ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00024721
Parties:
| Complainant | Respondent |
Anonymised Parties | Production Line Lead | Employer |
Representatives | Aine Feeney SIPTU Workers Rights Centre | Aislin Reid |
Complaint:
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00031406-001 | 07/10/2019 |
Date of Adjudication Hearing: 01/02/2021
Workplace Relations Commission Adjudication Officer: Maria Kelly
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. This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and SI 359/2020, which designates the WRC as a body empowered to hold remote hearing. The parties were given the opportunity to ask questions. Some questions were asked and answered.
Background:
The complainant commenced employment on 01 October 1994 as a production operative. He was promoted to senior operator and later to the Production Line Lead in April 2011. The Line Lead roles were declared redundant in July 2019. The complainant’s employment was terminated on 13 September 2019. The complainant had worked a 39-hour week and his gross pay per week was €540.20. The complainant contends he was unfairly selected for redundancy and so was unfairly dismissed. The complaint form was received by the Workplace Relations Commission on 07 October 2019. |
Summary of Respondent’s Case:
The complainant worked with the respondent since 1994. He was promoted to the role of Production Line Lead on 08 April 2011. He worked for the respondent at a client site. In May 2019 the respondent’s client informed it that they were encountering a reduction in business activity and reduced orders. The client had to realign business costs and called on the respondent to make cost reductions due to a decrease in delivery of over 15% in the previous two years. The respondent examined their cost efficiencies across the business and determined that a restructure of the management structure was a viable option. The restructuring would bring the management to team member ratio in line with the current employee headcount. The restructuring was part of a wider initiative which had previously resulted in several redundancies. In 2018 four positions were made redundant and in 2019 a further two positions were made redundant. As part of the restructuring the respondent considered seconded positions within the business, with a view to reverting individuals to their substantive posts, as a cost reduction exercise. The respondent commenced a consultation process on 24 June 2019. The complainant was informed that the Line Lead roles were at risk of redundancy. The complainant was informed that alternatives to redundancy would be examined in depth. He was also provided with details of the Employee Assistance Programme (EAP). Further consultation meetings took place on 25 June, 01, 11, 17 and 19 July 2019. The complainant was given the opportunity to be accompanied at the meetings, but he did not avail himself of this opportunity. There were two Line Lead positions in the organisation, one position held by the complainant and the other held by an employee who was seconded from another area. Both positions were in scope for redundancy. As part of the restructuring the seconded employee reverted to their permanent post of assembly coordinator. The complainant was the only permanent Line Lead within the organisation. After full consideration of all possible alternatives the respondent took the decision that the Production Line Lead role would be made redundant. The respondent issued a formal notice of redundancy on 19 July 2019. The complainant appealed this decision. His grounds of appeal were that he was not selected on objective criteria. The complainant’s appeal was heard by the HR manager on 31 July 2019. His appeal was not upheld. The complainant was informed the positions of Production Line Lead were being made redundant and his employment ended on 13 September 2019. He received redundancy payment of €27,518.30, which he accepted. The complainant lodged his claim of unfair dismissal with the WRC on 07 October 2019. Legal Submission The respondent refutes in its entirety the complainant’s claim of unfair dismissal. The complainant was dismissed wholly because of his role being redundant. As a result, his dismissal is not unfair within the meaning of Section 6(4) of the Unfair Dismissals Act, 1977 – 2015: “the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following: […] (c) the redundancy of the employee […]” Redundancy is defined in Section 7(2) of the Redundancy Payments Acts, 1967-2015. The respondent contends that a genuine redundancy situation existed with respect to the complainant’s position in the organisation. In May 2019 the respondent’s client informed the respondent that it was encountering a reduction in business activity and order volume and would therefore have to realign costs. The client called on the respondent to make cost reductions. There had been a reduction in the volume of delivery from 2017 to 2019 and six posts in the respondent’s business were made redundant in 2018 as a cost saving initiative. In 2019 the respondent analysed the roles and functions in the organisation and determined that the same level of service could be provided to the client without the two Line Lead roles as part of the managerial structure. The respondent asserts that the