ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00025198
Francis Rowan FX Rowan & Co & Ian Fitzharris BL
Rob Nolan Peninsula
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991
Date of Adjudication Hearing: 14/02/2020
Workplace Relations Commission Adjudication Officer: Brian Dalton
In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977 as amended following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.
The company operates in a competitive market place and based on market demand changed its production process to focus primarily on aluminium doors and frames. Arising from this change the existing job roles fundamentally changed. The amount of time required on spraying frames was significantly reduced. As the complainant was primarily involved in that activity his role was displaced. However, the complainant argues while his role was displaced he was more skilled to carry out the new production process. The complainant had previously done fitting work along with spraying and a colleague who also did fitting wok and carpentry but with less service was retained. His employer chose another employee over him because he was a skilled carpenter and the complainant was not. Some wood fitting and manufacturing would be maintained but much reduced. The owner of the business was also a carpenter and while he may have preferred to retain the other employee, the selection process he used was biased and unfair as both employees’ work was fundamentally affected by the change to aluminium frames. While an appeal process was provided for it was inadequate as the fact that the complainant’s first language is not English may have led to miscommunication and confusion. The appeal on the face appeared to be biased as it never addressed the grievance for the basis of the appeal in the first place. Another employee with less service was retained because [ arguably the work had become less complex] the other employee had more ability but not necessarily more skill at the new production process and fitting. In fact, the claimant states he was more skilled at the new work. The complainant was absent on sick leave when the decision was made to make him redundant and his employer gave him no minimum notice as he was out on long term absence.
Summary of Complainant’s Case:
The onus is on the company to establish that a genuine redundancy existed as detailed in Section 6(6) of the Unfair Dismissals Act 1977 based on the principles of ‘impersonality and change’.
“(6) 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 wholly 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.”
The complainant argues that in the first instance there was no genuine redundancy as there were several options that could have been explored to avoid a redundancy situation and no such process was ever envisaged. The process was a closed one from beginning to end and predetermined.
At least two employees’ and not just one employee were affected by the change to aluminium frames. Tasks were most definitely interchangeable between employees and training would also be required for employees arising from the change in product and the production process. In other words, a pool of employees was affected by the change. Redundancy arises from change and is impersonal in nature. This must be shown by objective criteria. The employer had no criteria to select one employee over another. The employer focused just on one employee. The process was subjective and personal and cannot be wholly or mainly justified on the grounds as detailed at Section 7(2) of the Redundancy Payments Act 1967 as amended:
(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 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,
The complainant argues that the employer has failed to demonstrate how the requirements to carry out the wooden frames work had in fact ceased as that work is continuing. They have failed to provide reasons whey one employee was chosen over another who had less service. The complainant is more than qualified to do the new work and fitting as he already had done that job. Superior ability is not a ground to choose one employee over another. There is no evidence of a matrix or set of criteria to objectively show that the selection was fair. There was no genuine consultation with the complainant.
In Crawford v Modern Plant UD 123/1998 the complainant states that the Tribunal rejected sectional selection for redundancy:
“The claimant’s work was merged in another section and we take the view that it was not reasonable for the respondent to deal with the redundancies on a sectional basis, but the procedure should have been spread throughout the respondent company.”
Also, in Whole Foods Wholesale Ltd UD 95/2006 the Tribunal held that the dismissal was unfair as the employer failed to complete an adequate and objective analysis regarding a pool of employees:
“That this was an unfair selection is further exemplified by the fact that T was still in the probationary period of his employment and was not considered. It is also noteworthy that there were employees with shorter periods of service.”
The complainant was dismissed on the 21st August 2019 and his employer stated because he was absent on sick leave minimum notice was not required.
The decision was appealed, and it is argued that this was simply a tick box exercise. The appeal never considered the central points at issue and just reaffirmed the employers view that because the job duties of the respondent had changed he should be selected for redundancy. The process was also significantly impacted by the fact that English is not the first language of the complainant which may have given rise to miscommunication and misunderstanding.
The employer has failed to prove that they acted fairly and reasonably and on that basis the dismissal is an Unfair Dismissal.
Summary of Respondent’s Case:
Allowing for intense competition the business needed to become more efficient. It made the decision to substitute its Alu-Clad product which is labour intensive and move to Aluminium frames which is more in demand and less labour intensive.
