ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00012175
Parties:
| Complainant | Respondent |
Anonymised Parties | Payroll Officer | Engineering & Construction Company |
Representatives |
| Eversheds Sutherland |
Complaint:
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-00016130-001 | 04/12/2017 |
Date of Adjudication Hearing:05/04/2018
Workplace Relations Commission Adjudication Officer: Ewa Sobanska
Procedure:
In accordance with Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
Background:
The Complainant was employed by the Respondent from 4th February 1990 to 15th September 2017. She was paid €3,851.67 a month and worked 39 hours a week. She claims that she was unfairly dismissed. The Respondent rejects the claim and submits that the Complainant was dismissed by reason of redundancy. |
Preliminary matter: Name of the Respondent.
The Respondent noted that the Complainant incorrectly named ABC as the Respondent. The Company ABC acquired Company XYZ in 2014. However, XYZ is still trading under its own name. There was no objection to amending the WRC Complaint Form accordingly. |
Summary of Respondent’s Case:
The Respondent submits that the Complainant's redundancy was genuine as it was a result of integration and reorganisation. In 2014 the Respondent was acquired by a Company ABC. Prior to the acquisition, the Respondent office where the Complainant was based, served as the central global hub for functional departments like finance, HR, and business development. The new Parent Company is located in Canada and has a corporate hub in the USA. As part of the integration process, each functional department was reviewing its team globally, and looking at where efficiencies could be created. Consequently, the Complainant’s office restructured from its global scale to a country specific office, now supporting only Ireland. As a result of the restructuring, 16 positions were made redundant between late 2015 and the end of 2017. The Respondent relies on section 7(2)(c) of the Redundancy Payments Acts 1967-2016 which prescribes: "an employee shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to - (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." Accordingly, the Complainant has not been replaced and her position remains redundant. The Respondent submits that the Complainant was one of a number of employees (globally) who had their employment terminated by reason of redundancy by virtue of the need to reorganize, cut cost, and to continue operating with less employees. Given that outsourcing payroll for all of Ireland showed effective cost efficiencies it was outsourced to a payroll service provider. The Complainant worked as the Account Payable/Payroll Technician. Complainant's role had two main parts: (a) payroll management and administration, and (b) vendor management and administration. As such, the outsourcing included the majority of the Complainant's work. The second part of the Complainant's job, the accounts payable portion, was to be assumed by the retained team. However, one of the individuals selected for the retained team, declined the offer, which caused the Respondent to recommence discussions on restructuring the retained team. In the meantime, the Complainant advised the Respondent that she had received a job offer for fulltime employment from a new employer and asked for accommodations to accelerate her exit for the purposes of securing her new employment. The Respondent clarifies that the work that was eventually assigned to Ms KK as a result of the final restructuring of the retained finance team was significantly different from the Complainant's original role in that it consisted of work at junior level, mainly data entry, such as checking invoices, securing approvals for payment, and inputting invoices into the system. This remaining work would have been a substantial downgrade to the Complainant full-time administrator role and was only part-time. The Complainant is an Accounting Technician and has a formal payroll qualification, IPass. Aside from the data entry work being far below her abilities, it would not be deemed similar work within the Respondent company, to avoid redundancy, and it did not come close to mirroring the job that the Complainant accepted in her new employment. In summary, Ms KK does not have the Complainant's former job as she does not manage vendors or payments to vendors as the Complainant did. It is noted that the Complainant makes the statement that, rather than take up a new role outside the Respondent, she would have preferred to "stay in my job". To be clear, her job no longer exists. The Respondent submits that it originally intended this remaining work to be assumed by the new team structure; and by the time that structure was revised for a part-time role, the Complainant had already accepted new employment. Ms KK has been working as a casual employee, performing administrative work for the Company since May 28, 2012. Noteworthy is the fact the Complainant is the person who recommended Ms KK for the position that she is now alleging she would have preferred to accept. Ms KK is the Complainant's niece. At no time did the Complainant suggest that this role was similar to her role or that she wished to be considered for this position rather than be made redundant. At no time did the Complainant ever communicate that she was interested in the part-time, junior administrative role that evolved during the restructuring of the Respondent’s business. Additionally, the Complainant at this stage was eager to leave the Respondent to take up a new role with a new employer. She requested to accelerate her exit so that she may start her new employment, and the Respondent accommodated her request. The Complainant had many opportunities to discuss this part-time role with the Respondent, but rather focused all of her communications around obtaining new work, and then securing her new employment. It is the Respondent's position that the Complainant turned down the part-time position by recommending her niece and asking to accelerate her exit.
