The importance of following correct procedures when making someone redundant
A recent decision of the WRC is a stark reminder to employers of the importance of fair procedures when terminating employment, even where a genuine redundancy situation exists and where the Adjudicator agrees that any appeal against the decision to make the position redundant is likely to be wasted.
The employee was a sales executive for the respondent company which provides international finance and IT services to businesses in the public and private sectors. The employee was made redundant following a decision by the company to close its sales operation in Dublin due to high costs, and the closure of the sales operation was to “generate cost savings and regain stability for the group.” The Company outlined there had been declining profits associated with the Dublin part of the business since 2017.
The Employee, in his evidence, outlined that in April 2020 he was invited to a Microsoft Teams Meeting, the purpose of which was unknown to him. At the meeting, which the employee said only lasted 10 minutes, the company’s Managing Director informed him that his job was redundant, as the Irish business was unprofitable, and that the decision had been made “centrally.”
The Adjudicator Officer in their decision said “I accept the explanation of the respondent witnesses that they closed down the sales operation in Dublin…I find that this explanation clearly falls within the definition of redundancy…I accept that his job was redundant wholly or mainly due to the closure of the business. While I am satisfied that the job the complainant was employed to do was Redundant, it does not follow that his dismissal was not unfair.”
The Adjudicator found that, in the context of redundancy, reasonableness on the part of the employer means treating the employee with respect and fairness, and noted it was regrettable the company did not act with more respect by informing him of the nature of the meeting; not engaging in relation to identifying any suitable alternative roles; not extending his notice period or treat him the same way as his manager, who was also made redundant.
The Adjudicator awarded the employee €120,000, which equated to a year’s salary as it took him a year to find a new position, taking account of the complainant’s redundancy lump sum payment of €19,152.
NOTE FOR EMPLOYERS: Employers should be mindful that despite the fact that there might be a genuine redundancy at play, the employer must still have regard for the employees’ rights and follow a fair and reasonable procedure in relation to the redundancy.
View full case details here; https://www.workplacerelations.ie/en/cases/2022/january/adj-00029093.html
For more information on fair procedures during the redundancy process, contact our office today on (01)8870690 or info@mssthehrpeople.ie
