REL COOLING SERVICES LTD
1.Appeal Of Adjudication Officer Decision No. ADJ-00026680 CA-00033981-001
This is an appeal on behalf of REL Cooling Services Limited (‘the Respondent’) from a decision of an Adjudication Officer (ADJ-00026680, dated 23 June 2021) under the Employment Equality Act 1998 (‘the Act’). Notice of Appeal was received by the Court on 29 June 2021. The Court heard the appeal over two sitting days, on 10 May 2022 and 21 July 2022. The Court heard evidence from Ms Sandra Veinberger (‘the Complainant’) and from two witnesses on behalf of the Respondent, Mr Liam Byrne and Mr Paul O’Carroll.
The Respondent company is a specialist refrigeration company. In early 2019 it employed thirty-two employees. When the within appeal came on for hearing that number had been reduced to twenty. The Complainant commenced employment with the Respondent on 4 December 2017 as Marketing Manager on an annual salary of €44,000.00, plus a potential bonus of up to 15% of salary. That salary had increased to €55,477.08 when the Complainant’s employment was terminated on grounds of redundancy on 15 October 2019. The Complainant was also provided with the use of a company car.
On 24 January 2020, the Complaint referred a complaint of discriminatory dismissal on the gender ground to the Workplace Relations Commission. The Adjudication Officer to whom the matter was assigned by the Director General held that the complaint was well-founded and directed the Respondent to pay compensation of €55,477.08, equivalent to one year’s salary.
It is common case that the Complainant informed Mr Liam Byrne, the Respondent’s CEO, on the morning of 29 July 2019 that she was pregnant. It is also common case that the Complainant was informed later that same afternoon that her position as the Respondent’s Marketing Manager was at risk of redundancy. The Respondent thereafter engaged on a one-to-one basis with the Complainant, over a series of four consultation meetings, to discuss her potential redundancy. The Respondent’s decision to confirm the redundancy was communicated to the Complainant by letter dated 13 September 2019. She was advised in that letter that she had a right of appeal against that decision. She chose not to avail herself of the right of appeal and her redundancy took effect on 15 October 2019.
The Respondent denies that its decision to make the Complainant’s position redundant was connected in any way to her pregnancy save that the ‘at risk’ meeting took place on the same day that the Complainant informed the Respondent that she was pregnant. The Respondent submits that it had been developing a restructuring plan from spring 2019 as it was incurring significant losses.
Although no company accounts were furnished to the Court, the Respondent’s witnesses gave evidence in relation to the quantum of losses being accrued by the company in the relevant period.
According to Mr O’Carroll, the Respondent’s Management Accountant, those losses amounted to €167,000.00 during the first four months of 2019. The Respondent further submitted that it had engaged in extensive internal discussions in relation to cost-saving measures and had engaged over a number of months with its external Human Resources advisors, Peninsula, in relation to proposed redundancies. This culminated, inter alia, in the generation of a document dated 22 July 2019 entitled “Business Case for Proposed Redundancies” that set out a proposal to make the Complainant’s position (only) redundant.
It is common case that the Complainant was on certified sick leave during the week beginning 22 July 2019. As stated previously, when she returned to the workplace on 29 July 2019, she met Mr Byrne and told him that she was pregnant. He congratulated her and did not mention that the proposal to make her position redundant at that meeting.
Later that day, the Complainant was asked to attend a meeting with Mr Byrne and Mr John Kelly – the Financial Controller – and was informed that her position was ‘at risk’. The Respondent sent a follow up letter to the Complainant after the meeting confirming what had been communicated to her at the meeting and advising her that it would take into account any suggestions that she had to avoid a redundancy.
The Respondent submits that further consultation meetings with the Complainant took place on 6 August, 12 August, 21 August and 28 August and that the Complaint did not put forward any suggestions as to how the proposed redundancy of her position might be avoided.
The meetings were minuted and the minutes were copied to the Complainant following each meeting. The Court was informed by the Company’s Representative, Mr Ryan, that other named employees were also made redundant in February and September 2019.
The Respondent’s case, in summary, is that the Complainant’s dismissal resulted wholly or mainly from the need to make savings to ensure the Company’s survival and that it had identified the Marketing Department as an area in which costs could be reduced.
It told the Court that during the consultation process, the Complainant was offered the option of transferring to a more junior Marketing Executive role in that Department but she declined this offer. Finally, it is submitted on the Respondent’s behalf that a number of the tasks that formed part of the Complainant’s job description were redistributed amongst staff that were retained and nobody has been recruited since the Complainant’s termination to fulfil the role she had had with the company.
The Complainant submits that the Respondent’s case rests to a very large extent on the purported generation of the “Business Case” document referred to earlier, on or before 22 July 2019. In the Complainant’s submission, the Respondent is not in a position to verify that that document predates the Complainant’s conversation with Mr Byrne on 29 July 2019.