complainant held a standalone post in the organisation. He was the only permanent Line Lead and thus no selection criteria was appropriate in the circumstances. The other Line Lead role was filled on a temporary basis by an employee seconded from another section. When the role was declared redundant the other employee reverted to their permanent role as assembly coordinator. The respondent utilised a robust redundancy process and entered a meaningful consultation with the complainant. Alternative roles were examined but the complainant did not deem any of the vacant positions suitable. Following the consultation, the complainant was notified in writing of the dismissal due to redundancy and he was afforded the right to appeal this decision. The respondent submits that the complainant was not unfairly selected for redundancy. Where unfair selection is alleged the complainant must demonstrate that there exists a comparator in similar employment against whom the complainant was unfairly selected by comparison. No such person can be found in the organisation. The complainant’s full-time role was singular in nature. The respondent relies on the decision in Barton v Newsfast Freight Ltd UD1269/2005 to support the submission that as there were no other employees in similar employment in the organisation the complainant was not unfairly selected for redundancy within the meaning of Section 6(3) of the Act. The respondent submits that it acted reasonably. Section 7 of the Act provides: […] in determining if a dismissal is an unfair dismissal, regard may be had, to (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal” The complainant was informed as to the rationale and need for the restructuring at consultation meetings. Due process and procedure regarding consultation and redundancy were adhered to at all times. The complainant was dismissed by way of redundancy, that need for which arose from the objective grounds of the requirement of the respondent to restructure the organisation to reduce costs for the client. It is the respondent’s position that the separate grievance raised by the complainant formed no operative consideration in the need to restructure the organisation. The complainant’s dismissal was wholly because of his role being redundant following a fair and concise consultation process. The respondent made all efforts possible to avoid a redundancy situation and the complainant’s right to natural justice was observed. The complainant’s dismissal in not unfair within the meaning of Section 6(4) of the Act. |
Summary of Complainant’s Case:
The complainant was employed in various positions by the respondent company from 01 October 1994 until his dismissal for redundancy on 13 September 2019. His final position with the respondent was as Production Line Lead. The complainant contends that he was unfairly selected for redundancy and so was unfairly dismissed. 24 June 2019 The complainant and four colleagues attended a Management Business Update meeting. The HR & Operations Manager informed the attendees that their positions were ‘in scope’ for redundancy. The respondent’s client needed to realign costs and the cost saving would be achieved by a management restructure. The attendees were informed that ‘last in first out’ selection would not be used as this was a management restructuring. The complainant was on sick leave at the time of this business update meeting and so he dialled in by telephone from home. Immediately after the meeting an ‘in scope meeting’ took place, by telephone. The complainant was informed that his position “may be at risk of redundancy”. Consultation Meetings The HR & Operations Manager held consultation meetings, by telephone, with the complainant on 25 June, 01, 11 and 17 July 2019. The complainant repeatedly asked what the selection criteria were but did not receive and answer, save that “the normal selection criteria does not apply”. At the meeting on 01 July 2019 the complainant was informed that the only positions in scope for redundancy were the two Production Line Lead positions. He was also reminded that the other employee who held a Production Line Lead position was on secondment in the role. At the meeting on 11 July 2019 the complainant was told that the normal selection criteria would not apply because the cost savings would be achieved via a management restructure and that may result in the loss of the two Line Lead positions. He was informed that secondment roles would be amended and reviewed. Outcome Meeting On 19 July 2019 the HR & Operations Manager informed the complainant that the Line Lead role was redundant and would be removed from the management structure. When the complainant asked why the Line Lead positions were selected he was told that they were no longer required. The complainant asked how many positions were redundant, but the HR & Operations Manager could not provide this information for ‘data protection purposes. Written notice of dismissal was issued on 19 July 2019. Appeal The complainant appealed against his dismissal for redundancy on the grounds that he was not selected for redundancy according to objective criteria. The HR Manager heard the appeal, by telephone, on 31 July 2019. The complainant stated that he did not see that there were any objective criteria used in his selection for redundancy and