WRC Finds No Genuine Redundancy where Employee was Dismissed Following Refusal of New Contract Terms

In Dariusz Kowalski v Nvd Limited (ADJ-00034716) the Complainant claimed that he was unfairly dismissed by the Respondent because of his refusal to sign a new contract that altered the terms and conditions of his employment to his detriment.

Facts: The Complainant began working for the Respondent as a driver in 2005 transporting new cars on trucks to various destinations in Ireland, the UK and the EU. In 2009, the Respondent engaged with SIPTU to introduce new terms and conditions including a reduction to the Complainant’s pay without his agreement. The Complainant engaged in prolonged efforts over twelve years to revert to the terms and conditions of his 2005 contract without success. In 2021 he was offered a new contract with non-negotiable terms, including the requirement to serve a probationary period, even though he had been working for the Respondent since 2005. There were other less favourable terms, including relating to the Complainant’s hours of work, the inclusion of a fixed retirement age of 60, higher cash penalties in the event of damage to vehicles, and uncertainty regarding the details relating to his bonus and times of work, which could be changed without his agreement. The 2021 contract also provided that the Respondent could vary terms solely on the basis of business needs whereas the 2005 contract required the agreement of both parties to alter the terms of the contract. The Complainant refused to sign the new contract.

The Complainant was dismissed on 19^th February 2021, purportedly on the basis of redundancy, and paid eight weeks’ salary in lieu of notice. The Complainant’s position was that the contract was being made “redundant” and not the work/the role. He pointed out that the dismissal letter referred to the contract and argued that a unilateral change in contractual terms does not give rise to a redundancy situation. He also argued that at the time of his dismissal, the market was expanding and there was no reduction in the requirement for drivers on the part of the Respondent. The Complainant contended that his dismissal arose not from a requirement to reduce the number of drivers, but instead as a result of his refusal to sign the new contract.

Without prejudice to the Complainant’s position that there was no genuine redundancy, the Complainant also argued that there was no fair redundancy process: the Complainant was not put on notice of redundancy; the Respondent did not follow a fair selection process, but simply selected the Complainant and three of his colleagues who also refused to sign the new contract; and the Complainant was simply informed that he was being made redundant.

The Respondent’s position was that the Complainant was not unfairly dismissed, and it was a genuine redundancy. The Complainant refused the offer of suitable alternative employment and therefore was not entitled to receive a statutory redundancy payment.

The Respondent provided details of market changes in respect of car importations as a result of the worldwide economic crash in 2008, and those associated with Brexit. Details were provided regarding the Respondent’s engagement with SIPTU in respect of pay restructuring, and a pay cut negotiated with SIPTU in 2009, to be restored when pre-2009 revenue returned. SIPTU sought a return to pre-2009 pay in negotiations with the Respondent between 2010 and 2011. However, the Labour Court ruled against it. In 2013 there were further negotiations between SIPTU and the Respondent, and drivers were given an option to either accept a new contract with €8000 in compensation for changes to conditions and salary reduction, or voluntary redundancy. The Complainant held out for a return to the 2005 contract. Further efforts to get the Complainant to agree to the new 2013 contract (between 2014 and 2018) were unsuccessful. The Complainant lodged a civil bill in the Circuit Court in 2018 for breach of contract when the Respondent amended his terms and conditions in accordance with the terms of the 2009 agreement to which the Complainant never agreed. This was settled in December 2020. Further attempts were made to secure the Complainant’s agreement to the new contract in December 2020 and January 2021, but these efforts were also unsuccessful. The Respondent issued the Complainant with a new contract in 2021 and informed him that he would be made redundant if he did not sign it, and that no statutory redundancy would be paid because suitable alternative employment was offered. The Complainant rejected the contract and was made redundant.

Decision: The Adjudicator, Máire Mulcahy, found that the requirement for the transportation of cars had not reduced, and the “manner of doing business” remained unchanged. She noted that the Respondent had not considered anyone else for redundancy except the Complainant and his three colleagues who took legal action against the company. The Adjudicator referred to the dismissal letter which made it clear that the reason for the Complainant’s redundancy was his refusal to accept the new contract. She was satisfied that the Complainant’s dismissal was not due to a genuine redundancy:

“The altered terms in the contract put to the complainant in 2021 did not indicate a diminished need for [sic] a reduction in the service to customers as opposed to requiring greater flexibility on his part to meet the needs of those customers. It’s not a redundancy that meets the statutory definition as the requirement for truck drivers had not diminished. That his refusal may have been unreasonable to accept the altered contractual terms is not a matter which fits in with the definition of a redundancy.”

The Adjudicator then considered whether or not the Respondent unfairly dismissed the Complainant. In doing so, the Adjudicator identified the Respondent’s failure to dismiss the Complainant through a fair disciplinary process as the “biggest defect” in the Respondent’s conduct. She noted that the Complainant was given an ultimatum, and then the same person who gave him the ultimatum dismissed him a month later. She concluded that the Complainant was unfairly dismissed.

However, the Adjudicator acknowledged that the Complainant behaved unreasonably in failing to accept the challenges facing the Respondent and in his dealings with the Respondent, noting that this was “short” of what the Respondent was entitled to expect. She found that his “mistrust in the bone fides” of the Respondent who had engaged in “painstaking efforts to find a resolution and avert dismissal was either misplaced or manufactured”. While she noted that opportunism is not a substantial ground for dismissal, she took the Complainant’s behaviour into account in assessing the amount of compensation to award by way of redress. The Complainant’s loss was €9,173 and the Complainant was awarded €3,500 by way of compensation which the Adjudicator regarded as just and equitable in all the circumstances.

Takeaway for Employers: While this case was quite fact-specific, the decision highlights that although redundancy is a fair reason for dismissal, “redundancy” has a specific statutory definition contained in the Redundancy Payments Act 1967. Section 7(2) sets out the various circumstances that may give rise to a redundancy situation. The fact that an employee’s contract of employment may no longer be fit for purpose does not mean that the employee’s role is redundant. Employers that find themselves in this situation should note that the Adjudicator in this case suggested that an employer ought to address an employee’s unreasonable refusal to negotiate necessary amendments to his/her contract of employment through a fair disciplinary process. Careful consideration must be given to the provisions of section 7(2) of the 1967 Act and whether or not a genuine redundancy situation exists before determining the appropriate course of action.

Link: ADJ-00034716 – Workplace Relations Commission

Authors- Abigail Ansell and Jenny Wakely

29^th October 2025

AOC Solicitors

19-22 Baggot Street Lower

Dublin 2

www.aocsolicitors.ie