UD2440/2010, MN2375/2010

EMPLOYMENT APPEALS TRIBUNAL

CLAIMS OF:                                                                                                 CASE NO.

Employee                    -claimant                                                                     UD2440/2010

                                                            MN2375/2010

against

Employer                     -respondent

under

UNFAIR DISMISSALS ACTS, 1977 TO 2007

MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005

I certify that the Tribunal

(Division of Tribunal)

Chairman:        Ms K.  T.  O'Mahony B.L.

Members:        Mr. J.  Hennessy

                        Ms S.  Kelly

heard this claim at Clonmel on 20th September 2012

                                           and 19th November 2012

Representation:

Claimant:    Ms Niamh Muldoon, Holohan, Solicitors,

Suite 319, Capel Building, St Mary's Abbey, Dublin 7

Respondent: In person

Dismissal was in dispute in this case.

Summary of Evidence

The respondent (RO) and his wife (WO) have a canine reproduction business. In 2008 they decided to open a small animal veterinary clinic/surgery on site and employ a veterinary surgeon who would be responsible for the setting up of the clinic and the small animal side of the business as well as doing the surgical implants and the collection of semen for the respondent’s business. The claimant, a qualified veterinary surgeon, was the successful candidate for the position and her employment with the respondent commenced, on 5 January 2009. The respondent sent the claimant to train with a top expert in Australia for three weeks on the commencement of her employment. Her salary was €50.000.00 per annum and on request she was given a company jeep, which she also had for her private use and €60.00 per week diesel money. Her hours were 9.00am to 5.00 pm Monday to Friday and 9.00am to 1.00pm on Saturdays and she did some Sundays. The respondent believed that this was an attractive position because it had set hours and did not involve emergency call-outs. In early 2009 the respondent took on a veterinary nurse (unqualified). Prior to employing the claimant the surgical implants were performed externally by a veterinary surgeon.

The small-animal business did not take off and the respondent was losing money. Reproduction work accounted for around 98% of the work in the clinic. The respondent and WO communicated their concerns to the staff twice in 2009 but decided to continue and see how things would work out. However, the small animal side of the business did not improve and in mid-2010, facing continuing financial difficulties, the respondent decided to restructure.  The number of implants per month fluctuates, with an average of 30 per month or around 400 each year.  They decided to continue doing the surgical implants on a changed employment relationship, from employee to contract worker, and to discontinue the small animal business. The claimant would have first refusal of the contract work.

On 8 June 2010 the respondent and W0 met with the claimant and explained that as they were continuing to lose money they could not sustain her salary and wanted her to change to working on a contract basis. Because the terms suggested were a bit vague the claimant asked for the proposal in writing so she could consider its terms. The following week the respondent provided the information in a document entitled “Draft Business Proposal”.

Under the proposed arrangement the claimant would become a contractor and would be paid a fee of €100.00 per implant; her weekly rent for the surgery would be €417.00 per week (effective from January 2011); a charge of €75.00 per week for electricity, phone and internet usage (effective from 1 July 2010), as well as having to pay a veterinary nurse € 15.00 for assistance in the implanting procedure.       

The claimant decided against the proposal as she would be doing the work at a decreased rate of pay, incurring rental costs and carrying other overheads and the risks involved.  On Tuesday 22 June 2010 the claimant informed WO that she could not accept the proposal as she could not make a living from it. It was the claimant’s position that WO told her, “You can finish up now”. The claimant informed W0 that under her contract of employment she was entitled to two months notice of the termination of her employment but WO told her that she could not rely on her contract of employment as she had not signed it and further told her to work the days she owed the respondent (for the extra annual leave she had taken in connection with her wedding in May 2010). WO denied telling the claimant ‘to finish up now’. WO’s position was that when the claimant told her she was not interested in the proposal she asked her to continue doing the surgical implants until she could find another veterinary surgeon for the role but the claimant refused to so do.

It was common case that the following week was very stressful for both the claimant and WO and communications between them broke down. The claimant maintained that WO was ‘hassling her’ about time she owed the respondent. The claimant wanted to talk to the respondent but he told her to communicate with WO. The claimant contacted the veterinary union and a representative (TU) agreed to attend a meeting with the respondent, WO and the claimant but the day before the proposed meeting was to take place the respondent indicated that WO was going shopping on the day the claimant had suggested for the meeting . On or around 24/25 June TU spoke with WO on the phone and informed her that the full-time position in the business was gone and that it was a redundancy situation. After this conversation WO informed the claimant that she was being made redundant.                                               

WO’s evidence was that the claimant left in the jeep taking all her belongings with her and sent a text saying she was feeling sick. It took a number of days to get the jeep back. Prescription drugs were left on the premises, leaving the respondent to deal with that situation. The claimant’s evidence was that she went to work as usual on Friday, 25 June but felt very stressed and ill and went to the doctor who certified her unfit for work until 1 July 2010.  She phoned the respondent and WO to tell them and said she would drop the jeep and keys back when better.  The next day the respondent collected the jeep and keys. She had taken extra holidays around the time of her wedding in May 2010 but she had been owed time in lieu in respect of bank holidays. The claimant maintained that she had never been told, prior to this, that her job was in jeopardy.

