ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00026252
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977
Date of Adjudication Hearing: 06/03/2020
Workplace Relations Commission Adjudication Officer: Brian Dalton
In accordance with Section 8 of the Unfair Dismissals Acts, 1977 as amended 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.
The company runs events and due to sales underperformance encountered financial difficulties. It required the company to reduce labour costs and to achieve cost efficiencies where possible by utilising the resources of a sister company, non-backfill of vacancies and selective redundancies. The dispute in question relates to the selection process for redundancy.
Summary of Complainant’s Case:
The complainant has just over 1.5 years’ service with the company and believes that a personal animus between her and the new Managing Director, influenced the decision to make her redundant. She believes that her request for a salary increase was negatively received and in turn motivated her new boss to select her over others for redundancy.
Summary of Respondent’s Case:
The company was forced to make difficult decisions-the complainant was not selected because of a personal animus rather because her role was identified as one that could be suppressed. The company is relatively small employing about 9 at the time of the redundancy.
Findings and Conclusions:
The central issue in the case relates to the fairness of the selection process for redundancy. During the hearing evidence was given by the respondent concerning all 9 roles at the time of the redundancy and why a role was suppressed or maintained. Some of the roles were suppressed due to natural attrition and their duties reassigned to colleagues in a sister company. This analysis ultimately led to the complainant’s role and another role that was involved in direct client relationship management being assessed for elimination or to be re-engineered. In other words’ the complainant’s role and the relationship role were similar in nature in contrast to the other positions.
It was decided to retain the relationship role and suppress the complainant’s role.
The issue therefore relates to selecting the complainant for redundancy rather than allowing her to fill the retained role and in turn bump the employee with less service.
The incumbent of the relationship role had less service being in employment for several months.
The company argued that allowing for the financial difficulties facing the company they couldn’t afford for the client relationship executive to be let go as the relationships he had personally developed were viewed to be crucial for the success of the turnaround programme.
The complainant argued that she also knew all the clients, had longer service and was more than capable of filling the role without negatively impacting on the fortunes of the company.
The question to be answered is how reasonable was it to retain the relationship executive over the complainant? The skills and experience required for both roles were broadly similar. The incumbent of the relationship role had about 8 months service; this level of service at face value doesn’t provide a compelling basis to differentiate between two employees to determine who should be selected to be made redundant.
Section 7(2) of the 1967 Redundancy Payment Act as amended states:
(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
(f) 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 selection for redundancy must be based on objective criteria and not related to the individual employee, this is often referred to as the impersonality requirement.
At face value the criterion justifying the selection is the depth of commercial relationship that one employee had over another employee based on 8 months experience in the actual role.
The 1977 Unfair Dismissal Act as amended states:
6. (7) 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 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 burden of proof is on the employer to show that they acted reasonably having regard to the circumstances confronting the business.
The selection of the complainant was based on the need to present a confident external side to clients and customers. To place a new employee into the relationship role, it is argued would have been destabilising and unnerved clients, who the company depended upon for continuing support.
It is up to the employer to show that their actions were objective. The justification for the decision while honestly held is a subjective belief without any data to support that view. The employer has not demonstrated that it selected impersonally by using objective selection criteria. They retained an employee with less service and in a role that the complainant can perform. On these grounds I determine that the selection for redundancy was unfair and the complainant was unfairly dismissed.
The complainant only recently has obtained a temporary role. She provided a very detailed job search file containing correspondence and applications for suitable employment since being made redundant. It is clear that earnest attempts have been made by the complainant to mitigate her financial loss.
Allowing for the fast changing economic circumstances confronting the company and indeed the complainant I do not consider re-instatement or re-engagement as feasible options having regard to the facts of this case.
I determine that the complainant should receive €16000 compensation for the financial loss arising from being unfairly dismissed. The loss lasted for about 6 months and the complainant’s annual gross salary is €32,000.
Financial loss under the Act is defined as:
“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;”
The compensation of €16000 is in addition to any statutory, contractual and leave payments made on termination of the employment.
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.
It is up to the employer to show that their actions were objective and fair. The justification for the decision while honestly held is a subjective belief without any data to support that decision. The employer has not demonstrated that it selected impersonally by using objective selection criteria underpinned by the principle of fairness. They retained an employee with less service and in a role that the complainant can perform. On these grounds I determine that the selection for redundancy was unfair and the complainant was unfairly dismissed
I determine that the complainant was unfairly dismissed and should receive €16000 in compensation for the financial loss arising from the unfair dismissal in addition to any other statutory payment she has received and in addition to the contractual notice and annual leave payment made on termination of her employment.
Dated: 21st April 2020
Workplace Relations Commission Adjudication Officer: Brian Dalton
Unfair selection for redundancy