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WRC Adjudicator Emphasises Employer’s Requirement to Explore Alternatives to Redundancy

In the WRC case of Karen Moloney v. T M Blinds Ltd (ADJ-00046400), the Adjudicator emphasised the necessity for employers to be able to prove that it engaged in a thorough exercise to avoid a redundancy. Failure to do so will result in a unfair dismissal decision.

Facts: The Complainant had worked for the Respondent company for 28 years in various different administrative and customer support roles. In the years leading up to her dismissal she had been working in a specific “projects” unit of the business which focused on direct sales to builders contracted to fit out office blocks and other large construction projects.

In July 2022 the Respondent reviewed its business and decided to close the projects unit of the business. The Complainant was notified of this in early November 2022 and after a series of meetings she was made redundant on 24th November 2022. The Complainant was shocked and upset that the Respondent could not find a place for her in the business after 28 years, particularly with her experience in the various areas.

The Respondent tried to argue that the Complainant opted for the redundancy but this was refuted by the Complainant. The Complainant never appealed the redundancy as she was so hurt. She stated in cross-examination that she couldn’t even recall the option to appeal as her head was in such a mess. She had never worked anywhere else.

Decision: The WRC Adjudicator, Mr David James Murphy, focused not only on whether or not it was a genuine redundancy but on whether the Respondent carried out a thorough exercise to try to avert the redundancy. He relied and quoted from the Labour Court decision of Students Union Commercial Services Ltd v. Alan Traynor (UDD1726) in this regard.

The Adjudicator held that the Respondent had a very high bar to justify the Complainant’s role was redundant due to the fact that she was working in a profitable business as the time the review was taking place. He was critical of the Respondent conducting the redundancy meetings in a blasé manner, particularly having regard to the Complainant’s length of service. He indicated that this would result in an employee having no faith in the process.  

The Adjudicator found that it is the Respondent’s responsibility to try to find and identify alternatives to redundancy. The Adjudicator was not satisfied that the Respondent carried out a thorough exercise to consider alternative options to redundancy and on that basis held the Complainant to have been unfairly dismissed.

The Complainant’s failure to appeal the redundancy was distinguished from other case law and it was found that in the circumstances it was reasonable for her not to have any faith in the process.

The Adjudicator found that there are two elements to the award of compensation –

  1. Loss of income and 2. Loss or diminution of statutory redundancy rights

He held that as the Complainant received her full statutory redundancy payment, then he did not have to address that element of loss. The Complainant did not find alternative employment until May 2023 and it was at a lower salary. Her financial loss up to the date of the hearing amounted to €9,990 gross but this was reduced to €5,000 as she failed to prove sufficient efforts were made to mitigate her loss. The Complainant had an ongoing loss of €5,800 per year. The Adjudicator awarded two years of this loss into the future on the basis that the gap of 18% in her salary would narrow over this period. Therefore, her full award was €16,600.

Takeaway for Employers: This decision highlights the importance of employers to be pro-active in putting forward alternative available roles and being able to prove that a thorough exercise was carried out in trying to avoid the redundancy. It also shows the importance of following a fair and reasonable process at all stages and to ensure that the statutory redundancy is paid.

Link  – https://workplacerelations.ie/en/cases/2024/march/adj-00046400.html

Author – Anne O’Connell

26th April 2024

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