UFD Redundancy
Cases
Employer v Employee
UD206/2011
“Determination:
Having considered the totality of the evidence the Tribunal is not satisfied that the respondent acted fairly and reasonably when addressing the need to reduce the number of employees. When an employer is making an employee redundant, while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy. The employer must follow the agreed procedure when making the selection. Where there is no agreed procedure in relation to selection for redundancy, as in this case, then the employer must act fairly and reasonably.
The Tribunal noted that the respondent kept taking away parts of the claimant’s job and that interviewing had taken place on 12 May 2010 for an alternative position within the company for which a job specification was not formulated until 14 May 2010. The Tribunal finds this most surprising. The Tribunal also takes the view that the claimant could have done a health-and-safety manager job which ultimately took on a construction-related title given that she had no construction-related qualification. The respondent had tried to row back and disadvantage the claimant.
The Tribunal does not accept that the Respondent acted fairly and reasonably in this case for the following reasons:
1. the decision to make the claimant redundant was taken at a meeting in a hotel in County Louth on the 23rd April 2010. The chairman of the company (SD) attended this meeting; 2. there was no serious or worthwhile consultation with the claimant prior to making her redundant. The consultation should be real and substantial. The decision to make the claimant’s position redundant was taken before the consultation process commenced; 3. no suitable or substantial consideration was given to alternatives to dismissing the claimant by reason of redundancy; 4. there was no worthwhile discussion in relation to the criteria used for selecting the claimant. The selection criteria should apply to all employees working in the same area as the claimant but should also consider other positions which the claimant is capable of doing.
The Tribunal finds that the claimant was unfairly selected for redundancy and is satisfied that the respondent has contravened Section 6 (3) of the Unfair Dismissals Act 1977 which states:
‘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,
then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.’
Employers must act reasonably in taking a decision to dismiss an employee on the grounds of redundancy. Indeed, Section 5 of the Unfair Dismissals (Amendment) Act, 1993, provides that the reasonableness of the employer’s conduct is now an essential factor to be considered in the context of all dismissals. Section 5, inter alia, stipulates that:
“…..in determining if a dismissal is an unfair dismissal, regard may be had……to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer inrelation to the dismissal”
The fact that the claimant did not appeal the dismissal was considered by the Tribunal but the Tribunal notes that the appeal would have to be made to SD, the chairman of the Company. The Tribunal further notes that SD was at the meeting which took the decision to dismiss the claimant. Therefore, it would be entirely inappropriate, and contrary to fair procedures, that he should hear the appeal.
The Tribunal is unanimous in finding, under the Unfair Dismissals Acts, 1977 to 2007, that the claimant was unfairly dismissed because she was unfairly selected for redundancy. The Tribunal deems compensation to be the most appropriate remedy and awards the claimant fifty thousand euro (€50,000.00) under the said legislation. For the avoidance of doubt this award is in addition to all payments already received by her in connection with the termination of her employment including a redundancy payment of €10,014.00 paid to the claimant under the Redundancy Payments Acts”
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.”
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
[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 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.”
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.”
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;”
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.”
Employer v Employee
UD564/2011
“Summary of evidence:
The Waterford store, within which the claimant was employed, opened in 2008. However, the subsequent sales figures were far less than the forecasted figures. The Waterford branch suffered poor sales figures in 2009, 2010 and 2011 and indeed throughout 2012.
The General Manager for the branches nationwide gave evidence to the Tribunal. He explained that the Waterford branch comprised of a trade counter area, warehouse area and the drawings section which was a tailored specific role.
By October 2010, when the claimant’s position was selected for redundancy the hope was that in closing the warehouse in the Waterford branch, it would help to improve the profitability of the branch. The closure of the warehouse was a last resort after attempting to reduce costs and re-negotiate overheads. However, the closure of the warehouse made little or no difference. Indeed the week prior to the hearing the staff of the Waterford branch was informed that the branch would be closing fully in January 2013.
With the closure of the warehouse in October 2010, the three positions in that area were made redundant, including the claimant’s. One salesperson was also made redundant and his position was selected using a matrix. There were a total of 11 redundancies across the company and 1200 across the umbrella group.
Giving evidence the General Manager stated that the redundancies were implemented in a very structured manner. On the 13th October 2010 staff members were called in groups of three to a meeting and informed of the decline in sales, that the branch was operating at a loss and that the company now found itself in the position of having to implement redundancies.
Staff were informed that the company would accept an application for voluntary redundancy or a career break with a return to continuous service. The company was also willing to consider re-deployment options to other branches but there was little available at that time. The staff were informed that a further meeting would follow on 15th October 2010. The General Manager acknowledged in evidence that this was a short timeframe but stated it was critical. During cross-examination he accepted that staff were not given details on the 13th October as to what areas of the business might be affected by redundancies
As part of the individual meetings on Friday, 15th October 2010 the General Manager met with the claimant and informed him that the warehouse was closing with immediate effect and that consequently his position was redundant. There was a retail sales position available in Limerick and this was offered to the claimant but he declined this position due to family commitments. On several occasions the General Manager informed the claimant that he had the right to appeal but the claimant signed the RP50 and accepted the redundancy cheque. The claimant received an ex-gratia payment. It was the claimant’s evidence that he was shocked to be informed that his position was redundancy as the warehouse was not mentioned during the meetings that took place on the 13th October 2010. The claimant stated that he did not appeal the decision to make his position redundant as he did not believe that management would reverse their decision to make his position redundant. During cross-examination the General Manager confirmed that the group has a written redundancy procedure and although this was not shown to the claimant, the policy was adhered to. There was no need to compile a matrix in relation to the warehouse staff as the warehouse was closing fully.
……
When the claimant’s position was made redundant he understood that the warehouse was shutting fully and that any future orders would be sent from another branch. However, the claimant stated that to the best of his knowledge the warehouse did not in fact close immediately and that there are still employees working in the warehouse, as the employees from the trade counter also work in the warehouse section. The claimant cannot understand how employees with lesser service were retained as he could have claimant could have been trained in most of the positions. During cross-examination he accepted that he could not have carried out the work that DP did from October to December 2010.
The claimant gave evidence of loss and efforts to mitigate the loss.
Determination:
Whilst the Tribunal accepts that the company was suffering losses this was not supported by adducing written documentation. The Tribunal finds that the procedures applied by the company were completely deficient in the manner of the implementation of the claimant’s redundancy. Accordingly, the Tribunal awards the claimant compensation of €8,000 under the Unfair Dismissals Acts, 1977 to 2007, with the redundancy sum already paid to the claimant to be offset against this award.”
