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Redundancy – LIFO Selection Criteria

The case of Clodagh Coyne v Reddington Child care Centres Limited ADJ00030508 is yet again another example of a successful case by the Complainant employee for unfair dismissal where the employer fails to follow the basics of a fair redundancy and to ensure proper and fair procedure is followed.

The complainant employee argued she was made redundant with no warning or fair procedure and that she was unfairly selected for redundancy. The creche argued that it had applied the “Last In First Out” or LIFO selection for redundancy but accepted that there were some flaws in the procedure in that other positions in its other creches had been advertised after the redundancy and that the complainant had refused to accept a previous paycut.

The Workplace Relations Commission looked at whether (a) there was a valid redundancy situation in the Respondent company. It noted that the burden of proof rested with the employer to establish that the dismissal was wholly redundancy connected and that they must then justify the process whereby the Complainant was selected for redundancy, was fair and transparent in all respects.  The Adjudicator agreed that the company had to reduce costs and the decision to make the Complainant redundant was taken for economic reasons and that it was a genuine redundancy.

The Adjudicator then considered that where redundancy is unavoidable, that an employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly. It was also observed that the company had predetermined that the complainant employee would be made redundant before a consultation meeting and that no evidence was presented to demonstrate that the company carried out a thorough exercise to consider alternative options.

The Workplace Relations Commission concluded that the employer approach was “arbitrary and unreasonable” and therefore the complainant had been unfairly dismissed.

Employment Law Learning

Employers must ensure that (a) a redundancy is genuine and financial evidence is available to corroborate this and (b) proper and fair procedure is followed at all times including meaningful consultation with affected employees, that any selection criteria is objective and transparent and (c) that no pre-determined outcome to any redundancy is made in advance. If any of the above elements are missing, it is likely that a finding of unfair dismissal will be made against an employer.

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