ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00023204
Cathal Deacy John J. Gordon & Son Solicitors, Grainne Quinn, BL
John Barry, MSS
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: 13/01/2020
Workplace Relations Commission Adjudication Officer: Janet Hughes
In accordance with Section 41 of the Workplace Relations Act, 2015 [and/or Section 39 of the Redundancy Payments Acts 1967 - 2014 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015, and/or Section 9 of the Protection of Employees (Employers’ Insolvency) Acts, 1984 - 2012, and/or Part VII of the Pensions Acts 1990 - 2015 and/or Section 79 of the Employment Equality Acts, 1998 - 2015, and/or Section 25 of the Equal Status Act, 2000, and/or Section 13 of the Industrial Relations Acts 1969] following the referral of the complaint / dispute to me by the Director General, I inquired into the complaint / dispute and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint / dispute.
Dismissal was not in dispute. The Respondent made the complainant redundant with effect from 4 March 2019 on grounds of redundancy. For his part the complaint accepted there were financial difficulties in the employment. The dispute regarding the selection of the complainant centred on the process used for selection, or the effective absence of such a process as contended by the complainant. On termination, the complainant received statutory redundancy €17616, pay in lieu of notice and an ex gratia payment of €15605 plus pay in lieu of notice. Part of the dispute related to the non-payment of a bonus payment of 10% of all savings made by him which the complainant maintained was agreed with him in 2015 together with a pay rise. Only the pay rise was implemented.
The complainant was in the employment for fourteen years. His rate of pay was given as €56117 gross plus a €5000 bonus together with a pension scheme. These figures exclude the disputed bonus arrangement. The complainant has not worked since. Compensation was sought by way of remedy.
Summary of Complainant’s Case:
In the period October-December 2018,there were communications between the complainant and two named senior managers regarding the reorganisation of roles, including that of the complainant. The senior management proposals were rejected by the complainant who maintains that his suggestions at the time for savings were rejected. On February 24th, 2019,the complainant was called to a meeting where he was informed that his job was ‘under threat’ and company restructuring was referenced in that context. He was told to think about it over the weekend and another meeting would take place on the Monday. At the meeting on the following Monday, the complainant was told he was being made redundant and was informed that he would receive 40k as a total package.
It was submitted that no consultation process occurred and that there is an obligation to consult. No alternative role was discussed, the criteria for his selection were not explained; others with less service were retained; in arriving at a decision to select him the complainant does not know whether he was compared to other employees. Counsel submitted that the Respondent must have clear criteria for the selection of an employee for redundancy and that these criteria must be assessed objectively whereas it was further submitted that in this case, the Respondent decided to dismiss the Complainant before looking at any criteria . Using the type of criteria which were set out as elements of correct selection criteria, the selection of the complainant ‘was unbelievable’ given he was highly efficient, well trained and had a wealth of experience. Previous suggestions to achieve savings made by the Complainant were rejected by the Respondents. An employer who proposes to dismiss an employee by way of redundancy must give that employee notice using the prescribed form-Part A of the RP50 which was not provided by the Respondent which it was submitted is an offence potentially incurring a fine. Several precedents were cited by Counsel in support of the case made under each of the relevant headings.
Summary of Respondent’s Case:
In their written submission, the Respondent submitted that the decision to rationalise the business was taken in response to the economic environment, that the Respondent attempted to retain the Complainant through a re-organisation of duties that would have allowed him to remain in employment-however the complainant did not accept the proposed changes and sought the company to declare him redundant. In November and December 2018 there were discussions and emails exchanged with the Complainant which revolved around a need to make changes within the stores, dispatch area. Initially the Complainant accepted the proposals but later sent an email detailing what he believed was required. Further emails culminated in the complainant stating:’ I am not going to be covering paperwork, picking orders or unloading trucks. So I will give this position a miss, thanks.’ At a meeting to discuss his email on December 11th , the Complainant indicated he would be interested in a package and being made redundant rather than taking on the duties previously rejected.
At the Hearing, Mr Barry stated that December was a very busy time and in January and February, the management had to deal with a ‘hack’ of the IT system,implying that for these reasons there was no further discussion with the Complainant until February 28th. The meeting on that day was described as the beginning of a process involving the Complainant and this was stated to him at this meeting when the Complainant asked about the quantum of a redundancy payment and said ’make me an offer’. He was informed his position was ‘under threat’ and advised to think about the situation, to take a day off to consider matters and a further meeting was arranged for the following Monday morning. Referring to a verbatim report of the meeting on February 28th provided by the Complainant, the Respondent stated that it was evident that this meeting was recorded by the Complainant and that record showed that the Complainant pursued the issue of a severance payment, that this was his main interest and the Respondent formed the view that the issue for the Complainant was not remaining in the Company, or expressing any interest in taking on other roles or responsibilities. On this basis, the Respondent went to the meeting on Monday March 4th with a revised package.
