Redundancy Issues
S.I. No. 115/1979 –
Redundancy (Inspection of Records) Regulations, 1979.
REDUNDANCY (INSPECTION OF RECORDS) REGULATIONS, 1979.
I, GENE FITZGERALD, Minister for Labour, in exercise of the powers conferred on me by section 58 of the Redundancy Payments Act, 1967 (No. 21 of 1967) [as amended by the Redundancy Payments Act, 1979 (No. 7 of 1979)], hereby make the following Regulations:
1. These Regulations may be cited as the Redundancy (Inspection of Records) Regulations, 1979.
2. The following Regulation is hereby substituted for Regulation 5 of the Redundancy (Inspection of Records) Regulations, 1968 ( S.I. No. 12 of 1968 ):
“5. Any person who—
( a ) wilfully delays or obstructs an officer in the exercise of any power under these Regulations,
( b ) refuses or neglects to answer any question or to furnish any information or to produce any document when required so to do under these Regulations, or
( c ) conceals or prevents or attempts to conceal or prevent any other person from appearing before or being examined by an officer,
shall be guilty of an offence and shall be liable on summary conviction thereof to a fine not exceeding £50.”
GIVEN under my Official Seal, this 5th day of April, 1979.
GENE FITZGERALD
Minister for Labour.
EXPLANATORY NOTE.
The purpose of these regulations is to increase to £50 the penalty for contraventions of the Redundancy (Inspection of Records) Regulations, 1968.
S.I. No. 347/1991 –
Redundancy Certificate Regulations, 1991.
REDUNDANCY CERTIFICATE REGULATIONS, 1991.
I, MICHAEL O’ KENNEDY, T.D., Minister for Labour, in exercise of the powers conferred on me by sections 18 (as amended by the Redundancy Payments Act, 1971 (No. 20 of 1971)) and 58 (as amended by the Redundancy Payments Act, 1979 (No. 7 of 1979)) of the Redundancy Payments Act, 1967 (No. 21 of 1967), hereby make the following Regulations:
1. These Regulations may be cited as the Redundancy Certificate Regulations, 1991, and shall come into operation on the 30th day of December, 1991.
2. A redundancy certificate shall be in the form set out in the Schedule to these Regulations, or in a form substantially to like effect, and shall contain—
( a ) the appropriate particulars referred to in that form,
( b ) a declaration or declarations (as appropriate) by the employer concerned in the terms set out in that form, and
( c ) a receipt, if appropriate, in the terms set out in that form, by the employee concerned for the lump sum payment referred to in that form.
3. An employer who fails to comply with these Regulations shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £50.
4. The Redundancy Certificate Regulations, 1984 ( S.I. No. 221 of 1984 ), are hereby revoked.
SCHEDULE
REDUNDANCY CERTIFICATE Form RP2
REDUNDANCY PAYMENTS ACTS, 1967 TO 1991.
AN ROINN SAOTHAIR-DEPARTMENT OF LABOUR
Note: Before completing this form please refer to explanatory booklet.
PLEASE COMPLETE THIS FORM IN BLOCK CAPITALS
Employer’s PAYE Registered Number
Figures
Letter
|___|___|___|___|__|___|___|___|
Business Name of Employer__________________________________________________________________________________
Business Address_________________________________________________________________________________________
_______________________________________________________________________________________________________
Employee’s Revenue and Social Insurance Number
Figures
Letters
|___|___|___|___|___|___|___|___|___|
To: Surname _____________________________________
First Name _____________________
Social Welfare Insurance Number (If any)
Sex
Male
Tick Appropriate Box
Figures
Female
|__|__|__|__|__|__|__|
Date of Birth
Occupation
For Official Use
|___|___|___|
_____________
MANCO
|__|__|__|__|__|
Date of Commencement
Date of Termination
Number of hours normally expected to work per week
Day Month Year
Day Month Year
|____|_____|______|
|______|_____|_______|
|________________|
Periods of Non Reckonable Service
Day
Month
Year
Day
Month
Year
Reason
From
To
________________
From
To
________________
From
To
________________
1. CALCULATION OF STATUTORY LUMP SUM PAYMENT
Note: Regard should be had to ceiling on normal weekly remuneration.
(i) Total Reckonable Service
Years
(Exclude service before age of16 and other non-reckonable service)
Weeks
(ii) Number of weeks pay due _________________________________________
(iii) Amount of Normal Week’s Pay:
Gross weekly wage
£
Average regular overtime
£
Benefits in kind
£
Total
£
(iv) State ceiling on earnings applied for purposes of calculation if the statutory ceiling is lower than normal week’s pay________________________________________________________
£
(v) Amount of Statutory lump sum payment to which employee is entitled_____________________________________________
£
2. EMPLOYEE’S RECEIPT FOR LUM SUM PAYMENT
Note: In no circumstances should this receipt be used for any payment other than the statutory redundancy lump sum or part thereof. This receipt will not be accepted as valid unless the sum paid is inserted.
WARNING: DO NOT SIGN THIS RECEIPT UNTIL YOU ACTUALLY RECEIVE PAYMENT OF THE SUM BEING ACKNOWLEDGED.
I acknowledge receipt of a lump sum redundancy payment amounting to _______________________________________________________________
£
Signature of Employee ____________________
Day Month Year
|________|_______|_________|
3. DECLARATION BY EMPLOYER
I declare that the employee was dismissed by reason of redundancy, that the employee is entitled to a lum sum of the amount set out in Part 1 (v) of this certificate, and that the employee was paid a lump sum of _______________________________________________________
£
(If no payment made, insert NIL)
Signature of Employer _________________________________________
___________________
Date
Position held in Company _______________________________________
GIVEN under my Official Seal, this 20th day of December, 1991.
MICHAEL O’KENNEDY,
Minister for Labour.
EXPLANATORY NOTE.
The purpose of these regulations is to require employers when giving a redundancy certificate under the Redundancy Payments Acts to use the amended form (RP 2) provided by the Minister for this purpose and to furnish the appropriate declarations in the form. A penalty for failure to comply with the regulations is also specified.
S.I. No. 348/1991 –
Redundancy (Notice of Dismissal) Regulations, 1991.
REDUNDANCY (NOTICE OF DISMISSAL) REGULATIONS, 1991.
I, MICHAEL O’ KENNEDY, T.D., Minister for Labour, in exercise of the powers conferred on me by sections 17 (as amended by the Redundancy Payments Act, 1971 (No. 20 of 1971)) and 58 (as amended by the Redundancy Payments Act, 1979 (No. 7 of 1979)) of the Redundancy Payments Act, 1967 (No. 21 of 1967), hereby make the following Regulations:
1. These Regulations may be cited as the Redundancy (Notice of Dismissal) Regulations, 1991, and shall come into operation on the 30th day of December, 1991.
2. In these Regulations “the notice” means the notice required by section 17 (1) of the Redundancy Payments Act, 1967 (No. 21 of 1967), as amended by the Redundancy Payments Act, 1971 (No. 20 of 1971).
3. The notice shall be given in the form set out in the Schedule to these Regulations, or in a form substantially to like effect, and shall contain the appropriate particulars refered to in that form.
4. A copy of the notice shall, at the same time as it is given to the employee concerned, be sent by the employer concerned to the Minister for Labour addressed to his office in Dublin.
5. An employer who fails to comply with these Regulations shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £50.
6. The Redundancy (Notice of Dismissal) Regulations, 1984 ( S.I. No. 220 of 1984 ), are hereby revoked.
SCHEDULE
Form RPI
NOTICE OF PROPOSED DISMISSAL FOR REDUNDANCY
Redundancy Payments Act, 1967 to 1991.
An Roinn Saothair — Department of Labour
Note for Employer: On the date that this notice is given by an employer to the employee a copy of it must be sent to the Minister for Labour at Davitt House, 65A Adelaide Road, Dublin 2. Failure to do this may lead to a reduction in rebate payable.
PLEASE COMPLETE THIS FORM IN BLOCK CAPITALS
EMPLOYER’S PAYE REGISTERED
NUMBER
Figures
Letter
|___|___|__|___|___|___|___|
BUSINESS NAME
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
OF EMPLOYER
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
BUSINESS
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
ADDRESS
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
GIVE DETAILS OF TYPE OF BUSINESS IN WHICH REDUNDANCY ARISES
For Official Use
Figures
Letters
EMPLOYEE’S REVENUE AND SOCIAL INSURANCE (RSI) NO.
|__|__|__|__|__|__|__|__|
To: SURNAME
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
FIRST NAME
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
ADDRESS
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
SOCIAL WELFARE INSURANCE NUMBER (If any)
Figures
SEX
Male
Tick
Appropriate
Box
|__|__|__|__|__|__|__|
Female
DATE OF BIRTH OF EMPLOYEE
Day Month Year
|________|_______|_________|
For Office Use
OCCUPATION
MANCO
|__|__|__|__|__|__|
ADDRESS OF PLACE OF EMPLOYMENT
AREA
|__|__|
GIVE DETAILS OF THE REASON FOR REDUNDANCY _________________________
REASON
|__|__|
Day Month Year
DATE OF COMMENCEMENT OF EMPLOYEE’S EMPLOYMENT
|________|_______|_________|
NUMBER OF HOURS NORMALLY EXPECTED TO WORK PER WEEK
|________|
It is necessary to terminate your employment by reason of redundancy. In accordance with the provisions of the Redundancy Payments Acts, 1967 to 1991, I hereby give you notice that your employment will terminate on
Day Month Year
|________|_______|_________|
POSITION HELD IN COMPANY
DATE OF NOTICE
Day Month Year
|________|_______|_________|
GIVEN under my Official Seal, this 20th day of December, 1991.
MICHAEL O’KENNEDY,
Minister for Labour.
EXPLANATORY NOTE.
The purpose of these regulations is to require employers when giving notice of dismissal under the Redundancy Payments Acts to use the amended form (RP 1) provided by the Minister for this purpose and to send a copy of the completed form to the Minister for Labour addressed to his office in Dublin. A penalty for failure to comply with the regulations is also specified.
Cases
Lloyd v Brassey
[1969] 2 WLR 310; [1969] 1 All ER 382; [1969] 2 QB 98
Lord Denning MR
“As I read the Act, a worker of long standing is now recognised as having an accrued right in his job ; and his right gains in value with the years. So much so that if the job is shut down, he is entitled to compensation for loss of the job – just as a Director gets compensation for loss of office. The director gets a golden handshake. The worker gets a redundancy payment. It is not unemployment pay. I repeat ‘not’. Even if he gets another job straightaway, he nevertheless is entitled to full redundancy payment. It is, in a real sense, compensation for long service.”
Salmon LJ
“Of the many factors to be taken into account in considering whether or not a change in the ownership of a business has occurred, none by itself nor a combination of any of them together is necessarily conclusive. Everything depends on a broad view of all the circumstances of each particular case. In this case, having come to the conclusion that there was ample evidence to support the tribunal’s finding, I would allow the appeal.”
Sanders v Ernest A Neale Ltd
[1974] EW Misc 1 [1974] IRLR 236,
Sir John Donaldson, President
“We should like to take this opportunity of exorcising the ghost of “self-induced redundancy”. It can certainly occur, but as such is has no legal significance. Interruption of service due to industrial action can cause customers to look to competitors or to turn to substitute materials or services. This can lead to a diminution in the requirements of the business for employees to carry out work of a particular kind and to workers being dismissed. But the mere fact that the employees’ action created the redundancy situation does not disentitle them to a redundancy payment The entitlement depends upon the words of the statute and there is no room for any general consideration or whether it is equitable that the employee should receive a payment.
The first issue in a redundancy claim is whether the applicant was dismissed by the employer. What constitutes such a dismissal is set out in section 3 of the Act and it is for the employee to prove the dismissal if it is not admitted.
The second issue is whether the employee has been dismissed by reason of redundancy. Here it is for the employer to prove either that there was no redundancy situation or that the dismissal was neither wholly nor mainly attributable to that situation (see the presumption set out in section 9(2) of the Act). He may, of course, prove both.
What is a redundancy situation is defined by section 1(2) of the Act, but it should be remembered that the mere fact that the employer proposes a change in the terms and conditions of employment and is unable to carry on his business on the existing terms does not of itself prove that a redundancy situation exists (see Chapman vs. Goonvean (supra) and Johnson vs. Notts Police[21].
If the employer fails or does not attempt to prove the absence of a redundancy situation, he can still try to show that the dismissal was wholly or mainly attributable to some other cause.
In the present appeals there was indeed a redundancy situation, but the tribunal found that it in no way caused the dismissals. The converse was true. It was the dismissals which caused the redundancy. The appellants were dismissed because they persistently refused to work normally. Their claim fails not because the redundancy was self-induced, but because it did not cause their dismissal.
By contrast a situation can arise in which due to a recession in trade it is found that the business is much over-staffed. The employer can either continue with his existing labour force sharing out the available work and paying reduced wages or he can halve the size of the labour force by dismissals. If the employees will not agree to work-sharing and some are in consequence dismissed, the case may be said to be one of “self-induced redundancy”. But this aspect is irrelevant. The question remains, “Were the applicants dismissed wholly or mainly by reason of redundancy?” The answer will depend upon an exact analysis of the facts, but if the employees could not reasonably be expected to accept the proposed reduction in wages any tribunal would be almost bound to find that the dismissals were wholly or mainly attributable to redundancy and that the dismissed employees were entitled to redundancy payments.
For the sake of completeness, we should add that on occasion tribunals may have to consider the effect of section 2(2) and section 10 of the Act in the context of a “self-induced redundancy” situation. These provisions apply if the employer was entitled to terminate the contract of employment without notice by reason of the employee’s conduct. They are complex and have been commented on by Sir Diarmaid Conroy in Essen vs. Vanden Plas (England) 1923 Ltd.[22] and by Professor Grunfeld in his book “The Law of Redundancy” at pp. 121-4. We agree with both that neither section has any application if the dismissal is neither wholly nor mainly attributable to redundancy. Section 2(2) is an exclusion provision and section 10 modifies that exclusion, but provides no positive right to a redundancy payment. It follows that a prima facie entitlement must first be established under section 1(1).
Professor Grunfeld seems to take the view that the sections only apply if there are concurrent causes for the dismissal, redundancy being the main cause. We are inclined to doubt whether this is correct for section 2(2) does not appear to have any causal element. It seems therefore that, subject to section 10, a man who is dismissed solely on account of redundancy may lose his right to a redundancy payment if, by reason of the employee’s conduct, his employer was actually entitled to dismiss him without notice.
Sir Diarmaid Conroy says he finds it difficult to understand why section 2(2)(c) provides for a special notice to be given to the employee if he is allowed to work out his notice and what sanction there is for not giving the notice. We suggest that the answer to the first question is that Parliament thought that an employer should not be allowed to resist a claim for redundancy payment upon the ground that the employee could have been dismissed without notice, unless the employee was warned of the facts upon which this defence is based at the time of the dismissal. Dismissal without notice or on inadequate notice impliedly alleges an entitlement to dismiss summarily. Dismissal on full notice does not. Hence the need for special notice in that case. The answer to the second question is that if the employee is dismissed wholly or mainly on account of redundancy and receives full notice of dismissal, the employer cannot rely upon section 2 unless he has given a notice complying with section 2(2)(c). This is not insignificant sanction.
Many other points can arise under these sections, but we hope that we may be acquitted of any lack of enthusiasm for the subject matter if we refrain from expressing even tentative views until they arise for decision.”
Morton Sundour Fabrics v Shaw
[1967] ITR 84
Widgery J
‘there are certain formalities about the type of notice necessary to determine a contract of employment. The notice may be a peremptory notice, sometimes referred to as a dismissal without notice, but if it is to operate on a future day, the notice must specify that date, or at least contain facts from which that date is ascertainable.’
Moon v Homeworthy Furniture (Northern) Ltd
[1977] ICR 117, [1976] UKEAT
Mr. Justice Kilner-Brown
“After the evidence of Mr. Bullard was given, the Chairman of the industrial tribunal with acute cogency asked Mr. Stephenson whether or not he accepted that there was a cessation of work and therefore a closure. • With integrity and common sense Mr. Stephenson conceded the point. Technically, therefore, a. redundancy situation was proved up to the hilt. But Mr. Stephenson hung on’to his proposition that if the reason of redundancy was relied on it ought to be open to challenge the declaration of redundancy on its merits. In the view of this Appeal Tribunal the argument then began to go off the rails. There was a long discussion as to the meaning of paragraph 6(8) of the First Schedule and whether or not in the circumstances a reasonable exercise of judgment or assessment of the situation required to make a dismissal fair extended also to the decision to close down the factory. In other words? did the guidelines as to fairness of dismissal entitle the employees to challenge the creation of a redundancy? This brought the industrial tribunal back to realities and Mr. Stephenson was asked what evidence he had other than evidence which sought to challenge the validity of the decision to close down. As he had none the tribunal ruled that as this was evidence he could not call he was bereft of any ammunition and his case must go by default.
Notwithstanding the care and the ability with which Mr. Stephenson put his case, we are unable to criticise the way in which the Chairman handled the matter or to find fault with his reasoning. However we would prefer to put the matter on a much broader and, in our view, more important basis.
The employees, through the chosen applicants, were and are seeking to use the Industrial Tribunal and the Employment Appeal Tribunal as a platform for the ventilation of an industrial dispute. This Appeal Tribunal is unanimously of the opinion that if that is what this matter is all about then it must be stifled at birth, for it was this imaginary ogre which brought about the demise of the National Industrial Relations Court. The Act of 1974 has taken away all powers of the courts to investigate the rights and wrongs of industrial disputes and we cannot tolerate any attempt by anybody to go behind the limits imposed on industrial tribunals.
The result is therefore that whether this appeal is considered upon the basis on which it was argued or on the more fundamental basis of jurisdiction, the decision of the industrial tribunal was right and there could not and cannot be any investigation into the rights and wrongs of the declared redundancy.
There are no grounds for finding any error of law and the appeals are dismissed”.
High Table Ltd v Horst & Ors [1997] EWCA Civ 2000 [1998] ICR 409
Peter Gibson L.J.:
“This is an appeal by High Table Ltd. (“the Employers”) from the order of the Employment Appeal Tribunal on 23 April 1996 whereby it allowed an appeal by the Respondents, Mrs. Horst, Ms. Jowett and Mrs. Burley (“the Employees”), from the decision of an Industrial Tribunal sitting in London (South). By that decision the Industrial Tribunal held that the Employees had been dismissed for redundancy and that it was in the ci
I would add that O’Brien v Associated Fire Alarms Ltd. [1968] 1 W.L.R. 1916 was decided by this court in a similar way. Again the question was whether employees (of a contract electricity firm) who had been employed for some years in jobs within commuting distance of their homes and who refused the employer’s requirement to work further afield were in breach of contract justifying dismissal. Again it was in that context that the terms of contract were considered. This court implied a term that the employees’ area of work was within commuting distance of their homes and concluded that the employees were not in breach of contract and so the presumption under s.9(2)(b) applied. Salmon L.J. (at p.1924) specifically referred to, but found it unnecessary to decide, “the rather difficult point as to whether the words …, “the place where the employee was so employed”, refer to the place where the employee actually worked or to the place where, under his contract of employment, the employee could be required to work”.
A similar issue arose in Stevenson v Tees-side Bridge and Engineering Ltd. [1971] 1 All E.R. 296. A steel erector had in the course of his employment travelled from place to place round the country, but when he refused to travel to work at 3 sites offered to him because he thought the opportunity of earning overtime was not good, he was dismissed. It was held by the Industrial Tribunal and the Divisional Court (Lord Parker C.J., Ashworth and Browne JJ.) that it was an implied term of the contract of employment that he should go where his employer required him to go, and that his refusal was a breach of contract. Accordingly he was not entitled to a redundancy payment.
Mr. O’Dempsey can rely on two decisions of the National Industrial Relations Court, each time presided over by Sir John Donaldson. In the first case, Sutcliffe v Hawker Siddeley Aviation Ltd. [1973] I.R.L.R. 304, an aircraft electrician, whose contract of employment provided that he could be moved to any station in the U.K., refused to move from one station, where his work had come to an end, to another station. He resigned but applied for a redundancy payment. Sir John Donaldson, in holding that there was no redundancy situation, said (at p.306):
“The words “where he was so employed”…. do not mean “where he in fact worked”. They mean “where under his contract of employment he could be required to work”.”
He referred to Stevenson “if it were necessary to rely on authority to support our decision.” But, with respect, Stevenson is authority for the proposition that to dismiss a man whose work requires him to travel but refuses to travel is to dismiss him for repudiating his contract, and whilst Lord Parker C.J. did refer to the statutory words in dealing with what term should be implied, it is clear that he was considering the extent of the place of employment in the light of what had happened in the course of the employee’s employment. It may be that the Sutcliffe decision could be supported on either the contractual or the factual test, as the employee in the course of his employment had been posted to a number of stations.
In the second case, United Atomic Energy Authority v Claydon [1974] I.R.L.R. 6, the employee had worked at one of the Authority’s establishments under a contract which provided that he could be transferred to any of the Authority’s establishments or overseas. When the authority decided to transfer all work of the kind performed by the employee to another establishment, the employee was told that a job would be available if he wished to transfer. He did not so wish and was dismissed. The Industrial Tribunal awarded him a redundancy payment, pointing out that he had never been required to transfer, but the Authority’s appeal was allowed. Sir John Donaldson reviewed the authorities and applied his own construction in the Sutcliffe case of the statutory wording. He held that because of the mobility clause and because no redundancy situation throughout the Authority’s establishments had been shown, no redundancy payment was due. It is unfortunate that the employee was a litigant in person. The decision has attracted severe criticism (see Harvey on Industrial Relations E 672). But it has been followed by the Employment Appeal Tribunal (see Rank Xerox v Churchill [1988] I.R.L.R. 280).
Mr. Underwood submitted that what he called a “plain words” construction of the statute was appropriate, the words “the place where he was so employed” clearly referring to the place where the employee actually worked and not where in theory the employer could require the employee to work. He relied in particular on the decision of the Employment Appeal Tribunal in Bass Leisure Ltd. v Thomas [1994] I.R.L.R. 104. In that case the employee was based at Coventry, but in the contract of employment the employer reserved the right to relocate the employee. When the employer closed its Coventry depot, the employee was expected to operate from a different location 20 miles away. After an unsuccessful trial, she left her employment and claimed a redundancy payment. The Employment Appeal Tribunal upheld the Industrial Tribunal’s finding that she was entitled to that payment. Judge John Hicks Q.C. in a judgment, which I have found most helpful, considered the language of s.81(2) and said (at p.110):
“We begin with the obvious but nevertheless important point that the question “Where is X employed?” is on the face of it a factual question. Indeed, where there is no contractual term – express or implied – requiring mobility, we do not see how it can be answered other than factually; that is to say as being equivalent to “Where does X work?”
