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The recent case of A Complainant v A Hotel ADJ-00026127 is a salutary lesson for employers to ensure fair selection criteria and procedures are followed when making a role redundant. The employee in this case was awarded €60,000

Background

In this case the complainant commenced employment with the Company in October 2015 as an “Accounts/HR Administrator” and her role was subsequently changed to “PA to General Manager/HR Assistant”. The complainant alleged sexual harassment and inappropriate text messages from the general manager and contended that this was what ultimately led to her redundancy. The employee was six months pregnant when she was informed at a meeting on in September 2019 that her role was to be made redundant.

The company denied the allegations but accepted that the language used in the text messages was “coarse”. The Company argued that the redundancy was genuine and arose when the General Manager left and there was no longer a role of PA to the General Manager. It was argued that there were significant impacts on the hotel business at that time. The complainant argued that the role of General Manager did not disappear when the General Manager resigned in July 2019 as another person took on the role.

The complainant also produced evidence of other roles advertised including that of a junior accounts assistant which would have suited her and was consistent with her contract of employment. She argued that even if there was a genuine redundancy, the manner of its application fell far short of what might be seen as reasonable and fair. She was not provided with any documentation and there was no consultation in respect of why her role was being made redundant. She argued that she was the only person selected for redundancy and there was no analysis or matrix provided to indicate why she was selected.

Findings and Conclusion

The Adjudicator first considered the law in respect of redundancy and considered Section 7(2) of the Redundancy Payments Act 1967 (as amended) which provides:

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if [for one or more reasons not related to the employee concerned] the dismissal is attributable wholly or mainly to –

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry our work of a particular kind in the place where he was so employed has ceased or diminished or are expected to cease or diminish.

It is clear from the evidence presented at the hearing that the Respondent initiated a cost and structure review. One of the outcomes of this process was that a decision was made that the post of PA to the General Manager did not align with the future plans of the company. It was also made clear that the basis for this was to facilitate growth plans.

It is also clear from the evidence adduced that the Complainant only became aware of the decision to make her role redundant after the review process concluded. The evidence presented also indicates that the Complainant was not given any opportunity to look at other roles within the hotel. The Respondent did not facilitate any appeals process.

He then considered the the issue of unfair dismissal and Section 6(1) of the Unfair Dismissal Act 1977 (as amended) which provides that the dismissal of an employee is deemed to be unfair unless having regard to all the circumstances, there were substantial grounds justifying the dismissal. In addition he considered Section 6(3) of the Unfair Dismissal Acts which consider the issue of fair selection for redundancy.

Section 6(3) of the Unfair Dismissals Act 1977 provides that

Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts 1941 and 1971 [as amended by the Industrial Relations Act 1990], representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

The Adjudicator also observed Section 6(7) of the Unfair Dismissal Act which provides that in determining whether a dismissal is unfair or otherwise, the Adjudicator or related body may take into account the reasonableness or otherwise of the conduct of the employer in effecting the redundancy.

He noted that

“…….the burden of proof rests with the Respondent to establish, in the first place, that the dismissal was wholly connected to redundancy, and having done so, to justify the selection process whereby the employee in question was selected for redundancy.

The Adjudicator accepted that the employer was entitled to restructure its business model and that the General Manager role had not been replaced by a Mr X and that the company were not aware of any roles advertised however he considered the reasonableness of the company in respect of the fair and objective selection of employees for redundancy and noted the case of  Boucher v Irish Productivity Centre [1994 EL 205] where the Tribunal enunciated the burden on an employer to: “establish that he acted fairly in the selection of each individual employee for redundancy and that, where assessments are clearly involved and used as a means of selection, that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made.”

He further noted “…………Having considered the evidence presented to me at the hearing and in written submissions, I am not satisfied that a genuine redundancy situation existed. Having decided that a genuine redundancy did not exist I must now consider if the Complainant was unfairly selected for redundancy………..On the basis of the evidence presented I am satisfied that the manner in which the Complainant was made redundant did not involve even a minimum of consultation. The Respondent at the meeting on 27/09/2020 the Complainant was presented with a final decision rather than a proposal. There was no engagement with the Complainant in relation to what alternatives which might exist. It was confirmed at the hearing by both the Complainant and the Respondent that the Complainant was not given any opportunity to make suggestions as to why she should be retained or as to what alternatives that might be considered.   Finally, the Complainant was not given any opportunity to appeal the decision or advised of any process in that regard”

In respect of selection for redundancy, it was observed that “….…selection criteria should not be based on subjective assessments of the employee. The employer must be able to establish that an employee was fairly selected for redundancy based on independent, objective and verifiable criteria. In essence, what is required of the employer in this respect is that it be able to objectively justify why a particular employee was selected for redundancy as opposed to another employee. Specifically, the employer must be able to demonstrate that a particular employee has been compared to others who might have been made redundant. Where redundancy arises, and no agreed procedure or custom is in place, the reasonableness of the selection criteria is usually focused on and tends to be assessed by the objective standard of the way in which a reasonable employer in these circumstances in that line of business, at that time would have behaved”.

The Adjudicator concluded “……..I note that the Complainant was never advised of the process that was being undertaken and the business needs for same. The Respondent did not provide any evidence of the objective standards used to inform the decision to make the complainant redundant. In the absence of such evidence I conclude that the Complainant was unfairly selected for redundancy”.

It was observed that there were no prospects of employment in the hotel industry in recent months and that the complainant was on maternity leave following her dismissal. The complainant was awarded €60,000 compensation.

Employment Law Case Lesson

Employers simply cannot make a role redundant without ensuring (a)the role is in fact redundant and there is sufficient financial documentation and evidence of same (b) proper consultation with the employee is carried out well in advance of any likely redundancy including consideration of all possible alternatives to redundancy including paycuts / reduced hours /upskilling etc. (d) if more than one employee is carrying out the same or similar role then fair selection criteria and matrix should be used.

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