Regarding the arguments around consultation, assessment criteria and precedents cited on behalf of the Complainant, a previous EAT Decision (UD 690/2013) was cited on behalf of the Respondent where that Body found that the particular good and prudent practices argued by the Complainant in that case were not persuasive to the extent that such practices are mandatory with automatic consequences for employers who do not follow them. In relation to other case law cited ,it was submitted that each case must have regard to its own facts.
Regarding the use of the RP50,it was submitted that the form was required to confirm a redundancy payment, that it was an administrative matter previously used because of the rebates once paid to employers, but no longer provided to them and had no relevance to the process, as such.
With regard to the disputed bonus payment ,the Respondent contended that a decision on this matter was not open to the adjudicator to make, that there was no claim under the Payment of Wages Act, and that in any event, it was explained to the Complainant on more than one occasion that it simply was not feasible to make such a payment given the economic circumstances of the Company.
Findings and Conclusions:
There were no witnesses called by the parties. On a preliminary point regarding the use of precedents-it was pointed out to the Complainants representative, that it is insufficient to make passing references to case law and that while detailed extracts might suffice in some instances, to ensure that any precedent is taken fully into account, those precedent decisions should be provided in full, preferably with the advance submission so that they can be fully considered by the other party, and the adjudicator. It is not for an adjudicator to research cases to review them and moreover to do so after a hearing without the same information being opened to the other side for any comment at the hearing would not represent due process. Nonetheless the principles set out on behalf of the Complainant were fully argued at the hearing and considered in the Decision.
At the Hearing, in response to the Adjudicator, the Respondent clarified that the process relating to the selection of the Complainant commenced on February 28th. That it concluded so quickly was put down to the attitude of the Respondent whose position at that meeting was concerned only with the amount he would receive. The notes of that meeting taken by the managers, do not support this contention in its entirety. At that meeting and again on March 4th,the Complainant expressed his view that this was the third time the company had tried to get him out, spoke about poor relations with some of the senior managers in recent times and asked who else would be replacing him to be told that it would be a family member.
Counsel for the Complainant responded to the precedent of UD690/2013,that the case and the EAT Decision were set in a very small employment and this factor did not apply in this current case as the Company employed 170 people. This point is well made as it not unreasonable to expect that a larger employment with a HR function will be tested to a higher standard of good and expected processes when deciding on redundancies. In this current case, there is nothing in the contributions of the Company Representatives at the meeting on February 28th that could be interpreted as suggesting that options were available for the Complainant to consider, which might have altered the decision to make him redundant. Everything points to a management selection process which had its origins in the discussions and exchanges about cost savings, additional work for the Complainant, his attitude to those efforts which was ultimately negative and even disrespectful in tone ‘I will give this position a miss, thanks’. And if was not intended to be disrespectful, the tone of his correspondence in general was unhelpful, at best, and given his position as PM, the Respondent might have expected a different approach than are reflected in the tone of his emails, his repeatedly raising the question of his 10% of savings bonus and in his request at a meeting in December that he made redundant.
The chronology of events , the attitude and responses to senior managers suggest that the Production Manager was increasingly unhappy in the employment and did indeed want to leave-provided the price was right, which ultimately it was not, as far as he was concerned-related it would appear to his expectations around the 10% bonus. It is in the context of the Complainants own attitude and behaviour that leads to one conclusion, that by February 28th,the Respondent was looking at the Complainant as someone who was not going to provide a solution to the financial situation and that this could be best achieved by making him redundant and using a family member to cover the areas of need. That it was the Complainant who was being told to consider matters over the weekend and was refused any information about other proposed restructuring and ultimately was the only member of the ‘indoor’ staff who was made redundant all point to the focus of the cost savings being aimed primarily at him on the afternoon of February 28th. It would appear that there was a Board meeting at which it was decided that he was to be made redundant. The Complainant was then informed his job ‘under threat’. Reflecting these conclusions back to Counsels point about the obligations of a larger employment to follow established practices and procedures repeatedly considered and refined by statutory third parties over many years, the Respondent has failed to make out any credible case that, whatever about November/December 2018,at the end of February 2019, there was any meaningful economic recovery assessment process available to the Complainant into which he could have made either an input or an assessment. It was reasonable of him to draw the conclusion that his services were no longer required. Given the position of the Complainant, that of a PM, the options for other employment opportunities for that post holder may have been limited, but it would be a very serious matter to decide that simply because he held a senior position he was not entitled to some sort of recognisable process beyond: think about it over the weekend; then be told how much he was to receive and that it was non-negotiable. Section 6 of the Unfair Dismissals Act states: ‘…the dismissal of an employee shall be deemed, for the purposes of this Act unfair unless, having regard to all of the circumstances, there are substantial reasons justifying the dismissal.’ In this case, no reasons, were put forward by the respondent to the Complainant to justify his selection for redundancy other than a generalised reference to restructuring. The Respondent has failed to meet the test set by Section 6(1) of the Act where substantial reasons to justify any dismissal ,including, by extension the selection of a specific person for dismissal by way of redundancy.
