Lack of good faith by employer in redundancy process leads to $16,000 compensation plus three months wages for employee…

An employee challenged the redundancy process of his employer by bringing a claim for unjustified dismissal in the Employment Relations Authority. 

The employee was hired to perform a specialist role for the employer. 

Four months later the employee was sent a proposal to dis-establish his role due to the role not being commercially viable anymore. The employer cited the lack of billable hours completed by the employee and believed a pipeline of guaranteed future work could not be secured. 

The proposal also stated that other roles within the employee’s team were assessed to be commercially viable. 

The proposal came as a shock to the employee who was unaware that his level of billing was a significant feature in the feasibility of his role. 

Even though the employee provided some feedback to the proposal, his role was dis-established, and the employer considered he was not suitable for any other roles within the company. 

The Authority found that the employee was hired into a role where there was never sufficient client work for him to perform throughout the entirety of the employment. 

At no point was it made clear to the employee that his role was conditional on securing future work. The employee could not be taken to share the employer’s commercial risk in hiring him on a permanent basis. 

The employer had an obligation to share this issue with the employee from the commencement of his employment because the issue went to the viability of the employee’s role. 

The employer had also made a unilateral decision regarding the employee’s suitability for other roles, and did not sufficiently allow the employee to comment on his suitability for redeployment. 

The employee was therefore held to be unjustifiably dismissed. He was awarded three months lost wages and $16,000 in compensation from the employer for humiliation, loss of dignity, and injury to feelings. 

This case highlights issues for employers:

• The need to take care when hiring for a role that issues going to the feasibility of the role are made clear to the employee…
• The importance of conducting a redundancy process throughout in good faith, and promptly raising employment issues with employees. 

It always pays for employers to receive legal advice from an employment professional to avoid causing a personal grievance.  

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