Complainant

Respondent

Parties

Denis  Korovin

Precision Parts and Products Limited.

Representatives

Self- represented.

Peninsula Business Services Ireland

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-00059181-001

02/10/2023

The complainant submits that he was unfairly dismissed contrary to the provisions of the Unfair Dismissals Act 1977-2015 on the 11/9/2023.

He had been employed as a Production Manager with the respondent from 21/5/2021- 21/8/2023.

His gross weekly salary was €800.

He submitted his complaint to the WRC on 4/9/2023.

The complainant maintains that he was unfairly dismissed when the respondent left him with no choice but to submit an RP9 application form for redundancy monies on 21/8/2023 in accordance with section 12(1) OF THE Redundancy Payments Act, 1967.

The complainant took up a new position on the 4/9/2023.

Preliminary point 1.

The complainant requested that the respondent ‘s name be amended to reflect its correct legal title.

There was no objection to this request.

Evidence of complainant given under affirmation.

Preliminary Point 2.

To the respondent ‘s contention that the complainant was not dismissed but resigned voluntarily when he submitted an RP9 form and claimed and received a redundancy payment, the complainant submits that the involuntary, rushed  lay off notified to him on 30/5/2023, to take effect the following working day, with an absence of communication from 21/7/-21/8/2023 persuaded him to seek a redundancy payment after a layoff period of 7 and a half weeks.

He was treated very unfairly and dismissed unfairly. His dismissal was a retaliation for a grievance which he initiated against the employer on 5/5/2023.

The last update on his employment was given to him on the 21/7/2023 to the effect that there was no work for him. He was forced to apply for redundancy.

Substantive complaint.

The complainant submits that the redundancy was not genuine. He did not see a rapid downturn to justify the layoff of 4 employees.

 The respondent failed to consider him for the position of Quality Engineer, filled in July 2023, while he was on lay off, though he has a level 7 Production Design qualification and a level 5 Control and Quality Manager’s qualification.

He believes he was dismissed because of the grievance which he had lodged against the company concerning pay on 5/5/2023. He had a meeting with the respondent Managing Director on 24/5/2023. He was notified of his lay off, described as temporary on 31/5/2023. It commenced on the next working day which was the 2/6/2023. The absence of information about a likely return to work forced him to apply for redundancy

The respondent’s failure to communicate with him from 30/6/2023 until 21/7/2023 and from 21/7/2023 – 21/8/2023 about a likely return led him to believe that he had no choice but to apply for redundancy monies.

There was no procedure employed in his dismissal. There was no pool drawn up for lay off or redundancies. No transparent criteria were used in selecting the complainant. He could have been offered the Quality Manager’s role.

Mitigation.

He started to apply for jobs on 30/5/2023. He confined his searches to jobs that were within a 1.5 hour commuting journey form Galway city. He didn’t turn down any positions

The complainant started a new job on 4/9/2023 on a monthly salary of €3333  for a 40-hour week, which was €30.77 less than the salary  paid to him by the respondent. His last pay cheque from the respondent was on 2/6/2023.

Cross Examination of complainant.

He undertook to keep the respondent’s financial files confidential.

He denies that the respondent-maintained communication. To the point as to whether he questioned the respondent about the RP9 form, he stated that he did not have legal advice.

He confirmed that he received periodic updates about layoff until 21/7/2023 and then nothing.

He confirmed that he read part 4 of the RP9 which states in Bold

“an employee who claims and receives a redundancy payment in respect of lay off or short time is deemed to have voluntarily left his /her employment and therefore is not entitled to notice under the Minimum Notice and Terms of Employment Act s 1972-2001”

He confirmed that he had an issue after having signed the RP9 form. He stated that had he had legal advice he would not have signed it.

He received a redundancy payment of €3000 on 21/9/2023.

The respondent company manufactures precision engineered products.

The respondent denies that the complainant was unfairly dismissed. He voluntarily resigned on 21/8/2023, was not dismissed and therefore the complaint should be dismissed.

