UFD Redundancy

Nature of Redundancy

If a particular job or role is redundant, the employer is entitled to dismiss the employee who fills that position. Provided that this is the true reason for dismissal, it is deemed not to be an unfair dismissal. The employee may have an entitlement to a redundancy payment if he or she has more than two continuous years’ service.

It is not sufficient that an employer labels a dismissal as caused by redundancy. There must be a genuine redundancy in relation to the position. Fair procedures must apply in the selection of the employee(s) who are made redundant.

The dismissal must be wholly or mainly because of redundancy.  In an unfair dismissal case, the courts may decide that the redundancy is not the genuine or operative reason for dismissal. In this case, there is likely to be a finding of unfair dismissal, with a consequent award of compensation or order for reinstatement or reengagement.

A central feature of the legislation is that the job or role that it is redundant, rather than the the employee concerned. There is usually a cessation of business or a change in the manner in which it is undertaken. Where the reason for the dismissal relates to the conduct or performance of a particular employee, there is unlikely to be a redundancy. If an employee is not able to do the work, the matter must be treated as arising on the grounds of capability and be investigated accordingly.


Deemed Fair

If an employee is dismissed on the grounds of genuine redundancy, the dismissal is deemed fair. The employer must make a redundancy payment, where the employee has more than two years’ service.

In order to justify dismissal on the grounds of redundancy, it must be shown that the dismissal is wholly or mainly because of redundancy. There must be a genuine redundancy, and the employee must be fairly selected. See the sections on redundancies.

The definition of “redundancy” provides for a number of alternative possibilities;

  • the employer ceases or intends to cease to carry on the business for which the employee is employed; or
  • the employer ceases or intends to cease to carry on business in the place where the employee is employed or
  • the requirements of the business for employees of a particular kind in that place has ceased diminished or is expected to cease or diminished or
  • the employer has decided to carry on business with fewer or no employees either by requiring the work which employee had done, to be done by other employees or otherwise, or
  • the employer has decided that the work which the employer was employed should be done in a different manner for which the employee is not sufficiently qualified or trained or
  • the employer has decided that the work which the employee has been employed to do should be done by a person who is capable of doing other work for which the employee is not sufficiently qualified or trained.

Nature of Redundancy I

Redundancy includes any of the following;

  • the fact that the employer has ceased or intends to cease to carry on business for the purpose for which the employee was employed, or has ceased or intends to cease to carry on that business at the place where the employee is so employed;
  • the fact that the requirements of the business for employees to carry out the work of a particular kind in the place where he was so employed, have ceased or diminished or are expected to cease or to diminish;
  • the fact that the 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 dismissal, being done by other employees;
  • the fact that the employer has decided that the work for which the employee had been employed or had been doing, should be done in a different manner for which the employee is not sufficiently qualified or trained;
  • the fact that the employer has decided that the work for which the employee has been employed or has been doing before dismissal. should be done by a person who is also capable of other work for which the employee is not sufficiently qualified or trained.

Nature of Redundancy II

A dismissal will not be unfair if it results wholly or mainly from redundancy.  However, where a person has been unfairly selected for redundancy, there is presumed to be an unfair dismissal. See the sections in redundancy.  Redundancy has the same meaning in the context of unfair dismissals as under the Redundancy Payments legislation.

Under Redundancy Payments legislation, a redundancy is presumed unless the employer proves otherwise.  In the case of an unfair dismissal claim, unfair dismissal is presumed, so that the employer must prove redundancy. Redundancy must be the main or only reason for the dismissal.

As with other areas of unfair dismissals law, a dismissal on the purported grounds of redundancy can be challenged on the basis that redundancy is not the true grounds. The WRC will look at the entire circumstances, to consider whether there is a genuine redundancy.  There must be both a genuine redundancy, and it must be the cause of the dismissal.


Deemed Unfair Grounds

Where the dismissal is wholly or mainly for one of the above following impermissible reasons, then it is deemed to be unfair notwithstanding that a redundancy may exist, if a person is selected on such grounds relative to another who is not dismissed. Criteria for selection based on prohibited discrimination may also constitute a breach of equality legislation.

The impermissible grounds are those deemed automatically unfair; namely trade union membership or activities, religious or political opinions, actual or threatened participation in legal proceedings against the employer, race, colour or age, membership of the travelling community, pregnancy or the exercise of maternity rights, paternal adoptive or carer’s leave.

Where unfair dismissal is claimed on the basis of redundancy where others in the equivalent position have not been dismissed, it is necessary to demonstrate a comparator. The comparator must be in similar employment with the employer and be retained.

The ease of comparison will increase if the employee’s work type is relatively wide in scope. The positions should be interchangeable.  The fact that the other could do the job would not be sufficient by itself.


Unfair Selection I

Unfair selection for redundancy may constitute an unfair dismissal. Redundancy applies to jobs and positions, rather than to individuals.  The process of selection typically involves deciding the criteria which apply and selecting the persons to whom the criteria apply.