Employer v Employee
UD292/2011
“Respondent’s Case
Witness for the respondent (AK) gave evidence that the respondent is a large multi-national engineering company operating in 29 countries. At the height of the economic boom the company employed over 500 employees in Ireland. The company was involved in a major electrical installation project on Dublin site and had 480 employees working on that site for a period of time. This project wound up from April/May 2010 and the company now has 85 employees in Ireland. The claimant was employed in an administrative training and development co-ordinator role lending support to apprentice electricians employed by the company. She was also responsible for organising internal executive courses in leadership management and skills enhancement. She reported to (DO’N) who was head of a group role for training and development within the company. Following the decline in construction business which started in 2010 the company implemented a large number of redundancies. The number of apprentices reduced by over 90% and the training and development courses for which the claimant had responsibility were outsourced to a university located in England. The claimant’s line manager (DO’N) was made redundant in March 2010 and the claimant’s position was also made redundant in June 2010.
The witness gave further evidence that the company advertised for two corporate human resource positions following the claimant’s redundancy. The positions were publicly advertised and carried a higher salary than that paid to the claimant. She gave evidence that the claimant did not have requirements or experience for these positions.
The claimant was paid her statutory redundancy entitlement and was also given one month’s notice which she was not required to work. She was also offered an ex-gratia payment of€10,000 which she declined to accept.
Claimant’s Case
The claimant gave evidence that she commenced working for the respondent company in March 2007. She worked in an administrative capacity and had a training and development role within the company. She arranged, co-ordinated and scheduled training and development courses. She worked and liaised with FAS management in relation to apprentices and reported to (DO’N) and (GG). She was aware that (DO’N) had been made redundant in March 2010 but understood that her position would remain as she also worked to (GG) and she had very little work with(DO’N).
On the morning of 9 June 2010 she attended a training and development meeting with (GG) and (TK), a senior member of management. She subsequently received an e-mail from (GG) inviting her to a meeting later that afternoon. She had no knowledge of the content of the proposed meeting. She attended the meeting and was told by (GG) that she was being made redundant. It was explained that the number of employees in the company had reduced and the courses for which she was responsible were being outsourced to a university in England. This was a massive shock to her and she became emotional and did not speak at the meeting. She was told that there were no alternative positions available for her in the company. She was told that two positions were going to be filled by the company but was told that she did not have the experience for these positions.
She gave evidence that she was not offered the opportunity to have a representative present with her at the meeting. She was willing to re-train or accept any other role within the company. She would have been willing to re-locate and work abroad for the company but none of these options were offered to her. She was given one month’s notice and was paid her statutory redundancy entitlement. She was also offered an ex-gratia payment of €10,000 but did not accept this offer as she needed time to think about it. She was also required to sign a waiver ifshe accepted the offer and ultimately this payment was not made to her.
Determination
The Tribunal has enormous sympathy for the claimant who was clearly traumatised by the loss of her position with the respondent company, coming as it did at a formative time in the claimant’s career. She was clearly an excellent worker and recognised as such by the respondent company.
The Tribunal, however, is satisfied that a genuine restructuring was occurring within the respondent company due to significant economic changes which led to a redundancy situation. The Tribunal is further satisfied on the evidence of both parties that the claimant’s role became redundant and that there was no unfair selection of the claimant.
In all the circumstances, the respondent company acted reasonably. The Tribunal does not agree with the claimant’s assertion that it was unreasonable of the respondent company not to find a position for her elsewhere in its worldwide operation.
The respondent company did show sympathy for the claimant’s loss by offering an ex-gratia payment of €10,000 to the claimant on her redundancy. This respectful response to the c laimant’s difficulties was further reflected in a similar approach to her cross-examination before the Tribunal by the respondent company’s representative. The Tribunal feels that the extent to which the claimant was traumatised affected her ability to arrive at a reasonable conclusion in relation to this offer. It was not indicated to the Tribunal whether this ex-gratia payment could still be availed of by the claimant. This, of course, is not an issue for the Tribunal.
The claim under the Unfair Dismissals Acts 1977 to 2007 fails. The Tribunal holds that the claimant was made redundant and as the claimant has already received her statutory redundancy entitlement the claim under the Redundancy Payments Acts 1967 to 2007 fails. It was accepted by the parties that the claimant received one month’s notice of the termination of her employment and accordingly the claim under the Minimum Notice and Terms of Employment Acts 1973 to 2005 fails.”
Desmond McG v Sleedagh Farms Limited
Morgan v The Welsh Rugby Union
EMPLOYEE v EMPLOYER
Richard Gee v The Irish Times Limited
and v The Irish Times Publications Limited (defendant)
2000 No. 5087P
High Court
27 June 2000
[2001] 12 E.L.R. 249
(McCracken J)
The plaintiff is a chartered accountant and has been employed by the first defendant, who I will call The Irish Times , since 1982. He has held the position of financial controller since 1988 and in 1991 he was appointed a director of the second defendant. This defendant is not a trading company and at this stage of the proceedings I am not really concerned with that directorship. I also think the plaintiff has not made out an arguable case that he has any special entitlement to retain this directorship.
The Irish Times is desirous of reorganising its management structure and has notified the plaintiff that it intends to appoint a chief financial officer whose functions will be different, it is claimed, from those of the plaintiff but whose presence will make the plaintiff redundant. The Irish Times has accordingly informed the plaintiff that he will become redundant and has given him 12 months notice. I should say immediately that there is no question of any misconduct on the part of the plaintiff and the only basis on which notice has been given is redundancy.
The plaintiff has issued these proceedings challenging the purported redundancy and now claims by way of an interlocutory order, and I quote his claims in his notice of motion:
1. An interlocutory injunction restraining the defendants and each of them, their servants or agents howsoever from dismissing or taking any steps whatever to dismiss the plaintiff from his position as financial controller of the first-named defendant.
2. An interlocutory injunction restraining the defendants and either of them, their servants or agents howsoever from dismissing or taking any steps whatsoever to remove the plaintiff as a director of the second named defendant.
3. An interlocutory injunction restraining the defendants and each of them, their servants or agents howsoever from appointing any person other than the plaintiff to the plaintiff’s position as financial controller of the first named defendant.
4. An interlocutory injunction restraining the defendants and each of them, their servants or agents from appointing any person to the post of financial officer of the first named defendant or any similarly entitled post.
5. An interlocutory injunction restraining the defendants and each of them, their servants or agents howsoever from appointing any person other than the plaintiff to perform his roles and functions as financial controller of the first named defendant. *251
6. An interlocutory injunction restraining the defendants and each of them, their servants or agents howsoever from denying to the plaintiff the payment to him of all salary remuneration and other emoluments arising from his position as financial controller of the first named defendant and/or director of the second named defendant.
7. An interlocutory injunction restraining the defendants and each of them, their servants or agents howsoever from taking any steps whatsoever whether by way of interview, selection or other procedure to identify and/or nominate and/or appoint any person other than the plaintiff to the plaintiff’s said post as financial controller of the first named defendant or to any other post, the requirements of which include the performance of the plaintiff’s current role and functions as financial controller of the first-named defendant.
