Redundancy

The issue of redundancy is going to come up more often. A recent case on this is ADJ-0020512.

Section 6 (4) of the Unfair Dismissal Act provides that a dismissal should be deemed not to be unfair if it results wholly or mainly from one of the following and that includes redundancy of the employee. Redundancy is defined itself in Section 7 (2) of the Redundancy Payment Acts.

The relevant applicable law was set out by the Adjudication Officer. The Adjudication Officer referred to the case of St. Leger –v- Front Line Distributors Ireland Limited 1995 ELR160 where the EAT held;

Impersonality runs throughout the five definitions in the [Redundancy Payment] Act. Redundancy impacts on the job and only as a consequence of the redundancy does a person involved lose his job… Changes also run through all five definitions. This means changing the workplace. The most dramatic change of all is complete shutdown. Change may also mean a reduction in the need for employees, or reduction in numbers. Definition (d) and (e) involve change in the way the work is done or some other form of change in the nature of the job. Under these two definitions change in the job must mean qualitive change. Definition (e) must involve, partly at least, work of a different kind, and that it is the only meaning which can put on the words “other work”. More work or less work of the same kind does not mean “other work” and is only quantative change”.

The Adjudication Officer also referred to the case of Panisi –v- JV (Europe) 2011 IEHC297 where the High Court held;

In all cases of dismissal, whether by reason of redundancy or for substantial grounds justifying dismissal, the burden of proof rests on the employer to demonstrate that the termination of employment came within a lawful means… In an Unfair Dismissal claim, where the answer is asserted to be redundancy the employer bears the burden of establishing redundancy and of showing what kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy isn’t personal. Indeed it must result from, as Section 7 (2) Of the Redundancy Payment Act 1967, as amended, provides “reasons not related to the employee concerned”.

Redundancy, cannot, therefore be used as a cloak for weeding out those employees who are regarded as less competent than others or who appear to have health or age related issues. If that is the reason for letting the employee go, then it is not a redundancy, but a dismissal.

In addition the High Court in Panisi held;

It may be prudent, and a mark of a genuine redundancy, that alternatives to letting the employee go should be exampled…similarly, a fair selection procedure may indicate an honest approach to redundancy by an employer”.

The Adjudication Officer also referred to the Labour Court case of Component Distributors (CD Ireland) Limited and Byrnes UDD1854 where the Labour Court said;

The Court accepts that the respondent was entitled to restructure the business and reduce the workforce if necessary. While the Court accepts that the respondent was entitled to decide on the most appropriate means of achieving its operational requirements, its entitlement in that regard is not unfettered. The right of the complainant to retain her employment must have been taken into consideration. That necessarily obliges the respondent to look at all available options by which this could be achieved”.

In Byrnes the Labour Court noted that the claimant had not been supplied with all company documentation as the Board of Management proposals were confidential.

In Edwards –v- Aerials & Electronics (Ireland) Limited UD236/1985 the EAT considered the case which Dublin based MD dismissed following a reorganisation and the employers decision to run the company from Belfast.

The EAT held;

The Claimant has raised major doubts as to whether the redundancy was genuine. We recognise that the function of a full time Managing Director no longer exists, but we must direct our minds to the cause and effect relationship between redundancy and dismissal. The issue was whether he was dismissed because the employer had decided to reorganise the structure of the company, or whether the decision was taken to dismiss him for some other reason. In other words, was the reorganisation a cause or a consequence? On balance we are inclined to the latter view”.

The Adjudication Officer also looked at the issue of the selection process.

The UK case of Babar Indian Restaurant –v- Rawat 1985 IRLR57 was referred to. Here the employer operated three separate businesses. One of which was a restaurant. The restaurant owner closed a frozen food business. He redeployed two staff to the restaurant. Mr. Rawat was an employee of the restaurant and was dismissed to make way for the redeployment. It was held that the restaurant was a separate business from the now closed frozen food entity. Looking solely within the restaurant business, there were no grounds for redundancy. The claim of Unfair Dismissal was upheld.

In Murphy and Regan Employment Law in the section under redundancy the Adjudication Officer pointed out that in it it is stated;

For a redundancy selection to be fair, objective selection criteria must be applied to the correct pool of employees. In particular, the pool of selection must be reasonably defined and the selection criteria applied by the employer must be applied to all employees “in similar employment”.

In this case the Adjudication Officer did award compensation. What is most relevant about this case is that the Adjudication Officer in this case has set out the law in some depth and this is most helpful.

*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.

**In contentious cases, a solicitor may not charge fees or expenses as a portion or percentage of any award of settlement.

Richard Grogan

Author Richard Grogan

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