The Claimant in this case was employed with the Respondent from April 2004, initially as a Sales Executive and then at the time of his dismissal as an Account Manager with a salary of €120,000.  The Complainant’s job was made redundant on the 31st of July 2020 as a result of the closure of the sales operation in the Respondent’s Dublin office. The respondent is an Irish registered company, part of an international provider of finance and IT services to businesses in the private and public sectors.  In 2020, the Irish business had six employees, including the complainant.

It was the Complainant’s submission that the redundancy was a ‘sham redundancy’.  The Respondent submitted that the reason for the closure of the sales operation in Ireland was due to the high costs associated with the Dublin business, and the decline in profit before tax since 2017 which meant that the sales operation comprising two account managers could not be sustained.

At separate meetings over Microsoft Teams on April 27th 2020, the Complainant and his manager were informed that their jobs were being made redundant.  The Complainant was unaware of the purpose of the meeting as no purpose of agenda was included in the meeting invitation. Some correspondence was exchanged between the Complainant and the HR director at the end of April and details of his redundancy lump sum and other termination payments were set out.  A further meeting took place on the 1st of May 2020 and the HR director agreed to increase the Complainant’s notice period from eight weeks to 12 weeks, meaning that his employment would terminate on the 31st of July 2020. The complainant responded on May 7th, claiming that the redundancy pay was “derisory and devaluing” and he sought enhanced terms of four weeks’ pay per year of service.  In a reply on May 11th, Ms McGuinness rejected the complainant’s request.

On the 22nd of June 22nd 2020, the Complainant went on leave, and his employment was terminated on July 31st.  He received a statutory redundancy payment of €19,152, plus outstanding holiday pay and commission due up to the date that he finished work on the 22nd of June 2020 and on deals drawn down after he left.  He submitted this complaint to the WRC on July 20th.

It is the respondent’s case that the termination of the Complainant’s employment was a genuine redundancy in accordance with section 7(2)(a) of the Redundancy Payments Act 1967 which provides that a redundancy arises in the context of the closure of a business or a part of a business.  It was the respondent’s case that the redundancy was impersonal in nature and due to a change in the workplace.  It was entirely justified and unavoidable, due to the closure of the sales part of the business and there were no other roles that the complainant could have carried out.

The Respondent submitted that a “truncated” consultation process was required due to the fact that the sales operation was closing.  The Respondent also argued that the fact that there were no discussions with the Complainant regarding alternatives to redundancy in circumstances where such discussions would have been futile does not render the redundancy process as a whole unfair.

The Respondent argued that it conducted itself as a reasonable employer, having regard to the fact that the sales team in Dublin was impacted by the closure of the sales operation and that there were no suitable alternatives to redundancy.

The Complainant argued that he was unfairly dismissed and that irrespective of whether the redundancy of his job was a valid redundancy, the manner in which it was effected is entirely at odds with his right to fair procedures as provided for the Unfair Dismissals (Amendment) Act 1993.  The Complainant said that there was no mention of the possibility of an appeal against the decision to dismiss him, and no discussion about an alternative. The Complainant added further that he was a fluent speaker of Spanish and Italian and that his wife is Spanish.  He was open to moving to another country to remain working with the Respondent firm.

The Adjudication Officer noted that no credible explanation was given for the decision of the managers not to engage with the Complainant to identify a suitable alternative role, or to extend his notice period so that he could find another job.  As his manager and colleague (with three years’ service) left the company on enhanced redundancy terms, and, as the managing director indicated that she would have paid more than statutory redundancy if the Complainant had asked, the Adjudication Officer was satisfied that it was unfair and inequitable not to exit the complainant on agreed terms, thereby avoiding this adjudication process.

The Adjudication Officer accepted that the Complainant’s job was redundant and any appeal against that decision was likely to be a wasted exercise.  However, the Adjudication Officer stated that the Respondent departed from the standard of reasonableness that a reasonable employer would have shown when dealing with an employee in similar circumstance. Therefore, the Adjudication Officer decided that the Respondent ought to pay the complainant €120,000 in compensation, equivalent to one year’s gross pay.

Practical Guidance for Employers 

Whilst this case was in fact a genuine redundancy situation, it is important for employers to have regard for their employees' rights and to take part in a fair process whereby each party is informed of the steps to be taken, decisions that have to be made and the potential other options (including redeployment) available for an employee. The employee should be given adequate notice of the redundancy and should be afforded the right to be represented, if appropriate, and the right to appeal a decision.
https://www.workplacerelations.ie/en/cases/2022/january/adj-00029093.html