UDD2331

1. Appeal of Adjudication Officer Decision No(S) ADJ-00032666 CA-00043366-001

BACKGROUND:

2. The Worker appealed the Decision of the Adjudication Officer to the Labour Court on 04 November 2022 in accordance with Section 8A of the Unfair Dismissals Act 1977 to 2015. A Labour Court hearing took place on 14 June 2023. The following is the Determination of the Court:

DETERMINATION:

This matter before the Court is an appeal by Suzanne Dunne (“the Complainant”) of a decision of an Adjudication Officer (Adj-00032666 CA-00043366-001, dated 27 October 2022) in a complaint made by her against her former employer Matrix Recruitment Group (“the Respondent”) under the Unfair Dismissals Acts 1977 to 2015. The Adjudication Officer held that Ms Dunne was not unfairly dismissed. A Labour Court hearing was held in Waterford on 14 June 2023.

Background

The Complainant was employed as a Branch Manager in the Carlow office of the Respondent company from 10 February 2007 until her employment was terminated by reason of redundancy on 14 October 2020. The Complainant was paid a statutory redundancy payment.

The Respondent submits that the Complainant’s employment was terminated wholly or substantially due to the redundancy of the role of Branch Manager in Carlow, and that the offer of alternative work on the same set of terms and conditions was a reasonable offer. The Respondent rejects any assertion that the decision to make the role redundant was related to workplace issues with a colleague or was based on the Complainant’s decision to take parental leave in 2019.

The Complainant submits that she was unfairly selected for redundancy after a period of parental leave which she took following the Respondent’s failure to address a workplace issue with a colleague. She asserts that during her absence there was a seismic shift against her, and she was isolated on her return to work. Her role was deemed redundant, and she was offered an unsuitable alternative role.

Witness Evidence

The Court heard evidence from the Complainant and from three witnesses on behalf of the Respondent.

Testimony of Kieran McKeown – Managing Director

The company is a small business recruitment agency based in Waterford with offices in Athlone, Carlow, and Dublin. External consultants were engaged in 2019 to conduct a strategic review of the organisation. All managers were informed of the review, including the Complainant. The review was still ongoing when the Complainant took parental leave in November 2019. Covid hit in March 2020, and the focus was on keeping costs under control.

Arising from the organisational review the branch manager role in Carlow was selected for redundancy because of a major reduction in volume in that area over a four-to-five-year period. Volumes were down 50% from 87 roles in 2014 to 44 roles by 2019. Volumes in the other areas were holding strong.

In order to survive the company needed to develop new business. As the Complainant was an expert in supply chain a new role of Recruitment Specialist Manager Accountancy & Supply Chain was created for her. The rationale for creating the new role was to increase revenue and market presence across a greater geographical area. The new role covers Carlow and Dublin with a greater focus on business development. It was envisaged that the role would eventually encompass all of the east coast region and that the Complainant would employ people as the role developed. The Complainant had said that she did not wish to be part of the management team and she had stopped attending management meetings.

Mr McKeown had initial discussions with the Complainant in May 2020. The discussions were by phone as Covid was at its height. They discussed gaps in revenue, subsidies available, and the new role. The only difference between the two roles was the people management element, which he planned to undertake, allowing the Complainant to devote her whole time to business development. People management duties comprised about 15% of the Complainant’s role at that time. He sent her details of the new role, but she came back to say that the role was not at the same level. He thought she would be happy with the new structure. It had not featured in his mind that she would not take the job, as in his view it was not a diminished role.

On 17 May 2020 the Complainant raised the matter of a severance payment in an email. He hoped that she would change her mind as he was getting close to retirement, and it was a good way to position the business for a buy-out. They agreed that she would remain on the subsidy payment until August, and that he would review the situation. There was no change and when they met on 2 September 2020, he advised her of his decision to make the role redundant. She appealed that decision, after which he made the final payment to her. No ex-gratia payment was made.

Cross examination

On the Complainant’s return from parental leave in March 2020, she was put on furlough as that is what was agreed between them. No other members of management were placed on furlough.

Mr McKeown rejected that the Complainant was made redundant because she took parental leave. He said that no issues arose around her return to the office or accessing emails when her leave ended. She handed in her computer while on parental leave and her emails were redirected to him. There was no recruitment activity for permanent roles when Covid hit. The only activity was for recruitment of temporary roles for the HSE, which was undertaken by others.

Mr McKeown acknowledged a dispute between the Complainant and another colleague. He understood that both parties decided not to proceed with a mediation process. The other colleague, who was a member of senior management, was involved in the strategic review but did not provide input into the job specification for the new role.