Subsequent to the claimant’s dismissal the respondent placed a number of advertisements in the Irish Veterinary Journal and one on a social media site looking for a small animal veterinary surgeon.  The respondent’s position was that he continued with the reproduction business and discontinued the small-animal side of the business. He did not take on a veterinary surgeon as an employee but engaged veterinary surgeons on a contract basis to do the implant work. A book of invoices in support of his position was produced in evidence.

Determination:

At the outset of this hearing the Tribunal was told that dismissal was in dispute. The respondent was under the misapprehension that a termination by reason of redundancy was not a dismissal. The Tribunal finds that the dismissal had occurred before 24/25 June 2010, the day on which WO relying on her conversation with TU, had told the claimant that she was being made redundant. The Tribunal accepts the claimant’s version of the conversation that took place between her and WO on 22 June 2010 and finds that telling the claimant, “You can finish up now” constituted a dismissal. The claimant continued to work thereafter as she maintained that she was entitled to two months’ notice under her contract of employment.

An employer is entitled to re-structure his/her business. Section 7 (2) of the Redundancy Payments Acts provides:

an employee who is dismissed shall be taken to be dismissed by reason of redundancy, if the dismissal is attributable wholly or mainly to –

 (c)   the fact that his employer has decided to carry on the business with fewer or no employees,  whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise 

In this case the restructure resulted in a redundancy under section 7 (2) (c) of the Redundancy Payments Acts and accordingly, the claimant’s position was made redundant, although the respondent may not be aware of the particular legal construct at that time (22 June). As the employee was in a stand-alone position the issue of selection criteria does not arise. The Tribunal accepts WO’s evidence that, subsequent to the dismissal, the respondent did not take on a veterinary surgeon as an employee.

Whilst taking cognisance of the fact that in the business and financial circumstances facing the respondent leading up to the meeting of 8 June, he had decided to restructure and was hoping that the claimant would change her employment relationship from that of employee to contract worker, there was no evidence before the Tribunal that the details of the plan had been finalised or that the date on which the change would occur was communicated to the claimant. Indeed, it is clear from WO’s evidence and the respondent’s own undated document entitled “Draft Business Proposal” given to the claimant for her consideration, which states in its final paragraph:

“This is a draft proposal only.  It is not a legally binding document and will never act in the capacity of the legally binding document.  All the above issues can be discussed with veterinary surgeon who is free to propose alternative arrangement and discuss any of the points above personally or in writing with no further obligations until the agreement is finalized and document in the form of the legally binding contract with the presence of witness/es”

that the proposal was at the negotiation stage.   The Tribunal strongly rejects the respondent’s submission that the claimant was told on 8 June that her employment was to terminate on I July 2010. There was no oral evidence whatsoever to this effect before the Tribunal.

The Tribunal considers it appropriate to have regard to subsection (7) of section 6 of the Unfair Dismissals Act 1977 as substituted by section 5 (b) of the 1993 Act which provides that the Tribunal may have regard, where it considers it appropriate ‘to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal’.  The Tribunal finds that the reaction of WO (the respondent’s wife and de facto agent) in reacting precipitately and dismissing the claimant on 22 June, when she informed her that she could not accept the proposal was unreasonable as it precluded, at a time close to the beginning of the negotiation/consultation stage, any further discussion or reasonable exploration by the parties which might result in an acceptable outcome/solution for both of them. Accordingly, applying subsection (7) the Tribunal finds that the dismissal was unfair.

The Tribunal determines that compensation is the only remedy available to it in this case. In calculating the amount of that compensation the Tribunal must have regard to the fact that the respondent was entitled to make the claimant redundant. Having regard to a reasonable negotiation period and the claimant’s entitlement to notice under her contract of employment the Tribunal determines that it ‘is just and equitable having regard to all the circumstances’ to award the claimant compensation in the sum of €9,615.00 under the Unfair Dismissals Acts, 1977 To 2007. Furthermore, in light of the fact that her relationship with the respondent and in particular with WO had broken down, the claimant’s refusal to take up the offer of continuing with the surgical implants, until the respondent found another veterinary surgeon to fill the role, cannot in this case be taken as a failure to mitigate her loss.

As the claimant worked for one week with the respondent following her dismissal on 22 June she has no further entitlement under the Minimum Notice and Terms of Employment Acts, 1973 to 2005.