Case Name: Jonathon McCormack v Fresh Choice Foods Ltd (RP 2650/2009 UD 2317/2009)

Legislation: Unfair Dismissals Acts 1997-2007, Redundancy Payments Acts 1967-2007

Subject Matter: Misconduct and Disentitlement from Redundancy


Facts

The claimant’s employment was terminated on 11 March 2009. He lodged his claim outside of the 6 month time limit imposed under the Unfair Dismissals Acts 1977 to 2007. The Tribunal deemed that there were no exceptional circumstances under which to extend this time limit thereby they decided that they did not have jurisdiction to hear the case.

The Tribunal then heard the case under the Redundancy Payments Acts, 1967 to 2007. The claimant said that in December 2008, the Company informed employees of the factory’s closure in April 2009, and that the employees would receive statutory redundancy.

On 14 October 2008 the claimant received a final written warning as a result of his behaviour. The claimant was then issued a second final written warning in November 2008. In February 2009, after a further incident, the respondent said that in light of the pending closure of the factory and future statutory redundancy payment, the respondent would give the claimant a final chance to adhere to the rules and procedures and to improve his behaviour.

On 9 March 2009 the claimant arrived two hours late and unfit for work, and after being afforded due process, he was dismissed from employment on 11 March 2009. The claimant argued that the respondent dismissed him in order to avoid paying a redundancy payment.


Determination

The Tribunal dismissed his appeal declaring that it was clear that the claimant was dismissed in March 2009 due to behavioural reasons; therefore he disqualified himself from the redundancy process:
http://bit.ly/luycbP


Legal Review

A) ‘Exceptional Circumstances’ necessary to merit an extension in lodging an unfair dismissals case:

The term “exceptional circumstances” is not defined in the Unfair Dismissals Acts 1977- 2007. Practice has shown however that the EAT impose a high threshold on a claimant attempting to extend the six month time frame. Two cases are instructive in determining when the Tribunal deems circumstances to be exceptional.

In McDonagh v Dell Computer Corporation 2004 the Tribunal held that the claimant’s depressive illness, caused by a work related stress injury, contributed to his inability to make his claim within the statutory time limit. The Tribunal held that this was an exceptional circumstance and permitted the claimant to take his case outside of the 6 month time limit.

In the earlier case of Byrne v P. J, Quigley Limited 1995, the Tribunal set out substantial guidelines to be followed when deciding if exceptional circumstances were made out. The Tribunal stated that there are three elements involved;

* “exceptional circumstances” go beyond that of “reasonably practicable” or “reasonable cause” (which permit an extension as part of the Redundancy Payments Acts). “Exceptional” means something out of the ordinary, the circumstances must be unusual, probably quite unusual but not necessarily highly unusual.
* In order to extend the time, the EAT must be satisfied that the exceptional circumstances prevented lodging the claim. It is not sufficient that the exceptional circumstances were a factor, but did not solely prevent the submission of the claim.
* The exceptional circumstances must be within the first six months; the period within which to take the claim. If they arose later, they could not be said to prevent the claim being initiated in the first place.

In this case, the claimant had been under the impression that he was a sub-contractor and not an employee. The Tribunal distinguished between “exceptional circumstances” and “reasonable cause” and allowed him to bring his case. We suggest that this is a decision which an employee may not want to rely on in attempting to excuse his/her delay. The law is not generally sympathetic to a litigant claiming that his ignorance of the law prevented him from taking his case and the Tribunal may not follow the precedent of Byrne.

B) A Dismissed Employee’s Entitlement to a Redundancy Payment

The second issue which arose in this case is the entitlement of an employee to a redundancy payment when he has been previously dismissed from his employment.

An employee who has been dismissed other than for redundancy is not entitled to a redundancy payment. The employer must, as the case at hand did, follow all disciplinary procedures in order to effect a valid dismissal and avoid an action for unfair dismissal. An employer, however cannot without good cause dismiss an employee, to try to avoid a redundancy payment.

In Bates & Ors v Model Bakery Ltd & Ors 1993, the plaintiff employees went on strike. Subsequently the employer wrote to each of the plaintiffs informing them that by their unauthorised withdrawal of labour, they had frustrated their contracts of employment and were not entitled to a redundancy payment when the Bakery shut down.

The High Court on appeal (and subsequently the Supreme Court) held that the plaintiff’s contracts of employment were terminated by the decision of the Bakery to close which brought about a redundancy situation. The court said that the plaintiffs had not frustrated their contracts; the letter of 18 January was an actual dismissal which was attributable to redundancy.

The courts and the Tribunal will deliberate whether there is an actual valid dismissal unrelated to redundancy to disentitle the claimant to his statutory redundancy payment. In the case at hand, the defendant employer gave the claimant reasonable time and several opportunities to improve his behaviour. The company gave unequivocal warnings which the employee chose not to adhere to. In such circumstances an employer is entitled to dismiss an employee in advance of redundancy so long as the correct procedure for dismissal is followed.


Conclusion

An employer should be aware of the statutory obligations owed to an employee in a redundancy situation. All employees are entitled to a redundancy payment when their role, for the reasons set out in Section 7 (2) of the Redundancy Payments Acts, becomes redundant. An employer should also be aware that a fixed term worker engaged by the employer for a fixed period may also be entitled to a redundancy payment. If the worker’s contract is not renewed as a result of the role being made redundant, then the fixed term worker may be entitled to a statutory payment once they have accrued the requisite length of service.