The plaintiff’s basic claim is that he is entitled to relief on three grounds. Firstly, that in fact there is no redundancy because the proposed new job is essentially the same as that already performed by the plaintiff. Secondly, that there is a policy of The Irish Times that there shall be no forced redundancies and this policy is incorporated in an agreement with several trade unions representing some 90% of employees of The Irish Times . The plaintiff claims that at least by implication this is a term of his employment. Thirdly, that The Irish Times did not comply with natural justice in taking their decision to make him redundant.
I do not intend to go into the facts of this case in any detail at all. It is sufficient to say that in my view there is an arguable case to be made by the plaintiff on the first two points, although I have serious doubts as to how far the third point is arguable in the absence of any personal allegations of wrongdoing against the plaintiff.
I should say that I am making no findings whatever as to the plaintiff’s capacity or ability to carry out duties of either his existing post or the proposed new post. These are matters for the trial of the action.
The Irish Times has purported to make the plaintiff redundant on terms that he will get 12 months notice and will work for the first three months of that 12—month period. In fact, as that three months has not yet expired, he is still working with The Irish Times . This term ensures that he will be paid his salary and all benefits and emoluments such as pension rights for that 12 month period.
The Courts have traditionally been very loathe to grant specific performance of a contract of employment, although there have been exceptions to this rule. The general principles to be applied at this interlocutory stage have been clearly laid down by Costello J, as he then was, in Fennelly v. Assicurazioni Generali Spa and General Underwriting Agencies Ireland Ltd (1985) 3 ILTR 73 and I would quote from the relevant portion of his judgment. Unfortunately there is no reported judgment officially of this decision but the accuracy of the quotation I *252 will make can be relied on. I quote from his decision:
I have to consider the well-established principles on which interlocutory relief is granted. I agree that in approaching the question of interlocutory relief I should approach the case on the basis that the Courts have laid down as a general principle that they will not give specific performance of an employment contract, but this general principle is subject to exceptions and it has recently been subject to exception in the well known case of Hill v. CA Parsons Limited. Whether or not the plaintiff is able to bring himself within exception to the rule I do not have to express a concluded view. It is possible that at the trial of the action and assuming the plaintiff succeeds, the Court might conclude that damages are an adequate remedy rather than specific performance, but that does not conclude the situation as far as this interlocutory application is concerned because I have to consider the balance of convenience between now and the time of the action. I will take steps to ensure that the action will come on speedily, but it is quite clear it will be some considerable time before it comes to hearing. In the meantime the plaintiff will be left without a salary and nothing to live on. The situation in which he finds himself would be little short of disastrous. It seems to me in that situation that the balance of convenience is in the plaintiff’s favour. He should not be left in the situation between now and the action in which he would be virtually destitute with the prospect of damages of the action. That seems an unjust situation.
In view of the very special circumstances in this case I will require the plaintiff to be paid his salary and I order that until the trial of the action the defendant should continue to pay the plaintiff’s salary and bonus under his present contract. I accept that the Court should not require an employer to take on an employee where serious difficulties have arisen between them or where there is no work for the employee, but in this case the parties have obviously the highest regard for one another. I will take an undertaking that the plaintiff will be prepared to carry out such duties as the defendants will ask of him until trial. If they would make use of him until the trial of the action, the plaintiff should attend and carry out such duties as they give him. They might prefer not to give him any duties and put him on leave of absence, that is for the defendant, but they must continue to pay his salary until the trial and I require the plaintiff to give an undertaking as to damages. I will reserve the costs.
A number of other cases have been cited to me in which this form of relief has been granted. The Irish Times’ attitude is that as they are prepared to pay the plaintiff for 12 months, such an order is unnecessary in this case. However, the plaintiff is seeking something more; he asks for an interlocutory injunction restraining The Irish Times from appointing anybody to perform his job or carry out his functions. This is in effect seeking a mandatory order that The Irish Times continue, not only to pay him his salary, but to permit him to actually continue to work. The Irish Times say they are not prepared to do this as they *253 have lost trust and confidence in the plaintiff. They also point to the fact that the plaintiff is not claiming to be entitled to be financial controller for life but only that he will not be made redundant and will continue in a post of similar standing to that of financial controller. The plaintiff does accept that he may be moved sideways and indeed part of his case is that this has occurred on previous occasions with other management personnel.
In addition to claiming to be entitled on an interlocutory basis to retain his present position, the plaintiff also seeks to restrain the appointment by The Irish Times of a chief financial officer. He points out that if such appointment is made, it would be a fait accompli by the time of the hearing of the action and it will be very difficult to unravel such a position. While this is undoubtedly so, the plaintiff again is not claiming any contractual entitlement to this position.
The relevant contractual provisions which the plaintiff claims and seeks to enforce are set out in paragraphs 8 to 11 of the statement of claim which he has delivered. In these paragraphs he claims:
8. It is an express or alternative feeling and implied term of the plaintiff’s contract of employment with the first named defendant that saying it will not be terminated by reason of compulsory redundancy. Further it is an express or implied term of the plaintiff’s contract of employment with the first named defendant that in the event of a redundancy situation arising within the first named defendant’s business affecting the plaintiff’s position, that the plaintiff will be offered a suitable and agreed alternative role in the employment of the first named defendant with his salary and other emoluments continuing heretofore.
9. It was further an express or implied term of the said contract of employment or alternatively implied therein by reason of the course of dealings between the plaintiff and the defendants that the plaintiff’s employment with the defendant would not be terminated by the defendant prior to the expected date of retirement on him reaching the age of 65, save by reason only of gross breach of the terms of the said contract by the plaintiff.
10. Further and in the alternative and without prejudice to the foregoing, it was an express or implied term of the plaintiff’s employment that as a non trade union member of staff, he should enjoy terms of employment that were no less favourable than those enjoyed by the trade union members and in particular should have the benefit of no forced redundancy policy applied to trade union members.
11. Further or in the alternative and without prejudice to any of the foregoing, if, which is denied, the aforesaid terms were not terms of the plaintiff’s original contract of employment with the defendants, the plaintiff’s contract of employment was subsequently expressly or impliedly varied by the inclusion of the aforesaid terms.
*254
While the plaintiff is claiming that the new position of chief financial officer is in effect the same as that of financial controller; nevertheless he does not seriously dispute the right of The Irish Times to reorganise their management staff and re-deploy the plaintiff in a different capacity. There is no doubt that The Irish Times are in the process of a management reorganisation and to hold this up could cause serious loss to The Irish Times which could not be calculated in damages. The plaintiff claims he is losing job satisfaction if his work is not continued and I am sure this is true. Again, it is a matter not calculable in damages.
