The recent Workplace Relations Commission (“WRC”) case of John McCormack v A & G Couriers Limited published in January is a useful summary of the law around redundancy and how to follow proper and fair procedure in carrying out redundancies. In this case the Complainant (employee bringing the case) along with another employee who were effectively carrying out the same role in sales were “treated differently with the other employee being given the choice of voluntary retirement or continued employment”. The WRC noted that there was no consultation with the Complainant and no matrix used to “select” his position but rather than the company simply used the “LIFO” method of “Last In First Out”. When the Complainant asked for reasons in writing, there was no mention of “LIFO”” in the correspondence.
The WRC also noted that the Staff Handbook contained a provision that “the company reserves the right to use a “selection matrix”, where appropriate, in order to identify those individuals to be made redundant; the terms of the matrix will be outlined as part of the redundancy process and where this has been activated i.e., we will inform you of the criteria we intend to use. All other factors being equal, and subject to the aforementioned retention of necessary skills and expertise required, the concept of last in, first out will apply.” It noted that the company decided to bypass the option of a selection matrix and proceeded straight to LIFO.
The WRC looked at a number of cases around redundancy and selection and referred to the case of Cronin v RPS Group, (UD2348 / 2009) whereby an employer deployed a matrix based on six criteria. In this case it was found that there was a genuine redundancy however fair procedure was not followed. The employee won the case on the basis the employer:
- Failed to advise the claimant of the criteria to be applied for redundancy
- Failed to give the employee the opportunity to make representations on her own behalf
- Failure to provide an appeal mechanism to the claimant
- Failed to consider redeployment as an alternative to redundancy
- Failed to consider the claimants service record.
The WRC considered that this case was similar to the facts of Cronin and found in favour of the Complainant employee
Conclusion
The WRC concluded:
“I find therefore that the respondent failed to advise the complainant of the risk of redundancy and failed to offer him an opportunity to consider the matter and make representations prior to a decision being made. There was also a failure to consider the possibility of re-deployment of the complainant. In this regard I note that the complainant had considerable experience within the organisation as an owner of a franchise, as manager of different regions and also had some Dublin-based employment. It would appear therefore that the complainant had displayed flexibility as regards his employment location and role. Furthermore, the respondent did not offer the complainant the opportunity to appeal the redundancy decision”
Award
The Complainant in this case sought compensation for unfair dismissal however was unable to show the actual financial loss suffered by him as a result of the dismissal and therefore the maximum he could be awarded was four week’s salary. As there was an amount paid to the Complainant in error and which he had not returned to the company, the award of 4 weeks salary was also reduced by this amount.
Case Law Learning Point
The caselaw from the WRC continues to demonstrate clearly the need for a redundancy to be genuine in the first instance AND that proper and fair procedure is followed.
Employees should also note that if they have an additional claim for unfair dismissal such as commission in this case, that a separate claim under the Payment of Wages Act 1991 needs to be lodged otherwise the Adjudicator will not have the power to hear this under the Unfair Dismissal Act 1977 (as amended).
