Senior Director of Sales for EMEA with the Respondent from 31 May 2021 until his unlawful dismissal on 19 October 2022. 

2.     The Complainant was dismissed under the guise of a redundancy. There was no genuine redundancy. Without prejudice to this, the Respondent did not follow any proper consultation process, it refused to engage with the Complainant, it failed to consider any proposals put forward by the Complainant and had clearly finalised its decision to terminate the Complainant’s employment before any process was commenced. The Respondent did nothing more than carry out a box ticking exercise to give the illusion that it was following fair procedures required in implementing a redundancy. Furthermore, the decision to dismiss the Complainant was made by a person who should also have been ‘at risk’ of redundancy if it was a genuine redundancy.

FACTS

3.     The Respondent and its parent company underwent a global collective redundancy process in July 2022. As set out in the Manager FAQ dated 19th July 2022, a full review took place to save costs on the following basis:

           “The reorganization announcement was based on the need to return to profitability by improving our ability to align our cost structure with a revised revenue plan, and ensure we meet our 2022 and future financial targets. To achieve these objectives, our focus will be on:

           • Operating effectively and efficiently.

           • Growing with current and new customers.

           • Anticipating and managing risk, proactively.

         We have reviewed all avenues to minimize the impact to our employees where possible. For example, we scrutinized all our non-people-related spending to look for areas of improvement or redundancy. We have also announced the termination and separation of contract employees as we focus more of our critical work through our own employees.

           In addition to these actions, Digital River has made the difficult decision to reduce our workforce to further reduce costs and restructure. The affected employees were selected based on the Company’s ability to consolidate and reassign tasks and the Company’s decision to stop pursuing certain products and services.”

         The document went on to state that the impacted employees are anticipated to be terminated before the end of August 2022.                                                                                                                        

4.     The Complainant was not part of this collective redundancy process and was not ‘put at risk’ of redundancy. Indeed, the Complainant was assured by his manager Dan Breuer, SVP Global Sales, on 19th July 2022 that there would be no further redundancies taking place. The Complainant was specifically asked to communicate and assure his team of same.

5.     On 17th August 2022, Mr Breuer sent an email to the global managers and subsequently to the entire company with slides on “Driving DR Forward”, which was a future strategy document to drive the Group Company forward after the completion of the collective redundancy process. The Complainant’s name was on the organisation chart for ‘Sales/SDR Operating Model (Europe)’ as the Europe Leader. The new structure involved the consolidation of the sales team across mid-Market and Enterprise in Europe after the Mid-Market Global Sales Director was made redundant and giving full reasonability to the Complainant in Europe. This required an extensive exercise with the teams to adjust 5000+ accounts and reassign the entire European territory to new team structure. The accounts for the sales staff that were made redundant were also re-distributed as part of this process to the new team structure. This was a 2–3-week process and required a number of individual meetings with each sales person to ensure they were happy with the changes and given reassurance of the future strategy. The business development function was also adjusted to suit the new format. This was also pointed out by Mr Breuer in the email to the Complainant on 29th August 2022 relating to territory and structure moving forward. Mr Breuer was to grow the sales in America and the Complainant was to grow the sales in Europe. The Complainant and his three direct reports were working on implementing the new strategy.

6.     On 29th August 2022, Mr Breuer messaged the Complainant to inform him that he had secured a Retention Bonus Agreement for him and also that he was working on amending the new commission plan which the Complainant had an issue with. On 31st August 2022, the Complainant was presented with a copy of a Retention Bonus Agreement to sign, in which it stated that it considered the Complainant’s “continued service and dedication to Digital River essential to our business operations”.  The Agreement provided for a payment of €30k gross to the Complainant if he remained an employee of the Respondent until 31st March 2023 and met the criteria set out in the Agreement. Prior to signing the Agreement, the Complainant informed his manager that he had opportunities of employment elsewhere but was assured that he was part of the new team structure going forward. The Complainant signed the Retention Bonus Agreement on 1st   September 2022 based on this reassurance by Mr Breuer. 

7.     At an ‘All Employee Meeting’ (AEM) on 7th September 2022 the new org “Refinement strategy” was presented to the business in relation to the plan moving forward. This documented a clear plan for the business to break even following a €33million costs reduction after the July redundancies, with no further need for redundancies. Furthermore, at the same meeting on 7th September 2022, the Complainant’s role was clearly shown as part of the plan moving forward in the company structure.

8.     On 15th September 2022, the Complainant had a 1:1 meeting with his manager Dan Breuer and was assured again that there was no further redundancies to take place in September. Mr Breuer asked the Complainant to quash any such rumours with his team, which the Complainant did and later assured Mr Breuer that the EMEA team were not concerned or hearing any such rumours. There was no reference in these communications to “collective” or “mass” redundancies. It was simply “redundancies”.

9.     On Thursday 22 September 2022, seven days later, the Complainant was due to have his 1:1 meeting with Dan Breuer. However, an hour before the call with Mr Breuer, the purpose of the call was changed to ‘Business Update’ and Ms Becky Garroch, VP People and Places, was added in the invite. During the meeting the Complainant was informed that his role was now “at risk” of redundancy. The Complainant expressed his shock during the meeting, given the fact he had received multiple assurances that there would be no further redundancies, had signed a Retention Bonus less than a month previous and turned down other roles and that his role was clearly outlined in the new organisational structure going forward. The Complainant also commented on how this would impact on his reputation in the market.

10.  During the short meeting the Complainant questioned the reasons as to why his role was now being put at risk and what had changed in a matter of days. Mr Breuer and Ms. Garroch did not answer his question as to ‘what had changed?’. Instead, they repeated the scripted response, that there was a re-evaluation of the sales structure, and a decision was made to centralise the global sales team. They did not explain what had resulted in the sudden need to re-evaluate the sales team after it had been clearly reviewed in detail in the previous months. They also refused to explain why the Complainant’s role was selected. They did not explain why the only other Head of Sales, Dan Breuer, was not also put ‘at risk’ of redundancy. Rather than being ‘at risk’ of redundancy, Mr Breuer took part in the alleged consultation process on behalf of the Respondent and made the decision in relation to the dismissal of the Complainant. Towards the end of this meeting, the Complainant queried, out of financial concern, what would happen with his retention bonus, his commission and was there a severance. The Respondent stated at this first meeting that the retention bonus would be given as an ex-gratia payment, without any qualification to their answer, clearly showing that the decision to terminate the Complainant’s employment had already been finalised.

11.  Following the at risk meeting with the Complainant, Mr Breuer, unknown to the Complainant, decided to call the Complainant’s three direct reports and informed them that the Complainant’s role was at risk of redundancy. Mr Breuer had no respect whatsoever about the Complainant’s privacy and had no reason to communicate that the Complainant was “at risk of redundancy” if the decision to terminate the Complainant had not already been finalised. After this call, the Complainant’s direct reports were reporting to Dan Breuer in relation to deals and the Complainant had very little interaction from this team. It was clearly a fait au complete.

12.  Ms. Garroch, in an attempt to rush through the process, sought to have the next redundancy consultation meeting with the Complainant on Monday 26th September 2022, two working days later. By email of 23rd September, the Complainant declined the meeting request and sought more time. The Complainant outlined the potential loss he may suffer, being the €30,000 in relation to the retention bonus, shares in the form of SARs he had been awarded and potential loss of his commission of an estimated €70,851. The Complainant outlined again in his email his shock at the decision to make his role redundant given the express confirmations from the Respondent that there would be no further redundancies seven days earlier, indeed further redundancies would not be necessary and less than three weeks previous he had signed a Retention Bonus Agreement. The Complainant was at a loss to understand how his role could now be inexplicably “at risk”.

13.  Ms Garroch responded by email on 23rd September 2022 enquiring if there was a better time for the meeting. The Complainant responded on the same date explaining that his solicitor was not available to talk to him until mid-next week and therefore requested the meeting to be held on Thursday 29th September. Ms Garroch responded to the Complainant on 26th September 2022 stating -

           “…there is no legal need to wait until Thursday. I will look to find alternative time tomorrow to go ahead with this meeting.” 

           The Complainant had to send Ms Garroch a further email begging for the meeting to be pushed back to Thursday as he felt it was important to talk to his solicitor beforehand. Finally, Ms Garroch begrudgingly postponed the meeting to Thursday 29th September 2022.

14.  The Complainant attended the consultation meeting on 29th September 2022 with Ms Garroch and Mr Breuer and put forward a number of questions to understand the reason for the sudden change in strategy, why his role was singled out and whether there was any other roles in Europe put at risk. As seen in the notes of the meeting of 29th September 2022, both Mr Breuer and Ms Garroch, would not answer the question as to whether there was any other role put at risk in Europe and why only his role was singled out but merely stated “there is only one head of Europe sales”.

15.  Both Mr Breuer and Ms Garroch used very definitive language during the meeting as seen in the notes.  They stated that “we do not need the role going forward” and that ‘it is redundant’.  It was clear that the decision was made before the consultation process commenced. The proposed centralisation of the global sales team would entail the management of the EMEA sales team from the US. However, Ms Garroch and Mr Breuer were unable or unwilling to answer how they were going to manage the day-to-day operations of a European sales team from a different time zone in the US. There was clearly no willingness on the part of the Respondent to engage with the Complainant in any discussion about the criteria used for selecting and singling out the Complainant’s role for redundancy. The Complainant expressed the belief that the whole process was “absolutely targeted and an individual attack”.

16.  Furthermore, the Complainant was eventually informed during the meeting that Mr Breuer was to take over the Complainant’s responsibilities. The reason given at this meeting for his selection was due to his number of direct reports being reduced to 3 in October 2022. However, the Complainant’s number of direct reports was back to 3 after the July 2022 collective redundancies and this was known and reflected in the strategy documents for moving the business forward after the restricting. Therefore, this reason made no sense to the Complainant as it wasn’t anything that had changed.

17.  There were no answers provided to the Complainant during the meeting as to what changed in the company to require this change. There was no mention of any necessity to further save costs or any requirement for further efficiencies. There was no engagement with the Complainant during the meeting. The Respondent required to get legal advice or made other excuses not to answer the Complainant’s questions at the meeting. 

18.  Later on 29th September 2022, Ms Garroch again attempted to push the Complainant to attend the next consultation meeting in line with her timeline, on 3rd October 2022. In the same email, she confirmed that the Complainant was the only employee in EMEA who has been put ‘at risk’ of redundancy in September and that the “decision” was made by Ted, Dan and herself on 20th September 2022. She attached a Teams invite which did not illustrate what the call was about. The Complainant emailed Ms Garroch informing her that his sister had difficulty on that date. Ms Garroch responded trying to get the Complainant to attend the meeting on his own. The Complainant pointed out that he was only requesting that the meeting be delayed by 2 working days which is not unreasonable. Finally, Ms Garroch begrudgingly agreed.

19.  On 5th October 2022 the Complainant put forward a comprehensive written proposal for an alternative role for discussion at the next meeting. The Complainant also repeated a number of questions in his email that had still not been answered at the previous meetings. The Complainant had only been provided with the repeated scripted answer from the Respondent as to why his role was being put at risk. Specifically, the Complainant queried:

“1. What happened in the few weeks between the date I was asked to sign a Retention Agreement and the date I was put at risk of redundancy? I have always only had 3 reports and therefore this does not explain what happened that lead to this decision being made contrary to all other messages. It is very hard to make a proposal when you have refused to tell me what happened to have led to this sudden decision.

2. Why was my name on the PowerPoint emailed to the strategy team and heads of department 17th of Aug, emailed directly to Kevin Foley 28th of Aug from Dan Bruer, Presented to the Sales organisation in Europe and the US on Aug 31st as part of the business going forward? Please refer to the screenshot attached from powerpoint presentations from multiple communications.

3. Why was I informed there would be no more changes in Europe on July 19th and instructed to inform my team. Teams Screen shot attached. Why was I informed on September 15th there would be no more redundancies in September in a 1:1 meeting? In a 1:1 on September 15th with Daniel Bruer I was asked if I had heard of any rumours of redundancies happing in Sep and I informed him I had not. He stated that two people had approached him. I was then told that there will be no further redundancies in September and to inform the team and quash any rumours. I spoke to the team and reverted to Dan with reassurance that the team were ok. “Mass redundancies” was never mentioned in this communication as alleged at the meeting.

20.  The Complainant clearly sought in his email answers to these outstanding questions prior to the next meeting to enable him to put additional context on his proposal. He did not seek an answer to his proposal. He stated at the end of his email –

           “ I should be grateful if you would respond to my above questions before our next meeting so that I can put more context on my proposals.”

21.  However, Ms Garroch reverted to the Complainant almost immediately on the morning of 7th October 2022 (US time), firstly rejecting the Complainant’s proposal outright without any discussion with, or clarifications sought from the Complainant. She made untrue assumptions about the proposed role in order to justify the rejection. It was clear that no proper or genuine consideration had been given to the Complainant’s proposal given the speed Ms Garroch had responded and the lack of any engagement with the Complainant in relation to it.  This was another clear indicator that the Respondent had already finalised its decision to terminate the Complainant’s employment and that it just wanted to rush through a box ticking exercise.

22.  In response to the Complainant’s questions outlined above, Ms Garroch in her email attempted to submit that:

           1. the Complainant had eight direct reports in April 2022, which would be reduced to three direct reports by October 2022 and that this formed part of the strategic business review in assessing the extent to which there was an ongoing need for a standalone EMEA Sales Leader.  This point was addressed by the Complainant in his response referred to below.

           Ms Garroch also stated that the award of a retention bonus at the end of August 2022 did not impact the company decision to make the Complainant’s role at risk of redundancy and align the sales team globally in September, as it was a different point in time. It is clear that this is a vague absurd answer to the Complainant’s question and gives no real clarity as to why there was a sudden change in strategy from the Respondent within a three-week time period.

         2.Ms Garroch further stated that as the Complainant was still an employee, that is why his name continued to appear on the organisation charts for September.  However, it is clear that the organisation charts presented to the company were in relation to the business going forward after the collective redundancy process and re-structuring and that the Complainant’s role was part of the future business strategy mere weeks before his role was put at risk.

           3. Ms Garroch also attempted to submit that any communications in July 2022 to the Complainant about any future redundancies were to the company as a whole and were to give the “all clear” and “this is a common practice post the global re-organization so that employees whose roles are not impacted understand there are no further notifications at that time”. This is incorrect as the Complainant received direct communications and assurances from his own manager, Dan Breuer, on 19th July 2022 requesting the Complainant to “please let your team know that there are no changes in Europe”.

23.  Ms Garroch’ attempts to twist the narrative of the matter does not align with the facts. The Complainant reverted to Ms Garroch on the same day to point out that she was incorrect on a number of points, specifically that he had only three enterprise direct reports with sole responsibility, a point which was acknowledged by Ms Garroch at the previous meeting and that the other names referred to by Ms Garroch were part of a shared responsibility with the Global Sales Director. Furthermore, the Complainant expressed his astonishment that his proposal was dismissed outright with no substantial consideration given to this alternative and he was not being given any opportunity to properly consult and explore his proposal.

24.   On receipt of the Complainant’s email Ms Garroch attempted to back-pedal and by email of 9th October 2022 offered to discuss the position at the next meeting.

25.  However, when the proposal was eventually discussed at the next meeting on 10th  October 2022, despite the Complainant addressing the Respondent’s alleged reasons for rejecting the proposal, it was clear that they were not interested,  it made no difference and there was no change in their predetermined position.

26.  Following the meeting on 10th October, the Complainant emailed Ms Garroch expressing his complete frustration at the supposed consultation process and reiterated that it was clear that the decision to dismiss him from his role was predetermined and that no real explanation was given for what had changed in September 2022 and no real consideration was given to his proposals to stay at the Respondent.  