However, on a balance of convenience, I have no doubt that the potential damage to The Irish Times is much greater than that to the plaintiff. I also think that in the ultimate hearing of the action assuming the plaintiff succeeds, the strong probability is that he will only obtain an order continuing his employment in some capacity but not necessarily in that of financial controller.
This is clearly a proper case for a Fennelly order and I will make one, but I do not think the plaintiff is entitled to any other interlocutory relief. Accordingly, other than making the order continuing the plaintiff’s salary, I would otherwise dismiss the other claims in this interlocutory motion.
I will reserve the costs. I think it is better to make a full Fennelly order although I would seriously hope that the case would be heard within 12 months. I will grant an injunction in terms of paragraph 6 of the notice of motion “an interlocutory injunction restraining the defendants and each or either of them, their servants or agents howsoever from denying to the plaintiff the payment to him of all salary, remuneration and other emoluments arising from his position”. I think there is an undertaking as to damages already given in the affidavit by the plaintiff. I am not prepared to say there cannot be another financial controller. I am prepared to grant an injunction simply restraining the defendants from dismissing the plaintiff from his employment with the first named defendant. I will not specify the particular employment. There will be liberty to apply by either party.
Desmond B. McCabe v Lisney and Son
1979 No. 1
High Court
16 March 1981
[1981] I.L.R.M. 289
ELLIS J
delivered his judgment on 16 March 1981 saying: In early August 1972 Mr McCabe the applicant, who is now fifty years of age, was appointed a senior negotiator in the commercial department of the firm of Lisney and Son, the respondent, which carries on the business of Estate Agents, Auctioneers, Valuers and Surveyors at their Dublin Office at 23/24 St Stephen’s Green. The *290 terms of the applicant’s appointment and employment were contained in three letters dated 21 July 1972, 2 August 1972 and 4 August 1972, passing between the applicant and Mr Henry, a senior partner in the respondent firm.
The applicant continued in his employment until it was terminated by the respondent by letter of 6 April 1977 to take effect from 31 May 1977 on the ground of redundancy under the Redundancy Payments Acts. This letter constituted a dismissal under s. 1 of the Unfair Dismissals Act, 1977, (to which I shall refer as the Act).
Arising out of his dismissal the applicant has brought proceedings against the respondent for redress by way of financial compensation under the Act.
The Employment Appeals Tribunal gave its decision on 17 November 1978, against which the respondent appealed to the Circuit Court, which in turn gave and made its decision and order on 7 February 1980. This is an appeal by both parties against the decision and order of the Circuit Court and is a full rehearing.
Mr Blayney in a preliminary submission contended that under the Act the applicant had no right of appeal to the High Court from an order of the Circuit Court made on appeal to it from an order or decision of the Employment Appeals Tribunal, and hence that this Court had no jurisdiction to hear or determine this appeal. Mr Blayney’s submission was fully argued by counsel for both parties. I have ruled against it on the ground that the phrases in the Act on which Mr Blayney relied in support of his contention were too indefinite and uncertain in their interpretation and intention to deprive the applicant of the right of appeal to this Court, to which he would otherwise be entitled in the absence of a sufficiently clear or express provision or intention in the Act to this effect.
The following are the statutory provisions of the Act and the Redundancy Payments Acts, 1967 and 1971 which are applicable to the issues in the case. S. 6(1) of the Act provides that subject to the provisions of this section, the dismissal of an employee shall be deemed for the purposes of the Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal. S. 6(4) provides that without prejudice to the generality of s.6(1) above, the dismissal shall be deemed not to be an unfair dismissal if it results wholly or mainly from one or more of the following in so far as they are material to the issues in this case:
(b) the conduct of the employee and/or
(c) the redundancy of the employee.
These were the two main issues in the case on liability.
Redundancy is defined in s. 1. of the Act as meaning any of the matters referred to in paragraphs (a) to (e) of s. 7(2) of the Redundancy Payments Act, 1967 as amended by the Redundancy Payments Act, 1971 — s. 4 as substituted, the relevant sub-sections on which the respondent relied being s. 7 (2)(1)(b) and s. 7(2)(1)(c) as substituted which provide as follows:
For the purposes of sub-s. (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 (1)(b) the fact that the requirements of that business for employees to carry out work *291 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 has been employed (or had been doing before his dismissal) to be done by other employees or otherwise.
S. 6(6) of the Act provides that:
In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in sub-s. (4) of this section or that there were other substantial grounds justifying the dismissal.
The only ground relied on by the respondent under s. 6 sub-s. (4) was on sub-s. (4)(c), namely the redundancy of the employee. Whilst the respondent did not claim or seek to rely on the conduct of the applicant to justify the dismissal (which would also be a ground under s. 6 sub-s. (4)(b) to justify a dismissal if it resulted wholly or mainly therefrom), it nevertheless claimed and sought to prove under s. 7(1) and 7(2)(b) and (c) of the Act that if contrary to their contention that the dismissal was due wholly or mainly to redundancy, the court held the dismissal was unfair, then that in awarding the applicant compensation for financial loss attributable to such dismissal, and in determining the amount thereof as would be just and equitable in all the circumstances, the court should also have regard to and take account of the extent to which such financial loss was also attributable to the applicant’s own conduct (s. 7 (2)(b)), and/or his failure to adopt measures to mitigate such financial loss (if any) (s. 7 (2)(c)), and thereby reduce the applicant’s compensation for financial loss (if any) accordingly. In my opinion this construction as to the manner in which s. 7 should be applied is correct.
Mr O’Hanlon has submitted that s. 7(2)(b) of the Act should be construed otherwise so as to relate only to conduct affecting the amount of the employees financial loss after his dismissal, and not to conduct relating to his employment before then which he submits should be excluded. If Mr O’Hanlon is correct in this submission then any conduct of the employee which was a factor contributing to his dismissal would have to be ignored in the assessment of compensation payable to him. This would not seem consistent with the requirement in s. 7 (1)(c) that the compensation payable to an employee (subject to the limitation provided in the said sub-section) should be in respect of any financial loss incurred by an employee and attributable to the dismissal as is just and equitable having regard to all the circumstances. In my view the financial loss to which s. 7(2)(b) relates is governed by s. 7(1)(c) which read together with s.7(2)(b) means financial loss attributable to the dismissal in the assessment of which by way of compensation the court is required to have regard to the extent (if any) to which such dismissal was partly attributable to conduct by the employee as would be just and equitable having regard to all the circumstances. It seem to me also that s. 7(2)(b) is intended to refer to conduct before dismissal as a ground for reducing compensation as distinct from s. 7(2)(c) to which the court should have regard to the measures (if any) adopted by the employee, or his failure to *292 adopt measures, to mitigate his financial loss which would arise after dismissal. I am supported in my view that the conduct of the employee referred to in s. 7(2)(b) is intended to refer to predismissal conduct by reference to s.6(4)(b) of the Act under which the conduct of the employee as a ground for dismissal clearly refers only to predismissal conduct. If such conduct resulted wholly or mainly in his dismissal, his dismissal would be justified under s. 6(4)(b). This suggests that conduct under s. 7(2)(b) is intended to be less than would justify dismissal, but which should be taken into account as a reason for reducing compensation. The respondent does not make the case here that the applicant was dismissed under s. 6(4)(b).
