Unfair Dismissal award of €40,000 Due to Flawed Redundancy

The recent case of Sales Manager v Equine Nutrition Providers ADJ-00023216 is a very useful summary of the law on redundancy and unfair dismissal.BackgroundThe Complainant worked for eight years for the Respondent Company and his employment was terminated by way of redundancy in 2019. The Complainant worked with horses all is life and whilst working with the Company, he had been able to combine his passion for horses with his ability to make sales. The complainant challenged the redundancy whilst his employer stated that it came down to restructuring in a competitive and challenging environment.Findings and DecisionThe Adjudicator Penelope McGrath noted that the company were based in England and were involved in the manufacture and distribution of horse feed and were also capable of creating bespoke feeds depending on the particular requirements of a horse yard or farm or school. The company relied on the expertise of its own technical staff when it came to promoting and selling its product. At its base in the UK, the company employed a team of individuals who came from a scientific, veterinary and equine nutrition background. The Complainant had been aware of the Respondent’s high-end horse feed and thought it had potential in the Irish market. He approached one of the company owners with a view to offering his expertise and knowledge of the Irish market for driving the promotion and sale of the product in Ireland. The Complainant excelled in sales and the Company turnover went from €75,000 in 2011 to €1,000,000 in 2017. Both the Complainant and Respondent Company had different views on the need to be seen to have expert technical and scientific personnel readily available to discuss the nutritional value of the product.In his evidence the Complainant stated that the lion’s share of the business was the provision of standard feeds to retail outlets and wholesalers. The new Managing Director of the Company subsequently held a competition to fill two posts of Northern and Irish Sales Director and Southern Sales Director. The Complainant was not successful in his application for the Irish role and was upset in respect of same.In 2019 the Complainant was invited to a meeting with the Company legal advisor and was advised that the company had been evolving such that the position he held was at risk. The Complainant was surprised that the new emphasis appeared to be on the need to have a qualified technical or scientific person on the ground in Ireland. The rationale for this shift in emphasis was never explained to him and whilst he accepted that Management can re-structure it’s business, he believed he had built that business. The Complainant also accepted that the company were making losses for the first time since he had taken on the role. The Complainant indicated that the losses complained of were very particular and out of his control and from then on he felt a shift in attitude and that he wasnt asked to attend certain trade shows and was being offered no support.The Complainant was offered the opportunity to apply for two proposed junior development business management positions and whilst he was invited to take part in a consultation process, the Adjudication Officer observed:“Unusually in the context of a purportedly ongoing Consultation process the Complainant was given a letter by WK which included a sample letter of Notice of Redundancy which included a Form of Acceptance waiving legal rights. The package on offer was Statutory Redundancy with an ex grata payment of circa €5,000.00”.The Complainant observed that the work and functions that he had been performing for seven years was not disappearing and the sales function would continue albeit performed by someone with a different title and smaller salary. The Complainant stated he was happy to be moved to the proposed  role of Junior Business Development Manger on his current terms and conditions and offered to put together a counter proposal to save his job. The process petered out and the Complainant was made Redundant.The Adjudication Officer stated:“On balance I am satisfied that the procedures adopted herein amounted to an Unfair Dismissal. The Complainant was let down by an employer for whom he had worked selflessly. Whilst there is evidence to demonstrate a dip in profits in 2018 and into 2019 there is nothing to suggest that Ireland had somehow become a chronic loss-making venture. I accept the Complainant was entitled to be dubious about the assertion that any solution had to include the engagement of a full-time technical/scientific person on the ground in Ireland. That had not proved necessary in the past and it was noted during the course of the hearing before me that no such person had been engaged right up to the time of hearing. No recruitment process had even been initiated……..At no point, outside the context of making him Redundant, was the Complainant really asked what changes could be made or what initiatives could be implemented to reverse the faltering fortunes”. In respect of some of the process adopted the Adjudicator observed that it was “perfunctory and without ambition”.The Complainant set up his own business and tried to sell other/competitor products available in the marketplace but the Adjudicator noted that this proved difficult as a lot of his client base were perfectly happy with the product he already sold from the Respondent.The Complainant was awarded €40,000 compensation for unfair dismissal.Employment law case tipEmployers need to undertake a genuine consultation process and not simply to “go through the motions”. Employers should also seek input from their employees as to how they job can be saved and to look at all proposals and genuinely engage with the employee to protect their role from redundancy where possible.If you have any queries in respect of this case or #redundancy please dont hesitate to call our offices on +353 1 5175900 or email us wendy@wdsolicitors.ie