Understanding Redundancy Selection

Redundancy situations in the workplace can incorrectly be seen by employers, on occasion, as opportunities to remove employees they no longer want that they deem less competent.

If an employer terminates employment of an employee along that thought process and deed, it is quite possible that claims for unfair dismissal will arise.

In cases taken of this nature, it is fundamental that a genuine redundancy arises. Redundancy concerns the job not the man/woman. It is the job that must go. The reasons that qualify as a genuine redundancy are set out by statute in S.7 of the Redundancy Payments Acts.

If an employer dismisses an employee by reason of redundancy, and an employee contends no genuine redundancy arose, an adjudication case officer hearing the inquiry, will look behind the veil of dismissal to ascertain what transpired.

Legal Requirements for Fair Selection

In the case of Boucher V Irish Productivity it was stated that in addition to proving there was a genuine redundancy, the employer had: 

“to establish that he acted fairly in the selection of each individual employee for redundancy and that where assessments are clearly involved and used as a means for selection that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made”.

As stated in Boucher & O.-V-P.C. the EAT stated “The onus of proof is on the employer to establish that he acted fairly in the selection of an employee for redundancy“.

Therefore the burden of proof is on the employer to prove what he/she did was fair regarding the selection process. The process employed by the employer will be assessed at a case hearing.

In the same case it was also stated:

“Where selection for redundancy involves consideration of employee’s contribution and versatility to the respondent those in the group likely to be dismissed should be made aware that such assessment was being made and they should be given an opportunity to give their views which should be considered. To be considered fair the assessment should have the characteristics of an enquiry.“

So, a question which needs to be examined at a case hearing, is did an ‘inquiry’ take place at all. Was there a genuine attempt by the employer at this or were they just going though the motions with a pre-determined outcome bound to happen.

Selection Criteria and Fairness

If an employee was chosen for their disciplinary record, for example, this then is selection based on subjective criteria and evidence a subjective assessment was conducted as opposed to an objective assessment.

It is necessary for an employer to be able to prove the employee was selected on objective, independent and visible criteria.

Why one employee was chosen over another ? for example.

An employer must be able to show the selection process was conducted fairly and was based on objective criteria.

It is very important for employers when considering redundancy selections, to Consult with employees, afford them the opportunity to respond regarding selection. Many employers don’t wish to do this as they do not wish to discuss anything financial with the employee regarding the business.

Employees should be asked for their input or contribution regarding the selection process and a fair scoring selection system should be applied.

In Employment Appeals Tribunal case UD206/2011 it was stated:

“When an employer is making an employee redundant, while retaining other employees, the selection criteria being used should be applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria to be adopted will come under close scrutiny if an employee claims that they were unfairly selected for redundancy.   The employer must follow the agreed procedure when making the redundancy. Where there is no agreed procedure in relation to selection for redundancy, as in this case, then the employer must act fairly and reasonably.

Redundancy Selection Fairness & Impersonality

A key and fundamental requirement of redundancy is Impersonality. It is the job / position that is no longer viable. It does not concern subjective factors individual to the employee made redundant.

Employers must ensure fairness is actively adopted into their selection process when they are considering redundancies.

S.7(2) of the Redundancy Payments Act 1967, as amended, states:

For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to one of the set reasons which can be seen here.

In St. Ledger V Frontline Distributors Ireland EAT Chairman stated ‘’Impersonality runs throughout the five definitions in the Act’’.

If an employer chooses selection criteria that relates to the employees commercial acumen, disciplinary record, personal achievements, for example, it will be put to the employer that unfair selection criteria were intentionally chosen by them contrary to the law on fair selection.

Selection criteria must be objectively based. The duty in fair versus unfair selection dismissal cases is on the employer to demonstrate a fair selection arose.

A key component of a fair selection is the concept of Impersonality, which many employers do not adopt when setting about creating selection criteria.

A procedurally fair selection should not be done with haste, there should be discussions with staff members in relation to the selection criteria, feedback requested from them, and the employers should not make the decision to make staff redundant and then start the process of consultation.

An employer must engage with the employee who may be made redundant. They should explain the change process and give reasons for it. Effective communication and consultations are key to an effective process.

Without consideration and due process regarding selection, natural justice may be found not to have been adhered to by the employer.

Impersonality Test

This is a key test in redundancy cases.  

Each selection process must be transparent, fair and objective. Was the employee selected impersonally ? and objectively ?. An employee will have a good indication of this themselves as they will be familiar with what happened and the workplace dynamics and personalities.  

