In our July 2009 Legal News, we discussed how the tribunals and courts have been scrutinising employers who claim that the dismissal of an employee was due to redundancy. This issue has come to the fore again following a Circuit Court appeal of an Employment Appeals Tribunal (EAT) case. Originally the EAT awarded an employee €161,420 in the case of Jerome Ponisi v JVC Europe Limited. The size of the award (14 months remuneration) was due to the EAT’s decision that no genuine redundancy situation existed and, accordingly, the employee had been unfairly dismissed.

The employer appealed this decision to the Circuit Court. The Circuit Court, however, agreed with the findings of the EAT. It described the consultation process entered into with the employee, in advance of the termination of his employment, as “a sham” and was of the view that the employer had predetermined the course it was to follow. The Circuit Court increased the award against the employer from 14 months to 18 months remuneration. This amounted to €214,540, an increase of €53,120. The employee was also awarded the costs of the Circuit Court hearing, which lasted for three days.

The employer is now appealing this decision to the High Court on a point of law.

This decision illustrates the high price an employer may incur when a redundancy is contested. The size of the award acts as a clear warning for employers that any hint of a ‘sham’ redundancy will not be tolerated by the EAT or, indeed, the civil courts. To successfully defend an allegation of unfair dismissal the employer must be able to show that a genuine redundancy existed, the employer acted reasonably in effecting redundancies, and that the employer considered all alternatives, including any redeployment options, prior to arriving at its decision.