Mr O’Hanlon also submitted that when an employer relies on one ground for dismissal, such as here, for redundancy, he is precluded from seeking to rely on evidence (as here) alleging conduct by the employee which does not warrant or falls short of justifiable grounds for dismissal as a ground or contributory factor to reduce compensation payable to the employee. In other words he says that if the respondent here fails in justifying redundancy as a ground of dismissal it cannot then rely on alleged conduct of the applicant to reduce compensation. In my view the provisions of s. 7(1) and s. 7(2)(b) of the Act do not have this meaning or effect, and cannot be construed to preclude the respondent from relying on one particular ground (here redundancy) to justify dismissal, and if it fails in this, from relying also on another or different alternative reason (here the conduct of the applicant under s. 7(2)(b)) as a matter to which the court should have regard under s. 7 in determining the amount of compensation payable to the employee as would be just and equitable having regard to all the circumstances.
Having thus decided against Mr O’Hanlon on these submissions, the applicant’s case is that his dismissal was not due wholly or mainly to redundancy and that there was no evidence of conduct by him or of any failure by him to adopt measures to mitigate his financial loss which would justify the court in reducing his compensation, which he claims was wholly attributable to his unfair dismissal.
Under the statutory provisions to which I have referred the onus is clearly on the respondent to show on what I hold to be the balance of probabilities that the dismissal of the applicant was due wholly or mainly to the redundancy it alleges. In my view the onus is also on the respondent to show on the balance of probabilities that there was conduct by the applicant to which his dismissal, and hence his financial loss (if any), was partially attributable to an extent to which the court should have regard and take into account by way of reduction thereof as would be just and equitable having regard to all the circumstances.
There is a similar onus on the respondent under s. 7(2)(c) which it has invoked to show failure by the applicant to adopt measures to mitigate the loss which he claims as a result of his dismissal.
The onus lies on the applicant to prove to the satisfaction of the court, also on the balance of probabilities, the actual financial loss and the estimated prospective loss of income which he attributes to his dismissal.
The applicant commenced working in the respondent’s commercial department under Mr Gerard J. Henry who was in charge of this department. The *293 applicant’s main brief as he described it was as general senior negotiator, with special emphasis on the licensed trade section of which he had previous experience, expertise and contacts.
The staff in the commercial department at this time consisted of its head Mr Henry, Mr Peter Browne a senior negotiator, Mr Henry’s secretary, and two or three junior staff members.
According to the evidence of the applicant the business of the respondent expanded after he joined it in 1972, and the staff in the commercial department was increased by two additional senior negotiators, and an extra secretary, and he himself was given his own secretary.
He said he got on very well with his associates and his working relationship with Mr Henry was particularly good. He described the business and his working conditions as flourishing. He said business generally and in the firm was very good in 1972 and 1973 and into 1974, but that around then it was hit by a reduction in commission fees from 5% to 2½%; an alteration from purchaser to vendor for the liability to pay auctioneers fees, and the fuel crisis. As a result business fell off and the respondent reduced its staff by 20 or 30 persons from 120. He felt his own position was not in jeopardy although he felt a bit anxious as there were three or four reductions in his department. He asked Mr Henry about his position and Mr Henry told him that ‘of course you are very much with us. If we stay together and combine our efforts we will be perfectly alright’. The applicant described the market conditions and the respondent’s business as very difficult in late 1974 and 1975, but that it began to pick up in early 1976, and became buoyant again in 1977 when he said the crisis had been overcome, and that this improved position was maintained during 1977–78, although it fell off again in 1979.
He said Mr Henry, who was then a director in the respondent’s firm, resigned in 1975 and that this was a severe blow to him. He was succeeded by Mr Whitaker who came from the development department. According to the applicant there then began a decided change in his relationships in the commercial department and hence in the firm, which became totally different. Mr Whitaker did not involve him and though accessible, there was not the same rapport, and that this brushed off on the staff. He said Mr Whitaker had a poor view of the licensed property side of the business which was the applicant’s speciality.
The applicant then gave evidence of a series of disputes, complaints and differences of a varied nature between himself and Mr Whitaker and Mr Broadhead, the senior partner in the respondent’s firm, which began and ran from late 1976 up to the time of the applicant’s dismissal in April 1977.
It is unnecessary to go into these matters in great detail except to mention them with some comments where material to the issues. The main sources of contention and disputes between the parties were as follows:
(a) the question of the use by the applicant of his personal auctioneer’s licence in the respondent’s premises to which the respondent objected, but to the use of which the applicant nevertheless maintained he was entitled under the conditions of his employment, and in respect of which he obtained legal advice.
(b) A very acrimonious dispute relating to a claim by the applicant for the additional *294 cost of petrol amounting to £41 arising out of poor miles per gallon performance of the firm’s car of which he had the use, and the substitute use of his own car. He made this claim in his vouched expense account which he had wrongly allowed to run for fifteen months without notice to the respondent. The applicant threatened Mr Whitaker, who had queried the claim, with resort to a solicitor if not paid. The amount was paid and the amount accepted but not in good grace. I feel I should express my view on this dispute. It was out of all proportion to the amount involved but obviously went deeper than this. I take the view that the applicant handled and presented this claim in a manner which was wholly incompatible with his position in the firm and in a way which was unduly annoying and unacceptable to the respondent, even if paid to get rid of it.
(c) What I can best describe as the Smith/Lowe affair over the applicant’s claim for commission on introductions in respect of which the applicant claimed the right to commission. The respondent, through Mr Whitaker and Mr Broadhead, denied this and disputed this claim by the applicant. This affair blew up into what I can only describe as a row around the end of December 1976 and carried on for some months. It was most unseemly. In February 1977 the applicant had a meeting about it with Mr Broadhead. This was the applicant’s evidence about Mr Broadhead’s attitude and reaction
I had expected a fairer type of reaction from Mr Broadhead — I expected an appeasement from him to settle the matter.
It was quite clear from the applicant’s own evidence that Mr Broadhead’s controlled patience was now being stretched over this affair, and the the applicant should have paused to consider his position.