There may be an unfair dismissal where the circumstances constituting the redundancy apply equally to one or more persons in similar employment with the same employer where

  • the selection of the employee for dismissal resulted wholly or mainly from one of the designated unfair dismissal grounds or from another ground that would not justify dismissal or
  • where the employee is selected in contravention of a procedure that was agreed between the employer and employee or trade union in circumstances where were no special reasons to justify a departure from that procedure.

If there are redundancy selection procedures which are customary in the business, the failure to follow them without a good  reason may constitute unfair dismissal. Many such procedures will be union-employer agreed procedures. Where there is no agreed procedure, custom or practice, the selection must not be based on one of the prohibited grounds, and it must be reasonable in the circumstances.


Unfair Selection II

The following of proper procedures in determining the employees to be dismissed is important.  The employer must be shown to have identified a rational policy and basis for selection. The “last in first out” principle is sometimes used in redundancy selection.  It may be found in a trade union-employer agreement.  It may apply in certain trades by custom and practice.

The selection criteria should be based on the objective needs of the business.  They should be rationally related to the skills, competence, and experience of the employees.

The last in first out principle is not any sense a matter of law. The business’s requirements and circumstances may justify and indeed require another procedure.


Selection Criteria

Where a redundancy affects a number of employees there must be  fair selection criteria. They must be fairly applied. The selection criteria should be documented. The process of its application should be documented.  In effect, the onus is on the employer to justify the selection if it is challenged.

The employer must act fairly and reasonably and in an open and objective fashion. In the absence of fair selection, an employee may be deemed to be unfairly dismissed.   The selection criteria should reflect any applicable dismissal procedure or code (assuming it to be reasonable by its terms).  It should be possible to justify any departure  from  these criteria.

The process should be recorded in writing. Meetings and the consideration of options should be minuted. There is no obligation as such to offer an alternative job, but the failure to do so may risk a finding of an unfair dismissal in some cases.


Consultation

Where there are proposals which may involve redundancy, the employees’ representatives should usually be consulted regarding how the employer’s requirements can be achieved with as little hardship as possible. In some cases, there is a legal requirement for consultation. Even where this does not apply, failure to consult may lead to a finding of unfair selection with a consequent finding of unfair dismissal.

The employee’s representatives should be invited to but forward alternative proposals, which should be considered. The employer is not bound to follow their proposals and representations but should take them into account. Where possible, the criteria for selection should be agreed with the union or employee representatives.

Although there is no specific obligation to consult an individual employee, there may be  an effective obligation to do so by reason of the duty to act fairly. The proposed redundancies should be discussed with the employees. Consultation is required unless it is reasonable to conclude that it would be utterly futile.

Sufficient warning should be given to employees to enable them to take steps to consider the position and if necessary, find alternative employment. The consultation should consider whether the employee will be willing to work in another department or relocate to work where there is another position. The employer should give sufficient information to allow the employee to evaluate whether to accept the alternative.

Where the  criteria are not agreed with the union or representatives, the employer should establish criteria which do not depend on subjective opinion but on objective criteria in relation to employee qualities which are relevant to the matter.


Selection Process

The employer must act reasonably in the selection process, in order to avoid the dismissals being deemed unfair. The selection criteria, should be followed. The selection should be made fairly in accordance with the criteria. Where there is a last in first out basis of redundancy selection, there should be no unlawful discrimination in its application.

The employer must conduct itself reasonably in selecting employees for redundancy. Each employee’s circumstance must examined separately so that proper consideration is givens to the individual application of the selection criteria

The selection should have particular regard to the employee’s abilities, and what he can offer to the organisation.  The relevant selection criteria could include qualifications, training, experience, punctuality, skills, work, the quality and length of service.

Reasonable criteria must be applied and the selection must  be made in accordance with the criteria.  Where the conduct of an employee is taken into account, then the dismissal may be characterised as unfair.

The employee must be made aware of the considerations used in selection.  The employer should not simply assume that an employee meets the relevant criteria. If there is an alternative position, it should offered to the employee, or he should be made aware of it.


Alternative Employment

A dismissal may be unfair because there is a failure to look for alternatives or because another position is not offered.  It might be necessary to consider an offer of employment in an associated company. However, the employer is not obliged to create a position if none exists.

An employee may lose entitlement to a redundancy payment where he refuses unreasonably an alternative position. Employment in the alternative position should  be specifically offered.  The offer may be on different terms in relation to the type of work, hours, etc., total remuneration, the degree of certainty of continued employment. It may be reasonable to refuse an offer of employment that is materially different and at a lower grade, lower pay or with less assurance in relation to salary.

The issue of reasonableness in relation to an alternative offer of employment has been considered in a number of cases.  The offer of an alternative position at a different location may be reasonable, provided that appropriate compensation and travel costs are paid. The terms and conditions must be suitable employment in relation to the employee. The renewal engagement must take effect, but later, not later than four weeks after the date of termination of the earlier contracts


Trial Period for Alternative

Where an employee who has been offered suitable employment and has carried out, for a period of not more than four weeks, the duties of that employment, refuses the offer, the temporary acceptance of that employment shall not solely constitute an unreasonable refusal for the purposes of the legislation.