He rejected the assertion that there was a seismic shift against the Complainant during her absence on parental leave because of the dispute with another colleague. He rejected that her role was deemed redundant as a result as a result of interpersonal difficulties, or that she was isolated without a computer or offered a role with less hours. He had worked with the Complainant for many years and never had any intention of not working with her.

Mr McKeown acknowledged that the Complainant was one of the highest revenue earners. He said that there was an ongoing downturn in business to the Carlow branch. The decision to make the branch manager role redundant was based on the lack of incoming volumes, not revenue generated to date. He saw the creation of a new business development role as a way of keeping the Complainant in employment. The branch manager post rather than the person was made redundant. The job description for the new role was not finalised until March 2020. The Complainant did not provide input into the review process but was kept up to date.

When asked if the Complainant was ever put on notice that her role was at risk of redundancy, he said that she was not at risk of redundancy until she decided not to take the new role. The Complainant was not considered for the branch manager roles in Dublin or Athlone, as those branch managers had expertise and knowledge of clients in their areas. Volumes in those areas were holding strong.

When the Complainant refused to attending management meetings, he did not insist that she attend as he did not like conflict and always strived to reduce it down.

He was in continuous engagement with the Complainant from May to August by email or telephone, and he addressed the concerns raised by her verbally. He hoped that she would change her mind.

The working hours for the role were reduced from 30 to 18 hours a week, as others were working 18 hours at that time. He told the Complainant that her hours would increase to 30 hours per week, and the intention always was that the role would be 30 hours per work.

The Complainant appealed the decision to terminate her employment, and that appeal was conducted by an independent person from Simplify HR.

Testimony of Ms Nichola Aylward

Ms Aylward is the Financial Controller with the Respondent company and gave evidence about what happened to other employees during Covid.

Ms Aylward said that the business was severely impacted with no products to sell. There were no government supports initially. Everyone had to work from home, except payroll. There were 24 employees employed in the company at the time. Five employees were placed on furlough. One employee was on maternity leave. Ms Aylward, the managing director, and the Athlone branch manager worked full-time hours. All others received a government subsidy and a 50% top up payment.

Testimony of Ms Helen Barry

Ms Barry is the Managing Director of Simplify HR and was engaged by the Respondent in April 2019 to assist with developing a strategic business plan and to provide HR support. Ms Barry said that she reviewed roles and responsibilities and with the managing director and looked at a strategic role for recruitment focused on regions, not branches. The managing director was concerned with succession planning and envisaged a management buyout.

She met with senior leaders including the Complainant in May and June 2019 to talk about the strategy. The Complainant raised a number of workplace issues when she met with her in June 2019. Following that meeting she sent the Complainant copies of the grievance and dignity at work policy, and identified a person to hear the workplace issue, however, the Complainant decided not to proceed with that matter as it was a small company. The matter of severance was also raised at the meeting in June 2019. She spoke with the managing director about that matter, but it was not progressed.

She was not involved in the review after Summer 2019. She could not say if there was a plan to make the branch manager role redundant at that time.

Testimony of Ms Suzanne Dunne - the Complainant

The Complainant was employed as a Branch Manager in Carlow since February 2007 and was successful in that role. She was happy managing staff and producing revenue. Over 14 years she was involved in reviews of organisational strategy and there was never any discussion about the branch manager role being dissolved. The branch manager role was the pillar of the company.

The Complainant had a conflict with a colleague which she brought to the attention of the managing director on several occasions. She looked at several ways of resolving the conflict and severance was discussed as one option. She could not recall who instigated the conversation about severance. She was happy when mediation was suggested, but the other party declined mediation. She never refused to attend management meetings, with the exception of one meeting which was a wellness day. She decided to take parental leave in November 2019. Her return to work coincided with Covid and the managing director asked her to extend her parental leave. It was not viable for her to do so economically, and she was laid off until September 2020.

She was offered an alternative role in May 2020 and had discussions about that via email. She was expected to focus on senior roles only, and on a whole new area. It was a difficult market with a difficult client group in a challenging time. The working hours were Monday to Thursday to 1.30pm. She felt she was better served looking at areas that she understood well. She was the top revenue earner. She disputed that volume levels were down in the five years preceding Covid. Volumes always fluctuate and they had always pulled through as a team.

She confirmed that she would not take the role by email on 17 May 2020, as it was a junior role with no people management responsibilities or strategic input to management decision-making. It was unachievable and unrealistic within part-time hours. She stated her concerns about the selection process given that others continued to operate at branch manager level within the company structure.