(d) There then was a conversation and meeting between the applicant and Mr Broadhead over the holding back by the applicant of a claim for expenses of about £300 for one year as he said ‘to save Lisney’s money’. It was not a pleasant meeting or conversation. At it the applicant said Mr Broadhead remonstrated with him for referring to himself (the applicant) as a senior executive of the firm when he was only a licensed departmental manager. The applicant agreed in evidence he had probably done so, but only on one or two occasions with senior publican clients for good business, but he said to Mr Broadhead that whether one was a senior negotiator, a manager or a senior executive was only a name. This understandably did not seem to go down too well with Mr Broadhead who according to the applicant then told him it was untenable of him to threated Mr Whitaker with a solicitor’s letter over the matter of a £41 claim for excess petrol consumption, and that his (the applicant’s) explanation of what happened had no effect on Mr Broadhead. This hardly surprises me. According to the applicant Mr Broadhead then told him it would be better if he looked for another job and that he would give him three/six months to look around, and that he suggested he would try one or two of the other auctioneering firms, especially Morrisseys, as being in the licensed trade business. He said Mr Broadhead also told him he might be able to find a niche for him in the residences department of Lisney’s, but that this would mean reduced status and earnings. The applicant said Mr Broadhead also told him he was unsuitable for Lisney’s and that he looked for business in a way which Lisney’s did not approve. Touting was the word used in court for this. The applicant stated he explained how and why this was common, and that he had only built up a trade in the licensed and hotel business so that clients would think of him in terms of public relations, and that what is called ‘touting’ could be looked upon as good marketing expertise. The applicant then said that Mr Broadhead told him that the commercial department was not viable and might have to close down, and that he finished up by saying that he would give him (the applicant) 24 hours to resign or leave the firm, to which the applicant said he replied that in spite of everything he was a hard worker and a gentleman, and challenged Mr Broadhead’s statement that the commercial department was not viable as he (the applicant) had done a survey on it which disclosed that its business was quite good.
*295
(e) These foregoing meetings and conversations took place in the context of an earlier meeting arising out of which the applicant said in evidence that the respondent lost the sales of 22 licensed premises and commission fees in excess of £70,000 to a rival firm because of what he said was Mr Broadhead’s negative attitude and refusal to agree to a policy of cutting fees to gain customers, which according to the applicant in evidence he told Mr Broadhead was the normal practice in the licensed division in which customers expected reduced fees. In my view, even if well meant, these were all matters for the applicant to accept as major serious policy decisions by the firm’s senior management which should not have been practiced or contested by him even if he thought it was good for business. The good name and reputation of the firm was involved.
(f) There was then a meeting in March 1977 to which the applicant was called into by Mr Broadhead over the list of the applicant’s fees which he has sent in for the year ending 31 March 1977. Mr Broadhead disputed the applicant’s figures, after which he said Mr Broadhead told him that the respondent’s licensed division was being abandoned and asked him (the applicant) if he would take a lesser job in a different department with lesser earnings. The applicant said he told him if he wished to make an offer he would have to consider it, and that Mr Broadhead then told him he would make the offer in a weeks time but that he recognised the applicant would in the meantime have to consult his wife who was in hospital.
(g) There were then two further disputes relating to the applicant’s firm car. There was a somewhat prolonged dispute concerning complaints by the applicant about the car which the firm supplied to him and about which he was not satisfied, either as to its condition or performance or its status befitting his position which he felt was being down graded. There was also a complaint by the applicant about his reserved parking position which he said should be available for him according to his status nearer the firm’s premises but had been reallocated further away. The applicant succeeded in getting back his parking position and also a different car, which did not satisfy him either.
There were then the events of 6 April 1977. The applicant was called into the office of Mr Broadhead who he said told him all the partners in the firm had considered the matter, and in the best interests of everyone in the firm, including the applicant, that he would not be offered the position already referred to and that as a consequence he was being made redundant. The applicant said Mr Broadhead then called in Mr Whitaker and he was given by Mr Whitaker the already prepared letter of 6 April 1977 dismissing him for redundancy reasons. He said he was told by Mr Broadhead that he could resign on 31 May; that he would get three months basic salary which he might get tax free, and that no other mention was made of why he was being dismissed. The applicant said he was very shocked and mentioned that his figures were good. He then left and made out his period of notice which he said was never such a busy period. He said he had not then much time to look for another post but that nevertheless he made every effort of approach for that purpose.
The applicant stated that the staff in the commercial department at the time of his dismissal consisted of Mr Whitaker, himself, Mr Rooney, who had been transferred from the office letting department one year before, and a shared secretary.
It is to be noted from the evidence of the applicant that during all the time from when controversy first commenced in 1976 to 6 April 1977 there was no positive reference to the matter of his redundancy or any risk of termination of his employment on that account. Neither was there any reference to such matters *296 in any of the correspondence which passed between the applicant and the senior officials of the respondent. The evidence indicates that this is correct. This is surprising to say the least, if redundancy was to be, or was, the sole or main reason for his dismissal. The applicant seems to have weathered well the reductions in staff which were made in 1974. In such an important matter relating to the applicant’s future livelihood and having regard to his age and domestic situation, of which the respondent by its senior officials was aware, I would have expected much prior discussion between the parties and that the applicant should have received due or prior warning which he did not get. It transpired during the course of the evidence of the respondent’s officials that in the company minutes produced in court there was no reference made to redundancy of any employee during the time with which the court is concerned, but that in the minutes of 18 April 1977 there appeared under the heading ‘reorganisation’ a decision that ‘as a result of the reorganisation of the commercial department it was unanimously agreed that Mr D. McCabe’s employment with the company be terminated on 31 May 1977 on the grounds of redundancy’. If this decision was made on 18 April 1977 it was obviously after the notice of dismissal of 6 April 1977. If however it merely seeks to record the happening of this event it is not clear at what meeting, or by whom, or when this decision was taken. The applicant’s claim is supported in this context by the minutes of the Directors meeting held on 6 December 1976 in relation to the preparation of the draft budget which states ‘no change in number or status of employees’.
The applicant in evidence has given a history of his relations with the firm, and of its business, economic and general financial position leading up to April 1977 which in my opinion would not have warranted his dismissal either wholly or mainly for redundancy reasons, but in the course of which he himself has nevertheless supplied in my opinion a picture of unhappy personal and business relationships with the firm and its senior officials which could not have continued with benefit to either, and which could not in ordinary circumstances have lasted much longer. It is with reluctance that I express my views as to blame for this position which developed and deteriorated during 1976 and 1977 except in so far as I have to do so as an issue to be decided in the case. I have come to the clear conclusion on the applicant’s own evidence that his conduct was substantially to blame for his dismissal. He raised and clashed on matters which became unnecessarily blown up and acrimonious by his lack of finesse in handling them, and he also differed seriously from the senior management on major and serious matters of policy, to which I have already referred. He claimed and sought a higher status to which he was not entitled in the opinion of the firm’s senior management. He appears to have been unduly pressing for and occupied with his status in the firm.
