+353 (0) 404 37420

Unfair Dismissal Award of €47,000 for Sham Redundancy

The case of Terence Varian v Sodexo Ireland Limited ADJ-00032016  dated 17th December 2021 from the Workplace Relations Commission is a simple reminder to employers to ensure a redundancy is genuine and not simply used as a ruse or way to get ride of an employee.

In this case the complainant or employees role had transferred under what is know as “TUPE” or the Transfer of Undertaking Regulations. Under TUPE, in general it is not possible to dismiss an employee around the transfer unless the ETO defence applies i.e. there are economic, technical or organisation reasons for the dismissal. In this case the employer stated that there were economic reasons for the dismissal including reduced footfall due to Covid-19 and that a genuine redundancy arose.

The Adjudicator (or the person hearing the case at the WRC) noted that they did not “….hear any evidence of the respondent consideration of support measures as advocated by Public Policy at that time, such as PUP/ Temporary Lay Off, Temporary Wage Subsidy” and that this was “unusual”. In general an employer should consider all alternatives to redundancy and that redundancy should be seen as a last resort.

The Adjudicator observed:

I detected a defined lack of concrete economical, technical or organisational detail of the genesis of the decision to make the complainant redundant. No financial documents were opened, nor was a table of completed redundancies exhibited. This caused me some unease and prompted me to probe further in the case. The loss making was not quantified by the respondent”

An employer should always ensure that they are in a position to demonstrate the financial position of the company to demonstrate clearly how the financial position of the company deteriorated over a period of time resulting in a need for to make the role redundant.

The Adjudicator also noted that the Complainant did not try to save his role until it was too late and in fact took a step back from the consultation process. She concluded

I have found that the Respondent acted unfairly in not incorporating the complainant’s role into the management sub structure for the business on the client site. I found that the redundancy consultation ran contrary to best practice and lacked effectiveness in securing a participation from the complainant. I found that the measures taken to source alternative work or even  the vacuum in an exploration of state supports for covid 19 pressure points fell far short of a fair employer”

The Complainant employee was awarded 40 weeks gross pay or €47,552.

Employment Law Learning

Employers should always ensure the following:

  1. The redundancy is genuine and can be justified one one of the grounds under Section 7(2) of the Redundancy Payments Act 1967 (as amended)
  2. Proper and fair procedure is followed at all times. Proper consultation and engagement with the employee should take place and not just a “tick the box” exercise.
  3. Ensure all alternatives to redundancy are looked at including pay reductions, reduced hours, layoff or any other means to try and save the employees role.
  4. Ensure you have all financial evidence justifying the redundancy including showing how the financial position of the company declined over a period of time by way of audited accounts or otherwise.

Whilst other steps can be taken to mitigate the threat of an unfair dismissal claim, by implementing steps 1-4 above, it will certainly help to defend any claim which could arise.

Scroll to Top