It is arguable that that is all that needs to be said, but for ourselves we should not be disposed to maintain that contractual provisions are irrelevant, or that “Where does X work?” is always an adequate paraphrase. The use of the words “so employed”, relating back to the phrase “employed by [the employer]”, directs attention to the relationship between the parties, and the definite article in “the place” suggests a certain fixity which tends against equating the place of employment with, for instance, each location of a peripatetic “place of work” successively. Without needing to consider or decide whether the parties could arbitrarily define the “place where the employee is employed” in terms outside the limits of the objective realities, we see no reason why there cannot be valid and effective contractual terms, express or implied, evidencing or defining the place of employment and its extent within those limits, so that (for example) the place where a steel erector is employed could be the area within which he can be required to attend at construction sites to perform his duties. That is supported by the fact that the preposition before the expression to be construed is “in” not “at”.
A construction which looks beyond those bounds and treats the “place where the employee is employed” as including any place where he or she can contractually be required to work, whatever the nature of the term under which that requirement is imposed, whatever the limits to be observed, and whatever the conditions to be complied with before the power to impose it can be exercised, seems to us to raise substantial difficulties.”
And a little later on p.110:
“We appreciate that if a distinction such as we have recognised is drawn between different types of contractual provision there will be debateable borderline cases, but that simply reflects the infinite variety of factual situations and contractual terms, and the difficulty of applying to them a statutory test which requires the identification of a unique “place where the employee was …. employed”.
It seems clear to us that the references to “the place where [the employee] was … employed” in s.81(2)(a) and (b) require that the location and extent of that “place” be ascertainable whether or not the employee is in fact to be required to move, and therefore before any such requirement is made (if it is) and without knowledge of the terms of any such requirement, or of the employee’s response, or of whether any conditions upon the making of such a requirement have been complied with”.
The Judge carefully reviewed the authorities, finding particular assistance in the decision of the Divisional Court (Lord Parker C.J., Diplock L. J. and Ashworth J.) in McCulloch vMoore [1968] 1 Q.B. 360. There the existence of a mobility clause had been held not to prevent an employee, who had worked for his employer in Sussex and whose work there had come to an end but who declined the employer’s offer of employment elsewhere, from being entitled to a redundancy payment. The Judge chose not to follow Sutcliffe and Claydon and concluded (at pp.112,3) that the place where the employee was employed for the purposes of s.81(2) “is to be established by a factual inquiry, taking into account the employee’s fixed or changing place or places of work and any contractual terms which go to evidence or define the place of employment and its extent, but not those (if any) which make provision for the employee to be transferred to another.”
I am in broad agreement with this interpretation of the statutory language. The question it poses – where was the employee employed by the employer for the purposes of the business? – is one to be answered primarily by a consideration of the factual circumstances which obtained until the dismissal. If an employee has worked in only one location under his contract of employment for the purposes of the employer’s business, it defies common sense to widen the extent of the place where he was so employed, merely because of the existence of a mobility clause. Of course the refusal by the employee to obey a lawful requirement under the contract of employment for the employee to move may constitute a valid reason for dismissal, but the issues of dismissal, redundancy and reasonableness in the actions of an employer should be kept distinct. It would be unfortunate if the law were to encourage the inclusion of mobility clauses in contracts of employment to defeat genuine redundancy claims. Parliament has recognised the importance of the employee’s right to a redundancy payment. If the work of the employee for his employer has involved a change of location, as would be the case where the nature of the work required the employee to go from place to place, then the contract of employment may be helpful to determine the extent of the place where the employee was employed. But it cannot be right to let the contract be the sole determinant, regardless of where the employee actually worked for the employer. The question what was the place of employment is one that can safely be left to the good sense of the Industrial Tribunal.
In my judgment a remission on the first issue is not justified. It is plain that for all of the Employees the place where they were employed by the Employers was Hill Samuel and that there was a redundancy situation there which caused the Employees to be dismissed.”
Safeway Stores Plc v Burrell
[1997] UKEAT 168_96_2401, [1997] IRLR 200
HIS HONOUR JUDGE PETER CLARK
“The correct approach
Like the appeal tribunal in Cowen v Hadens we started by looking at the statute and construing the words free of authority. Similarly, we have looked at the authorities. Unlike that tribunal we return to our original approach and conclude first, that it was correct, and secondly that no binding authority causes us to abandon that position. We would summarise it as follows:
(1) There may be a number of underlying causes leading to a true redundancy situation; our stage 2. There may be a need for economies; a re-organisation in the interests of efficiency; a reduction in production requirements; unilateral changes in the employees’ terms and conditions of employment. None of these factors are themselves determinative of the stage 2 question. The only question to be asked is; was there a diminution/cessation in the employer’s requirement for employees to carry out work of a particular kind, or an expectation of such cessation/diminution in the future? [redundancy]. At this stage it is irrelevant to consider the terms of the applicant employee’s contract of employment. That will only be relevant, if at all, at stage 3 (assuming that there is a dismissal).
(2) At stage 3 the tribunal is concerned with causation. Was the dismissal attributable wholly or mainly to the redundancy? Thus;
(a) even if a redundancy situation arises, as in Nelson, if that does not cause the dismissal, the employee has not been dismissed by reason of redundancy. In Nelson the employee was directed to transfer to another job as provided for in his contract. He refused to do so. That was why he was dismissed.
(b) if the requirement for employees to perform the work of a transport clerk and transport manager diminishes, so that one employee can do both jobs, the dismissed employee is dismissed by reason of redundancy. See Pennington. The same explanation applies, on the facts, to the eventual decision in Robinson. In Cowen v Haden the requirement for employees to do the work of a divisional contracts surveyor ceased. The post-holder was dismissed. That was a dismissal by reason of redundancy.
(c) conversely, if the requirement for employees to do work of a particular kind remains the same, there can be no dismissal by reason of redundancy, notwithstanding any unilateral variation to their contracts of employment. See Chapman, Lesney and Johnson.
(d) the contract versus function test debate is predicated on a misreading of both the statute and the cases of Nelson and Cowen v Hadens. Save for the limited circumstances arising from Nelson where an employee is redeployed under the terms of his contract of employment and refuses to move, and this causes his dismissal, the applicant/employee’s terms and conditions of employment are irrelevant to the questions raised by the statute.
(e) this explains the concept of ‘bumped redundancies’. Take this example; an employee is employed to work as a fork-lift truck driver, delivering materials to six production machines on the shop floor. Each machine has its own operator. The employer decides that it needs to run only five machines and that one machine operator must go. That is a stage 2 redundancy situation. Selection for dismissal is done on the LIFO principle within the department. The fork lift truck driver has the least service. Accordingly one machine operator is transferred to driving the truck; the short service truck driver is dismissed. Is he dismissed by reason of redundancy? The answer is yes. Although, under both the contract and function tests he is employed as a fork-lift driver, and there is no diminution in the requirement for fork-lift drivers, nevertheless there is a diminution in the requirement for employees to carry out the operators’ work and that has caused the employee’s dismissal. See, for example, W Gimbert & Sons Ltd v Spurett [1967] 2 ITR 308; Elliott Turbomachinery v Bates [1981] ICR 218. In our judgment the principle of ‘bumped’ redundancies is statutorily correct, and further demonstrates the flaw in the ‘contract test’ adumbrated in Pink.
(f) our approach is also consistent with the decision of the Court of Appeal in Murphy v Epsom College [1985] ICR 80. There, the applicant was one of two plumbers employed by a school. His work consisted mainly of general plumbing work. The employers decided to employ a heating technician to maintain their improved heating system. They then decided to dismiss one of the two plumbers and selected the employee for dismissal. The Court of Appeal upheld the majority view of the Industrial Tribunal that the reason for dismissal was redundancy. The employer originally had two plumbers; now it only required one. The employee was dismissed by reason of redundancy.
Murray and Another v. Foyle Meats Ltd (Northern Ireland)
[1999] UKHL [2000] AC 51
LORD IRVINE OF LAIRG L.C.
“My Lords, the language of paragraph (b) is in my view simplicity itself. It asks two questions of fact. The first is whether one or other of various states of economic affairs exists. In this case, the relevant one is whether the requirements of the business for employees to carry out work of a particular kind have diminished. The second question is whether the dismissal is attributable, wholly or mainly, to that state of affairs. This is a question of causation. In the present case, the Tribunal found as a fact that the requirements of the business for employees to work in the slaughter hall had diminished. Secondly, they found that that state of affairs had led to the appellants being dismissed. That, in my opinion, is the end of the matter.
This conclusion is in accordance with the analysis of the statutory provisions by Judge Peter Clark in Safeway Stores Plc. v. Burrell [1997] IRLR 200 and I need to say no more than that I entirely agree with his admirably clear reasoning and conclusions. But I should, out of respect for the submissions of Mr. Declan Morgan Q.C. for the appellants, say something about the earlier cases which may have encouraged a belief that the statute had a different meaning.
In Nelson v. British Broadcasting Corporation [1977] I.R.L.R. 148 Mr. Nelson was employed by the B.B.C. under a contract which required him to perform any duties to which he might be assigned. In fact he worked for the General Overseas Service broadcasting to the Caribbean. In 1974 the B.B.C. reduced its services to the Caribbean, as a result of which Mr. Nelson’s services in that capacity were no longer required. When he refused alternative employment, he was dismissed on grounds of redundancy. The Industrial Tribunal concluded that he had been dismissed for redundancy, apparently on the grounds that a term could be implied into Mr. Nelson’s contract of employment that he should carry out work on Caribbean programmes. The Court of Appeal rightly rejected the implication of such a term. But they went on to hold that Mr. Nelson was therefore not redundant. This was wrong. Whatever the terms of Mr. Nelson’s contract, it was open to the Tribunal to find that he had been dismissed because the B.B.C.’s requirements for work on Caribbean programmes had diminished. This was a question of fact.
The basis for the fallacy is to be found in the judgment of Brandon L.J. in Nelson v. British Broadcasting Corporation (No. 2) [1979] I.R.L.R. 346, when Mr. Nelson’s case came again before the Court of Appeal. He said (at p. 353) that Mr. Nelson had been right in law in maintaining that “because the work which he was employed to do continued to exist, he was not redundant.” In saying this Brandon L.J. appears to have meant that because Mr. Nelson was employed to do any work to which he might be assigned with the B.B.C. and because the B.B.C. was still carrying on business, he could not be redundant. In my opinion this cannot be right. The fact was that the B.B.C.’s requirements for employees in the General Overseas Service in general and for Caribbean broadcasts in particular had diminished. It must therefore have been open to the Tribunal to decide that Mr. Nelson’s dismissal was attributable to that state of affairs. Of course, the B.B.C. did not necessarily have to respond in that way. They could, for example, have transferred Mr. Nelson to broadcasts which were still being maintained at full strength (say, to West Africa) in the place of a less experienced employee and made the latter redundant instead. In that case, it would have been open to the Tribunal to find that the other employee had been dismissed on account of redundancy. (Compare Safeway Stores Plc. v. Burrell [1997] IRLR 200 at p. 207.) In each case, the factual question of whether the dismissal was “attributable” to the statutory state of affairs is one for the Tribunal.
The judgments in the two Nelson cases have caused understandable difficulty for Industrial Tribunals. They have been treated as authority for what has been called the “contract test”, which requires consideration of whether there was a diminution in the kind of work for which, according to the terms of his contract, the employee had been engaged. I give one example. In Pink v. White [1985] I.R.L.R. 489, Mr. Pink was engaged to work in a shoe factory as a “making and finishing room operative.” In practice, he did more specialised work as sole layer/pre-sole fitter. Because of a reduction in demand, the employer’s requirements for making and finishing room operatives in general diminished, but their need for sole layers and pre-sole fitters remained the same. Nevertheless, they selected Mr. Pink for redundancy, apparently because he had been absent for lengthy periods and the employer had had to train someone else to do his work while he was away. The argument before the Employment Appeal Tribunal turned on whether the “contract test” ought to be applied (i.e. did the company need less employees of the kind specified in Mr. Pink’s contract), in which case he was redundant, or the “function test” (did it need less employees to do the kind of work he was actually doing), in which case he was not. It held that it was bound by Nelson v. British Broadcasting Corporation [1977] I.R.L.R. 148 to apply the contract test and held that Mr. Pink was redundant. I have no doubt that on its facts the case was rightly decided, but both the contract test and the function test miss the point. The key word in the statute is “attributable” and there is no reason in law why the dismissal of an employee should not be attributable to a diminution in the employer’s need for employees irrespective of the terms of his contract or the function which he performed. Of course the dismissal of an employee who could perfectly well have been redeployed or who was doing work unaffected by the fall in demand may require some explanation to establish the necessary causal connection. But this is a question of fact, not law.
For these reasons, I would dismiss the appeal.”
Vokes Ltd v Bear
[1974] ICR 1, [1973] IRLR 363
Sir Hugh Griffiths
“We are unable to accept the submission that ‘the circumstances’ are limited to those directly affecting the ground of dismissal, in the sense submitted by [counsel for the employers], ‘The circumstances’ embrace all relevant matters that should weigh with a good employer when deciding at a given moment in time whether or not he should dismiss his employee. The subsection [section 24(6) of the Industrial Relations Act 1971] is focusing the tribunal’s attention upon ‘the dismissal’, that is, the dismissal on March 2. The question they have to ask themselves is whether on March 2 the employers were acting reasonably in treating redundancy as a sufficient reason for dismissing the employee on that date. The tribunal are entitled to take into account all the circumstances affecting both the employers and the employee at the time of the dismissal. In the present case, no doubt the time would have come when the employers would have to dismiss the employee for redundancy for the good of the company as a whole, but the tribunal were fully entitled to take the view that that moment had not yet arrived by March 2. The employers had not yet done that which in all fairness and reason they should do, namely, to make the obvious attempt to see if the employee could be placed somewhere else within this large group. The position is somewhat analogous to the case of a warning. An employer may have good grounds for thinking that a man is not capable of doing his job properly, but in the general run of cases it will not be reasonable for him to regard that lack of capability as a sufficient reason for dismissing him until he is given a warning so that the man has a chance to show if he can do better. So in this case there was a redundancy situation but there was no compelling reason why the axe should fall until the employers had done their best to help the employee. It is therefore with satisfaction that we find that there is nothing in the wording of section 24(6) of the Act of 1971 which compels us to take the view that behaviour which we think most people would consider manifestly unfair is nevertheless to be deemed fair under the Act. If the employers had made all reasonable attempts to place the employee in the group and had failed, then the time might have come when it would be reasonable for them to regard the redundancy as a sufficient reason for the dismissal, but until that moment had come the tribunal were entitled to take the view that it was not reasonable to dismiss for redundancy and accordingly that it was unfair.’
Spencer & Anor v Gloucestershire County Council
[1985] EWCA Civ 14
LORD JUSTICE NEILL:
“Speaking for myself, it seems to me that it only leads to confusion if one tries to draw too rigid a distinction between suitability of employment and the circumstances which may lead an employee reasonably or, in some cases, unreasonably to refuse to accept a particular offer. Some factors may be common to both aspects of the case. It may be that a factor may reflect both on the suitability of the work for the particular employee and also be something which the employee can take into account when he comes to judge whether he can properly accept the employer’s offer. I would deprecate trying to draw too rigid a distinction and say that some particular factors must fall exclusively under one heading and other factors under the other heading. The industrial tribunal clearly must look at the two separate points – in other words, whether the employment is suitable in relation to the employee and, secondly, whether or not the employee has unreasonably refused to accept the offer. But, in my judgment, in evaluating those two separate questions, the industrial tribunal are entitled to look at factors which may prove on analysis to be common to both.
Returning to the facts of this case, it seems to me that it cannot be right to say as a general proposition that it is not a good reason for an employee to refuse to do work because he considers that the work he is being asked to do does not come up to a standard which he himself wishes to observe. It all depends on the facts of the case. There may well be cases where an employee wishes to apply a wholly unreasonable standard to the work, and say,
“I am only prepared to work to that standard.”
But it seems to me that this is eminently a matter for the industrial tribunal to evaluate in the particular circumstances. In paragraph 11 the industrial tribunal set out the factors which they had in mind. It is clear from the way they expressed themselves in their reasons that they had a substantial amount of evidence from the applicants as to why they (the applicants) thought that the job could not be done satisfactorily in the way in which the employer suggested. . In those circumstances, it seems to me, it was for the industrial tribunal to decide on the facts then before them whether or not each individual employee had unreasonably refused the offer of employment. With all respect to the Employment Appeal Tribunal, it does not seem to me to be a case where they were entitled to overturn the decision of the industrial tribunal.
We were referred in the course of the argument to the decision of the Industrial Relations Court in Morganite Crucible Ltd. v. Street [1972] 1 W.L.R. 918. That was a case where on the facts the Industrial Relations Court thought it right to intervene. It may be that, in view of some of the decisions of the Court of Appeal which have been given in the last five or six years, that case would not have been decided in the same sense today. But comparing one particular case or one particular set of facts with another is not very helpful in this field of the law. I am satisfied that in the case with which we are concerned the industrial tribunal had material before them from which they could come to the conclusion that the employees had not unreasonably refused the offer of alternative employment.
In those circumstances, I would allow this appeal.”
Barry & ors -v- Minister for Agriculture & Food
[2015] IESC 63 (16 July 2015)
Supreme Court Charleton J.
“10. The Employment Appeals Tribunal was originally established in 1967 as the Redundancy Appeals Tribunal under s.39 of the Redundancy Payments Act 1967. With the introduction of statutory rights to redundancy on the failure of a business or on surplus employees being let go, an entitlement was also established with a view to determining rights by ex-employees to redundancy payments to seek a ruling from a rights commissioner, whose ruling in turn could be appealed to a more formal quasi- judicial tribunal. Both the rights and the manner of enforcing the rights were new to the legal system and were justiciable not in the courts established under Article 34 of the Constitution, but through a mechanism of resolution established separately. Procedural rules are contained in the Redundancy (Redundancy Appeals Tribunal) Regulations 1968, which have been since much amended; SI No.24 of 1968. Hearings are conducted by a panel of three, with a legally qualified chairperson and hearings are open to the public, save by request. Complaints of not being given the statutory minimum notice of dismissal may be referred to the Employment Appeals Tribunal under the Minimum Notice and Terms of the Employment Act 1973 section 4. Upon such a claim succeeding, an award may be made in compensation for any loss and this is recoverable as a simple contract debt against the employer; section 12 (2). A right of appeal is provided, as noted above, and this may also be exercised by the relevant Minister; section 12 (3). The extensive jurisdiction of the Employment Appeals Tribunal includes such legislation as the Maternity Protection Acts 1994-2004 and the Transfer of Undertaking Regulations 2003; see generally Forde and Byrne, Employment Law 3rd Ed., (Dublin, 2009). The appellate jurisdiction is specifically defined in s.39 of the Redundancy Payments Act 1967 in providing:
The decision of the Tribunal on any question referred to it under this section shall be final and conclusive, save that any person dissatisfied with the decision may appeal therefrom to the High Court on a question of law.
11. The Employment Appeals Tribunal is a creature of legislation exercising jurisdiction in the enforcement of modern employment rights which did not exist at common law and which were created specifically by statute, often pursuant to international convention obligations, and with precise remedies under legislation, the analysis of which are within the exclusive competence of that statutory body. The High Court is not mandated to exercise that jurisdiction. Appeals are not by rehearing, with the High Court applying its own view, but are on the basis of whether there has been an error of law in the reasoning or, alternatively, such a fundamental error of fact such that an error of law may be inferred. Clarke J in Fitzgibbon v. Law Society of Ireland [2014] IESC 48 (Unreported, Supreme Court, 29th July, 2014) at para 1.2 commented on the wide range of statutory wordings which can cause confusion;
[The] problem stems from the use of terminology in the context of appeals which can be open to legitimate debate as to its proper meaning and which can, therefore, lead to significant uncertainty as to the precise form of appeal permitted. The background to that difficulty is that the term “appeal” covers a wide range of possible forms of process. These comments are offered in the hope that they may be taken on board by those who are charged, whether in the public or private spheres, with drafting rules or legislation (whether primary or secondary) which provide for the possibility of an appeal.
The only body with jurisdiction in respect of redundancy payments and minimum notice payments on the termination of employment is the Employment Appeals Tribunal. That jurisdiction exists by virtue of statute and its exclusive nature determines that no other body can make decisions that are mandated solely to the Employment Appeals Tribunal.
.
Result
16 It is also reasonable to comment in this context that it is far too common for complex issues of law to overwhelm or occlude the clear questions that are necessary to be stated for the decision of any tribunal, or the decision of any court, as to what result should be arrived at. In the rehearing of this matter by the Employment Appeals Tribunal, the courtesy extended to courts whereby it is indicated as to what issues, cast as simple and ordinary questions, need to be decided for the result to go one way or the other should be adopted. This used to be the function of pleadings but this purpose of clarification through pleading has now largely been lost. As a matter of practice, it is for the advocate pursuing a case to put before a tribunal or court such straightforward questions for its determination as will enable a decision to be made.
17. In the result, the ruling Hedigan J in the High Court must be overturned. The case of whether the vets were employed by the respondent Minister or were, instead, self-employed persons doing shifts at the Mitchelstown meat plant is a matter of fact for the Employment Appeals Tribunal on a rehearing of the matter.”
FJVC Europe Ltd -v- Panisi
[2011] IEHC 279
Charleton J.
Status of Judgment: Approved
1. Redundancy can be a devastating blow. Where economic conditions are difficult, or where the employee who is let go has aged or is experiencing health difficulties, finding alternative employment may be impossible. Years of devotion to an employer count for nothing where technology overtakes the workforce, rendering the labour of those displaced unnecessary; where new methods of work are demanded from those who do not have the skills to respond; or where a product is rendered obsolete. All these are examples of genuine redundancy. As ordinarily understood, redundancy means that a worker is no longer needed. The legal definition, as stated in the legislation which I quote later, mirrors common comprehension. Because redundancy is inevitable if there is no work for workers to do and the workers cease to be needed, it is also lawful. The Redundancy Payments Act 1967, as amended, establishes a floor of rights in compensation for redundancy; circumscribes the use to which dismissal by reason of redundancy can be put; and provides for minimum payments for qualified employees who are subject to this misfortune. In circumstances of insolvency those payments can be met from the public purse.
2. A contract of employment can involve both personal and impersonal interaction between employer and employee. Redundancy is not, however, a personal choice. It is, in essence, the external or internal economic or technological reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner. As such, redundancy is entirely impersonal. Dismissal, on the other hand, is a decision targeted at an individual. Under the Unfair Dismissals Act 1977, as amended (“the Act of 1977”), the dismissal of an employee may only take place for substantial reasons that are fair. In effect, the contract of employment is protected in law and it may only be repudiated by the employer for reasons which do not amount to an unfair dismissal.