After 4 weeks on lay off the respondent advised him that he could claim redundancy.  The complainant submitted an RP 9 form seeking redundancy payments and, in this way, he voluntarily resigned from his employment with the respondent.

The respondent Managing Director gave evidence e under affirmation.

The complainant was employed as a Production Engineer from 21/5/2021- 21/8/2023, responsible for the day to day running of the factory floor. The company manufactures precision engineered products. He also did some computer programming on products.

The witness sent a letter on 31/5/2023 placing the complainant, two machinists, and one general operative on temporary layoff because the company was undergoing financial pressures due to diminished volume of work. It came to the point that they would have been unable to pay wages without some intervention.

His role and the three others were chosen as they were more expendable functions. There had been a huge downturn in work. The demand for products was not there; hence the two machinists were laid off. The witness stated that he took on some of the production management functions himself. As far as he can recall, one customer moved all his manufacturing requirements in January 2023 to China, and this constituted a huge loss for the respondent business. In July 2023 the situation was very worrying, he had to refinance to keep the company going

For the first couple of weeks the respondent notified them on a weekly basis.

No one was hired to replace these 4 employees

The respondent issued the RP9 on 7/9/2023 on the advice of the HR company

Redundancy monies of €3000 were paid to the complainant on 22/9/2023.

Cross examination of witness.

The witness stated that financially, the company was secure in May 2022, but not so in May 2023 due to the loss of repeat contract work and the increase in the price of metals owing to the war in Ukraine. By May 2023, the witness advised that the company had used up practically all of its overdraft, leaving the company with an overdraft of a mere €10,000.  The weekly salary bill was €10-11,000. It was a gradual decline, loss of customers, downturn in trade. The respondent was not in an overdraft position in 2022.

As to why the downturn, the respondent stated that they didn’t secure repeat work from existing clients. The war in Ukraine affected metal prices and shipping costs.

Asked by the complainant to explain the layoff notice on 31/5/2023, following the initiation  of lodgement of a grievance process which extended until May 2023, the witness stated that they were entirely unconnected. For example, he laid off a 5th employee, the Design Manager, a number of weeks later.

The witness confirmed that he did not discuss the need to reduce costs with the complainant, nor alternative ways in which costs could be cut.

On the question of which criteria were used to select people for lay off, he stated the criteria used to select employees for redundancy was the need to cut costs, and the fact that he could take on some of the production manager’s role himself. There wasn’t a sufficient volume of work to maintain the two machinists who were also laid off.

The fifth role made redundant at a later point was that of the Design Manager.

He stated that he brought in each affected person to explain to them.

He confirmed that he did not hire any replacement staff in the 3-month period following the complainant’s lay-off.

To the point that a Quality Engineer was hired 3 weeks after the complainant’s lay off, the witness denied that a Quality Engineer, hired in a temporary capacity and whose start date he was unsure of, took on the complainant’s work as the complainant had not done quality control work. They had never previously employed a Quality Engineer. That role did not match the skills or experience of those of a Production Manager. He confirmed that he did not advise the complainant of the existence of this role or publicise it. He confirmed that he did not offer him the role of Quality Engineer as these roles were not interchangeable. The Quality Engineer’s role was a different role. The complainant’s role was production manager which was to ensure that production went smoothly.

To the question as to what other roles the witness had explored for the complainant, he stated he was trying to reduce costs and therefore staff numbers.

To the point that the absence of communication from the respondent forced the complainant to apply for redundancy, the respondent stated that there is no law requiring him to give weekly updates in a layoff situation.

The witness stated that the savings to the company over the first 4 weeks of the layoff amounted to €3-4000 per week or €16,000 over the 44-week period.

To the point that the complainant used to do actual quality checks on products, the witness stated that he did quality checks occasionally, but that the machinists also did quality control checks.

To the point that it had been acceptable for the complainant to put his signature on quality assessment until 3 months before he left, the witness stated that the company needed a sign off in the absence of a Quality Engineer.

They had never previously employed a quality engineer.