She proposed that they discuss a severance situation, as it was clear that her role no longer existed.

The Complainant said that she asked to remain on the Covid subsidy payment until August, as no other options were put forward. There was no regular contact throughout this period, and she was left in limbo. Once she lodged a complaint to the WRC on 17 July 2020, there were no communications.

She thought the managing director would revise the plan and put her back into the branch manager position. With so much uncertainty at that time, she thought things might change. She was invited to a review meeting on 2 September 2020, where the managing director read out a letter terminating her employment. She was stunned.

She believed that she was made redundant because of the unresolved conflict with another colleague. She believes she was targeted, and the decision was more personal than business. The appeal process was a farce as the independent HR company was paid for by the respondent.

Cross-examination

The Complainant accepted that the strategic review was undertaken because of the need to improve market share and profitability. She acknowledged that there was a massive decline in business due to Covid but did not accept that there was a decline in volume over the five-year period preceding 2019.

She did not reject the role because of a preference to remain on the Covid subsidy payment. There were a number of reasons for rejecting the role. It took her out of the decision-making process, and away from people and branch management duties. It was a new geographical area, with a focus on senior positions only. It was a stand-alone role, and a very difficult environment at that time. Ms Barry had mentioned the possibility of a MBO in the future and she did not want to be precluded from any buyout opportunities.

The new role was already decided in February 2020 before she returned from parental leave. If the role was built around her, why wasn’t she given the opportunity to input into it? In her view it was as way of avoiding difficulties, rather than addressing those difficulties.

She queried the hours for the role. A document she received said the hours would be Monday to Friday until 1.30pm. She wanted to return to a 4-day week. She did not raise the issue of reduced hours at the appeal, as she was more concerned about the selection process for redundancy.

She accepted that she was allowed to provide input at the consultation meeting in May. She had shared her view that the role was unrealistic, given the hours. She was not given an opportunity to engage about the job specification. She did not put any alternative options forward. She raised the issue of redundancy, as she wanted clarity and was told that her role no longer existed.

She accepted that she decided not to proceed with a formal investigation into the workplace issue with another colleague.

The Complainant was not allowed to return to work from parental leave on 16 March 2020. She understood that other managers were working full time hours. Employees were working from home. She was not aware of employees working 18 hours per week.

She thought the managing director would retract the job offer and reinstate her as branch manager or marry the two roles together. She expected more communication and understood the September meeting was a review. She genuinely thought he’d say she could come back. In her view, the company got rid of her personally rather than address workplace issues.

The relevant Law

Section 6 of the Unfair Dismissals Act in relevant part provides:

6.—(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.

(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.

• (c) the redundancy of the employee,

• (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and
  (b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14 (1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7 (2) of this Act.

• (2) For the purposes of subsection (1), 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) 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.”

In this case, the Respondent’s evidence is that following a strategic organisational review that commenced in 2019 a decision was made to make the Branch Manager role in Carlow redundant. The Court was told that this decision was made to due to a continuing downturn in the volume of work coming through the pipeline in that area. The managing director, Mr McKeown, acknowledged that the Complainant was a high revenue earner, but asserts that as volumes had dropped and the company needed to generate new business to survive. His evidence was that he wanted to keep the Complainant in employment and retain her expertise in a different role that focused on business development across a greater geographical area.

The Complainant challenged that assertion. In her view, there was a seismic shift against her when she was absent on parental leave, and her role was made redundant because of the Respondent’s failure to address a workplace issue with another colleague.

Both the managing director and the Complainant gave clear and cogent evidence to the Court, however, on balance, the Court accepts the Respondent’s evidence that the decision to make the role of Branch Manager redundant was motivated by a decline in business volumes for the Carlow area, and that the decline in business was exasperated by economic challenges caused by the Covid pandemic.

In coming to this decision, the Court is mindful that having conducted an organisational review in 2019 the Respondent was entitled to restructure its business and carry out that business in a different way. The Court accepts the evidence that business volumes were down in the Carlow area, and the focus needed to shift to developing business opportunities and increasing market share across a greater area.

While the Complainant places much emphasis on an interpersonal conflict with a colleague, the Court does not find that to be the motivating factor in the decision to make the branch manager role redundant. The Court further notes that the Complainant had decided against proceeding with a formal investigation into those workplace issues. The Court is further swayed in this finding by the managing director’s clear and convincing evidence that he wished to retain the Complainant expertise and that it did not feature in his mind that she would not take the job.