Mr Broadhead’s evidence dealt mainly with his various meetings and conversions on the same problems as those on which the applicant gave evidence, although differing in content. He said all these complaints of the applicant upset him. He also gave evidence relating to the financial position and business of the respondent firm and of the commercial department in particular. His attitude to the applicant was that as the commercial department was not viable *297 (a view which the applicant has said was not justified) and on account of the applicant’s general dissatisfaction and complaints, he suggested to him that the applicant should look for another position in the best interests of every one. Mr Broadhead said however, and I accept, that at the same time he offered continued employment to the applicant which he told him would be at a lower level and status, but with a potentially higher income than the applicant’s position in the commercial department. These two positions were or would be in the residences department and the management department, although it is not clear if Mr Broadhead told this to the applicant. The applicant was given time to decide on this offer, but an impasse arose. Mr Broadhead said that the applicant would or said he could not decide unless he knew of the offer in greater detail. Mr Broadhead said he told the applicant he could not give him this until the applicant decided in a general way if he would be prepared to accept another position in the firm. He said he could not get an answer from the applicant and therefore in order to bring the matter to a head and force the issue, he, either by himself or in consultation with the senior management, decided to give the the applicant the notice of dismissal of 6 April 1977 and at the same time to give him his choice of this, or the alternative of resignation whereby he could look for another position from strength, when, if the applicant wished, the letter of 6 April 1977 would be withdrawn. Mr Broadhead said, and I accept his evidence and that of Mr Whitaker in corroboration, that this was explained to the applicant at the time of the meeting on 6 April 1977. On cross-examination Mr Broadhead said he knew the figures of the alternative positions that could be offered to the applicant but that he did not inform him of them. On the whole of the evidence of Mr Broadhead, including his letter of 28 January 1977, to the applicant, I am of opinion that whilst the commercial department may not have been showing the required or desirable profit or viability, this was not of itself sufficient to warrant the dismissal of the applicant, or was it the whole or main reason for doing so. I believe that his dismissal was largely attribable to and influenced by the applicant’s own conduct to which I have referred and that this greatly provoked the respondent. I believe it was decided for reasons other than redundancy not to continue the applicant in the commercial department, or in the firm for that matter, and that he should be offered the opportunity of another position in the firm, the full particulars of which he was never given. I got the clear impression from the evidence that the senior management in the firm found the applicant’s conduct cumulatively so aggravating and unacceptable that they felt they had had enough, and wished to see the end of the applicant in the firm. The availability or making of these two positions for the applicant does not appear to have been compatible with a position of redundancy in the firm to which could be attributed wholly or mainly the applicant’s dismissal. Mr Blayney has submitted that the issue of redundancy should be confined to the commercial department, whereas Mr O’Hanlon has contended that it should be related to the firm generally. In my view this depends on the particular facts of the case. Here there was said to be two other positions of possibly higher earning potential for which the applicant must have been thought suitably qualified and experienced. But for the impasse *298 to which Mr Broadhead has referred, the applicant may well have accepted one of them. In this situation I think the applicant had some justification for refusing to make a decision until he knew fully what was on offer. I think Mr Broadhead should have told him of the positions and given him the figures which he has said he had. These would have helped the applicant in making a decision. In any event on these particulat facts, if for no other reason, a position of redundancy for the applicant cannot be said of itself to have existed in the firm to justify the dismissal for this reason. Mr Broadhead agreed that the reference in the minutes of the company of 18 April 1977, was the first references in writing to the question of the applicant’s redundancy on 6 April 1977. He further said that no one had been taken on since May 1977, in the commercial department to replace the applicant. This was a matter on which the respondent relied strongly. I do not think I can accept this fully and without reservation having regard to the position of Mr Keaveney to which I will refer later.
Mr Whitaker’s evidence dealt mainly with his part in most of the problems relating to the applicant’s complaints. He was also in charge of staffing and dealt in detail with the staffing economies which he had effected, particularly in relation to the commercial department which he took over from Mr Henry in 1976. He dealt in detail with the documentation in relation to this, and to the respondent’s financial position generally, and of the commercial department in particular. It transpired there were four senior negotiators in this department in 1974 which were then reduced by two. He gave evidence that the position of the applicant was discussed at a board meeting in February/March 1976 because of the overstaffing position with a view to effecting staff reductions in the commercial department because this department was not generating enough profit. He said the respondent could have done without the applicant in 1974–5–6 but that as he was taken on to develop his speciality of licensed premises it was decided to retain him for 1976 and 1977. The applicant as we know was dismissed on 6 April 1977. He said he told the applicant of this in 1976 and that he would have to develop the sale of licensed premises in particular if he was to have a continuing future in the department. In the course of a further discussion between the applicant and Mr Whitaker in December 1976 relative to one of the applicant’s car complaints and the Lowe/Smith affair, Mr Whitaker said the conversation enlarged into the applicant’s position generally in the firm and that he told him his position in the commercial department was one which in fact was unlikely to continue after the April (1977) review, and that he would be seeing whether he could get him transferred to another department in the firm. After this discussion Mr Whitaker said the applicant avoided him and went over his head to Mr Broadhead with whom Mr Whitaker said he discussed the various problems relating to and raised by the applicant with the object of seeing if they were going to have to make changes in other departments to facilitate a possible move or transfer of the applicant out of the commercial department. I think it is a fair inference that these discussions between Mr Broadhead and Mr Whitaker led to the dismissal of 6 April 1977 following the offers of alternative positions which Mr Broadhead had made to the applicant. Mr Whitaker’s account of what was said and transpired in Mr Broadhead’s *299 Office at the time of the applicant’s dismissal agreed substantially with the account given by Mr Broadhead.
As I have mentioned already, Mr Whitaker dealt fully with the need for staff economies. I have gone carefully through all the various records to which reference was made in the course of his evidence, and the record of staff redundancy and the replacement position. In the course of cross-examination by Mr O’Hanlon, Mr Whitaker agreed that the general picture for the period leading up to April 1977 was one of catching up. I believe, although the economic position in the commercial department was not yet as satisfactory as the respondent would have wished, that the applicant’s employment would have been continued in this department on account of his special qualifications in relation to the licensed trade properties, or that other employment by way of transfer would have been found for him but for the other matters relating to his conduct which in my opinion became an overriding factor and the real or substantial reason for his dismissal.