further that he found his selection for redundancy incredible as it was so close to him lodging a grievance in March 2019. The HR Manager, by letter dated 02 August 2019, upheld the respondent’s decision. In the letter it was stated that the decision to remove the Line Lead position… was due to the business requirement for Line Lead duties and responsibilities diminishing as a result of the decrease in the volume of orders and reduction of the number of employees on that area of the business. A job analysis was completed on all managerial roles in the business and the Company decided that Line Leads were the most suitable to be removed. The HR Manager also found no link between the complainant’s grievance and the management restructure. Dismissal The complainant was given 8 weeks’ notice, paid statutory redundancy and dismissed on 13 September 2019. Complainant’s Arguments The onus is on the respondent to demonstrate that it dismissed the complainant for redundancy, a potentially fair ground for dismissal, and that it acted reasonably in relation to the selection for dismissal for redundancy. The complainant contend that the employer did not act reasonably or fairly in relation to the dismissal. The complainant relies on the following decisions, Employee v Employer UD1826/2010 and Free v Oxigen Environmental UD206/2011, to support his submission that objective selection criteria are needed in order or carry out a proper redundancy procedure and that the criteria should be objectively applied in a fair manner. Further, he relies on the Labour Court decision in Student’s Union Commercial Services v Traynor UDD 1726 to support his submission that there is an obligation on an employer to look for an alternative to redundancy even if that involves dismissing another employee with shorter service. He also relies on the decision of the Employment Appeals Tribunal in Mulcahy v Kelly [1993] E.L.R. 35 to submit that there is an obligation on an employer to look at all employees as possible candidates for redundancy. The complainant contends that for the selection criteria to be objective, they must be transparent and communicated to the employee. Where the employee has not been told what the objective selection criteria are, the employer cannot maintain it has behaved fairly and reasonably in relation to the selection for redundancy. The complainant asked, on at least four occasions what the selection criteria were but, the only answer he received from the HR & Operations Manager was that normal selection criteria did not apply. The complainant submits that this constitutes unreasonable conduct in relation to the dismissal within the meaning of Section 6(7)(a) of the Act. The complainant rejects the argument that his position had no comparator in the employment. There were two positions made redundant, so he had at least one comparator within the employment. In the outcome of appeal letter of 02 August 2019, the HR Manager stated that the redundancy selection was made based on a job analysis process. The complainant had no knowledge of such a process and was not involved in such a process. If the HR Manager is correct the HR & Operations Manager should have been able to inform the complainant of this during the consultation meetings on 24,25 June and 01, 11 and 17 July 2019. The complainant contends that the selection of the Line Lead position for redundancy was not made on objective selection criteria and was therefore improper, unreasonable and unfair. The complainant contends that his position was selected for redundancy before the consultation period commenced on 24 June 2019. Therefore, no genuine consultation occurred. The Business Update presentation of 24 June 2019 included an organisation chart showing the removal of the Line Lead positions. No other management positions were discussed or shown as being considered in the presentation. The employee holding the other Line Lead position was not considered for redundancy on the ground that she was a secondee. The complainant submits that the failure to consider the other employee for redundancy was a breach of the obligation of the employer, as enunciated in Mulcahy v Kelly [1993] E.L.R. 35 to consider all employees for selection. The complainant submits that the decision in Student’s Union Commercial Services v Traynor UDD 1726 is authority for the proposition that the employer’s duty to seek an alternative to redundancy might extend to the selection of another employee with shorter service. Failure to consider a ‘bumping’ redundancy in this case rendered the selection of the complainant’s position for redundancy unfair. The complainant initially sought reinstatement as the form of redress but by the date of the hearing he had been successful in obtaining employment. He now seeks compensation as redress for his unfair dismissal. |
Findings and Conclusions:
CA-00031406 Complaint brought under Section 8 of the Unfair Dismissals Act, 1977 The complainant contends that he was unfairly selected for redundancy and so was unfairly dismissed. Redundancy is defined in Section 7 (2) of the Redundancy Payments Act, 1967, as amended, as follows: 7 (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 concernedthe 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 particular 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.
