Ormonde Solicitors

€60,000 Award After Employer Failed to Explain Redundancy: Why Communication Matters in Redundancy Processes

A recent decision of the Workplace Relations Commission serves as an important reminder that even where a genuine redundancy situation exists, employers must still follow fair procedures and clearly communicate the reasons for dismissal.

A former Chief Financial Officer has been awarded over €60,000 after the WRC found that her employer failed to adequately explain why her employment was terminated.

The case highlights a common misconception among employers: that the existence of financial difficulties automatically protects a redundancy decision from challenge.

In reality, redundancy must not only be genuine — it must also be implemented fairly.

The Background

The employee had worked as Chief Financial Officer of the business and was dismissed in April 2024.

According to evidence before the WRC:

  • She was informed that she no longer had a job.
  • No explanation was provided for her dismissal.
  • No appeal process was offered.
  • Access to company systems was removed almost immediately.

The company later argued that the dismissal arose from genuine redundancy due to financial difficulties within the business.

Evidence presented included:

  • Loss of a significant commercial contract.
  • Reduced profitability.
  • Previous rounds of redundancies.
  • Salary reductions and short-time working measures.
  • Further workforce reductions after the employee’s departure.

What the WRC Found

The adjudicator accepted that the company had experienced genuine financial difficulties.

However, the WRC found significant procedural failings.

In particular:

❌ No clear reason for dismissal was provided.

❌ No meaningful consultation took place.

❌ No appeal process was offered.

❌ The employee was left without sufficient information to explain her departure to prospective employers.

The adjudicator concluded that the employer’s failure to provide any explanation for the termination was unreasonable.

Why the Compensation Was So Significant

One of the most important aspects of this decision was the WRC’s approach to financial loss.

The employee provided evidence that she:

  • Applied for 146 jobs.
  • Spent six months unemployed.
  • Ultimately secured employment at a lower salary.

The WRC accepted that her efforts to secure alternative employment were reasonable.

Importantly, the adjudicator found that the lack of explanation surrounding her dismissal made finding another senior executive role significantly more difficult.

The company was ordered to pay compensation reflecting her full financial losses of approximately €60,000.

Key Employer Lessons

1. A Genuine Redundancy Still Requires Fair Procedures

Employers often focus heavily on the business rationale behind a redundancy.

However, even where redundancy is genuine, employers must still:

  • Consult with employees;
  • Explain the reasons for the decision;
  • Follow a fair process;
  • Consider alternatives where appropriate.

Failure to do so can render a dismissal unfair.


2. Employees Need Clarity About Why They Are Leaving

One of the strongest findings in this case was the employer’s failure to explain the reason for dismissal.

For senior employees in particular, unexplained departures can create:

  • Reputational concerns;
  • Difficulties during recruitment processes;
  • Questions from prospective employers.

Clear communication reduces both legal and practical risks.


3. Appeal Procedures Matter

Even in redundancy situations, employers should carefully consider whether:

  • A right of appeal;
  • A review mechanism;
  • Or a consultation process

should be made available.

The absence of procedural safeguards can significantly weaken an employer’s position.


4. Documentation Is Critical

Employers should ensure redundancy decisions are supported by:

✔ Financial evidence
✔ Organisational restructuring plans
✔ Consultation records
✔ Selection criteria (where applicable)
✔ Written communications

Good documentation remains one of the strongest defences in WRC proceedings.

Practical Steps for Employers

To reduce exposure when managing redundancies:

✅ Clearly explain the business rationale
✅ Consult employees early and meaningfully
✅ Keep detailed records of decision-making
✅ Provide written confirmation of reasons
✅ Consider appeals or review processes
✅ Obtain legal advice before implementing significant workforce changes

The Bigger Message for Employers

This decision reinforces a simple but important principle:

👉 Employees are more likely to challenge decisions they do not understand.

Even where a business faces genuine financial pressures, poor communication and procedural shortcomings can transform a legitimate redundancy into a costly unfair dismissal claim.

How Ormonde Solicitors Can Help

At Ormonde Solicitors, we advise employers on:

  • Redundancy and restructuring projects
  • Workforce reductions
  • Consultation obligations
  • Employment law compliance
  • WRC defence and representation

Early legal advice can help ensure redundancy processes are both commercially effective and legally compliant.

📞 Contact us today for confidential guidance.

Disclaimer: This article is for general information purposes only and does not constitute legal advice.

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