Tribunal Proposes an Employer's Checklist for Redundancies

A determination from the EAT has given a very clear indication to all employers what is to be expected from them when looking to affect redundancies in their business.

The Tribunal in this case awarded €35,000 to the employee and set out what is effectively a checklist for employers when going through a redundancy process.

Background

In the case of Employee -v- Employer UD1791/2010 the employee, a qualified accountant, was employed since 2009 on a salary of in excess of €94,000 per year. The Company was going through a redundancy process due a 10% reduction in funding. He was informed by the board that his position was to be made redundant, and he put forward the option to the board that he take on an area manager position as an alternative to being made redundant.

He was later informed that he was to be made redundant and the area manager positions would not exist. In the Tribunal the employee accepted that some restructuring may have been necessary, and that had a 10% pay cut been implemented there would have been no need for redundancies. The Employee also stated to the Tribunal that alternatives such as working for a reduced rate or redeployment could have been offered but were not.

Checklist for Redundancy

In the determination the Tribunal firstly commended the employee on their willingness to accept that a redundancy process was necessary, and also their offer to take on a role of a significantly lower pay grade. They then went on to put forward six points that an employer should look at when affecting redundancies.

1. Engage with employees, provide information at an early opportunity and afford them reasonable time to consider the proposed redundancies:
2. Explore all alternatives to redundancies:
3. Consider redeployment to any alternative positions that might be available within the organisation:
4. A right to apply for and be considered for any new roles being created should be allowed:
5. Consider offering a right to appeal the redundancy decision:
6. Consider any proposals put forward by the employee concerned:

Implication for Employers

It is important to look at these points and the implications of each;

1. this point basically looks as the consultation process and providing them all with the information regarding the process and adequate time to take stock of this, as with Mugford -v- Midland Bank Plc. [1977] IRLR 209
2. look at the possibility of any alternatives such as reduction in salaries, short time, temporary layoff's or a reduced working week
3. Look at any alternative roles within the business and potentially based on the Bunzel case look at the option of "Bumping"
4. If any new roles are being created those involved in the redundancy process should be given the opportunity to apply
5. interestingly is says "consider offering the right of appeal" as opposed to a clear-cut "give them the right to appeal", it may be ambitious to think there is no requirement to offer the right to appeal, however this case (along with some previous decisions) could be construed as there is no obligation to offer the right of appeal
6. Employees should be allowed to propose alternatives (they are the ones carrying out the role so perhaps they will have a viewpoint on this that may not have been apparent), and they should have them properly considered and evaluated, as seen in Jeffers v DCC Ireland Ltd. (UD 169/2000).

We have previously posted about redundancies (here and here) and set out points based on a number of previous cases that would indicate best practice. It is interesting that in this case the Tribunal set out clear points that employers should follow to ensure best practice and fair procedure.