Employer pays $7,000 for unjustified disadvantage after employee made redundant...

The Employment Relations Authority has upheld an employee’s personal grievance claim of unjustified disadvantage after an employer made the employee’s position redundant.

The employer had purchased a new product line with aims of expanding the business. In order to make the new business venture work, the employer had become knowledgeable of the new product and its market.

After acquiring the licence to sell the new product, the employer believed that the employee’s position as manager was no longer needed, due to the new skillset gained by the employer. The employer believed this may lead to “doubling up” on the work being done, and it would be more profitable for the employer do the work himself.

The employer decided to restructure the business, and the employee was informed that his position was being made redundant. The employer explained that this decision was for the profitability of the business.

The employee was given an option to respond, but his proposal of working part-time was declined by the employer. An alternative was offered to the employee but rejected, and his employment was terminated.

Five months after being dismissed, the employee saw a job advertisement for the same employer which was very similar to his previous role. The employee applied for the job but his application was declined.

The employee raised  personal grievance claims of both unjustified dismissal and unjustified disadvantage with the Authority.

An unjustified dismissal occurs when an employer dismisses an employee, but has not acted fairly and reasonably in all the circumstances.

In this case, the Authority decided that the restructure of the business was justified. In terms of the economic conditions at the time, making the employee’s position redundant was viable for the business and made sense for profit.

It was also accepted by the Authority that the choice to advertise a new job role fitted with the new product line, and required a different knowledge and skill set than the employee had.

However, the Authority decided that the employer had failed to provide the employee with adequate information regarding the rationale behind the restructure. The Authority decided that this was a flaw in the redundancy process, and meant the employee had been disadvantaged in his employment.

The Authority ordered the employer to pay $7,000 in compensation to the employee for the hurt and humiliation caused by the disadvantage.

An employer has a number of obligations to fulfil when dismissing an employee. If you are confused about these obligations, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley and Hunter Flanagan-Connors