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IRELAND IS AWASH with redundancies currently, particularly in the tech sector, and the government this week announced some reforms to redundancy law.
The new laws will cover some of the most egregious redundancies – where employment is terminated with no notice, consultation or redundancy pay by companies that are insolvent, having hived off valuable assets into other group companies via corporate restructurings.
The infamous closures of Clerys and Debenhams department stores highlighted serious loopholes in our corporate restructuring and employment protection laws and a report was published in 2016 by the former chair of the Labour Court, Kevin Duffy, and Senior Counsel, Nessa Cahill, recommending major reforms to these areas of law. The Duffy Cahill report has gathered dust on various Ministers’ desks for years, so it is good news that at least one part of that report is finally being acted on.
But these reforms will not affect the vast majority of employees being made redundant from very profitable companies today, particularly those in the tech sector.
As an employment solicitor, I spend much of my time advising employees who believe they have been unfairly selected for redundancy and who want to know their rights.
Of course, it is perfectly lawful for companies to restructure and reduce their workforce, as long as they do so in a transparent and reasonable manner and comply with our laws on collective redundancies and unfair dismissals. Employers must be able to demonstrate both that they have a genuine business need to eliminate a particular role, and that they have fairly selected the particular individual for redundancy. They must consult with any potentially affected employees with the aim of avoiding the redundancy or finding a suitable alternative role.
The need to explain the rationale behind their decisions seems to be a problem for some employers. It appears that some tech companies have been cutting staff numbers recently not because they actually need to, but rather because “the market” and their shareholders expect them to because everyone else is doing it.
Results released last week by Meta, Alphabet, Microsoft and Amazon sparked a stock market rally as the tech sector giants posted stronger Q1 earnings than many analysts had been expecting. Yet many companies continue to go through further rounds of redundancies along with hiring freezes.
That being the case, the justifications for many redundancies in my opinion are getting thinner and thinner. In my experience, companies are dismissing very talented, high-performing staff who have significantly contributed to their profits over lengthy periods of time.
Alternative open roles in these companies are few and far between, and the companies are not engaging with employees who suggest alternatives to their redundancy, or who point to flaws in the business case for their redundancy.
In extreme cases, some companies that anticipate they will make redundancies this year have even reportedly started making life difficult for employees in the hope they will leave “voluntarily” without the need for the company to make a redundancy payment. Suffice it to say, that could amount to a constructive dismissal and anyone in that situation should take advice!
As well as this, many employees I’m advising feel particularly aggrieved because their treatment while being made redundant is in such stark contrast to their employer’s stated policies and values, holding themselves out as being great places to work. These workers are now experiencing the sharp end of corporate hypocrisy; the difference between what a company does for good PR and how it acts when it comes to their bottom line. See also: Greenwashing.
Many companies offer more than basic statutory redundancy pay, but in return for an “enhanced” redundancy package employees are required to sign away all rights they have to sue the company for how they have been treated, the most common potential remedy being an unfair dismissal claim.
Employers are betting that most employees will accept their enhanced payments and therefore any problems in their redundancy process will be moot.
But with floods of employees entering the jobs market from these companies, workers are now worried that the severance they are being offered won’t see them through until they find a new job.
However, they are also hesitant to challenge their redundancies via unfair dismissal complaints at the Workplace Relations Commission because of the long delays getting these cases heard, and the consequent delay in receiving any compensation should they win.
Most simply can’t afford to wait for 10-12 months for their case to be heard, so they feel they have no choice but to accept low severance offers from their employers because they will receive this payment far sooner than any potential WRC compensation. This is simply not good enough.
Our employment dispute mechanisms were streamlined in 2015 when the WRC was created and this was done to ensure better, fairer and more efficient industrial relations mechanisms in this State. However, due to the dearth of Adjudication Officers, ordinary workers are still not receiving swift justice.
Workers must not be put off from making a claim in good faith because the Government is failing to prioritise the industrial relations machinery of the State. More Adjudication Officers are needed to ensure swift access to justice. As the old saying goes, justice delayed is justice denied.
Ciarán Ahern is Partner at McInnes Dunne Murphy LLP law firm. He is also the Labour Party representative for Dublin South West.
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