27.  By email on 10th October 2022, the Complainant discovered that Mr Breuer was losing two of his direct reports as they had tendered their resignations. This meant that Mr Breuer would have one report less than the Complainant. This again raised the question as to why Mr Breuer was not put at risk of redundancy with the Complainant, if it was a genuine redundancy.  This explained why Mr Breuer was taking over the Complainant’s responsibilities. In such circumstances, Mr Breuer’s involvement in deciding to terminate the Complainant’s employment was contrary to basic fair procedures and made his dismissal entirely unfair.

28.  The Complainant reluctantly attended the final meeting on 17th October2022 with Ms Garroch and Mr Beurer, as he felt that the decision to dismiss him from his role had clearly already been made. The Complainant stressed again that the strategy had been that Mr Breuer would grow the business in the US and the Complainant would maintain Europe, this was clearly outlined in the future organisation charts and in discussions as to how the business would grow following the collective redundancies in July 2022. However, the new strategy was simply to wrap up a global sales team, which did not align. Furthermore, no answer was given to the Complainant when he questioned what the new strategy was.

29.  The Complainant raised at this meeting the fact that Mr Breuer’s number of direct reports were reducing to two and therefore it did not make sense that his role was at risk of being made redundant when he had 3 direct reports. However, the point was never addressed or responded to by the Respondent.

30.  Ms Garroch also stated that she had looked at alternative roles within the Respondent  but could answer during the meeting the Complainant’s queries as to what roles she had looked at or reviewed. Clearly Ms Garroch was sticking to the pre-scripted process that she had to follow and there was no room for engagement or discussion which is required in any proper consultation.

31.  The Complainant received notice of termination of his employment two days later, on 19th October 2022, which was effective immediately on that date.

32.  The Complainant submitted Grounds of Appeal to Becky Garroch on 24th October 2022, appealing the decision to terminate his employment. He referred to there being an oral Appeal Hearing in his email. At no time was the Complainant informed that the Appeal would be decided on documents only and without any meeting/hearing.

33.  On 4 November 2022 the Complainant was shocked to receive an Appeal Report from Mr Andrew Hedden, Director of Legal Counsel, who was conducting the appeal on behalf of the Respondent. The Complainant was never advised that the appeal would be decided without giving him an opportunity to talk to the decision maker. The Complainant made it clear in his grounds of appeal that he wanted to expand on the grounds at the appeal hearing but he was never informed that an appeal hearing would never take place. The appeal was conducted in the same manner as the Complainant’s dismissal, predetermined and without any regard of what the Complainant had to say.

THE LAW

34.  Section 5 of the Unfair Dismissals (Amendment) Act 1993 provides, inter alia, that:

“… in determining if a dismissal is an unfair dismissal, regard may be had … to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal.”

35.  The onus is placed on the Respondent to justify the dismissal and where the Respondent seeks to rely on the redundancy defence, case law has determined that the following criteria must be met:

a)       A genuine redundancy situation must have arisen;

b)      Fair selection criteria applied and discussed with the employee in advance of finalisation;

c)       Serious or worthwhile consultation with the employee prior to making the decision to make him/her redundant;

d)      Consult and explore alternatives to the redundancy; and

e)      Offer an option of appeal

36.       The Employment Appeals Tribunal (“EAT”) set out the conduct expected of employers in a redundancy situation in the case of Margaret Griffin v. John Spicer & Company Navan (UD1938/2009), where, the EAT did not accept that the respondent in the case acted fairly and reasonably for the following reasons:

-      there was no “serious or worthwhile” consultation with the complainant prior to making her redundant;

-      there was no previous indication of the “very serious” financial difficulty in which the respondent found itself;

-      there was no discussion as regards to the criteria used for selecting the complainant for redundancy; and

-      there was no discussion with the complainant about her suitability for an alternative position other than the part-time position which the respondent unilaterally decided the complainant would not be interested in. 

37.       The EAT has reiterated these criteria in similarly decided cases. In Gillian Free v. Oxigen Environmental (UD 206/2011)heard on 22nd June 2012,the EAT was not satisfied that the respondent had acted fairly and reasonably when addressing the need to reduce the number of employees. It found that:

a)   there was no serious or worthwhile consultation with the complainant prior to making her redundant;

b)   the decision was made before the consultation process commenced;

c)   there was no substantial consideration given to alternatives; and

d)   there was no worthwhile discussion in relation to the criteria used for selecting the complainant for redundancy.

38.       In the High Court decision of JVC Europe Limited v Jerome Panisi, (2011), at paragraph 5 of Charleton J’s judgment he states:

“A dismissal, however, can be disguised as redundancy; that is not lawful… In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy is impersonal. Instead, it must result from… ‘reasons not related to the employee concerned.’ Redundancy, cannot, therefore be used as cloak for the weeding out of those employees who are regarded as less competent than others or who appear to have health or age related issues. If that is the reason for letting an employee go, then it is not a redundancy, but a dismissal.”

39.       In the case of Oscar Mielczarek v Adrian Lee Services Limited Employment Appeals Tribunal, UD2073/2009, 2 August 2012.  In this case, the EAT found that the employee had been unfairly dismissed by reason of redundancy and awarded the employee the sum of €200,000 in compensation. In coming to its decision the EAT took into account that: there was no prior discussion with the employee in relation to the proposed redundancy and the employee was not invited to submit any alternatives to redundancy; there was no genuine redundancy of the position; the employer fell well short of proving that a redundancy situation existed and that redundancy was the main reason for dismissal; the decision to dismiss the employee had to be viewed against the background of antagonistic relations between the parties; the employer did not act as a reasonable employer should act having regard to all the circumstances; the employer did not act fairly and reasonably in their dealings with the employee; and the employee was dismissed for performance issues under the cloak of redundancy.

SUBMISSIONS

40.  It is submitted that in this case, that there was no genuine redundancy. The basis for the Complainant’s termination was personal to him and a redundancy is impersonal.

 There was no reference to any requirement for cost savings or efficiencies. No reason was given to the Complainant as to the necessity for his alleged redundancy. He was the only person in sales put “at risk” of redundancy which further highlights that it was not impersonal. There were two heads of sales but only one was put “at risk” of redundancy regardless of the fact that nothing in his team had altered since the new strategy had commenced. The Complainant was the only employee of the Respondent that was made redundant in 2022 after the July 2022 collective redundancies.

41.       Without prejudice to the above submission that the redundancy was not a genuine redundancy, the Respondent did not follow fair procedures in effecting the termination of the Complainant, even if it was a genuine redundancy -

(i) The actions and the language used by the Respondent indicated that the decision to terminate the Complainant’s employment was predetermined. This was especially reflected by Mr Breuer contacting the Complainant’s 3 direct reports unknown to the Complainant and informing them that he was put ‘at risk’ of redundancy and taking over the management of the deals from that date.

(ii)   The Respondent attempted to rush through the consultation process again showing predetermination.  Ms Garroch kept trying to schedule the next consultation meeting as soon as possible, giving the Complainant very little time to consider the matter in between meetings. The Complainant had to insist on getting more time and the push back received from Ms Garroch added to his stressful situation and was entirely unreasonable on the part of the Respondent.

(iii)  During the consultation meetings, the Respondent worked from scripts and refused to answer questions that the Complainant raised if they did not fall within the script. They also refused to engage in any discussions with the Complainant during the consultation meetings to assist him to understand the basis for putting his role at risk of redundancy, so that he would be better placed and better informed in putting together any proposals.

(iv)    The Respondent failed to clarify why the Complainant was selected to be put at risk of  redundancy. When he was informed that it was due to having 3 reports from October 2022, he corrected the Respondent and reminded them that he initially had 3 direct reports and that he was back to 3 direct reports since the July redundancies. The strategies moving forward were drafted on the basis of the Complainant having 3 direct reports and therefore this reasoning made no sense and clearly was not the true reason.

(v)     The Respondent failed to give any consideration whatsoever to the Complainant’s proposal before rejecting it out of hand. In fact, rather than discussing the proposal with the Complainant, which he expected to have the opportunity to do, the Respondent made untrue assumptions about his proposal in a feeble attempt to justify its rejection of the Complainant’s proposal.

(vi) The Respondent refused to respond to the Complainant during the last meeting as to why Mr Breuer was not put ‘at risk’ of redundancy.

(vii)    The Respondent informed the Complainant that Mr Breuer was to take over the Complainant’s responsibilities. Given this together with the fact that Mr Breuer should have also been put at risk of redundancy, Mr Breuer was conflicted and should not have been part of the decision makers in relation to the dismissal of the Complainant.

(viii) The Respondent did not consider any alternative roles for the Complainant, regardless of making statements to the contrary. Ms Garrach was unable to identify what roles were considered when queried during the last consultation meeting.

(ix) The Complainant was not given an opportunity to be heard and to explain his grounds of appeal before it was decided upon. The Respondent failed to inform the Complainant that he would not get such an opportunity even though he had referred to it in his grounds of appeal.

The Respondent carried out a mere box ticking exercise in respect of terminating the Complainant’s employment. However, in doing so, the Respondent denied the Complainant any form of fair procedures in breach of his rights to natural justice and it did not act reasonably in effecting his dismissal in breach of the Unfair Dismissals Acts.

REMEDY

42.       Section 7 of the Unfair Dismissal Acts provides for redress for unfair dismissal of, inter alia, re-instatement or compensation in respect of financial loss attributable to the dismissal “as is just and equitable having regard to all the circumstances” but not exceeding 104 weeks’ remuneration. The Complainant sought compensation and re- instatement in his WRC Complainant Form. 

43.       The Complainant made considerable efforts to mitigate his loss and seek alternative employment following his unfair dismissal by the Respondent. Although his applications have been rejected, he has finally secured new employment commencing on 8th August 2023.  The Complainant will give oral evidence in relation to his efforts in respect of mitigating his loss from the date of his dismissal.  A list of the roles and dates of applications, meetings together with email correspondence from job applications as at June 2023 are available.

44.       Due to the Complainant securing alternative employment he now seeks compensation.

45.       The Complainant will be unemployed for a total of 42 weeks from the date of his dismissal until the date of his new role. The Complainant’s financial loss for that period works out as €168,682.09 gross.

46.       The Retention Bonus Payment was not added to the financial loss as the Respondent paid it in line with clause 1 of the Retention Bonus Payment where he was terminated without cause. Correspondence had to be sent to the Respondent by AOC Solicitors on behalf of the Complainant pointing out the Complainant’s entitlement to the payment by letters dated 10th and 15th November 2022. The Complainant received his contractual retention bonus payment of €30,000 gross at the end of November 2022 in line with the Retention Bonus Agreement. This does not reduce the Complainant’s financial loss as if had not received it, the amount would have been added to his financial loss figure.

47.       The Complainant seeks compensation in the amount of his full financial loss in the amount of €168,682.09 gross.

CONCLUSION

48.       The Complainant was unfairly dismissed in breach of the Unfair Dismissals Acts and he seeks compensation for his full financial loss. 

1.Introduction.

1.1           The Respondent is an Irish registered company and a wholly owned subsidiary of Digital River Inc. The Respondent is part of the Digital River group (“the Group”); a global group of companies which provides internet commerce and marketing consulting services. It offers software tools and services for website development, customer acquisition, transaction processing, tax management, and product fulfilment. The Respondent manages the Group’s operations in Ireland.

1.2           At the beginning of 2022, the Group had 648 employees globally. However, owing to a downturn in business, by the end of 2022, the Group had 382 employees globally. The Group had involuntary eliminations in March, May, July, September, October and December 2022 as well as in January 2023. The Respondent had 55 employees in January 2022. This number had decreased to 44 by January 2023 owing to redundancies.

1.3           The combined US GAAP financial results of operations for the Ireland based entities of the Group were a loss of €5.2million for the nine-months ending 30th September 2022.

1.4           In September 2022 Digital River Inc engaged in a restructuring process and having evaluated the business decided to centralise its global sales team.

1.5           The Complainant, Mr. Kevin Foley was employed by the Respondent as Senior Director of Sales. This role was the only EMEA sales leader role in the Group. His employment commenced on 31st May 2021.

1.6           In September 2022, the Complaint was informed that his role was being placed at risk as part of the decision to centralise the Group’s global sales team. Following a thorough consultation process, his employment was terminated by reason of redundancy on 19th October 2022. The Complainant appealed the decision and following an independent appeal process the redundancy dismissal was affirmed.

2               Background

i.                  Identifying the Complainant’s role as being at risk of redundancy

2.2               In September 2022 Digital River Inc. engaged in a strategic business review. The decision was made to restructure the Group’s organisational model in light of a downturn in business. The decision was made to align the sales team globally so as to have the field sales team globally between Europe and the US as one team reporting to one individual as opposed to two individuals.

2.3               As part of this re-alignment, Digital River Inc. re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post earlier redundancies. On both 15th September 2022 and 20th September 2022, Digital River Inc.’s Chief Revenue Officer, Mr. Ted Rogers, SVP Global Sales, Mr. Dan Breuer and VP People & Places, Ms. Becky Garroch met to discuss this re-alignment and re- structuring. The decision to align the sales team globally led to the decision to place the Complainant’s role as EMEA Sales Leader at risk of redundancy.

ii.                  Communicating that the Complainant’s role was as at risk of redundancy

2.4               The Complainant was asked to attend a meeting on 22nd September 2022 with Mr. Breuer and Ms. Garroch at which he was informed that following restructuring, the Group had evaluated and decided to centralise the global sales team. As a result, the Complainant was informed that his role as Europe sales leader had been put at risk of redundancy. This role was identified as being at risk of redundancy based on the Respondent’s need to consolidate responsibilities.

2.5               Ms. Garroch emphasised that at this time no final decisions had been made in relation to the Complainant’s role. It was explained to the Complainant that a consultation process would be conducted whereby the Respondent would look at suitable alternative roles that might interest the Complainant. He was informed that at that time there were no suitable openings in EMEA, however there was a possibility of global open roles that the Complainant might wish to consider. Ms. Garroch stated that she understood that this was difficult news for the Complainant to hear. He was advised to take the rest of the day off and a follow up meeting would be set up early the following week to answer any questions that the Complainant might have. At the end of the meeting the Complainant asked questions concerning his retention bonus, commissions and severance. A copy of the minutes of this meeting was provided to the complainant by way of email from Ms. Garroch dated 23rd September 2022.

2.6               The Respondent provided the Complainant with a letter outlining that his role had been placed at risk by email on 22nd September 2022. This letter outlined that the Respondent would be engaging in a formal consultation process with the Complainant with a view to discussing any alternatives that could be identified or a means by which any potential redundancy situation could be averted.

iii.            Consultation process

2.7               The Respondent engaged in a thorough consultation process with the Complainant which comprised a total of three remote meetings over the course of a three week period. Details of each of these meetings are set out below.

a.     The first consultation meeting

2.8               The Complainant was invited to a first consultation meeting on 26th September 2022 in order to explore potential alternative roles. Following a request from the Complainant, the meeting was rescheduled to 29th September 2022 as the Complainant indicated that he wished to seek the advice of his solicitor in advance of this meeting. The Respondent agreed to accommodate the Complainant’s request for the meeting to be rescheduled.

2.9               Ms. Garroch informed the Complainant by way of email on 27th September 2022 that he was entitled to be accompanied by another employee as support during the consultation meeting, provided that the Respondent deemed that person a reasonable representative. Ms. Garroch stated that the nature of the meeting was an individual consultation and during the meeting the parties would be looking at suggestions for suitable alternative positions and the Respondent would be answering the questions that the Complainant had raised in the meeting of 22nd September 2022, concerning his retention bonus, commission and severance.

2.10           By email the following morning on 28th September 2022 the Complainant requested a change to the time of the meeting and that his sister be permitted to attend as a note taker. Both requests were acceded to by the Respondent.