To the adjudicator’s question on the qualifications and experience sought for a Production Manager as opposed to a Quality Engineer, the witness stated that he had sought a graduate with a degree in Production Management or a degree in Precision Engineering, whereas a Quality Engineer needs experience in metallurgy, with a different engineering degree. The Quality Engineer’s function is to design procedures and standards which ensure the quality of the product. The Quality Engineer was hired because low quality products had issued from the company.

The four employees laid off in August 2023 had been replaced.  A new Production Manager had been promoted internally in 2024 from within the pool of machinists. His machinist role was replaced in 2025.

In July 2023 the situation was very worrying. The witness stated that he had to refinance to keep the company going.

The staff complement in May 2023 was 14 and stands at 16 in August 2025.

The sum of €3000 in redundancy monies was paid to the complainant on 22/9/2023.

Legal submissions.

The respondent relies on the decision of Vincent Scott, David Drennan, Francis Orr, Sandra Murphy, David bell v Irish Printed Circuits Ltd, UDD 287, 31 July 1989 which held that as the employees  had applied for redundancy, they had resigned and had not been dismissed

The respondent also relies on Browne V Iarnrod Eireann (2013) IEHC 620, which concerned an offer of voluntary redundancy from which the employer tried to resile. The plaintiff was awarded €60,000 for breach of contract.

I must decide if the complainant was unfairly dismissed contrary to the provisions of the unfair Dismissals Acts 1977-2015.

Preliminary point 1.

Incorrect Title

The complainant had requested that the respondent’s title be amended .

The Labour Court in Ballarat Clothing Ltd v Aziz, EDA151 agreed to amend the respondent’s title in the light of authorities and adopted the reasoning of Hogan J in O’Higgins v University College Dublin & The Labour Court [2013] IEHC 431 wherein Mr Justice Hogan held

“Even if the wrong party was, in fact, so named, no prejudice whatever was caused by reason of that error (if, indeed, error it be)” ….

 “In these circumstances, for this Court to hold that the appeal was rendered void by reason of such a technical error would amount to a grossly disproportionate response and deprive the appellant of the substance of her constitutional right of access to the courts.”

The respondent made no objection to the complainant’s application to amend the respondent’s title.

As no prejudice will arise for the respondent, and in accordance with a line of authorities, I agree to correct the name of the respondent to reflect its correct legal title.

This is reflected in this decision.

Preliminary point 2.

The respondent maintains that as the complainant voluntarily resigned, he was not unfairly dismissed and that he does not have recourse to the protections contained in the Unfair Dismissals Acts 1977.

The respondent in support of this contention cites Section 20 of the Unfair Dismissals Acts 1977 which provides as follows:

“—The First Schedule to the Minimum Notice and Terms of Employment Act, 1973, is hereby amended by the substitution of the following paragraphs for paragraphs 5 and 7:

“5. An employee who claims and receives redundancy payment in respect of lay-off or short time shall be deemed to have voluntarily left his employment.”

But this amendment to the Act refers to the notice provisions set out in section 5 and 7 of the Act of 1973 as amended and the computation of service for the purposes of reckonable service set out in the First Schedule the Minimum Notice and Terms of Employment Act, 1973,as amended.

It cannot be said to cancel out the right of an employee to avail of a separate statutory protection available to him under section 6(7) of the separate Unfair Dismissals Act, 1977.

The respondent, furthermore, relies on the decision of Vincent Scott, David Drennan, Francis Orr, Sandra Murphy, David bell v Irish Printed Circuits Ltd, UDD 287, 31 July 1989, which held that as the employees had applied for redundancy, they had resigned and had not been dismissed. But that decision differs from the instant case in that it concerned employees laid off due to a lockout, who returned to work without providing the employer with notice after a strike, and  yet having been advised that work would be available for them in a week or so ,and faced with this information and the prospect of upcoming work  applied, without any prompting from the employer, for redundancy payments. The respondent in the instant complaint held out no such prospect of a return to work but rather the contrary and prompted the application for redundancy monies.

The respondent also relies on Browne V Iarnród Eireann (2013) IEHC 620, which concerned an offer of voluntary redundancy from which the employer tried to resile. The plaintiff was awarded €60,000 for breach of contract, but that case concerns a voluntary redundancy offer, not within the ambit of the Unfair Dismissals Act, 1977 and is distinguishable from the instant complaint brought under the Unfair Dismissals Act  1977.

