Complainant

Respondent

Parties

Colm  Vize

 Artomatix Ltd

Representatives

  self

Alice Duffy DLA Piper Ireland LLP/ Emma Davey BL

Act

Complaint Reference No.

Date of Receipt

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

CA-00057359-001

26/06/2023

The Respondent maintains that the Commission has no jurisdiction to hear the complaint as it was lodged with them prior to the actual date of termination.

The substantive case relates to the reasonableness of the decision to compulsorily make the Complainant redundant.

The Complainant maintains that the selection process used was arbitrary. While he accepts the need for redundancies, the criterion applied was not fair. He contends that while an activity did cease it was wrongly assumed by the decision maker that the economic activity to cease was carried out by a dedicated team. While the cost centre showed a 100% allocation of certain team members to that economic activity, it was not reflective of how the work was distributed between two teams.

The Complainant made an application for line managers who had left the Company, to give evidence and that direction was made and the managers with the agreement of the Respondent gave evidence.

The decision to stop an activity was made due to economic and financial pressure. The Company commenced a consultation process and looked for suggestions from the workforce about the selection process. No suggestions were received. It was clear that an entire activity would cease.  It was reasonable and fair that those who had worked on that project would be informed that their jobs were at risk and invited to a consultation about the decision to stop that activity. The development work to cease was clearly differentiated operationally from other development work and had a separate budget and management oversight.

The criterion used by the Company was reasonable and impersonal. Those who worked primarily on a specific type of development work were at risk of losing their jobs and absent of viable alternatives redundancies would take place. The process provided for an appeal stage. That was exercised by the Complainant. However, he failed to engage meaningfully and provided no constructive options other than to challenge the decision to make his role redundant and that in turn would affect him based on the criterion used.

A decision to make an employee redundant must be impersonal; as Charleton J determined in JVC Europe Ltd v Jerome Ponisi [2012] 23 E.L.R. 70:

2. 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. Under the Unfair Dismissal’s Act as amended ( “the Act of 1977” ), the dismissal of an employee may only take place for substantial reasons that are fair. In effect, the contract of employment is protected in law and it may only be repudiated by the employer for reasons which do not amount to an unfair dismissal. This requires the employer to show substantial grounds which justify the dismissal. The burden of proof, in that regard, is squarely placed upon the employer. Sections 6(1) and (2) of that Act, in their amended form, provide:

On the facts the selection was impersonal. An entire team working on a specific project would be made redundant.

In Cronin v RPS Group, Tallaght UD 2348/2009 and cited in the Arthur Cox yearbook 2011 the tribunal determined that:

The EAT accepted that a genuine redundancy situation existed but concluded that the employer did not act reasonably when it came to selecting the claimant for redundancy. It cited the following grounds for upholding the claim:

failure to advise the claimant of the criteria to be applied for redundancy;

failure to give her the opportunity to make representations on her own behalf in respect of those criteria;

failure to provide an appeal mechanism for the claimant;

the company adhered rigidly to a system of selection that did not provide for any consideration of redeployment;

failure to have regard to the claimant’s length of service.

While impersonality is a defining characteristic of a genuine redundancy the law also provides for the decision to be judged based on whether is was reasonable or not.

In this case the net point relates to the reasonableness of retaining personnel who worked on a project team that the Complainant stated he also worked on. He maintains that the demarcation between the two teams operationally never existed and that he was as competent as any employee who was retained. That assertion is denied by the Company, and senior managers for the Respondent stated that the two teams were separate and did not operationally share work.

There is a net point is this case and that relates to whether the two development teams very significantly overlapped every day operationally. The Complainant stated that the separation of the two teams as separate cost centres and with two separate executive corporate reporting lines was not the way work was actually done. The executives called by the Respondent were clear that the two teams were entirely separate. In contrast two-line managers who have since left the Company and gave evidence that supported the Complainant’s account that work between the two teams was shared and team members freely moved between the two work areas.

The Company did commence a consultation process and detailed the criterion that it would apply when choosing employees to be made redundant. That criterion related to the development team whose work would cease and who were allocated in the cost system to that development work. It was impersonal and an objective criterion. The question arises was it reasonable? The Complainant has proven that there was a high level of interchange between the two teams and that he frequently would carry out tasks for that area of development work that continued.

