If you’re facing the difficult situation of making redundancies, read our advice from employment expert Daniela Kocis on making a fair selection before you act as we look at a recent case decision.
One of the more common questions that comes up in Employment Law is in relation to redundancies and selection for redundancy. It is very important to understand that when considering a redundancy, it is the role that is made redundant and not the person. Redundancy is also not an alternative to terminating an employee’s contract. In order to proceed with redundancy there should be a genuine business reason, that falls under one of the five genuine reasons for redundancy as per section 7(2)(a) of The Redundancy Payments Act .
- Employer has ceased or intends to cease the business for the purpose for which the employee was employed, or in the place where the employee was employed;
- Requirements of the business for the employee to carry out work of a particular kind, has ceased or diminished;
- Employer decides to carry on the business with fewer or no employees, by requiring another employee to do the work of the redundant employee;
- Employer decides work being done is to be done in a different manner, for which the employee is not qualified or trained to do;
- Employer decides that the work being done is to be done by a person who is capable of doing other work for which the employee is not sufficiently qualified or trained.
If the reason for redundancy does not fall under one of the above five reasons, fair procedure and selection has not been followed there is a risk of a claim for unfair selection for redundancy. An Unfair Selection for Redundancy claim would be taken under the Unfair Dismissal Act, which could result in two years compensation on top of the redundancy payment that has already been paid.
In a recent case heard by the Appeals Tribunal, a sportswear retail worker was awarded 20.000 euro in compensation for being unfairly dismissed by their employer. This award was in addition to a lump sum statutory redundancy payment of 15.700 euro, which was paid out to the claimant at the time they were made redundant.
The Tribunal based its decision on the fact that there was no evidence that the company was going through any financial difficulty (genuine redundancy reason), nor has the employer implemented a redundancy process and transparent redundancy process. The award was also made based on the fact that the employer was unable to prove that the selection for redundancy was fair and not based on personal dislike. In an Unfair Dismissals claim, the burden of proof lies upon the employer. As such, the employer had to prove that 1) there was a genuine redundancy situation and 2) that a fair consultation and selection process has been followed. In this case, the employer justified the redundancy by the fact the employee’s return (he was on extended leave at the time) was quite abrupt and that the work had been absorbed by the Managing Director. The claimant denied that his position had been made redundant.
Considering the high compensation awarded in this case, it is of upmost importance to observe the necessity of any business to be able to prove that there is a genuine business reason for a redundancy, that the employer has considered a fair selection process and that a redundancy and consultation process was implemented prior to any redundancy being finalised.
If you have any questions in relation to this article please don’t hesitate to contact Daniela and our expert employment law advisors on the 24 Hour Advice Service on 01 855 50 50
