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A Twist in a Redundancy Tale at the Labour Court

This week we look at a recent Labour Court case in which the Court was asked to find that a supposed "redundancy" was actually an unfair dismissal. There was, however, a twist in the tale. Our Adrian Twomey highlights the key points to note in the case of Castolin Eutectic Ireland Limited v Vasarheli, UDD2313.

The Complainant, Mr. Bogdan Vasarheli, commenced employment as a machine operator with the company in 2017. According to evidence given by the company, there was a reduction in demand for their products in mid-2021. They contacted the workers' trade union, SIPTU, and explained that there would be three redundancies.

An earlier agreement between SIPTU and the company provided that a 'last in, first out' (LIFO) methodology was to be used when selecting workers for redundancy where 'all other things' were equal. There were three other machine operators who had shorter service than Mr. Vasarheli. Nonetheless, the company selected him for redundancy because it believed that one of those with less service (referred to in the decision as 'Mr. TB') had a broader skillset that it wished to retain.

Management held two individual meetings with each of the impacted employees - bar Mr. Vasarheli - prior to the redundancies taking effect. The company's evidence was that it had also intended to meet with the Complainant, but he was absent on sick leave. A registered letter sent to his home was returned undelivered.

The Labour Court accepted that there was a genuine redundancy situation at the company in 2021 and that there had been a need to reduce the number of machine operators by three. However, the Court went on to find that:

"... the redundancies effected by the Respondent in May 2021 were carried out with little or no regard to fair procedures. The individuals concerned were selected for redundancy without any prior direct engagement with them and they were not afforded an opportunity to suggest alternatives to redundancy and nor were they given an opportunity to appeal the Respondent’s decision to make them redundant. The only justification offered by the Respondent for its decision to depart from a strict application of LIFO and to select the Complainant ahead of Mr TB (who had short service than he did) is the witnesses’ verbal assertions that Mr TB was a more competent machine operative than the Complainant.

On the basis of the foregoing, the Court finds that the selection process was procedurally deficient and the Complainant’s dismissal was, therefore, unfair."

The Workplace Relations Commission (WRC) and Labour Court would normally go on to award compensation to complainants in such cases but in there was to be a twist in the tale of Mr. Vasarheli.

Complainants in unfair dismissal cases are obliged to make efforts to 'mitigate' or reduce the impact of their dismissals by actively seeking alternative employment. The Court noted that Mr. Vasarheli's evidence on that point was "less than credible". He was described as "evasive" and "unforthcoming" by the Court. The Court also stated that:

"When specifically asked to explain why, as a self-employed driving instructor since June 2022, he had not apparently made any efforts to generate work for himself outside the hours provided for him by the aforementioned school of motoring, the Complainant was unable to offer any meaningful explanation other than that he wanted to build up his business slowly. In similar vein, the Court found Complainant’s explanation for his inability to demonstrate that he [w]as making efforts to seek alternative employment in the periods June to August 2021 and January to April 2022 lacked any credibility. Finally, the Court cannot accept that the Complainant could have believed had any realistic prospect of securing many of the jobs he says he applied for as they clearly required a level of experience and skill that he did have.

Having regard to the foregoing, the Court finds that the Complainant, through a combination of inaction over protracted periods and a series of ill-advised job applications, found himself unemployed for a much longer period than could otherwise have been the case had he been more diligent in seeking alternative employment. The Respondent cannot be held liable in compensation for the Complainant’s lack of effort and/or poor judgment in this regard."

In light of these factors, the Court concluded that it should make no award of compensation to the Complainant over and above the sum already paid to him by his former employer when he was made redundant.

Employers should note that dismissals by reason of redundancy are open to challenge under the Unfair Dismissals Acts. It is important that any redundancies are genuine, that fair selection methods are used and that real efforts are made to explore alternatives to redundancy. They should also take care to offer employees an opportunity to appeal any decision to select them for redundancy.

Those who require advice in relation to redundancies or who need representation before the WRC or Labour Court can contact our Adrian Twomey.


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