€30,000 compensation for false redundancy confirmed

A safety superintendent at a shipping company who was needlessly made redundant had actually been fired to make way for a preferred candidate and was owed €30,000 in compensation, the Court of Appeal has held.

The case dates back to 2012, when Vanessa Fenech had been informed that a drop in business had necessitated a restructuring of SL Ship Management Company Ltd, where she had been working on an indefinite contract since 2010, and that she would be made redundant as a result.

Fenech argued that the redundancy was an excuse and that she had, in essence, been forced to make way for someone else. Despite the official reason for the termination of her employment being redundancy, the woman had been asked to give a hand over to a new employee. Had the position become available up to a year of her having been made redundant, at law Fenech would have had the right of first refusal, she argued.

The company had argued that it had acted within its rights and that the new employee had been highly experienced and had been providing services to several companies, including SL Ship Management Ltd for several years.

In 2014, the Industrial Tribunal had found for Fenech and concluded that “whatever the reason behind the termination of the applicant's employment, it had certainly not been redundancy.” The company was ordered to immediately pay the ex-employee €10,000 in compensation and a further €20,000 in monthly payments of €2,000.

SL Ship Management Company Ltd had filed an appeal, arguing amongst other things that company restructuring triggers the “last in, first out” rule, which had been respected in this case because the woman's role had been outsourced to a more experienced former employee. Fenech had not invoked the special legal protection afforded to employees during a change in company ownership, it argued, despite her awareness of the fact that her job had transferred to another company due to a decrease in the volume of trade.

In a judgement handed down yesterday, Judge Anthony Ellul presiding the Court of Appeal, quoted several cases which established that for redundancy to subsist, the post vacated must have been abolished.

In order for the “last in, first out” argument to succeed, it needed to be shown that the employee had first been transferred to the acquiring company, who would then give the employee notice of termination. This had not happened, it observed.

The court pointed out that amongst the situations where redundancy is considered to have taken place at law was “dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related.” This provision had been introduced in 1993 to protect those who found themselves dismissed because of reorganisations, but whose dismissal did not fall within the previous definition of redundancy.

Fenech had been fired over one year after business started to drop, the court noted, and a senior employee had testified that redundancies had never been mentioned in any of the management review meetings at the time. The absence of evidence that the woman had been informed of the possibility of redundancy before she was handed her termination letter, put the company's arguments in doubt. This doubt was amplified by the fact that she was the only employee that the company had made redundant in the period, it said.

Emails exhibited in the acts of the case indicated that far from decreasing, business was getting so good that in the months leading up to her termination, Fenech's responsibilities had been increased.

The emails also showed that the relationship between Fenech and the company's Fleet Superintendent had become strained in those months and he had instituted disciplinary proceedings against her for “insubordination to orders by the Management.”

The court pointed out how in his letter informing Fenech that she was losing her job, the Fleet Superintendent had justified the action by saying that the company had decided to consolidate her duties within the role of the current security superintendent and that, as the last employee in the category, she was had to be let go.

“Effectively, in reality there was no consolidation ... In reality, the job started to be performed by an employee in another company,” noted the court. “The inconsistency between that which was said in the letter and that which effectively took place, [was a testament to] the state of confusion in SL Ship Management Company Ltd over Fenech's termination.”

The company's objection to the amount awarded in compensation was also dismissed, the court pointing out that Fenech had been dismissed in October 2012 and the compensation was ordered in July 2014. “The €30,000 compensation was more than justified,” the court said, saying the sum was now due immediately, in its entirety.

Lawyer Abigail Critien appeared for Fenech.