Having regard to the evidence, the Court is satisfied that in the circumstances where business volumes had reduced the requirements for the Complainant to carry out the work of a branch manager in Carlow diminished and as a result that a genuine redundancy situation arose, as provided at section 7(2)(b) of the Redundancy Payments Act 1967.

Was the new role an offer of suitable alternative work?

Following the organisational review a new role of Recruitment Specialist Manager Accountancy & Supply Chain was created with a view to increasing market presence across a wider region. The Court notes the Respondent’s rationale for wanting the Complainant to relinquish management duties in Carlow in order to focus on the role and develop business opportunities across a greater geographical area, given her acknowledged expertise and experience.

However, the Court had some difficulty with the assertion that the role offered to the Complainant was an offer of suitable alternative work on the same set of terms and conditions. The Complainant’s evidence was that the role was not comparable to her previous role, as it had no people management responsibilities or strategic input onto management decision-making. Furthermore, she asserted that it covered a greater geographical area, and that the remit of the role was unachievable and unrealistic within the part-time hours specified in the job description.

Notwithstanding the conflicting evidence about what hours of work would apply, it is clear that the new role had different responsibilities focused on business development covering a larger geographical area. It is also clear that the Complainant would no longer be a member of the management team, and that she would relinquish her people management responsibilities.

Having regard to the above, the Court finds that the alternative role offered to the Complainant cannot be considered a “suitable” alternative role and, in those circumstances, the Complainant’s decision to decline that new position was not unreasonable.

Was the Complainant fairly selected for redundancy?

There was no established procedure or custom and practice in the company for implementing redundancies at the time that the Complainant’s employment was terminated. The Complainant submits that the manner in which she was selected for redundancy was unfair given that (i) redeployment was not considered as an option and (ii) given that others continued to operate at branch manager level within the company structure while her position was made redundant.

As outlined above, the Complainant was offered an alternative role which she declined. In the Court’s view, the Complainant cannot assert that redeployment was not considered as an option by the Respondent, in circumstances where she was offered another role in the company. The role may not have been a suitable alternative role in the eyes of the Complainant, but nevertheless an alternative role was offered to her. As already determined it was not unreasonable for the Complainant to decline that offer on the basis that it had less management responsibilities.

The question the Court must now consider is whether the Complainant was fairly selected for redundancy in circumstances where others continued to operate at branch manager level within the company structure.

The Court was told that there were three branch managers in the company - one based in Athlone, another based in Dublin (on maternity leave during the relevant period) and the Complainant based in Carlow – in addition to the Managing Director who was based in Waterford. In her appeal the Complainant specifically cites the Athlone based branch manager who was not selected for redundancy.

The Managing Director told the Court that he did not consider redeploying the Complainant to other branches in order to retain her in employment as branch managers have specific client knowledge of their own geographical areas and business volumes in the other areas were holding strong. The Athlone branch manager had 20 years’ service and knew the business and client based in that area well. He said that it made no sense to put the Complainant into the Athlone branch given that it was a different geographical area, and she did not have the same level of client or business knowledge as the manager based there.

In the Court’s view, the Managing Director gave a cogent and reasonable explanation for not displacing branch managers in other geographical areas, given that they had specific client knowledge in their business areas, and those areas were performing well.

The Court is satisfied that, having regard to the circumstance cited by the Managing Director, it was reasonable to confine the selection for redundancy to the Carlow branch manager role, and so finds on the evidence that the selection of the Complainant for redundancy does not render the Complainant’s termination of employment unfair.

Was the process followed by the employer reasonable?

In determining if a dismissal is unfair the Court may have regard, where it considers it appropriate to do so, to the reasonableness of the employer, which means balancing an employer’s interests with those of the employee. The question for the Court in this case is whether the process followed by the Respondent was such that it rendered the termination of the Complainant’s employment unfair.

The Complainant’s evidence was that she was left in limbo and was stunned when her employment was terminated at a meeting on 2 September 2020. She said that she had expected more communication from the managing director and had remained hopeful that she would be reinstated as a branch manager in Carlow. The Respondent refuted that assertion and submitted that there were a number of consultation meetings, albeit they were conducted remotely because of Covid.

On reviewing the email correspondence between the parties, it is evident that at a meeting on 7 May 2020 the Complainant was notified that the role of branch manager in Carlow was at risk of redundancy. She was also made aware that an alternative role of Recruitment Specialist Manager Accountancy & Supply Chain was available to her.

The Complainant confirmed by email on 17 May 2020 that she would not take the new role setting out the reasons why. In the same email she raised concerns about the selection process by reference to others who remained in employment as branch managers and stated that “As it is clear that my role no longer exists, I would suggest that we most likely now need to discuss a redundancy situation”.