The selection process was fair and reasonable as it was objectively guided by the roles that were going to be outsourced or centralized into the corporate hubs. The decision to outsource was based upon cost efficiencies. The majority of the Complainant's position was going to be outsourced. The Respondent also used skillset and experience to help identify the team required post restructuring. All of the employees identified for retention were qualified accountants. The Complainant is not a qualified accountant. It is important to note that roles of retained employees changed in each case as a result of restructuring of the business. As can be seen above, the Respondent did not originally plan on having a part-time role to offer. It was only after one of the accountants declined one of the new roles that the Respondent needed to revisit its team structure. In the meantime, the Complainant informed the Respondent she had secured new employment and was very keen on accelerating her exit. The part time role was given to an existing employee.
The Respondent submits that it's conduct was fair and reasonable as the Respondent (a) provided proper notice - On June 14th 2017, the Senior Vice-President of Finance travelled from the USA to the Irish Office to personally give the protective warning to employees by advising them that their jobs were at risk and the related business reasons. The Complainant was in attendance for this notification. The Complainant, following a period of consultation, was then subsequently notified that her position was going to be made redundant. The Complainant received notice of termination, but refused to sign or acknowledge it. In an effort to accommodate the Complainant's requests, the Respondent added two extra weeks of notice, paid out as part of her Pilon.
(b) engaged in meaningful discussions in advance and throughout the process - on June 27th 2017, the Respondent advised the Complainant that her position was going to be terminated by September 30th 2017, essentially three months before it was to be terminated. This was a formal meeting, and attended by upper management, consisting of the Senior Director Financial Controls and Reporting, the Senior Director Tax & Treasury and the HR Manager of Europe. At this meeting, the Complainant wanted to be assured that the payroll was being outsourced. At this time, she was informed that the remaining portion of her accounts payable work would be assumed by another employee in the retained team, as was the case at the present time. As the Complainant’s position was to be outsourced, as is the case at hand now, it was selected for redundancy. In addition to the initial meeting, the Senior Director Tax & Treasury, Mr. S was assigned to oversee and assist those affected employees. On multiple occasions, the Complainant sought his advice. He engaged in meaningful discussions with the Complainant related to interviews, her job offer, and her request to be released early so that she could accept her new position without impacting her redundancy package. These were informal consultations and discussions, and the Complainant was free to contact Mr S as she needed.
(c) provided reasonable paid time off to look for another job and attend training/induction sessions, and, accommodated Complainant's request to have an early release; and
(d) and provided Complainant with an enhanced redundancy package. The Respondent accommodated the Complainant's request to exit early without impacting her redundancy package. On or about 31st July 2017 the Complainant verbally informed Mr S that she had secured alternative employment. She advised that her new employer wished her to start in early September, but this was in conflict with her exit date of 30th September 2017. To facilitate her situation, the Respondent agreed to bring forward her end date to 15th September 2017, and to increase her notice period to two and a half months instead of the statutory two months she was entitled to, which effectively enhanced her redundancy package. Car Allowance was still provided on the days the Complainant was familiarizing herself with her new employer.
The Respondent wholly denies that it treated the Complainant coldly and without regard to her mental health and wellbeing. Rather, the Respondent took additional actions to end the employment relationship on a positive footing. The Respondent hosted a farewell party on September 14th 2017 for the four employees that were made redundant, which included the Complainant. The Respondent invited everyone from the office to this event, and gave a presentation of flowers. This was a sit-down dinner that included drinks, and was largely subsidised by the Respondent. Despite the circumstances, everyone was in good spirits and wished these employees farewell. The Complainant attended this farewell event and did not exhibit any signs or voice any concerns related to her mental health and wellbeing.
