Genuine Redundancy, Unfair Process: Why a Company Was Ordered to Pay €25,000 Despite a Valid Business Case
A recent decision of the Workplace Relations Commission highlights a lesson many employers learn the hard way:
👉 Having a genuine redundancy situation does not automatically make a dismissal fair.
A Dublin-based leisure business was ordered to pay more than €25,000 after the WRC found that while a genuine redundancy existed, the process used to dismiss a long-serving employee was fundamentally flawed.
The decision serves as another reminder that employers must focus not only on why a role is being made redundant, but how the redundancy is carried out.
The Background
The employee had worked for the business for approximately 17 years and held the position of Financial Controller.
The company argued that:
- It had experienced significant financial difficulties.
- Several business interests had already been closed.
- Only two arcades remained operational.
- Outsourcing the employee’s work would generate substantial savings.
The managing director told the WRC that replacing the role with outsourced services could save approximately €30,000 annually.
The employee, however, maintained that the business appeared profitable during her time there and challenged aspects of the redundancy process.
What the WRC Found
The adjudicator accepted that a redundancy situation genuinely existed.
This is a particularly important aspect of the decision because it demonstrates that employers can still lose an unfair dismissal claim even where redundancy is legitimate.
The WRC found:
✅ A genuine redundancy situation existed.
❌ The redundancy process was procedurally flawed.
As a result, the dismissal was ruled unfair and compensation exceeding €25,000 was awarded.
Why This Case Matters for Employers
Many employers believe that proving a downturn in business activity is enough to defend a redundancy.
It is not.
Employment law requires employers to demonstrate both:
- A genuine business reason for redundancy.
- A fair process leading to the dismissal.
Failure in either area can create liability.
Common Redundancy Mistakes Highlighted by This Case
1. Focusing on the Business Case but Ignoring Process
Employers often spend significant time documenting:
- Declining revenue;
- Restructuring plans;
- Cost-saving measures.
However, insufficient attention is sometimes given to:
- Consultation;
- Communication;
- Alternatives to redundancy;
- Appeal rights.
This is often where cases are lost.
2. Poor Communication During Difficult Conversations
The WRC frequently examines not just what decisions were made, but how they were communicated.
Employees who feel excluded from the process are significantly more likely to challenge the outcome.
Respectful and transparent communication can often reduce disputes.
3. Failing to Consult Meaningfully
Even where only one role is affected, employers should consider:
- Discussing the proposal with the employee;
- Considering alternatives;
- Documenting the consultation process.
A redundancy should rarely come as a surprise.
4. Assuming Long Service Reduces Risk
Long-serving employees often attract increased scrutiny in WRC proceedings.
Employers should expect decisions involving employees with lengthy service histories to be closely examined.
Practical Steps for Employers
Before implementing a redundancy, employers should ensure they can demonstrate:
✅ A genuine business rationale
✅ Proper consultation
✅ Consideration of alternatives
✅ Clear written communications
✅ Fair selection criteria (where relevant)
✅ A documented decision-making process
A strong business case alone is not enough.
The Bigger Message for Employers
This decision reinforces a trend seen regularly in WRC decisions:
Employers often win the argument on redundancy but lose on procedure.
In many cases, the financial cost of defending a claim and paying compensation far exceeds the cost of conducting a compliant redundancy process from the outset.
How Ormonde Solicitors Can Help
At Ormonde Solicitors, we advise employers on:
- Redundancy and restructuring exercises
- Workforce reduction projects
- Consultation obligations
- Selection criteria
- Unfair dismissal claims
- WRC representation
Taking advice before implementing redundancies can significantly reduce legal and financial risk.
📞 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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