I do not find that these cases align with the circumstances of the instant complaint and, as such, fail to support the respondent in their contention that this complaint cannot come within the ambit of the Unfair Dismissals Act, 1977.

This complaint concerns the applicability of the Act of 1977 to the circumstances of this complaint.

The definition of dismissal found in section 2 of the Act of 1977 includes a termination by the employee of the contract of employment.

I find that the objections raised by the respondent are insufficient to invalidate the admissibility of this complaint.  I find that the Act of 1977 is applicable to the instant complaint.

Substantive complaint of Unfair Dismissal.

Having found that his complaint of unfair dismissal is admissible, it will be necessary to consider the relevant statutory provisions and the facts surrounding the layoff.

Section 6 (7)  of the Unfair Dismissals Act,1977, 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, and

(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14 (1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7 (2) of this Act.]”

Was there a genuine need for a lay off or was it a contrivance?

This question arises as the complainant’s case is that the layoff was triggered by his lodgement of a grievance.

The respondent presented evidence of a downturn in business, depleted cash reserves and loss of contracts necessitating a lay off. A reduction in staff numbers was deemed to be the most efficient way to achieve a reduction in costs. The criteria used to select employees for redundancy was the need to cut costs and the fact that he could take on some of the Production Manager’s role himself. There wasn’t a sufficient volume of work, to maintain the two machinists.

The respondent confirmed that he did not hire any replacement staff in the 3-month period following the complainant’s lay-off.

I accept that the respondent was faced with having to reduce costs.

 I find that that the circumstances obtaining in June 2023 indicates that there was a genuine need for layoffs. The respondent in this way demonstrated that there had been a decrease in demand for products or services as per section 7(2) ( c) of the Redundancy Payments Act, 1967.

The layoff process.

The circumstances of the termination of the complainant’s employment.

Following the complainant’s complaints about his salary first raised in December 2022, the complainant lodged a grievance with his employer on 5/5/2023, had a meeting on 24 May concerning his grievance, and was informed on Friday 30/5/2023 of his scheduled layoff to take effect on the next working day, the 2/6/2023.

Notification of a layoff the next working day hardly satisfies the requirement set out in section 11 (1) b of the Act of 1967 to provide notice to the employee prior to the cessation,

I do not find this to be reasonable conduct on the respondent’s part.

The respondent within 4 weeks of the commencement of the layoff and without any prompting from the complainant, issued him with a RP9 on 7/7/2023 notifying him of his entitlement to seek a redundancy payment.

The respondent updated him on the unaltered situation for 4 weeks following the layoff. He issued one final update to him on 21 July stating that the situation was unchanged. The complainant then applied for redundancy via the RP9 form on 21/8/2023 at a point where for the previous month no communication had issued from the respondent as to recovery or otherwise. Nor did the respondent in the instant case counter the request.

The respondent did not employ any selection matrix demonstrating the basis for the complainant’s selection for layoff which focussed on the role. Nor did he identify the ongoing needs of the business and how some areas were less expendable than others. The respondent confirmed that he did not discuss the need to reduce costs or ways of cutting costs with the complainant. He did not explore reduced hours. He did not consider alternatives for the complainant; he did not give the complainant an opportunity to offer alternatives to layoff notwithstanding that there was a continuing requirement for a Production Manager some of whose duties were undertaken by the Managing Director.

The evidence showed that the respondent did not engage in any meaningful consultations concerning the complainant’s role.

I find that the selection of the complainant for lay off was totally lacking in any transparent criteria. No evidence or case was presented as to why the selection for layoff should be immune from the fair procedures which must attend upon a redundancy. The layoff was the first stage in a redundancy process.

I accept that there is a difference in the skills and professional qualifications required in the role of Quality Control Engineer, hired 3 weeks after the complainant’s layoff.  But there was no discission with the complainant about this role and its adaptability or otherwise to his skills and experience, especially given the fact that the complainant had performed quality checks periodically.