Evidence of Mr. S, the Senior Director Tax & Treasury Mr. S outlined the timeline of the events. He submitted that following the acquisition major review took place. The decentralised structure of the Respondent was being changed into a centralised one. A number of roles in various areas have been shed globally and in the Irish office, such as finance function, recruitment function, estimating & proposals services, small business development function. Following the review, it was established that three positions in the Finance Team will carry the workload. A meeting with the staff members took place on the 14th June 2017, the Complainant was in attendance. Mr. C informed them of the oncoming redundancies. Mr. C informed the staff that three positions will remain and the selection criteria include qualifications and industry experience. It was agreed with the affected staff that Mr. C will be the ultimate decision maker. A follow up meeting took place on 22nd June 2017, the Complainant was on leave and did not attend. On 27th June, one-to-one meetings took place. The Complainant was informed that her principal role, payroll would be outsourced. The volume of activity in respect of vendors management and communication with banks has fallen drastically and would be distributed across the three remaining positions. She was informed that, based on her qualification and experience she has not been selected for one of the remaining positions. Throughout July the Complainant assisted in passing over of the payroll to the external company while seeking a new employment. On 1st August Mr. S informed the HQ that she has secured a job offer. The cessation date was 30th September 2017. However, the Complainant informed that she would be starting with the new employer some two weeks earlier. Her early exit was accommodated without any financial loss. Mr. S submitted that the Complainant received informal assistance in respect of her preparation for interviews, she was also released for the interviews and trainings. In the early August 2017 the three candidates were offered the jobs, two accepted and one declined and chose redundancy. The Complainant’s work was to be absorbed by the team of three. However, taking into account that the team was now limited to two people it was decided that a administrative support would be required. Mr. S emphasised that it is considerably junior role. The Complainant was aware of the position and recommended her niece. Ms KK was offered a part-time junior administrative role. At no stage the Complainant suggested she would be interested in the role and at this stage she has secured a new employment. Mr. S submitted also that he did not notice different attitude toward the Complainant following the redundancies announcement. Mr. S noted that there has never been any performance or disciplinary issues with the Complainant.
Evidence of Ms E, HR Manager
Ms E submitted that she attended the meeting on 14th and 22nd June 2017. At the later meeting, it was confirmed by Mr. C that three positions will remain. Mr. C left it to the employees to decide on the selection process. It was agreed that he will be the decision-maker. Ms E stated that she had a friendly relationship with the Complainant, she helped her with her CV etc. She did not notice any change in attitude towards the Complainant. She noted that the Complainant did not meet the criteria set for the three available positions. |
Summary of Complainant’s Case:
The Complainant submits that she received notification that her job was at risk in June 2017 together with her Finance Team colleagues. The company advised them as a group that there would only be three jobs available after the "restructuring" and that they would be given an opportunity to put themselves forward for the positions available. During her next consultation with the company a panel of three managers informed the Complainant that her role was to be made redundant and that the payroll was going to be outsourced. She was informed that she was not qualified to take up one of the three jobs available. The Complainant submits that she asked about the accounts payable part of her job as she knew that this function would still need to be performed. The panel of three managers advised her that it would become part of one of the other three jobs on offer. The Complainant claims that the balance of her job (accounts payable) was offered in August on a 20-hour contract to a part time employee who did relief reception and who helped her when she was busy. The person in question was capable of doing her accounts payable role as she had trained her up herself. The Complainant claims that this person was offered the job as she is on half the rate that she was being paid. The Complainant submits that she had faced many interviews and although she was successful in securing a job she would have preferred to be given the choice to work a 20-hour week and stay in her job. But by this time the environment she was working in had become very difficult and stressful and the Finance Team were as a group treated as if their jobs had already been terminated. The Complainant submits that she served 27 years in the company and she is finding the treatment she received to be very cold with no regard to her mental health and wellbeing and she is struggling to deal with the way she has been treated. The company made an employee redundant in July and August and three in September and more are to be made redundant in December. The Complainant feels that they have spaced out the redundancies so as to avoid a collective redundancy situation. In her direct evidence, the Complainant concurred with a lot what has been put forward by the Respondent. However, she submitted that after 27 years with the Respondent she would have expected to be accommodated somehow. She expressed disappointment that Mr. C having no affiliation to the Irish office conducted the process in an impersonal manner. In cross-examination, the Complainant agreed that the part of her job which was given to Ms KK is carried out in a different way due to her skillset and different nature of her role. The Complainant further agreed that the business activity and the importance of the Irish office has reduced. She accepted that there was restructuring but added that she could have been accommodated. The Complainant agreed that she recommended, albeit in casual manner, Ms KK for the job and accepted that she was overqualified for the position in question. |
