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The business case was genuine, but was the selection process fair and impersonal?

15/02/2022
Even where there is a genuine business case in a redundancy situation identified by an employer and redundancies may need to be carried out, the redundancy selection process is still crucial. 
 
Generally, if an employee's position is a stand-alone one and there is nobody else who performs the same or a similar job, then selection criteria would not have to apply.

However, if there are a number of employees performing the same or similar work, then those employees will most likely need to be pooled for fair selection.

Recent WRC case

In a recent Workplace Relations Commission ("WRC") decision (ADJ-00029059), the Complainant employee brought an unfair dismissals claim alleging that, whilst he accepted that there was a “significant downturn” in the business, he was in fact unfairly selected for redundancy.

Facts

The complainant was employed with the Respondent employer since 1995. At the time of his dismissal, he was employed as a Sales Manager.

At the hearing, the employer claimed that its sales had decreased significantly and savings were needed by reducing staff numbers. The Respondent told the WRC that, as part of the redundancy process, three sales representatives were made redundant in 2019.

A valid redundancy situation but a predetermined selection 

Upon considering the facts of the case, the WRC adjudicator found that the Respondent had submitted "plausible" evidence showing that sales had in fact significantly dropped at the particular branch where the Complainant had worked. The adjudicator was satisfied that the Respondent was faced with the need to reduce costs and that a genuine redundancy situation existed.

However, the adjudicator found that the manner in which the Complainant was selected for redundancy was unfair and objective criteria for selection were not applied. The WRC formed this view as the Respondent admitted that the Complainant’s position had been made redundant on the sole criteria of his high salary. As a consequence, the WRC determined that the redundancy consultation with the Complainant masked an already "pre-determined" decision to dismiss him.

Furthermore, the WRC found that the Respondent presented no evidence to demonstrate that it carried out a thorough exercise to consider alternative roles the Complainant prior to dismissing him. 

Mitigation of Loss

The Complainant was successful in his claim and the WRC ordered that the Respondent pay the Complainant €3,464 (4 weeks' net salary) in compensation for the unfair dismissal. Such an apparently low award reflected the fact that the employee had secured similar employment at a higher rate within days of being dismissed and also took into account the fact that he already received €30,345 in statutory redundancy.
 
Commentary

The instant case is a good example of where there is a valid business case and a genuine redundancy situation but the employer cannot show that the process for making the employee redundant was fair and impersonal.

The ability of an employer to demonstrate that they used a fair and objective process for making employees redundant may prove invaluable at a later date if the matter goes before the WRC.

This case is also a warning that employers should always, as part of the consultation process, consider what alternative roles exist within the business before making any employees redundant.

Finally, while a bad result for the employer in general terms, the employee's duty to mitigate loss and his success in that regard meant that the financial sanction was limited.

Interestingly, the employee also received €1732 under the Terms of Employment (Information) Act 1994, the equivalent of two weeks net salary, for the failure by the employer to provide the employee any written terms or conditions of employment over the 25 years tenure of his employment.

Written by: Greta Siskauskaite 

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Employment