Even when there is a real business case in a layoff situation identified by an employer and layoffs may be necessary, the layoff selection process remains crucial.

Generally, if an employee’s position is a stand-alone position and there is no one else doing the same or similar work, the selection criteria would not have to apply.

However, if there are a number of employees performing the same or similar work, those employees will most likely need to be grouped together for fair selection.

Recent WRC case

In a recent Workplace Relations Commission (“CMR“) decision (ADJ-00029059), the complainant employee brought an action for wrongful dismissal alleging that, while admitting that there was a “significant slowdownin the company, he was indeed unfairly selected for dismissal.

Facts

The complainant had worked for the respondent employer since 1995. At the time of his dismissal, he held the position of sales manager.

At the hearing, the employer argued that its sales had dropped significantly and that savings needed to be made by reducing the workforce. The respondent told the WRC that, as part of the dismissal process, three sales representatives were terminated in 2019.

A valid dismissal situation but a predetermined selection

After reviewing the facts of the case, the WRC arbitrator found that the respondent had submitted “plausible“evidence demonstrating that sales had in fact dropped significantly at the particular branch where Complainant had worked. The Arbitrator was satisfied that Respondent was faced with the need to cut costs and that a genuine situation of dismissal.

However, the arbitrator found that the manner in which the grievor was selected for termination was unfair and that objective selection criteria were not applied. The WRC formed this opinion because the Respondent admitted that the Complainant’s position was terminated solely on the basis of his high salary. Accordingly, the WRC determined that the dismissal consultation with the grievor already obscured “predetermineddecision to dismiss him.

Further, the WRC found that the Respondent presented no evidence that it conducted a thorough exercise to consider alternative roles for the Complainant prior to dismissing him.

Loss Mitigation

The Complainant was successful and the WRC ordered the Respondent to pay the Complainant €3,464 (4 weeks net salary) in compensation for the unfair dismissal. Such a low compensation reflected the fact that the employee had obtained a similar job at a higher rate in the days following his dismissal and also took into account the fact that he had already received €30,345 in legal dismissal.

Remark

This case is a good example of a valid business case and a real termination situation, but where the employer cannot demonstrate that the employee’s termination process was fair and impersonal.

An employer’s ability to demonstrate that it used a fair and objective process to terminate employees can prove invaluable at a later date if the matter comes before the WRC.

This case is also a warning that employers should always, as part of the consultation process, consider the alternative roles that exist within the company before laying off employees.

Finally, while this was a bad outcome for the employer in general terms, the employee’s obligation to mitigate the loss and his success in doing so meant that the financial penalty was limited.

Interestingly, the employee also received €1732 under the Terms and Conditions of Employment (Information) Act 1994, the equivalent of two weeks net pay, for the employer’s failure to provide the employee written employment conditions during the 25 years of seniority of his employment.


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