The Employment Appeals Tribunal (EAT) has awarded €175,000 to a former manager of a software company who was unfairly dismissed*. The award is understood to be one of the largest awards to date from the EAT.
The claimant commenced work for a start up technology company in 1999. As the company expanded, so did his role and level of responsibility. There was a take over in 2007 and the claimant was instrumental in negotiating aspects of the deal. Following the takeover, his role changed from general manager to sales manager of the media division. He viewed this to be a demotion but was assured that the company was not concerned with titles. He was also assured at the time of the takeover that there would be no redundancies. He was made redundant in 2008, notwithstanding the fact that his division had exceeded by a significant margin their target for the first quarter of 2008. The claimant said that he did not raise any of his apprehensions and concerns with the HR department as he felt that this was not something which was done by management level.
The EAT held that the claimant had been unfairly selected for redundancy. He was not kept appraised of developments generally within the organisation such as promotion of another employee to replace him in the role of general manager. The Tribunal was of the view that the redundancy was engineered. The Tribunal felt that by moving him into the media sales division, which was incurring a loss because of the size of his salary that it was a "device or contrivance to bring about the claimant's redundancy."
The Tribunal accepted the claimant's evidence that he justifiably felt frustrated and aggrieved at the turn of events and that it became more difficult for him to perform his role. The EAT awarded him €175,000 in compensation.
The quantum of the award is likely to have been premised on the fact that, in the current climate, it is becoming increasingly difficult for claimants to secure alternative work and accordingly they are unable to mitigate their loss. The claimant in question was also relatively senior within the company. This is likely to have been another contributory factor to the large award.
The size of the award will also be of concern for employers engaged in restructuring within their business and consequently carrying out any redundancies identified by this exercise. Employers now face the possibility, particularly in dealing with more senior executives in a company, of being exposed to the maximum penalty of two year's remuneration under the Unfair Dismissals legislation in circumstances where the redundancy is not genuine or where unfair selection criterion for redundancy is used.