Awards for unfair dismissal should not be reduced on the basis of any redundancy payment an employee might have received, the Workplace Relations Commission (WRC) has ruled in a decision against a well-known motoring school published on Tuesday.
“A practice of deducting a lump sum already paid from actual and prospective loss awarded as redress for unfair dismissal erodes the protections offered by the Unfair Dismissals Acts, especially for long-standing employees,” adjudicating officer Kevin Baneham wrote.
In the decision, the WRC upheld Brendan Phelan’s complaint under the Unfair Dismissals Act 1977 and ordered the Irish School of Motoring to pay him €28,000 on top of severance pay for his 15 years’ service.
Mr Baneham said he would not cut the award made to the complainant for unfair dismissal despite his already having received a redundancy payment, saying this would “erode” the worker’s statutory rights.
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The driving school argued it was only the second time in its 60 years that it had made an employee redundant – but that the pandemic left it with “no choice” except to make Mr Phelan’s role as fleet training manager redundant in May 2021.
Its representative, David Kearney, of HR Brief, said Mr Phelan’s job up to the pandemic had been to manage training for employees of client firms who had been given company cars. This work had dropped off by 82 per cent because of the Covid-19 pandemic and was slow to recover afterwards because of the switch to working from home, Mr Kearney said.
The fleet training business was “no longer viable” and Mr Phelan “had not and would not be replaced”, Mr Kearney said.
Mr Kearney argued it had been a genuine redundancy and that the firm had gone through a redundancy consultation with the claimant in September 2020.
The tribunal was told Mr Phelan was placed on lay-off in March 2020, returning to work the following July before going on lay-off again in October that year until his employment was terminated at a meeting in May 2021.
Solicitor Gerald Kean, who appeared for Mr Phelan, said his client was told after the September 2020 consultation that “redundancy was not necessary and they would send him alternative roles”.
In his evidence, Mr Phelan said he had been “expecting to go back to work” before he went to the meeting in May 2021.
He said there was “no discussion of any alternative role” even though he believed that, with some training, he could have taken over the duties of another manager, who had been at the firm four years.
He said he was “devastated” at the end of the meeting with his bosses, calling the way he had “disappeared from the business” a “humiliating” experience. “There were colleagues with similar levels of seniority who were left untouched,” Mr Phelan said.
In his decision, Mr Baneham noted that the Irish School of Motoring had warned Mr Phelan of the possibility of redundancy in September 2020 and had discussed an alternative role which had been “deemed unsuitable”. However, the driving school “did not then implement that redundancy and the complainant went on lay-off again”, he wrote.
“The outcome of the September 2020 process was not to dismiss the complainant, so how could it justify the decision to dismiss the complainant six months later?” Mr Baneham wrote.
He said there had been “no discussion of alternatives or any process” when Mr Phelan was “presented with a fait accompli” and told he was to be made redundant in May 2021, Mr Baneham wrote. “Without this process, the respondent cannot say the dismissal was not unfair wholly or mainly on grounds of redundancy.”
He upheld the complaint of unfair dismissal and awarded €28,000 for his financial losses, a sum equivalent to nine months’ pay. Mr Baneham noted that Mr Phelan had already received a statutory redundancy payment in respect of his nearly 15 years’ service from his former employer. But he wrote that there was “no legal basis” for deducting the value of a redundancy lump sum paid to an unfairly dismissed worker.
