Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

CASE REF: 2552/04

CLAIMANT: Dermot O'Brien

RESPONDENT: Sperrin Galvanisers Ltd

DECISION

The unanimous decision of the tribunal is that the claimant was unfairly dismissed by reason of his unfair selection for redundancy and is entitled to the compensation set out at the end of this decision.

Constitution of Tribunal:

Chairman: Ms P Sheils

Members: Miss A Hamilton

Mr J McCusker

Appearances:

The claimant was represented by Mr. Donal Flanagan of Counsel, instructed by Joseph McGarrity, Solicitor, of John McGale, Kelly & Co. Solicitors.

The respondent was represented by Mr. John Peel of ELAS, Employment Law Advisory Services Limited.

Preliminary Issues

1. An application for an adjournment and costs was made by the claimant's counsel on the basis that the respondents had failed to reply to the request for further and better particulars and a request for discovery. The claimant's counsel stressed that to proceed in the absence of these particulars would jeopardise the claimant's case.
2. The respondents resisted the application on the basis that the application was being made late, that documents had been sent to the claimant's representatives and that there had been no further enquiry for documents since and that the questions sought in the particulars were questions of fact and could be dealt with in the course of evidence. The respondent also sought costs.
3. The tribunal noted that while there had been relatively recent notices for particulars and discovery issued no Orders had been sought. It was agreed that these orders could be sought and responded to and considered, if granted, in time to allow the case to proceed the following day.
4. Accordingly the claimant's counsel applied for Orders for Additional Information and Disclosure. The respondent's representative did not contest these applications. The tribunal considered the applications and granted the Orders as sought. The respondents' representative agreed to reply to the Orders by 5.30pm and furnish them forthwith to the claimant's representative.
5. The issue of costs was reserved until the end of the hearing.

The Claim and Defence

The claimant lodged a claim to the tribunal dated the 20^th September 2004 in which he claimed that he had been unfairly dismissed by reason of his unfair selection for redundancy.

The respondent stated in its Response dated 29^th September 2004 that the claimant had been dismissed but that the correct procedure had been used to select the claimant for redundancy.

Sources of Evidence.

The tribunal heard evidence from Mr. Michael Murphy, the company accountant, Mr. Damien Convery, company managing director and Mr. Colum McSorley, foreman, on behalf of the respondent and from Mr. Dermot O'Brien, claimant.

The tribunal also received a bundle of agreed documents, prepared by the respondent's representatives.

The Issues for the tribunal to determine were: -

•    Was the reason for the claimant's dismissal redundancy

•    If so did the respondent act reasonably in treating that as reason for dismissing the claimant

