Case Name: Safia Chercham v Campion Insurances Limited (UD 1496/09)
Legislation: Redundancy Payments Acts, 1967 to 2007, Unfair Dismissals Acts, 1997 TO 2007 (the “Acts”)
Jurisdictions/Subject Matter: Redundancy

A decision in the above case was recently delivered by the Employment Appeals Tribunal. We asked David Faganto set out details of the case and review legal entitlements around redundancy.


Facts

The claimant/employee was employed on a full time basis in one of the respondent’s companies. The respondent had eleven companies and in October 2008, the decision was taken to amalgamate the companies into one single entity.

The amalgamation resulted in redundancies being made and of the three employees in the employee’s department, only one was kept on.

The respondent’s Chief Financial Operator (“CFO”) had a short meeting with the employee on 3 April 2009. The CFO submitted that he told the employee that her role was being redeployed and that she was not being made redundant. The employee said that she was not prepared to relocate as part of the redeployment. The CFO then emailed all staff on 24 April 2009 informing them that he was recruiting new members in the accounts team.

The employee said that in the meeting on 3 April, the CFO informed her that she was going to be made redundant and that she was never offered another role.

It was submitted on behalf of the respondent that the CFO had looked for a new role for the employee and had met her on two or three occasions to discuss. During these meetings the employee allegedly enquired about her end date and no grievance was raised.

On 10 June 2009, the CFO emailed the employee notifying her of her redundancy effective from 30 June 2009.

The employee submitted that prior to her being informed of her redundancy, another member of her team was offered a finance role in Dublin. The employee believes that she could have carried out this role and also submitted that she did not apply for the roles advertised in the email of 24 April 2009 as she thought they did not apply to her. She claims that she had no discussions with regards to alternative roles.


Determination

The Tribunal did accept that the employee understood that she could have become part of the team that was to make up the new Finance department based outside of Dublin. The Tribunal opined that the onus rested with the CFO to fully explain and communicate to the employee about the company’s restructuring and redeployment programme.

The Tribunal found that the employee was unfairly selected for redundancy and her claim under the Acts succeeded. However, in determining compensation the Tribunal acknowledged that the employee had an opportunity to challenge the redundancy process but failed to do so. On that basis, the Tribunal only awarded the employee €3,000.


Legal Review

When making employees redundant, an employer must be able to show that a genuine redundancy situation exists. The Tribunal was not satisfied in the above case that the circumstances surrounding the redundancy of the employee were made clear to her. There was conflicting oral evidence and no written minutes or notes were taken at any of the meetings held between the employee and the respondent’s CFO.

There was no evidence to suggest that the employee was precluded from applying for the advertised positions and the employee accepted that she raised no query or objection to her selection for redundancy. However, the Tribunal reiterated the onus was on an employer to make information available to employees where a redundancy situation exists.

In the absence of a binding company policy or collective agreement to be followed when selecting employees for redundancy, employers should establish clear and objective selection criteria to ensure fairness and to assist in defending any future unfair dismissal claims. A skills matrix against which each individual employee is evaluated is an impartial way of choosing employees to be made redundant. However, it is crucial that the criteria adopted are not unreasonable or directly or indirectly discriminatory in any way.

The “last in first out” or “LIFO” rule is a commonly used mechanism to select employees for redundancy where there is no other basis for distinguishing between employees. However, it is often an unsatisfactory method for employers as it does not take account of skills or experience.