. Exceptions are provided for redundancy as a defence to a claim of unfair dismissal in s.2A of the Act of 1967. These are not relevant to this case, but encompass the protections that legislation has required in the case of collective redundancies, compulsory redundancy and dismissal for the purpose of re-engagement on less advantageous conditions. The comment on the nature of redundancy made in St. Leger v. Frontline Distributors Ireland Ltd., [1995] E.L.R. 160 at 161 to 162 by Dermot MacCarthy S.C., as chairman of the Employment Appeals Tribunal, is apposite:-
“Impersonality runs throughout the five definitions in the Act. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job. It is worthy of note that the E.C. Directive on Collective Redundancies uses a shorter and simpler definition: ‘one or more reasons not related to the individual workers concerned’.
Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a 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 qualitative change. Definition (e) must involve, partly at least, work of a different kind, and that is the only meaning we can put on the words ‘other work’. More work or less work of the same kind does not mean ‘other work’ and is only quantitative change.”
8. It may be prudent, and a mark of a genuine redundancy, that alternatives to letting an employee go should be examined. However, that does not arise for decision in this case. Similarly, a fair selection procedure may indicate an honest approach to redundancy by an employer, but I do not wish to comment on matters which are outside the competence of the decision to be made in this case: see Stewart and Dunleavy, Compensation on Dismissal – Employment Law and Practice, (Dublin, 2007) at paragraph. 19.8.6. As a matter of contract, where selection procedures for redundancy, or a consultation process to seek to discover alternatives to redundancy, are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed. Following what is on the surface a fair procedure does not necessarily demonstrate that the decision maker is taking an honest approach to a decision. As with much else, an apparently fair procedure can be used as a cloak for deceptive conduct. It may be followed in form only so as to mask an ulterior motive or with no intention of fulfilling its purpose, even should the best of reasons for not proceeding to redundancy arise during its course.
9. The contractual entitlement to a defined procedure is declared in s. 6 of the Act of 1977. This provides at s. 6(3):-
“Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—
(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or
(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure.”
Issues
10. The issues which arise for determination in this case depend upon the general analysis of the law set forth above. These issues are whether Jerome Panisi, as employee, was selected for apparent redundancy by his employer, JVC Europe Limited:
(i) on the basis of a dismissal disguised as a redundancy; or
(ii) pursuant to procedures which were followed in form, but not in substance.
The quantum of damages also arises for decision in the event that the answer to either question is in the affirmative.
…..
7. This section clarifies the consideration that is to be given to compensation for unfair dismissal. Payments under social welfare and income tax legislation are to be disregarded. In assessing compensation, the court should have regard to the implications for dismissal. My task is to assess the financial damage which the dismissal has brought about and then to place the measure of that damage against the maximum amount of compensation that is available. In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages. Where the quantum of damage is more, then the jurisdiction is limited to that maximum and the amount of damages must thus be reduced to that maximum sum. Where the measure of damages on dismissal is more than the maximum but contributory fault is found in respect of the dismissal against the employee, the reduction is on the totality of those damages, and not on the maximum award. If the result is to reduce compensation within the maximum award, that sum is appropriate. Where the reduction in total damages for contributory fault puts the damages above the maximum award, then the maximum award is the correct measure of compensation for unfair dismissal.
28. My reasoning on this matter is that it is likely, had Jerome Panisi not been dismissed, that he would have worked within JVC for approximately the same length of time as Thomas Dillon. Redundancy in a situation where employee numbers were diminishing could not have been avoided all the way to his retirement at age 65 in October 2011. During the two years lost, however, he would have achieved full remuneration and would have been topping up his pension entitlement. This would have provided for his retirement. This has otherwise proved to be impossible. He has sought many jobs since his dismissal. Those efforts have been genuine. His actual loss and prospective loss of pension therefore exceeds the maximum of 104 weeks of remuneration. One hundred and four weeks of remuneration is €298,000. On redundancy Mr. Panisi was paid the sum of €101,000. Of this, €19,800 was a redundancy payment; €18,312 was statutory notice; €9,156 was four weeks extra notice; and €51,315 was an ex gratia payment. As there was no redundancy, but as there was a dismissal, Mr. Panisi has now no entitlement to the redundancy money or the ex gratia payment. In addition, it is highly unlikely that he would have been given an extra four weeks notice by way of wages, notwithstanding his long service to the company. After submissions of counsel as to the correct figures, it is agreed that the total award of €298,000 should be reduced. Since Mr. Panisi has already been paid the sum of €101,000, the damages due are €197,000.
Result
29. In the result, there will be a decree in the sum of €197,000 against JVC in favour of Jerome Panisi.”
Limerick Health Authority v. Ryan
[1969] I.R.199
Kenny J.
“Section 7, sub-s. 1, of the Act provides that:”An employee, if he is dismissed by his employer by reason of redundancy . . . shall, subject to this Act, be entitled to the payment of moneys which shall be known . . . as redundancy payment . . .” Section 7, sub-s. 2, provides that:”For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish.”
The question whether sub-s. 2 of s. 7 is a complete statement of the circumstances in which an employee is dismissed “by reason of redundancy” for the purposes of sub-s. 1 of s. 7 or whether that expression is to be given a general meaning in sub-s. 1, so that the circumstances stated in sub-s. 2 are only some of the cases in which there is a redundancy, was not discussed before the Tribunal or in this Court. I mention the question to show that it has not been overlooked and because conflicting views on the sections in the English Act of 1965 (containing provisions similar to those in sub-ss. 1 and 2 of s. 7 of the Act of 1967) have been expressed. In Hindle v. Percival Boats Ltd. 3 the dissenting judgment of Lord Denning contains this passage at p. 177 of the report:”He [the employee] is entitled to it [the redundancy payment] if he ‘is dismissed by his employer by reason of redundancy’: see s. 1 (1) (a). Those words are not defined in the Act. The Act only gives us a recital of circumstances in which a man is deemed to be dismissed for redundancy. Sections 1 (2) and 3 (1) set out circumstances in which a man ‘shall be taken’ to be ‘dismissed’ and ‘dismissed by reason of redundancy’. But those circumstances are not an exhaustive definition. Thus if an employer is overstaffed, and for that reason dismisses some of his men, then the dismissal is by reason of redundancy. The case may not come exactly within section 1 (2) (b), but still it is dismissal for redundancy”. The other members of the Court (Sachs and Widgery L. JJ.) did not adopt this view and they, and those who decided North Riding Garages Ltd. v. Butterwick 4,regarded words similar to those in sub-s. 2 of s. 7 of our Act as an exhaustive statement of the circumstances in which an employee should be taken to have been dismissed by reason of redundancy.
I think that sub-s. 2 of s. 7 specifies all the circumstances in which an employee is to be taken to have been dismissed by reason of redundancy, and that it is not a statement of some of them only. The word “redundancy” is not defined in the Act but its popular meaning includes all the circumstances stated in paragraphs (a) and (b) of sub-s. 2 of s. 7 which would, therefore, have been unnecessary if redundancy was to be given its popular meaning in sub-s. 1 of section 7.
The definition section in the Act defines “business” as including”. . . any activity carried on by a person or body of persons, whether corporate or unincorporate, or by a public or local authority or a Department of State, and the performance of its functions by a public or local authority or a Department of State.”
….The plaintiffs have not ceased and do not intend to cease to carry on the functions for the purposes of which Mrs. Ryan was employed by them, nor have they ceased nor do they intend to cease to carry on these functions in the dispensary district of Grean. Therefore, para. (a) of sub-s. 2 of s. 7 does not apply.
The requirements of the plaintiffs for employees to carry out midwifery work have not ceased or diminished nor are they expected to cease or diminish, and the requirements of the plaintiffs for employees to carry out this type of work in the dispensary district of Grean have not ceased or diminished. The kind of work, not the type of employee, is the decisive factor under para. (b) of sub-section 2. I think that the Tribunal were correct in holding that the requirements of the plaintiffs for temporary district midwives of the age group and training of the defendant had ceased or diminished; but their requirements for employees to carry out this work had not and so the defendant was not, in my view, dismissed by reason of redundancy. I agree with the remarks of Mr. Justice Widgery in North Riding Garages Ltd. v.Butterwick 5 at p. 63:”It is, we think, important to observe that a claim under section 1 (2) (b) is conditional upon a change in the requirements of the business. If the requirement of the business for employees to carry out work of a particular kind increases or remains constant no redundancy payment can be claimed by an employee, in work of that kind, whose dismissal is attributable to personal deficiencies which prevent him from satisfying his employer. The very fact of dismissal shows that the employee’s services are no longer required by his employer and that he may, in a popular sense, be said to have become redundant, but if the dismissal was attributable to age, physical disability or inability to meet his employer’s standards he was not dismissed on account of redundancy within the meaning of the Act.”
The English Act creates a presumption that an employee who has been dismissed shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy. This is not in our Act of 1967. If, however, such a presumption exists (and I do not think that it does), it has been rebutted in this case. In my opinion, the defendant was not entitled to a redundancy payment and the decision of the Tribunal must be reversed.”
St Ledger v Frontline Distributors Ireland Ltd
EAT
“impersonality runs through the five definitions in the [Redundancy Acts]. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job.Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete closedown. Change may also mean a reduction in the needs for employees, or a reduction in number. Definition (d) and (e) involve change in the way 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 qualitative change. Definition (e) must involve, partly at least, work of a different kind and that is the only meaning we can put on the words “other work”. More or less work of the same kind does not mean “other work” and is only quantitative change.”
Bates v. Model Bakery Ltd.
[1993] I.R. 359
S.C. Egan J.
“I would uphold the High Court finding. The letter of the 18th January to the plaintiffs constituted a dismissal of the employees; it was an unequivocal communication to them that their services were no longer needed. At that time the bakery had ceased or intended to cease carrying on business. Accordingly, the statutory presumption, already quoted, came into play.
While the bakery had alleged that the plaintiffs had frustrated their contracts of employment this term was not used in its strict legal meaning. There was no attempt made at the hearing before us to argue that the strike action here was in any category of case within the doctrine of frustration of contract. Frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because of some intervening illegality or because the circumstances in which performance is called for would render it something radically different from that which was undertaken by the contract. Neither was any serious attempt made to suggest that the plaintiffs had repudiated their contracts of employment simply by going on strike. Such a proposition is not tenable in the light of the decision of this Court in Becton, Dickinson Ltd. v. Lee [1973] I.R. 1. As Walsh J. observed at pp. 35 and 36:
“I would agree with the view expressed by Lord Denning in Morgan v. Fry [1968] 2 Q.B. 710 that there is to be read into every contract of employment an implied term that the service of a strike notice of a length not shorter than would be required for notice to terminate the contract would not in itself amount to notice to terminate the contract and would not in itself constitute a breach of the contract and that to take action on foot of the strike notice would likewise not be a breach of the contract. Such an implied term, of course, could not be read into a contract where there is an express provision in the contract to the contrary, or where by necessary implication a provision to the contrary must be read into the contract.”
Here, the basic submission made on behalf of the bakery is that the employees must have known that if they went on strike in breach of the undertaking contained in the document of the 30th September, 1987, signed by Mr. Doherty, they would bring about an end to their contracts of employment. However, as the learned High Court Judge found that document (in so far as it had any legal standing) related to the future. In my judgment that was a correct finding. Here, there was an on-running dispute as regards the payment of the wage increase from the 1st April, 1987. The bakery had never really faced up to this issue at all. It had never said in express terms that it would not pay the back money due; on the other hand, it had never unequivocally said that it would. That, to say the least, was an unsatisfactory situation which gave rise to the service of the strike notice. The strike notice that was served comes within the scope of the decision in Becton, Dickinson Ltd. v. Lee [1973] I.R. 1. In those circumstances there was no repudiation of the contract nor was there a resignation by the employees from the bakery and therefore I come to the conclusion that there was a dismissal in a redundancy situation.
I would dismiss the appeal and I would affirm the order of the High Court and have the matter remitted to the Employment Appeals Tribunal for the determination of the entitlements of the plaintiffs under the relevant legislation.”
……The defendants finally relied on what they argued was the implication of s. 14, sub-s. 2 of the Redundancy Payments Act, 1967. Section 14 provides inter alia as follows:
“(1) Subject to subsection (2), an employee who has been dismissed shall not be entitled to redundancy payment if his employer, being entitled to terminate that employee’s contract of employment without notice by reason of the employee’s conduct, terminates the contract because of the employee’s conduct
(a) without notice
(b) by giving shorter notice than that which, in the absence of such conduct, the employer would be required to give to terminate the contract, or
(c) by giving notice (other than such notice as is mentioned in sub-paragraph (b)) which includes, or is accompanied by, a statement in writing that the employer would, by reason of such conduct, be entitled to terminate the contract without notice.
(2) When an employee who has received the notice required by section 17 takes part, before the date of dismissal, in a strike and his employer by reason of such participation, terminates the contract of employment with the employee in a manner mentioned in subsection (1), that subsection shall not apply to such termination.
(3) [irrelevant].”
Sub-section (2) of the section is not, of course, directly relevant to the present case and was mentioned because it contains a reference to a striking situation and suggests that there can be strikes which will not always result in a redundancy on subsequent closure. So be it but the implication does not govern or apply to the present case.
On the 18th January, 1988, the bakery wrote to each of the plaintiffs alleging that they (the plaintiffs) by their unauthorised withdrawal of labour had effectively frustrated their contract by not later than the 31st December, 1987. The bakery, in fact, closed down about this time. For reasons already stated, the plaintiffs did not frustrate their contracts and I am satisfied that the letter of the 18th January, 1988, constituted a dismissal and that s. 7, sub-s. 2 of the Act of 1967 applies. It provides as follows:
“For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to
(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purpose of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed.”
There was an actual dismissal in this case and it was attributable to the statutory reason. A redundancy, therefore, arose. The appeal from the decision of the High Court should be dismissed and the matter should be remitted to the Employment Appeals Tribunal to compute the plaintiffs’ entitlements under the Redundancy Payments Acts, 1967 to 1969, and the Minimum Notice and Terms of Employment Act, 1973.”
An Post v. McNeill
[1997] IEHC 161
O’Sullivan J.
THE LAW
8. In his judgment of the 5th July, 1992 in the Model Bakery Limited case the then Chief Justice, Finlay C.J., made the following observations:-
It is of importance to point out, however that having regard to the clear terms of the two sections providing for a final and conclusive decision by the Tribunal, subject only to an appeal to the High Court on a question of law, that what would appear to be the appropriate procedure is the summons as provided for in Order 105, which should state the decision being appealed against, the question of law which it is suggested was in error, and the grounds of the appeal, and that it should be supported only by an Affidavit or Affidavits exhibiting the determination of the Employment Appeals Tribunal, including any findings of fact or recital of evidence made by it, and, in effect, identifying the parties and the grounds on which the aggrieved party seeks a determination of a question of law. There does not appear to be any room, however, in the procedure, having regard to the terms of the two sections involved, for repeating, and in particular, for adding to or supplementing evidence which was given before the Employment Appeals Tribunal concerning the circumstances of the dispute which have referred to that Tribunal.”
9. Before going further I should say that in the present case Affidavits were filed on behalf of the Applicant which contain some material which appeared to me to offend against the above principles and I have ignored such material. The determination of the Tribunal should stand on its own and there is no need and it is inappropriate, having regard to the above passage, either to repeat the material contained in the determination of the Tribunal and, in particular, there is no need for either adding to or supplementing the evidence before the Tribunal. This judgment is based on the determination of the Tribunal which has appended to it the Schedule of Periods of Lay-Off and on the evidence alluded to in the relevant Superior Court Rules.
……..
12. Before stating my conclusions I would observe that there is nothing in the statutory provisions to which I have referred which establishes that a period of lay-off may not exceed twenty-six weeks. In the context of the minimum notice legislation, a shorter period shall count as a period of service and in the context of the redundancy payments legislation continuity of employment shall not be broken by a lay-off of a shorter period. There is nothing to say that a lay-off cannot exceed this period. Indeed the specific provisions to which I have referred suggests that such can be the case. That being so, it is within the jurisdiction of the Tribunal to find that a period of interruption of work in excess of twenty-six weeks is a period of lay-off. If they find this as a fact under the principles to which I have referred, this Court will not disturb such a finding.
McG v Park Developments
(UD/950/2008)
“Determination
The key question that the Tribunal must ask itself in cases of unfair selection for redundancy being brought before it, is whether the job or type of work has been made redundant as against an individual being made redundant. The onus is therefore on the employer to establish that the work is no longer being carried out in the workplace.
Clearly, this is not the case as the employer had demand for plastering work to be carried out long after it had let go its own employees.
In its defence the employer stated that it could not breach its contractual arrangement with the sub-contractors though little evidence was adduced to outline what the impact of such a breach would have been.
The Tribunal note the position of the employer as it was caught between letting its own employees go and breaking a contractual agreement.
The Tribunal notes that some of these claimants had given over twenty years service to the respondent and that no consideration was given to temporary lay off or short week options or indeed to the options of re-negotiating the contract with the sub contractor who it seems went on to work a further contract at the affordable housing site in Ballinteer.
The Tribunal finds that the respondent has not demonstrated that the selection to make employees redundant was fair in all the circumstances. The respondent went for the easier option without having regard to the service it had received from each of these individual claimants.
The claimants therefore must succeed in their claim that they had been unfairly selected for
redundancy and are therefore unfairly dismissed.
In assessing compensation the Tribunal is mindful of the fact that redundancy proceedings would have occurred before the end of the year in any event.
The Tribunal cannot say with certainly how many more weeks or months the claimants might have worked.
There might have been four months of work for eight plasterers or twelve weeks work for four plasterers. In the interest of fairness the Tribunal finds that there was up to twelve more weeks work available to each of the claimants before there would inevitably have been a redundancy situation.
The Tribunal notes that substantial redundancy packages have already been paid which must now be seen to comprise part of the compensation awarded under the Unfair Dismissal legislation and credit will be given in respect of such sums. “
McN v BM etc.
(RP/731/2008)
The appellant was employed as an apprentice electrician by the respondent. His employment
commenced in August 2003 and terminated in July 2008. He brings a claim pursuant to the
Redundancy Payments Acts, 1967 to 2007. The Tribunal was told that the normal apprenticeship for an electrician lasts for four years. The appellant had failed two phases, which lengthened his apprenticeship. The respondent was notified by FÁS that the appellant had successfully completed phase 6 by letter dated 18th April 2008.
Phase 7 consists of on the job training and lasts at least twelve weeks. The appellant successfully completed phase 7 in early July 2008 and became a qualified electrician. The respondent thereupon terminated his employment.
The Tribunal was told that the respondent engages about four apprentices each year and that almost all of them are released at the conclusion of their apprenticeship.
The Tribunal is satisfied that the appellant’s employment was terminated on the conclusion of his apprenticeship, as was normal in the company. He was not dismissed by reason of redundancy.
Furthermore, the Tribunal is satisfied that the appellant was dismissed within one month of the end of his period of apprenticeship and, accordingly, is not entitled to a redundancy payment pursuant to the provisions of Section 7 (4) of the Redundancy Payments Act, 1967.
The claim under the Redundancy Payments Acts, 1967 to 2003 is dismissed.
Employer v Employee
RP/779/2008
The first appellant gave evidence. She worked for the respondents’ from July 1997 to August 2007 as a housekeeper. On 1 November 2004 she reached retirement age and received her lump sum payment and state pension. She entered into a contract of temporary whole-time employment with her employer, effective from 1 November 2004. She continued in employment until made redundant on 31 August 2007. She received a redundancy payment in respect of her temporary whole-time service, from November 2004 to August 2007.
Her claim before the Tribunal is for a redundancy payment in respect of her service from July 1997 to November 2004. The second appellant gave evidence. She was employed from October 1986 to November 2007.
She was paid her pension lump sum from the pension scheme in March 2007 when she reached the age of 65. She was not paid a pension as she continued working in the same position. In January 2007 she accepted a temporary contract of employment from March to August 2007. She
continued to work as usual until August 07, after that she was archiving and doing research. Her employment terminated in November 2007. She was made redundant.
.
Determination
The Tribunal carefully considered the evidence adduced. The Tribunal is satisfied that the first appellant retired on 1 November 2004. This event terminated her employment. She was subsequently employed under a new contract of employment. She was paid redundancy when her second employment was terminated by reason of redundancy. The Tribunal finds that the first appellant is not entitled to a redundancy payment in respect of her employment prior to 1 November 2004. Her claim under the Redundancy Payments Acts, 1967 to 2003 fails.
The second appellant, the Tribunal finds, retired in March 2007. Subsequently she was employed under a temporary contract in the knowledge that the organisation was being wound up and that her employment would terminate then. The Tribunal finds that the second appellant retired from her employment in March 2007. Her retirement terminated her employment. Therefore the second appellant is not entitled to a redundancy payment. Her claim under the Redundancy Payments Acts, 1967 to 2003 fails.
C v Coffey Construction
(RP/481/2008)
Appellant’s Case
The appellant gave direct evidence that he worked for the respondent company as a labourer for over 7 years. He lives in North East Galway and during his time working for the respondent he worked in Counties Galway, Mayo, Sligo, Longford and Roscommon. Sligo was the furthest distance he worked away from his home, it being 52 miles from his home. He only stayed away from his home overnight on two occasions during the 7 years working for the respondent. He was also a part-time farmer and his wife worked part-time.
In July 2007 following the completion of work on a site in Co. Galway his employer informed him that his next place of work was to be Ennis, Co.Clare. The witness explained that it would not be possible for him to work in Ennis as it was 72 miles from his home and he was not prepared to travel that distance. He requested that he be provided with work closer to his home but was informed by his employer that the work in Ennis was the nearest on hand at that time. He then requested a redundancy payment but did not receive same as work was being made available to him in Ennis. He received his P45 from the company on the 13 August 2007.
…….The company adheres to the Registered Employment Agreement Construction Pay and Conditions and “Country money” is paid to all employees in line with this agreement including the appellant. The company hired a new employee to replace the appellant when he finished working for the company.
Under cross examination the witness confirmed that the company were operating at a site in Claremorris in June 2007. The duration of this project was approximately 3 months and this project had commenced 5 to 6 weeks prior to the completion of work on the Co. Galway site where the appellant had been working. He confirmed that only one employee out of a total workforce of 550 had been made redundant in 2007 and this employee had been based in Navan, Co. Meath. He was not in a position to confirm or deny if an employee had received a redundancy payment following refusal to move to a site in Co. Limerick in 2006.
,,,,.
Determination
The Tribunal is satisfied having heard all the evidence that a genuine redundancy situation did not exist. Under the Registered Employment Agreement Construction Pay and Conditions there is no cap on the travel distance that employees are expected to travel to attend work, once “country money” is paid by their employer. In this case there was nowhere else nearer the appellant’s home that the employer could have located him and furthermore there was evidence that the appellant was replaced. Therefore the claim under the Redundancy Payments Acts 1967 to 2003 fails.