Where an employee’s remuneration is reduced substantially but not to less than one half of his normal weekly remuneration, or his hours of work are reduced substantially but not to less than one-half of his normal weekly hours, and the employee temporarily accepts the reduction in remuneration or hours of work and indicates his acceptance to his employer, such a temporary acceptance for a period not exceeding 52 weeks shall not be taken to be an acceptance by the employee of an offer of suitable employment in relation to him.


Deemed Unfair Dismissal

Where the redundancy situation applies to a number of employees who have not been dismissed the selection of the employees who are dismissed, may amount to an unfair dismissal if the selection of the employee resulted wholly or mainly from one of the matters specified below or another matter justifying dismissal;

  • there is a is a contravention of a procedure which has been agreed by on behalf of the employer, employee or a trade union or representative body;
  • there is a custom practice relating to redundancy, and there are no special reasons justifying a departure from the procedure;
  • In other circumstances. where the above procedure does not apply, then the fairness of the selection will be examined.

The selection must not be based on a ground that is prohibited under anti-discrimination legislation.


References and Sources

Primary References

Employment Law  Meenan  2014 Ch. 24

Employment Law Supplement Meenan 2016 Ch.24A

Employment Law Regan & Murphy  2009  Ch.22 ( 2nd Ed 2017)

Employment Law in Ireland Cox & Ryan 2009 Ch.2

Dismissal Law in Ireland  Redmond 2007 Ch.10

Other Irish Books

Employment Law Forde & Byrne 2009

Principles of Irish Employment Law   Daly & Doherty           2010

Employment Law Contracts (Book & CD-ROM)       Beauchamps, Solicitors          2011

Acts

Unfair Dismissals Act 1977 (10/1977)

Worker Protection (Regular Part-Time Employees) Act 1991 (5/1991),

Unfair Dismissals (Amendment) Act 1993 (22/1993)

Protection of Employees (Part-Time Work) Act 2001 (45/2001

Civil Service Regulation (Amendment) Act 2005 (18/2005) (Part 6)

Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 (27/2007)

Industrial Relations (Amendment) Act 2015 (27/2015), s. 39

Periodicals and Reports

Employment Law Yearbook (annual) Arthur Cox

Employment Law Reports

Irish Employment Law Journal

Employment Law Review

Legislation

Dismissal & Redundancy Consolidated Legislation   Barrett, G        2007

Irish Employment legislation (Looseleaf)       Kerr     1999-

Employment Rights Legislation (IEL offprint) Kerr     2006

Dismissal & Redundancy Consolidated Legislation             Barrett, G            2007

Principles of Irish Employment Law          Daly & Doherty 2010

Termination & Redundancy, What is the law?      Hayes, Barry & O’Mara   2005

Termination of Employment Statutes (IEL)            Kerr       2016

Termination of Employment: Practical Guide for Employers          Purdy    2011

Shorter Guides

Employment Law Nutshell      Donovan, D     2016

Employees: Know Your Rights           Eardly  2008

Essentials of Irish Labour Law           Faulkner          2013

Websites

Workplace Relations Commission http://www.lrc.ie/en/

Irish Human Rights and Equality Commission https://www.ihrec.ie/

Health and Safety Authority http://www.hsa.ie/eng/

UK Texts

Textbook on Employment Law, Honeyball, et al. 13th Ed. 2014

Labour Law, Deakin and Morris 5th Ed. 2012

Employment Law, Smith and Wood 13th Ed 2017

Selwyn’s law of Employment Emir A 19 Ed. 2016

Employment law : the essentials. Lewis D Sargeant M and Schwab M 11 Ed.2011

Labour Law Collins H, Ewing K D and McColgan  2012

Industrial relations law reports. (IRLR): Law Section,

Employment law Benny R Jefferson M and Sargent  5th Ed.  2012

Pitt’s Employment Law 10th  Ed. Gwyneth Pitt 2016

CLP Legal Practice Guides: Employment Law 2016 Gillian Phillips, Karen Scott

Cases and Materials on Employment Law 10th  Ed. Richard Painter, Ann E. M. Holmes 2015

Blackstone’s Statutes on Employment Law 2015 – 2016 Richard Kidner

UK Practitioner Services

Tolley’s Employment Handbook 2017 Mrs Justice Slade 2017

Butterworths Employment Law Handbook 2017 Peter Wallington 2017

Blackstone’s Employment Law Practice 2017 Edited by Gavin Mansfield, John Bowers, John Macmillan 2017

UK Periodicals and Reports

The Employment Law Review 8th  Ed.   Erika C. Collins 2017

Industrial Relations Law Reports

Employment Law in Context: Text and Materials 2nd  Ed. David Cabrelli 2016