by Anne O’Connell, Founder and Principal at AOC Solicitors
In the recent decision of Darragh O’Farrell v Campbell Catering Limited Trading as Aramark Ireland, ADJ-00029348, the WRC awarded €45,000 in compensation to the Complainant deciding that his role was not in fact redundant, and he had been unfairly dismissed.
The Respondent’s case was that the Complainant was employed as a General Manager and managed a team of 100 for large sporting events for the Respondent which specialises in providing outdoor catering and is part of the Respondent group. The business collapsed in 2020 as a result of the Covid-19 pandemic. In that year the Respondent entity only provided catering to two small events, which incurred losses. The company’s future was therefore uncertain.
The Respondent outlined that the Complainant had a standalone role and was senior. As a result of the lockdown which was announced in March 2020 there was a cancellation of a number of large sporting events. The Complainant was on a period of sick leave from 27th March until 26th April 2020 as he received skin cancer treatment. The Complainant was then placed on lay-off and designated per the Temporary Wage Subsidy Scheme. The Respondent confirmed that on 8th May 2020 a senior manager informed the Complainant of the loss of revenue and that his role was at risk of redundancy. The Respondent outlined the redundancy process it brought the Complainant through and that the Complainant was given notice of redundancy on 29th May 2020.
The Complainant appealed the decision on 4th June 2020 and the appeal hearing took place on 10th June 2020. The appeal outcome was issued on 23rd June 2020 in which the outcome of redundancy was upheld. The meetings took place online because of the pandemic. The Respondent outlined that during the appeal hearing three alternative positions had been discussed one in Cork, one in Athlone and one in Galway. The Complainant had raised issues regarding the proposed salary and not having access to a van as well as a 4am start in Cork. The Complainant did apply for one of the roles i.e. the General Manager role in a healthcare facility in Galway which would have attracted a similar salary to his, but he was unsuccessful in this application.
The facts as outlined by the Respondent were accepted by the Complainant, the issue at hand was whether the urgency on the Respondents behalf to make the Complainant’s role redundant was reasonable in the circumstances. The Complainant made the point that there was no financial loss for the Respondent to keep him on lay-off. He would have been available to work when required and he could have been kept on the books to avail of opportunities that might present themselves in other areas in the business. The Complainant also alleged he was not given sufficient information about the reasons for the proposed redundancy and that it should have been a two stage process with the first stage being to determine whether a redundancy situation existed rather than immediately engaging with alternatives.
The Adjudicator concluded that the Complainant was unfairly dismissed.
Firstly, the Adjudicator disagreed with the Respondent’s inaccurate designation of the Complainant as being ‘unique’ (i.e. in a standalone role within the business) when he was contractually obliged to be flexible in other roles and other locations of work. The Complainant had already worked for the Respondent in other roles. The Adjudicator found that the Complainant must be viewed as an employee who had a potential role across the Respondent business. He commented that the Complainant had skills applicable to areas like healthcare which was going to be a growing area in the business. The Adjudicator observed that while the Complainant was not successful in applying for one particular healthcare role, there was likely to be other roles available and therefore questioned why the Respondent would dismiss him when this potential existed. The Adjudicator commented that it would have been straightforward to keep the Complainant on layoff but avail of his skills when the opportunity arose.
Secondly, the Adjudicator noted the short time period to complete the redundancy process. This did not reflect the extraordinary circumstances of the time, including the inevitable lack of alternatives. The Adjudicator commented that there were potentially many growing parts of the business, and the Complainant should have been treated the same way as one of his colleagues, a chef, who filled in for appropriate short term vacancies at that time.
Thirdly, there was no cost to the Respondent. The Complainant was on lay-off and in receipt of the wage subsidy. The wage subsidy was an extraordinary intervention by Government, reflecting extraordinary times. The Adjudicator was of the opinion that the Respondent should be expected to follow suit and treat lay-off and redundancy in a way to reflect the extraordinary times.
The Adjudicator took into consideration the Complainant’s efforts to mitigate his loss and awarded €45,000 compensation (which appears to have represented 9 month’s pay). This was awarded in addition to the statutory redundancy payment the employee already received and the Adjudicator commented that it was for “financial loss attributable to the dismissal i.e. after the dismissal”.
The Adjudicator commented that while Section 19 of the Unfair Dismissals Act provides that an unfairly dismissed employee can be asked to repay a redundancy lump sum paid out where they are reinstated or re-engaged, there is no equivalent provision where an award of compensation is made.
Additionally, the Complainant was awarded €821 in respect of five days of annual leave.
Takeaway for the Employers:
There are a few valuable takeaways from this case for employers:
- Employers should ensure that when drafting contracts of employment the job specifications of the employee are not drafted too broadly. If they are too broad it may be difficult to make the role redundant in future as was the scenario in this case where the employee was deemed to have a potential role across the entire of the Respondent business.
- The decision also strongly demonstrates that the WRC view redundancy as a “last resort” and where an employer is seen to rush through a redundancy process and terminate on the basis of redundancy without giving sufficient time to seriously consider how things might play out for the business or how the redundancy might be avoided, they are at risk of a finding of unfair dismissal against them.
- Despite the historical view of many that the WRC are likely to reduce any unfair dismissal award by the amount of any statutory redundancy payment already made, the WRC in this case and another recent similar case have taken a different approach and have instead shown a willingness to make an unfair dismissal award that is not reduced by a previous statutory redundancy payment.
About the author
Qualified as a Solicitor in 2001 and as a New York Attorney, Anne O’Connell, the Founder and Principal of AOC Solicitors, specializes in Employment Law. She holds an LLB Degree together with Diplomas in Employment Law and International Litigation and has practiced with the Chief State Solicitors Office and two top tier Irish Law Firms. Anne has acted in the largest international case taken by Ireland to date and also acted in a European case that led to the amendment to Ireland’s Constitution. Anne advises large multinational companies, semi-state companies, small businesses and employees in all areas of employment law, particularly issues that were likely to become contentious.
With over 19 years of employment law experience, Anne formed her own specialist boutique Employment Law Firm in 2017 and thus Anne O’Connell Solicitors was born.
Anne is very passionate about what she does and becomes vested in finding solution to her client’s issues.