It has been shown in recent case law that the Employment Appeals Tribunal (“the EAT”) are showing an alarming tendency to find in favour of employees and grant them substantial awards even where the Tribunal recognises that the employer had fair grounds for terminating the employees contract of employment. The rationale for these substantial awards had primarily rested on the fact that the employer did not follow what the tribunal determines as reasonable and correct procedures. The most common example is where an employer had genuine grounds for making an employee redundant but the procedures adopted in doing so or the manner in which the manner in which the particular employee is selected for redundancy is deemed unfair. However, as has often been the case with the EAT, these determinations have stated that the employers did not follow the correct procedure but the determinations have frustratingly contained sparse details, if any detail at all, as to where and why the employer fell down in respect of the procedure they adopted. This article will explore some recently published EAT cases, the procedures that were followed by the employer and the Tribunals determination on the case which often does not explore in detail the exact reasoning why they found the procedure followed to be unfair. Unfortunately, these cases re so recently published on the EAT website that they do not specify the parties names so they will all have to be referred to as “Employee -v- Employer”. However, if any client wishes to review a copy of these decisions they need only contact the advice line at Peninsula.
Case Study 1: In the case of Employee -v- Employer (UD 2214/2009) the employer has been experiencing trading difficulties which showed a loss of €650,000 and needed to implement cost cutting measures which involved making positions redundant. It was important for the employer to retain employees who had the requisite skills to allow the company to continue to trade efficiently and they would use skills as their primary consideration when selecting employees for redundancy and they would only consider length of service in the event of a tie. As such, they selected the employee in this case on the basis of their weaker skill-set. The employee argued at the EAT that she should have been retained instead of another employee with less service as their skill set was very similar. The employee at the time was not given a copy of the skills set comparison made by the employer and at no time was the employee afforded the opportunity to discuss alternatives to redundancy. The Tribunal was satisfied that the employer was experiencing trading difficulties and that there was a genuine case for cost cutting including redundancies. However the tribunal was not satisfied that the selection process was properly carried out or that there were any objective criteria for selection of the employee for redundancy. The Tribunal found in favour of the employee but, frustratingly, the Tribunal did not go into any detail as to the precise areas the employer fell down in and they did not specify how the employer should have conducted the selection process. The determination was very general with no guidance and simply stated that “having considered the evidence adduced the Tribunal is satisfied that the respondent was experiencing trading difficulties and there was a genuine case for cost cutting including redundancies. However in the present case the Tribunal is not satisfied that the selection process was properly carried out or that there was any objective criteria for selection of the claimant for redundancy. Therefore the Tribunal finds that the claimant was unfairly selected for redundancy and awards the claimant €30,336.00 under the Unfair Dismissals Acts, 1977 to 2007.” As can be seen from the quotation above, the Tribunal recognised that this business was struggling, that there was a genuine need to make an employee redundant, but still awarded a massive sum of €30,336.00 to the employee purely on the basis of the selection process followed. The Tribunal have failed to provide any detailed explanation as to why the selection process used was unfair and thus employers in future are completely unaware where exactly the employer in this case fell down. Was it the entire process? Or was one aspect in particular?
Case Study 2: In the case of Employee -v- Employer (UD 169/2010) the employee was informed that his job was to be made redundant. Throughout the redundancy process, the employer gave the employee the alternative option of accepting a different job with a different title. However, it transpired that this “new” job was on exactly the same terms and conditions and with the same job duties only with a substantial reduction in salary. The employee proposed that as a compromise and as a different alternative to redundancy that he would forego his 10% bonus and take an additional 9% wage reduction. This was not accepted by the employer and instead the employee was made redundant. The employee signed a severance agreement but he argued at Tribunal this was signed under duress. The employer never replaced the employee and effectively the role was redundant in the end. The Tribunal was not satisfied that the employer went through the adequate procedures to make sufficient efforts to explore the alternatives that might have avoided the redundancy and drew the conclusion that the employee had no choice but to do his existing role for less money or accept redundancy. The Tribunal awarded the employee €25,000. In this case again the Tribunal have stated that they were not satisfied that the fair procedures were followed but have failed to explain in any detail why the procedures were not fair. The Tribunal simply stated that they “were not satisfied that the employer went through the adequate procedures to make sufficient efforts to explore alternatives”. On a cursory inspection a seasoned employment law practitioner can highlight areas where the process was flawed but Tribunal provided no guidance as to which aspect of the process they feel was flawed, which aspect contributed most to the award and indeed they did not clarify if the entire process was incorrect and unfair. Thus, practitioners and employers are left scratching their heads as to what exactly the Tribunal wants.
Case Study 3: In the case of the Employee -v- Employer (UD 2192/2009) the employer in 2007 had made a profit of €80,000 but in 2008 the made a loss of €580,000. The employer injected more money into the company which resulted in a further loss of €250,000 in 2009 and in 2010 the company broke even. The employer in 2009 decided that it had no other option but to introduce cost-cutting measures and as a result commenced a redundancy process whereby employees in a particular department would be evaluated on a skills selection matrix with the weakest employee overall being selected for redundancy. The matrix was shown to the employee throughout the course of the consultation process and the employee was aware of the scores she received and how they were calculated. However the employee believed their redundancy was pre-determined and that the procedure was not fair. The employee was not offered the opportunity to appeal the redundancy outcome. The Tribunal stated that after carefully considering the evidence they accepted that a genuine redundancy existed. They stated that the selection and scoring criteria for the matrices, which resulted in the claimant’s selection for redundancy, were inconsistently scored. They also found fault in the fact that the employee was not offered the opportunity to appeal and in the end awarded the employee €45,000 for unfair dismissal. In this case the Tribunal awarded a significant amount to the employee. There were substantial amounts of evidence presented from the employer in this case in relation to the selection method used. This was all presented and discussed in the Tribunal. However, the determination published by the Tribunal officer simply stated that the “The Tribunal carefully considered the evidence adduced at the hearing and the documentation
submitted. The Tribunal accept that a genuine redundancy situation existed. The criteria for the matrixes, which resulted in the claimant’s selection for redundancy, were inconsistently scored. There was no appeal mechanism in place for the claimant to utilise.”
The above small number of cases highlights the significant awards that are being made in favour of the employees even when a genuine need for redundancies existed and there are many other cases similar to the above. Indeed, these cases have all been published over the last few months and are indicative of this growing trend in the Tribunals to grant awards to employees but even in the absence of any precise reasoning as to why this award is being afforded to the employee. It is quite contradictory as Tribunals insist that employers follow fair procedures and clearly evidence and justify why they reach a particular conclusion with an employee, such as why the dismissed a particular employee or why they picked a particular employee for redundancy. However, the Tribunals themselves simply issue an outcome and don’t clarify why they gave that outcome. How are employers supposed to learn? How can employers ensure they are compliant with the law if no guidance is provided? It seems therefore that employment tribunals are issuing outcomes in a punitive manner and with no intention of offering guidance on how to correct employer behaviour.