The Complainant points to some discrepancies between the version of the minutes of the ‘at risk’ meeting of 29 July 2019 submitted by the Respondent to the Workplace Relations Commission and the version that she agreed and signed. That discrepancy – and the fact that she took issue with some element of the minutes of the subsequent consultation meetings – she says calls the Respondent’s credibility into question, particularly in relation to the provenance of the “Business Case” document dated 22 July 2019.
Counsel for the Complainant submits that the facts herein establish aprima faciecase of discriminatory dismissal on the gender ground, such that the burden has shifted to the Respondent, in accordance with section 85A of the Act, to disprove the claims advanced by the Complainant. Counsel further submits that the Respondent has not rebutted the inference of discrimination and that, in the special circumstances of the within case, the Court should increase the compensation awarded to the maximum level permissible under the Act.
The Complainant’s Evidence
The Complainant gave evidence in relation to her employment as Marketing Manager with the Respondent, the terms and conditions attaching to her position and the responsibilities that attached to her role and how they developed over time. She went on to recount her first meeting with Mr Byrne on 29 July 2019 in the course of which she informed him of her pregnancy and the fact that he congratulated her but said nothing about the decision that had purportedly been taken to put her position at risk of redundancy.
She told the Court about the second meeting later that day when this news was communicated to her by Mr Kelly and Mr Byrne. She told the Court that she sent an email to Mr Byrne after the second meeting and attached a report confirming her pregnancy. She said that she raised the issue of a connection between her pregnancy and the proposed redundancy in that email.
The Complainant gave detailed evidence in relation to the projects that were underway in the Respondent’s business in the period prior to her redundancy. She said she believed that there was sufficient work ongoing at the time associated with those projects to justify retaining her.
According to the Complainant, a Mr Stephen Kelly – whom she had recruited as an Account Manager – took over part of her sales role when her redundancy took effect. She also told the Court that the junior marketing person, with less service than the Complainant, took over the marketing functions she had previously performed.
The Complainant told the Court about the effect her redundancy had on her and her family. She said that they had lived in Gorey during the period of her employment with the Respondent and although her husband also worked, she was the breadwinner as her salary was significantly higher than his. When her employment was terminated, they could no longer afford the rent in Gorey and were forced to relocate to Croatia with their two children where her earnings are considerably lower than they had been.
Under cross-examination, the Complainant denied any knowledge of the Respondent’s financial losses in 2019. She told the Court that she believed the business was ‘booming’. It was put to her that Mr Stephen Kelly had left the business by mutual agreement in February 2019 and could not, therefore, have assumed part of her role after her redundancy. She did not accept this to have been the case. It was also put to the Complainant that Mr John Kelly, Financial Controller, and Mr Patrick Crowley, Group Sales Manager, had both left the Respondent’s employment by mutual agreement during 2019 as part of the Respondent’s campaign to reduce costs.
In response to a question from the Court, the Complainant said that she had never received a bonus from the Respondent and was never given the methodology by which the Respondent’s bonus scheme is operated.
Mr Liam Byrne’s Evidence
The witness told the Court that he has been CEO of the Respondent since 2010. He gave evidence in relation to the Respondent’s poor financial performance in spring 2019. He said the company’s costs were higher than the income it was generating. This, he said, prompted Mr John Kelly and himself to conduct a full business review of all ongoing activities with a view to restructuring the business.
The witness’s evidence is that the Respondent company is a small company that operates in an enclosed office environment with the result that all staff are aware of what is going on at any given time, including in the early part of 2019. He told the Court that Mr John Kelly left the business in early 2020 because he was unhappy with the pace at which the restructuring of the business was taking place. He also said that Mr Patrick Crowley had left in February 2019, having found another job elsewhere, because he was not achieving sales targets.
The witness told the Court that the Respondent had engaged with Peninsula in relation to reducing headcount as part of its restructuring plans. The day-to-day communications between the Respondent and Peninsula were via Mr John Kelly and Paul O’Carroll, according to the witness.
The witness said that it had been his intention to inform the Complainant on 29 July 2019, following her return to work from a period of sick leave, that her position had been put at risk of redundancy.
However, before he had had an opportunity to do so he encountered the Complainant who informed him of her pregnancy. He decided, he said, to take advice from Peninsula about the matter before pressing ahead with meeting the Complainant as planned. He told the Court that he had been advised that there was nothing preventing him from going ahead with the meeting and informing the Complainant of the position.
Under cross-examination, the witness said he did not accept that Stephen Kelly had assumed some of the Complainant’s former responsibilities after her employment terminated. He said Mr Kelly had been employed as a specialist and his expertise related to coffee and coffee filters. He confirmed that it had been his decision to make the Complainant’s position redundant at the conclusion of the consultation period.