The Company did provide for an appeal process and on the facts the Complainant was not co-operative and failed to engage in that process or to provide any alternatives. He assumed that he was the most qualified of his colleagues for both areas of work and on that basis, he should be retained. His own witnesses while supporting his view that the work was not separate between the two teams, stated that several colleagues were equally able to work across the two types of development work.

Colleagues in one work area were made compulsorily redundant. In the circumstances where there was not a clearly demarcated line between the two teams that selection criterion was not reasonable. As redundancy is impersonal and as there were colleagues who completed tasks for both development work A and B; solely targeting those based on a cost allocation and executive reporting line, that did not reflect the reality of how work was actually carried out, was not fair or reasonable

The Company would appear to have met some of the criteria of what would constitute a fair process; however, essentially the selection process was not fair or reasonable as the primary objective reason used to make an employee redundant failed to have regard to the high level of interchange between the two working groups.

In this case while a genuine redundancy situation existed the selection process was rigid; was devoid of meaningful consultation; failed to have regard to the complainant’s length of service, his previous relevant experience that could have allowed him to be redeployed. Where the two teams shared work, the employer can’t rely on a cost centre allocation as the sole determinant. Ultimately the company has the right to determine the criteria. However, in this case two-line managers responsible for day to day management stated that team members freely moved between both areas of work and that the Complainant was more than capable of continuing to work alongside colleagues who were retained, as he was as competent and experienced as they were in that area of development.

 All those factors detailed in Cronin if applied to all work colleagues in both teams may not have been sufficient to retain the employee; however, the test to be applied is how reasonable was the conduct of the employer when deciding that this employee should be made redundant over others. In the absence of any proof that alternatives were meaningfully considered and combined with the fact that  the work between the two areas did overlap ,the process was rigid; provided no specific reasons why redeployment would not take place and the selection process must be deemed to be unfair. For these reasons I determine that the complainant was unfairly dismissed.

In in JVC Europe Ltd v Jerome Ponisi [2012] 23 E.L.R. 70 Charleton J. stated that Unfair Dismissals Act required Financial Loss to be determined as follows:

27. This section clarifies the consideration that is to be given to compensation for unfair dismissal. Payments under social welfare and income tax legislation are to be disregarded. In assessing compensation, the court should have regard to the implications for dismissal. My task is to assess the financial damage which the dismissal has brought about and then to place the measure of that damage against the maximum amount of compensation that is available. In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages. Where the quantum of damage is more, then the jurisdiction is limited to that maximum and the amount of damages must thus be reduced to that maximum sum. Where the measure of damages on dismissal is more than the maximum but contributory fault is found in respect of the dismissal against the employee, the reduction is on the totality of those damages, and not on the maximum award. If the result is to reduce compensation within the maximum award, that sum is appropriate. Where the reduction in total damages for contributory fault puts the damages above the maximum award, then the maximum award is the correct measure of compensation for unfair dismissal.

The Unfair Dismissals Act1977 as amended also states that the following should be excluded:

(2A) In calculating financial loss for the purposes of subsection (1), payments to the employee—

(a) under the Social Welfare Acts, 1981 to 1993, in respect of any period following the dismissal concerned, or

(b) under the Income Tax Acts arising by reason of the dismissal,

shall be disregarded.

In relation to Redundancy Payments the Unfair Dismissals Act as amended states:

financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;

“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.

The Complainant has received his statutory redundancy payment.

I note in the case of Aoife Foley v Waterford Health Park Pharmacy Ltd UD/23/108 where the court determined that:

Counsel for the Respondent submits that ‘financial loss’ for the purposes of s.7 of the Act falls to be considered under three headings: actual loss, future loss and loss of rights under protective legislation and superannuation. He submits that the Complainant’s actual loss in this case is €5,742.00 and that she cannot have any future loss in circumstances where she secured employment at a higher rate than that she had been paid by the Respondent.

Finally, Counsel refers the Court to the case of Bunyan v United Dominion Trust (Ireland) Limited [1982] ILRM 404 for guidance in relation to the calculation of loss under the third heading i.e. loss of statutory rights, and submits that the Court should not have regard to this head in circumstances where the Complainant had not accrued sufficiently long service with the Respondent to bring her within scope of the Redundancy Payments Act 1967.

