Fair procedures in redundancy cases

A recent determination from the Employment Appeals Tribunal (the EAT) reiterates the key elements of fairness necessary when effecting a redundancy dismissal (Desmond McGuire v Sleedagh Farms Limited UD1320/2012). 

The case concerned a factory butcher who succeeded in his claim for unfair dismissal after the EAT held that whilst a genuine redundancy situation existed within the company, the redundancy "was not effected in a fair or reasonable manner".

The EAT awarded the claimant €10,000 in compensation over and above the €6,500 which was awarded by statutory redundancy lump sum. The EAT acknowledged that the respondent employer was entitled to reorganise its business in order to be able to offer its customers a competitive price and at the same time maintaining a high standard quality product. The result of this reorganisation was the redundancy of the claimant. A genuine redundancy situation existed but the manner in which the respondent approached it was unfair.

The elements of unfairness were set out by the EAT as follows:

• There was a failure by the respondent to adhere to any procedures, fair or otherwise;
• There was no warning – there was no discussion with the claimant in advance of the decision to make him redundant;
• No consideration was given to the possibility of alternatives. The EAT noted, in particular, that the respondent owned other entities where the claimant could have been redeployed to and whereas there may have been no suitable vacancies at that particular time, some may have arisen at a future date;
• The claimant was not offered the right to appeal the decision to make him redundant.

The last point is of particular interest. There is no statutory requirement to offer a right of appeal; however a line of authority has emerged from the EAT where this has been established. There is no definition in the unfair dismissals legislation of what constitutes fairness; however there is a requirement that an employer act reasonably. It is from this provision that the requirement to offer an appeal has evolved. Depending on the size of the respondent employer, it may or may not be practical to offer a right of appeal but employers nonetheless should bear in mind that  they may be penalised by the EAT for failing to offer this right.

For more information please contact Sinead Grace, sgrace@algoodbody.com or your usual contact in A&L Goodbody Solicitors.

Date published: 24 March 2015