Hotel manager awarded €28,000 for unfair redundancy

A Dublin hotels group which claimed it could not avoid redundancies because of business subsidy cuts has been ordered to pay a 20-year veteran of the hospitality trade over €28,000 for unfair dismissal.

Adam Brien said at the hearing that the way he was made redundant “destroyed” his faith in the hospitality trade – and that he will not go back to it.

His complaint under the Unfair Dismissals Act against Persian Properties Unlimited, trading as the O’Callaghan Collection, was upheld by the Workplace Relations Commission in a decision published this morning.

He claimed the firm did not apply fair procedures in making him redundant as food and beverage manager at the Davenport Hotel on 7 August 2020.

The firm denied unfair dismissal and argued the impact of the Covid-19 pandemic meant there was simply no job available for him.

The company’s chief executive, Paul O’Callaghan, argued that the group cut its workforce by two thirds when restrictions were imposed on the hospitality sector on public health grounds in March 2020.

It was the company’s position that it put around 180 staff on temporary layoff and kept 76 others on part-time hours, including Mr Brien.

Persian Properties operates four hotels in Dublin under the O’Callaghan brand: the Davenport on Lincoln Place, the Alexander on Fenian Street, the Mont Hotel on Lower Merrion Street and the Green Hotel on Cuffe Street.

Of the four, only the Alexander Hotel was reopened in August 2020, with occupancy running at about 5% compared with the 80% it would expect for the season.

This is equivalent to a 1.4% occupancy rate across the group, the company said.

Mr O’Callaghan submitted that the group was spending €350,000 a month – €181,000 of it on pay – even though its revenues were down 85-90%. He said the hotel group was “making up work” for those still on the roster.

“Just in case people see headlines about staycations doing well, Dublin is just decimated,” he told the hearing. “We are a family business. We’re not sheikhs with oil who can pump out to pay for it.”

Although the Government had initially supported firms with a grant administered by Revenue called the Employment Wage Subsidy Scheme, in July 2020 it announced it would switch to giving a tax credit under the Transitional Wage Subsidy Scheme.

Persian Properties chief financial officer Paul Lively said when the change was announced as part of the Government’s July Stimulus plan that year, he calculated payroll costs would go up by €74,000 as a result. To compensate, managers decided to cut 17 more jobs.

On the morning of August 7, staff were informed at a meeting that redundancies were being sought, and Mr. Brien asked his line manager what was happening.

“He said he didn’t know anything but to continue on with my work,” he said in evidence. “It was nerve-wracking because no one knew. My small crew working with me were asking and I didn’t know”.

He then noticed he was locked out of accessing his work email account on his phone, and soon after he was called up to a meeting room upstairs in the hotel to meet general manager Paul Joy and group HR director Samantha Shepherd.

“I went in and they told me to take a seat, and I saw the pile of paperwork in front of Sam, and I knew myself. I got a lump in my throat and started to shake,” he said.

“They said unfortunately they were going to have to let me go, they were making me redundant,” he added.

“Each employee was spoken to, not just handed a letter and told ‘good luck’,” said O’Callaghan Group CEO Paul O’Callaghan. “We don’t treat people like that.”

Andrew King BL, for the complainant, said it was their position that Mr Brien should have been consulted with on possible alternatives to redundancy, such as reducing his hours further or going on temporary unpaid layoff.

“Did you say anything?” he asked his client.

“No, I was shocked,” Mr. Brien replied. “I had to compose myself that I didn’t break down to tears in front of them.”

Mr Brien gave evidence that he had originally earned over €2,900 a month as a food and beverage manager, and now makes €1,507.62 as a special needs assistant.

He told the hearing he had been so turned off the hospitality trade by the process of being made redundant that when he was later headhunted for a similar role with a competitor he chose to press on with training as an SNA for the security of a public sector job, despite the lower pay.

“It’s just that having that over me, to think that they could bring me in and say: ‘thank you so much, goodbye, you’re finished now’, it’s destroyed any faith that I’ve had in the hotel industry for all these years,” he said.

In her decision this morning, adjudicating officer Catherine Byrne wrote that the requirement for a “skeleton crew” at the hotels group was “bound to be temporary” and that a temporary cessation of business was provided for in legislation.

She wrote that Mr. Brien’s career in the hotel group “would have been maintained” by placing him on layoff.

“This was precisely the objective of the Government schemes such as the EWSS and the PUP – their purpose was to maintain the connection between employers and employees during the pandemic, and to avoid job losses,” she said.

She wrote that the company had “battened down the hatches” when lockdown came with “no idea” they would be closed for 19 months.

But she noted that there was no evidence the managers “contemplated closing down or selling any of their properties or changing their use”.

“They set their sights on riding out the storm until they could open again. In such a scenario, it is obvious that the job of the complainant, and other jobs that were laid off or made redundant, were going to be needed when the business opened up again,” Ms Byrne added.

She ruled that his job had not been redundant.

“These difficulties do not relieve the company of the requirement to act reasonably when it comes to making an employee redundant, to consider all possible alternatives and to involve the employee in the final decision,” she added.

Ms Byrne ruled Mr Brien’s dismissal unfair, and ordered the company to pay him €28,500 in compensation for loss of earnings.

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