In our previous post we gave a general outline of the genuine reasons for a redundancy and what should be incorporated into a redundancy rationale.
In this post we are going to look at the fair procedures behind redundancies and the subject of Collective Redundancies.
The primary element of any fair procedure is that the role is actually redundant, based on the
five grounds for redundancy. This will ultimately determine if an employee has any basis to be able to claim that they were unfairly selected for redundancy. A good insight into this is the case of
Ponisi -v- JVC Europe Limited [2010] 21 E.L.R. 320 & (UD 949/2008) where the Employer was making the General Manager role redundant and offered a Sales Manager role as an alternative to the Employer. It was held to be an unfair dismissal as the two roles were effectively the same only the new role was of a lower status with lesser pay. The role wasn’t genuinely redundant and employee awarded €161,420 compensation.
Consultation Process
In order for a Redundancy to be seen as "
fair" an employer must engage in a consultation process with the affected employees, this is based on
Unfair Dismissals Acts, 1977-2007 Section 6(3) which states that even in circumstances where there is a genuine redundancy situation, an employee who is unfairly selected will be able to bring a claim for unfair dismissal. Also section 6(3) states that an employee may claim unfair dismissal where they were selected for redundancy in a manner which contravened a previously agreed selection procedure.
The consultation process is important as in the case of
Mugford -v- Midland Bank Plc. [1977] IRLR 209 the UK EAT held that “
[w]here no consultation about redundancy has taken place with either the trade union or the employee the dismissal will normally be unfair”. So it is vital that in order for a redundancy process to be seen as "fair" a consultation process must take place.
Selection Pool
Once an employer has established that it is a genuine redundancy scenario they must then look to engage in a consultation process with
all the affected employees. The word
all is important here as an employer must not select certain people over others for redundancy if all carry out the same role, and so all employees in this "selection pool" are included. Essentially an employer is ensuring that the "job" itself is seen to be redundant and not the employee, so everyone who does this "job" is included in any redundancy consultation.
The case of
Dowling v Whole Foods Wholesale Ltd. UD 95/2006 is important on the basis that the employee was the only employee considered for redundancy, even though he worked across several departments. This was held to be an unfair dismissal and the employee was awarded €4,500.
Selection Criteria
Once a selection pool is established, if an employer does need to select only a certain number of employee's for redundancy a fair means of selection should be used and the employees notified of this in advance. In the case of
Maura Cronin -v- R.P.S. Group (UD2348/2009) the employee awarded €21,500 compensation due to the employer’s “failure to advise the Claimant of the criteria that were applied in selecting her for redundancy."
This "
selection criteria" would normally be in the form of a
Skills Matrix and the criteria for selection should be objective, fair and measurable. In the case of
Williams -v- CompAir Maxam Ltd. [1982] IRLR 83 the employer selected for redundancy on the basis of ‘
who in the opinion of the managers concerned would be able to keep the company viable’, which failed to meet the objectivity requirement.
Also the case of McDermott -v- Masonry Fixing Services [2009] 5 JIEC 0801 & (UD 1523/2008) is notable as the selection criteria used was “
vague, ambiguous and subjective”. The employee was awarded compensation in the sum of €15,000.
Alternatives to Redundancy
Finally in the consultation process itself an employer must look at alternatives to redundancy in order to adequately justify any redundancy, and to also show that all other avenues have been explored, there are no other positions available and that redundancy is the final resort. This is highlighted in
Jeffers v DCC Ireland Ltd. (UD 169/2000) where the tribunal stated
"where a person is being made redundant, there is an onus on the employer (i) to take reasonable steps to seek alternative employment within the company for the employee being made redundant (ii) to know what positions, if any, are available on the relevant date, and (iii) to offer any such reasonable alternative positions to the employee whose position is becoming redundant."
Collective Redundancies
We also advised that we will look at the matter of collective redundancies and how they differ from standalone redundancies. The criteria for a Collective Redundancy is set out in
the Protection of Employment Acts 1997 to 2007. According to the Act collective redundancies apply where in any period of 30 consecutive days the number of such dismissals is—
- at least five in an establishment normally employing more than 20 and less than 50 employees,
- at least ten in an establishment normally employing at least 50 but less than 100 employees,
- at least ten per cent. of the number of employees in an establishment normally employing at least 100 but less than 300 employees, and
- at least 30 in an establishment normally employing 300 or more employees.
There are strict consultation requirements for a collective redundancy, where the employer is required to engage in consultation at the earliest opportunity and at least 30 days before the first dismissal takes place. this consultation must be held in conjunction with employee representatives to discuss the details such as the number of employees concerned, selection criteria, alternatives and calculation of payments.
