In a ruling by the Employment Appeals Tribunal an employer has been found to have unfairly dismissed an employee when they were made redundant, the employee was awarded €58,000 in compensation.
The Claim, UD2115/2011, was taken by the employee, because he had worked for the employer for approximately ten years, 2001-2011, as the exhaust centre manager, when he was made redundant. The employee gave evidence that he met with customers every month and was always continuing to look for new customers. The employee could not understand why “the other directors were losing sleep over his sales,” when “the sales director did not contact him in relation to his sales” or his work.
There were four employees employed within similar roles, the employee was one of them. The employer decided to use a matrix system in order to establish who should be made redundant. The employer stated “it was not an easy task because one person would go home”. The employers reasoning for making one of the employees redundant was on the basis of the decline in the business.
According to the employer the employee scored four out of four, but had a low score for profitability. As three of the sales reps had a close bond with one another, this caused the employee to score low on team work. The employee did not object with the matrix; however his objection was with the way he was scored.
After the employee became redundant it came to his attention that the employer had developed a new operation in Cork. A previous employee was hired for manage the new operation and the employee was not given the opportunity to apply for this position.
Determination
The Tribunal found that:
- The employer was faced with some difficult challenges with the proposed opening of a new depot.
- Even though the finance director concluded that the employees position was not profitable, neither the finance director nor the sales director communicated with the employee “to discuss solutions or implications” he may face.
- The process for selecting the employee, for the redundancy, was unfair and it put the employee at a distinct disadvantage.
- The employee also had a dissimilar role when compared to the other three employees, and he had more of a distinct relationship with the sales director.
Tip for Employers
In a recent case we looked at we identified a 'Checklist for Redundancy' which set out 6 clear points to consider in any redundancy. It is important to look at these points and the implications of each, and as the above case highlights the Selection criteria must be clear and precise.
This is the criteria an employer will need to rely on when looking at effecting a redundancy, and so must be able to stand over each scoring and why a particular employee was scoring in a certain way. It is imperative that the employees are allowed to discuss the matrix and their scoring to ensure that the redundancy is both fair and transparent. In the case of Cronin -v- R.P.S Group (UD2348/2009) and employee was awarded €21,500 as they we not able to make any representations in respect of the criteria applied to their redundancy
In the case at the heart of this post we can see an example of where the criteria being used was not fair and objective, and placed one employee at a distinct disadvantage to the rest. This requirement is not just best practice recommendations, as it is set out in case-law that the criteria should be transparent, as in the case of Shanley -v- IT Alliance Ltd. (UD467/2002) where the criteria was very subjective, and in Williams -v- CompAir Maxam Ltd. [1982] IRLR 83 where the management selected people on the basis of who would be able to keep the company viable, which did not meet the objectivity required.
Large awards are being made against employers for a lack of fair procedures, so a fair consultation process is essential and could be the difference between a finding of fair and unfair dismissal. We have previously posted about redundancies (here and here) and set out points based on a number of previous cases that would indicate best practice.
