Employer Resources Newsletter - February 2023
HR Best Practice - Right Sizing your Organisation (When Redundancies Take Place)
Whilst Ireland is currently at low unemployment levels the impact of the cost-of-living crisis and geopolitical impact on the market has meant that organisations in many sectors are seeking to reduce headcount. The ongoing cost of living crisis and high inflation is forcing many employers to examine the budgetary constraints and financial implications on their organisation. Where this happens and a reduction in headcount is necessary it is of paramount importance that impacted organisations ensure they are applying a procedurally correct approach and remaining fully compliant in order to mitigate the potential financial complications that come with these processes.
While there may be no other option to help protect an organisation, redundancies can be fraught with risks if not managed correctly. One of the main issues is ensuring it is done in a fair and objective manner and making sure a consultative procedure is put in place with employees whose roles are at risk of being made redundant.
If an employer does not follow the correct procedure, they leave themselves open to serious financial implications. If it is found that an employee was unfairly dismissed, they can be awarded up to two years’ gross salary as compensation under the Unfair Dismissal Acts or an adjudicator may agree to reinstatement in some cases.
There are some careful considerations that an employer must take into account before selecting a role for being at risk of redundancy, having first demonstrated that a genuine redundancy situation exists due to the organisational case for change.
Selecting roles for redundancy
To fairly select a role for being at risk of redundancy, an employer must first establish which positions may become redundant. Having established that certain positions may no longer be required, employees in those positions must be considered against the criteria for selection.
When setting out the criteria for selection, employers should consider precedence – has the organisation made redundancies in past and, if so, what selection methods were used. The two main methods of selection used are ‘last in first out’ or ‘matrix selection criteria’ that can be based on qualifications, skills, experience, or a combination of all three. If a redundancy process has been previously used by the organisation and it wants to use a different procedure, then it must have a specific reason justifying a departure from the procedure that applied previously.
Employers need to be careful and transparent when dealing with a redundancy process. While a potential redundancy situation may exist, an employee can have grounds for complaint if the manner of the selection for redundancy was unfair.
In selecting a particular role for redundancy, an employer must apply selection criteria that are reasonable and applied in a fair manner. An employee is entitled to bring a claim for unfair dismissal if they consider that they were unfairly selected for redundancy or consider that a genuine redundancy situation did not exist.
Under the Unfair Dismissals legislation, selection for redundancy based on certain specific grounds is considered unfair. These include redundancy as the result of an employee's trade union activity, pregnancy or religious or political opinions. The Employment Equality legislation also prohibits selection for redundancy that is based on any of the following nine grounds: gender, civil status, family status, age, disability, religious belief, race, sexual orientation or membership of the Traveller community.
It is important to point out that the burden of proof in a claim for unfair dismissal is on the employer. While an organisation may believe they are justified in making an employee redundant, they risk leaving themselves open to claims if they don’t follow correct policies and procedures set out in the Redundancy Payments Acts 1967 - 2014.
Risks associated with redundancy
Critical to any planned redundancy is the fact that fair procedures must apply, and an employer must be able to demonstrate all considerations. Implicit in any potential redundancy are the justifications that a genuine redundancy situation exists, fair selection procedures are employed, and legislative requirements are met in terms of procedures and compliance. Thorough and meaningful engagement in consultation with the impacted employees is paramount to a procedurally correct process and ensuring all considerations and alternatives are examined prior to any decision being made.
If any of the above is not in line with fair procedures or natural justice then an employee can seek redress under the Unfair Dismissals Acts, the Redundancy Payment Acts, the Protection of Employment Acts or the Employment Equality Acts if the dismissal was on any of the nine grounds previously mentioned, which may result in financial liability or other redress on the employer.
The current economic impact on organisations may lead to some difficult resourcing decisions being made. Paramount to any at risk and redundancy process is the application of proper procedures, best practice, transparency, and compliance. Where all these are present organisations can mitigate the risks that inevitably flow from such a process whilst also managing the interests of the organisation.
If your organisation is experiencing challenges and considering a reduction in headcount, please contact Adare Human Resource Management for details of support under our Partnership Programme.
WRC / Labour Court Decisions
Internal Dispute leads to a complaint under the Industrial Relations Act
The worker raised several issues with their line management concerning his safety at work and the Charity’s policy concerning challenging service users and how that may impact on the safety of the worker.
It was perceived by the worker that in raising the grievance he became the victim of a process that labelled him as prejudiced regarding a segment of the client group. That manifested in remarks that were not properly put to the worker and were contained in a confidential report arising from the grievance.
The worker fears that this conclusion potentially had negative implications for his future progression with the Charity.
Summary of Workers Case:
The worker argued that he raised a grievance in line with the organisations policy and arising from that grievance he was penalised. He stated that he in fact suffered loss as he was no longer provided any shift work pending the outcome of an investigation. He also feared that his personnel record would be tainted by unfounded remarks made in that report.
Summary of Employer’s Case:
The organisation took the complaint very seriously outlining that the worker was held in high regard and in fact had moved to another work area in a regular role and was no longer filling relief slots. In reference to the investigation the employer noted that some mistakes were made in how the report was written. However, the organisation outlined that they had apologised for those remarks and the matter was closed with no record held on the workers file with any adverse or negative review relating to this matter and in fact that the worker had not been scheduled for shifts based on the belief that he was unavailable due to sickness.
The adjudicator noted that the worker was held in high regard and has now moved to another work unit in a more stable role and finds the working relationship positive.
The adjudicator acknowledged that the worker was inadvertently not scheduled for shifts and the organisation acknowledged that gave rise to loss but that no adverse finding had been made against the worker and no record whatsoever regarding the investigation had been nor will be placed on the worker’s file.