Mr Keaveney whom the respondent denies was a replacement for Mr McCabe gave evidence. He was first employed by the respondent in May or June 1977. He presented himself and appeared to me to be a highly qualified and competent person who is likely to go far. In 1979 he left the industrial department for the commercial department solely, and has remained in this department ever since. He now negotiates prices with clients. He has had a firm car for two and a half years and is on the pension scheme for one and a half years, and according to himself he has made reasonably rapid progress. It seems to me he is now and has been for some time past a highly regarded and valued member of the staff in the commercial department in which he has become a negotiator in fact if not in name, and that he has effectively been promoted as an additional member to an extent that if not an intended replacement for the applicant, he has assumed this position. I believe the respondent saw his potential from an early stage.
Mr O’Doherty, the respondent’s secretary also gave evidence in which he dealt with the company trading figures; the minutes of the company, and his contacts with the applicant’s complaints. I paid particular attention to his affirmative answer to Mr O’Hanlon in cross-examination that the revenue accounts from November 1976 forward showed the commercial department ahead of the budget estimates and well ahead by the end of February 1977, and that this was a good indication of the performance of the commercial department during the relevant period. This accords with the views expressed in the respondent’s property review magazine in which it is stated that 1976 showed the property market was returning to normal and that the improvements noted in 1976 would probably be consolidated and the brighter trends confirmed. This optimism appears to have been confirmed by the respondent’s results for 1977 to 31 March 1978. All this lends support to my view that any alleged non-viability of the commercial department was overridden by other considerations as a reason for dismissing the applicant.
I am therefore of opinion and so hold on a full consideration of all the evidence that the respondent has not justified the applicant’s dismissal as resulting wholly or mainly on account of redundancy, and hence that his dismissal was *300 unfair. I am also of opinion however that the respondent has made out a good case that such dismissal and any resulting financial loss to the applicant was substantially attributable to his own conduct, and therefore that such financial loss and the applicant’s compensation should be thereby reduced to a sum which the court considers appropriate, and just, and equitable having regard to all the circumstances. In arriving at what I consider to be an appropriate sum for compensation I have taken into account that some of the applicant’s complaints were initially partially justified, although the manner in which they were made and pursued was not. I refer in particular to the matter of his auctioneers licence which his letter of appointment entitled him to hold at the respondent’s premises; the matter of his car parking facilities; his list of fees discussed with Mr Broadhead and to a lesser extent his initial enquiry into the Smith/Lowe affair.
As the respondent has not sought to make the case that the conduct of the applicant resulted wholly or even mainly in his dismissal I do not think it would be appropriate to attribute to his conduct more than 50% of any financial loss he may have incurred. I have come to the conclusion that it would be just and equitable having regard to all the circumstances to find as I do that this precentage of the financial loss was attributable to his conduct.
As indicated earlier the applicant’s financial loss has to be determined according to the provisions of s. 7 of the Act, and to include any actual loss and any prospective loss of income attributable to the dismissal as the court considers appropriate and just and equitable in all the circumstances. Without going into or repeating the evidence I have come to the conclusion on a full consideration thereof that the applicant took reasonable measures on his dismissal to find alternative employment, and hence having failed in these efforts that his setting up on his own in his private residence was not, in all the circumstances in which he then found himself, a failure to mitigate damage under s. 7 (2)(c) of the Act.
I am therefore unable to accept Mr Blayney’s submission that what the applicant did was an independent act intervening between his dismissal and when he set up on his own, an account of which Mr Blayney contended that any financial loss thereby incurred would not result from the dismissal. Similarly I am unable to accept Mr Blayney’s further submission that the extent of the applicant’s financial loss should be limited to a period akin to what would ordinarily be awarded if he had brought an action for wrongful dismissal. Such an approach would be contrary to what s. 7 of the Act provides.
S. 7 of the Act also provides that the limit of compensation for financial loss to which the applicant is entitled cannot exceed in amount 104 weeks remuneration in respect of the employment from which he was dismissed, calculated in accordance with regulations under s. 17 of the Act. This sum has been agreed at £9,351 p.a. gross. The maximum compensation which the court can award is therefore £18,702.
The question then arises as to whether under s. 7 of the Act the 50% deduction in the applicant’s compensation to which I have found the respondent entitled should be made only from the maximum permitted amount, even if the applicants financial loss exceeded this amount or from the full amount of the financial *301 loss, including the amount by which it is found to exceed the maximum permitted amount. I am informed that in the Circuit Court judge Ryan construed the section to accord with the first view, whereas the latter construction found favour with the tribunal, the chairman of which was then Mr John Gleeson SC, now judge Gleeson of the Circuit Court. In my opinion the tribunal was correct. In my view if the financial loss incurred by the applicant is greater than the maximum amount of compensation permitted under the section, then any apportionment or reduction is to be made, not from such maximum permitted sum, but from the full financial loss if it exceeds the maximum permitted sum, and any resulting excess over this must then be reduced waived or abandoned to this level.
In evidence the applicant said that in business on his own he would hope to draw level by way of net income with what was his Lisney salary in five years from then (1977), although this may prove to be too short, but that in time he would hope to do far better than his equivalent Lisney salary level. This was referring to his salary level in 1977.
Mr Patton the applicant’s accountant produced accounts to show that over the three year period ending 31 May 1980 the applicant had a net profit of £3,817.00. In arriving at this figure he showed certain expenses which he allowed as wholly deductable from the applicant’s gross fees. I do not think all of these are properly fully allowable in the sum claimed bearing in mind that the applicant has been and will continue to be working from his own home with some overlapping and mixed expenses. I think the motor travel and entertainment expenses at £6,263 is too high when the sum of £1,595 which has also been deducted for motor insurance, including his wife’s motor car, is not included. I also think there is some duplication in the bank interest charges, and that the charge for office redecorating and repair is not a recurring annual charge. I do not think I am being unfair if I reduced the applicant’s deductable expenses by £500 p.a. or by £1,500 over the three year period to 31 May 1980. The applicant’s net profit is thereby increased to £5,317 over this period. Accepting the applicant’s own estimate of five years to draw level with what would have been his equivalent 1977 Lisney annual salary, he will have a net profit income of £9,351 in the fifth year, that is in the year ending 30 May 1982. I have not been given any figures as to what the applicant’s net profit might he in his fourth year after 1977, that is for the year ended 30 May 1981. Doing the best I can, I estimate that the applicant would have made an overall net profit of £20,000 for the five year period he mentions, after which on the balance of probabilities on his own estimate he should not incur any further financial loss. For the five year period since April 1977 the applicant’s gross financial loss at his then Lisney annual salary scale would have been £46,755. Whilst I have not been given any figures for annual salary increases an allowance on this basis to bring his five year loss to £50,000, had he remained with the respondent would not be unfair. I therefore assess the applicant’s net financial loss at £15,000 being 50% of the difference, which I award him for compensation resulting from his unfair dismissal by the respondent.
Mr Blayney also submitted a claim to justify dismissal under s. 6 (3) of the Act. *302 Having regard to the evidence and my findings, in my view this claim also fails.