A letter must also be submitted to the Minister for Jobs, Enterprise and Innovation (currently Richard Bruton) at the beginning of the process to notify the Minister of the intention to make redundancies.
There has been a wealth of information between these two posts and we feel we have only just brushed the top of this subject, the redundancy process can be tricky for any employer and employers should be fully aware of the process they are entering into if they do wish to pursue redundancies. Our
Readers Questions page is open to anyone who does have a query on this topic.
In our previous post we gave a general outline of the genuine reasons for a redundancy and what should be incorporated into a redundancy rationale.
In this post we are going to look at the fair procedures behind redundancies and the subject of Collective Redundancies.
The primary element of any fair procedure is that the role is actually redundant, based on the five grounds for redundancy. This will ultimately determine if an employee has any basis to be able to claim that they were unfairly selected for redundancy. A good insight into this is the case of Ponisi -v- JVC Europe Limited [2010] 21 E.L.R. 320 & (UD 949/2008) where the Employer was making the General Manager role redundant and offered a Sales Manager role as an alternative to the Employer. It was held to be an unfair dismissal as the two roles were effectively the same only the new role was of a lower status with lesser pay. The role wasn’t genuinely redundant and employee awarded €161,420 compensation.
Consultation Process
In order for a Redundancy to be seen as "fair" an employer must engage in a consultation process with the affected employees, this is based on Unfair Dismissals Acts, 1977-2007 Section 6(3) which states that even in circumstances where there is a genuine redundancy situation, an employee who is unfairly selected will be able to bring a claim for unfair dismissal. Also section 6(3) states that an employee may claim unfair dismissal where they were selected for redundancy in a manner which contravened a previously agreed selection procedure.
The consultation process is important as in the case of Mugford -v- Midland Bank Plc. [1977] IRLR 209 the UK EAT held that “[w]here no consultation about redundancy has taken place with either the trade union or the employee the dismissal will normally be unfair”. So it is vital that in order for a redundancy process to be seen as "fair" a consultation process must take place.
Selection Pool
Once an employer has established that it is a genuine redundancy scenario they must then look to engage in a consultation process with all the affected employees. The word all is important here as an employer must not select certain people over others for redundancy if all carry out the same role, and so all employees in this "selection pool" are included. Essentially an employer is ensuring that the "job" itself is seen to be redundant and not the employee, so everyone who does this "job" is included in any redundancy consultation.
The case of Dowling v Whole Foods Wholesale Ltd. UD 95/2006 is important on the basis that the employee was the only employee considered for redundancy, even though he worked across several departments. This was held to be an unfair dismissal and the employee was awarded €4,500.
Selection Criteria
Once a selection pool is established, if an employer does need to select only a certain number of employee's for redundancy a fair means of selection should be used and the employees notified of this in advance. In the case of Maura Cronin -v- R.P.S. Group (UD2348/2009) the employee awarded €21,500 compensation due to the employer’s “failure to advise the Claimant of the criteria that were applied in selecting her for redundancy."
This "selection criteria" would normally be in the form of a Skills Matrix and the criteria for selection should be objective, fair and measurable. In the case of Williams -v- CompAir Maxam Ltd. [1982] IRLR 83 the employer selected for redundancy on the basis of ‘who in the opinion of the managers concerned would be able to keep the company viable’, which failed to meet the objectivity requirement.
Also the case of McDermott -v- Masonry Fixing Services [2009] 5 JIEC 0801 & (UD 1523/2008) is notable as the selection criteria used was “vague, ambiguous and subjective”. The employee was awarded compensation in the sum of €15,000.
Alternatives to Redundancy
Finally in the consultation process itself an employer must look at alternatives to redundancy in order to adequately justify any redundancy, and to also show that all other avenues have been explored, there are no other positions available and that redundancy is the final resort. This is highlighted in Jeffers v DCC Ireland Ltd. (UD 169/2000) where the tribunal stated
"where a person is being made redundant, there is an onus on the employer (i) to take reasonable steps to seek alternative employment within the company for the employee being made redundant (ii) to know what positions, if any, are available on the relevant date, and (iii) to offer any such reasonable alternative positions to the employee whose position is becoming redundant."
Collective Redundancies
We also advised that we will look at the matter of collective redundancies and how they differ from standalone redundancies. The criteria for a Collective Redundancy is set out in the Protection of Employment Acts 1997 to 2007. According to the Act collective redundancies apply where in any period of 30 consecutive days the number of such dismissals is—
