ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00053110

Parties:

	Complainant	Respondent
Parties	Rodrigo Cunha	Wiline Pmu Limited

	Complainant	Respondent
Anonymised Parties

Representatives

Marcin Szulc, Rostra Solicitors

Mary O’Sullivan HR Director

John Maguire,

CEO

Complaint:

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-00064968-001	25/07/2024

Date of Adjudication Hearing: 12/11/2024

Workplace Relations Commission Adjudication Officer: Penelope McGrath

Procedure:

In accordance with Section 8 (1)(a) of the Unfair Dismissals Act of 1977 (as substituted) and where a claim for redress under the Unfair Dismissals legislation is being made, the claim is referred to the Director General of the Workplace Relations Commission who in turn refers any such claim to an Adjudication Officer, so appointed, for the purpose of having the said claim heard in the manner prescribed in Section 41 of the Workplace Relations Act, 2015. In particular, the said Adjudication Officer is obliged to make all relevant inquiries into the complaint. The Adjudication Officer will additionally and where appropriate hear all relevant oral evidence of the parties and their witnesses and will take into account any and all documentary or other evidence which may be tendered in the course of the hearing.

In circumstances where the fact of dismissal is not in issue, the evidential burden of truth (or the onus) rests with the Respondent/Employer to establish it has acted fairly and appropriately. Per Section 6(1) of the Unfair Dismissals Act 1977:

“Subject to the provisions of this section the dismissal of an employee shall be deemed, for the purposes of this Act to be an Unfair Dismissal unless having regard to all the circumstances there were substantial grounds justifying the dismissal”

The Act suggests circumstances which might be relied on by an Employer to establish the Dismissal was not Unfair. Section 6(4) of the Unfair Dismissals Act 1977 reads:

“Without prejudice to the generality of Subsection (1) of this section the dismissal of an employee shall be deemed for the purposes of the Act, not to be an Unfair Dismissal, if it results wholly or mainly from one or more of the following:

(a) The Capability, Competence or Qualifications of the employee for performing work of the kind for which he was employed by the employer to do;

(b) The conduct of the employee,

(c) the redundancy of the employee, and

(d)….”

Lastly, Per Section 6(6) of the 1977 Act in determining for the purposes of the Acts whether or not a dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or other of the specified grounds (as outlined in Sect 6(4) of the Act – conduct, redundancy etc.), or that there were other substantial reasons justifying the dismissal.

An Adjudication Officer should, in determining if a dismissal is unfair, have regard to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal (per Section 6 (7) of the Unfair Dismissal Act of 1977).

In the case before me, the Employer seeks to establish that the dismissal is not an Unfair Dismissal as the Dismissal results wholly or mainly from the Redundancy of the Employee (as provided for in Section 6(4) of the 1977 Act aforesaid). In making this assertion, the Respondent will have to establish that the Redundancy is a genuine one (and not a sham or a ruse to get rid of an employee). Under Section 7(2) of the Redundancy Payments Act of1967 the Employer will have to demonstrate (in general terms) that the dismissal (by reason of Redundancy) is attributable wholly or mainly to the fact that the Employer is ceasing to trade, or proposes trading with fewer employees or that the work is to be done differently and that the Employee has not the requisite training or qualification to continue.

Further, even if there is a Redundancy situation there is an onus on the Employer to show that the selection of an individual (over and above other potential candidates) is fair and reasonable and that the selection process is fair and transparent. The Adjudication Officer must, in determining if a dismissal is unfair, have regard to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the said dismissal (per Section 6(7) aforesaid).

It is further noted that in the case before me the Complainant herein has referred the complaint of having been unfairly dismissed by reason of his Unfair selection for Redundancy from his employment wherein he had worked for in excess of one year. Because the Workplace Relations Complaint Form (dated the 25th of July 2024) issued within six months of his dismissal, I am satisfied that I (an Adjudication Officer so appointed) have jurisdiction to hear the within matter.

Where an employee has been dismissed and the dismissal is found to be unfair the employee shall be entitled to redress pursuant to Section 7 of the 1977 Act. Such redress might include re-instatement, re-engagement, or compensation for any financial loss attributable to the dismissal where compensation for such loss does not exceed 104 weeks remuneration. The acts, omissions and conduct of both parties will be considered when calculating the extent of the financial loss and there is an onus on a Complainant to adopt measures to mitigate the financial/ remunerative loss (which includes actual loss as well as estimated prospective loss).