The Court has had particular regard to the wording of section 7(1)(c)(i) whereby the Oireachtas provided that it may make an award of compensation not exceeding 104 weeks’ remuneration to an employee who has been unfairly dismissed the amount of which the Court deems to be “just and equitable having regard to all the circumstances”. A key fact in this case, and one which has been conceded by the Respondent, is that there was not a scintilla of procedural fairness in the manner in which the Complainant was dismissed from her employment.

The second element of section 7 that the Court also notes is that the meaning it attributes to financial loss is framed as ‘including’ actual loss, estimated prospective loss etc. In short, the statute does not purport to set out an exhaustive definition of “financial loss”.

Having regard to the foregoing and to the Complainant’s submissions, the Court finds that the appropriate level of compensation payable to the Complainant in this case is €14,000.00. The decision of the Adjudication Officer is therefore upheld and the appeal fails.

The obligation to mitigate is just one factor to be considered when determining compensation and not the sole factor.

`I note in Dismissal Law the following:

In Sheehan v Continental Administration Co Ltd 114 the EAT endorsed the position set out in the second edition of this work that ‘[a] claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work ... The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather [is] to be profitably employed in seeking to mitigate his loss.’ 115 This passage was recently adopted and applied by the Workplace Relations Commission in deeming a claimant to have made insufficient effort to mitigate his loss. 116

Where the complainant has been unavailable for work and thereby has not availed of opportunities to mitigate his or her loss, compensation will normally be reduced accordingly.

In Redmond on Dismissal Law 3rd edition at:

[24.72]

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. 111 Sir John Donaldson explained the duty in AG Bracey Ltd v Iles: 112

‘The law is that it is the duty of a 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 interests 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.

The test to be applied is an objective one in determining if the employee acted reasonably to mitigate loss.

I also note in Dismissal Law the following:

[24.67]

When determining compensation, the WRC must take into account all the circumstances of the case, according to the Supreme Court in Carney v Balkan Tours Ltd. 106 Section 7(1) coupled with s 7(2)(d) allow the adjudication body to look at all the circumstances including the conduct of the parties prior to dismissal.

And:

The Supreme Court 107 held on a case stated from the Circuit Court that:

(1) There was no doubt that the conduct of an employee was material in determining his or her rights to redress under the 1977 Act.

(2) Under s 6 of the 1977 Act, if the dismissal resulted wholly or mainly from the conduct of the employee there would be no right to redress whether by way of reinstatement or compensation. The Court remarked: ‘Indeed one of the surprising features of the present case is that the EAT having found that the claimant “contributed substantially towards her dismissal” ... had satisfied themselves that the employee had not contributed wholly or mainly to her dismissal.’

(3) The discretion conferred upon the tribunal (or other adjudicating body) by s 7 of the 1977 Act in relation to the computation of a payment by way of compensation was very wide.

The Complainant has commenced his own business and continues with that endeavour. I must have regard to the fact that the Complainant did not openly engage in the appeal process or make any constructive proposal to save his role other than that he should not be made redundant.

The Complainant commenced employment in November 2015 and his employment ended in July 2023. He was on a monthly salary of €7676.

I have determined that the Complainant was unfairly dismissed arising from applying a selection criterion that failed to reflect the reality that colleagues worked between two development project streams. Therefore, it was not reasonable to select him on the assumption that he was primarily working on just one project development team. On the evidence he was more than capable of strongly contributing to the project development work that continued.

Allowing for the circumstances of this case I award €38,000 in compensation which is separate to the statutory redundancy payment received.

I find that the Complainant was unfairly dismissed. He commenced employment with the Company in November 2015.

The Complainant has commenced his own business and continues with that endeavour. I must have regard to the fact that the Complainant did not openly engage in the appeal process or make any constructive proposal to save his role other than that he should not be made redundant.

The Complainant commenced employment in November 2015 and his employment ended in July 2023. He was on a monthly salary of €7676. The Complainant is actively engaged in a new business venture and therefore reinstatement or reengagement are not appropriate remedies in this case.

I have determined that the Complainant was unfairly dismissed arising from applying a selection criterion that failed to reflect the reality that colleagues worked between two development project streams. Therefore, it was not reasonable to select him on the assumption that he was primarily working on just one project development team. On the evidence he was more than capable of strongly contributing to the project development work that continued.

Allowing for the circumstances of this case I award €38,000 in compensation which is separate and in addition to the statutory redundancy payment received.

Selection Criterion-Lodging complaint prior to dismissal