2.11           The first consultation meeting was held remotely on 29th September 2022 at 6pm. It was attended by Ms. Garroch, Mr. Breuer, the Complainant and his sister. Ms. Garroch commenced the meeting by indicating that its purpose was to explore suitable alternative roles and answer any questions from the Complainant. Responses to the questions concerning the retention bonus, commission and severance raised by the Complainant in the at risk meeting on 22nd September 2022 had been prepared by the Respondent however the Complainant requested that these not be answered as he had other questions he wished to raise.

2.12           During the course of the meeting in the context of a question from the Complainant concerning why his role had been made redundant Mr. Breuer informed him that the Digital River Inc. had decided to centralise the global sales team. Mr. Breuer explained that Digital River Inc. intended to restructure its organisation model so as to have the field sales team globally between Europe and the US as one team reporting to one individual as opposed to two individuals. In relation to the retention bonus that had been provided to the Complainant the previous August, Mr. Breuer stated that a decision to consolidate the team and make it a global team had been made subsequent to the decision to provide the retention bonus.

2.13           In response to the Complainant’s query as to how his role had been selected, it was explained to him that the decision to consolidate the sales team had been made and there was no role for a head of European sales in this consolidation. It was explained that owing to the changes in the business he would now only have three reports.

2.14           Mr. Breuer informed the Complainant that at that time there was only one open position within Europe and that was an accountant position, in respect of which the Complainant was not suitably qualified. The Complainant indicated that he wished to go away and think about ideas and proposals that he might put forward to the wider business. He indicated that he would check the careers portals to see where there could be a suitable fit in the business for him.

2.15           The meeting concluded with Ms. Garroch proposing that the next meeting should take place the following Monday, 3rd October 2022. However, she stated that the meeting would occur at this time if the Complainant thought that this would be a reasonable amount of time for him to prepare. The Complainant indicated that he would come back to Ms. Garroch on this.

2.16           Notwithstanding the fact that the Complainant expressed himself dissatisfied with the majority of the responses provided during the course of this meeting and criticised the responses as “vague”, Mr. Breuer and Ms. Garroch engaged fully with the questions asked by the Complainant and indicated that where they did not have information to hand regarding specific dates or whether they required legal advice they would revert to the Complainant.

2.17           The Complainant indicated that the decision to put his position at risk felt “targeted”. There is absolutely no basis for this contention having regard to the rationale underpinning the decision to place his position at risk as explained to him at the at risk meeting and again at this meeting. Similarly, the Complainant’s remark that he felt rushed is without any basis in fact having regard to the fact that he was facilitated with a rescheduling of the meeting both in terms of date and time. The Complainant’s complaints as expressed in this meeting are entirely without merit as appears from a review of the minutes of the consultation meeting.

2.18           The Complainant was provided with a copy of the minutes of the meeting on 30th September 2022. The Complainant provided a copy of the notes taken by his sister during the meeting.

b.     The second consultation meeting

2.19           Ms. Garroch sent the Complainant an invitation to the second consultation meeting on 29th September 2023 following the conclusion of the first consultation meeting. The second meeting was scheduled for the following Monday, 3rd October 2022 as had been suggested during the first consultation meeting. The Complainant responded by email indicating this would afford him insufficient time. The Respondent took into account the Complainant’s objection and Ms. Garroch sent him a further invitation for the meeting, this time on Wednesday 5th October 2022. The Complainant responded indicating that he had a conflict at this time and suggested Friday 7th October 2022.

2.20           The Complainant emailed both Ms. Garroch and Mr. Breuer on 5th October 2022 setting out his proposals in relation to his continued employment. He proposed that his employment would be retained in a role as head of all commercial teams in EMEA. He also set out three questions in this email regarding the decision to place his role at risk of redundancy, namely:

(i)              What had changed between him being asked to sign a retention agreement and 22nd September 2022? He stated that he had always had only 3 reports, and this did not explain why a decision had been made to put his role at risk.

(ii)            Why his name appeared on a PowerPoint emailed to the strategy team and heads of department on 17th August 2022?

(iii)           Why was he informed there would be no more changes in Europe on 19th July 2022 and instructed to inform his team?

2.21           Crucially, the Complainant concluded his email by stating: “I should be grateful if you would respond to my above questions before our next meeting so that I can put more context on my proposals.”

In line with the Complainant’s express request for a response to his email in advance of the meeting scheduled for 10th October 2022, Ms. Garroch responded on 7th October 2022. She indicated that Mr. Rogers, Mr. Breuer and herself had taken the time to fully review and consider the content of the Complainant’s proposal internally. In relation to the proposed role of head of commercial teams EMEA, Ms. Garroch summarised the position as follows:

(i)              This was not a position that currently existed. This role had been created in 2014 when the organisation was significantly larger – 1,400 employees globally compared to 430. The creation and implementation of this role was not successful at the time and was dissolved in 2016, as it created greater silos in operating with different structures in US to EMEA – in short, the Head of Commercial Teams EMEA type role created at that time resulted in an overly matrixed organisation that was not a workable “fit” within the Group’s business model.

(ii)            The decision to restructure was to align the sales team globally. The net effect of the Complainant’s proposal would be the opposite of what the Respondent was trying to achieve with a more streamlined approach – it would be effectively creating a separate sub-team across multiple functions in EMEA. The organisation was purposefully designed to be structured based on functional area, and not operated independently by region (i.e. centralising global teams where possible).

(iii)           A large scale reduction in force was made in the summer of 2022 which was driven by financial need primarily. The role proposed by the Respondent was a higher level and therefore would likely constitute a more highly compensated role than the Respondent would not have the budget to afford at that point in time - even it aligned with the current corporate strategy.

2.22           Ms. Garroch thus stated that having fully considered the Complainant’s proposal regrettably the Respondent did not consider it to be feasible from a business perspective.

2.23           Ms. Garroch further responded to the Complainant’s three questions as set out above:

(i)              In relation to his direct reports Ms. Garroch stated that in April 2022 the Complainant had 8 direct reports but owing to redundancies and resignations as of 31st October 2022, he would have only 3 direct reports. This, she stated was a significant change from a business organisation perspective and one that the Respondent took account of as part of its strategic business review when assessing the extent to which there was an ongoing need for a standalone EMEA sales leader post the significant restructuring programme.

She stated that the decision to award the Complainant a retention bonus at the end of August did not in any way impact on the Respondent’s decision to subsequently identify the need to place his role at risk of redundancy. During the collective redundancy exercise in July 2022, the Complainant’s role was not considered to be at risk of redundancy. However, in September 2022, the Group re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post-redundancies. It was concluded that there was a desire to align the sales team globally, which led to the Respondent putting the Complainant’s role as EMEA sales leader at risk of redundancy.

This was not a sudden decision as suggested by the Complainant but rather a decision that took place following an internal re-grouping and re-assessment of the post-collective reorganisation structure and consideration of whether any further adjustments in the structure were warranted to align with the overall strategic business review.

(ii)            As the Complainant remained an employee of the Respondent he continued to appear on organisational charts and would continue to appear on organisational charts pending the outcome of the consultation process.

(iii)           Regarding the communication on 19th July 2022, this was made in respect of the actions that were made on that day globally, that the Respondent had communicated to all the employees that were being potentially impacted at that time. This was a large scale global layoff, with employees globally all being notified on the same day. There were communications that went out across the organisation to give an “all clear”. This is a common practice post the global re-organisation so that employees whose roles are not impacted understand there are no further notifications at that time. She stated that this did not mean that an organisation will never make other decisions and other reductions in the near or far future.

While the Respondent’s sincere hope was that there would be no other roles identified to be at risk following the July collective redundancy programme, this was not the case and the Respondent remained committed to fully consulting with the Complainant before any final decision was made.

2.24           Ms. Garroch concluded by stating that these matters would be discussed further at the second consultation meeting.

2.25           The Complainant responded by email of 7th October 2022 stating that he was “astonished” that a decision had been made about his proposal without giving him the opportunity to fully discuss it. The Respondent cannot accept this criticism of Ms. Garroch’s email of 7th October. The Complainant expressly sought a response in advance of the meeting on 10th October 2022 and then complained that he received a response. This, in and of itself, to use the Complainant’s words, is astonishing.

2.26           Further, inher emailMs.Garrochset outtheRespondent’spositionbut indicatedthat these matters would be discussed further at the meeting the following Monday. The Respondent was thus afforded time to consider the Respondent’s position and adapt his proposal in advance of the meeting the following Monday in accordance with his request. The Complainant also contended that Ms. Garroch was incorrect in relation totheinformationshehadprovidedinrespectofthenumberofhisreports.

2.27           The Respondent does not accept this criticism. Ms. Garroch will outline in her oral evidence the number of reports that the Complainant had throughout the duration of his employment with the Respondent. Her evidence will be that upon the commencement of his role the Complainant had 6 direct reports across Europe. As of 1st January 2022, he had 5 direct reports across Europe. In mid-January 2022 the 2 APAC sellers were added bringing his total of direct reports to 7 and from mid-March the total number of direct reports was 8. The two APAC sellers were made redundant in May 2022 reducing the number of direct reports to 6. Two of the Complainant’s team resigned and as of June 2022 he had 4 direct reports. One of these 4 reports was let go in the reduction in force in July 2022 resulting in the Complainant having 3 direct reports at the beginning of the consultation process.

2.28           By response dated 9th October Ms. Garroch reiterated that the Complainant’s role had neither been confirmed as redundant nor had he been issued a notice of termination. She stated that the consultation process was still ongoing and, as such, every consultation meeting remained an opportunity for the Complainant to put forward queries and alternative proposals and, to provide further clarity on proposals that had already been put forward. She confirmed that no final decision had been made in relation to the Complainant and that the Respondent was committed to a thorough process. She stated that the reason such fulsome feedback had been provided on the Complainant’s proposed alternative was to ensure as informed and productive a consultation meeting would occur on 10th October. In respect of the Complainant’s number of reports she outlined that when he first began employment with the Respondent3 he had 6 direct reports and that in addition for a number of months a further two individuals in APAC were reporting to the Complainant until their roles were made redundant.

2.29           The second consultation meeting was held on 10th October 2022 and was attended by Mr. Breuer, Ms. Garroch, the Complainant and the Complainant’s sister. At the commencement of the meeting Ms. Garroch stated that its purpose was to explore suitable alternative roles, or redeployment and to answer any of the Complainant’s questions. The Complainant was critical of the process during this meeting stating that it was “rushed” and that a decision had already been made about his proposal.

2.30           Ms. Garroch pointed out that it was inaccurate to describe the process as rushed as each time the Complainant had requested that the consultation meeting be rescheduled, the Respondent had acceded to the request and it had, at this time, been 10 days since the last meeting. Further, it was pointed out to the Complainant that he had been afforded with a response to his proposal on 7th October 2022 in accordance with his express request for same.

2.31           The Complainant indicated that in respect of the role he had proposed in his email of 5th October 2022 he would not be seeking an increase in pay. This adjustment to the proposal was subsequently considered by the Respondent but was not deemed feasible from a business perspective.

2.32           The minutes of this meeting were provided to the Complainant by email dated 11th October 2022. The Complainant provided the Respondent with a copy of the notes that his sister took during the meeting.

c.     Third consultation meeting

2.33           Ms. Garroch sent the Complainant an invitation to the third consultation meeting on 13th October 2022. The meeting was scheduled for 17th October 2022. By email of the same date the Complainant informed Ms. Garroch that he saw “little point” in attending a further meeting and contended that the process was “predetermined.” He declined the email invitation to attend the third consultation meeting. The Respondent does not accept that the process was predetermined in any respect. The Respondent fully engaged in the process and was open to considering alternative roles for the Complainant. Regrettably, no suitable roles were identified.

2.34           Ms. Garroch responded to the Complainant’s email on 14th October 2022. She rejected the Complainant’s complaints that the process was predetermined and corrected his assertion that there had been a decision to dismiss him. She emphasised that the consultation process had not yet concluded and as previously stated no decision had been taken to dismiss him. She reiterated the Respondent’s full commitment to engaging with the Complainant in a thorough process in an effort to fully explore alternatives to the potential redundancy.

2.35           The Complainant replied by email of the same date indicating that inter alia, none of the persons present at the previous consultation meeting “were interested in what” he had to say. A review of the minutes from that meeting renders it patently clear that this is incorrect. The Complainant stated that he would attend the meeting on Monday but thought that it was “a waste of everyone’s time.” The Complainant contended that Ms. Garroch’s email did “not reflect what actually [had] occurred to date and appears to be an effort to re-write history.”

2.36           A review of the correspondence and minutes of the meetings contained in the appendices to these submissions demonstrates quite starkly that it was in fact the Complainant who was inaccurately characterising what had occurred and who was seeking to “re-write history.” At all times, the Respondent remained committed to engaging fully with the Complainant in an effort to identify an appropriate alternative role for the Respondent. This was reflected in Ms. Garroch’s further response on 17th October 2022 in which she stated that at the next meeting they would discuss (i) any points that the Complainant felt the Respondent has not responded to in full in respect of your proposal; ii) any further variations to the Complainant’s proposal; or iii) any other alternatives to the Complainant’s proposed redundancy. A copy of this email chain and the Complainant’s initial rejection of the meeting invitation were made available.

2.37           The third consultation meeting occurred on 17th October 2022. It was attended by Mr. Breuer, Ms. Garroch, the Complainant and his sister. During the course of the meeting the Complainant complained that no reason had been outlined as to why the global sales team was being made. This complaint was made notwithstanding the fact that the rationale for the restructure had been set out at the at-risk meeting, the previous two consultation meetings and in the email of 7th October 2022. It was explained that other roles in the business had been reviewed but the Respondent could not see an alternative position for the Complainant. It was explained that Mr. Breuer, Ms. Garroch and Mr. Rogers had met to review the open roles again with a view to identifying a suitable alternative. The Complainant did not provide any further suggestions at this meeting.

iii.    Decision to terminate the Complainant’s employment

2.38           On 18th October 2022, Ms. Garroch, Mr. Breuer and Mr. Rogers met to discuss the consultation process. The minutes of each of the meetings were reviewed as was the Complainant’s proposal as set out his email of 7th October 2022 and his adjusted proposal whereby he indicated he would not seek an increase in salary if the position he sought was created. All open roles within the Group were considered. Ultimately, and for the reasons set out in the letter sent to the Complainant on 19th October 2022 it was determined that there was no alternative to redundancy for the Complainant.

2.39           By email dated 19th October 2022 Ms. Garroch provided the Complainant with an outcome letter confirming that 19th October 2022 was his last day of employment. The outcome letter outlined in summary the process that had been followed, namely the at risk meeting and the three consultation meetings. It was reiterated that the Complainant’s proposal had not been considered feasible from the Respondent’s perspective. Further, it was outlined that the adjustment to the proposal whereby the Complainant had outlined that he would not be seeking an increase in remuneration if the position he proposed was created, had also been considered but was not deemed feasible. The Complainant was provided with notice of his termination and informed of his right to appeal.

iv.    Appeal of the decision to terminate the Complainant’s employment

2.40           By email dated 24th October 2022 the Complainant emailed Ms. Garroch indicating an intention to appeal the decision to terminate his employment and setting out the grounds of appeal. The Complainant contended that:

(i)              The termination was not a genuine redundancy.

(ii)            There had been a failure to properly consider his proposal and a failure to consider alternative roles.

(iii)           The decision to terminate was predetermined.

(iv)           The decision to terminate was in been a breach of the Complainant’s contract.

(v)            The decision to terminate ignored the outstanding issue regarding commission.