Background:

This hearing was conducted in person in the Workplace Relations Commission situate in Lansdowne Road, Dublin. In line with the Supreme Court decision in the constitutional case of Zalewski -v- An Adjudication Officer and the Workplace Relations Commission and Ireland and the Attorney General [2021] IESC 24 (delivered on the 6th of April 2021) the hearing was conducted in recognition of the fact that the proceedings constitute the administration of Justice. It was therefore open to members of the public to attend this hearing.

It should also be noted that the Complainant and Respondent witnesses were all agreeable to giving a formal affirmation that all evidence provided would be truthful. The giving of false statements or evidence is an offence.

The Specific Details of the Dispute are outlined in the Workplace Relations Complaint Form which was received by the WRC on the 25th of July 2024.

Summary of Complainant’s Case:

The Complainant was represented and gave evidence on his own behalf. The Complainant provided me with a submission dated 11th November 2024

Summary of Respondent’s Case:

The Respondent was represented, and a number of witnesses gave evidence on behalf of the Respondent entity. I was provided with two sets of submissions dated the 21st October 2024 and the 12th of November 2024

Findings and Conclusions:

I have carefully considered the evidence adduced in the course of this hearing.

The Complainant commenced working with the Respondent Company in and around April of 2016. The Employer herein provides different commercial services to third party Clients. Services include Marketing, Billing and Collection as well as technological solutions and development. By 2024 the Respondent Company had 17 Employees. Two Director Managers. Six in the technological Areas and 9 people spread across customer Care, marketing and Billing. The Complainant had come on board in2016 and had worked his way through a couple of promotions leaving him in the role of Marketing Director in and around 2021. In practise the Complainant really only dealt with one Client which was a large Broadband Company operating in the United States. I accept that the Complainant is excellent at his job and over the course of the years (especially 2022) his marketing strategy yielded great feedback and revenue.

It is an unavoidable fact that the Respondent had availed of the Debt Warehousing facility that the Department of Revenue had provided over the Covid years. The day of reckoning seemingly arrived in 2024. At that time the total due was €442,508.00. Revenue was prepared to allow instalments to be made over a five-year period. In this instance, the Respondent had to find upwards of €88,000.00 per annum to extinguish the debt due and owing. I have had sight of a letter from Revenue dated the 29th of March 2024 setting out the details. Whilst this letter is not addressed especially to the Respondent Company I am happy to accept that this letter accurately records the facts on the ground in March of 2024.

I have also been shown the Company’s end of year Revenues for 2023 which show that the total income generated was in the region of €922,350.00 and that this was slightly down on the previous year where the income generated was €948,000.00. The largest outgoing by far was the annual bill for wages and salaries which came in at €886,222 in 2023.

I accept that as of Mid-2024 the Company was anticipating a significant drain on it’s resources month-to-month to meet the annual sum of €88,000.00 which had to be discharged over five years. I further acknowledge that there is no wiggle room in the Company outgoings other than in the category of wages and salaries which therefore needed to be reduced in the amount of €88,000.00 per annum.

It is clear to me that the CEO Mr. M, had been implementing cost saving options well in advance of this time. The Company headquarters had moved to a smaller less costly premises - saving on rent. Any departing Employees were not replaced with their work simply being re-absorbed into the workplace. However, these measures were small and did not meet necessary amounts required. There seems to have been an inevitability to the need to re-structure the workforce so as to survive with fewer members of staff.

It should also be noted that the client base (and particularly the client with whom the Complainant worked most closely on Marketing strategy) were also trying to cut the costs of marketing. I got the sense that the Client wanted results without expending money. I also get the sense that the Complainant was of the view that the more dynamic the campaign the greater the return, whilst Mr. M had a more puritanical approach which it seems was in line with the client’s requirements at that time.