While I accept that the evidence indicates the need for  layoffs, the speed with which the respondent informed the complainant of his lay off – to take place the following working day- and coming hot on the heels of the complainant’s grievance makes it difficult to detach that factor, when combined with the lack of transparency, from the selection of the complainant for layoff.

I do not find this to be reasonable conduct on the respondent’s part.

In Boucher v Irish Productivity centre UD 882/1992, the right of the employee to have an input into the selection criteria used in a redundancy process was emphasised. This right was not offered to this complainant.

In Mulligan –v- J2 Global (Ireland) Ltd (UD/993/2009), the tribunal stated:

“In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases there may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.”

In Students' Union Commercial Services Ltd v Alan Traynor [UDD 1726]. There the Labour Court held that:

“The Court was presented with no information to demonstrate that the Respondent

carried out a thorough exercise to consider alternative options/ suggestions. The Court can accept that had such an exercise been carried out it may not have identified any alternative positions suitable to the Complainant; however, it seems clear that no such exercise was engaged in. On that basis the Court finds that the approach adopted by the Respondent was somewhat arbitrary and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair.

In Ian Nagle v Premier Auto Parts Ltd., ADJ 00029059, the adjudicator was satisfied that the respondent was faced with the need to reduce costs and that a genuine redundancy situation existed. However, the adjudicator found that the manner in which the complainant was selected for redundancy was unfair and objective criteria for selection were not applied. While accepting that a search for alternative options for the complainant may have failed to yield anything, it seems clear that the respondent did not engage in such an exercise. On that basis, the adjudicator stated that

 “I find that the approach adopted by the Respondent was arbitrary and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair.”

While the cases cited refer to deficient redundancy selection processes, a layoff can be a stage in a redundancy process, can precede or can precipitate its arrival by virtue of applying for a redundancy payment. No reason was advanced as to why a fair process of selection should elude this complainant or a meaningful consultation should not have taken place.

 I find that the process of lay off should attract and enjoy the same transparency, robust procedures and consultations as an actual redundancy.

The evidence demonstrates that the respondent of his own volition ushered  complainant via the lay off in to the redundancy ‘lane’ which led to the termination of his employment without the provision of fair treatment.

There was no consultation process.

The complainant received notice the day before the layoff was implemented.

No discussion took place with the complainant as to the criteria to be used in advance of the notification of layoff or at meeting on the 30/5/2023.

There was no consideration at that meeting or later to any alternatives to layoff such as reduced hours.

Based on the evidence, I find that the respondent has failed to discharge the onus of proving that the selection process for the layoff of the complainant was fair.

I find the process of selecting the complainant amounted to unfair and unreasonable conduct and meets the definition of an unfair dismissal with reference to section 6(7) (a) of the Act of 1977 as amended.

I find this complaint to be well founded.

Remedy.

I consider that compensation is the more appropriate remedy.

Loss

The complainant received his last pay cheque on 2/6/2023.

I find that the date of dismissal was the 21/8/2023, the date of the submission of the RP9.

He started a new job on 4/9/2023 on €3333 a month. He earned €3466 a month with respondent.

His loss was €3498.

In considering the complainant’s loss, I am guided by the decision of Kieran Murray v Sherry Garden Rooms Limited., ADJ  28766, which did not offset the complainant’s redundancy sum against his actual loss of earnings, with the adjudicator concluding that:

“There is no statutory basis to deduct a lump sum redundancy payment made from actual or prospective loss incurred.”

Mitigation of loss.

Notwithstanding that he obtained employment within 2 weeks of his dismissal, his evidence was that he limited his searches for jobs to within a 1.5 hour commuting distance of Galway city. This limited his options.

He stated that he refused no offers.

I find this complaint to be well founded, and I direct the respondent to pay the complainant the sum €2500, being an amount which I consider to be just and equitable having regard to all the circumstances.

I decide that this complaint is well founded, and I direct the respondent to pay the complainant the sum €2500, being an amount which I consider to be just and equitable having regard to all the circumstances.

Unfair selection for layoff.