In the current economic climate, redundancies have been an unavoidable reality for many companies. However, employers now face heightened scrutiny from courts and tribunals of their actions and procedures in both individual and collective redundancy scenarios.
A recent decision of the Employment Appeals Tribunal ("EAT") in Denis Ryan & 34 others v Dell Products, Limerick significantly clarifies an employer's information and consultation obligations during a collective redundancy.
The closure of Dell's manufacturing facility in Limerick in 2008 resulted in 1900 redundancies. A number of employees claimed that there had been a breach of section 9 of the Protection of Employment Acts 1977 - 2007 Acts ("1977 Acts") which places an obligation on employers to consult employees' representatives where they propose to make collective redundancies. The employees also alleged that a breach of section 10 of the 1977 Acts had occurred, insofar as the employer had failed to supply the employees' representatives with all relevant information relating to the proposed redundancies.
In making its determination in favour of Dell, the EAT found that an employer is entitled to make strategic decisions (in this case, a strategic decision to cease operations) prior to starting the collective consultation process. It found that an initial meeting informing employees had been arranged in the appropriate manner and at an appropriate time. It accepted the company's argument that the meeting was the commencement of a consultation process rather than a notice of termination, as was argued on behalf of the employees.
This case involved an analysis of case law from the European Court of Justice, Junk v Kühnel and Fujitsu Siemens and is the first decision of an Irish court or tribunal on this important legal point.