On 12 June, the Complainant sought an update stating that she had been left in limbo for four weeks. The managing director replied to advise he would be in a position to update her in another week.

On 25 June 2020, the managing director emailed the Complainant to summarise key points of a conversation they had by phone the previous day. He advised that it was not clear when things would improve and gave the Complainant the option of remaining on the government subsidy scheme until August or availing of statutory redundancy to be paid in instalments due to cash flow restrictions.

On 29 June 2020, there was a further exchange of emails between the two following a telephone conversation on 26 June 2020. The managing director acknowledged the Complainant’s dissatisfaction with the redundancy payment proposed and her preference to review the matter in mid-August, rather than proceed with redundancy at that time. For her part, the Complainant confirmed her dissatisfaction with the proposed payment and reiterated her concerns about the selection process, stating that she was excluded from returning to work after taking parental leave.

By email on 7 July 2020, the managing director rejected the assertion made by the Complainant that her role was the only one impacted by Covid, or that there was any correlation between her parental leave and the decision to make the Carlow role redundant. He again noted that she had declined an alternative senior role and stated that the company was not in a position to pay anything more than the statutory payment proposed. He undertook to keep matters under review.

On 28 August 2020 the Complainant was invited to attend a meeting to discuss the outcome of that review. On 2 September 2020 the managing director informed the Complainant that he was respectful of her wishes not to take on the new role offered to her, and that the outcome of the business review was that her role was to be made redundant with effect from 14 October 2020. He advised her that she could appeal that decision to an external party.

The Complainant may take issue with the extent and nature of the consultation process undertaken by the Respondent however, in the Court’s view having regard to the evidence before it any shortcomings in the process do not amount to failings such that it deems the termination of the Complainant’s by reason of redundancy employment to be unfair.

In this regard, it may have been preferable for the Respondent to seek the Complainant’s input when drafting the job description for the new role, albeit she accepts that she was provided with an opportunity to provide input at the consultation meeting in May. The Respondent could have engaged more proactively with the Complainant at different stages during the consultation process. That said, it is clear that the Complainant was aware that her role was at risk of redundancy in May 2020. She declined an alternative position offered to her, which she was entitled to do, and sought to instigate a conversation about severance terms. The terms proposed were not to her satisfaction. The parties agreed that the Complainant would remain on the subsidy scheme until August and the matter would be kept under review, rather than enact redundancy at that point.

The Court further notes that no issues were raised by the Complainant about the consultation process on appeal. The Complainant set out four grounds for her appeal as follows: (i) her role was made redundant because she took parental leave; (ii) she was offered an unsuitable alternative role with diminished responsibilities; (iii) a manager in Athlone was not selected for redundancy; and (iv) a grievance in motion since 2019 was not addressed. The Court does not accept the Complainant’s assertion that the appeal process was “farcical” because an independent external person appointed was paid by employer, and notes that this is a common practice in employment matters.

The appeal was conducted by an external consultant who rejected the four appeal grounds and set out her reasoning in a letter that was opened to the Court. The appeal hearer notes that the impact of Covid-19 and the organisation review led to the decision to make the position in Carlow redundant, and that there was nothing to suggest that the role was chosen because the Complainant took parental leave. The appeal hearer found the alternative role did not have diminished responsibilities. The appeal hearer found that it was clear from the information provided to her why the Carlow role was chosen for redundancy as opposed to other roles in the company. Finally, the appeal hearer noted that it was the Complainant’s decision not to proceed with an investigation into the grievance she raised in 2019.

The Complainant’s employment subsequently terminated on 14 October 2020, and she was paid a statutory redundancy payment.

Having regard to all of the circumstances of this case, the Court is of the view that the matters identified by the Complainant in relation to the consultation and appeals process did not render the dismissal to be unfair.

In the view of the Court, the Court is satisfied that a genuine redundancy situation arose, and that the Complainant was fairly selected for redundancy. Having considered all of the circumstances of this case, the Court is of the view that the conduct of the Respondent in relation to the implementation of the redundancy, when viewed in totality, was substantially reasonable, and any shortcomings that arose during the consultation process did not amount to behaviour on the part of the Respondent, such that it can be deemed the termination of the Complainant’s by reason of redundancy to be unfair.

As a result and for the reasons outlined above, the Court finds that the Complainant’s dismissal by reason of redundancy was not unfair.

The decision of the Adjudication Officer is upheld.

The Court so decides.

	Signed on behalf of the Labour Court
	Katie Connolly
CO'R	______________________
17 August 2023	Deputy Chairman