2.41           Mr. Andrew Hedden, the Respondent’s Director Legal Counsel confirmed receipt of the grounds of appeal on 25th October 2022. By email dated 26th October 2022, Mr. Hedden attached the documentation that he would be relying upon in conducting the appeal. This documentation included the minutes of the at risk meeting, the minutes of the consultation meetings, the Complainant’s notes of the consultation meetings, the outcome letter, the email thread from 5th – 7th October 2022 concerning the Complainant’s proposal and the Respondent’s reply. Mr. Hedden indicated that if there were additional materials that the Complainant wished he consider, the Complainant should be notified by close of business on 28th October 2022.

2.42           By response of 27th October 2022, the Complainant requested that: “all emails sent so far” be taken into account. He provided a number of emails that Mr. Heddon considered as part of the appeal process.

2.43           Following a thorough review of the materials, Mr. Hedden reached the decision that each of the grounds of appeal were unfounded. He communicated this to the Complainant by letter dated 4th November 2022 and set out his reasoning in detail in respect of each ground of appeal.

2.44           On receipt of this decision the Complaint emailed Mr. Hedden on 4th November 2022 complaining that he believed that he would be given the opportunity to put forward and explain his grounds of appeal orally. Mr. Heddon responded by email of the same date noting inter alia that he had informed the Complainant that he would review the materials and anticipated that he would get back to him by the end of the week. He duly did this.

2.45           The Respondent submits that there is no merit to the Complainant’s complaint regarding an oral appeal. There is no requirement for same. What is required is that fair procedures are followed. This quite clearly was the case where Mr. Heddon had no involvement in the consultation process, informed the Complainant what materials he intended to consider, gave the Complainant an opportunity to provide further information which was duly received, considered all of these materials and provided a reasoned decision.

2.46           The Respondent received a copy of the Complainant’s WRC complaint form on 14th March 2023. The Respondent disputes the monthly salary indicated by the Complainant.

3               Legal submission

3.1           Section 6(1) of the Unfair Dismissals Acts 1977-2007 (“the UD Acts”) provides that the dismissal of an employee shall be deemed to be an unfair dismissal: “unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal”. Section 6(4) of the UD Acts specifically provides that an employee may be dismissed if that dismissal results wholly or mainly from “the redundancy of the employee”. The burden of proof is on the employer to establish the legitimacy of any redundancy dismissal.

3.2           The statutory definition of redundancy is found in s.7(2) of the Redundancy Payments Acts 1967-2007 (“the RP Acts”), which provides that an employee who is dismissed shall be taken to be dismissed by reason of redundancy: “if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly” to a number of listed factual circumstances which arise in business closures, general restructuring, changes of business location, reductions in workforces, changes of job functions, changes in the manner in which work is to be done or changes in requirements for particular jobs.

4               GENUINE REDUNDANCY

4.1           Section 7(2) of the RP Acts sets out the different redundancy situations which can arise each comprising a change in the workplace and provides that an employee is dismissed by reason of redundancy where their dismissal is wholly or mainly attributable to, inter alia:

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

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

4.2           The two most important characteristics in a redundancy situation are (i) the impersonality of the redundancy, in that it refers to the job and not the person, and (ii) the redundancy must be due to a change in the workplace.

4.3           In JVC Europe Ltd v. Panisi Charleton J. emphasised the central impersonality of redundancy and contrasted it with unfair dismissal:

“A contract of employment can involve both personal and impersonal interaction between employer and employee. Redundancy is not, however, a personal choice. It is, in essence, the external or internal economic or technological reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner. As such, redundancy is entirely impersonal. Dismissal, on the other hand, is a decision targeted at an individual.”1

4.4           The requirement for change in the workplace was considered by the EAT in St. Ledger

v.   Frontline Distributors Ireland Ltd. In a passage which has been extensively relied upon in subsequent case law, the EAT explained:

“Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a reduction in number. Definition (d) and (e) involve change in the way the work is done or some other form of change in the nature of the job. Under these two definitions change in the job must mean qualitative change.”2

4.5           The Respondent submits that the Complainant’s redundancy was a genuine redundancy within the meaning of Section 7(2) of the RP Acts. The Complainant’s redundancy resulted from the Group’s decision, following a strategic business review, to centralise its global sales team to align with the business’ US sales team structure and to enhance efficiencies.

4.6           As part of this re-alignment, Digital River Inc. re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business in light of earlier redundancies. The desire to align the sales team globally led to the Respondent putting the Complainant’s role at risk of redundancy. This decision took place following an internal re-grouping and re-assessment of the post-collective reorganisation structure and a consideration of whether any further adjustments in the structure were warranted to align with the overall strategic business review.

4.7           In April 2022 the Complainant had 8 direct reports but owing to redundancies and resignations as of 31st October 2022, he would have only 3 direct reports. This was clearly a significant change from a business organisation perspective and one that was considered as part of the strategic business review when assessing the extent to which there was an ongoing need for a standalone EMEA sales leader post in the significant restructuring programme.

4.8           The decision to award the Complainant a retention bonus at the end of August did not impact on the Respondent’s decision to subsequently identify the need to place his role at risk of redundancy. During the collective redundancy exercise in July 2022, the Complainant’s role was not considered to be at risk of redundancy. However, in September 2022, the Group re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post-redundancies. It was concluded that there was a desire to align the sales team globally, which led to the Respondent putting the Complainant’s role as EMEA Sales Leader at risk of redundancy.

4.9           The redundancy was therefore both impersonal in nature and was due to a change in the workplace. This decision was not taken lightly but was based on the financial position of the Respondent’s business. The redundancy must be viewed against the backdrop of the significant number of involuntary eliminations in Digital River Inc. throughout 2022 which resulted in a reduction in the number of employees in the Respondent company from 55 at the beginning of 2022 to 44 at the end of 2022 and within the Group from 648 at the beginning of 2022 to 382 at the end of 2022.

4.10        The Respondent submits that the redundancy of the Complainant’s role was entirely justified and genuine and the selection of the Complainant for redundancy was unavoidable having regard to the restructuring that the Group was required to engage in.

5.       Fair procedures

5.1   An employer must select the particular employee for termination fairly. The overriding obligation of fairness in relation to this is found in the UD Acts at section 6(3):

“(3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a)   the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b)   he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

5.2   Section 6(7) of the UD Acts provides that: “in determining if a dismissal is an unfair dismissal, regard may be had… to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”.

5.3   The leading case in relation to this is the UK EAT case of Williams v. Compare Maxam Ltd.3 Williams, was followed by the UK Court of Appeal decision in Walls Meat Co. v. Selby where the court approved the following passage of Browne Wilkinson LJ which sets out how an employer should approach redundancy. Speaking about the subsection in English law which is similar to the Irish provision Browne Wilkinson LJ stated:

“For the purposes of the present case there are only two relevant principles of law arising from that subsection. First, that it is not the function of the industrial tribunal to decide whether they would have thought it fairer to act in some other way: the question is whether the dismissal lay within the range of conduct which a reasonable employer could have adopted. The second point of law, particularly relevant in the field of dismissal for redundancy, is that the tribunal must be satisfied that it was reasonable to dismiss each of the applicants on the ground of redundancy. It is not enough to show simply that it was reasonable to dismiss an employee; it must be shown that the employer acted reasonably in treating redundancy ‘as a sufficient reason for dismissing the employee,’ i.e., the employee complaining of dismissal. Therefore, if the circumstances of the employer make it inevitable that some employee must be dismissed, it is still necessary to consider the means whereby the applicant was selected to be the employee to be dismissed and the reasonableness of the steps taken by the employer to choose the applicant, rather than some other employee, for dismissal. In law, therefore, the question we have to decide is whether a reasonable tribunal could have reached the conclusion that the dismissal of the applicants in this case lay within the range of conduct which a reasonable employer could have adopted.”4

5.4   In Boucher v. Irish Productivity Centre the EAT held that selection criteria should be assessed: “by the objective standard of the way in which a reasonable employer in these circumstances, in that line of business, at that time would have behaved.”

5.5   The Respondent made substantial efforts to consult with the Complainant and to explore whether there was any suitable alternative employment or other ways in which the redundancy of his role could have been avoided. The Respondent considered all open roles however none were suitable for the Complainant’s skill set.

5.6   The Respondent proposed the creation of a new role which was not feasible as its effect would be the opposite of the streamlined approach that the Respondent was attempting to achieve. Further, the adjustment to the proposal whereby the Complainant had outlined that he would not be seeking an increase in remuneration if the position he proposed was created, was also considered but was not deemed feasible. There were thus no suitable alternative roles which could be identified for the Complainant which would have avoided the redundancy of his role

5.7   The Complainant was given an opportunity to appeal the redundancy decision which he duly availed of. Having considered all of the relevant materials and having provided the Respondent with an opportunity to provide additional material, which he did, Mr. Heddon found that each of the grounds of appeal were unfounded. A detailed and thorough outcome letter was provided to the Complainant.

5.8   The Respondent submits that having regard to the genuine redundancy situation that existed within its business, the Respondent behaved as a reasonable employer would have in the circumstances. The Complainant’s dismissal was entirely fair.

6.       Conclusion

6.1   Having regard to the foregoing, the Respondent submits that the Complainant’s dismissal on redundancy ground was not unfair under the UD Acts. The redundancy of the Complainant’s role, while regrettable, was genuine and unavoidable. The Respondent acted as a reasonable employer would have in the circumstances.

What is a Redundancy?

The definition of redundancy in Ireland is set out in the Redundancy Payments Act 1967 and amended by the Redundancy Payments Act 1971 and 2003 –

An employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable or mainly to –

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

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

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

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

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

Key Factors in Redundancy

There are two critical factors to be gleaned from the definition above:

a)       The redundancy should arise from the doing away with the job, not the person. This feature of impersonality is necessary in a genuine redundancy situation.

b)      Change – the change must arise as a result of change in the workplace which might range from a closing down of the business to a simple reduction in number of employees.

In the instant case two witnesses on behalf of the Respondent gave evidence to the effect that the  at the beginning of 2022, the Group had 648 employees globally. However, owing to a downturn in business, by the end of 2022, the Group had 382 employees globally. The Group had involuntary eliminations (redundancies) in March, May, July, September, October and December 2022 as well as in January 2023. The Respondent had 55 employees in January 2022. This number had decreased to 44 by January 2023 owing to redundancies. The combined US GAAP financial results of operations for the Ireland based entities of the Group were a loss of €5.2million for the nine-months ending 30th September 2022.

To help address these problems a decision was made to centralise the Sales function on a global basis, this would result in the elimination of separate Sales Divisions in the USA and EMEA.

The Respondent provided the Complainant with a letter outlining that his role had been placed at risk by email on 22nd September 2022. This letter outlined that the Respondent would be engaging in a formal consultation process with the Complainant with a view to discussing any alternatives that could be identified or a means by which any potential redundancy situation could be averted.

Three consultation meetings were held with the Complainant, the first such meeting on 29th September 2022, the second meeting on 10th October 2022 and the third and final consultation meeting on 17th October 2022. I note that the Complainant was initially reluctant to attend the third meeting as he felt the decision was pre-determined. I further note that the Complainant was of the opinion that senior management had not fully considered his proposal that, if implemented, would be a suitable alternative to his Sales position.

On 19th October the Complainant received a letter stating that his employment was being terminated with immediate effect. Sections of this letter read as follows:

“Notice of Termination on Grounds of Redundancy.

We regret to confirm that your position as Senior Director Sales will be made redundant with effect from 19 October 2022. Please accept this letter as formal notice of your redundancy. The necessary arrangements and formalities are set out below in addition to information in relation to your option to appeal this decision should you so wish.

Appeal

Please be advised that you may appeal the outcome of this redundancy consultation process in writing within 5 working days of the date of this letter. Any appeal should be addressed to me, Kristopher T. Schmidt, Chief Administrative Officer. On receipt of any such appeal I will revert with details of a senior member of the business who has not been involved in the consultation process to date who will conduct the appeal process in a timely manner”.

The Complainant exercised his right to appeal the decision, his reasons for doing so were as follows and sent to Ms Garroch on 24th October 2022:

1.       My termination is clearly not a genuine redundancy.

2.       Failure to Properly Consider my Proposal Before Rejecting it and Failure to Consider Alternative Roles.

3.       The Decision to Terminate my Employment was Pre-Determined and the Procedure Flawed

4.       Breach of Contract.

5.       The Decision to Terminate My Employment Ignored the Outstanding Issue Regarding my Commission.

 The final paragraph of his appeal letter read as follows:

“There may be other additional issues that I will want to be raised orally as part of my appeal of my dismissal and which I may want to be considered but the above are the main points”.

Mr Andrew Hedden, the Respondent’s General Legal Counsel was appointed as the appeals officer. I note that at this time Mr. Hedden was in a position junior to those who had made the decision to make the Complainant’s position redundant, this should be considered as being unusual. The Digital River Employee Handbook under the heading of Employee Grievances states the following:

‘Where practicable the appeal will be heard by a more senior manager than whoever decided to take disciplinary action. Their decision will be final within the company’.

The subject of appeals appears in three sections of the Employee Handbook, these sections are:

·       Workplace Bullying and Harassment Policy.

·       Disciplinary Procedure

·       Employee Grievances.

All three sections referred to above contain the clause:

‘As with the hearings at earlier stages the employee may be accompanied by a colleague (or trade union official)’.

This implies that a hearing into the matter will take place and that the employee may be accompanied at such a meeting by a colleague or trade union official. In the instant case the complainant was denied the right to a hearing. I refer back to the final sentence of the complainant’s appeal letter, “There may be other additional issues that I will want to be raised orally as part of my appeal of my dismissal and which I may want to be considered but the above are the main points”.

When Mr Hedden was asked at the hearing of the complaint which appeal process he was using from the Employee Handbook he replied that he thought none were appropriate.

Mr Hedden was also asked had he checked if there was any national legislation on this subject, he replied that he had not checked this.

The Respondent’s failure to conduct an appeal hearing with the complainant at which he could be accompanied constitutes a serious flaw and a breach of their own procedures and policies.

Mitigation of Loss.

The common law rule of mitigation of damages applies to compensation for unfair dismissal. Questions of mitigation are questions of fact. The burden of proof lies on the party seeking to allege that another has failed to mitigate loss. Sir John Donaldson explained the duty in AG Bracey Ltd v Iles ([1973] IRLR 210:

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

These principles are illustrated in decisions of the Workplace Relations Commission and the Labour Court. It is clear that an employee must produce evidence at the unfair dismissal hearing that he or she has made a determined effort to find work.

In the instant case the Complainant has made a very positive effort to find another position and has produced documents that show his efforts. He secured another suitable job 8 months after his dismissal from the Respondent.

In conclusion I find that the dismissal of the Complainant was a genuine redundancy situation however the appeals process was so flawed that I must find that the complaint as submitted under section 8 of the Unfair Dismissals Act, 1977 is well founded.

The representative for the complainant has calculated loss at €168,682.09.

I now order the Respondent to pay to the Complainant a gross sum of €168,682.09 in full and final settlement of this complaint. Such a payment should be made within 42 days from the date of this decision. I would strongly recommend that the Respondent obtain some expert advice on any possible tax implications involved in the making of this payment.

I now order the Respondent to pay to the Complainant a gross sum of €168,682.09 in full and final settlement of this complaint. Such a payment should be made within 42 days from the date of this decision. I would strongly recommend that the Respondent obtain some expert advice on any possible tax implications involved in the making of this payment.

Unfair Dismissals Act, 1977.

Complainant

Respondent

Parties

Kevin  Foley

Digital River Ireland Limited

Complainant

Respondent

Anonymised Parties

Representatives

Anne O'Connell ,AOC solicitors

Ms Alison Fynes BL instructed by Mr Niall Pelly, GQ Littler.