J v Duffy Meats
(RP/442/2008)
The appellant had been employed by the respondent as a production operative on the dispatch
nightshift for a period of approximately seven and a half years. There was no dispute between the parties as to whether the position for which he had originally been employed had ceased. It was accepted by the respondent that as a result of technological change automatic processes had eliminated the purpose of the original shift and that the dispatch nightshift on “Chill D” was discontinued.
It was the respondent’s case that the appellant had been offered alternative work and that the offer constituted suitable employment in relation to the employee for the purposes of the Redundancy Payments Act and that the appellant had unreasonably refused the offer.
The four employees affected by the change had been offered three different options as to alternative employment within the factory. The appellant had rejected all three alternatives. The Tribunal is satisfied that there was no material issue of fact in dispute between the parties and the only matter to be resolved is whether the refusal to accept each of the alternatives was unreasonable.
All three alternatives involved working in the same factory as the appellant had worked before, albeit in different parts of the factory. Two of the alternative employments involved working significantly different hours. The third alternative employment involved working the same hours as previously but as a cleaner rather than as a production operative.
The basic rate for the third alternative employment was less than the appellant had been earning in his original position, however the respondent claimed that the total remuneration, including bonuses, would be the same as before. The appellant pointed out that the bonus element of pay was not guaranteed with quite the same absolute certainty as having that part of remuneration due as basic pay. There appeared to be no great controversy between the parties in relation to these issues and the Tribunal accepts both parties’ positions.
The Tribunal finds that the appellant, who had been employed to work a nightshift, was not unreasonable in refusing to accept the first two alternative employments as they involved working quite different hours. The Tribunal further finds that the appellant was not unreasonable in refusing to accept the third alternative employment, as the nature of the work offered was as a cleaner and was materially different to that of a production operative for which he had originally been employed.
The Tribunal has found that the refusal by the appellant of all offers of alternative work by the respondent was not unreasonable for the reasons given above and therefore it is unnecessary for the Tribunal to state a view in relation to the issue of remuneration. The issue of remuneration appears to have been of lesser significance and presumably could have been resolved by the parties by means of red circling, had they wished to do so.
The Tribunal finds that the appellant is entitled to a lump sum payment under the Redundancy Payments Acts, 1967 to 2003 based on the following criteria:”
Scully v Largan Developments Limited
(UD/10/2007)
Determination
It is clear that the respondent employed agency workers at the time the claimant was let go. The agency workers were not performing store duties on other sites and while it was acknowledged by the claimant that alternative work as a store man was not available at the other sites, it is the case that agency workers were also employed in carrying out general operative duties on the other sites.
The claimant had done this work in the past and could have done it on this occasion. The claimant’s efforts to appeal or discuss the respondent’s decision to make him redundant were ignored by the respondent. Accordingly the Tribunal finds that the selection of the claimant for redundancy was unfair. The Tribunal awards €14,300-00 under the Unfair Dismissals Acts, 1977 to 2001;”
C v Northstone (NI) Ltd
[2012] NIIT 00253_12IT
“Issues
1. At the outset of the hearing, the parties presented the following as the agreed issues in the case:-
(a) Do the claimants’ contracts of employment contain a term which permits the respondent to lay them off in inclement weather?
(b) Can such a term be implied into the contract by custom and practice?
(c) If the contract does not contain such a term, has the contract been varied to permit the respondent to lay off the claimants in inclement weather? The respondent accepted that there was no written consent to a variation in such terms but submitted that the claimants were notified of the respondent’s proposed variation and consented to the variation by continuing to work.
…4. The following facts were agreed:-
(a) The claimants are employed as boatmen/skippers on the respondent’s dredger barges which operate on Lough Neagh.
(b) The claimants were issued with a statement of particulars of terms of employment pursuant to the Contracts of Employment and Redundancy Payments Act NI 1965.
(c) David Br signed same in June 1994, Michael C in May 1995 and Mr T signed in January 1992, confirming his service from July 1979.
(d) Prior to the events narrated in the originating application and response, the claimants had not previously been laid off as a result of inclement weather in their employment history. Upon days when sailing was either impossible or unsafe, the claimant(s) would undertake work at the respondent’s depots as directed by the respondent and provided for in the claimant’s terms and conditions.
(e) Bonus negotiations were undertaken with the claimants’ representative and a document entitled Lough Wages Summary was applied to those in the Lough Squad. The last of such meetings occurred in September 2003.
(f) In December 2010 the claimants received a letter from G McQ, Managing Director, advising that the company will no longer be in a position to provide alternative work for those employees affected by excessively cold weather and they would be laid off. The letter invited the claimants to raise concerns with their director responsible.
(g) The claimants did not object to same nor did they raise any query.
(h) The claimants were never laid off as a result of excessively cold weather and have not been to date.
(i) In June 2011, a further letter was received from the respondent which stated that from 13 June 2011 we will no longer be in a position to provide alternative work for any employee who cannot perform his or her normal work activities due to adverse weather of any description and those affected would be laid off. The letter invited the claimants to raise concerns with their director responsible.
(j) The claimants did not object to same nor did they raise any query.
(k) The claimants were prevented from sailing due to adverse weather on 17 June 2011. No lay off was imposed as the respondent found meaningful work for them.
(l) The claimants were prevented from sailing due to adverse weather on a number of occasions from June until November 2011 and no lay off was imposed as the respondent found meaningful alternative work for them.
(m) Some 18 weeks after the letter of June 2011, at a meeting on 17 October 2011 at the conclusion of a meeting on other matters, Brian Thompson of the respondent company, advised the claimants that the company was going to enforce the proposed arrangement as set out in the correspondence of both December 2010 and June 2011.
(n) The claimants raised a grievance on 28 October 2011 stating, inter alia,
We believe that your proposal not to pay us when there is no sailing is a unilateral variation to our terms and conditions which we do not accept. Further any deduction from wages as a result of any such decision may amount to an unlawful deduction from wages and/or breach of contract.
(o) The claimants were sent home on 2 November and 28 November as a result of inclement weather.
……
8. The claimants had been temporarily laid off for two months in or around January/February 2009. The downturn in the economy was the reason for that
lay-off. The respondent was producing more sand than it could sell, its stock was full and there was no more room to store the sand. Mr C said that he and his colleagues had accepted the lay-off because work wasn’t plentiful for the company and they could see that the respondent had more stock than was needed at that time. He said that they had been given notice of that lay-off and they could plan and budget for it. Mr C said that he was not aware of the concept of a lay-off prior to January 2009.
9. Mr C told the tribunal that no objection was raised to the contents of the letters dated December 2010 and June 2011 referred to at paragraph 4 above because he and his colleagues regarded them as general letters which were not directed at them specifically. As soon as they realised at the meeting on 17 October 2011 that the letters did apply to them, they took steps to raise a grievance. Mr C said that from December 2010 until 17 October 2011 he and his colleagues did not object to weather lay-offs because, “there was nothing to object to, we were paid as normal”.
Law
10. Express terms of the contract are those that the parties specifically deal with and agree upon. They may be contained in a document.
11. In respect of the implication of a term into a contract by way of custom and practice, the respondent’s counsel relies on paragraph 35 of Harvey on Industrial Relations and Employment Law which includes the following:-
“…where the custom and practice is confined to a particular establishment, the custom must be proved, but if it is proved, it apparently does not matter that the individual concerned was unaware of the custom. If ‘everybody knows’ then he ought to know too; and it is his own fault if he does not. The other party will reasonably have assumed that he does know, and therefore he is bound by the custom. It follows however that the court will not lightly find a custom. The custom asserted must be (in the traditional phrase) ‘reasonable, notorious and certain’: reasonable, in the sense of fair (Devonald v Rosser & Sons [1906] 2 KB 728); notorious, in the sense of well known—perhaps not universal, but at least the general rule rather than the exception (Ropner & Co v Stoate Hosegood & Co (1905) 92 LT 328); certain, in the sense of precise: Devonald v Rosser.”
12. Insofar as variation of the terms of the contract is concerned, the respondent relies on paragraph 84 of Harvey on Industrial Relations and Employment Law which contains the following:-
“what is needed in contract law for a valid variation is consent/assent somehow; there is no requirement that it be joyful consent /assent and of course UK contract law tends to have little regard for idea of ‘good faith’ negotiations. Indeed, references to ‘assent’ may not just be semantic because employment law has long accepted the idea of assent by acquiescence, ie by lack of objection on the part of the workforce, evidenced by continuing to work on the new terms and conditions; the fact that this may in reality have been because the employees need the work and are ‘accepting’ unhappily is legally irrelevant. It is a tough old world out there”.
13. The claimants’ rely on paragraph 22 of the decision of the Employment Appeal Tribunal in Jones v Associated Tunnelling Co Ltd [1981] IRLR 477. There the President commented:-
“If the variation relates to a matter which has immediate practical application (eg, the rate of pay) and the employee continues to work without objection after effect has been given to the variation (eg, his pay packet has been reduced) then obviously he may well be taken to have impliedly agreed. But where, as in the present case, the variation has no immediate practical effect the position is not the same…it is asking too much of the ordinary employee to require him either to object to an erroneous statement of his terms of employment having no immediate practical impact on him or be taken to have assented to the variation. So to hold would involve an unrealistic view of the inclination and ability of the ordinary employee to read and fully understand such statements.”
Conclusion
14. Express term
The tribunal is unable to find that there was an express term in the claimants’ contracts of employment on the basis of either the 1999 Farrans Limited statement of particulars or the 2005 Northstone (NI) Ltd statement of particulars. The claimants deny ever having seen the documents prior to this litigation and the respondent has not produced evidence which would enable the tribunal to conclude on the balance of probabilities that the documents had been seen by the claimants.
15. Implied term
The evidence falls far short from that which would be required to persuade the tribunal that a term in respect of lay-offs was implied by custom and practice. The previous two month lay-off in 2009 fell into an entirely different category. Prior notice was given of that lay-off which was caused by general trading conditions rather than poor weather on a given day.
16. On all previous occasions when weather conditions impeded operations, meaningful alternative work was found for the claimants. This was the established custom and practice.
17. Variation
The tribunal is not satisfied that there was an effective variation of the terms of the contract.
Despite the terms of the letters written in December 2010 and June 2011, the respondent did not act on the purported variation of the terms on any one of the number of occasions between December 2010 and October 2011 when adverse weather prevented sailing.
Prior to 2 November 2011, meaningful alternative work was found for the claimants on such occasions. By the time that the respondent sought to act on the purported variation, the claimants had already made clear their objections by raising their grievance on 28 October 2011.
The grievance was raised as soon as it became clear to the claimants that the respondent intended to act on the purported variation of the contract. At no time did the claimants acquiesce in any actual reliance by the respondent on the purported variation.
18. In the circumstances the tribunal finds that the respondent did make unlawful deductions from the claimants wages. Consequently the tribunal makes awards in favour of the claimants in the sums agreed between the parties”.
Darcy –v- McLoughlin Painting Contractors Limited
MN 94/2007
“
Determination
The Tribunal has carefully considered the evidence adduced. The claimant and his
colleagues were laid off in and around August 2006. The Tribunal does not doubt
that a genuine lay-off situation existed. Up to twenty-two employees were laid off as
work contracts unexpectedly dried up over a period from August 2006.
The Tribunal would be critical of the respondent company’s failure to keep it’s laid
off employees notified about what was going on and what their realistic prospects
were. The legislation clearly states that an employee who has been laid off is entitled
to look for voluntary redundancy after four weeks. This option was not made known
to the claimant and his colleagues and, instead, the situation was allowed to drag on
for three months – made all the more frustrating because there was no direct line of
communication between the employer and employee.
Ultimately, and in response to union pressure, a meeting was called at the end of
November 2006. At this meeting it was made clear that lay-offs would continue into
the future as the company was trying to chase contracts.
Of the twenty-two employees, eighteen chose to take voluntary redundancy, which
was the alternative open to them. The obvious disadvantage to an employee who
chooses to take voluntary redundancy in a situation of lay-off is that that employee
disentitles himself to work out a notice period or get paid in lieu. This posed a
significant loss to the claimant, who had worked with the company for 14 years.
What the Tribunal has to ask itself is whether this lay-off was a genuine one and not
some ploy on the part of the employer to avoid paying substantial notice entitlements
where, in fact, a genuine redundancy existed.
The Tribunal is satisfied, on the uncontradicted evidence, that the company was
going through difficult times and had lost good contracts and was desperately trying
to compete for others. It is fair to assume that the company could not know if, or
when, work would become available again. In taking this view the Tribunal is
mindful of the four employees who held out for another two months and returned to
the workplace when things looked up.
In calculating redundancy, the company did not include the period of lay-off. This is
provided for under the Acts and no advantage or disadvantage arises in consequence
of this.
The Tribunal has every sympathy for the applicant herein, but finds that he has been
paid his full entitlement in the circumstances presented.
The claim under the Minimum Notice and Terms of Employment Acts, 1973 to 2001
fails.
Craig v Bob Lindfield & Son Ltd
[2015] UKEAT 0220_15_2011
UKEAT
3. Eligibility for a redundancy payment by reason of being laid off or being kept on short-time (under section 135(1)(b)) is dealt with under Chapter III of Part XI in sections that are of particular importance to this appeal and to which we shall come.
4. Dismissal for redundancy, if that option is chosen, may serve neither the interests of an employer nor those of its employees. The employer will lose staff it relies on to do work, who are experienced in doing it, and who may have specialist skills. It may particularly wish to retain such employees if the work is specialist, both because it will need to have such employees available for work when, as it hopes, the work picks up again, and because it would be put to some expense to lose them, since it would have to pay the amount of any redundancy payment to which they would be entitled if dismissed. The employees on their part will lose jobs they may value, together with the continuity of employment that brings with it a number of important statutory rights, and be thrown upon the uncertainties of the labour market at a time when the more particular their skills are and the more particular the niche that his employer has in the marketplace the more likely it is that the downturn in work will have affected similar employment with similar employers, thus making an alternative job for the employee all the more difficult to secure. At least where it is anticipated that the downturn in work will not last for long, it may therefore be in the interests of both employer and employee that provisions as to lay off and short-term working should be effective, and should not generally be regarded as a breach of contract, let alone as repudiatory, not least since they are provided for by express contractual terms.
…
6. In A Dakri & Co Ltd v Tiffen [1981] ICR 256 the EAT thought that a contractual term that a period of lay off should not extend beyond that which was reasonable was to be implied. In the submission of Mr Watson, who appears for the appellate Claimant before us, this was as an incident general to most contracts of employment which provide for lay off and short-term working.
7. A different view as to the nature of this term (if it existed at all) was expressed in the later case of Kenneth MacRae & Co Ltd v Dawson [1984] IRLR 5. Whereas the former was a decision of the Appeal Tribunal sitting in England, Judgment in which was expressed by Mr Gough, one of the lay members of that Tribunal, the latter was a decision of the Appeal Tribunal sitting in Scotland, the decision being given in a Judgment of Lord McDonald. The fact they arose on different sides of the border is irrelevant: being decisions of this Tribunal, they are of equal standing. In general, however, this Tribunal would wish to follow a previous decision in the same general area as a matter of comity. Where there are two decisions, the later of which has expressly considered and departed to some extent from the earlier decision, the convention is that this Tribunal will normally follow the later decision unless persuaded that it was in error. Mr Watson does not dispute those propositions.
8. The question before us is whether, in the circumstances of this case, the Judge was entitled to reject the claim by the Claimant that he had been constructively unfairly dismissed by the employer in circumstances in which there had been a genuine drop-off in work that had led to his employer operating a clause in his contract permitting there to be a lay off for an indefinite period, where the lay-off led to an absence of pay for just over four weeks. The effect of his claim if successful would be that he would be entitled not only to an amount equivalent to a redundancy payment as a basic award for unfair dismissal, but would also be entitled to a payment of what would otherwise have been his wages during the period of notice and, it may be, further and consequential damages as appropriate to a claim of unfair dismissal. He would not therefore be restricted to the amount of a redundancy payment; he would, he claims, be entitled to receive rather more.
Discussion
35. We do not accept that there is real scope here for a contractual provision to be implied as to the length of time for which it is reasonable for there to be lay off and short-term working. We acknowledge that there is ample scope for the operation of contract and for the law relating to repudiatory breach if, in handling a process of laying off staff or introducing short-term working, an employer is in breach of other contractual obligations to his employees. We regard it as essential that in general any lay off effected under a contractual power must be what one might describe as a genuine lay off. The lay members are clear that there are occasions in today’s world where there is a strong incentive for an employer to replace a qualified, experienced and loyal workforce with workers who will work for less but who may be equally qualified, as for instance by the employer taking advantage of posted workers, who are paid in a country of work where wages are generally high that which they would have been receiving for such work in their country of origin where wages are generally lower. However, this is not such a case. Nor is it one of those cases in which there is any suggestion that the employer has manipulated the lay off or short-term provisions for its own economic benefit, at the expense of its employees. If it had done so, this would have been a very different case. Nonetheless, we wish to make it clear at the outset that what we have to say does not altogether prevent employees making good a claim for constructive dismissal arising in relation to a lay-off. All must depend upon the particular circumstances.
36. We have concluded as we do for these reasons. Where there is a real prospect of there being fresh work for the employer and its employees, it is likely to be in the interests of neither for there to be wholesale redundancies and likely that it is in the interests of both that there should be lay off or short-time working. It is not difficult to see why lay offs and short-time may cut against the essential elements of the wage/work bargain, but it does not wholly defeat the principal object of the contract agreed between the parties for it also to be agreed that if the enterprise in which both have a stake and provides both with a livelihood falls on hard times there should for a period be neither work nor pay. The question whether there comes a time when the lay off or short-time working has gone on for so long that the employer should choose redundancy and lose his employees, or free them, as they may see it, so they may seek fresh employment elsewhere, is one to which Parliament, as it seems to us, has given some answer in what is now Chapter III of Part XI of ERA. The scheme of the Act may be prescriptive, but it begins with a choice. The choice is for the employer: either to pay a redundancy payment, or to lay off employees or keep them on short-time working. As we say, that must be with a realistic expectation that there may be some further work and not solely to evade his responsibilities to pay.
37. If, however, he chooses the latter, as happened in this case, in circumstances where, as in this case, he was contractually entitled to, it seems to us that Parliament has set out the appropriate balance between the rights of the employees and the interests of their employer. Plainly, a drop-off in work results in a reduction in the needs of the business concerned for work to be done of a particular kind or in a particular place. This meets the statutory definition of redundancy. If employees are dismissed for redundancy in these circumstances, their dismissal will almost inevitably be fair, subject only to procedural questions and appropriate selection for dismissal. A person in the position of the Claimant would thus receive a redundancy payment if dismissed. Unless dismissed, however, he would not automatically have any such entitlement: his only hope would be of resigning and persuading a Tribunal that he did so in circumstances amounting to a constructive dismissal. Unless regulated by statute, this could create uncertainty for both employee and employer: the first, risking that he might not be entitled to such a payment; the second that he might be ordered to pay one, with both having the expense of claiming or, as the case may be, resisting such a payment. It is in such circumstances that the effect of the provisions under Chapter III is to postpone any entitlement to such a redundancy payment for at least four weeks, but to recognise that the employee should increasingly be put in control as to when after that the entitlement should accrue. Thus after four weeks the employee may enter a notice claiming a redundancy payment and seek to be paid. For the four weeks next after a notice there is a different balance to be struck: the employer may be able to resist a claim for payment, but only where the prospects at the time of the notice were not only of an upturn in work but an upturn to such an extent that a reasonable period of full-time working was probable thereafter; but time is running out for him, given the provisions of section 152(2). The statute provides for greater certainty for both.
38. In general terms, this scheme leaves it to an employee to decide whether he still has sufficient interest in working for his employer’s business as not to serve the notice which he is entitled to serve. However, being a matter of statute, the provisions apply whatever the contract provides as to the permissible duration of lay off and short-time working may be. If for instance the contract provided for three months as a maximum period of lay off, nonetheless the employee would have his rights under the Act to issue a notice seeking a redundancy payment after four weeks.
39. It seems to us therefore that Parliament has stepped in, to determine the rights of both parties in these difficult economic circumstances, as indeed was recognised by Lord McDonald in the Dawson case. We find the decision in Tiffen surprising. It is surprising because the Claimant was held entitled to a redundancy payment though she had not gone through the steps that Parliament had decreed a person had to go through in order to claim just such a payment and, by imposing that requirement for a Claimant to go through that process, suggesting that there was no other route. What is a reasonable time for lay-off to persist is thus in part provided for by Parliament: by provisions arguably favouring the employer during the initial four weeks, but for periods beyond that in essence leaving matters up to the employee. Before us Mr Watson had, as we see it, no really effective answer to the conundrum posed by this case: if the Claimant was entitled to make a claim for constructive dismissal after four and a half weeks, irrespective of having put in a claim under Chapter III of Part XI of the ERA, he would be entitled to a sum of money potentially above and beyond that which would have been in contemplation as a redundancy payment. This would tend to negate the purpose of the statutory provisions.
40. We do not see there being any imbalance in particular between the positions of employer and employee, both of which are difficult at times when business declines, which would require an Employment Tribunal to have to pass judgment upon whether a particular length of time on lay-off or short-time working in particular circumstances is or is not reasonable: all the more so, when the contract provided for an indefinite period.
41. Accordingly, bearing in mind that which Dyson LJ said in paragraph 36 of Crossley and that which he quoted from at paragraph 33 from Anson’s Law of Contract (see above), we take into account as highly relevant how the proposed term sits with existing law (i.e. with the statute) would affect the parties to the relationship (whose respective positions we have described) and wider issues of fairness (which, as we have indicated, we hold that Parliament has considered when setting out a timetable and procedural template). All these considerations support the view expressed in Dawson, which we have echoed above.
42. Accordingly, we do not consider that this is a case in which the view of the Tribunal as to whether the period of time laid off was objectively reasonable is relevant. In so holding, we accept and endorse the views expressed by Lord McDonald in the penultimate paragraph of Dawson, though we should, as we indicated, follow Dawson in the interest of comity in any event; far from being satisfied that it is in error, we have concluded that it is correct and that in so far as it expresses an overall test of reasonableness the decision in Tiffen is in error and is not to be followed.
…….