Findings and Conclusions:
The case presented by the Complainant is that she was unfairly dismissed on the grounds of unfair selection for compulsory redundancy. Section 6(4)(c) of the Unfair Dismissal's Act, 1977 states that: “the dismissal of an employee shall be deemed, for the purpose of this Act, not to be an unfair dismissal, if it results wholly or mainly from the redundancy of an employee”. Section 6(6) of the Unfair Dismissal's Act, 1977 states that: “In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted only or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal." Section 7(2)(b) of the Redundancy Payments Act, 1967, states that: “for the purposes of subsection (1), an employee who was dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to - the fact that the requirements of that business for employees to carry of work of a particular kind, or for the employees to carry over work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish.” Based on the above legislative requirements, it falls to me to consider whether or not a genuine redundancy situation existed in compliance with Section 7 (2) (b) of the Redundancy Payments Act, whether the termination of the Complainant's employment resulted from that redundancy and, finally, whether or not her selection for compulsory redundancy resulted from a fair and reasonable process. The evidence before me shows that the Company which employed the Complainant was acquired by another company in 2014. Following the acquisition a major review took place globally in the company. As a result, the Complainant’s office restructured from its global scale to a new role, one supporting only Ireland. Consequently, it emerged that there was an excess of resources in the Finance Team and Mr. C, the Senior Vice-President of Finance engaged in the redundancy process. The Respondent determined that the Finance Team would be reduced to three positions only and the selection criteria included qualification and experience. Mr. C met with all the staff of the team, including the Complainant on 14th June 207 and notified them of redundancies. A follow up meeting took place on 22nd June 2017. The Complainant was on leave and did not attend. The selection process was discussed with the staff members and it was agreed that Mr. C would be the decision maker in that respect. The Respondent decided the criteria for the three roles, namely a person to be considered for the position would have to be a qualified accountant and have at least 7 years’ industry experience. One to one meetings took place on 27th June 2017. The Complainant was informed that the main part of her role would be outsourced and the rest would be absorbed by the team of three remaining employees. She was also informed that she did not meet the set criteria and therefore was not successful. The parties agreed that the Complainant was not a qualified accountant and therefore was one of the four people selected for redundancy. Regrettably, the Complainant did not appeal this decision and made no suggestion as to possible accommodation. I note that at the time the Complainant dealt with difficult personal circumstances. However, the Complainant was able to attend interviews and secure a new employment at the same time. Therefore, as upsetting and difficult as the circumstances were, I am not satisfied that they prevented the Complainant from addressing the matter of redundancy at the time. I note the Complainant disappointment that Mr. C who had no affiliation to the Irish office conducted the process in an impersonal manner. However, it must be stressed that the redundancy by its nature is impersonal with the reason for dismissal relating to the job, not to an individual employee. In relation to whether the Complainant’s selection for redundancy was fair and reasonable in the circumstances I find that a significant part of the Complainant’s role was outsourced. The remaining part, volume of which has been and is declining was to be distributed among the team. In the context where the role which the Complainant held was being eliminated, it is incumbent on the Respondent to consider the possibility of relocation to alternative role. However, it is also incumbent on the employees in question to proactively engage with their employer in discussion pertaining to their situation. The Complainant agreed that she was not qualified to put herself for one of the three roles. Following the decision to retain a part-time administration clerks the Complainant did not express any interest in the role. Even though she claimed that she would have preferred to be given the choice to work a 20-hour week and stay in her job, at the hearing she confirmed that she felt she was overqualified for the role. Critically, at the time she had already secured a new employment and recommended her niece for the position. The Respondents contends that there were no vacancies within the organisation which could be used to accommodate the Complainant as the Complainant did not fit the required skillset. The Respondent has satisfied its legal obligation to put the Complainant on notice of the pending redundancy and to have a consultation process during which the Complainant could have made suggestions on how to avoid the redundancy. Taking all the above into consideration, I find that a genuine redundancy situation existed. The termination of the Complainant’s employment with the Respondent was as a result of the implementation of the new organisational structure and the resulting redundancies. In addition, having carefully considered all of the evidence adduced, I find that the Complainant selection for redundancy was fair and reasonable in the circumstances. |
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.
In all of the circumstances, I find that the Complainant’s employment ended due to a redundancy situation and was therefore not unfair within the meaning of Section 6 of the Unfair Dismissal Act, 1977. |
Dated: 1st August, 2018
Workplace Relations Commission Adjudication Officer:Ewa Sobanska
Key Words:
Redundancy, unfair dismissal |