Say the employer lays out criteria regarding the selection process.

•  Was the aggrieved employee afforded the opportunity to be involved in this process ?.
• Was he/she asked for an input?
• Could they challenge, for example, any scoring?
•  Did the decision-maker look at things objectively or did the process instead have the character of a subjective performance assessment ?.
• This selection process must be objective and fair.
• Did personal bias arise? is another good question to ask and assess.

By examining the facts at a case hearing, an Adjudication officer is looking to assess whether the employer’s conduct was reasonable or not.

If the Adjudicator concludes the employer’s acts or omissions were not reasonable and/or the selection process was flawed, then the employee is on the path to succeeding in an unfair dismissals claim taken.

Fair Procedures in Selection

Fair procedures must be adopted by employers when engaging in selecting employees prior to dismissal.

In an unfair dismissal case the adjudication case officer will assess the reasonableness of the employers conduct with respect to the selection process, as we can see from the following paragraph.

Section 6(7) of the Act states:

Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so –

(a)    to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal…

Employers should not make the decision to dismiss employee x before meeting with them.

Employers should adopt a Consultation process with the employee.

Employers should consider alternatives to dismissing the employee and be able to show this.

Employers should discuss the selection criteria with each employee and get their feedback.

Employers should offer an employee a right of representation at meetings discussing selection.

Redundancy Selection – Alternative Options

During the course of a redundancy selection process orientated approach undertaken by an employer, it is very important for an employer to explore ‘alternative options’ to that of dismissal.

Whatever options or alternatives the employer assessed should be documented and maintained by the employer. The employee during the consultative process should be asked for their input into the assessment of alternative options.

Selection should involve a fair, transparent process that applied objective selection criteria.

In case UD206/2011 it was stated :

“When an employer is making an employee redundant, while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy… Where there is no agreed procedure in relation to selection for redundancy, as in this case, then the employer must act fairly and reasonably.”

The burden of proof is on the employer in dismissal cases to show fairness was applied in the selection process and to justify it by objective standards.

The employer is duty bound to consider alternative work for the employee within the organisation, or within another business or business location of the employer.  

In case UDD1726 the court was presented with no information to demonstrate the employer carried out a thorough exercise to consider alternative options.

An employer needs to furnish to a case officer proof that an alternative options exercise was undertaken by them, or the case officer may conclude the dismissal was unfair and damages should be awarded.

Genuine Redundancy Test

When an employee is dismissed, there must be a genuine reason for the redundancy. The law sets out the reasons for when a dismissal is a dismissal by reason of redundancy. This is to stop employers dismissing employees and just giving the reason as that of redundancy, when there is no genuine basis in fact for that proposition.

What was the reason for the Redundancy will be assessed in any case.

S. 7 of the Redundancy Payments Act(as amended) sets out the circumstances the when a dismissal will be considered a redundancy.

‘’For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

• ( a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or
• ( b ) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or
• ( c ) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or
• ( d ) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or
• ( e ) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained’’.

An employer may notify an employee the redundancy reason is that they are going to operate with fewer staff for purely economic reasons, for example.

Defence to an Unfair Dismissal Claim

Redundancy is a defence to an Unfair Dismissal claim made by the employee which can be seen in Section 6 of the Unfair Dismissals Act as follows:

‘’Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

• ( a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
• ( b) the conduct of the employee,
• ( c) the redundancy of the employee, and
• ( d) the employee being
  unable to work or continue to work in the position which he held without
  contravention (by him or by his employer) of a duty or restriction imposed by
  or under any statute or instrument made under statute.

Redress for unfair dismissal

The following are various levels of redress an employee is entitled regarding unfair dismissal matters. It is the Adjudicator or the Labour Court who decides upon the appropriate relief.

•  re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or
• re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or
•  if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed.

Cleary & Co. Solicitors, Litigation Law Firm 

Kieran Cleary and Roger Cleary Employment Law Solicitors can help with questions you may have regarding employment law matters and our numbers are (01) 546 1121 or  (052) 612 1999 or our email address is info@clearysolicitors.com

Roger Cleary, L.L.B., Solicitor

Roger is a Bachelor of Law, Solicitor has an advanced diploma in employment law & has over ten years of experience specialising in employment law advising employees and employers on unfair dismissal, redundancy, discrimination, contractual dispute matters, bringing and defending cases before the Workplace Relations Commission and Labour Court.

Contact details are (01) 546 1121 or  (052) 612 1999 or our email address is info@clearysolicitors.com

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