Conclusion
46. It follows that, despite the erudition of Mr Watson’s argument, we have concluded that this appeal should be, and is, dismissed. We would add only this. We have throughout attempted to indicate our view that this case, like so many others in its field, is dependent upon its particular facts. We do not exclude that there may be facts that show that an employer has so behaved in and around the difficulties of a lack of orders or throughput of work, or for that matter for reasons purely of maximising his profit, in a way that falls foul of the obligation not without reasonable or probable cause to act in a manner calculated or likely to damage or seriously destroy the relationship of trust and confidence between them. If there is such a contention in any case, it will have to be considered on its facts. We can easily see situations in which there might, notwithstanding there being a period of lay off and short-term working, also be, at the same time, a viable claim for dismissal, albeit constructive. However, such a claim did not arise on the facts we have had to consider on the present appeal, which is dismissed.
Irish Leathers Ltd. v. Minister for Labour
[1986] I.R. 180
H.C. Barrington J.
“This is an appeal on a point of law from a decision of the Employment Appeals Tribunal given on the 23rd August, 1984. The facts of the case are as follows. The plaintiff is a publicly quoted company, based in Waterford and engaged in the tanning trade. In the years prior to 1983, the plaintiff company suffered heavy trading losses. As a result of these losses it planned to close down a tannery operated by a wholly owned subsidiary of the plaintiff company as and from the 16th September, 1983. Following negotiations with the workers’ trade unions it was agreed to keep the tannery open but with a reduced workforce. The balance of the workforce was to be temporarily laid off and was to be given the opportunity of accepting redundancy if not re-employed within a certain time.
This compromise was accepted by the workers and the factory continued in production. Unfortunately, however, the company was not able to re-employ as many workers as it had hoped and such workers as had not been called back by the end of March, 1984, were declared redundant and the full redundancy pay plus 1.2 times the statutory redundancy was paid to these workers in April and May, 1984.
The second defendant was one of the workers who was temporarily laid off in September, 1983. He was not called back to work and on the 6th April, 1984, he received notice of redundancy to expire at the end of six weeks, namely on the 18th May, 1984. His employment was brought to an end in accordance with this notice and by reason of redundancy, on the 18th May, 1984.
The second defendant maintained that although he was on lay-off he should have received six weeks pay in lieu of notice. It was the contention of the company that because he was on lay-off he was not in a position to suffer loss and furthermore, that during the period of his lay-off he was in receipt of social welfare benefits and accordingly did not suffer loss, or suffered reduced loss having regard to the provisions of s. 12 of the Minimum Notice and Terms of Employment Act, 1973.
This case turns in part upon the fact that the second defendant was “on lay-off” at the time when notice of dismissal was served upon him. Because the employee was “on lay-off” the employer submits that he would not have been earning in any event and therefore no loss was occasioned to him by reason of the fact that he was not paid during his period of notice. There is no definition of lay-off in the Act of 1973. But it appears to me that the Minimum Notice and Terms of Employment Act, 1973, is in pari materiawith the Redundancy Payments Act, 1967. Indeed s. 1 of the Act of 1973 refers to “the Act of 1967” as meaning the Redundancy Payments Act, 1967. The same section of the same Act refers to “the Tribunal” as meaning the tribunal established under the Act of 1967. That tribunal, which was established by s. 39 of the Redundancy Payments Act, 1967, was formerly known as the “Redundancy Appeals Tribunal” and is now renamedby virtue of the provisions of s. 18 of the Unfair Dismissals Act, 1977,the”Employment Appeals Tribunal”.
The Redundancy Payments Act, 1967, contains, at s. 11, a definition of lay-off. The definition is as follows:
“(1). Where after the commencement of this Act an employee’s employment ceases by reason of his employer’s being unable to provide the work for which the employee was employed to do, and”
(a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and
(b) the employer gives notice to that effect to the employee prior to the cessation,
that cessation of employment shall be regarded for the purposes of this Act as lay-off.”
It seems clear from this definition that for a lay-off to exist that the employer must believe “that the cessation of employment will not be permanent.” This was undoubtedly the position when the second defendant in the present case was laid-off initially. But a time came when the employer had to accept that there was no hope of re-employing the second defendant and that it was necessary to dismiss him. Once notice of dismissal was served it appears to me that the employee was no longer “laid-off” but was an employee under notice of dismissal. Put another way, the contract of employment, the operation of which had been suspended, had been reinstated for the purpose of terminating it. Once this happened it appears to me that the rights of the parties were governed by the provisions of the Minimum Notice and Terms of Employment Act, 1973.
Among the rights which the employee had under these circumstances was the right given to him by s. 2 of the second schedule to the Act to be paid by his employer in respect of any time during his normal working hours when he was ready and willing to work but no work was provided for him by his employer. That was the position so far as the second defendant was concerned. He was ready and willing to work. There is no question of his being in other employment or of his being prevented from working by illness.
Under these circumstances it appears to me that the second defendant had a statutory right to be paid the sum indicated in the second schedule to the Act of 1973 and that his “loss” under s. 12 of the Act is the amount of money which he was entitled by statute to receive and which he did not receive.”
McD v JM
(RP/125/2008)
EAT
Appellant’s case:
The appellant worked for the respondent for approximately two and a half years. On the week
before the summer holidays in 2007 he and his colleagues were told by the foreman that work was getting slack and they could look for other work. After the holidays they were asked if they had looked for the work. The managing director (MD) told them they were put on protective notice.
On or about the 16th August 2007 when the MD was asked if he could guarantee thirteen weeks work he stated that he could guarantee one week. The appellant and his colleagues kept enquiring about the work situation and the last time they made contact was in January 2008. They got other work with the Waterford Institute of Technology (WIT) the Monday after finishing with the respondent.
Determination:
On the evidence of both the appellant and the respondent, the respondent was unable to furnish a guarantee of continuity of work to the same extent as the work available to the appellant with another employer. Based on this the appellant left the respondent’s employment and commenced with another employer the following Monday. The Tribunal therefore finds there was no dismissal on the basis of redundancy and the appeal under the Redundancy Payments Acts, 1967 to 2003 is dismissed.
R v OC Electric Ltd
(RP/366/2008)
EAT
Claimant’s case:
The appellant worked for the respondent for ten years and one hundred and eleven days. On
15February 2008, he received one week’s notice of the termination of his employment and
His employment ended on 22 February 2008.
During the week of 20 November 2008, a cheque was received in the office of his union in relation to the appellant’s redundancy. The redundancy payment was capped at the statutory amount of €600.00 per week. The appellant confirmed that he received this redundancy cheque. However, he was entitled to six week’s notice of the termination of his employment but only received one weeks notice. The short fall in the cheque equated to five week’s notice.
An application was made to the Tribunal to amend these proceedings to include a claim under the Minimum Notice and Terms of Employment Acts, 1973 to 2001.
In cross-examination, the appellant said that on receipt of the one week’s notice of the termination of his employment, he had understood from the respondent that there was no possibility of future work and that the lay off was going to be long term. The respondent had no work at that time. The appellant had contacted the respondent to enquire about forthcoming work and because he had been given no hope of same, he had sent his RP77 form to them. The appellant confirmed that he had received his redundancy payment.
The appellant explained that his presence before the Tribunal was because of his
Determination:
The uncontested evidence adduced to the Tribunal established that the respondent gave notice of lay-off to the appellant on the 15 February 2008 (albeit it is disputed by the appellant that this was stated to be a temporary lay-off) and on the 27 March 2008, an RP77 form was sent by the appellant to the respondent to which there was no reply. Furthermore, on the 29 April 2008, the appellant lodged an appeal under the Redundancy Payments Act 1967 to 2003 to the Employment Appeals Tribunal.
On the 20 November 2008, a cheque for redundancy was sent to the appellant’s union (the appellant confirmed receipt of same), which sum was capped at the statutory amount of €600.00 per week.
The Tribunal finds the lay-off of the appellant, as well as a number of other employees, was genuine and in accepting the redundancy cheque, the appellant disentitled himself to either work out a notice period or be paid in lieu. Accordingly, the Tribunal determines the appellant’s application to amend the proceedings to include a claim under the Minimum Notice and Terms of Employment Act 1973 to 2001 is refused and his appeal under the Redundancy Payments Act 1967 to 2003 is dismissed as he has been paid his full entitlement to same. “
Talbot Ireland Ltd. v the Minister for Labour and Others
(1983 No. 407 SP )
Barron J.
. The point at issue concerned an agreement whereby certain employees of the company purported to accept a lump sum payment ‘in full and final settlement of any claims against the company’ and the question was whether the employees had forfeited their right to statutory redundancy by signing the agreement.
The acceptance by the appellants of payments of sums purported to be in full and final settlement of any claim they had against the company, cannot, in the light of section 51 of the Redundancy Payments Acts, 1967, be taken to have resulted in a forfeiture of their statutory rights. Section 51 states: Any provision in an agreement (whether a contract of employment or not) shall be void insofar as it purports to exclude or limit the operation of any provision of this Act .
The Reasoning
The Court considered the case of The Minister for Labour v Daniel P. O’Connor and Irish Dunlop Company Ltd. (Kenny J 6 March 1973) which had been referred to by the Tribunal as supporting their decision. The case had involved a claim similar to the one at issue in this case. Kenny J had upheld the claim on the basis that the amount of the statutory redundancy payment had not been mentioned by the parties during their negotiations concerning termination payments and so had not been agreed between them. Kenny J rejected the view that failure to issue a redundancy certificate (RP2) will be conclusive evidence that the statutory entitlement had not been fulfilled. His view was that an employer who has agreed to pay a sum greater than the statutory lump sum, but has not given a redundancy certificate to the employee is liable to pay the statutory lump sum in addition to the agreed sum unless he establishes that when the amount agreed was paid, the employee knew the amount of the statutory lump sum and had agreed to accept the sum paid in discharge of the employer’s statutory obligation.
Barron J noted that it was his view that Kenny J had said no more than that anyone with full knowledge of his or her legal position is fully entitled to enter into any bargain he or she wishes and that there is nothing in the Redundancy Payments Acts 1967 to the contrary.
P.M.P.A . Insurance Company Ltd. v Keenan and Others , (Supreme Court. 27 July 1983)
concerned an agreement which purported to be in settlement of ‘all claims’ and it was decided in favour of the respondents on the basis that their claim was not one which had arisen in the negotiations and as such was not contemplated by it. Barron J states that the Supreme Court was indicating ‘that a party may enter into an agreement in relation to his or her statutory rights and the question whether or not such rights have been lost is a matter for the proper construction of the agreement itself.’
Thus Barron J concluded that the Tribunal was wrong in holding that monies payable under the agreement could not result in a forfeiture of statutory rights and he stated that there was nothing in the agreement which purported to exclude or limit that right.
University College Cork v Bushin
[2012] IEHC 76
Kearns P,
“I am satisfied, contrary to the submissions of the appellant, that the Labour Court did consider s. 5 (1)(a) and its possible application to the respondent in relation to several categories of permanent employees. Those considered included staff and employees of St. Catherine’s College of Education for Home Economics, employees of the Royal College of Surgeons, catering staff in the National University of Ireland in Maynooth and an employee in Wexford VEC.
The Labour Court decided that none of these employees fell within the category described at s. 5(1)(a) before proceeding to consider whether an appropriate comparator existed for the purposes of section 5(1)(b).
Having conducted that secondary exercise, the Labour Court then moved on to consider section 5(1)(c).
Given that no permanent employees employed by the appellant have been made redundant, I cannot see how any such permanent employee would be an appropriate comparator, either for the purposes of the statute or for the purposes of Council Directive 1999/70/EC of 28th June 1999 concerning the Framework Agreement on Fixed Term Work concluded by ETUC, UNICE and CEEP. Clause 1 of the Framework Agreement describes the purpose of the Directive as being, inter alia, to improve the quality of fixed term work by ensuring the application of the principle of non discrimination and to establish a framework to prevent abuse arising from the use of successive fixed term employment contracts or relationships.
While the appellant did contend that the Labour Court had failed to properly consider s. 5 (1)(a) I am satisfied that this submission is based on an incorrect premise. There is an inherent artificiality in arguing that no issue of discrimination can arise because no permanent employees employed by the appellant have been made redundant. It seems clear to me that to classify such permanent employees as appropriate comparators would, contrary to the purposes of the Directive, foster discrimination by encouraging employers to select fixed term employees for redundancy ahead of permanent employees, thereby avoiding the creation of any form of precedent of enhanced redundancy payments against which fixed term employees could measure their own payments.
I am also satisfied that the Labour Court was correct in law in finding that an ex gratia redundancy payment represented a “condition of employment” within the meaning of the Act. In so finding, the Labour Court relied upon the decision of the European Court of Justice in case C 262/88 Barber v. Royal Exchange [1990] ICR 616, in which the ECJ stated at para 16:-
“A redundancy payment made by the employer, such as that which is at issue, cannot cease to constitute a form of pay on the sole ground that, rather than deriving from the contract of employment, it is a statutory or ex gratia payment.”
A similar view was taken in the High Court (Smyth J.) in Sunday Newspapers Ltd. v. Kinsella [2007] JEHC 324 at 18.
I am further satisfied that the two decisions cited by the appellant in relation to “conditions of employment’ namely, 0′ Cearbhaill v. Bord Telecom Eireann [1994] ELR 54 and Rafferty v. National Bus and Rail Union [1997] 2IR 424 can be distinguished on the basis that both decisions have been superseded by the Act of 2003.
In relation to the submissions made by the appellant in relation to s. 7, I am satisfied that in view of my conclusion that the Labour Court did not err in law in finding that the respondent was treated less favourably than appropriate comparators, it was correct to consider the issue of objective justification under section 7.
The respondent was denied an ex gratia payment on the basis she was a fixed term employee. Ex gratia payments were made to valid comparators. There was thus no possibility of her receiving some different, but no less favourable treatment. The contention advanced by the appellants is predicated entirely on the status of the respondent as the fixed term employee and as such is, in my view, precluded by s. 7(1) of the Act.
Overall, I am satisfied from a perusal of the determination of the Labour Court that it gave every aspect of this matter careful and comprehensive consideration.
Bodies such as the Labour Court are, in my view, entitled to a significant degree of curial deference with regard to the way in which they conduct their business. I would exercise that discretion in the instant case in favour of non-intervention to grant the relief sought by the appellant in this appeal.”
UD85/2015, RP2/2016
POD v Barnes Limestone Quarry Limited
(CHAIRMAN)
Damien Moran v Ernst & Young Ireland
UD12/2011
Employment Appeals Tribunal
13 September 2012
[2013] 24 E.L.R. 100
Background
The respondent is a global organisation that deals with accountancy, business needs and professional services organisation. The claimant worked in an IT support role with the respondent. The IT support team dealt specifically with audit support software.
Respondent’s case
The Tribunal heard evidence from the claimant’s manageress (AY) for the respondent with whom she has worked for 11 years. She works in the audit technology team and her role includes the development of technology specifically for the respondent to be used in the day today running of the business. AY was charged with handling middle-east part of the world and also the U.K. and Ireland which was categorised as a sub-area. The respondent develops software internally for its auditors. Gamex was the name of one of the software products they developed and it was used as an audit tool. The claimant was hired as part of the team of three people to assist with Gamex and other internally developed products. The claimant was the longest-serving member of the team. The team was in charge of implementing the tools and products together with supporting the users of the product. By way of support the calls/emails from users requiring assistance were classified as tier 1 calls and tier 2 calls. Tier 1 calls required basic assistance and generally could be dealt with expediently. Tier 2 calls related to more in depth technical problems that may have arisen for the user and would require a higher level of assistance. Tier 1 calls required a minimal level of IT skills. An employee could gain knowledge and be promoted to tier 2. In October 2007 the claimant was promoted to level two (tier 2 calls). Over time the various products were developed and put in place with the users thereby reducing the level of support required for users. There were changes to the team in 2009–10 as they were no longer getting phone call queries of a certain type.
A capacity review was undertaken by the respondent and it was identified that the team had an over-capacity of one person. There was a decrease in the level of project work for the team together with the decrease in users making support calls. All of the tier 1 support calls were transferred to Glasgow, therefore the requirements of the team reduced. The Gamex software was used by auditors specifically. Auditors were busiest in January and February each year. The witness explained that she was given the responsibility to evaluate the support network after February 2010. In carrying out the capacity review she engaged with the team members to assess the level of support calls attended to by each team member together with their capacity for project work. In carrying out the capacity review AY engaged with other team members, the HR manager and her own senior managers in order to assess what was required of her. The witness gave evidence that the review was finalised in or about May 2010 and an over-capacity of 164 hours and of one person was identified.
The selection of candidates was based on a Performance Management and Development Programme. The PMDP review was carried out between July 1 and June 30 each year. Each employee has goals assigned to them and the ratings on the PMDP reflect the success in reaching their goals. This document was opened to the Tribunal. The PMDP for each employee would be discussed by an employee’s senior management at what was known as “round table meetings” *103 wherein a rating would be decided based on the input of the various attendees at the meeting. The witness was asked if the document was used at the time of making the decision and she replied that it was.
The witness explained that the PMDP had nine sections and the ratings were from 1 to 5, 5 being the best rating. AY stated under cross-examination that the capacity review was not completed in April 2010 when the PMPD was being conducted. She did not indicate to the claimant that a capacity review was being conducted nor did she mention the possibility of any potential redundancies. It was AY’s position that until the capacity review was finalised she could not communicate the possibility of redundancy to any staff member.
The claimant was given a score of 2 which meant that he had “met expectations” in terms of his performance in his job where the other team members exceeded expectations. The PMDP rating was used in the selection procedure for redundancy and it formed 30 per cent of the selection criteria. The respondent company does not have a procedure in place for making employees redundant. This instance was the first time AY was involved in a redundancy procedure. The half-yearly assessment took place in January of each year. Ratings were not discussed until the end of the assessment year which was in May. Each employee was assigned a counsellor and AY was the claimant’s counsellor. In addition each employee did a self-assessment. AY had recommended to the claimant that he manage his time better and that he take more support calls. The claimant expressed concern that the report document (the PSG report) that showed the full extent of the support calls he had taken. AY investigated the report and ran a brand new report document taking into consideration the claimant’s concerns. While there were some changes the overall number of calls the claimant still had the lowest number of calls taken. The claimant further expressed concern that other members of the team were “more aggressive” in taking calls therefore that team member’s numbers were higher. AY stated that all calls came from the same source and each team member had equal access to the call stack. She was not going to discourage team members from taking calls whether aggressively or not.
Each team member’s project work was assessed separately to that of the support calls. The claimant expressed concern that his work on what was known as the GAAIT project was not scored accordingly. It was put to AY that his GAAIT work was not scored high enough in that he was taking support calls for this project and those calls were not registered as support calls thereby reducing his calls taken but also reducing his available hours to attend to “real” support calls. He was the only team member dealing with the GAAIT project. It is the respondent’s position that if the claimant had spent more time on project work than taking support calls his project work assessment would rate higher. The claimant did in fact have a higher score for his project work that his support calls. When asked why the claimants various other “outstanding” performances *104 during the course of his employment were not taken into consideration in his ratings AY indicated that the ratings applied for the assessable year in question and not previous years. In previous years the work in question would have been taken into consideration in due course. It was noted by AY that the claimant only received a 3 rating for the previous year and a 3 rating for the year before that.
The claimant communicated to AY that he was not satisfied with the way his work was categorised. During April 2010 a series of emails were sent between the claimant and AY detailing his dissatisfaction. AY asked the claimant to complete an “issue resolution template” to document his issues. AY indicated that she found the claimant resistant to this but ultimately he completed to document. As far as AY was concerned the “issues” were resolved as she heard nothing further from the claimant and the Tribunal was directed to email correspondence that alluded to this.
AY gave evidence that the selection criteria for the redundancy were determined by the needs of the business. An over-capacity was identified within the team. The other candidates were included in the selection criteria. The three team members were rated and assessed together and the claimant came out at the bottom. In the circumstances he was identified for redundancy.
AY and a senior manager (CC) met with the employee relations manageress in HR (AOH) on May 24, 2010 to find out what the process was regarding redundancy. The HR manageress explained quite clearly that they had to meet the claimant to notify him of the situation and what would happen if his role became redundant. They should encourage him to seek guidance and identify any internal opportunities that were available and suitable.
AY and AOH met with the claimant on May 26, 2010 and notified him that his role was at risk as a result of an over-capacity of staff on the team. The claimant was the only member of the team of three that was told “his role was at risk”.
She and the employee relations manageress in HR met the claimant on May 26, 2010. The purpose of this was to identify internal roles that the claimant could maybe avail of. AY gave evidence that if there was a suitable role within the company the claimant’s role would no longer be at risk. No suitable role was identified therefore it was confirmed to the claimant that his role was redundant. AOH explained the redundancy package also included an ex gratia payment.
The position at present is that the respondent has not employed any additional team members. Two other people that were hired in January 2012 and April 2012 but have no IT experience and they were level one staff. There is no change in the senior support staff. From January 2009 IT employees left and they were not replaced. The support team went from ten or eight down to three. Brief reference was made to the general IT section and the selection pool in the context of the redundancy but the matter was not addressed in any material way in evidence.
The Tribunal heard evidence from the director of IT risk (LC). She explained that the claimant did not have the relevant qualifications to fill a particular *105 vacancy in the company.
The Tribunal heard evidence from a senior manageress (CC). Her role is now different from when the claimant was employed in the company. She was a member of the round table group that assessed the claimant’s PMDP.
It was put to the witness that she met the claimant in November 2009 and told him that he would be given a rating of four on his review because of the work he was doing on the GAAIT project. She denied this and said that she would not have said that to him but she would have said the work he was doing was excellent. Furthermore, the ratings that were given at the end of the year (in or about May) and she would not have been in a position to discuss ratings in November. CC went to the round table meeting with AY and the U.K. contingent. AY proposed that the claimant would get a rating of two or three and the U.K. contingent proposed a rating of one. She opposed rating of one on the grounds of the claimant’s work on GAAIT.
AOH spoke to the claimant at a later time about other job possibilities for the claimant and the claimant said that he was not interested in a particular role that arose in Glasgow as it was not suitable. She asked the claimant if there were any other roles that he had identified and he told her that there were not. She then told the claimant that on that basis he was redundant. She confirmed that his role was redundant.
Claimant’s case
The Tribunal heard evidence from the claimant. He commenced in the respondent company in 2006 as a second level agent in software support. His role was part of a newly formed team providing direct IT support for auditors. He had experience in IT support and had worked in various multi-nationals prior to working with the respondent.
The claimant had a six-month probationary period on commencement with the respondent. He explained that the people were a nice group of people who were friendly, open and helpful. He had a good and normal working relationship with his colleagues. They all got on well and it was a nice place to work. In 2009 he felt his feedback was good in relation to his work. There were some issues but nothing that could not be worked out.