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-00054332-001

03/01/2023

The Complainant was employed by the Respondent from 31st May 2021 until 19th October 2022. The Complainant was employed as a Senior Director of Sales.

This complaint was received by the Workplace Relations Commission on 3rd January 2023.

INTRODUCTION

1.     The Complainant was employed as a Senior Director of Sales for EMEA with the Respondent from 31 May 2021 until his unlawful dismissal on 19 October 2022. 

2.     The Complainant was dismissed under the guise of a redundancy. There was no genuine redundancy. Without prejudice to this, the Respondent did not follow any proper consultation process, it refused to engage with the Complainant, it failed to consider any proposals put forward by the Complainant and had clearly finalised its decision to terminate the Complainant’s employment before any process was commenced. The Respondent did nothing more than carry out a box ticking exercise to give the illusion that it was following fair procedures required in implementing a redundancy. Furthermore, the decision to dismiss the Complainant was made by a person who should also have been ‘at risk’ of redundancy if it was a genuine redundancy.

FACTS

3.     The Respondent and its parent company underwent a global collective redundancy process in July 2022. As set out in the Manager FAQ dated 19th July 2022, a full review took place to save costs on the following basis:

           “The reorganization announcement was based on the need to return to profitability by improving our ability to align our cost structure with a revised revenue plan, and ensure we meet our 2022 and future financial targets. To achieve these objectives, our focus will be on:

           • Operating effectively and efficiently.

           • Growing with current and new customers.

           • Anticipating and managing risk, proactively.

         We have reviewed all avenues to minimize the impact to our employees where possible. For example, we scrutinized all our non-people-related spending to look for areas of improvement or redundancy. We have also announced the termination and separation of contract employees as we focus more of our critical work through our own employees.

           In addition to these actions, Digital River has made the difficult decision to reduce our workforce to further reduce costs and restructure. The affected employees were selected based on the Company’s ability to consolidate and reassign tasks and the Company’s decision to stop pursuing certain products and services.”

         The document went on to state that the impacted employees are anticipated to be terminated before the end of August 2022.                                                                                                                        

4.     The Complainant was not part of this collective redundancy process and was not ‘put at risk’ of redundancy. Indeed, the Complainant was assured by his manager Dan Breuer, SVP Global Sales, on 19th July 2022 that there would be no further redundancies taking place. The Complainant was specifically asked to communicate and assure his team of same.

5.     On 17th August 2022, Mr Breuer sent an email to the global managers and subsequently to the entire company with slides on “Driving DR Forward”, which was a future strategy document to drive the Group Company forward after the completion of the collective redundancy process. The Complainant’s name was on the organisation chart for ‘Sales/SDR Operating Model (Europe)’ as the Europe Leader. The new structure involved the consolidation of the sales team across mid-Market and Enterprise in Europe after the Mid-Market Global Sales Director was made redundant and giving full reasonability to the Complainant in Europe. This required an extensive exercise with the teams to adjust 5000+ accounts and reassign the entire European territory to new team structure. The accounts for the sales staff that were made redundant were also re-distributed as part of this process to the new team structure. This was a 2–3-week process and required a number of individual meetings with each sales person to ensure they were happy with the changes and given reassurance of the future strategy. The business development function was also adjusted to suit the new format. This was also pointed out by Mr Breuer in the email to the Complainant on 29th August 2022 relating to territory and structure moving forward. Mr Breuer was to grow the sales in America and the Complainant was to grow the sales in Europe. The Complainant and his three direct reports were working on implementing the new strategy.

6.     On 29th August 2022, Mr Breuer messaged the Complainant to inform him that he had secured a Retention Bonus Agreement for him and also that he was working on amending the new commission plan which the Complainant had an issue with. On 31st August 2022, the Complainant was presented with a copy of a Retention Bonus Agreement to sign, in which it stated that it considered the Complainant’s “continued service and dedication to Digital River essential to our business operations”.  The Agreement provided for a payment of €30k gross to the Complainant if he remained an employee of the Respondent until 31st March 2023 and met the criteria set out in the Agreement. Prior to signing the Agreement, the Complainant informed his manager that he had opportunities of employment elsewhere but was assured that he was part of the new team structure going forward. The Complainant signed the Retention Bonus Agreement on 1st   September 2022 based on this reassurance by Mr Breuer. 

7.     At an ‘All Employee Meeting’ (AEM) on 7th September 2022 the new org “Refinement strategy” was presented to the business in relation to the plan moving forward. This documented a clear plan for the business to break even following a €33million costs reduction after the July redundancies, with no further need for redundancies. Furthermore, at the same meeting on 7th September 2022, the Complainant’s role was clearly shown as part of the plan moving forward in the company structure.

8.     On 15th September 2022, the Complainant had a 1:1 meeting with his manager Dan Breuer and was assured again that there was no further redundancies to take place in September. Mr Breuer asked the Complainant to quash any such rumours with his team, which the Complainant did and later assured Mr Breuer that the EMEA team were not concerned or hearing any such rumours. There was no reference in these communications to “collective” or “mass” redundancies. It was simply “redundancies”.

9.     On Thursday 22 September 2022, seven days later, the Complainant was due to have his 1:1 meeting with Dan Breuer. However, an hour before the call with Mr Breuer, the purpose of the call was changed to ‘Business Update’ and Ms Becky Garroch, VP People and Places, was added in the invite. During the meeting the Complainant was informed that his role was now “at risk” of redundancy. The Complainant expressed his shock during the meeting, given the fact he had received multiple assurances that there would be no further redundancies, had signed a Retention Bonus less than a month previous and turned down other roles and that his role was clearly outlined in the new organisational structure going forward. The Complainant also commented on how this would impact on his reputation in the market.

10.  During the short meeting the Complainant questioned the reasons as to why his role was now being put at risk and what had changed in a matter of days. Mr Breuer and Ms. Garroch did not answer his question as to ‘what had changed?’. Instead, they repeated the scripted response, that there was a re-evaluation of the sales structure, and a decision was made to centralise the global sales team. They did not explain what had resulted in the sudden need to re-evaluate the sales team after it had been clearly reviewed in detail in the previous months. They also refused to explain why the Complainant’s role was selected. They did not explain why the only other Head of Sales, Dan Breuer, was not also put ‘at risk’ of redundancy. Rather than being ‘at risk’ of redundancy, Mr Breuer took part in the alleged consultation process on behalf of the Respondent and made the decision in relation to the dismissal of the Complainant. Towards the end of this meeting, the Complainant queried, out of financial concern, what would happen with his retention bonus, his commission and was there a severance. The Respondent stated at this first meeting that the retention bonus would be given as an ex-gratia payment, without any qualification to their answer, clearly showing that the decision to terminate the Complainant’s employment had already been finalised.

11.  Following the at risk meeting with the Complainant, Mr Breuer, unknown to the Complainant, decided to call the Complainant’s three direct reports and informed them that the Complainant’s role was at risk of redundancy. Mr Breuer had no respect whatsoever about the Complainant’s privacy and had no reason to communicate that the Complainant was “at risk of redundancy” if the decision to terminate the Complainant had not already been finalised. After this call, the Complainant’s direct reports were reporting to Dan Breuer in relation to deals and the Complainant had very little interaction from this team. It was clearly a fait au complete.

12.  Ms. Garroch, in an attempt to rush through the process, sought to have the next redundancy consultation meeting with the Complainant on Monday 26th September 2022, two working days later. By email of 23rd September, the Complainant declined the meeting request and sought more time. The Complainant outlined the potential loss he may suffer, being the €30,000 in relation to the retention bonus, shares in the form of SARs he had been awarded and potential loss of his commission of an estimated €70,851. The Complainant outlined again in his email his shock at the decision to make his role redundant given the express confirmations from the Respondent that there would be no further redundancies seven days earlier, indeed further redundancies would not be necessary and less than three weeks previous he had signed a Retention Bonus Agreement. The Complainant was at a loss to understand how his role could now be inexplicably “at risk”.

13.  Ms Garroch responded by email on 23rd September 2022 enquiring if there was a better time for the meeting. The Complainant responded on the same date explaining that his solicitor was not available to talk to him until mid-next week and therefore requested the meeting to be held on Thursday 29th September. Ms Garroch responded to the Complainant on 26th September 2022 stating -

           “…there is no legal need to wait until Thursday. I will look to find alternative time tomorrow to go ahead with this meeting.” 

           The Complainant had to send Ms Garroch a further email begging for the meeting to be pushed back to Thursday as he felt it was important to talk to his solicitor beforehand. Finally, Ms Garroch begrudgingly postponed the meeting to Thursday 29th September 2022.

14.  The Complainant attended the consultation meeting on 29th September 2022 with Ms Garroch and Mr Breuer and put forward a number of questions to understand the reason for the sudden change in strategy, why his role was singled out and whether there was any other roles in Europe put at risk. As seen in the notes of the meeting of 29th September 2022, both Mr Breuer and Ms Garroch, would not answer the question as to whether there was any other role put at risk in Europe and why only his role was singled out but merely stated “there is only one head of Europe sales”.

15.  Both Mr Breuer and Ms Garroch used very definitive language during the meeting as seen in the notes.  They stated that “we do not need the role going forward” and that ‘it is redundant’.  It was clear that the decision was made before the consultation process commenced. The proposed centralisation of the global sales team would entail the management of the EMEA sales team from the US. However, Ms Garroch and Mr Breuer were unable or unwilling to answer how they were going to manage the day-to-day operations of a European sales team from a different time zone in the US. There was clearly no willingness on the part of the Respondent to engage with the Complainant in any discussion about the criteria used for selecting and singling out the Complainant’s role for redundancy. The Complainant expressed the belief that the whole process was “absolutely targeted and an individual attack”.

16.  Furthermore, the Complainant was eventually informed during the meeting that Mr Breuer was to take over the Complainant’s responsibilities. The reason given at this meeting for his selection was due to his number of direct reports being reduced to 3 in October 2022. However, the Complainant’s number of direct reports was back to 3 after the July 2022 collective redundancies and this was known and reflected in the strategy documents for moving the business forward after the restricting. Therefore, this reason made no sense to the Complainant as it wasn’t anything that had changed.

17.  There were no answers provided to the Complainant during the meeting as to what changed in the company to require this change. There was no mention of any necessity to further save costs or any requirement for further efficiencies. There was no engagement with the Complainant during the meeting. The Respondent required to get legal advice or made other excuses not to answer the Complainant’s questions at the meeting. 

18.  Later on 29th September 2022, Ms Garroch again attempted to push the Complainant to attend the next consultation meeting in line with her timeline, on 3rd October 2022. In the same email, she confirmed that the Complainant was the only employee in EMEA who has been put ‘at risk’ of redundancy in September and that the “decision” was made by Ted, Dan and herself on 20th September 2022. She attached a Teams invite which did not illustrate what the call was about. The Complainant emailed Ms Garroch informing her that his sister had difficulty on that date. Ms Garroch responded trying to get the Complainant to attend the meeting on his own. The Complainant pointed out that he was only requesting that the meeting be delayed by 2 working days which is not unreasonable. Finally, Ms Garroch begrudgingly agreed.

19.  On 5th October 2022 the Complainant put forward a comprehensive written proposal for an alternative role for discussion at the next meeting. The Complainant also repeated a number of questions in his email that had still not been answered at the previous meetings. The Complainant had only been provided with the repeated scripted answer from the Respondent as to why his role was being put at risk. Specifically, the Complainant queried:

“1. What happened in the few weeks between the date I was asked to sign a Retention Agreement and the date I was put at risk of redundancy? I have always only had 3 reports and therefore this does not explain what happened that lead to this decision being made contrary to all other messages. It is very hard to make a proposal when you have refused to tell me what happened to have led to this sudden decision.

2. Why was my name on the PowerPoint emailed to the strategy team and heads of department 17th of Aug, emailed directly to Kevin Foley 28th of Aug from Dan Bruer, Presented to the Sales organisation in Europe and the US on Aug 31st as part of the business going forward? Please refer to the screenshot attached from powerpoint presentations from multiple communications.

3. Why was I informed there would be no more changes in Europe on July 19th and instructed to inform my team. Teams Screen shot attached. Why was I informed on September 15th there would be no more redundancies in September in a 1:1 meeting? In a 1:1 on September 15th with Daniel Bruer I was asked if I had heard of any rumours of redundancies happing in Sep and I informed him I had not. He stated that two people had approached him. I was then told that there will be no further redundancies in September and to inform the team and quash any rumours. I spoke to the team and reverted to Dan with reassurance that the team were ok. “Mass redundancies” was never mentioned in this communication as alleged at the meeting.

20.  The Complainant clearly sought in his email answers to these outstanding questions prior to the next meeting to enable him to put additional context on his proposal. He did not seek an answer to his proposal. He stated at the end of his email –

           “ I should be grateful if you would respond to my above questions before our next meeting so that I can put more context on my proposals.”

21.  However, Ms Garroch reverted to the Complainant almost immediately on the morning of 7th October 2022 (US time), firstly rejecting the Complainant’s proposal outright without any discussion with, or clarifications sought from the Complainant. She made untrue assumptions about the proposed role in order to justify the rejection. It was clear that no proper or genuine consideration had been given to the Complainant’s proposal given the speed Ms Garroch had responded and the lack of any engagement with the Complainant in relation to it.  This was another clear indicator that the Respondent had already finalised its decision to terminate the Complainant’s employment and that it just wanted to rush through a box ticking exercise.

22.  In response to the Complainant’s questions outlined above, Ms Garroch in her email attempted to submit that:

           1. the Complainant had eight direct reports in April 2022, which would be reduced to three direct reports by October 2022 and that this formed part of the strategic business review in assessing the extent to which there was an ongoing need for a standalone EMEA Sales Leader.  This point was addressed by the Complainant in his response referred to below.

           Ms Garroch also stated that the award of a retention bonus at the end of August 2022 did not impact the company decision to make the Complainant’s role at risk of redundancy and align the sales team globally in September, as it was a different point in time. It is clear that this is a vague absurd answer to the Complainant’s question and gives no real clarity as to why there was a sudden change in strategy from the Respondent within a three-week time period.

         2.Ms Garroch further stated that as the Complainant was still an employee, that is why his name continued to appear on the organisation charts for September.  However, it is clear that the organisation charts presented to the company were in relation to the business going forward after the collective redundancy process and re-structuring and that the Complainant’s role was part of the future business strategy mere weeks before his role was put at risk.

           3. Ms Garroch also attempted to submit that any communications in July 2022 to the Complainant about any future redundancies were to the company as a whole and were to give the “all clear” and “this is a common practice post the global re-organization so that employees whose roles are not impacted understand there are no further notifications at that time”. This is incorrect as the Complainant received direct communications and assurances from his own manager, Dan Breuer, on 19th July 2022 requesting the Complainant to “please let your team know that there are no changes in Europe”.

23.  Ms Garroch’ attempts to twist the narrative of the matter does not align with the facts. The Complainant reverted to Ms Garroch on the same day to point out that she was incorrect on a number of points, specifically that he had only three enterprise direct reports with sole responsibility, a point which was acknowledged by Ms Garroch at the previous meeting and that the other names referred to by Ms Garroch were part of a shared responsibility with the Global Sales Director. Furthermore, the Complainant expressed his astonishment that his proposal was dismissed outright with no substantial consideration given to this alternative and he was not being given any opportunity to properly consult and explore his proposal.

24.   On receipt of the Complainant’s email Ms Garroch attempted to back-pedal and by email of 9th October 2022 offered to discuss the position at the next meeting.

25.  However, when the proposal was eventually discussed at the next meeting on 10th  October 2022, despite the Complainant addressing the Respondent’s alleged reasons for rejecting the proposal, it was clear that they were not interested,  it made no difference and there was no change in their predetermined position.

