- Having a solid rationale for redundancy is not enough by itself; an employer will need to follow a fair consultation process and a fair and objective selection process.
- A fair consultation process would generally involve multiple meetings over a number of weeks whereby the employer would discuss the rationale for redundancy and any possible alternatives to same.
- A fair selection process is essential; if an employer has multiple persons performing the same or similar roles then the employer will need to be able to objectively justify why one person was selected for redundancy over another. Many employers will have a written policy on this matter which would need to be followed. Common selection policies would be last-in-first-out or alternatively a scoring system whereby employees are evaluated and the best employees retained.
- Keeping accurate minutes of meetings is vital. The burden of proof is on the employer to prove that the dismissal was fair. It is worth noting that in the above two cases the EAT highlighted that neither employer could provide evidence of minutes of meetings, or letters to the employee, etc. This meant that the employers could not provide evidence to support their arguments and ultimately this counted against both.
- Implementing redundancies can be a complex process which is fraught with risk. As evidenced above; even law firms can get this wrong. It is therefore vitally important that any employer considering redundancy seek advice before entering into discussions with affected employees.
Employment law can be very tricky to negotiate for employers and this is especially the case when it comes to redundancy. If an employee is made redundant and they take an unfair dismissal claim then an a tribunal will very closely scrutinise the employer’s rationale for making the employee redundant, the redundancy consultation process followed by the employer, and whether or not the employee has been fairly selected for redundancy. The fact that there have been some recent high profile cases where law firms have lost unfair redundancy claims typifies the tightrope that employers have to follow.
Campbell –v- AC Pendred & Co, Solicitors (UD 827/2012)
The employee in this case commenced employment with the solicitor’s firm in 2008 and worked as a practising solicitor and office manager overseeing the day to day running of the practice. Unfortunately by 2012 the firm was in financial difficulty it was accepted that cash-flow was an enormous problem.
At the EAT there was a conflict of evidence as to how the employee was made redundant. Ultimately the EAT accepted that the employee’s version of events (noting that the employee had brought written emails which supported his argument) and concluded that firm had not followed any redundancy consultation process and that the employee had simply been informed that he was being made redundant.
At the EAT, the employee argued that his dismissal by way of redundancy was a “fait accompli” and that the dismissal was “unfair by reason of the way it was handled procedurally”. The EAT agreed with the employee, stating that “with more consideration a lawful and fair termination of employment would have been implemented ultimately”. Therefore, the EAT noted that the law firm had a good rationale for implementing redundancies but that the dismissal was unfair by virtue of the manner in which the firm had handled it. The employee was awarded €17,984.
Morris –v- Callan Tansey Solicitors (UD 143/2014)
The employee in this case was as a legal secretary who commenced employment in July 1980 working in a full time capacity until 1995 at which point she moved to part time hours up until her redundancy in July 2013. Due to the recession, there was a decrease in private client work, conveyancing, probate, and district court litigation which ultimately gave rise to a need to reduce costs.
It was agreed by the parties that the employee had been called to a meeting on 01st May 2013 to discuss the situation. However, there was a conflict of evidence as to what was discussed at this meeting. The employee alleged that she was definitively told that she was being made redundant during this meeting, that there were no alternatives available, and that she was to receive her notice. The firm alleged that no decision was made at this meeting and that the employee had been notified of alternative positions in a different branch. The EAT noted that there “no written notes or memos of the said meetings” and ultimately accepted the employee’s version of events. It was concluded that “no meaningful consultation took place… There was no attempt to secure a voluntary redundancy. No consideration was given to an alternative to redundancy, such as a pay cut or reduced hours. The respondent did not consider a last in, first out policy… The respondent acted unreasonably in failing to apply objective criteria to the selection of the claimant for redundancy”.
Therefore, the EAT noted that whilst there was an overall restructuring process at the firm, the redundancy process followed was unfair and that the employee had been unfairly selected as she was one of eight legal secretaries and the one with the longest service. The employee was awarded €12,765.06.
Learning Points
There are some key learning points that we can take away from these cases:
