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Latest in Employment Law>Case Law>Bennett v Bunzl Ireland [2012]
Bennett v Bunzl Ireland [2012]
Published on: 09/04/2013
Issues Covered: Dismissal Redundancy
Article Authors The main content of this article was provided by the following authors.
Jeffrey Greene
Jeffrey Greene
Background

The decision in the case of Bennett v Bunzl Ireland (UD 2409/2009) was published in September 2012. The case involved the claimant, Mr. Bennett, successfully arguing that he had been unfairly dismissed and being awarded compensation of €40,000. 

The claimant commenced employment with Bunzl in February 2007 as a sales representative. He was promoted firstly to Business Development Manager and then to Sector Leader. However, shortly after the last promotion the business began to experience financial difficulties. Management decided that cuts had to be made to make the business more competitive and viable. Seven positions were to be made redundant in the business area in which the claimant was employed, including the claimant’s position. The claimant maintained that other courses of action, such as pay cuts, should have been followed instead, but even after such consideration his position was still made redundant.

After hearing the evidence, the EAT was satisfied that a genuine redundancy situation existed in Bunzl due to the particular business and financial circumstances. However, it went on to say that the Unfair Dismissals Acts required the Tribunal to consider “the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”. 

The Tribunal stated that the claimant’s position was one which had been created, and to which the claimant had been promoted, less than one year before the redundancies. His former position of Business Development Manager still existed. The Tribunal quoted the UK case of Thomas and Betts Manufacturing Limited v Harding ([1980] IRLR 255) where the UK Court of Appeal held that an employee’s dismissal was unfair because she had not been offered alternative work in a role that she had previously held, even though this would have meant dismissing someone else. The Tribunal said that, relying on that case, Bunzl had failed to explore with the claimant the possibility of him reverting to his former position of Business Development Manager, and therefore Bunzl had not acted reasonably within the meaning of the Unfair Dismissals Acts. Compensation in the amount of €40,000 was awarded.


3. Commentary

This decision has the potential to create difficulties for employers in Ireland. In redundancy situations to date, employers were required to show that the redundancy was (1) genuine and (2) carried out reasonably. Proving the redundancy to be genuine is perhaps an easier concept for employers to understand in that it requires sufficient evidence, both financial and otherwise, as to the employer’s need to effect the redundancy in question. 

Displaying reasonableness however is more of a moveable feast, and the exact requirements can differ from Tribunal to Tribunal. Typically it involves an employer demonstrating that it has considered all the alternatives to redundancy, provided information and/or consulted with the employee, allowed the employee to put forward his/her own alternatives to redundancy and, finally, that the decision to proceed with the redundancy was taken following adequate consideration by the employer of all the relevant facts in question. In addition, if a selection process was necessary the employer must be able to show that the pool of employees was correctly identified and that the selection criteria were fairly and objectively chosen and implemented. 

In itself this concept of “reasonableness” has tripped up many an employer. However, the Bunzl case above could potentially mean that employers have to jump yet another hurdle for the redundancy to be declared reasonable. Employers may now have to consider whether the employee in question should be moved to another position held by employee B, and 'bump' employee B out of that position so that he/she is made redundant instead.

If the concept of bumping were to become more widespread following this decision, there are a number of difficulties facing employers in the absence of legislative clarification or well-reasoned case law: the employee who has been 'bumped' from his position may himself claim for unfair dismissal, breach of contract or under some other piece of legislation. Difficulties may also arise in situations involving a selection process because, once the selection process is completed, it will not be as straightforward as simply making the unsuccessful employee redundant. Instead the employer may have to implement a further process and consider bumping another employee from his/her position to make room for the employee 'redundant' following the selection procedure. 

However, there are a number of reasons why employers should not necessarily rush to implement the concept of bumping in their redundancy processes. Firstly, the Bunzl decision could be read very much on its facts. The Tribunal emphasised in particular the fact that the position to be made redundant was a position which had been created, and to which the claimant had been promoted, less than one year before the redundancies in question. Furthermore, the claimant’s former position still existed. Therefore, it might be argued that an employee to be made redundant has no right to insist on being moved to a position which he has never before occupied or which no longer exists. Similarly, if a number of years have elapsed since the employee moved from his former position, again it is arguable that there has been a sufficient break between the positions such that it is not reasonable or equitable for him to return to that position and bump the incumbent employee out.

Secondly, the EAT does not adhere to a strict concept of precedent. This means that one panel of Tribunal members need not necessarily follow past decisions of other Tribunal panels. Interestingly, in another EAT case from 2012 (Flanaghan v Castlethorn Construction (UD 1451/2010)) the claimant challenged his redundancy and gave evidence that he felt he should have been offered a different position held at that time by other employees, thereby bumping that employee. The claimant was unsuccessful and the Tribunal stated that “Part of the claimant’s argument implies that certain other employees doing different kinds of work should have been moved to make way for him to do this work because he had done that kind of work in the past and was trained to do it. Had this happened it seems to us that such employees would have justifiable complaints”. Therefore, essentially we have two different Tribunal panels giving decisions in 2012 with seemingly opposing viewpoints as to whether bumping should be practised or not in Ireland.


4. Conclusion 

Although the situation is unclear, redundant employees may now try to rely on the Bunzl decision in their unfair dismissal actions. Until further clarification is obtained, employers seeking maximum protection against similar actions might therefore at least consider the concept of bumping in situations mirroring the Bunzl facts, i.e. where an employee to be made redundant had recently been promoted from another position that remains in existence. 

However, it is by no means clear that bumping is now a practice to be considered in each and every redundancy in Ireland and, indeed, there is much to suggest from the UK’s experience that forcing employers to consider bumping can create a high degree of practical difficulties for employers already struggling to maintain the viability of their businesses. It is therefore hoped that guidance through legislation or through a superior court decision is forthcoming as soon as possible.

Full case decision: 
www.eatribunal.ie/determinationAttachments/a4f7a9db-e241-49f3-842b-1a15e85c33a4.pdf 

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 09/04/2013
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