In light of Brexit, the spectre of potential redundancies has returned for some sectors of the economy. Dismissal on grounds of redundancy is permitted as a fair dismissal. However, that is only where a valid redundancy situation exists and fair procedures have been followed.
Two unfair dismissal cases published by the WRC at the end of 2016 highlight the importance of following fair procedures.
In the first adjudication decision (available here), the employee was awarded €21,750 due to the employer’s failure to follow a fair process in implementing the redundancy. The adjudication officer focused on the employer’s failure to apply a selection criteria, particularly in circumstances where the employee was the only individual made redundant out of circa 30 employees. Crucially, it appears that the employer did not provide any evidence of the financial circumstances which necessitated the redundancy. The adjudication officer found that the offer of a two-day week could not be considered a suitable alternative and the employee was not provided with any option to appeal the redundancy decision. The adjudication officer concluded that the employee was unfairly selected for redundancy and he was awarded compensation for unfair dismissal.
In the second case (available here), the adjudication officer’s award of €35,000 for unfair dismissal was appealed to the Labour Court. The Court accepted that the employee’s position became redundant in October 2015. However, in considering the manner of the employee’s dismissal, the Court found that the employer engaged in the “minimum of consultation and in effect put a decision rather than a proposal” to the employee. The Court also criticised the employer’s failure to provide an avenue of appeal. The dismissal was procedurally unfair and therefore the employee was awarded €20,000, thus varying the original decision of the adjudication officer. The Court did not provide any commentary on the reduction of the award, but simply noted that the amount was “just and equitable in all of the circumstances”. Presumably, the existence of a genuine redundancy situation merited the reduction in the award to the employee.
Where redundancies are proposed, employers must ensure that a fair process is followed. In any given case, this is likely to require a valid business case for redundancy which employees can comment on, fair selection, consideration of alternatives to redundancy, a period of engagement and consultation with the affected employees and an avenue of appeal.