26.  Following the meeting on 10th October, the Complainant emailed Ms Garroch expressing his complete frustration at the supposed consultation process and reiterated that it was clear that the decision to dismiss him from his role was predetermined and that no real explanation was given for what had changed in September 2022 and no real consideration was given to his proposals to stay at the Respondent.  

27.  By email on 10th October 2022, the Complainant discovered that Mr Breuer was losing two of his direct reports as they had tendered their resignations. This meant that Mr Breuer would have one report less than the Complainant. This again raised the question as to why Mr Breuer was not put at risk of redundancy with the Complainant, if it was a genuine redundancy.  This explained why Mr Breuer was taking over the Complainant’s responsibilities. In such circumstances, Mr Breuer’s involvement in deciding to terminate the Complainant’s employment was contrary to basic fair procedures and made his dismissal entirely unfair.

28.  The Complainant reluctantly attended the final meeting on 17th October2022 with Ms Garroch and Mr Beurer, as he felt that the decision to dismiss him from his role had clearly already been made. The Complainant stressed again that the strategy had been that Mr Breuer would grow the business in the US and the Complainant would maintain Europe, this was clearly outlined in the future organisation charts and in discussions as to how the business would grow following the collective redundancies in July 2022. However, the new strategy was simply to wrap up a global sales team, which did not align. Furthermore, no answer was given to the Complainant when he questioned what the new strategy was.

29.  The Complainant raised at this meeting the fact that Mr Breuer’s number of direct reports were reducing to two and therefore it did not make sense that his role was at risk of being made redundant when he had 3 direct reports. However, the point was never addressed or responded to by the Respondent.

30.  Ms Garroch also stated that she had looked at alternative roles within the Respondent  but could answer during the meeting the Complainant’s queries as to what roles she had looked at or reviewed. Clearly Ms Garroch was sticking to the pre-scripted process that she had to follow and there was no room for engagement or discussion which is required in any proper consultation.

31.  The Complainant received notice of termination of his employment two days later, on 19th October 2022, which was effective immediately on that date.

32.  The Complainant submitted Grounds of Appeal to Becky Garroch on 24th October 2022, appealing the decision to terminate his employment. He referred to there being an oral Appeal Hearing in his email. At no time was the Complainant informed that the Appeal would be decided on documents only and without any meeting/hearing.

33.  On 4 November 2022 the Complainant was shocked to receive an Appeal Report from Mr Andrew Hedden, Director of Legal Counsel, who was conducting the appeal on behalf of the Respondent. The Complainant was never advised that the appeal would be decided without giving him an opportunity to talk to the decision maker. The Complainant made it clear in his grounds of appeal that he wanted to expand on the grounds at the appeal hearing but he was never informed that an appeal hearing would never take place. The appeal was conducted in the same manner as the Complainant’s dismissal, predetermined and without any regard of what the Complainant had to say.

THE LAW

34.  Section 5 of the Unfair Dismissals (Amendment) Act 1993 provides, inter alia, that:

“… in determining if a dismissal is an unfair dismissal, regard may be had … to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal.”

35.  The onus is placed on the Respondent to justify the dismissal and where the Respondent seeks to rely on the redundancy defence, case law has determined that the following criteria must be met:

a)       A genuine redundancy situation must have arisen;

b)      Fair selection criteria applied and discussed with the employee in advance of finalisation;

c)       Serious or worthwhile consultation with the employee prior to making the decision to make him/her redundant;

d)      Consult and explore alternatives to the redundancy; and

e)      Offer an option of appeal

36.       The Employment Appeals Tribunal (“EAT”) set out the conduct expected of employers in a redundancy situation in the case of Margaret Griffin v. John Spicer & Company Navan (UD1938/2009), where, the EAT did not accept that the respondent in the case acted fairly and reasonably for the following reasons:

-      there was no “serious or worthwhile” consultation with the complainant prior to making her redundant;

-      there was no previous indication of the “very serious” financial difficulty in which the respondent found itself;

-      there was no discussion as regards to the criteria used for selecting the complainant for redundancy; and

-      there was no discussion with the complainant about her suitability for an alternative position other than the part-time position which the respondent unilaterally decided the complainant would not be interested in. 

37.       The EAT has reiterated these criteria in similarly decided cases. In Gillian Free v. Oxigen Environmental (UD 206/2011)heard on 22nd June 2012,the EAT was not satisfied that the respondent had acted fairly and reasonably when addressing the need to reduce the number of employees. It found that:

a)   there was no serious or worthwhile consultation with the complainant prior to making her redundant;

b)   the decision was made before the consultation process commenced;

c)   there was no substantial consideration given to alternatives; and

d)   there was no worthwhile discussion in relation to the criteria used for selecting the complainant for redundancy.

38.       In the High Court decision of JVC Europe Limited v Jerome Panisi, (2011), at paragraph 5 of Charleton J’s judgment he states:

“A dismissal, however, can be disguised as redundancy; that is not lawful… In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy is impersonal. Instead, it must result from… ‘reasons not related to the employee concerned.’ Redundancy, cannot, therefore be used as cloak for the weeding out of those employees who are regarded as less competent than others or who appear to have health or age related issues. If that is the reason for letting an employee go, then it is not a redundancy, but a dismissal.”

39.       In the case of Oscar Mielczarek v Adrian Lee Services Limited Employment Appeals Tribunal, UD2073/2009, 2 August 2012.  In this case, the EAT found that the employee had been unfairly dismissed by reason of redundancy and awarded the employee the sum of €200,000 in compensation. In coming to its decision the EAT took into account that: there was no prior discussion with the employee in relation to the proposed redundancy and the employee was not invited to submit any alternatives to redundancy; there was no genuine redundancy of the position; the employer fell well short of proving that a redundancy situation existed and that redundancy was the main reason for dismissal; the decision to dismiss the employee had to be viewed against the background of antagonistic relations between the parties; the employer did not act as a reasonable employer should act having regard to all the circumstances; the employer did not act fairly and reasonably in their dealings with the employee; and the employee was dismissed for performance issues under the cloak of redundancy.

SUBMISSIONS

40.  It is submitted that in this case, that there was no genuine redundancy. The basis for the Complainant’s termination was personal to him and a redundancy is impersonal.

 There was no reference to any requirement for cost savings or efficiencies. No reason was given to the Complainant as to the necessity for his alleged redundancy. He was the only person in sales put “at risk” of redundancy which further highlights that it was not impersonal. There were two heads of sales but only one was put “at risk” of redundancy regardless of the fact that nothing in his team had altered since the new strategy had commenced. The Complainant was the only employee of the Respondent that was made redundant in 2022 after the July 2022 collective redundancies.

41.       Without prejudice to the above submission that the redundancy was not a genuine redundancy, the Respondent did not follow fair procedures in effecting the termination of the Complainant, even if it was a genuine redundancy -

(i) The actions and the language used by the Respondent indicated that the decision to terminate the Complainant’s employment was predetermined. This was especially reflected by Mr Breuer contacting the Complainant’s 3 direct reports unknown to the Complainant and informing them that he was put ‘at risk’ of redundancy and taking over the management of the deals from that date.

(ii)   The Respondent attempted to rush through the consultation process again showing predetermination.  Ms Garroch kept trying to schedule the next consultation meeting as soon as possible, giving the Complainant very little time to consider the matter in between meetings. The Complainant had to insist on getting more time and the push back received from Ms Garroch added to his stressful situation and was entirely unreasonable on the part of the Respondent.

(iii)  During the consultation meetings, the Respondent worked from scripts and refused to answer questions that the Complainant raised if they did not fall within the script. They also refused to engage in any discussions with the Complainant during the consultation meetings to assist him to understand the basis for putting his role at risk of redundancy, so that he would be better placed and better informed in putting together any proposals.

(iv)    The Respondent failed to clarify why the Complainant was selected to be put at risk of  redundancy. When he was informed that it was due to having 3 reports from October 2022, he corrected the Respondent and reminded them that he initially had 3 direct reports and that he was back to 3 direct reports since the July redundancies. The strategies moving forward were drafted on the basis of the Complainant having 3 direct reports and therefore this reasoning made no sense and clearly was not the true reason.

(v)     The Respondent failed to give any consideration whatsoever to the Complainant’s proposal before rejecting it out of hand. In fact, rather than discussing the proposal with the Complainant, which he expected to have the opportunity to do, the Respondent made untrue assumptions about his proposal in a feeble attempt to justify its rejection of the Complainant’s proposal.

(vi) The Respondent refused to respond to the Complainant during the last meeting as to why Mr Breuer was not put ‘at risk’ of redundancy.

(vii)    The Respondent informed the Complainant that Mr Breuer was to take over the Complainant’s responsibilities. Given this together with the fact that Mr Breuer should have also been put at risk of redundancy, Mr Breuer was conflicted and should not have been part of the decision makers in relation to the dismissal of the Complainant.

(viii) The Respondent did not consider any alternative roles for the Complainant, regardless of making statements to the contrary. Ms Garrach was unable to identify what roles were considered when queried during the last consultation meeting.

(ix) The Complainant was not given an opportunity to be heard and to explain his grounds of appeal before it was decided upon. The Respondent failed to inform the Complainant that he would not get such an opportunity even though he had referred to it in his grounds of appeal.

The Respondent carried out a mere box ticking exercise in respect of terminating the Complainant’s employment. However, in doing so, the Respondent denied the Complainant any form of fair procedures in breach of his rights to natural justice and it did not act reasonably in effecting his dismissal in breach of the Unfair Dismissals Acts.

REMEDY

42.       Section 7 of the Unfair Dismissal Acts provides for redress for unfair dismissal of, inter alia, re-instatement or compensation in respect of financial loss attributable to the dismissal “as is just and equitable having regard to all the circumstances” but not exceeding 104 weeks’ remuneration. The Complainant sought compensation and re- instatement in his WRC Complainant Form. 

43.       The Complainant made considerable efforts to mitigate his loss and seek alternative employment following his unfair dismissal by the Respondent. Although his applications have been rejected, he has finally secured new employment commencing on 8th August 2023.  The Complainant will give oral evidence in relation to his efforts in respect of mitigating his loss from the date of his dismissal.  A list of the roles and dates of applications, meetings together with email correspondence from job applications as at June 2023 are available.

44.       Due to the Complainant securing alternative employment he now seeks compensation.

45.       The Complainant will be unemployed for a total of 42 weeks from the date of his dismissal until the date of his new role. The Complainant’s financial loss for that period works out as €168,682.09 gross.

46.       The Retention Bonus Payment was not added to the financial loss as the Respondent paid it in line with clause 1 of the Retention Bonus Payment where he was terminated without cause. Correspondence had to be sent to the Respondent by AOC Solicitors on behalf of the Complainant pointing out the Complainant’s entitlement to the payment by letters dated 10th and 15th November 2022. The Complainant received his contractual retention bonus payment of €30,000 gross at the end of November 2022 in line with the Retention Bonus Agreement. This does not reduce the Complainant’s financial loss as if had not received it, the amount would have been added to his financial loss figure.

47.       The Complainant seeks compensation in the amount of his full financial loss in the amount of €168,682.09 gross.

CONCLUSION

48.       The Complainant was unfairly dismissed in breach of the Unfair Dismissals Acts and he seeks compensation for his full financial loss. 

1.Introduction.

1.1           The Respondent is an Irish registered company and a wholly owned subsidiary of Digital River Inc. The Respondent is part of the Digital River group (“the Group”); a global group of companies which provides internet commerce and marketing consulting services. It offers software tools and services for website development, customer acquisition, transaction processing, tax management, and product fulfilment. The Respondent manages the Group’s operations in Ireland.

1.2           At the beginning of 2022, the Group had 648 employees globally. However, owing to a downturn in business, by the end of 2022, the Group had 382 employees globally. The Group had involuntary eliminations in March, May, July, September, October and December 2022 as well as in January 2023. The Respondent had 55 employees in January 2022. This number had decreased to 44 by January 2023 owing to redundancies.

1.3           The combined US GAAP financial results of operations for the Ireland based entities of the Group were a loss of €5.2million for the nine-months ending 30th September 2022.

1.4           In September 2022 Digital River Inc engaged in a restructuring process and having evaluated the business decided to centralise its global sales team.

1.5           The Complainant, Mr. Kevin Foley was employed by the Respondent as Senior Director of Sales. This role was the only EMEA sales leader role in the Group. His employment commenced on 31st May 2021.

1.6           In September 2022, the Complaint was informed that his role was being placed at risk as part of the decision to centralise the Group’s global sales team. Following a thorough consultation process, his employment was terminated by reason of redundancy on 19th October 2022. The Complainant appealed the decision and following an independent appeal process the redundancy dismissal was affirmed.

2               Background

i.                  Identifying the Complainant’s role as being at risk of redundancy

2.2               In September 2022 Digital River Inc. engaged in a strategic business review. The decision was made to restructure the Group’s organisational model in light of a downturn in business. The decision was made to align the sales team globally so as to have the field sales team globally between Europe and the US as one team reporting to one individual as opposed to two individuals.

2.3               As part of this re-alignment, Digital River Inc. re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post earlier redundancies. On both 15th September 2022 and 20th September 2022, Digital River Inc.’s Chief Revenue Officer, Mr. Ted Rogers, SVP Global Sales, Mr. Dan Breuer and VP People & Places, Ms. Becky Garroch met to discuss this re-alignment and re- structuring. The decision to align the sales team globally led to the decision to place the Complainant’s role as EMEA Sales Leader at risk of redundancy.

ii.                  Communicating that the Complainant’s role was as at risk of redundancy

2.4               The Complainant was asked to attend a meeting on 22nd September 2022 with Mr. Breuer and Ms. Garroch at which he was informed that following restructuring, the Group had evaluated and decided to centralise the global sales team. As a result, the Complainant was informed that his role as Europe sales leader had been put at risk of redundancy. This role was identified as being at risk of redundancy based on the Respondent’s need to consolidate responsibilities.

2.5               Ms. Garroch emphasised that at this time no final decisions had been made in relation to the Complainant’s role. It was explained to the Complainant that a consultation process would be conducted whereby the Respondent would look at suitable alternative roles that might interest the Complainant. He was informed that at that time there were no suitable openings in EMEA, however there was a possibility of global open roles that the Complainant might wish to consider. Ms. Garroch stated that she understood that this was difficult news for the Complainant to hear. He was advised to take the rest of the day off and a follow up meeting would be set up early the following week to answer any questions that the Complainant might have. At the end of the meeting the Complainant asked questions concerning his retention bonus, commissions and severance. A copy of the minutes of this meeting was provided to the complainant by way of email from Ms. Garroch dated 23rd September 2022.

2.6               The Respondent provided the Complainant with a letter outlining that his role had been placed at risk by email on 22nd September 2022. This letter outlined that the Respondent would be engaging in a formal consultation process with the Complainant with a view to discussing any alternatives that could be identified or a means by which any potential redundancy situation could be averted.

iii.            Consultation process

2.7               The Respondent engaged in a thorough consultation process with the Complainant which comprised a total of three remote meetings over the course of a three week period. Details of each of these meetings are set out below.

a.     The first consultation meeting

2.8               The Complainant was invited to a first consultation meeting on 26th September 2022 in order to explore potential alternative roles. Following a request from the Complainant, the meeting was rescheduled to 29th September 2022 as the Complainant indicated that he wished to seek the advice of his solicitor in advance of this meeting. The Respondent agreed to accommodate the Complainant’s request for the meeting to be rescheduled.

2.9               Ms. Garroch informed the Complainant by way of email on 27th September 2022 that he was entitled to be accompanied by another employee as support during the consultation meeting, provided that the Respondent deemed that person a reasonable representative. Ms. Garroch stated that the nature of the meeting was an individual consultation and during the meeting the parties would be looking at suggestions for suitable alternative positions and the Respondent would be answering the questions that the Complainant had raised in the meeting of 22nd September 2022, concerning his retention bonus, commission and severance.

