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Articles
Redundancies – Fair Selection
by Caroline Keane
IN THESE CHALLENGING ECONOMIC TIMES, with businesses coming under increasing pressure to reduce costs, redundancies are becoming a more common occurrence. For employees who may find themselves on the receiving end of a redundancy notice, the first question is quite often “Why me?”
AS OF RIGHT, an employer is entitled to continue their business with fewer employees. They are entitled to dismiss a person on the grounds of a genuine redundancy and no claim for unfair dismissal will succeed. The exception to this rule is when fair selection criteria have not been applied.
UNFAIR SELECTION FOR REDUNDANCY is a common occurrence, with employers frequently using the redundancy cloak as a means of cherry picking the staff they want to retain and those they wish to get rid of, without applying a fair selection process.
FOR EMPLOYEES who believe that their dismissal is not genuine, or who believe that they may have been unfairly selected, the Unfair Dismissals legislation enables them to challenge both the validity of a redundancy situation and the fairness of the selection procedure. Unfair dismissal claims may be heard by a Rights Commissioner or by the Employment Appeals Tribunal. In unfair dimissal claims, the onus is on the employer to show that the redundancy was genuine and that the employee was fairly selected. All of an employer's arrangements are open to scrutiny; for example, employees may claim that they were 'singled-out' when other positions might have been deemed to be equally at risk, or that the criteria applied in the selection process were unfairly biased against them. Important points to note relating to unfair dismissal claims are as follows:
A claim for unfair dismissal claim must be brought within six months from the date of dismissal.
In order to take an unfair dismissal claim, employees should have a minimum of twelve (12) months continuous service. The requirement to have one year’s continuous service does not apply in respect of dismissals due to pregnancy.
The remedies available under the unfair dismissals legislation include financial compensation of up to two year’s gross pay; reinstatement to their old job from the date of the dismissal; or reengagement in their old job or in a suitable alternative job on conditions which the Rights Commissioner and/or the Employment Appeals Tribunal consider reasonable.
FOR EMPLOYERS who may have little or no previous experience in this area, the entire redundancy procedure, from the selection process to implementation, can be quite daunting. Important points to bear in mind when considering the selection criteria are as follows:
Where there is an existing agreement or practice in place, that rule must be applied, unless there are genuine reasons for departing from this rule.
An employer is not obliged to apply the “last in, first out” rule, and can set the criteria for selection for redundancy appropriate to its needs, provided those criteria are reasonable and are set out in a fair manner.
The selection process must be fair and reasonable and must not discriminate against any employee or group of employees.
Before setting selection criteria, employers should have regard to the provisions of the employment equality legislation. It is automatically unfair to set selection criteria which would discriminate against an employee on any of the following grounds; age, race, gender, colour, disability, marital or family status, religious opinion or membership of the travelling community.
It is deemed unfair to set selection criteria that would discriminate against staff on the basis of their part-time status.
The criteria for the selection process may include experience, qualification, length of service, cost (both the cost of retaining an employee or the cost of making an employee redundant), job performance, flexibility, and any other relevant factors.
Where a number of redundancies are being made, the employer should check as to whether this would constitute a collective redundancy. A collective redundancy will arise when a certain proportion of the workforce is let go within a 30-day timeframe. Where collective redundancies occur, there is an obligation on the employer to enter into consultations with the employees for at least 30 days before anyone is given notice of redundancy. There is also an obligation to inform the Minister for Enterprise, Trade and Employment in writing of the proposed redundancies.
If an employer is not in a position to pay the statuatory redundancy to their employees, there can avail of a procedure whereby the Department of Enterprise, Trade and Employment will pay the redundancies out of the Social Insurance Fund, provided that the Employer provides a letter to the Department accepting liability for the 40% owing to the Social Insurance Fund together with a letter from their accountant stating the company is not in a position to pay. This should be supported by documentary evidence (e.g. audited accounts/statement of affairs.)
Many employers will have had little or no previous experience in this area, and may find the entire redundancy procedure, from the selection process to implementation, to be quite daunting. And unless proper procedure is applied, employers may well find themselves facing a claim of unfair dismissal, where an employee could be awarded the equivalent of two years gross salary if their claim is successful. The importance of taking sound legal advice and of careful planning for these situations cannot be overemphasised.
If you require any employment law advice contact Aoife Hennessy, employment law solicitor at Sweeney McGann on ahennessy@sweeneymcgann.com |
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