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Redundancy – Failure to Inform Employee of “LIFO” Criteria for redundancy not fatal

The recent case this month of Wallace Myers International Limited v Sean Fitzgerald concerned an appeal by the employer to the Labour Court against a finding by the Workplace Relations Commission that the employee had been unfairly dismissed.

In this case the employee was a recruitment consultant and worked in the company’s accounting and finance recruitment division. This was the only division in the business that was staffed by more than one consultant and ultimately Mr Fitzgerald’s role was made redundant due to a downturn in business as a result of Covid-19.

The Labour Court considered all background to the redundancy and in light of the Covid-19 panedemic found that “a genuine redundancy” situation existed that entitled the company to decide to carry on its business with fewer employees. The court also found that a “structured and reasonable consultation process with each of the consultants” in the acccounting and finance division took place and that the employee was given a chance to propose alternatives to redundancy during this consultation process and a right of appeal to an independent external person.

The employee in this case argued that the process was incorrect or “tainted” by virtue of the fact that he had not been informed earlier in the process that the selection criterion that would be applied was LIFO or “Last In First Out”.

The Labour Court accepted that the information should have been given to the employee at the start of the process but could not see that any “substantive unfairness” was visited or placed on the employee as a result of the company’s oversight. The company also accepted that It was also accepted that “it would have been preferable to have communicated the selection criterion to employees at risk of redundancy at an early stage in the process”

The Labour Court found that the employe’s dismissal by reason of redundancy was not unfair and therefore overturned the Workplace Relations Commission decision.

Case Law Learning

This case demonstrates that while the selection criteria should have been provided to the employee at the start of the redundancy process, the redundancy process overall was conducted fairly and this oversight was not fatal. It is likely that had there been any other mistakes or defects in the redundancy process, that the dismissal may have been found to be unfair.

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