Finally and not an insignificant point, the duties of the Complainant did not disappear, nor was there a case made that they did, they were absorbed by a member of the family, or at least that is what the Complainant was told while at the same time he received no opportunity to hold on to any of that work, or other work or to propose other cost saving remedies.
For this third party to accept what purported to be a process in this case as an acceptable standard would be not be justified by the facts. By his attitude, his demeanour, his lack of trust in his employer-setting them up with recorded meetings, his argumentative approach at the meetings on February 28th and again on March 4th,his repeated references to wanting an offer to leave-not only at the two meetings on these dates, but previously, the Complainant undoubtedly contributed to his own downfall. While these contributions do not remove the obligations of the employer of due process in selection for redundancy, they do fall to be taken into account when deciding on the remedy.
Nothing turns on the absence of an RP50, in this case.
Regarding the disputed bonus, a decision on its applicability or otherwise is outside the scope of this claim under the Unfair Dismissals Acts.
The Complainant was selected for redundancy outside of any recognisable process which could suggest that there was alternative open to him on February 28th or March 4th,other than compulsory redundancy which is what occurred in this instance. The absence of any meaningful process renders this selection for redundancy and consequently this dismissal, unfair.
Regarding mitigation of loss-the Complainant remains unemployed. Details were provided of his applications for positions including attendance at some interviews. The Respondent queried how the complainant could still be unemployed at a time of high employment. Counsel for the Complainant cited geographical factors. On reviewing the list of job applications, a significant majority of these were made through a recruitment agency where there was no reply. Relying to such an extent on online applications through employment agencies cannot be regarded as being sufficiently active in attempting to secure alternative employment. The fact that there were twenty-one vacancies directly related to his previous experience, suggest that there is available work in the geographical area, contrary to the assertion of Counsel for the Complainant .
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint / dispute in accordance with the relevant redress provisions under Schedule 6 of that Act
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.
I find the selection of the Complainant for redundancy unfair and accordingly I find the dismissal of the Complainant unfair.
Regarding remedy, given the factors which are found to have contributed to his selection for redundancy and the evident lack of trust demonstrated by the Complainant in recording meetings with his managers without their knowledge, this relationship is irretrievably damaged leading to the conclusion that compensation is the appropriate remedy in this case.
Regarding the calculation of compensation, a figure of one year’s compensation was suggested by Counsel for the Complainant. This would be a figure of €56117 pay,€5000 in annual bonus, and an amount for the employer’s pension contribution estimated at €5000 amounting to€66117 in total. Given his age, the Complainant cannot hope to recover the statutory redundancy entitlements accrued in this employment.
I consider that allowing the Complainant until March 3rd to obtain alternative employment and therefore calculating his losses on this basis is reasonable having regard to the conclusion that insufficient effort has been made by the Complainant to source alternative employment.
The amount paid as an ex-gratia payment and the statutory redundancy payment are deducted from the total to be paid.
In respect of the factor for the Complainants contribution to the decision to dismiss him , allegedly on grounds of redundancy, I decide that the Complainant contribution to the Respondents decision should be set at 60% taking into account his attitude towards the Respondents efforts to achieve savings expressed in his emails and his repeated references to a financial package in December and again in February.
Calculation of compensation:
One year’s total loss calculated as €66117. Less statutory redundancy and ex gratia payment(€17616+€13605)=€34,896-less a factor of 60% for the Complainants contribution to the circumstances of this case, leaves a balance of €13958.
The Complainant is to receive compensation of €13958 in settlement of his complaint under the Unfair Dismissals Acts.
Dated: May 22nd 2020
Workplace Relations Commission Adjudication Officer: Janet Hughes