Seeking Fairness in Redundancy Situations

It is no surprise to report that there has been a marked increase in the number of redundancies sought by employers in these recessionary times. The Redundancy Payments Acts allow termination of employment in genuine redundancy situations. However, even in legitimate redundancy situations an employee may still have a case under the Unfair Dismissals Acts if it is found that the employer has not acted reasonably in dealing with the redundancy situation.  The SIPTU Workers Rights Centre (WRC) has seen a marked increase in the number of cases involving unfair selection for redundancy.

Section 5 of the Unfair Dismissals (Amendment) Act 1993 states that, “…In determining if a dismissal is an unfair dismissal, regard may be had …to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal”.

Below are some of the scenarios where an employer might be found to have acted unreasonably:

1.     No proper consultation with Employees

In collective situations employers are obliged to consult with trade unions at the time redundancies are first contemplated. The collective is calculated as follows:

• At least 5 in an establishment normally employing more than 20 and less than 50 employees;

• At least 10 in an establishment normally employing at least 50 but less than 100 employees;

• At least 10% of the number of employees in an establishment normally employing at least 100 but less than 200 employees; and 

• At least 30 in an establishment normally employing 300 or more employees.

In such situations, the Union can bring a case to the Rights Commissioner service under the Protection of Employment Acts. Even if employees do not fall under the range above they still need to be consulted when a proposal for redundancy is being discussed by management, even before decisions are made. Employees should be allowed the opportunity to put forward proposals to avoid redundancy, if possible.

 2.     Fair Selection Procedures

An employer is allowed to set clear selection criteria where there is no agreed “last in first out” arrangement but such criteria must be transparent and  fair and must rely on factors relevant only to the redundancy situation. The onus is on the employer to objectively show why a particular employee was selected for redundancy as opposed to another employee. Employers are sometimes tempted to retain favoured  staff instead of those whom are less favoured for various reasons. They might raise issues like performance and punctuality as part of the selection process. If these or similar issues were not previously raised with an employee before redundancy was contemplated, then they cannot be subsequently be  relied upon subsequently  as suitable criteria for selection.  Likewise, any person with a bias towards a particular employee should not be involved in the selection process and at least two people should be involved to ensure that there are checks and balances. A Tribunal will not delve into the suitability or otherwise of the criteria but will examine closely the manner in which the criteria was applied.

3.     Alternative Cost Cutting Measures

Employees through their unions have opportunities to submit alternative measures which are constructed to avoid job losses. This could include re-training so as to take up alternative employment or perhaps to negotiate a voluntary redundancy scheme so that mandatory redundancies are avoided. An employer would be acting unreasonably if no due consideration was given to such proposals. The EAT has found that an employer is obliged to look for an alternative to redundancy.

4.     Denying a Right of Appeal

A recent development at the Employment Appeals Tribunal has been the assertion that that employees who contest their redundancy should be given the opportunity to appeal before termination of employment.

In conclusion, every case will be decided on its merits and the facts of every case differ therefore it would be folly to assume that the presence of one of the above factors ensures a successful Unfair Dismissal claim. The above examples are but just a pointer with regard to examples of how employers may be found to have acted unreasonably. Union members should consult with their local representative/organiser immediately upon hearing of any possible move towards a redundancy. In such situations it is always advised to approach the matter collectively, if possible, as the submission of alternative proposals, or ultimately the negotiation of a severance package, is best handled by workers acting together with a common aim.