Therefore, I must be satisfied that where an employee is dismissed by reason of redundancy that there was a genuine redundancy and that the redundancy was the main reason for dismissal.
The respondent provided details of the business difficulties encountered in 2019. The respondent provides services to client organisations. In May 2019 the respondent’s client informed it that they were encountering a reduction in business activity and order volume. There had been a 15.9% reduction in delivery from 2017-2018 and a 15.67% reduction from January to May 2019. In those circumstances the client required cost reductions from the respondent. As part of cost saving initiatives in the Manufacturing Department in 2018 and 2019 six roles were made redundant. The details of the decrease in order volumes were presented to the complainant and colleagues in a Business Update on 24 June 2019. Based on the information provided by the respondent I am satisfied that there was a genuine need to reduce costs at the request of their client.
How the cost reduction was to be achieved was for the respondent to decide. In the Business Update presented on 24 June 2019 the employees were informed that “The cost efficiencies will be achieved via a management team re-structure to bring the management to team member ratio in line with current employee headcount.” The presentation states that the respondent was looking at all options and mandatory redundancy was always a last option.
Consultation Process
The Unfair Dismissals Act, 1977 provides that termination of employment on the ground of redundancy is lawful.
Section 6 of the Unfair Dismissals Act, 1977 provides the following: 6.— (1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.
(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following: (a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do, (b) the conduct of the employee, (c) the redundancy of the employee, and (d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.
The respondent may rely on the defence of a genuine redundancy situation existing to a claim of unfair dismissal. However, Section 6 (7) of the Unfair Dismissals Act, 1977 provides:
(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], 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 …
Two posts (the Line Leads) were identified in the Business Update presentation as no longer forming part of the management structure. There were two Line Lead posts and two employees employed in those posts, but the presentation stated that the restructuring “may result in the loss of one position”. There is no indication in the presentation that cost saving options, other than the restructure of the management grades, were considered.
Following the Business Update of 24 June 2019, the respondent arranged a series of consultation meetings. The complainant was on sick leave and he attended meetings by telephone on 24, 25 June, 01, 07, 11 and 17 July 2019. I was provided with the minutes of those meetings. The complainant, on several occasions, asked for the selection criteria. The reply he received was that the cost savings would be achieved via a management restructure, therefore the normal selection criteria would not apply. No further information about selection was provided to the complainant.
On 19 July 2019 the complainant was informed that his role was redundant. He appealed his dismissal for redundancy on the ground that he was not selected according to objective criteria. In a letter dated 02 August 2019, the HR Manager who heard his appeal stated that the decision to remove the Line Lead position was “due to the business requirement for Line Lead duties and responsibilities diminishing as a result of the decrease in the volume of orders and reduction of the number of employees in that area of the business”. She stated that a job analysis was completed on all managerial roles in the business and the Company decided that Line Leads were the most suitable to be removed.
Until the outcome of his appeal the complainant was not aware that there had been a job analysis completed on all managerial roles. The complainant was not consulted or involved in the job analysis process or presented with the result of that analysis of his post. The reason why the Line Lead roles were selected for redundancy was not explained to the complainant during the consultation process.
Further, the complainant was supplied with information on other roles in the organisation that were vacant at that time, but they were all roles for which he was not qualified. At the meeting of 17 July 2019, the complainant was asked if he was interested in the role of Data Scientist to which he replied, “you know I don’t have the Batchelors degree or Masters”. The HR & Operations Manager then stated “I have not seen an up to date copy of your CV. Just to confirm that you don’t have the qualifications for the position?” I find it hard to understand how the respondent could seek alternative roles for the complainant when the HR & Operations Manager had not seen his CV and was unaware of his qualifications.
The questions to be decided are, did a genuine redundancy situation exist, did the circumstances constituting the redundancy apply equally to one or more other employees and if so, was there a fair selection for redundancy and did the respondent act fairly and reasonably.