The claimant explained the GAAIT system and the Gamex system to the Tribunal as being direct audit tools developed by the respondent for its business. The work that he did on the GAAIT system was classed as project work. The system was not operating at a satisfactory level in 2009 and a manager (not AY) told him that the U.K. team wanted the system to run at 85 per cent. The claimant indicated that to bring the system up to a satisfactory level he had to update all of the user’s machines to “unclog” the system, reinstall the software on the machines and teach users to use the software effectively. He maintains that there were approximately 680 users of the system installed on their computer with *106 some 380 using the system regularly. He had to contact the users by phone to arrange to update or fix the system. This adds to the difficulty of a usual support call as normally the user would phone the IT support to solve a problem but in this case he had to contact the users. The claimant was the only team member dealing with GAAIT and he expended substantial time on the system. This work was project work but his manager told him to log the work as PSG work. Therefore in November/December of 2009 and January 2010 he logged this work as normal work. It is the claimant’s position that all of the calls he would have taken in relation to GAAIT were not logged as “support calls” therefore his figures in the PMDP were distorted. The claimant estimated that at one point in time he was spending 40–50 per cent of his time on GAAIT work.
The claimant gave evidence as to his disagreement regarding a report and his contact and correspondence with AY on the matter. He thought that the work or PMDP report on him was flawed and also he had fixed up to 300 machines and he was not allowed to put that on his report. This was the first time that he saw a report on case numbers. It was an important report and it was sent to the U.K. therefore management in the U.K. could observe his work pattern. He did not want mis-information about his performance communicated to senior managers. At some time during the beginning of 2010 he heard rumours that there might be redundancies. He asked his supervisor and the supervisor told him to keep his head down. AY did not say anything about redundancy situation in advance of the “at risk meeting” on May 26, 2012.She did not say anything to him about a capacity report. The first he heard of a capacity report was at the Tribunal hearing. The claimant was confused as to why a redundancy situation existed in the respondent as it is a viable business. Furthermore he was confused as to the rating systems in the PMDP. He knew his teammates were both scored 4 for the year in question and he felt he could not compete as he did not know what they were doing different to him. He felt his work on GAAIT was not rewarded properly in the rating system. He was concerned about a redundancy situation as he was trying to purchase an apartment and his evidence was that he communicated this to his managers.
He had no knowledge of the criteria of selection for redundancy and he did not know that the respondent was going to reduce the head count by one person. He did not know that performance/the PMDP could affect a redundancy situation.
In or about April 2010 the claimant accepts that he was asked by AY to fill out an “issue resolution template”. He did not want to do it as he felt the report, which he considered flawed, spoke for itself. He also indicated that he was stressed at the time but ultimately filled it out. He communicated his concerns in that document. He did not consider his issues a grievance and did not take the matter any further. When asked whether the matter was resolved as AY thought it was he indicated that he just “wanted it finished”.
The claimant was invited to and went to a meeting with AY and CC on May 5, *107 2010 which concerned his end of year review. He was invited to a further meeting on May 26, 2010. He had asked what the meeting was about and he was told that it was an update (about work matters). It turned out that the meeting concerned his role being identified as “at risk” of redundancy. The claimant was in shock and felt nauseous. All he could think of was the deposit for the apartment. He said this to CC and she told him that she had not known about that. He said to AY that she must have known about the situation and she did not reply to him.
Following this meeting the claimant contacted GK in relation to any available internal positions that would be suitable for him. He saw some jobs advertised but they were accountancy-based jobs and not to his skill set.
In the next meeting he had with management on May 28, 2010 it was communicated to him that as there were no suitable positions available within the company they were proceeding with the redundancy. They did not put any alternative positions to him other than a position in Glasgow which the claimant believed was not a suitable role for him as he did not have fluent German which was required. Furthermore it was a more junior position than he held previously. The claimant sought re-instatement as his preferred remedy and both his counsel and counsel for the respondent addressed the Tribunal on the merits of same.
Determination
The Tribunal are unanimous that a redundancy situation existed in this case.
The Tribunal must therefore decide whether or not the selection of the claimant for redundancy was fair. It is common case that the claimant was the only person within the team of three identified as having “his role” at risk. Surely all three team members should have been told that a role within the team was at risk. It seems to the Tribunal that the claimant was identified for redundancy rather than the role within the team.
None of the employees on the team were warned that a potential redundancy situation may arise. It is coincidental that the capacity review and the final stage of the PMDP were conducted at the same time and the claimant was not aware that the PMDP would impact on the selection for redundancy. The claimant’s evidence is that he was confused by the application of the various ratings in the PMDP. Some considerable time was expended during the course of this hearing on the application of the respondent’s scoring systems. It is not a system that is clear in its application and it was the claimant’s evidence that he did not understand it nor was it communicated to him in a cogent manner. All that seems to have been communicated to him was the fact that he scored the lowest and therefore his role was at risk of redundancy.
The process of communicating the decision to make the claimant redundant was conducted very quickly. The claimant was called to a meeting on May 24, 2010 and was told his role was at risk unless he could find a suitable alternative within the company. That did not happen and on May 28, 2010 he was told *108 that his role was being made redundant. Following the decision to identify the claimant’s role as being at risk of redundancy it seems to the Tribunal that no material effort was made by the respondent to find the claimant an alternative position within the organisation.
Whilst the respondent’s evidence is that there is no appeal process the claimant gave evidence that he should have been able to communicate the decision to make him redundant “further up the line”. In fact evidence was given that as of May 2010 the respondent had no formal procedures in place to deal with a redundancy situation.
In all of the circumstances by a majority decision, the Tribunal finds that the claimant was unfairly selected for redundancy. The majority of the Tribunal consider compensation to be the more appropriate remedy than re-instatement having heard the arguments of both sides.
The Tribunal awards the claimant the sum of €40,000 (being forty thousand euro) under the terms of the Unfair Dismissals Acts 1977 to 2007.
Alex Bates and Others v Model Bakery Ltd and Charles Kelly Ltd
1990 No. 21
Supreme Court
15 July 1992
[1993] I.L.R.M. 22
(Finlay CJ, Hederman, McCarthy, O’Flaherty and Egan JJ)
15 July 1992
FINLAY CJ
(Hederman and McCarthy JJ concurring) delivered his judgment on 15 July 1992, saying: I have had the opportunity of reading the judgments about to be delivered by O’Flaherty and Egan JJ in this case, and I am in agreement with those judgments and with the orders which they propose.
It would appear to me necessary, however, that I should add some comments on the procedures which have been adopted in this case.
The claim is a claim brought by way of appeal on a question of law pursuant to s. 11(2) of the Minimum Notice and Terms of Employment Act 1973, and pursuant to s. 39(14) of the Redundancy Payments Act 1967, against a determination of the Employment Appeals Tribunal, dated 14 October 1988.
S. 11 of the Minimum Notice and Terms of Employment Act 1973 provides as follows:
(1) Any dispute arising on any matter under this Act, other than a dispute arising on any matter under s. 9 of this Act, shall be referred in the prescribed manner to the tribunal.
(2) The decision of the tribunal on any matter referred to it under this section shall be final and conclusive, save that any person dissatisfied with the decision may appeal therefrom to the High Court on a question of law.
S. 9 of the Act of 1973 deals with the right of an employee to a written statement of his terms of employment and is irrelevant to this case.
39(14) of the Act of 1967 provides as follows:
The decision of the tribunal on any question referred to it under this section shall be final and conclusive, save that any person dissatisfied with the decision may appeal therefrom to the High Court on a question of law.
The issue arising in this case under the Redundancy Payments Acts 1967 to 1979 constitutes a question referable to and referred to the tribunal under s. 39 of the Act of 1967.
The procedure for the bringing of these appeals is provided in O. 105 of the Rules of the Superior Courts 1986 which provides:
*25
(a) that it should be brought by special summons;
(b) that the summons shall state the decision of the Redundancy Appeals Tribunal appealed against and the grounds of the appeal and which provides a time limit, with a power in the court to extend it for the issue of the summons.
The summons in the instant case sets out at paragraph 5 a number of grounds of appeal against the finding of the tribunal, all of which are stated to be related to questions of law, though in some instances, at least, they would appear, though stated to be an error in law, to be directed against inferences raised by the tribunal from facts found by them. The summons was supported by an affidavit sworn by Patrick Shanley, a trade union official, who had acted as the advocate on behalf of the plaintiffs in the hearing before the Employment Appeals Tribunal. This affidavit, in addition to exhibiting the determination of the tribunal, which appears to be a necessary and appropriate thing to do, and setting out the identity of the parties to the action, contains a number of averments of fact dealing with the dispute between the parties, some of which, at least, do not appear to have been placed in evidence before the tribunal. In particular, the tribunal’s determination, which recites the evidence brought before it, and the findings made by its majority, does not appear to recite the giving of evidence by Mr Shanley. It would appear that evidence before the tribunal was given by a Mr White who was an employee; by a Mr Kelly who was the director and manager of the defendant company; by a Mr Doherty who was the shop steward in the bakery; and by a Mr McCafferty who was a bread checker employed in the bakery. Certain documents and correspondence were clearly also produced before the tribunal and are referred to in the determination of the tribunal.
In the High Court, however, further affidavits were filed from John Doherty, the shop steward, who had given evidence before the tribunal; by Patrick Swaine, a secretary of a branch of the Bakery and Foodworkers’ Amalgamated Union, who had not given evidence before the tribunal; from a Mark Connaughton on behalf of the defendant, who was an industrial relations executive employed by the Federated Union of Employers and who had not given evidence before the tribunal; and by Mr Kelly, the managing director, who had.
No objection was taken to these procedures, either in the High Court, or on the hearing of this appeal. The basis of the decision of the learned trial judge in the High Court, on the issues brought before him, namely, that the tribunal was wrong in law in holding that no dismissal of the plaintiffs had taken place, was clearly a determination of a question of law, and was in his judgment and in the judgments of O’Flaherty and Egan JJ upholding that decision, with which I am in agreement, based on a consideration of the primary facts found by the tribunal, and on the statutory provisions and legal principles applicable. The fact, therefore, that other evidence was adduced in the High Court and other matters clearly canvassed before the learned trial judge, without objection from either party, in no way invalidates his decision.
*26
It is of importance to point out, however, that having regard to the clear terms of the two sections providing for a final and conclusive decision by the tribunal, subject only to an appeal to the High Court on a question of law, that what would appear to be the appropriate procedure is the summons as provided for in O. 105, which should state the decision being appealed against, the question of law which it is suggested was in error, and the grounds of the appeal, and that it should be supported only by an affidavit or affidavits exhibiting the determination of the Employment Appeals Tribunal, including any findings of fact or recital of evidence made by it, and, in effect, identifying the parties and the grounds on which the aggrieved party seeks a determination of a question of law. There does not appear to be any room, however, in the procedure, having regard to the terms of the two sections involved, for repeating and, in particular, for adding to or supplementing evidence which was given before the Employment Appeals Tribunal concerning the circumstances of the dispute which had been referred to that tribunal.
O’FLAHERTY J
(Hederman and McCarthy JJ concurring): In 1987 the plaintiffs/respondents were full-time employees of Model Bakery Ltd (‘the bakery’) at Letterkenny, Co. Donegal. They were members of the Bakery and Foodworkers’ Amalgamated Union (‘the union’) of which union Mr Patrick Shanley was general secretary and Mr John Doherty was a shop steward. Mr William Kelly was a director of the bakery who it appears took all decisions on its behalf which are relevant to this litigation.
On 6 April 1987, the Labour Court issued a wage increase of 5% in respect of employees in the bakery trade, including the plaintiffs. The increase was to have effect from 1 April 1987. The Labour Court recommendation did not include an ‘inability to pay clause’, the Labour Court noting that in the past this matter has been negotiated at local level and that the parties exchanged letters on the inability to pay issue and considered that that was the appropriate way to deal with the problem. That was why it did not recommend inclusion of a specific clause dealing with ‘inability to pay’.
In subsequent correspondence between the union and the bakery inability to pay was never invoked.
It was not, however, until 20 September 1987, following a threat of industrial action by the union that the wage increase was paid. But only from that date, 20 September: it was not paid retrospectively from 1 April. This point remained an area of contention.
At the end of September 1987, an unofficial strike took place at the bakery premises. This had nothing to do with the matter of wages but had followed on the dismissal of certain workers who had engaged in a fight on the premises. The dispute was resolved and the employees reinstated and on that occasion there was executed a document which had been submitted by management dated *27 30 September 1987, and which had been signed by Mr Doherty purporting to do so ‘for and on behalf of the staff’. It provided as follows:
We undertake that we will adhere to the following grievance procedure for the processing of any dispute which may arise between the individual or body of workers and the company.
1. Appeal to management.
2. Appeal to the union.
3. Refer to rights commissioner and/or Labour Court as agreed.
No industrial action will be taken until 14 days have elapsed from the issue of a Labour Court recommendation.
Mr Doherty deposed, in the course of the proceedings, that he had no mandate from the union to enter into any agreement that would bind the union or any of its members. It will be clear, too, that this document emerged as a result of something completely different from what had been agitating the parties up to then, viz the matter first of all of the payment of the wage increase and then, the matter that was still outstanding, which was that of retrospection.
On 25 November 1987, Mr Shanley wrote to Mr Kelly expressing disappointment that Mr Kelly had not returned his phone calls expressing the concerns of the plaintiffs that they had not been paid the monies due to them by way of arrears and stating that they intended to take industrial action with effect from finishing time on Saturday, 12 December 1987.
Thereafter, a strike commenced on 13 December when the plaintiffs withdrew their labour. On 14 December, the bakery issued a statement as follows:
To all employees of the bakery.
Because of the nature of our business as bakers and confectioners the continuation of the present dispute will result in certain permanent closure of the bakery before the end of this week.
We believe the dispute is unnecessary and is prolonged by the refusal of the union to conduct meaningful negotiations. The union has informed you that the dispute relates to a wage increase of 5%. Our position on your pay claim is as follows:
1. We paid a 5% increase in September 1987 as agreed with the union.
2. At no time have we refused to back date the pay increase to April 1987. We are still open to talks on any back dating.
There is a major issue which the union refuses to address. The company cannot continue to run the business without a procedure to handle industrial disputes and to avoid strikes. At the end of the last strike such a procedure was agreed (copy attached — this is a reference to the document signed by Mr Doherty). The union is now in clear breach of this procedure. We state again the company cannot operate on this basis.
Furthermore Mr Patrick Shanley of the union refused to accept a statement *28 from the company to be delivered to each of you on Saturday, 12 December 1987.
The company’s position is simple:
We cannot run the bakery under continual threat of strike.
If there are issues of difference between us there is an agreed procedure for this resolution.
Because of the severe nature of the dispute and the implications of the closure of the bakery for the whole community we have notified the Minister for Labour of the situation fulfilling our responsibility under the Protection of Employment Act 1977: a copy of our notification is attached.
There followed some efforts by Mr Shanley on behalf of the union and a representative of the Federated Union of Employers to resolve the impasse but these efforts came to nothing.
On 18 January 1988, there was written a letter on behalf of the bakery to each of the plaintiffs as follows:
We refer to the unauthorized withdrawal of your labour, in conjunction with your colleagues, on 12 December last. We are writing to advise you that by this unilateral action, you have effectively frustrated your contract of employment. You will have been aware and we advised you specifically several times that any unauthorized withdrawal of your labour would very quickly result in the destruction of our bakery trade. Accordingly, we have no option but to regard your employment contract as having been frustrated by not later than 31 December 1987.
We are making arrangements to have your P45 made up from that date, and shall forward same to you in due course.
The essential point made on behalf of the bakery before the Employment Appeals Tribunal, the High Court and again before this Court was that the plaintiffs had not been dismissed. Rather that their employment contracts were frustrated by themselves because they were on notice that any withdrawal of labour would result in a closure of the bakery. As a result of the withdrawal of labour by the plaintiffs on 12 December 1987 the bakery closed in or around 31 December 1987.
In its determination, by a majority, on 14 October 1988 the tribunal reached the conclusion that the agreement of 30 September 1987, was a binding agreement and that the union had not complied with clause 3 of that agreement in that the union took strike action without any reference of the dispute to a rights commissioner and/or the Labour Court as agreed. That, in those circumstances, there had not been any dismissal entitling the plaintiffs to relief under the Redundancy Payments Acts 1967 to 1979 and the Minimum Notice and Terms of Employment Act 1973.
*29
Under s. 7(2) of the 1967 Act, as amended by the 1971 Act, an employee is dismissed by reason of redundancy if the dismissal is attributable ‘wholly or mainly’inter alia to the following:
(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purpose of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed.
By virtue of s. 10(b) of the 1971 Act an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy. But if there is no ‘dismissal’ then these provisions are not applicable.
The matter was appealed to the High Court, on a point of law, as to whether the tribunal was correct in holding that there had been no dismissals giving rise to a redundancy situation.
The learned High Court judge (Lardner J), in his judgment delivered on 24 November 1989, concluded that the strike really related to the failure to pay the arrears of the award. He did not find it necessary to resolve whether Mr Doherty was entitled to engage in the undertaking that he did on 30 September 1987, because the judge reached the conclusion that that had to do with future disputes whereas what the strike was about was a past dispute. He went on to hold that the plaintiffs had not frustrated their contracts of employment and he held that the plaintiffs’ contracts of employment were terminated by the decision of the bakery to close down and that that brought a redundancy situation into existence.
I would uphold the High Court finding. The letter of 18 January to the plaintiffs constituted a dismissal of the employees: it was an unequivocal communication to them that their services were no longer needed. At that time the bakery had ceased or intended to cease carrying on business. Accordingly, the statutory presumption, already quoted, came into play.
While the bakery had alleged that the plaintiffs had frustrated their contracts of employment, this term was not used in its strict legal meaning. There was no attempt made at the hearing before us to argue that the strike action here was in any category of case within the doctrine of frustration of contract. Frustration occurs whenever the law recognises that without default of either party, a contractual obligation has become incapable of being performed because of some intervening illegality, or because the circumstances in which performance is called for would render it something radically different from that which was undertaken by the contract. Neither was any serious attempt made to suggest that the plaintiffs had repudiated their contracts of employment simply by going on strike. Such a proposition is not tenable in the light of the decision of this Court in Becton Dickinson Ltd v Lee [1973] IR 1. As Walsh J observed at 35–36:
I would agree with the view expressed by Lord Denning in Morgan v Fry [1968] *30 2 QB 710 that there is to be read into every contract of employment an implied term that the service of a strike notice of a length not shorter than would be required for notice to terminate the contract would not in itself amount to notice to terminate the contract and would not in itself constitute a breach of the contract and that to take action on foot of the strike notice would likewise not be a breach of the contract. Such an implied term, of course, could not be read into a contract where there is an express provision in the contract to the contrary, or where by necessary implication a provision to the contrary must be read into the contract.
Here, the basic submission made on behalf of the bakery is that the employees must have known that if they went on strike in breach of the undertaking contained in the document of 30 September 1987, signed by Mr Doherty, they would bring about an end to their contracts of employment. However, as the learned High Court judge found, that document (insofar as it had any legal standing) related to the future. In my judgment that was a correct finding. Here, there was an on-running dispute as regards the payment of the wage increase from 1 April 1987. The bakery had never really faced up to this issue at all. It had never said in express terms that it would not pay the back money due; on the other hand, it had never unequivocally said that it would. That, to say the least, was an unsatisfactory situation which gave rise to the service of the strike notice. The strike notice that was served comes within the scope of the Becton Dickinson decision. In those circumstances there was no repudiation of the contract nor was there a resignation by the employees from the bakery, and therefore I come to the conclusion that there was a dismissal in a redundancy situation.
I would dismiss the appeal and I would affirm the order of the High Court and have the matter remitted to the Employment Appeals Tribunal for the determination of the entitlements of the plaintiffs under the relevant legislation.
Since I prepared my judgment in this case I have had an opportunity of considering what the Chief Justice has set out in his judgment concerning the proper procedures to be followed in appeals from the Employment Appeals Tribunal and I respectfully agree with what he has said in this regard.
EGAN J
(Hederman and McCarthy JJ concurring): The plaintiffs’ claim in the High Court was by way of appeal on a question of law pursuant to s. 39(14) of the Redundancy Payments Act 1967 and s. 11(2) of the Minimum Notice and Terms of Employment Act 1973 against the dismissal by the Employment Appeals Tribunal of the appeal of the plaintiffs under both Acts.
The plaintiffs succeeded in their appeal to the High Court against the determination of the Employment Appeals Tribunal and the defendant then appealed to this Court.
*31
The plaintiffs argued that they were dismissed without notice by reason of redundancy, but the defendants argued that the employment of the plaintiffs had been frustrated and that they had not been dismissed.
It will be noted that two defendants were sued but there was no real dispute that only the first defendant, Model Bakery Ltd, was the employer, and the finding of the tribunal in this regard was agreed to be correct.
The plaintiffs were employed by the defendant in the defendant’s bakery in Letterkenny, Co. Donegal, and on 6 April 1987 the Labour Court issued a recommendation for a 5% wage increase affecting employees in the bakery trade including the plaintiffs. This recommendation did not include any ‘inability to pay’ clause and they considered that an exchange of letters between the parties would be the appropriate way of dealing with any such problem. It seems clear, in any event, that neither before the tribunal nor in the High Court was there any serious argument on an inability to pay. There was certainly no evidence to support such a contention. The wage increase was to have effect from 1 April 1987.
Numerous requests were made to the bakery to implement the wage increase but to no avail until 20 September 1987 when the increased wage commenced to be paid following a threat of industrial action by the union. The arrears to 1 April 1987 were never paid despite claims being made by and on behalf of the plaintiffs for payment of these arrears. At no time did the company refuse to back-date the pay increase to April, and said that they were open to talks on any back-dating. They did not, however, pay the arrears which were requested.
Evidence was given that on 29 and 30 September 1987 an unofficial strike took place as a result of a fight between two employees on the respondent’s premises. The dispute was resolved on 30 September and a grievance procedure was entered into with the union. The agreement stated:
We undertake that we will adhere to the following grievance procedure for the processing of any dispute which may arise between an individual or body of workers and the company.
(1) Appeal to management.
(2) Appeal to Bakers and Foodworkers’ Amalgamated Union.
(3) Refer to rights commissioner and/or Labour Court as agreed.
No industrial action will be taken until 14 days have elapsed from the issue of a Labour Court recommendation.
This agreement was signed by the shop steward, Mr Doherty, and the tribunal majority said that ‘we find it difficult to accept Mr Doherty’s evidence that he was not aware of the implications of the agreement.’ This means that they did not believe Mr Doherty, who said he had been given to understand by the defendants that he must sign the ‘agreement’ as it was a matter of extreme urgency.
*32
I hold the view that this ‘agreement’ may be something in the nature of a ‘red herring’ as regards relevancy in this case. The dispute as regards non-payment of the arrears had been going on for months whereas it is my opinion that the agreement was intended for future disputes ( eg the wording says ‘for the processing of any dispute which may arise’). This disposes of the argument that there was a duty on the plaintiffs to comply with the ‘agreement’.