2.10           By email the following morning on 28th September 2022 the Complainant requested a change to the time of the meeting and that his sister be permitted to attend as a note taker. Both requests were acceded to by the Respondent.

2.11           The first consultation meeting was held remotely on 29th September 2022 at 6pm. It was attended by Ms. Garroch, Mr. Breuer, the Complainant and his sister. Ms. Garroch commenced the meeting by indicating that its purpose was to explore suitable alternative roles and answer any questions from the Complainant. Responses to the questions concerning the retention bonus, commission and severance raised by the Complainant in the at risk meeting on 22nd September 2022 had been prepared by the Respondent however the Complainant requested that these not be answered as he had other questions he wished to raise.

2.12           During the course of the meeting in the context of a question from the Complainant concerning why his role had been made redundant Mr. Breuer informed him that the Digital River Inc. had decided to centralise the global sales team. Mr. Breuer explained that Digital River Inc. intended to restructure its organisation model so as to have the field sales team globally between Europe and the US as one team reporting to one individual as opposed to two individuals. In relation to the retention bonus that had been provided to the Complainant the previous August, Mr. Breuer stated that a decision to consolidate the team and make it a global team had been made subsequent to the decision to provide the retention bonus.

2.13           In response to the Complainant’s query as to how his role had been selected, it was explained to him that the decision to consolidate the sales team had been made and there was no role for a head of European sales in this consolidation. It was explained that owing to the changes in the business he would now only have three reports.

2.14           Mr. Breuer informed the Complainant that at that time there was only one open position within Europe and that was an accountant position, in respect of which the Complainant was not suitably qualified. The Complainant indicated that he wished to go away and think about ideas and proposals that he might put forward to the wider business. He indicated that he would check the careers portals to see where there could be a suitable fit in the business for him.

2.15           The meeting concluded with Ms. Garroch proposing that the next meeting should take place the following Monday, 3rd October 2022. However, she stated that the meeting would occur at this time if the Complainant thought that this would be a reasonable amount of time for him to prepare. The Complainant indicated that he would come back to Ms. Garroch on this.

2.16           Notwithstanding the fact that the Complainant expressed himself dissatisfied with the majority of the responses provided during the course of this meeting and criticised the responses as “vague”, Mr. Breuer and Ms. Garroch engaged fully with the questions asked by the Complainant and indicated that where they did not have information to hand regarding specific dates or whether they required legal advice they would revert to the Complainant.

2.17           The Complainant indicated that the decision to put his position at risk felt “targeted”. There is absolutely no basis for this contention having regard to the rationale underpinning the decision to place his position at risk as explained to him at the at risk meeting and again at this meeting. Similarly, the Complainant’s remark that he felt rushed is without any basis in fact having regard to the fact that he was facilitated with a rescheduling of the meeting both in terms of date and time. The Complainant’s complaints as expressed in this meeting are entirely without merit as appears from a review of the minutes of the consultation meeting.

2.18           The Complainant was provided with a copy of the minutes of the meeting on 30th September 2022. The Complainant provided a copy of the notes taken by his sister during the meeting.

b.     The second consultation meeting

2.19           Ms. Garroch sent the Complainant an invitation to the second consultation meeting on 29th September 2023 following the conclusion of the first consultation meeting. The second meeting was scheduled for the following Monday, 3rd October 2022 as had been suggested during the first consultation meeting. The Complainant responded by email indicating this would afford him insufficient time. The Respondent took into account the Complainant’s objection and Ms. Garroch sent him a further invitation for the meeting, this time on Wednesday 5th October 2022. The Complainant responded indicating that he had a conflict at this time and suggested Friday 7th October 2022.

2.20           The Complainant emailed both Ms. Garroch and Mr. Breuer on 5th October 2022 setting out his proposals in relation to his continued employment. He proposed that his employment would be retained in a role as head of all commercial teams in EMEA. He also set out three questions in this email regarding the decision to place his role at risk of redundancy, namely:

(i)              What had changed between him being asked to sign a retention agreement and 22nd September 2022? He stated that he had always had only 3 reports, and this did not explain why a decision had been made to put his role at risk.

(ii)            Why his name appeared on a PowerPoint emailed to the strategy team and heads of department on 17th August 2022?

(iii)           Why was he informed there would be no more changes in Europe on 19th July 2022 and instructed to inform his team?

2.21           Crucially, the Complainant concluded his email by stating: “I should be grateful if you would respond to my above questions before our next meeting so that I can put more context on my proposals.”

In line with the Complainant’s express request for a response to his email in advance of the meeting scheduled for 10th October 2022, Ms. Garroch responded on 7th October 2022. She indicated that Mr. Rogers, Mr. Breuer and herself had taken the time to fully review and consider the content of the Complainant’s proposal internally. In relation to the proposed role of head of commercial teams EMEA, Ms. Garroch summarised the position as follows:

(i)              This was not a position that currently existed. This role had been created in 2014 when the organisation was significantly larger – 1,400 employees globally compared to 430. The creation and implementation of this role was not successful at the time and was dissolved in 2016, as it created greater silos in operating with different structures in US to EMEA – in short, the Head of Commercial Teams EMEA type role created at that time resulted in an overly matrixed organisation that was not a workable “fit” within the Group’s business model.

(ii)            The decision to restructure was to align the sales team globally. The net effect of the Complainant’s proposal would be the opposite of what the Respondent was trying to achieve with a more streamlined approach – it would be effectively creating a separate sub-team across multiple functions in EMEA. The organisation was purposefully designed to be structured based on functional area, and not operated independently by region (i.e. centralising global teams where possible).

(iii)           A large scale reduction in force was made in the summer of 2022 which was driven by financial need primarily. The role proposed by the Respondent was a higher level and therefore would likely constitute a more highly compensated role than the Respondent would not have the budget to afford at that point in time - even it aligned with the current corporate strategy.

2.22           Ms. Garroch thus stated that having fully considered the Complainant’s proposal regrettably the Respondent did not consider it to be feasible from a business perspective.

2.23           Ms. Garroch further responded to the Complainant’s three questions as set out above:

(i)              In relation to his direct reports Ms. Garroch stated that in April 2022 the Complainant had 8 direct reports but owing to redundancies and resignations as of 31st October 2022, he would have only 3 direct reports. This, she stated was a significant change from a business organisation perspective and one that the Respondent took account of as part of its strategic business review when assessing the extent to which there was an ongoing need for a standalone EMEA sales leader post the significant restructuring programme.

She stated that the decision to award the Complainant a retention bonus at the end of August did not in any way impact on the Respondent’s decision to subsequently identify the need to place his role at risk of redundancy. During the collective redundancy exercise in July 2022, the Complainant’s role was not considered to be at risk of redundancy. However, in September 2022, the Group re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post-redundancies. It was concluded that there was a desire to align the sales team globally, which led to the Respondent putting the Complainant’s role as EMEA sales leader at risk of redundancy.

This was not a sudden decision as suggested by the Complainant but rather a decision that took place following an internal re-grouping and re-assessment of the post-collective reorganisation structure and consideration of whether any further adjustments in the structure were warranted to align with the overall strategic business review.

(ii)            As the Complainant remained an employee of the Respondent he continued to appear on organisational charts and would continue to appear on organisational charts pending the outcome of the consultation process.

(iii)           Regarding the communication on 19th July 2022, this was made in respect of the actions that were made on that day globally, that the Respondent had communicated to all the employees that were being potentially impacted at that time. This was a large scale global layoff, with employees globally all being notified on the same day. There were communications that went out across the organisation to give an “all clear”. This is a common practice post the global re-organisation so that employees whose roles are not impacted understand there are no further notifications at that time. She stated that this did not mean that an organisation will never make other decisions and other reductions in the near or far future.

While the Respondent’s sincere hope was that there would be no other roles identified to be at risk following the July collective redundancy programme, this was not the case and the Respondent remained committed to fully consulting with the Complainant before any final decision was made.

2.24           Ms. Garroch concluded by stating that these matters would be discussed further at the second consultation meeting.

2.25           The Complainant responded by email of 7th October 2022 stating that he was “astonished” that a decision had been made about his proposal without giving him the opportunity to fully discuss it. The Respondent cannot accept this criticism of Ms. Garroch’s email of 7th October. The Complainant expressly sought a response in advance of the meeting on 10th October 2022 and then complained that he received a response. This, in and of itself, to use the Complainant’s words, is astonishing.

2.26           Further, inher emailMs.Garrochset outtheRespondent’spositionbut indicatedthat these matters would be discussed further at the meeting the following Monday. The Respondent was thus afforded time to consider the Respondent’s position and adapt his proposal in advance of the meeting the following Monday in accordance with his request. The Complainant also contended that Ms. Garroch was incorrect in relation totheinformationshehadprovidedinrespectofthenumberofhisreports.

2.27           The Respondent does not accept this criticism. Ms. Garroch will outline in her oral evidence the number of reports that the Complainant had throughout the duration of his employment with the Respondent. Her evidence will be that upon the commencement of his role the Complainant had 6 direct reports across Europe. As of 1st January 2022, he had 5 direct reports across Europe. In mid-January 2022 the 2 APAC sellers were added bringing his total of direct reports to 7 and from mid-March the total number of direct reports was 8. The two APAC sellers were made redundant in May 2022 reducing the number of direct reports to 6. Two of the Complainant’s team resigned and as of June 2022 he had 4 direct reports. One of these 4 reports was let go in the reduction in force in July 2022 resulting in the Complainant having 3 direct reports at the beginning of the consultation process.

2.28           By response dated 9th October Ms. Garroch reiterated that the Complainant’s role had neither been confirmed as redundant nor had he been issued a notice of termination. She stated that the consultation process was still ongoing and, as such, every consultation meeting remained an opportunity for the Complainant to put forward queries and alternative proposals and, to provide further clarity on proposals that had already been put forward. She confirmed that no final decision had been made in relation to the Complainant and that the Respondent was committed to a thorough process. She stated that the reason such fulsome feedback had been provided on the Complainant’s proposed alternative was to ensure as informed and productive a consultation meeting would occur on 10th October. In respect of the Complainant’s number of reports she outlined that when he first began employment with the Respondent3 he had 6 direct reports and that in addition for a number of months a further two individuals in APAC were reporting to the Complainant until their roles were made redundant.

2.29           The second consultation meeting was held on 10th October 2022 and was attended by Mr. Breuer, Ms. Garroch, the Complainant and the Complainant’s sister. At the commencement of the meeting Ms. Garroch stated that its purpose was to explore suitable alternative roles, or redeployment and to answer any of the Complainant’s questions. The Complainant was critical of the process during this meeting stating that it was “rushed” and that a decision had already been made about his proposal.

2.30           Ms. Garroch pointed out that it was inaccurate to describe the process as rushed as each time the Complainant had requested that the consultation meeting be rescheduled, the Respondent had acceded to the request and it had, at this time, been 10 days since the last meeting. Further, it was pointed out to the Complainant that he had been afforded with a response to his proposal on 7th October 2022 in accordance with his express request for same.

2.31           The Complainant indicated that in respect of the role he had proposed in his email of 5th October 2022 he would not be seeking an increase in pay. This adjustment to the proposal was subsequently considered by the Respondent but was not deemed feasible from a business perspective.

2.32           The minutes of this meeting were provided to the Complainant by email dated 11th October 2022. The Complainant provided the Respondent with a copy of the notes that his sister took during the meeting.

c.     Third consultation meeting

2.33           Ms. Garroch sent the Complainant an invitation to the third consultation meeting on 13th October 2022. The meeting was scheduled for 17th October 2022. By email of the same date the Complainant informed Ms. Garroch that he saw “little point” in attending a further meeting and contended that the process was “predetermined.” He declined the email invitation to attend the third consultation meeting. The Respondent does not accept that the process was predetermined in any respect. The Respondent fully engaged in the process and was open to considering alternative roles for the Complainant. Regrettably, no suitable roles were identified.

2.34           Ms. Garroch responded to the Complainant’s email on 14th October 2022. She rejected the Complainant’s complaints that the process was predetermined and corrected his assertion that there had been a decision to dismiss him. She emphasised that the consultation process had not yet concluded and as previously stated no decision had been taken to dismiss him. She reiterated the Respondent’s full commitment to engaging with the Complainant in a thorough process in an effort to fully explore alternatives to the potential redundancy.

2.35           The Complainant replied by email of the same date indicating that inter alia, none of the persons present at the previous consultation meeting “were interested in what” he had to say. A review of the minutes from that meeting renders it patently clear that this is incorrect. The Complainant stated that he would attend the meeting on Monday but thought that it was “a waste of everyone’s time.” The Complainant contended that Ms. Garroch’s email did “not reflect what actually [had] occurred to date and appears to be an effort to re-write history.”

2.36           A review of the correspondence and minutes of the meetings contained in the appendices to these submissions demonstrates quite starkly that it was in fact the Complainant who was inaccurately characterising what had occurred and who was seeking to “re-write history.” At all times, the Respondent remained committed to engaging fully with the Complainant in an effort to identify an appropriate alternative role for the Respondent. This was reflected in Ms. Garroch’s further response on 17th October 2022 in which she stated that at the next meeting they would discuss (i) any points that the Complainant felt the Respondent has not responded to in full in respect of your proposal; ii) any further variations to the Complainant’s proposal; or iii) any other alternatives to the Complainant’s proposed redundancy. A copy of this email chain and the Complainant’s initial rejection of the meeting invitation were made available.

2.37           The third consultation meeting occurred on 17th October 2022. It was attended by Mr. Breuer, Ms. Garroch, the Complainant and his sister. During the course of the meeting the Complainant complained that no reason had been outlined as to why the global sales team was being made. This complaint was made notwithstanding the fact that the rationale for the restructure had been set out at the at-risk meeting, the previous two consultation meetings and in the email of 7th October 2022. It was explained that other roles in the business had been reviewed but the Respondent could not see an alternative position for the Complainant. It was explained that Mr. Breuer, Ms. Garroch and Mr. Rogers had met to review the open roles again with a view to identifying a suitable alternative. The Complainant did not provide any further suggestions at this meeting.

iii.    Decision to terminate the Complainant’s employment

2.38           On 18th October 2022, Ms. Garroch, Mr. Breuer and Mr. Rogers met to discuss the consultation process. The minutes of each of the meetings were reviewed as was the Complainant’s proposal as set out his email of 7th October 2022 and his adjusted proposal whereby he indicated he would not seek an increase in salary if the position he sought was created. All open roles within the Group were considered. Ultimately, and for the reasons set out in the letter sent to the Complainant on 19th October 2022 it was determined that there was no alternative to redundancy for the Complainant.

2.39           By email dated 19th October 2022 Ms. Garroch provided the Complainant with an outcome letter confirming that 19th October 2022 was his last day of employment. The outcome letter outlined in summary the process that had been followed, namely the at risk meeting and the three consultation meetings. It was reiterated that the Complainant’s proposal had not been considered feasible from the Respondent’s perspective. Further, it was outlined that the adjustment to the proposal whereby the Complainant had outlined that he would not be seeking an increase in remuneration if the position he proposed was created, had also been considered but was not deemed feasible. The Complainant was provided with notice of his termination and informed of his right to appeal.

iv.    Appeal of the decision to terminate the Complainant’s employment

2.40           By email dated 24th October 2022 the Complainant emailed Ms. Garroch indicating an intention to appeal the decision to terminate his employment and setting out the grounds of appeal. The Complainant contended that:

(i)              The termination was not a genuine redundancy.

(ii)            There had been a failure to properly consider his proposal and a failure to consider alternative roles.

(iii)           The decision to terminate was predetermined.

