Summary Sentence:

The Complainant was found to have been unfairly dismissed by the Respondent by way of “sham” redundancy, and this, along with working time violations and a failure to provide a written contract, merited a direction for the Respondent to pay the Complainant €61,549.

Background:

The Complainant worked as the Operations Manager for the Respondent, and was in this role pursuant to an arrangement with the new shareholders of the Respondent company. The Complainant was one of three sons of the former main shareholder of the Respondent company, who had owned and operated it until financial difficulties caused it to enter examinership and ultimately caused the Complainant’s father to relinquish his directorship and shareholding. The Respondent company gained two new company directors, Mr H and Mr P, who appeared to have personal and professional differences with the three brothers, including the Respondent. In the aftermath of the COVID-19 pandemic, the Respondent company suffered serious losses, as it was in the highly-affected food service business. During this time, the Respondent engaged a business consultancy firm to develop plans for restructuring its business which would allow the business to survive, and this firm delivered a business case which proposed the Complainant’s role should be made redundant. The Complainant alleged the business cases were a sham and that the independent firm involved was an associated company of the Respondent’s representative body, Peninsula. The Complainant went on sick leave and ultimately was made redundant, according to the Respondent. After his dismissal, the Complainant made further complaints that he was required to work hours far in excess of the maximum weekly working hours required by law, and that he received no written contract of employment.

Outcome:

After a lengthy and contentious hearing process, the Adjudication Officer preferred the evidence of the Complainant and found that the reason for the Complainant’s purported redundancy was personal in nature and therefore was an unfair dismissal. The Adjudication Officer also found the Complainant’s claims for working time breaches and a failure to provide a written contract well-founded. The effects this ordeal had on the Complainant’s health, as well as the effects of the COVID-19 pandemic, caused the Adjudication Officer to find his extended period of unemployment after his dismissal to be reasonable in the circumstances and therefore awarded €46,385 in respect of the unfair dismissal, as well as €11,596 in respect of working time breaches and €3,568 in respect of the failure to provide a written contract of employment.

Practical Guidance for Employers:

Employers involved in corporate takeovers of family businesses find themselves in a very difficult situation if those members of the family are also employees of the business, and care must be taken to ensure buy-in by these employees of changes required by the business (or at least to reach an agreement which leads to the amicable end of those family members’ employment entirely!).

The full case is here: https://www.workplacerelations.ie/en/cases/2024/april/adj-00028355.html