On 19 and 20 November 1987 strike action was threatened on the question of the arrears and on 25 November notice of intended industrial action was served to take effect from 13 December 1987. The defendants say that this was in breach of the agreement dated 30 September 1987 which precluded such industrial action.
The Supreme Court, in Becton Dickinson & Co. Ltd v Lee [1973] IR 1, held that service of a strike notice of a length not shorter than would be required for notice to terminate the contract would not in itself amount to notice to terminate the contract. An implied term to this effect was to be read into every contract of employment.
To some extent the court was following the minority judgment of Lord Denning MR in Morgan v Fry [1968] 2 QB 710 when he stated as follows:
It has been held for over 60 years that workmen have a right to strike (including therein a right to say that they will not work with non-unionists) provided they give sufficient notice beforehand; and a notice is sufficient if it is at least as long as the notice required to terminate the contract.
It must be pointed out, however, that Walsh J in Becton Dickinson had stated that such an implied term as mentioned above could not be read into a contract where there is an express provision in the contract to the contrary, or where by necessary implication a provision to the contrary must be read into the contract. Even if the ‘agreement’ could be read as containing any additional term to be added to the contract of employment, it did not have this effect in regard to disputes which had pre-dated it.
The strike duly commenced on 13 December 1987 in accordance with the notice given. On the following day, the bakery issued a statement addressed to all employees in which it was stated inter alia that, because of the nature of their business as bakers and confectioners, the continuation of the strike would result in certain permanent closure of the bakery before the end of the week.
The defendant argued that the plaintiffs then knew that the effect of continuing the strike would result in the business being closed down and that, by continuing to strike, they frustrated their contract of employment. If this were so, the question of a dismissal would not arise and there would be no redundancy. I know of no authority or legal principle which would justify such an argument.
The defendants finally relied on what they argued was the implication of s. 3314(2) of the Redundancy Payments Act 1967. S. 14 in its entirety provides as follows:
(1) Subject to subs. (2), an employee who has been dismissed shall not be entitled to redundancy payment if his employer, being entitled to terminate that employee’s contract of employment without notice by reason of the employee’s conduct, terminates the contract because of the employee’s conduct—
(a) without notice
(b) by giving shorter notice than that which, in the absence of such conduct, the employer would be required to give to terminate the contract, or
(c) by giving notice (other than such notice as is mentioned in sub-paragraph (b) which includes, or is accompanied by, a statement in writing that the employer would, by reason of such conduct, be entitled to terminate the contract without notice.
(2) When an employee, who has received the notice required by s. 17 takes part, before the date of dismissal, in a strike and his employer by reason of such participation, terminates the contract of employment with the employee in a manner mentioned in subs. (1), that subsection shall not apply to such termination.
(3) [irrelevant].
Subs. (2) of the section is not, of course, directly relevant to the present case, and was mentioned because it contains a reference to a striking situation and suggests that there can be strikes which will not always result in a redundancy on subsequent closure. So be it, but the implication does not govern or apply to the present case.
On 18 January 1988, the bakery wrote to each of the plaintiffs alleging that they (the plaintiffs) by their unauthorised withdrawal of labour, had effectively frustrated their contract by not later than 31 December 1987. The bakery, in fact, closed down about this time. For reasons already stated, the plaintiffs did not frustrate their contracts and I am satisfied that the letter of 18 January 1988 constituted a dismissal and that s. 7(2) of the 1967 Act applies. It provides as follows:
For the purposes of subs. (1) an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to—
(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes for which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed.
There was an actual dismissal in this case and it was attributable to the statutory reason. A redundancy, therefore, arose. The appeal from the decision of the High Court should be dismissed and the matter should be remitted to the Employment Appeals Tribunal to compute the plaintiffs’ entitlements under the Redundancy Payments Acts and Minimum Notice and Terms of Employment Act.
JVC Europe Ltd -v- Panisi
[2011] IEHC 279 (27 July 2011)
JUDGMENT of Mr. Justice Charleton delivered on the 27th day of July 2011
1. Redundancy can be a devastating blow. Where economic conditions are difficult, or where the employee who is let go has aged or is experiencing health difficulties, finding alternative employment may be impossible. Years of devotion to an employer count for nothing where technology overtakes the workforce, rendering the labour of those displaced unnecessary; where new methods of work are demanded from those who do not have the skills to respond; or where a product is rendered obsolete. All these are examples of genuine redundancy. As ordinarily understood, redundancy means that a worker is no longer needed. The legal definition, as stated in the legislation which I quote later, mirrors common comprehension. Because redundancy is inevitable if there is no work for workers to do and the workers cease to be needed, it is also lawful. The Redundancy Payments Act 1967, as amended, establishes a floor of rights in compensation for redundancy; circumscribes the use to which dismissal by reason of redundancy can be put; and provides for minimum payments for qualified employees who are subject to this misfortune. In circumstances of insolvency those payments can be met from the public purse.
2. A contract of employment can involve both personal and impersonal interaction between employer and employee. Redundancy is not, however, a personal choice. It is, in essence, the external or internal economic or technological reorienting of an enterprise whereby the work of employees needs to be shed or to be carried out in an entirely different manner. As such, redundancy is entirely impersonal. Dismissal, on the other hand, is a decision targeted at an individual. Under the Unfair Dismissals Act 1977, as amended (“the Act of 1977”), the dismissal of an employee may only take place for substantial reasons that are fair. In effect, the contract of employment is protected in law and it may only be repudiated by the employer for reasons which do not amount to an unfair dismissal. This requires the employer to show substantial grounds which justify the dismissal. The burden of proof, in that regard, is squarely placed upon the employer. Sections 6(1) and (2) of that Act, in their amended form, provide:-
“(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.
(2) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal if it results wholly or mainly from one or more of the following:
(a) the employee’s membership, or proposal that he or another person become a member, of, or his engaging in activities on behalf of, a trade union or excepted body under the Trade Union Acts, 1941 and 1971, where the times at which he engages in such activities are outside his hours of work or are times during his hours of work in which he is permitted pursuant to the contract of employment between him and his employer so to engage,
(b) the religious or political opinions of the employee,
(c) civil proceedings whether actual, threatened or proposed against the employer to which the employee is or will be a party or in which the employee was or is likely to be a witness,
(d) criminal proceedings against the employer, whether actual, threatened or proposed, in relation to which the employee has made, proposed or threatened to make a complaint or statement to the prosecuting authority or to any other authority connected with or involved in the prosecution of the proceedings or in which the employee was or is likely to be a witness,
(dd) the exercise or proposed exercise by the employee of the right to parental leave, force majeure leave under and in accordance with the Parental Leave Act, 1998, or carer’s leave under and in accordance with the Carer’s Leave Act, 2001,
(e) the race, colour or sexual orientation of the employee,
(ee) the age of the employee,
(eee) the employee’s membership of the travelling community,
(f) the employee’s pregnancy, attendance at ante-natal classes, giving birth or breastfeeding or any matters connected therewith,
(g) the exercise or proposed exercise by the employee of the right under the Maternity Protection Act 1994 to any form of protective leave or natal care absence, within the meaning of Part IV of that Act, or to time off from work to attend ante-natal classes in accordance with section 15A (inserted by section 8 of the Maternity Protection (Amendment) Act 2004), or to time off from work or a reduction of working hours for breastfeeding in accordance with section 15B (inserted by section 9 of the Maternity Protection (Amendment) Act 2004 ), of the first-mentioned Act,]
(h) the exercise or contemplated exercise by an adoptive parent of the parent’s right under the Adoptive Leave Acts 1995 and 2005 to adoptive leave or additional adoptive leave or a period of time off to attend certain pre-adoption classes or meetings.”
3. To condense this and attempt a summary: a dismissal is automatically unfair under s.6 (2) of the Act of 1977 if it results from trade union activity; religious or political opinions; actual or proposed civil or criminal proceedings; bigotry; ageism; or reasons connected with maternity or parental leave due to childbirth or adoption. An employer may nonetheless dismiss an employee, but only if a reason outside of that set of proscribed reasons is the motivation and the reason for dismissal is fair.
4. A dismissal is fair, however, only if it results from a reason within the statute. The lawful reasons for dismissal are precisely set out. Section 6(4) of the Act of 1977 provides:-
“Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:
(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
(b) the conduct of the employee,
(c) the redundancy of the employee, and
(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.”
5. Explanation is hardly necessary of these clear terms. Most unfair dismissal cases revolve around alleged misconduct by an employee. The issue for the tribunal deciding the matter will be whether the circumstances proven to found the dismissal were such that a reasonable employer would have concluded that there was misconduct and that such misconduct constituted substantial grounds to justify the dismissal. An employee may also be dismissed where, by reason of a change in primary or secondary legislation, it becomes unlawful for that employee to continue to work. For instance, in a pharmacy, only a qualified person may dispense controlled medication. Were legislation to provide that a large number of over-the-counter medications are to be restricted to dispensation by pharmaceutical chemists, work will disappear for unqualified assistants. An employee may be discovered not to have the capability, competence or qualifications to do the work for which he or she was employed. Such reasons for ending employment are all personal to the employee, to his or her conduct, to his or her competence or qualifications. It is made abundantly clear by that legislation that redundancy, while it is dismissal, is not unfair. A dismissal, however, can be disguised as redundancy; that is not lawful. Upon dismissal an employer can simply say that the employee was not dismissed for a reason specific to that person but that, instead, his or her services were no longer required, pointing to apparently genuine reasons for dispensing with the services of the employee. 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 reason. In cases of misconduct, a fair procedure must be followed whereby an employee is given an entitlement to explain what otherwise might amount to a finding of real seriousness against his or her character. In an unfair dismissal claim, where the answer is asserted to be redundancy, the employer bears the burden of establishing redundancy and of showing which kind of redundancy is apposite. Without that requirement, vagueness would replace the precision necessary to ensure the upholding of employee rights. Redundancy is impersonal. Instead, it must result from, as s.7(2) of the Redundancy Payments Act 1967, as amended, provides, “reasons not related to the employee concerned.” Redundancy, cannot, therefore be used as cloak for the weeding out of 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 an employee go, then it is not a redundancy, but a dismissal.
6. Section 7(2) of the Redundancy Payments Act 1967, as amended by s. 4 of the Redundancy Payments Act 1971 and s.5 of the Redundancy Payments Act 2003, provides:-
“(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to-
(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or
(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or
(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or
(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.”
7. Exceptions are provided for redundancy as a defence to a claim of unfair dismissal in s.2A of the Act of 1967. These are not relevant to this case, but encompass the protections that legislation has required in the case of collective redundancies, compulsory redundancy and dismissal for the purpose of re-engagement on less advantageous conditions. The comment on the nature of redundancy made in St. Leger v. Frontline Distributors Ireland Ltd., [1995] E.L.R. 160 at 161 to 162 by Dermot MacCarthy S.C., as chairman of the Employment Appeals Tribunal, is apposite:-
“Impersonality runs throughout the five definitions in the Act. Redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his job. It is worthy of note that the E.C. Directive on Collective Redundancies uses a shorter and simpler definition: ‘one or more reasons not related to the individual workers concerned’.
Change also runs through all five definitions. This means change in the workplace. The most dramatic change of all is a complete close down. Change may also mean a reduction in needs for employees, or a 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 qualitative change. Definition (e) must involve, partly at least, work of a different kind, and that is the only meaning we can put on the words ‘other work’. More work or less work of the same kind does not mean ‘other work’ and is only quantitative change.”
8. It may be prudent, and a mark of a genuine redundancy, that alternatives to letting an employee go should be examined. However, that does not arise for decision in this case. Similarly, a fair selection procedure may indicate an honest approach to redundancy by an employer, but I do not wish to comment on matters which are outside the competence of the decision to be made in this case: see Stewart and Dunleavy, Compensation on Dismissal – Employment Law and Practice, (Dublin, 2007) at paragraph. 19.8.6. As a matter of contract, where selection procedures for redundancy, or a consultation process to seek to discover alternatives to redundancy, are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed. Following what is on the surface a fair procedure does not necessarily demonstrate that the decision maker is taking an honest approach to a decision. As with much else, an apparently fair procedure can be used as a cloak for deceptive conduct. It may be followed in form only so as to mask an ulterior motive or with no intention of fulfilling its purpose, even should the best of reasons for not proceeding to redundancy arise during its course.
9. The contractual entitlement to a defined procedure is declared in s. 6 of the Act of 1977. This provides at s. 6(3):-
“Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—
(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or
(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure.”
Issues
10. The issues which arise for determination in this case depend upon the general analysis of the law set forth above. These issues are whether Jerome Panisi, as employee, was selected for apparent redundancy by his employer, JVC Europe Limited:
(i) on the basis of a dismissal disguised as a redundancy; or
(ii) pursuant to procedures which were followed in form, but not in substance.
The quantum of damages also arises for decision in the event that the answer to either question is in the affirmative.
Access to justice
11. This is the third full hearing on oral evidence of this case. Under the relevant legislation a claim for unfair dismissal may first be brought before the statutory Rights Commissioner. The determination of the Rights Commissioner may then be appealed by either employer or employee to the Employment Appeals Tribunal. The appeal is therefore from a single individual, as decision-maker, to a panel of three: a barrister or solicitor, as chairman, and one representative nominated from each of the employer’s and employee’s groups. The Rights Commissioner can be bypassed in favour of an initial hearing before the Employment Appeals Tribunal. Both the Rights Commissioner and the Employment Appeals Tribunal apply fair procedures equivalent to those required in a civil trial. Witnesses are heard and there is cross-examination and opening and closing submissions. Since no transcript is kept, the written decision of the Rights Commissioner may be appealed to the Employment Appeals Tribunal and the determination at that level, in turn, may be appealed to the Circuit Court. No transcript is kept in that Court. Thence, it may be appealed, as was this case, to the High Court. All of these steps involve re-hearing all of the evidence. None of the appeals are appeals on a point of law. An employee seeking the vindication of employment rights may be required by a determined employer to proceed through four full oral hearings. The costs in terms of the engagement of legal representation may be very large. Whereas the Rights Commissioner and the Employment Appeals Tribunal may not award costs to a successful applicant, the Circuit Court and High Court are obliged to award costs in accordance with the resolution of the litigation. The entire procedure may take some years. It is also a situation where the resources of an employer may militate against fairness in the disposal of proceedings brought by an impecunious employee. After all, the point of such a case is whether the employee was unfairly dismissed; consequently he or she often has no job. The costs of legal hearings has a human rights implication: see Campbell v. MGN Limited [2004] UKHL 22; and in the European Court of Human Rights as MGN Limited. v. The United Kingdom, application number 39401/04. I am satisfied that the employee in this particular dispute was so worried about the potential costs that the sum which he received in apparent redundancy from his employer has been kept untouched by him in a bank account. The timescale involved in this case is not untypical of others. The employee filled in a T1A form seeking redress for unfair dismissal and a failure to comply with the period of notice of termination of employment required by statute on the 20th August 2008. His case was heard before the Employment Appeals Tribunal on the 8th December 2008. That tribunal issued a decision on the 24th April 2009. On the 14th July 2009, that decision was appealed by the employer. It was heard by the Circuit Court on the 2nd and 3rd June 2010, and a decision was given immediately by Judge Linnane. On the 14th June 2010 the matter was then appealed to the High Court. This Court heard the case over the 5th, 6th, 7th and 8th of July 2011. Judgment is now being given after a gap of about two weeks. The entire process has taken three years and three full oral hearings.
12. This procedure is cumbersome and redolent with the potential for unfairness. Many proposals have been mooted with a view to changing it. There are compelling reasons why change might be considered. No appeal in any court proceeding under the Constitution is ever more than a hearing and a re-hearing. Often it is less. From District Court to Circuit Court there is a full oral re-hearing in a civil or criminal case. The process is then complete. In a civil case, a Circuit Court judgment may be appealed to the High Court by a full oral re-hearing. The process is then complete. Circuit Court criminal decisions and High Court civil and criminal decisions can be appealed to the Court of Criminal Appeal or the Supreme Court on a point of law argued on the basis of a transcript. The process is then complete, barring a rare criminal appeal on a point of law of exceptional public importance from the Court of Criminal Appeal to the Supreme Court. In criminal cases the process is usually funded at public expense.
Facts
13. Jerome Panisi was employed from the 30th September 1991 as general manager of JVC in Ireland. His functions as general manager are set out in his written contract of that date. Having analysed that contract, and having heard the evidence of Jerome Panisi, I am satisfied that 90% of his work involved sales. He was not a technical person, versed in electrical engineering, but instead maintained a strong public face in Ireland on behalf of his employer as a salesman. The results of his work were impressive. In due course the employer by whom he was engaged, JVC (U.K.) Limited, became JVC Europe Limited. Nothing turns on that and I will call the employer ‘JVC’.
14. The employer argues that the Court should accept that throughout the years 2000 to 2008 JVC faced a very serious situation in terms of turnover. Apparently, the company had not invested early enough in flat screen television technology. In consequence, many of its competitors overtook it in terms of sales. Tube televisions were fast disappearing and being replaced in many homes by modern slimline televisions. The television market is, in terms of sales of consumer electronics, in or around 80% of the market. For any firm in that line of commerce, a fall in sales of televisions is very serious. That is not only because of the revenue which television sales represent, but also because the brand name thereby becomes less visible and so less established in the marketplace and in the home. Whereas there has been some variation in the figures, it seems to me to be clear that turnover in the Irish and British market for JVC fell by around 50% over that time period, and for the reasons stated. The number of people operating in Ireland in sales and administration has decreased from a high point that exceeded twelve employees down to the two that are currently employed as of the date of writing this judgment in the summer of 2011.
15. On the 4th March 2008, a meeting was arranged with Jerome Panisi in Dublin and it was attended by him, by David Diamond, the human resources manager for the company, and by Kevin Crossland, the sales director. Mr. Panisi was handed a letter which told him that there would no longer be a requirement for his position, for the post of mobile entertainment in the U.K. or for the national independent sales manager in the U.K. While these three posts were disappearing, for reasons which were not at all apparent during the hearing, three new posts were being created. These would be: sales manager of key accounts and independent firms, a London position; in Ireland, sales manager for Ireland; and lastly a post of area sales manager in the U.K. Appended to the letter were two job descriptions but, curiously, the job description for sales manager in Ireland was not forwarded until a week later. I have read the job description for that post. In terms of the actual work to be undertaken it very closely mirrors the job then being done by Jerome Panisi. It is possible to describe it in different terms but, in reality, the work to be undertaken by the individual taking that post would be virtually the same.
16. Approximately a year before this development a new key account manager had been appointed in Ireland. This individual was highly competent but lived too far away from Dublin to be effective. As a recruitment brief for this post, an outside agency prepared a document on behalf of JVC. A curious passage occurred therein:-
“JVC are a progressive company and are looking to attract a talented individual with potential to progress their career to General Management level as the current General Manager (Ireland) is due to retire in two years, ambition, drive and delivery focus is essential to the successful candidate.”
17. Jerome Panisi was not due to retire within that timescale, and would not, in fact, have retired until October 2011, had matters taken their course without the intervention of what is claimed to be a redundancy.
18. At some point in the process of consultation before redundancy, provided for under the JVC employee-employer contract, Jerome Panisi became suspicious as to what was happening and began to record telephone conversations and meetings. While this is undesirable, I do not regard it as undermining his character or the integrity of his testimony.
19. The process for redundancy pursuant to the contract between Jerome Panisi and JVC, and as established as engaging rights under s. 6 of the Act of 1977, provided for a period of consultation within which the employee targeted for redundancy could put forward different ways in which the company might proceed without losing that worker. On the 26th March 2008, Jerome Panisi replied to the employer on the proposal to make him redundant. He pointed out that sales had yielded a high net profit in Ireland from 2000 to 2004. He further pointed out that the post of national account manager would be lost to the local organisation under the proposed arrangements. He referred to the peculiarities of the Irish market, whereby under the new structure of reporting proposed in the reorganisation, he would be reporting, were he to be selected as sales manager Ireland, directly to London. His first and primary reason, however, was that the duties of the new position of sales manager Ireland were practically the same as those currently assigned to him. In the result of the reorganisation for the apparent purpose of redundancy, the national account manager in Dublin, who used to report to Mr. Panisi as general manager in Ireland, would be lost and instead there would be a sales manager in Ireland.
20. The issue which thus comes into sharp focus is whether there was a plan, implemented through an apparent redundancy, for the new post of sales manager Ireland to be filled by the existing national account manager.
21. Thomas Dillon was then the national account manager in Ireland. He was recruited in August 2007 and reported to Jerome Panisi. He worked in that position, and then subsequently as sales manager Ireland when Jerome Panisi departed, up to the 16th April 2010. He then left in order to better himself by joining another consumer electronics firm. His evidence was that on the 10th April 2008 he was on holiday abroad when he received a telephone call from Kevin Crossland, the sales director, who was then the vice president of JVC for sales in Ireland and the U.K. He was informed by Mr. Crossland that an email had been sent to all staff advertising the position of sales manager Ireland. Mr. Dillon asked whether selection for the new post would be a long process, to which he received the reply, “I am now speaking to the sales manager Ireland”. Mr. Dillon then sent in his C.V., but on the understanding that he had already been appointed as sales manager. As he understood the situation, it was possible that another person had also applied. It seemed to him, however, that the process was just for show. This incident provides a strong indication that the apparent plan of redundancy was a process of removing Jerome Panisi as general manager and replacing him with Thomas Dillon under a different designation. Prior to sending in his C.V., Mr. Dillon checked with Mr. Panisi as to whether, as a friend, he approved of his action in applying for the job and Mr. Panisi indicated that he had no objection.
22. It has been stated in evidence that had Jerome Panisi applied for the position of sales manager Ireland, he would have been given the position. That evidence is difficult to accept at face value. Had Jerome Panisi been made redundant, then he would have been, had procedures been followed, in open competition with a younger man, and probably with others, had there been no pre-selection for that post. It is also difficult to see him accepting a diminution in status after seventeen years, and pay and conditions which were not advertised but which would be, as is often said, negotiable.
23. The crux of the issue as to whether the manner of dismissal of Jerome Panisi as general manager of JVC in Ireland was a genuine redundancy through a genuine process, or a disguised dismissal, hinges on a meeting which took place in London on the 10th March 2010. This was a weekly management meeting. Jerome Panisi would come from Ireland perhaps once a month and report to that meeting. He was not present on this occasion. In 2008 John Welbourne was general manger of sales for JVC. He was later made redundant. He said in evidence that he was not involved in the creation of the role of general manager of sales. He said that he was not involved in Thomas Dillon moving into the new role in Ireland and nor was he involved in the restructuring. He denied that he was recruiting Simon Hedges for one of the new positions. His view was that the new position in Ireland would involve simply sales, whereas Jerome Panisi had been “responsible for everything”. In addition to this evidence, I have heard testimony from David Diamond, the human resources manager, and Meishi Tsuya, who held a very senior post in JVC at the time. Meishi Tsuya struck me as being a loyal person. He is also, however, a company man and highly motivated on behalf of his employer. David Diamond presented in the witness box as a clearly decent individual. It is obvious to me that he at all times did his best on behalf of employees, notwithstanding difficult and unpleasant duties. The person indicating most strongly that the dismissal of Jerome Panisi was a disguised redundancy was Dermot O’Rourke. His clear testimony stands in contrast to the infirmity in recollection and the qualified testimony of opposing witnesses. Dermot O’Rourke clearly had a much better recollection of the incident in question than the other persons present at that meeting.