(iv)           The decision to terminate was in been a breach of the Complainant’s contract.

(v)            The decision to terminate ignored the outstanding issue regarding commission.

2.41           Mr. Andrew Hedden, the Respondent’s Director Legal Counsel confirmed receipt of the grounds of appeal on 25th October 2022. By email dated 26th October 2022, Mr. Hedden attached the documentation that he would be relying upon in conducting the appeal. This documentation included the minutes of the at risk meeting, the minutes of the consultation meetings, the Complainant’s notes of the consultation meetings, the outcome letter, the email thread from 5th – 7th October 2022 concerning the Complainant’s proposal and the Respondent’s reply. Mr. Hedden indicated that if there were additional materials that the Complainant wished he consider, the Complainant should be notified by close of business on 28th October 2022.

2.42           By response of 27th October 2022, the Complainant requested that: “all emails sent so far” be taken into account. He provided a number of emails that Mr. Heddon considered as part of the appeal process.

2.43           Following a thorough review of the materials, Mr. Hedden reached the decision that each of the grounds of appeal were unfounded. He communicated this to the Complainant by letter dated 4th November 2022 and set out his reasoning in detail in respect of each ground of appeal.

2.44           On receipt of this decision the Complaint emailed Mr. Hedden on 4th November 2022 complaining that he believed that he would be given the opportunity to put forward and explain his grounds of appeal orally. Mr. Heddon responded by email of the same date noting inter alia that he had informed the Complainant that he would review the materials and anticipated that he would get back to him by the end of the week. He duly did this.

2.45           The Respondent submits that there is no merit to the Complainant’s complaint regarding an oral appeal. There is no requirement for same. What is required is that fair procedures are followed. This quite clearly was the case where Mr. Heddon had no involvement in the consultation process, informed the Complainant what materials he intended to consider, gave the Complainant an opportunity to provide further information which was duly received, considered all of these materials and provided a reasoned decision.

2.46           The Respondent received a copy of the Complainant’s WRC complaint form on 14th March 2023. The Respondent disputes the monthly salary indicated by the Complainant.

3               Legal submission

3.1           Section 6(1) of the Unfair Dismissals Acts 1977-2007 (“the UD Acts”) provides that the dismissal of an employee shall be deemed to be an unfair dismissal: “unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal”. Section 6(4) of the UD Acts specifically provides that an employee may be dismissed if that dismissal results wholly or mainly from “the redundancy of the employee”. The burden of proof is on the employer to establish the legitimacy of any redundancy dismissal.

3.2           The statutory definition of redundancy is found in s.7(2) of the Redundancy Payments Acts 1967-2007 (“the RP Acts”), which provides that an employee who is dismissed shall be taken to be dismissed by reason of redundancy: “if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly” to a number of listed factual circumstances which arise in business closures, general restructuring, changes of business location, reductions in workforces, changes of job functions, changes in the manner in which work is to be done or changes in requirements for particular jobs.

4               GENUINE REDUNDANCY

4.1           Section 7(2) of the RP Acts sets out the different redundancy situations which can arise each comprising a change in the workplace and provides that an employee is dismissed by reason of redundancy where their dismissal is wholly or mainly attributable to, inter alia:

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

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

4.2           The two most important characteristics in a redundancy situation are (i) the impersonality of the redundancy, in that it refers to the job and not the person, and (ii) the redundancy must be due to a change in the workplace.

4.3           In JVC Europe Ltd v. Panisi Charleton J. emphasised the central impersonality of redundancy and contrasted it with unfair dismissal:

“A contract of employment can involve both personal and impersonal interaction between employer and employee. Redundancy is not, however, a personal choice. It is, in essence, the external or internal economic or technological reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner. As such, redundancy is entirely impersonal. Dismissal, on the other hand, is a decision targeted at an individual.”1

4.4           The requirement for change in the workplace was considered by the EAT in St. Ledger

v.   Frontline Distributors Ireland Ltd. In a passage which has been extensively relied upon in subsequent case law, the EAT explained:

“Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a reduction in number. Definition (d) and (e) involve change in the way the work is done or some other form of change in the nature of the job. Under these two definitions change in the job must mean qualitative change.”2

4.5           The Respondent submits that the Complainant’s redundancy was a genuine redundancy within the meaning of Section 7(2) of the RP Acts. The Complainant’s redundancy resulted from the Group’s decision, following a strategic business review, to centralise its global sales team to align with the business’ US sales team structure and to enhance efficiencies.

4.6           As part of this re-alignment, Digital River Inc. re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business in light of earlier redundancies. The desire to align the sales team globally led to the Respondent putting the Complainant’s role at risk of redundancy. This decision took place following an internal re-grouping and re-assessment of the post-collective reorganisation structure and a consideration of whether any further adjustments in the structure were warranted to align with the overall strategic business review.

4.7           In April 2022 the Complainant had 8 direct reports but owing to redundancies and resignations as of 31st October 2022, he would have only 3 direct reports. This was clearly a significant change from a business organisation perspective and one that was considered as part of the strategic business review when assessing the extent to which there was an ongoing need for a standalone EMEA sales leader post in the significant restructuring programme.

4.8           The decision to award the Complainant a retention bonus at the end of August did not impact on the Respondent’s decision to subsequently identify the need to place his role at risk of redundancy. During the collective redundancy exercise in July 2022, the Complainant’s role was not considered to be at risk of redundancy. However, in September 2022, the Group re-assessed whether there would be a continuing need for an EMEA sales leader role given the change in the business post-redundancies. It was concluded that there was a desire to align the sales team globally, which led to the Respondent putting the Complainant’s role as EMEA Sales Leader at risk of redundancy.

4.9           The redundancy was therefore both impersonal in nature and was due to a change in the workplace. This decision was not taken lightly but was based on the financial position of the Respondent’s business. The redundancy must be viewed against the backdrop of the significant number of involuntary eliminations in Digital River Inc. throughout 2022 which resulted in a reduction in the number of employees in the Respondent company from 55 at the beginning of 2022 to 44 at the end of 2022 and within the Group from 648 at the beginning of 2022 to 382 at the end of 2022.

4.10        The Respondent submits that the redundancy of the Complainant’s role was entirely justified and genuine and the selection of the Complainant for redundancy was unavoidable having regard to the restructuring that the Group was required to engage in.

5.       Fair procedures

5.1   An employer must select the particular employee for termination fairly. The overriding obligation of fairness in relation to this is found in the UD Acts at section 6(3):

“(3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a)   the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b)   he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

5.2   Section 6(7) of the UD Acts provides that: “in determining if a dismissal is an unfair dismissal, regard may be had… to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”.

5.3   The leading case in relation to this is the UK EAT case of Williams v. Compare Maxam Ltd.3 Williams, was followed by the UK Court of Appeal decision in Walls Meat Co. v. Selby where the court approved the following passage of Browne Wilkinson LJ which sets out how an employer should approach redundancy. Speaking about the subsection in English law which is similar to the Irish provision Browne Wilkinson LJ stated:

“For the purposes of the present case there are only two relevant principles of law arising from that subsection. First, that it is not the function of the industrial tribunal to decide whether they would have thought it fairer to act in some other way: the question is whether the dismissal lay within the range of conduct which a reasonable employer could have adopted. The second point of law, particularly relevant in the field of dismissal for redundancy, is that the tribunal must be satisfied that it was reasonable to dismiss each of the applicants on the ground of redundancy. It is not enough to show simply that it was reasonable to dismiss an employee; it must be shown that the employer acted reasonably in treating redundancy ‘as a sufficient reason for dismissing the employee,’ i.e., the employee complaining of dismissal. Therefore, if the circumstances of the employer make it inevitable that some employee must be dismissed, it is still necessary to consider the means whereby the applicant was selected to be the employee to be dismissed and the reasonableness of the steps taken by the employer to choose the applicant, rather than some other employee, for dismissal. In law, therefore, the question we have to decide is whether a reasonable tribunal could have reached the conclusion that the dismissal of the applicants in this case lay within the range of conduct which a reasonable employer could have adopted.”4

5.4   In Boucher v. Irish Productivity Centre the EAT held that selection criteria should be assessed: “by the objective standard of the way in which a reasonable employer in these circumstances, in that line of business, at that time would have behaved.”

5.5   The Respondent made substantial efforts to consult with the Complainant and to explore whether there was any suitable alternative employment or other ways in which the redundancy of his role could have been avoided. The Respondent considered all open roles however none were suitable for the Complainant’s skill set.

5.6   The Respondent proposed the creation of a new role which was not feasible as its effect would be the opposite of the streamlined approach that the Respondent was attempting to achieve. Further, the adjustment to the proposal whereby the Complainant had outlined that he would not be seeking an increase in remuneration if the position he proposed was created, was also considered but was not deemed feasible. There were thus no suitable alternative roles which could be identified for the Complainant which would have avoided the redundancy of his role

5.7   The Complainant was given an opportunity to appeal the redundancy decision which he duly availed of. Having considered all of the relevant materials and having provided the Respondent with an opportunity to provide additional material, which he did, Mr. Heddon found that each of the grounds of appeal were unfounded. A detailed and thorough outcome letter was provided to the Complainant.

5.8   The Respondent submits that having regard to the genuine redundancy situation that existed within its business, the Respondent behaved as a reasonable employer would have in the circumstances. The Complainant’s dismissal was entirely fair.

6.       Conclusion

6.1   Having regard to the foregoing, the Respondent submits that the Complainant’s dismissal on redundancy ground was not unfair under the UD Acts. The redundancy of the Complainant’s role, while regrettable, was genuine and unavoidable. The Respondent acted as a reasonable employer would have in the circumstances.

What is a Redundancy?

The definition of redundancy in Ireland is set out in the Redundancy Payments Act 1967 and amended by the Redundancy Payments Act 1971 and 2003 –

An employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable or mainly to –

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

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

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

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

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

Key Factors in Redundancy

There are two critical factors to be gleaned from the definition above:

a)       The redundancy should arise from the doing away with the job, not the person. This feature of impersonality is necessary in a genuine redundancy situation.

b)      Change – the change must arise as a result of change in the workplace which might range from a closing down of the business to a simple reduction in number of employees.

In the instant case two witnesses on behalf of the Respondent gave evidence to the effect that the  at the beginning of 2022, the Group had 648 employees globally. However, owing to a downturn in business, by the end of 2022, the Group had 382 employees globally. The Group had involuntary eliminations (redundancies) in March, May, July, September, October and December 2022 as well as in January 2023. The Respondent had 55 employees in January 2022. This number had decreased to 44 by January 2023 owing to redundancies. The combined US GAAP financial results of operations for the Ireland based entities of the Group were a loss of €5.2million for the nine-months ending 30th September 2022.

To help address these problems a decision was made to centralise the Sales function on a global basis, this would result in the elimination of separate Sales Divisions in the USA and EMEA.

The Respondent provided the Complainant with a letter outlining that his role had been placed at risk by email on 22nd September 2022. This letter outlined that the Respondent would be engaging in a formal consultation process with the Complainant with a view to discussing any alternatives that could be identified or a means by which any potential redundancy situation could be averted.

Three consultation meetings were held with the Complainant, the first such meeting on 29th September 2022, the second meeting on 10th October 2022 and the third and final consultation meeting on 17th October 2022. I note that the Complainant was initially reluctant to attend the third meeting as he felt the decision was pre-determined. I further note that the Complainant was of the opinion that senior management had not fully considered his proposal that, if implemented, would be a suitable alternative to his Sales position.

On 19th October the Complainant received a letter stating that his employment was being terminated with immediate effect. Sections of this letter read as follows:

“Notice of Termination on Grounds of Redundancy.

We regret to confirm that your position as Senior Director Sales will be made redundant with effect from 19 October 2022. Please accept this letter as formal notice of your redundancy. The necessary arrangements and formalities are set out below in addition to information in relation to your option to appeal this decision should you so wish.

Appeal

Please be advised that you may appeal the outcome of this redundancy consultation process in writing within 5 working days of the date of this letter. Any appeal should be addressed to me, Kristopher T. Schmidt, Chief Administrative Officer. On receipt of any such appeal I will revert with details of a senior member of the business who has not been involved in the consultation process to date who will conduct the appeal process in a timely manner”.

The Complainant exercised his right to appeal the decision, his reasons for doing so were as follows and sent to Ms Garroch on 24th October 2022:

1.       My termination is clearly not a genuine redundancy.

2.       Failure to Properly Consider my Proposal Before Rejecting it and Failure to Consider Alternative Roles.

3.       The Decision to Terminate my Employment was Pre-Determined and the Procedure Flawed

4.       Breach of Contract.

5.       The Decision to Terminate My Employment Ignored the Outstanding Issue Regarding my Commission.

 The final paragraph of his appeal letter read as follows:

“There may be other additional issues that I will want to be raised orally as part of my appeal of my dismissal and which I may want to be considered but the above are the main points”.

Mr Andrew Hedden, the Respondent’s General Legal Counsel was appointed as the appeals officer. I note that at this time Mr. Hedden was in a position junior to those who had made the decision to make the Complainant’s position redundant, this should be considered as being unusual. The Digital River Employee Handbook under the heading of Employee Grievances states the following:

‘Where practicable the appeal will be heard by a more senior manager than whoever decided to take disciplinary action. Their decision will be final within the company’.

The subject of appeals appears in three sections of the Employee Handbook, these sections are:

·       Workplace Bullying and Harassment Policy.

·       Disciplinary Procedure

·       Employee Grievances.

All three sections referred to above contain the clause:

‘As with the hearings at earlier stages the employee may be accompanied by a colleague (or trade union official)’.

This implies that a hearing into the matter will take place and that the employee may be accompanied at such a meeting by a colleague or trade union official. In the instant case the complainant was denied the right to a hearing. I refer back to the final sentence of the complainant’s appeal letter, “There may be other additional issues that I will want to be raised orally as part of my appeal of my dismissal and which I may want to be considered but the above are the main points”.

When Mr Hedden was asked at the hearing of the complaint which appeal process he was using from the Employee Handbook he replied that he thought none were appropriate.

Mr Hedden was also asked had he checked if there was any national legislation on this subject, he replied that he had not checked this.

The Respondent’s failure to conduct an appeal hearing with the complainant at which he could be accompanied constitutes a serious flaw and a breach of their own procedures and policies.

Mitigation of Loss.

The common law rule of mitigation of damages applies to compensation for unfair dismissal. Questions of mitigation are questions of fact. The burden of proof lies on the party seeking to allege that another has failed to mitigate loss. Sir John Donaldson explained the duty in AG Bracey Ltd v Iles ([1973] IRLR 210:

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

These principles are illustrated in decisions of the Workplace Relations Commission and the Labour Court. It is clear that an employee must produce evidence at the unfair dismissal hearing that he or she has made a determined effort to find work.

In the instant case the Complainant has made a very positive effort to find another position and has produced documents that show his efforts. He secured another suitable job 8 months after his dismissal from the Respondent.

In conclusion I find that the dismissal of the Complainant was a genuine redundancy situation however the appeals process was so flawed that I must find that the complaint as submitted under section 8 of the Unfair Dismissals Act, 1977 is well founded.

The representative for the complainant has calculated loss at €168,682.09.

I now order the Respondent to pay to the Complainant a gross sum of €168,682.09 in full and final settlement of this complaint. Such a payment should be made within 42 days from the date of this decision. I would strongly recommend that the Respondent obtain some expert advice on any possible tax implications involved in the making of this payment.

I now order the Respondent to pay to the Complainant a gross sum of €168,682.09 in full and final settlement of this complaint. Such a payment should be made within 42 days from the date of this decision. I would strongly recommend that the Respondent obtain some expert advice on any possible tax implications involved in the making of this payment.

Unfair Dismissals Act, 1977.