The company has two working directors, three full time employees and one part time office administrator. The three full time employees were mainly employed as a joiner, one as glazer/finisher and one as a sprayer.
The move away from Acu-Clad meant that there would be work for a joiner; glazer/finisher; however, the requirement for spraying was dramatically reduced and it was this role that was at risk.
The decision to make the complainant redundant was not made lightly and only occurred after other cost saving measures were pursued. None of the changes implemented were enough to justify having a full-time member of staff engaged in the spraying department, when that role was becoming less and less business critical.
The company wholly and mainly made the complainant redundant for the reasons as set out under Section 7(2) of the Redundancy Payments Act 1967 as amended. The employer was reducing work of a particular kind as specified at 7(2)(b) ‘in the place where he was so employed have ceased or diminished or are expected to cease or diminish’, or at 7(2)(c) ‘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 at 7(2)(e) the fact that’ his employer had decided that work for which the employee had been employed ( or had been before his dismissal) should henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.’
The redundancy was wholly and mainly made based on a new production process that would require less staff and the business also had to ensure it retained the most qualified employees. The comparator that the complainant relies upon to show that he was unfairly dismissed is a time served carpenter, the complainant is not. The spraying duties diminished most, and this meant that the complainant’s role was most affected by the change. The impact on the spraying section was most significant. The comparator does have less service; however, service is not the criterion only used.
The business is a small business there are not a wide range of choices to avoid a redundancy. The decision was not personal or subjective. The complainant was a skilled member of staff in a highly specialised area that is not readily transferable.
The complainant was on sick leave when he was made redundant, he was not required to work out his notice as he was absent on sick leave.
The company did engage in an independent appeal process and on balance that process concluded that the selection process was fairly made.
The employer has proven that a genuine redundancy situation existed and allowing for the small scale nature of the business, with only a handful of employees, it applied a fair and independent process to ensure it made the decision to select the complainant based on objective criteria. The decision to dismiss was fair and made wholly and mainly on the grounds of redundancy.
Findings and Conclusions:
CA-00031979-001 Unfair Dismissal
On the facts there was a genuine redundancy situation. The company was moving from a wooden frame and labour intensive product to relying more on aluminium frames which was less labour intensive and was a product more in demand. They were not totally stopping production of the Alu Clad frames (wooden); however, they were shifting away from this product to a more in demand product. That business decision was based on market demand and cost considerations. The consequence of that decision was to significantly reduce the need for a fulltime sprayer, a job the complainant held.
The respondent is a small company at the time of the redundancy employing 5. There were 3 employees apart from the 2 working directors.
The dispute relates to retaining a named employee who had less service. The complainant states that he was more skilled and trained for the Aluminium frames than the other employee. The respondent states that is not so as the other employee is a highly skilled carpenter and that work requiring those skills will still be required; although, much reduced. The company states that it has demonstrated that its decision was made fully cognisant of the grounds as set out under redundancy legislation. The work that the employee was involved in has diminished; there is a requirement for fewer employees and an employee who is more skilled is being retained. They are the grounds for the redundancy.
The complainant states that he in effect was targeted and relies on case law that a fair and objective selection process should have been applied to a pool of workers and that did not occur. The complainant also received no notice as required by legislation.
Section 6(7) of the Unfair Dismissals Act as amended states:
“Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so —
(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, “
The decision to make an employee redundant over another is at the heart of this dispute. The facts don’t show that the employer seriously considered the other employee in the mix of employees being at risk. The appeal process was also deficient by not addressing this matter. On balance the procedures adopted by the company were unfair. However, there is a genuine redundancy situation and the company was not contriving a redundancy to target one individual. It clearly did not apply fair selection procedures and it is for this reason that I determine that the complainant was unfairly dismissed.