Evidence of Mr Paul O’Carroll
The witness told the Court that he has been employed by the Respondent as a Management Accountant since October 2016 and that he became company secretary also in spring 2019. He outlined the extent of the Respondent’s losses at that time.
He said the company had incurred losses of €167,000.00 over the first four months of 2019 and this prompted the senior management team to develop a business plan to try and stem the losses. The witness told the Court that the EMER Water project was losing the company significant money; although sales in 2019 increased to €47,000.00 from €40,000.00 the previous year, the returns did not justify the level of investment. This business line is now being wound down, he said, and turnover last year was only €20,000.00.
According to the witness, the Respondent’s strategy to address its financial situation involved reducing headcount and removing non-core roles. He also gave specific examples of both employees and contractors who left the business in 2019 and 2020.
The witness told the Court that he had been instructed to engage with Peninsula in relation to the proposed redundancy of the Marketing Manager and Sales Executive roles. He said the process was initiated when Peninsula sent a template questionnaire by email dated 5 July 2019. The completed questionnaire, he went to say, was completed by Mr John Kelly and returned, along with an organisational chart, to Peninsula by 22 July 2019.
The witness said he learned of the Complainant’s pregnancy on 29 July 2019. He was told of this by Mr John Kelly. He said her position in the business was not filled after her redundancy. The witness then confirmed in direct evidence that he had been present as note-taker at the consultation meetings with the Complainant on 12, 21 and 28 August and that the minutes of those meetings were an accurate reflection, to his recollection, of what had been discussed at the meetings. He said he had been brought in to replace Mr John Kelly as notetaker as the Complainant had objected to Mr Kelly acting in that role.
Discussion and Decision
Both Representatives referred the Court to its own previous determinations inMelbury Developments Limited v Arturs Valpeters 21 ELR 64 andMitchell v Southern Health Board 12 ELR 201 wherein the Court gave detailed consideration to the meaning and application of section 85A of the Act.
Having regard to the Court’s reasoning in those determinations, the Court finds that the Complainant in this appeal has established primary facts which the Court regards as being of “sufficient significance to raise a presumption of discrimination” i.e. within a very short number of hours of informing the Respondent of her pregnancy she was called to a meeting with senior management to be informed for the very first time that her position was at risk of redundancy.
It follows that the burden has been shifted to the Respondent to prove that it did not discriminate against the Complainant as alleged. In this regard, the evidence of the Respondent’s witnesses – corroborated by a detailed trail of email correspondence between Peninsula executives and members of the Respondent’s management team in the period 5 July 2019 to 22 July 2019 opened to the Court – is that the proposal to make a number of non-core positions (including the Complainant’s) in the Respondent’s business redundant was being actively progressed throughout this period.
The Respondent further relies on a document entitled “Business Case for Proposed Redundancies” dated 22 July 2019 and authorised by Mr Liam Byrne which the Respondent’s witnesses told the Court under oath had come into being as of that date and expressly identified the Complainant’s role as one that was at risk of redundancy and would have led to the Complainant being notified of the risk to her position on, or shortly after, that date had she been present in the workplace at the time.
Put simply, the Respondent’s position is that the Complainant’s notification of her pregnancy was not the causative factor in putting her position at risk of redundancy; it was the company’s deteriorating financial position in 2019 that led to a management decision to reduce the number of non-core positions in the business, including the Complainant’s and that decision had been taken prior to anyone in the Company becoming aware of the fact of her pregnancy.
Counsel for the Complainant called into question the Respondent’s credibility and particularly the bone fides and provenance of the “Business Case” document because of an unexplained discrepancy between the unsigned minutes of the “at risk” meeting between the Complainant and Mr Byrne and Mr John Kelly included in the Respondent’s papers submitted to the Court and the signed and agreed version of those minutes.
The Court accepts that different iterations and drafts of documents can be generated and it can be difficult to keep track of them all. The Court has relied on the signed version of the minutes in question agreed with the Complainant and, in the Court’s judgment, the inclusion of the unsigned and slightly different iteration of those minutes in the Respondent’s papers does not give rise to an inference of fraud and wholesale fabrication of documents on the part of the Respondent.
Having regard to the totality of the evidence before it, the Court finds that the Respondent, having regard to its precarious financial position, had decided on or before 22 July 2019 to put the Complainant’s position at risk of redundancy.
It did not arrive at this decision in response to the notification of her pregnancy on 29 July 2019, in the Court’s judgment. It may well be the case – had the Court been called upon to consider the course of dealings between the Complaint and the Respondent between 29 July 2019 and 13 September 2019 within a different statutory framework – it would have concluded that the Respondent’s thinking as of 22 July 2019 had already progressed beyond merely putting her position at risk. However, that is not the case before the Court on this occasion.
For the reasons outlined above, the Respondent’s appeal succeeds and the decision of the Adjudication Officer is set aside.
The Court so determines.