EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
Michael O'Brien (claimant) UD768/2013
Furlong Flooring Limited T/A Furlong Flooring (respondent)
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr. P. O'Leary B L
Members: Mr E. Handley
Mr. S. O'Donnell
heard this claim at Dublin on 10th June 2014
Claimant(s) : John Sherlock & Company, 9-10 Main Street, Clondalkin, Dublin 22
Respondent(s) : In person
The determination of the Tribunal was as follows:
The respondent company operates a retail/wholesale business selling various types of flooring. The claimant commenced employment with the company on 1st June, 1993 as a sales representative. The Managing Director (MD) told the Tribunal that prior to 2006 the claimant was appointed as Manager in the wood sales area.
Due to the downturn, the number of staff employed in the sales area dropped from nine employees in 2009 to five employees in 2012. The MD, along with another Director of the company, made the decision to make the claimant redundant. As a result of the downturn, the sales turnover in Dublin decreased under the stewardship of the claimant.
In September, 2011 the MD introduced a contracts division in the company and allocated the claimant to this new work area. The MD indicated that he told the claimant to “try it for a year”. It was envisaged that the claimant’s basic salary would be reduced, with a sales commission to be added to his salary. At a meeting in October, the claimant told the respondent that he was not happy with the salary on offer and he wanted an increase in wages from €60,000 per annum to €66,000. As the company was losing money at the time, the respondent was not in a position financially to concede to the claimant’s request. The MD stated that the respondent had no option but to make the claimant redundant. The claimant was paid his statutory redundancy entitlement.
Under cross-examination, the MD denied that there was any personal animosity towards the claimant. The respondent had in fact created a contracts division in order to retain the claimant as an employee of the company. He said the claimant was not made redundant because of the dispute about the salary payment. The MD confirmed that the claimant had already had two pay cuts of 10% and 5% and denied that another sales person was taken on at the time of the claimant’s redundancy.
When asked about making abusive comments towards the claimant on a return journey from a trade show, the MD said he had no recollection of making any such comments. When asked again if anyone else was taken on at the time of the claimant’s redundancy, namely PR, the MD confirmed that a new employee had in fact been taken on and was on a salary of €30,000 with no bonus option. The MD stated that PR stayed with the company for a number months.
The reason the claimant failed in his efforts to seek an appeal through Mr. F, Director, was because Mr. F does not get involved in these matters. The MD confirmed that while the respondent company had procedures, he did not bring the company handbook to the hearing. The MD agreed to forward a copy of same to the Tribunal.
In reply to the Tribunal as to whether any other position was considered for the claimant, the MD indicated that there was no other position suitable for the claimant on the same wage level and confirmed that no appeal option was afforded to the claimant. The MD stated he did not know whether there was any provision for an appeal procedure within the company procedures booklet.
Giving evidence, the claimant stated that he worked with the company for just over 19 years with his last role as contracts manager. The claimant submitted that the day before he was made redundant he was training a new member of staff.
The claimant told the Tribunal that on return from a trade fair, the MD made abusive comments to the claimant on the return flight home. At the meeting in September, 2012 to discuss the claimant’s salary, a redundancy situation was not mentioned to the claimant. When the claimant met the MD on 23rd October, 2012, the MD put the salary proposal of €50,000 plus commission to the claimant. The claimant told the MD that the company did not have the facility to calculate commission. At this meeting the claimant mentioned the trade fair incident to the MD who stated that he had no recollection of saying abusive things to the claimant. Two days later, the MD told the claimant that he was making him redundant. The claimant asked the MD to re-consider but he said that he had made up his mind on the matter. The MD refused to let the claimant talk to Mr. F, Director and told the claimant that the decision had been made. The claimant wrote to Mr. F on 25th October, 2012 requesting a meeting in relation to his redundancy but no reply was received. The claimant submitted that there was at least two territories he could have managed as he was more senior than both employees involved, who were on approx. €40,000 - €50,000 per annum.
The claimant gave evidence of loss and his efforts to mitigate his loss.
Under cross-examination, the claimant indicated that he was not made aware that it was a take or leave it situation. The claimant set up his own company after he was made redundant. No reasons were given to the claimant as to why he could not meet with Mr. F in relation to appealing his redundancy.
The Tribunal having carefully considered the evidence in this case, have determined that the claimant was unfairly dismissed. The employer failed to set out a clear matrix in regards to the selection of the claimant for redundancy and failed to comply with any reasonable procedure in informing the claimant of his dismissal. The employer also denied the claimant the opportunity of appealing the decision to the superior of the Director who communicated the decision to the claimant, where it was reasonable to allow him to do so. The preferred remedy selected by both the employer and the employee in this case was compensation.
Mr. Handley, in his decision, has agreed with the remedy stated above but finds that the sum of compensation should be €20,000 and that as the claimant has already received a sum larger than that as a redundancy payment he would not award him any further sum. Mr. Handley bases his decision on both section 7 (1) (c) where it is stated “payment by the employer to the employee of such compensation (not exceeding in amount 104 weeks remuneration in respect of the employment for which he was dismissed calculated in accordance with regulations under section 17 of this Act) in respect of any financial loss incurred by him and attributable to the dismissal as is just and equitable having regard to all the circumstances”, and, on section 7 (2) (c) where it is stated “the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid of the Unfair Dismissals Act, 1977
The Tribunal, Mr Hanley dissenting, in determining the award of compensation in this case took into account the above opinion of Mr. Handley. In awarding compensation, the Tribunal must give consideration to the aforementioned subsections of section 7 of the Act in determining the amount to be awarded to the claimant. As a Tribunal of limited jurisdiction, the Tribunal in taking sessin of a case, is confined to the jurisdiction given it under the legislation in which the claim is made. In this case, the claim was made under the Unfair Dismissals Acts and the Tribunal must only exercise its jurisdiction under those Acts. It cannot offset payments made under other legislation and in particular the Redundancy Payments Acts, as in this case, because it has no jurisdiction to do so. This is a function given to a Court but not to a Tribunal of limited jurisdiction. It can consider under “financial loss” the right of a claimant to a redundancy payment where one would have arisen subsequent to the date of dismissal, under sub section 3 of the Act however that does not arise here.
Another reason why a redundancy payment cannot be taken into consideration by the Tribunal in making an award to a claimant is that the payment made in this case would include a rebate paid by the State to the employer. If this sum included such a rebate, which it did, this would mean that the State was subsidising an unfair dismissal compensation amount which would be properly payable by the employer.
Further, a payment made in respect of a dismissal that purports to be a redundancy payment where a Tribunal of competent jurisdiction finds that the dismissal was an unfair dismissal is not a redundancy payment but money paid by mistake and as such is recoverable by the payer under the principal of a resulting trust expounded in The Chase Manhattan Bank NA v The Israeli-British Bank (London)Ltd.,1981Ch.105.
From the above, it follows that the Tribunal should not consider the payment made by reason of redundancy in its determination of the issues in this case. Such issues may be considered by the parties in paying the award or if this determination is taken for enforcement.
In considering the financial loss suffered by the claimant, the Tribunal determines that the claimant should receive the sum of €27,000 in respect of compensation for his dismissal.
Sealed with the Seal of the
Employment Appeals Tribunal