Under Section 13 of the Industrial Relations Act 1969 the adjudicator was required to make a recommendation in relation to the dispute.
Aligned to the facts presented the employer agreed that no record whatsoever will be held on the workers personnel file concerning the disputes in the complaint and as part of the recommendation the adjudicator noted that no adverse record concerning these disputes will be ever held on the file.
Allowing for the effects on the worker and the financial loss incurred though inadvertent, in full and final settlement concerning all matters related to these complaints and disputes the adjudicator recommended that the employer pay the worker €4000.
Managing grievances is par for the course as an employer but how a concern is resolved will ultimately dictate whether or not a risk of third-party engagement will result. With all grievances an informal resolution will always be the preferred option but with many a more formal application will be necessary. Maintaining natural justice and fair procedures is paramount to the resolution of any grievance and ensuring all parties are treated in a manner that is fair is essential. This also includes the manner in which an individual is treated throughout the process. Care must be taken to not intentionally or unintentionally impact on the rights of an individual in the maintenance of their contractual terms and conditions. Where a matter is being investigated it is essential that the parties’ terms and conditions are maintained and all rights and entitlements protected. The outcome here highlights that all organisations regardless of sector should ensure the principles of natural justice apply. Therefore, seeking appropriate advices is essential to maintaining the requirements and alignment to the relevant Code of Practice in particular on the question of impartiality.
Did You Know?
Integration of the Right to Request Remote Work and Work Life Balance
With a number of employment law changes already taking place in 2023 such as the enactment of legislation relating to Statutory Sick Pay, amendments to Protected Disclosures, Predictable and Transparent Working Conditions and increases to the national minimum wage, employers must prepare for what is the long-anticipated integration of the Right to Request Remote Work into the Work Life Balance and Miscellaneous Provisions Bill.
The Work Life Balance and Miscellaneous Provisions Bill (2022), expected to be enacted this year, aims to bring Ireland into compliance with the 2019 EU Work Life Balance Directive which should have been transposed back in August 2022.
Under the integrated Bill remote working will be defined as one type of flexible working and the right to request any other type of flexible working will be limited to parents and carers.
An employer will have an obligation to consider both the needs of the organisation and the employee when contemplating any request as well as having regard to the Code of Practice. Where an employer has not complied with the Code of Practice or other requirements of the Bill a complaint can be made to the WRC, which is seen as an enhanced right.
The Bill provides for the introduction of a right to request a flexible working arrangement for caring purposes for a set period of time. This is much narrower than a general right to request flexible or remote working arrangements, although it does include a request to adjust the employee's working arrangements, work patterns and/or working hours.
The request may be made by a parent of a child up to the age of 12 (or 16 if the child has a disability or long-term illness) and by employees providing ‘care or support for a serious medical reason”. Employers may request evidence of the medical issue and the nature of the relationship.
The Bill sets out the responsibilities of both employer and employee in relation to this request. Firstly, employees must have at least six months' service before they are entitled to request flexible work and notice of eight weeks is required, with the employer having to respond to the request within four weeks.
An employer may postpone the start of the proposed flexible working arrangement if the arrangement would have a substantial adverse effect on their business for reasons such as seasonal variations in the volume of the work concerned, the unavailability of a person to carry out the duties of the employee in the employment, or the nature of those duties, but must provide a reasoning for this and consult with the employee.
It is worth noting that a postponement can only be made once unless the reason relates to seasonal variation in the volume of the work concerned, in which case, the arrangement cannot be postponed more than twice.
When the agreed period of flexible working ends, the employee shall be entitled to return to the working arrangements held immediately before it started.
Changes in working patterns and operational processes must be viewed as part of the overall employer’s effort to retain staff and recruit top talent. Adare Human Resource Management’s most recent HR Barometer Report found that Retention, Recruitment and Talent Acquisition are the top two priorities for employers this year and with 63% of employers planning to increase headcount in 2023 it will be important that organisations develop a remote work strategy considering how new policies can be introduced to both support organisational objectives and assist employees with work-life balance.
Five Days Unpaid Leave for Serious Medical Care
Under the Bill employees will be entitled to five days unpaid leave per year to provide “significant care or support for a serious medical reason” to certain categories of people for serious medical reasons. This will be reserved for instances of care given to a specified person who is a child, co-habitant, parent, grandparent, sibling or someone who resides with the employee.
Employees will be required to confirm to their employer in writing, as soon as reasonably practicable, that they intend to take or have taken this leave.
Employers may request evidence of the employee's relationship with the person requiring care, the nature of the personal care or support required and a medical certificate to evidence the person’s serious medical issue.
This type of leave is subject to a maximum of 5 days in any 12-month period.
The Bill provides for the introduction of leave for employees for reasons relating to domestic violence. This category of leave will allow an impacted employee to seek medical attention, seek help from victim services organisations, get counselling, relocate, get a court order, take advice, or seek assistance from the Gardaí.
Domestic violence leave will be paid at a rate which may be prescribed by the Minister and will be subject to a maximum of 5 days in any 12 months period.
The Bill will amend the Maternity Protection Acts to increase the amount of time allowable (without loss of pay) for breastfeeding purposes from 26 to 104 weeks.
While all employers wait for the enactment of the new legislation the opportunity is here to commence preparation of a draft policy that will cover the requirements of flexible working and work life balance. Organisations should also use this time before the enactment to consider whether or not more favourable terms will be provided, under for example, the domestic violence leave section.
If your organisation requires support, advice or guidance on developing and implementing policies and procedures or developing HR Strategy contact our expert-led team at Adare Human Resource Management.