The claimant commenced employment as a sales representative with the respondent company in early 2006. Almost from the beginning, the claimant exceeded his targets and sales and maintained this standard throughout his employment. From 2007 onwards, the company began to experience a substantial decrease in sales revenue with a 50% decrease from 2007 to 2010.
The respondent told the Tribunal that towards the end of 2009, the former managing partner arranged a meeting with the claimant to discuss the deteriorating situation. It was at this meeting the claimant was presented with two options, either to leave with a clear monetary package or remain on and take over contract customers. The MD told the Tribunal that this offer was not linked with a proposed redundancy. However, the claimant opted not to accept the package offered to him.
The Tribunal heard that interviews were held to fill a new position of a sales manager in the respondent’s other company. The claimant stated that prior to receiving an invitation to interview for a position he claimed was the same as the one he held, there were rumours around the office, that he would not be retaining the job. The respondent refuted the claim that a younger cheaper replacement was found for the claimant. The claimant also felt that interviews held by the respondent company including the one he was invited to attend were being utilised as part of a redundancy selection process.
By May 2010, the directors reluctantly made the decision that reductions in the sale force from five representatives to no more than three were inevitable to facilitate cost cutting measures. A task force of a non-executive director and an outside business consultant became engaged in behavioural and competency based interviews with the purpose of scoring the sales force. The scores were collated and furnished to the directors within the respondent company, who in turn based their redundancy decisions on those results. Due to the claimant’s results, he was given his notice of dismissal by way of redundancy. He was later issued with a RP50 and accepted a cheque to cover his statutory redundancy. The Tribunal also heard that no alternatives to redundancy were offered to the claimant.
Three months later the respondent closed down as a going concern resulting in all remaining staff losing their jobs.
DETERMINATION
The Tribunal found in favour of the claimant and accepted his assertion that the interview process carried out by the respondent was not a proper redundancy procedure and was in fact a sham exercise. There was no evidence of objective selection criteria and the purpose of the interviews was unclear and lacked the required direction and focus.
The Tribunal held that the claimant was unfairly dismissed and awarded the claimant €31,000 as compensation under the Unfair Dismissals Acts 1977 to 2007.
LEGAL REVIEW
As a general rule, selection criteria should not be based on subjective assessments of the employee. The employer must be in a position to establish that an employee was fairly selected for redundancy on the basis of independent, objective and verifiable criteria.
In essence, what is required of the employer in this respect is that it be able to objectively justify why a particular employee was selected for redundancy as opposed to another employee. Specifically, the employer must be able to demonstrate that a particular employee has been compared to others who might have been made redundant. Employers should also be mindful to the necessity of applying redundancy selection criteria. Employers should consider whether there are comparable roles within the organisation, or whether the roles are unique.
Where redundancy arises, and no agreed procedure or custom is in place, the reasonableness of the selection criteria is usually focused on and tends to be assessed by the objective standard of the way in which a reasonable employer in these circumstances in that line of business, at that time would have behaved.
CONCLUSION
Changing economic circumstances mean that employers are constantly having to reorganise their resources and are nowadays faced with the unenviable task of making difficult operational and strategic decisions when choosing the option of redundancy. Employers must ensure that the redundancy selection process is transparent, objective and fair. In all cases, the employer must ensure that he conducts himself reasonably and must not breach any of the statutory prohibitions or an agreed or customary procedure within the particular employment.
The manner in which employees are selected for redundancy is of crucial importance. An area where employers can fall foul of the Unfair Dismissals Acts 1977 to 2007 is in deciding upon appropriate selection criteria and determining the pool of employees to whom those criteria should be applied. Pursuant to the Unfair Dismissals Acts, even in circumstances where there is a genuine redundancy situation, an employee who is unfairly selected for redundancy will be able to bring a successful unfair dismissal action and employers should be particularly wary and vigilant of this. The overall fairness of the process is often also considered by the Tribunal.
Full case decision:
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