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Remembering the Human Aspect

  • Ireland
  • General

15-10-2018

The human touch: kindness, sensitivity, consideration. You would be forgiven for thinking that these basic tenets of human decency do not necessarily go hand in hand with the law. And unfortunately, to a large extent, you would be right.

However, a recent decision of the Workplace Relations Commission (the “WRC”) reminds us that, when it comes to employment law at least, a lack of human decency can prove costly. In that case, the WRC’s focus was on the human aspect of a redundancy process.

Generally speaking, in order to carry out a legally compliant redundancy process, an employer must demonstrate that:

     1. the redundancy is genuine – this requires the employer to show that it has a valid basis for the redundancy. For example, it is closing its business or it is restructuring such that a certain role/roles will cease to exist etc.

     2. it acted reasonably – this limb focuses on aspects of fair process such as fair selection, whether alternatives to redundancy were considered, whether a reasonable consultation process took place etc.

Unless an employer can satisfy both limbs of this test, it may very well find itself in hot water trying to (very often unsuccessfully) defend a claim for unfair dismissal. That is precisely what happened to the employer in this recent decision.

The employee in question had just under 30 years’ service when his role became redundant. Although his employer was able to establish that there was a genuine basis for the redundancy (in this case, a restructure), the WRC stated that the process “was carried out in a cold systematic fashion which…completely failed to deal with the human aspect of this very difficult time for the employees”.

More particularly, the WRC stated that the consultation process was “carried out with undue haste”. The entire process from the initial announcement to formal termination took place within one week. The WRC stated that a more detailed consultation process should have taken place to (a) enable the affected employees to understand the changes taking place in the business and (b) to understand the process and be able to partake in it. In light of these considerations, the WRC held that the redundancy constituted an unfair dismissal and awarded €17,500 to the claimant.

So, just how comprehensive does a consultation process have to be? In non-collective redundancies (ie where only a few roles relative to the total size of the workforce will be made redundant), there is no specific statutory requirements which outline how to carry out a redundancy process. However, the legal position is that if the conduct of an employer is unreasonable, then the redundancy may amount to unfair dismissal.

Therefore, it is essential that an employer can show it acted reasonably. To do so, an employer should be able to answer the following questions in the affirmative:

     1. Is there a paper trail which confirms that it is very likely that the role(s) will no longer be required and the reasons for this (eg ongoing losses)?

     2. Did we explain to the employees the business reasons for the redundancy process? Did we provide sufficient information regarding the timescales/process?

     3. Were other options, to include alternative roles, discussed and considered?

     4. Was the selection fair? Can we point to objective and fair criteria, which we used to select what positions were to be made redundant?

     5. Did we provide the affected employee(s) with a suitable opportunity to come forward with their own ideas? Were these ideas given fair consideration?

     6. Did we ask the employee(s) whether they would be willing to re-locate or to work in another department/position?

It is good practice, where possible, to hold face-to-face meetings with affected employees and to make a record of these discussions. Ideally, meetings should be held on an individual basis.

The purpose of the first meeting with the affected employee will usually be to advise him/her of the risk that his/her role will become redundant and to invite him/her to a further meeting to discuss any alternative positions or cost cutting measures that he/she may have in mind to avoid redundancy.

During the second, follow-up meeting, the employer should discuss if there are any suitable alternative positions. The employer should also consider any suggestions which the employee may have submitted.

Following the second meeting, and once the employer has had sufficient time to consider alternatives (if any), it is appropriate to proceed to make the employee’s position redundant. This should be followed up with a written notice of termination. There should be at least a few days in between each meeting/correspondence in order to allow both parties to fully consider options and alternatives discussed.

Understandably, an employer may feel that it would be artificial to step through the kind of process described here, especially where it is quite clear from the outset that there is no realistic alternative to redundancy. However, adhering to a process, which is sensitive and reasonable, is key, particularly if the affected employee has been with the business for some time. As well as providing an invaluable support to a colleague during what can be a very difficult time, a fair process can also help to protect your business from unwanted and costly litigation.

 

Sunday Business Post - How to ease the redundancy process - for everyone.

 

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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