24. On the 7th March 2008, Jerome Panisi had told Dermot O’Rourke about an indication in conversation over the phone which made him suspicious as to whether the process of redundancy was genuine. I am satisfied that, notwithstanding the sharing of suspicions, Mr. O’Rourke kept an open mind. At the meeting on the 10th March, approximately ten people were present, and Mr. Crossland was absent. At the very end of the meeting, one final item was announced by Mr. Welbourne which was stated not to be minuted. This was because, as was announced by him, the people concerned had not been told. A debate arose during the testimony as to whether previous management meetings had an off-the-record element to them. I am satisfied that they did. Further, I am satisfied that such discussions did not simply extend to things like the meals of employees, or the number of free beverages that were available at work, but encompassed important issues such as matters concerning employment. I am thus satisfied that Mr. Welbourne said that there was an item which was not to be minuted because people had not been told. The item, he said, was to be announced at the JVC sales conference, which takes place on an annual basis, and which was to be held in London some short time later. The announcement was to the effect that there was to be a restructuring across sales prior to this annual conference. Mr. Welbourne said there would be a new structure at the top of sales with two new positions. A named individual was to become the area sales manager in the U.K., another named individual was to take over in the other new post and “Thomas Dillon will report to him” from Ireland.
25. Whereas other witnesses described this announcement as unlikely, I am satisfied that it was made. The accumulation of evidence proves as a probability that the dismissal of Jerome Panisi from his job as general manager of JVC in Ireland was not a genuine redundancy. Even were that evidence to be absent, the indications in the evidence in favour of a genuine process, the burden of proof being on the employer in this regard, are not strong. I do not accept that the assignment brief prepared independently for the key account manager in Ireland could so badly misdescribe the future of Jerome Panisi, given that the person to be recruited was to be directly reporting to him. Rather, it is clear that the systems were required by someone in management to be bypassed, through no fault of the human resources manager, in favour of employing Mr. Dillon, who had neither sought nor played any part in this scheme. I do not know and nor am I obliged to make a finding as to where the responsibility within management for this situation lies.
Damages
26. Redress for unfair dismissal is provided for in s. 7 of the Act of 1977, which provides:-
“(1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers appropriate having regard to all the circumstances:
(a) re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or
(b) re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or
(c)
(i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act ) as is just and equitable having regard to all the circumstances, or
(ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances,
and the reference in the foregoing paragraphs to an employer shall be construed, in a case where the ownership of the business of the employer changes after the dismissal, as references to the person who, by virtue of the change, becomes entitled to such ownership.
(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to-
(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,
(b) the extent (if any) to which the said financial loss attributable to an action, omission or conduct by or on behalf of the employee,
(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,
(d) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved of by the Minister,
(e) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the said section 14, and
(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal..
(2A) In calculating financial loss for the purposes of subsection (1), payments to the employee
(a) under the Social Welfare Acts, 1981 to 1993, in respect of any period following the dismissal concerned, or
(b) under the Income Tax Acts arising by reason of the dismissal, shall be disregarded.
(3) In this section –
“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts 1967 to 2007, or in relation to superannuation;
“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.”
27. This section clarifies the consideration that is to be given to compensation for unfair dismissal. Payments under social welfare and income tax legislation are to be disregarded. In assessing compensation, the court should have regard to the implications for dismissal. My task is to assess the financial damage which the dismissal has brought about and then to place the measure of that damage against the maximum amount of compensation that is available. In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages. Where the quantum of damage is more, then the jurisdiction is limited to that maximum and the amount of damages must thus be reduced to that maximum sum. Where the measure of damages on dismissal is more than the maximum but contributory fault is found in respect of the dismissal against the employee, the reduction is on the totality of those damages, and not on the maximum award. If the result is to reduce compensation within the maximum award, that sum is appropriate. Where the reduction in total damages for contributory fault puts the damages above the maximum award, then the maximum award is the correct measure of compensation for unfair dismissal.
28. My reasoning on this matter is that it is likely, had Jerome Panisi not been dismissed, that he would have worked within JVC for approximately the same length of time as Thomas Dillon. Redundancy in a situation where employee numbers were diminishing could not have been avoided all the way to his retirement at age 65 in October 2011. During the two years lost, however, he would have achieved full remuneration and would have been topping up his pension entitlement. This would have provided for his retirement. This has otherwise proved to be impossible. He has sought many jobs since his dismissal. Those efforts have been genuine. His actual loss and prospective loss of pension therefore exceeds the maximum of 104 weeks of remuneration. One hundred and four weeks of remuneration is €298,000. On redundancy Mr. Panisi was paid the sum of €101,000. Of this, €19,800 was a redundancy payment; €18,312 was statutory notice; €9,156 was four weeks extra notice; and €51,315 was an ex gratia payment. As there was no redundancy, but as there was a dismissal, Mr. Panisi has now no entitlement to the redundancy money or the ex gratia payment. In addition, it is highly unlikely that he would have been given an extra four weeks notice by way of wages, notwithstanding his long service to the company. After submissions of counsel as to the correct figures, it is agreed that the total award of €298,000 should be reduced. Since Mr. Panisi has already been paid the sum of €101,000, the damages due are €197,000.
Result
29. In the result, there will be a decree in the sum of €197,000 against JVC in favour of Jerome Panisi.
Hospira v Mary Roper
, Phyllis Needham, Margaret Bryson, Breege Ward and Evelyn Dunnion (complainants/respondents)
EDA1315
Labour Court
29 April 2013
[2013] 24 E.L.R. 263
Background
The events giving rise to this dispute can be traced to a decision taken by the respondent, in 2005, to close its plant in Donegal. The complainants worked there for various periods ranging from 16 to 25 years. Negotiations *266 on redundancy terms took place between the respondent and SIPTU, the trade union that represented the staff, including the complainants. Redundancy terms were agreed on or about August 30, 2005. The closure was on a phased basis extending over 18 months. The complainants herein were made redundant on various dated between June and October 2006.
The agreed redundancy terms provided for a payment of five weeks’ pay per year of service in addition to statutory redundancy payments. However, in the case of those employees who were close to retirement age it was agreed that they would receive either the terms of the agreed package or the amount of salary that they would have earned had they remained in employment until the normal retirement age of 65, whichever was the lesser. Each of the complainants were in an age category in which their proximity to retirement age meant that they would receive an amount equal to their potential earnings up to age 65 which, in their case, was less than the amount paid to younger workers.
Each of the complainants was paid an amount calculated as aforesaid on the termination of their employment. They each signed a discharge agreement in the following terms:
“I hereby acknowledge receipt in full of the sum of [amount stated]. I am satisfied that I have received all entitlements due to me. I accept this payment, therefore, in full and final settlement of all claims, under both statute and common law, arising out of my employment with Hospira.”
The complainants subsequently referred the within claims to the Equality Tribunal on October 5, 2006. The Equality Officer commenced his investigation on May 8, 2009. In a decision dated April 26, 2011 the Equality Officer upheld the complaints. He awarded each of the complainants amounts being the difference between that which they received by way of non-statutory redundancy payments and the amount that they would have received had the full package agreed with the union been applied to them.
The respondent appealed to this Court.
Position of the parties
The first point taken by the respondent is that the complainants are estopped for proceeding with their claim by the terms of the discharge agreement that each of them signed, the terms of which are recited above. The respondent contends that the complainants had the advice of their trade union available to them at all times and with the benefit of that advice they accepted the amounts proffered to them by the respondent in full and final settlement of all claims. It is the respondent’s contention that the reference in the discharge agreement to “all claims under both statute and common law” included the within claims.
Without prejudice to its position in that regard the respondent relies on the provisions of s.34(3) of the Act, which provides: *267
“In an occupational benefits scheme it shall not constitute discrimination on the age ground for an employer—
(a) to fix ages for admission to such a scheme or for entitlement to benefits under it,
(b) to fix different such ages for all employees or a category of employees,
(c) to use, in the context of such a scheme, age criteria in actuarial calculations, or
(d) to provide different rates of severance payment for different employees or groups or categories of employees, being rates based on or taking into account the period between the age of an employee on leaving the employment and his or her compulsory retirement age,
provided that that does not constitute discrimination on the gender ground.”
It is the respondent’s case that what is in contention in this case is a severance payment provided for by an occupational benefit scheme. It contends that paragraph s.34(3)(d) provides it with a complete defence to the within claim and operates so as to deprive the complainants of any cause of action.
The complainants
SIPTU, on behalf of the complainants, contends that the document which they signed on receiving the disputed redundancy payment was not a valid wiaver of their claim. They say that on the conclusion of the negotiations an issue arose as to whether or not the proposal concerning those workers who were close to retirement age was lawful. The official dealing with the matter sought advice from the Equality Authority. At first he was advised that the proposal would not offend against equality law. This advice was later revised and he was advised that on the basis of certain decisions of the CJEU the Authority had reservations as to the legality of what was in contemplation.
The respondent was informed of the nature of the advice received and was further advised that if the proposals were accepted, the union would pursue claims under the Employment Equality Acts on behalf of those adversely affected by the proposal. The union contends that it was in the interest of all parties that the redundancy settlement be brought to finality. Consequently the proposal was put to a ballot of members on the understanding that the union would pursue the claims of those affected by the proposed limitation of the amount payable. According to the union, the respondent did not demur from that proposal.
The union contends that the purported waiver was included in the discharge documents without reference to it and in the knowledge that it was pursuing claims of discrimination on behalf of the complainants herein. They say that the discharge documents were presented to each of the complainants together with a cheque for their redundancy payment. They were not given an opportunity *268 to study or reflect on its content nor was the import of the document explained to them.
With regard to the substance of the claim it was submitted that s.34(3) of the Act must be interpreted and applied in accordance with what is often referred to as the principle of conforming interpretation. That is to say, it must be interpreted and applied in light of the wording and purpose of the European Directive which it was enacted to transpose.
Reliance was placed on Article 6 of Directive 2000/78 which provides:
“Justification of differences of treatment on grounds of age
1. Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary. Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;
(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
(c) the fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.
2. Notwithstanding Article 2(2), Member States may provide that the fixing for occupational social security schemes of ages for admission or entitlement to retirement or invalidity benefits, including the fixing under those schemes of different ages for employees or groups or categories of employees, and the use, in the context of such schemes, of age criteria in actuarial calculations, does not constitute discrimination on the grounds of age, provided this does not result in discrimination on the grounds of sex.”
It was submitted that this Article makes it clear that differences in treatment on grounds of age must be objectively justified and that s.34(3) of the Act must be similarly construed. It is the union’s case that there are no objective grounds justifying the impugned unequal treatment of the claimants.
Conclusion
The Court heard evidence from each of the complainants and from Mr Sean Reilly, who was a senior official of SIPTU at the time and who negotiated the redundancy package on behalf of the union. The Court also heard evidence *269 from Mr Colm Ryan who was the personnel manager of the respondent. They each gave evidence in relation to the circumstances in which the waiver in issue was proffered to the complainants. In light of the attitude taken by the Court to the substantive matter in dispute it is unnecessary to express a concluded view on the question of whether the complainants are estopped from seeking redress under the Act. Suffice it to say that the Court is satisfied, on the evidence, that Mr Reilly made it clear at all times that the complainants did not accept that they could lawfully be paid a reduced redundancy ex gratia lump sum because of their proximity to the normal retirement age in the employment. The Court is satisfied that this was known and accepted by the respondent in the course of the negotiations. The Court is further satisfied that it was never expressly or implicitly brought to the complainants’ attention that the signing of the document in issue would extinguish their claim under the Act. Nor was it indicated to them that the amount which they received by way of redundancy pay was intended as consideration in compromise of that claim.
The substantive claim
As previously noted in this Determination, s.34(3)(d) of the Act provides that it shall not constitute discrimination on the age ground “to provide different rates of severance payment for different employees or groups or categories of employees, being rates based on or taking into account the period between the age of an employee on leaving the employment and his or her compulsory retirement age, provided that that does not constitute discrimination on the gender ground.”
It is the respondent’s case that this provision provides it with a complete defence to the within claims. In response Ms Kimber B.L, for the complainants, drew the Court’s attention to the provision of subsection (3A) of s.34 which provides:
“In subsection (3)—
‘occupational benefits scheme’ includes any scheme (whether statutory or non-statutory) providing for benefits to employees or any category of employees on their becoming ill, incapacitated or redundant but does not include any occupational pension scheme providing for pensions, gratuities or other allowances payable on retirement or death;
‘severance payment’ means a sum paid voluntarily by an employer to an employee otherwise than as pay when the employee leaves the employment.”
Counsel relied on the final paragraph of this subsection which excludes a sum paid in the nature of pay from the application of subsection (3). Counsel submitted, in reliance on authority, that a voluntary redundancy payment of the type in issue in this case is to be regarded as pay for the purposes of the Act.
*270
Neither the Act nor Directive 2000/78 provides a definition of the term “pay” . The term is defined at Article 157 (2) TFEU as follows:
“For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.”
That definition is derived from the jurisprudence of the CJEU and is widely applied for the purpose of European Union law. Based on that broad definition the Court of Justice, in Barber v Guardian Royal Exchange Assurance Group Case C-262/88 [1990] E.C.R. I-1889, held that a voluntary redundancy payment constitutes pay for the purposes of Article 157 (ex Article 119) of the Treaty and the now repealed Equal Pay Directive.
If the term “pay” as it is used in s.34(3A) of the Act is to be ascribed the same broad European Law meaning, the subsection, read literally, would exclude redundancy payments of the type in issue in this case from the ambit of subsection (3)(d) of s.34 of the Act. However, in the Court’s view that would result in a manifest absurdity and would render the final paragraph of subsection (3A) self-defeating in that any sum paid voluntarily by an employer to an employee on leaving employment would have to be regarded as pay and therefore excluded from the ambit of the subsection. The subsection would therefore be devoid of any meaning.
It is a well settled principle of statutory construction that a provision in a statute cannot be interpreted in a way that produces an absurd result. That common law rule is now reflected in s.5 of the Interpretation Act 2005, which provides:
“In construing a provision of any Act (other than a provision that relates to the imposition of a penal or other sanction)
(a) that is obscure or ambiguous, or
(b) that on a literal interpretation would be absurd or would fail to reflect the plain intention of—
(i) in the case of an Act to which paragraph (a) of the definition of “Act” in section 2(1) relates, the Oireachtas, or
(ii) in the case of an Act to which paragraph (b) of that definition relates, the parliament concerned,
the provision shall be given a construction that reflects the plain intention of the Oireachtas or parliament concerned, as the case may be, where that intention can be ascertained from the Act as a whole.”
In the Court’s view, the literal construction of s.34(3A) contended for by the complainants must be rejected in favour of a construction that reflects the intention of the Oireachtas ascertained from the Act as a whole.
*271
It is noted that while the Act does not define what constitutes pay it does define the term “remuneration” as follows:
“ ‘remuneration’ , in relation to an employee, does not include pension rights but, subject to that, includes any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment.”
This definition includes, as does the definition at Article 157 TFEU, a worker’s ordinary basic pay and any other payment or allowance which the worker receives from his or her employer in respect of employment. Consequently, the term “pay” as used in s.34(3A) should be understood as a reference to basic pay which is one component of remuneration. On that interpretation pay does not include redundancy payments of the type in issue. It then follows that s.34(3)(d) of the Act applies to the payments giving rise to this dispute.
A further point taken on behalf of the complainants is that s.34(3)(d) must be read in conjunction with Article 6 of Directive 2000/78. It was submitted that on such a reading the aforementioned statutory provision only applies where the respondent provides objective justification for the impugned difference in treatment. It is the complainants’ contention that there is no such objective justification.
Objective justification
Paragraph 1 of Article 6 of the Directive provides that Member States, rather than individual employers, may provide for differences in treatment on grounds of age where it is “objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary” .
In R. (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform Case C-388/07 [2009] E.C.R. I-1569, the CJEU held that the absence of precision in the legislation as to what aims were being pursued did not preclude justification provided those aims could be ascertained from a reading of the legislation as a whole. The court held, at paras 44–45:
“[I]t cannot be inferred from Article 6(1) of Directive 2000/78 that a lack of precision in the national legislation as regards the aims which may be considered legitimate under that provision automatically excludes the possibility that the legislation may be justified under that provision (see, to that effect, Palacios de la Villa v Cortefiel Servicios S.A. Case C-411/05 [2007] E.C.R. I-8531, para.56).
In the absence of such precision, it is important, however, that other elements, taken from the general context of the measure concerned, enable the underlying aim of that measure to be identified for the purposes of review by the courts of its *272 legitimacy and whether the means put in place to achieve that aim are appropriate and necessary (Palacios de la Villa, para.57).”
The court went on to hold that the standard of objective justification required under Article 6(1) of the Directive is different to that required in order to justify indirect discrimination under Article 2(2)(b). The court pointed out that Article 6 is addressed to the Member States and allows them to derogate from the requirement of Article 2(1) by permitting less favourable treatment that would otherwise constitute direct discrimination. It repeated the oft stated principle that a derogation must be interpreted strictly and given no wider scope than the language providing for it suggests. On this point the court held:
“Article 6(1) of Directive 2000/78 allows member states to introduce into their national law measures providing for differences in treatment on grounds of age which fall in particular within the category of direct discrimination as defined in Article 2(2)(a) of that Directive. It is indeed to that extent, in particular, that Article 6(1) must be interpreted as applying, in accordance with the first subparagraph thereof, notwithstanding Article 2(2) of that Directive. That option, in that it constitutes an exception to the principle prohibiting discrimination, is however strictly limited by the conditions laid down in Article 6(1) itself (par 62).”
The court further held that the type of objectives referred to in Article 6 upon which reliance can be placed in allowing different treatment on grounds of age are of a public nature. Consequently, the court held, the legitimate aim in pursuance of which the derogation is invoked must relate to the social policy objectives of the Member State. The court pointed out (at para.46):
“It is apparent from Article 6(1) of Directive 2000/78 that the aims which may be considered ‘legitimate’ within the meaning of that provision, and, consequently, appropriate for the purposes of justifying derogation from the principle prohibiting discrimination on grounds of age, are social policy objectives, such as those related to employment policy, the labour market or vocational training. By their public interest nature, those legitimate aims are distinguishable from purely individual reasons particular to the employer’s situation, such as cost reduction or improving competitiveness, although it cannot be ruled out that a national rule may recognise, in the pursuit of those legitimate aims, a certain degree of flexibility for employers.”
The court went on to point out that Article 6(1) of the Directive imposes on the Member States the burden of establishing to a high standard of proof the legitimacy of the aim pursued. At para.65 it said the following:
“However, since the referring court is uncertain as to the existence of a difference in the application of the criteria set out in Article 2(2)(b) of Directive 2000/78 as *273 compared with the application of the criteria in Article 6(1), it must be stated that the latter provision gives Member States the option to provide, within the context of national law, that certain forms of differences in treatment on grounds of age do not constitute discrimination within the meaning of that Directive if they are ‘objectively and reasonably’ justified. Although the word ‘reasonably’ does not appear in Article 2(2)(b) of the Directive, it must be observed that it is inconceivable that a difference in treatment could be justified by a legitimate aim, achieved by appropriate and necessary means, but that the justification would not be reasonable. Accordingly, no particular significance should be attached to the fact that that word was used only in Article 6(1) of the Directive. However, it is important to note that the latter provision is addressed to the Member States and imposes on them, notwithstanding their broad discretion in matters of social policy, the burden of establishing to a high standard of proof the legitimacy of the aim pursued.”
The Oireachtas has made provision for a difference in treatment based on age in respect to severance payments in enacting s.34(3)(d) of the Act. It appears to the Court that the underlying rationale for this provision is that workers close to retirement are in a substantially different position than those who have longer periods in which they could have expected to remain in the active labour force and that, as a matter of social and labour market policy, this difference can be legitimately reflected in constructing redundancy packages.
A worker who is made redundant many years before their expected retirement date loses the expectation of a continuing income up to that date and the redundancy pay that they receive is unlikely to fully compensate them for the loss which they may suffer in consequence of losing their employment. Furthermore, such a worker will be entitled to receive social security payments while seeking alternative employment but the continuance of these payments is now limited to a period of nine months. By contrast, a worker who is made redundant at a time in close proximity to their retirement date and who receives a redundancy payment equal to the earnings that he or she could have expected up to that date suffers no pecuniary loss. Moreover, where, as in this case, the retirement age coincides with the age at which retirement social security pensions become payable the worker will normally have an alternative source of income for their lifetime.
Against that background it appears that the Oireachtas considered it reasonably and objectively justifiable, within the meaning of Article 6(1) of the Directive, to provide for the differences in treatment allowed for by s.34(3)(d) of the Act. The Court cannot see any basis upon which it could be held that the Oireachtas was precluded from reaching that conclusion by a provision of Directive 2000/78 as interpreted in the jurisprudence of the CJEU.
A similar arrangement in respect to differences based on age in the calculation of redundancy payments was recently upheld by the U.K. Employment Appeals Tribunal ( per Underhill P.) in Kraft Foods UK Ltd v *274 Hastie [2011] 3 All E.R. 956. The EAT held that a cap on awards made under a redundancy scheme was justified even though it led to direct and indirect age discrimination. The EAT considered that the aim of preventing employees who were nearing retirement from receiving a windfall was legitimate—the aim of the scheme being to compensate employees who were made redundant for the loss of earnings which they had a legitimate expectation to receive had their employment continued. The cap was said to be a proportionate means of achieving that objective.
In Odar v Baxter Deutschland GmbH [2013] 2 C.M.L.R. 332, the court had to consider if a redundancy payments scheme in Germany which differentiated between workers on grounds of age offended against Article 6 of Directive 2000/78. The court considered that the arrangements in issue were objectively justified on the basis, inter alia, that they allowed for a fair distribution of limited financial resources as between younger and older workers. In the Court’s view such a consideration is also appropriate in the instant case.
Determination
For all of the reasons set out herein the Court has reached the conclusion that the differences in redundancy payments made to the complainants as compared to their comparators is saved by s.34(3)(d) of the Act. Accordingly the respondent is entitled to succeed in its appeal.
The appeal is allowed and the decision of the Equality Tribunal is set aside and substituted with a finding that the complainants were not discriminated against on grounds of pay.
Representation