Redundancy, Retirement or Resignation

Background

The case of Denis McCallig v Bord Iascaigh Mhara (BIM) (ADJ00052727) examines the circumstances under which an employee will be considered to have been made redundant, retired, or alternatively resigned.

Mr. McCallig (the Complainant) brought a complaint under Section 39 of the Redundancy Payment Act, 1967, against Bord Iascaigh Mhara (BIM) (the Respondent) to the Workplace Relations Commission (WRC), alleging he was entitled to a redundancy payment on the decommissioning of the factory where he worked.

However, the Respondent argued that he was not entitled to a redundancy payment, as a role continued to exist for him, at that location. However, at that juncture, the Complainant had moved from the site location in Donegal, to Dublin, and never presented thereafter for work.

Legislation and Case Law

The complaint was primarily grounded in under the Redundancy Payment Act, 1967, there was significant case law submitted, as to what constituted a dismissal under the Unfair Dismissals Act, 1977.

Section 7(1) of the Redundancy Payment Act, 1967, provides that;

“An employee, if he is dismissed by his employer by reason of redundancy or is laid off…shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment…”

It was the Respondent’s position that the Complainant was not dismissed by redundancy, or any other reason, but that the Complainant voluntary resigned from his employment by reason of retirement in December 2023.

As outlined by the Labour Court in Millett v. Shinkwin, EED044:

“A resignation is a unilateral act which, if expressed in unambiguous and unconditional terms, brings a contract of employment to an end. The contract cannot be reconstructed by the subsequent unilateral withdrawal of the resignation.”

It is also noted in the case of Tina Casey v Dunnes Stores [2003] 14 E.L.R. 313:

“For a dismissal to occur an employment contract must be deliberately, purposefully and knowingly terminated by either the employer or the employee or alternatively, the contract of employment must expire of itself or for some reason, whether or not that reason is fair, proper, reasonable and/or just. Termination is understood to mean ‘coming to an end’ and this import should be communicated to either party, directly or indirectly, or must be understood by virtue of the nature and extent of the circumstances of the case, or reasonably inferred therefrom.”

The Respondent relied on the similar case of Kieran O’Brien V Paul Boyd trading as John Dwyer Butchers ADJ-00043348, where the Adjudication Officer stated:

“The Complainant did resign from his position for reasons of his retirement and that he was not dismissed. Section 7 of the Redundancy Payments Act 1967 sets out that an employee shall be entitled to a Redundancy payment, if he is dismissed by his employer by reason of redundancy. I accept the Respondent submission that there was no dismissal in the ending of the Complainant's employment. I find that the Complainant retired (albeit reluctantly) from his position.”

Decision

Ultimately, the Adjudication Officer decided that the Complainant had resigned.

Section 15 of the Act covers an employee’s disentitlement to redundancy payment for refusal to accept alternative employment:

15.(1) An employee shall not be entitled to a redundancy payment if —

(a) his employer has offered to renew that employee’s contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would not differ from the corresponding provisions of the contract in force immediately before the termination of his contract,

(c) the renewal or re-engagement would take effect on or before the date of the termination of his contract, and

(d) he has unreasonably refused the offer.

(2) An employee shall not be entitled to a redundancy payment if —

(a) his employer has made to him in writing an offer to renew the employee’s contract of employment or to re-engage him under a new contract of employment,

(b) the provisions of the contract as renewed, or of the new contract, as to the capacity and place in which he would be employed and as to the other terms and conditions of his employment would differ wholly or in part from the corresponding provisions of his contract in force immediately before the termination of his contract,

(c) the offer constitutes an offer of suitable employment in relation to the employee,

(d) the renewal or re-engagement would take effect not later than four weeks after the date of the termination of his contract, and

(e) he has unreasonably refused the offer.

The Adjudication Officer determined that “… in essence, in order to qualify for a redundancy payment, the employee must be dismissed by his employer. The question to be answered in this case, therefore, is whether the Complainant was dismissed by reason of redundancy, or did he resign from his employment with the Respondent. As the Complainant does not allege that he was dismissed, the first criterion in section 7 of the Act, that a dismissal must have taken place, has not been discharged…. Based on the totality of the evidence, both oral and written, put before me, I am satisfied that no dismissal took place. As no dismissal took place, no redundancy could be said to have occurred. I find, therefore, that this complaint is not well founded.”

Takeaway

The takeaway for employees considering bringing a complaint under Redundancy Payment Act, 1967, is to determine whether they were in fact, made redundant. Very often, this issue can be in dispute. There are occasions when employers, attempt not to make an employee redundant, which, given particular circumstances and be challenged by the employee. 

For employers, it will be necessary to demonstrate that, if they are not be held liable for a redundancy payment, that they did not make the employee redundant. Very often, disputes can arise as to whether suitable alternative employment was provided. This will be examined based on whether there was a diminution in terms and conditions of service, or other such subjective reason as to why the employee rejected any alternative employment proposal.

Further information

This article was prepared by Barry Crushell for informational purposes only. For further advice, please email contact@crushell.ie or contact the offices of Crushell & Co Solicitors.