I have considered the complainant’s request for re-instatement and re-engagement. I don’t believe they are appropriate allowing for the facts of this case. The complainant’s role has substantially changed. The company is facing cost pressures and must reduce its relatively small staff complement. While an employee with less service has been retained that employee is also more qualified and is a time served carpenter. The company will inevitably have to make one or other of the two employees redundant. The company engaged in a selection procedure that was flawed; however, that flaw is readily rectified by adopting objective criteria relating to skill level. Allowing for the experience of the complainant I do not believe that it has been demonstrably shown that he is more qualified and skilled than the other employee. Based on the craft qualification of the retained employee at face value he is more qualified and skilled. The flaw in the selection process is the absence of any proof to show that the company applied a fair process. The justification for the decision was well argued at the hearing; however, that does not correct a process where the pool of employees affected by the decision to use aluminium frames should have been assessed under a selection for redundancy rather than targeting one individual. However, a mitigating factor is the fact that the company is small, and the decision was between two employees. While a technical flaw occurred that renders the dismissal unfair; reinstatement or re-engagement while considered is not appropriate having regard to the fact that a genuine redundancy situation prevails and a future selection process is likely to correct what was a technical flaw. In these circumstances I determine that compensation is the more appropriate form of redress having regard to what is just and equitable.
The employee continues to be on long term sick leave and no evidence was provided by the complainant as to the likely return date. In these circumstances the redress is limited to 4 weeks as the employee has been unavailable to work. In addition to statutory redundancy I determine that the complainant receive 4 weeks compensation which amounts to €2532 euro [to be paid in addition to statutory redundancy]. The weekly amount was calculated by annualising the gross monthly pay of €2743.41 and dividing by 52 to arrive at €633 gross per week.
CA-00031979-002 Payment of Wages Act:
The complainant claims under Section 6 of the Payment of Wages Act 1991 as amended for the appropriate payment of notice.
Section 6 states:
(1) A decision of an adjudication officer under section 41 of the Workplace Relations Act 2015, in relation to a complaint of a contravention of section 5 as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding —
(a) the net amount of the wages (after the making of any lawful deduction therefrom) that
(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or
(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,
In the complaint form made to the WRC the complainant clearly states:
“I did not receive the appropriate payment in lieu of notice of termination of my employment”
Wages under the Act is defined as:
“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—
(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and
(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:”
The complainant commenced employment on the 13th of January 2016 under the Minimum Notice and Terms of Employment Act 1973 he is entitled to 2 weeks’ notice. I estimate nett weekly pay to be €529.15 and award 2 weeks nett pay which is €1058.30 as the complainant received no notice. Nett monthly pay is €2292.96 and annualised this amounts to a nett weekly pay of €529.15.
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Act, 1977 as amended 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.
CA-00031979-002 Payment of Wages Act:6.(1) A decision of an adjudication officer under section 41 of the Workplace Relations Act 2015, in relation to a complaint of a contravention of section 5 as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding —
I determine that the complaint is well founded.
The complainant commenced employment on the 13th of January 2016 under the Minimum Notice and Terms of Employment Act 1973 he is entitled to 2 weeks’ notice. I estimate nett weekly pay to be €529.15 and award €1058.30 in compensation ; as the complainant received no notice.
Minimum period of notice.
4.— (1) An employer shall, in order to terminate the contract of employment of an employee who has been in his continuous service for a period of thirteen weeks or more, give to that employee a minimum period of notice calculated in accordance with the provisions of subsection (2) of this section.
(2) The minimum notice to be given by an employer to terminate the contract of employment of his employee shall be—
(a) if the employee has been in the continuous service of his employer for less than two years, one week,
(b) if the employee has been in the continuous service of his employer for two years or more, but less than five years, two weeks,
As his employment commenced on 13th of January 2016 and terminated on 21st August 2019 he has been in continuous employment for more than 2 years and less than 5 years and therefore he should have received 2 weeks’ notice and I direct that the employer pay €1058.30 to the complainant which is 2 weeks nett pay.
CA-00031979-001 Unfair Dismissal:
As per section 8 of the Unfair Dismissals Act 1977 as amended I determine that the complainant was unfairly dismissed and is entitled to 4 week compensation which amounts to €2532 gross pay in addition to statutory redundancy:
Redress for unfair dismissal.
7.— (1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer or the Labour Court, as the case may be, considers appropriate having regard to all the circumstances:
(ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances,
As the complainant has been unavailable to work and no return date provided as to his likely fitness to be available for and applying for work; I have awarded him 4 week compensation [ in addition to his statutory redundancy] as specified in the Act.
Workplace Relations Commission Adjudication Officer: Brian Dalton
Unfair selection-Minimum Notice-Payment of Wages