Findings of Fact

The tribunal found the following facts proved on a balance of probabilities: -

6. The claimant had been employed by the respondent company since September 2002. He was employed as a steel handler/factory operative in the respondent's production of galvanised steel products. He had also worked from time to time in the acid dipping section of the production but this had been an occasional departure.
7. The respondent company employed in the region of 50 workers. 30% of the work of the respondent company came from the west of Ireland. In response to this the respondent company decided to build a plant in Galway and do that portion of its work there. This plant was to open in July 2004. This had a direct impact on the workforce at the Draperstown plant in that there was to be a corresponding reduction in its workload, which in turn necessitated a corresponding decrease in that workforce.
8. The company posted a notice on the canteen wall inviting interest from all workers for positions in the Galway plant. There was some interest but there still remained a need to reduce the Draperstown workforce. The tribunal found that these positions were offered to all workers who could avail of them, without restriction. The tribunal found that these positions were open to the claimant as to all other workers. The tribunal did not accept that the company would not have recommended the claimant for one of these positions. The claimant had been aware of these positions in Galway but he was unable to avail of them due to his personal/family commitments.
9. The claimant received a letter dated July 5^th 2004 advising him that he had been selected for redundancy, effective from July 12^th 2004. On receipt the claimant contacted his wife. He subsequently spoke to Mr. Murphy that same day with a number of questions and objections. He made it clear that he was unhappy with his having been selected for redundancy and asked why he had been selected. He also advised that on information he had received from his wife his notice period had not been properly calculated.
10. The claimant received another letter dated July 5^th 2004 advising that the effective date of his redundancy was July 26^th 2004, taking account of his proper notice period.
11. The claimant received a further letter dated July 8^th 2004 advising him of the reason for the redundancy and of how he had been selected for redundancy.
12. This letter stated that the company had taken professional advice on how candidates should be selected. It also stated that the selection had been made against a number of criteria and that some of these criteria were given greater importance and emphasis than others. A pool of candidates had been chosen; the candidates had been assessed against a range of criteria- Skill; Quality; Knowledge; Flexibility; Potential; Attendance; Punctuality; Service: an objective assessment was made of each candidate; some of the criteria were given greater emphasis and importance than others.
13. This letter also offered the claimant an opportunity to discuss the matter further with Mr. Murphy and included an offer that the company would do what it could to get help the claimant get another job. The tribunal found that the terms of this letter did not constitute advice to the claimant that he had a right of appeal.
14. Mr Convery had started the business approximately 8 years ago and had always run it along informal lines. There were clock cards to which he occasionally referred but these were destroyed on a systematic and regular (approx. 6 monthly) basis. The tribunal found that there were no formal processes or procedures in place in relation to the recording or noting of the performance of any of the 50 strong workforce.
15. The respondent produced a redundancy selection matrix. It was suggested on behalf of the claimant that this matrix had been produced in response to the claimant's queries about his having been selected for redundancy and about how he had been selected.
16. It was claimed that Mr. Michael Murphy and Mr. Damien Convery had compiled this matrix at a meeting on July 2^nd 2004. It was claimed that Mr. Murphy and Mr. Convery had assessed each of 19 candidates against 8 criteria without reference to any document e.g. attendance cards, clock cards or the PAYE payroll documents that might have been available. It was also claimed that this assessment had involved a comparison amongst each of the candidates as against each other and that this exercise had been carried out by both men from within their own knowledge.
17. The tribunal found the evidence given by the respondent in relation to the compilation of the matrix was contradictory and unreliable. There were no personnel files in existence and there were no records ever kept of the performance of any of the workers. The tribunal did not accept that this complex assessment and selection process had been carried out as claimed and it did not accept that the matrix had been compiled as claimed.
18. The tribunal found that the scoring on the matrix had been made by Mr. Murphy and Mr. Convery without any reference to any independent or objective documentation.
19. The tribunal found that there was no reliable evidence to support the claimant's scores. The evidence given in relation to the compilation of the scores on the matrix also contradicted the documentary evidence in relation to the scoring in the selection process. The claimant had been advised by letter that some of the criteria had been given greater importance and emphasis than others. However the respondent accepted in evidence that this had not been the case.
20. The tribunal found that there was no reliable evidence to support the claimant's scores. The tribunal also found that no independent or objective documentation of any kind, e.g. clock cards or PAYE details or attendance records, was referred to in the evidence given to justify the claimant's scores. The tribunal heard evidence from Mr. Colm McSorley, the claimant's foreman for a period of 3 months, and noted that this evidence did not describe the claimant's performance at his work or in his attendance at work to be such as to justify his low scores on the matrix.

The Law

The tribunal considered the relevant statutory provision and the case law to which it was directed by the claimant's counsel, namely: -

Article 126 of the Employment Rights (Northern Ireland) Order 1996 sets out the right of an employee not to be unfairly dismissed by his employer.

Article 130 of that Order states that

(1) In determining…whether the dismissal of an employee is fair or unfair, it is for the employer to show-

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this paragraph if it is, amongst other things therein set out, that the employee was redundant.

Article 130(4) goes on

Where the employer has fulfilled the requirements of paragraph (1), the determination of whether the dismissal is fair or unfair (having regard to the reason shown by the employer)-

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case.

Case Law

Counsel for the claimant referred the tribunal to the following case law: -

•    Williams v Compair Maxam Ltd. [1982] IRLR 83

•    Bristol Channel Ship Repairers Ltd v O'Keefe [1977] 2 All ER 258

•    Cox v Wildt Mellor Bromley Ltd [1978] ICR 736

•    John Brown Engineering Ltd v Brown [1997] IRLR 90

•    FT Orr Ltd v Holloway [1995] IRLR 400

Application of the Law and Findings of Fact

21. It was agreed that the claimant had been made redundant. There was no challenge to the need for redundancies or that a redundancy situation existed.
22. The tribunal had to consider whether the claimant's selection for redundancy was fair. In so doing the tribunal considered the evidence and how this sat with the statutory requirements of fairness and the case law guidelines for fairness as set out in the Williams v Compair Maxam case. These guidelines include

•    giving to employees as much warning as possible of impending redundancies, to consider possible alternative solutions and if necessary to find alternative employment;

•    ensuring that there is proper consultation with employees to achieve the desired management result and to avoid hardship amongst employees; to agree selection criteria and ensure that these were applied;

•    establishing criteria for selection which will not depend solely on the opinion of the person making the selection without reference to objective verification;

•    ensuring that the selection is made fairly in accordance with those criteria;

•    considering alternative employment instead of dismissal.