I am satisfied that there was a genuine need to reduce costs. The respondent decided the cost reduction would be achieved by a management restructure. It is unclear if alternatives to the management restructuring were considered by the respondent. However, the letter of 02 August 2019 to the complainant, rejecting his appeal, does provide some clarity. It was stated in the letter that the decision to remove the Line Lead roles was due to the duties and responsibilities diminishing as a result of the decrease in the volume of orders and reductions of the number of employees in that area of the business. That is a logical explanation, but it was not provided to the complainant during the consultation process. Based on that explanation together with the need to reduce costs I am satisfied that a genuine redundancy situation did exist.
There were two Line Lead roles in the management structure. There were two employees occupying those roles in June 2019 when the cost reduction requirement was announced. The respondent contends that the complainant held a standalone permanent Line Lead position, thus no selection criteria were appropriate in the circumstances. The respondent stated that another employee was temporarily seconded into a Line Lead role and she reverted to her permanent substantive role of Assembly Coordinator. The respondent’s submission contains two organisation charts. One is headed ‘Current Org Structure’, that does not contain an Assembly Coordinator role. The second is headed ‘New Proposed Org Structure’ and does contain an Assembly Coordinator role. If the role of Assembly Coordinator always existed surely it would have appeared on both organisation charts. I note in the minutes of the meeting of 01 July 2019 that the respondent had entered a consultation meeting with the other employee. Having carefully considered the submissions I am satisfied that the circumstances constituting redundancy applied equally to more than one employee.
In its determination in Free v Oxigen Environmental UD206/2011 the Employment Appeals Tribunal noted that “when an employer is making an employee redundant, while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy…. Where there is no agreed procedure in relation to selection for redundancy…then the employer must act fairly and reasonably.” The Labour Court in Kohinoor Limited v Hussain Ali UDD1629, quoted with approval the above determination. The respondent regarded the complainant as holding a standalone position and therefore contends that no selection criteria were appropriate. I am satisfied that there were two posts made redundant. I find that the two employees holding those two posts were treated differently regarding redundancy.
In Free v Oxigen Environmental UD206/2011 the Employment Appeals Tribunal stated that prior to making an employee redundant the consultation with the employees should be real and substantial. The respondent did engage in consultation meetings with the complainant but, in my opinion those meetings did not constitute real and substantial consultation. The minutes of the meetings show that there were brief telephone conversations during which the complainant was not provided with answers to his questions. The complainant was provided with the list of available posts in the organisation but, they were all posts for which he did not hold the relevant qualifications. As the manager who was consulting with the complainant had not seen his CV there could not have been a genuine attempt to find an alternative post for him in the organisation.
I do not accept that the respondent acted fairly and reasonably in this case. There was a genuine redundancy situation and two posts were made redundant. The two employees holding the Line Lead posts were treated differently. The reason why the Line Lead posts were selected was not communicated to the complainant until after his appeal hearing. The consultation process engaged in was not real or substantial and there was no genuine attempt to identify suitable alternative posts for the complainant. I find that the complainant was unfairly dismissed because he was unfairly selected for redundancy.
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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.
CA-00031406 I do not accept that the respondent acted fairly and reasonably in this case. There was a genuine redundancy situation and two posts were made redundant. The two employees holding the Line Lead posts were treated differently. The reason why the Line Lead posts were selected was not communicated to the complainant until after his appeal hearing. The consultation process engaged in was not real or substantial and there was no genuine attempt to identify suitable alternative posts for the complainant. I find that the complainant was unfairly dismissed because he was unfairly selected for redundancy.
The complainant mitigated his financial loss by obtaining new employment. He commenced his new job on 07 February 2020. He suffered financial loss from his period of unemployment and an ongoing loss of €240.20 per week due a lower rate of pay in his new employment. Having regard to all the circumstances I determine that it is just and equitable to award the complainant compensation of €40,000. 00. He has already received a payment of €27,518.00 from the respondent on the termination of his employment. I therefore direct the respondent to pay the complainant compensation of €12,482.00. |
Dated: 1st June 2021
Workplace Relations Commission Adjudication Officer: Maria Kelly
Key Words:
Redundancy Unfair Selection for Redundancy Unfair Dismissal |