I have not been given the impression that Mr. M sought any particular advice on how to approach the issue of Redundancy within his workforce. I can accept that he asked his HR and Finance Director Ms O’S to look at his options across the 17 staff. However, it is clear that even before Ms O’S had returned to him with a critical analysis of the workforce and how it might be restructured, Mr. M had already asked the same client that the Complainant worked closely with, what their view on outsourcing the Marketing function would be? The response was positive. It is worth noting that this issue was seemingly raised in the course of one of the weekly or monthly meetings held between the Respondent company and this client on about the 18th of April 2024. It is also worth noting that the Complainant was not at that meeting as he was out of work in post operative recovery.

There is little doubt in my mind that raising the question of whether the client would allow the Respondent company to outsource the Marketing function was deliberately done in the absence of the Complainant. Ms O’S confirmed that she had done some research into the notion of using either a Spanish or Bosnian Marketing Company for their marketing campaigns moving forward. In fact, I was given the financial breakdown in the course of Ms O’S’ evidence. She had worked out that the company could spend as little as €23,000.00 per annum on a quality (albeit remote) service based in Bosnia. I understand this is the arrangement that currently prevails.

The Respondent witness Mr. M says that he told the Complainant that his job was at risk on the 22nd of April. I have no evidence of this, and the Complainant flatly refutes that he was ever put on Notice of an impending Redundancy scenario. There is nothing to substantiate that it ever happened. In fact, the Complainant maintains that he had no knowledge that re-structuring was happening and Redundancies were being required. Despite the fact that the complainant seemingly was in a role of senior Management he was not made aware of the Debt Warehousing situation which needed to be dealt with as matter of urgency.

Ms. O’S says she came back to Mr. M on the 27th of April 2024 with an outcome and Recommendation. In fact, Ms O’S agreed that she had discussed with Mr. M on various aspects of the review before coming to the final outcome and therefore I do not get the impression that Mr. M was in any way surprised at the final draft as presented. The Report concludes that it is in the interests of the company to retain it’s technical staff as innovation and development of software is key to the survival of the company. It was decided that:

“By making the two marketing roles redundant and outsourcing the marketing and putting a cap of €2k per month on this cost the company could achieve sufficient savings to fund the €88,000.00 per year repayments to Revenue.”

On balance I find that the solution to the problem of the Debt Warehousing has been found and that there was some logic to the finding where the function could be so easily sourced elsewhere. I accept that the Employer is allowed to arrange its affairs in such a way that it ensures its own survival. However, that does not mean that the Respondent can ignore its duty of care and obligations to an Employee of eight years standing.

I find as a matter of fact that the Complainant had no pre-warning as to the fact that his job was being selected for Redundancy. There was no warning and no communication and certainly no opportunity to try and save his role – though I suspect even had opportunity been given the €88,000.00 shortfall per annum was out of his reach. Instead, the Complainant received a letter on the 20th of May 2024 which stated:

WiLine PMU Ltd has had a significant amount of tax warehoused since the COVID-19 pandemic.

Under this scheme, we were allowed to defer paying certain tax liabilities for a period of time. This period of deferral ended on 1 May 2024 and we have had to enter a Phased Payment Plan with Revenue to repay this warehoused debt. This means our cash flow has been affected so we conducted a detailed review of all of our overheads as they need to be significantly reduced.

As a result of this review, we have decided to outsource all of our marketing, therefore, your position is being made redundant as your role will no longer exist.

I further note that no right of Appeal was offered. I also note there is no suggestion in the letter that the Complainant was in any way on notice of the fact that his job was at risk. This was a termination out of the blue. The actual employment ended after a four-week period of notice had been worked (June 17th 2024).

As I understand it the Complainant was successful in obtaining employment by mid-October. He was out of work for sixteen weeks.

On balance I find that the process by which the Complainant’s employment came to be terminated was Unfair. Whilst I accept that the Respondent was entitled to re-structure, it failed to balance this entitlement against the rights of the Employee to be treated with dignity and respect. In assessing compensation, I accept that Complainant’s job was always at risk the failure lay in not telling him that this was so.

Decision:

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

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

CA-00064968-001 - The Complainant was Unfairly Dismissed when proper and adequate procedures were not adopted. I award the Complainant €10,000.00

Dated: 23-01-25

Workplace Relations Commission Adjudication Officer: Penelope McGrath

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