23. Even though the respondent company was a small concern it did have a workforce of 50 employees. No evidence indicated that the lack of processes and procedures for the management of the workforce was an economic necessity. In fact the evidence was that this informal approach was a matter of choice and that decisions had now been taken to put more formal processes and procedures in place. Therefore the size of the company was not an issue in its choice of or application of the selection procedure in this case.
24. The tribunal then had to decide if the selection criteria themselves were fair and objective. Counsel for the claimant submitted that the fact the criteria were so interlinked and that the evidence given in relation to them was so contradictory and confused indicated that the criteria were not of themselves objective. The tribunal did not accept this. The evidence that was so contradictory and confused about the criteria was in relation to the way in which the criteria were applied and the assessment/selection that was made.
25. The tribunal did not accept that the redundancy selection had been carried out in the way described by the respondents. Specifically the tribunal did not accept that the redundancy matrix had been compiled when the assessment and selection for redundancy had been made. The reason for this conclusion is that the evidence in relation to the compilation of the matrix was contradictory and unreliable. There was no independent or objective documentary evidence used during the assessment and selection procedure. Additionally there was also no independent or objective evidence to support or justify the claimant's scores on the matrix.
26. Accordingly the tribunal concluded that the respondent did not act reasonably in dismissing the claimant for redundancy. The claimant had been unfairly dismissed by reason of having been unfairly selected for redundancy.

Compensation

27. Compensation is awarded and calculated within the terms of the statutory provisions of The Employment Rights (Northern Ireland) Order 1996.
28. In considering the issue of compensation the tribunal had to consider the issue of the likelihood that the claimant would have been made redundant if the selection process had been fair. This is a speculative exercise. It was accepted that there was a redundancy situation. However the tribunal had no independent documentary or other evidence on which to assess the suitability of the claimant as a candidate for redundancy as against the other candidates in the pool. Accordingly the tribunal was unable to say whether the claimant would have been made redundant.
29. The tribunal found the evidence of the claimant to be straightforward with no unnecessary embellishments. He gave evidence that under the Jobseekers scheme through which he was claiming state benefit he was obliged to apply for and go to interviews for at least four jobs per week. It was a condition of his getting his benefit monies that he do so. Accordingly he had applied for numerous jobs of every ilk but had been unsuccessful in securing employment.
30. A schedule of loss was prepared by the claimant's representatives and agreed by the respondent. The tribunal heard no evidence as to whether the claimant had been given any redundancy pay. The claimant worked his notice period.

Basic Award

The claimant was employed by the respondent company for a continuous period of 3 years and was aged 28 at the time of his dismissal. His gross weekly pay was his basic pay plus a weekly overtime production bonus, £235.

Basic Award

£235 x 3years £705

Compensatory Award

This is an award paid to compensate the claimant for the loss he has suffered as a result of his unfair dismissal. It is not awarded to penalise the respondent. It must also be an amount that the tribunal thinks is just and equitable in all the circumstances.

Weekly loss of pay (nett) from effective date of dismissal

£195 x 56 weeks £10,920

Total Compensatory Award £10,920

Loss of Statutory Rights

This is to cover the fact that the claimant had acquired statutory rights and protection and that he will now have to build this up again. The tribunal felt that an award of £500 was reasonable.

Loss of statutory Rights £500

Future Loss

The tribunal considered a number of factors in assessing this, the age of the claimant, his location his potential for flexibility, the fact that he has been out of work for over a year and had been constructively looking for work during that time. The tribunal awards a sum for future loss taking account of these factors and awards a sum for a further period of six months.

Future Loss £580 x 6 months £3,480

Total Compensation Payable £15,605

Costs

Both parties had applied for costs from each other on the first day. It was agreed between the parties that there should be no order as to costs and accordingly the tribunal made no order.

Recoupment

The claimant received Jobseekers allowance for 56 weeks @ £90 per week. The Recoupment Regulations apply to this decision.

The dates to which the Prescribed Element relates are July 27^th 2004 to 5^th September 2005

The amount of the Prescribed Element is 56 weeks @ £195=£10,920

The amount by which the monetary award exceeds the Prescribed Element is £4,685.

This is a relevant decision for the purposes of the Industrials Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing: 5-6 September 2005, Strabane.

Date decision recorded in register and issued to parties: