Carraig Donn consider appealing compensation award for former HR manager
Tribunal rules maternity leave not a factor in job loss but employee should have been offered an alternative position
A WESTPORT retail and fashion company are considering appealing a recent decision by the Employment Appeals Tribunal, after their former Human Resources Manager was awarded almost €29,000 in compensation. The tribunal's determination, which was made last November, was released last week.
Carraig Donn, headquartered on The Lodge Road in Westport, and also operating a nationwide chain of fashion, household, gift and luxury goods stores, was found to not have offered former employee Cornelia Tobin of Falduff, Louisburgh, any alternatives to her job once the decision had been made by senior management to make the position of Human Resource Manager redundant as part of wide-sweeping cost saving measures.
Ms Tobin had been on maternity leave from Carraig Donn and when she returned to work, was informed one month later that her position was being made redundant. She argued before the tribunal that her dismissal was unfair on the grounds that it resulted ‘wholly or mainly from the exercise or proposed exercise of the employee of a right under the Maternity Protection Act 1994’ - meaning that she felt she was dismissed as a consequence of having taken maternity leave from the company, during which time the respondent (Carraig Donn) discovered that they were able to get other employees to do her work.
Her claim was that she was unfairly dismissed, whereas Carraig Donn argued that a review of the company’s operations, in line with similar businesses, highlighted that their HR Department was no longer viable or necessary.
The tribunal decided that it did not ‘find on the evidence before it’ that it needed to make a determination on the aspect of the case relating to the claim by Ms Tobin that her redundancy was a direct consequence of having been on maternity leave. The three person panel, chaired by Mr R Maguire BL, also said in their determination, that they were satisfied that there was a redundancy situation in this case.
However, they added that this point ‘does not obviate the need for a fair and transparent process leading to redundancy’ and that it must be inferred that the respondent had concluded that it did not need a dedicated Human Resources function in advance of the claimant’s return to work.
The tribunal found against Carriag Donn on grounds that they did ‘not offer the claimant any alternatives to her job’, and for making the decision to terminate her job ‘as if this was the only logical consequence of making the role of Human Resources Manager redundant’.
Carraig Donn position
Giving evidence to the tribunal last year, Pat Hughes, Managing Director of Carraig Donn, outlined that Ms Tobin was hired by the company as a Retail HR Manager in 2000 and was promoted to the role of HR Manager in 2003. There was a HR administrator working in the office at the time, but when that person left it was only the claimant in the HR Department. Ms Tobin took time off to train as a primary school teacher in 2009. In June 2010 she went on maternity leave. An interim HR manager was appointed but left for personal reasons in 2010 when the Group Finance Officer took over the HR duties. The claimant took extended maternity leave and returned to work in May 2011, when she was handed back the HR functions.
Mr Hughes spoke of pressures on the business due to the economic downturn, which necessitated in a root and branch review of all departments and a general pay freeze. He decided that the group HR Manager position should be made redundant and as there were no alternative positions, the claimant was dismissed. He said the dismissal had nothing to do with her maternity leave and that the company is largely staffed by women. The claimant’s salary was €60,000 plus a company car and he asked her to look at costs for a shorter working week, but it was her contention that the role of HR Manager was full-time. Upon assessing what his competitors were doing, Mr Hughes discovered that they were all removing the HR Manager role.
The tribunal heard that the claimant appealed the decision to make her redundant to a non-executive director of the company but was unsuccessful, and that the HR manager position has not been replaced at Carraig Donn. Mr Hughes added that there were no performance issues with Ms Tobin and he disputed that he had any difficulties with her adding that there were a lot of redundancies made, including at management level, though the claimant was the only senior manager made redundant.
He said he held weekly meetings with senior managers but there was little activity on the HR side, and the tribunal was also informed about three documents which summarised the review of the HR Department, one of which showed that the HR office had been closed for 36.45 per cent of the previous two years. These factors had helped make up his mind about making the role redundant.
Also giving evidence, Colette Caulfield, Group Finance Officer since February 2009, said that the company was operating in a very difficult environment at that time and subsequent to it. She outlined that a plan was put in place to review operations and implement savings, which led to redundancies, pay cuts and rent reductions. The review showed that the company’s competitors operated without a stand-alone HR section and she agreed with Mr Hughes that Carraig Donn’s HR Department should not be retained.
She added that the absence of the claimant for various reasons, but especially her maternity leave, was not a factor in making her job redundant, and that while the claimant was unavailable her position was either replaced or carried out by a number of other staff, including herself. She furthermore stated that she was surprised to hear of reported disputes, aired by the claimant, and added that she had a good working relationship with Ms Tobin and that there was no suitable alternative position to offer her at the time of her redundancy in June 2011.
The claimant told the tribunal that within four years of commencing employment with Carraig Donn, she had 23 stores and over 300 staff ‘under her wing’. She had wide-ranging functions and when she first took maternity leave in 2005, she was actively involved in recruiting her replacement.
By the late 2000’s Ms Tobin could recognise the effects of the downturn on the retail trade and while wishing to remain in her human resource position, also opted to better safeguard her future in the region where she resided. That same year the respondent granted her leave of absence to pursue an outside, unrelated degree course, and during that absence the Group Finance Officer undertook her HR functions.
The claimant regained her position when she returned from her studies in 2009, and 13 months later began a second period of maternity leave. Her post was again replaced but this time she had no involvement in that process. Her good working relationship with the Managing Director was deteriorating she felt, and she differed with management over the extent of proposed wage cuts for staff.
Prior to returning to work in May 2011, the claimant received two letters from the respondent related to ongoing reviews of all aspects of the business, including HR. When Ms Tobin returned to work on May 16 2011, she had a meeting with Mr Hughes and Ms Caulfield, and was tasked with producing ways to improve efficiencies and secure cost savings for her department.
A week later she presented certain proposals and also received a letter from Mr Hughes detailing possible savings under a number of headings. Among these was a suggestion to close the HR Department and subsume it into other sections of the company. A proposal to reduce the HR Manager’s role to a shorter working week was aired two days later and the claimant was asked to stress test that option. She neither offered nor was invited to consider a shorter working week and in early June 2011 she told the MD that she could not recommend the closure of of the HR Department and its functions being dispersed.
The claimant was informed by the MD on June 13, 2011, that the position of HR Manager was to be made redundant, and consequently, her employment with Carraig Donn was to cease.
While accepting the need for the redundancy by Carraig Donn, the tribunal found that the termination of Ms Tobin’s employment was unfair, ‘in general because of the approach adopted and the failure of genuine engagement with the position of the claimant’. Ms Tobin had sought two years salary but was awarded €43,000, minus any redundancy payments already received, leaving her with compensation of almost €29,000.