EMPLOYMENT APPEALS TRIBUNAL
CLAIM OF: CASE NO.
Derek Beglan - claimant
UD688/2012
against
Scanomat Ireland Limited - respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. M. Levey B.L.
Members: Mr J. Goulding
Mr P. Trehy
heard this claim at Dublin on 1st August 2013, 24th February 2014 and 20th June 2014.
Representation:
Claimant: Mr. Ken Stafford, 7 Castletown Court, Celbridge, Co Kildare
Respondent: Mr. Jim Waters, Waters & Associates, Solicitors, Unit 1a,
Hyde Court, Shaw Street, Dublin 2
Claimant’s Case:
The case before the Tribunal was one of constructive dismissal.
The claimant was employed with the respondent company from 1999. The company is engaged in coffee dispensing equipment and coffee sales.
Giving evidence the claimant outlined that at the time his employment terminated his role entailed only sales duties but prior to this he had been involved in other areas of the business including working on new agreements at head office level, dealing with key customers and managing the van drivers. To the claimant’s knowledge the company was very profitable. The claimant reported to NC (Managing Director) until his death in December 2010. In July 2009 the claimant suffered from work related stress and sought advice. The advice given to him was to keep his head down. Prior to this NC was absent on two occasions for a number of months due to illness. He had been told by NC that the company was doing well up to this. His position was not filled on those occasions. From the time that NC’s successor was appointed in January 2011 everything began to change.
CMC was appointed to the position of Managing Director in January 2011. CMC had worked in the company from June 2009 and the claimant recalled being told that CMC was responsible for back office systems. When CMC became Managing Director, without explanation he removed the responsibility the claimant had for the van drivers.
In June 2011 GF commenced employment in the company. The claimant was informed that GF would take on the duties associated with NC’s position. The claimant questioned this as he understood CMC to have fulfilled this role. The claimant was not consulted in relation to GF’s role in the business. From this time the claimant reported to GF who issued him with a specific instruction to cover the south and south-east areas of the country. The claimant stated that prior to this he did not have a sales territory. GF also issued the claimant with a list of customers. In August 2011 a relative of GF’s was employed to cover another territory including Dublin, Galway, Cavan and Monaghan.
In mid-December 2011 CMC presented the claimant with a document regarding the sales figures he had achieved in 2011. The claimant stated that he felt that management wanted him out of the company, he no longer had day-to-day input into the business and the travel was difficult.
In January 2012 CMC held a meeting with the claimant at which he expressed his unhappiness at the claimant’s sales figures. He told the claimant that the sales he achieved were not high enough for the level of the claimant’s salary. The claimant raised the point that when he had commenced employment with the company he received commission but as the years passed he did not receive commission but had been rewarded by means of salary for his hard work. CMC informed the claimant that the new business figure he had achieved in 2011 (€119,000) was not sufficient. The claimant noted that this was in addition to his other sales for 2011 of €593,168. The claimant was not given sales reports throughout 2011.
CMC informed the claimant that he would be issued with a set of sales targets. Subsequently, the claimant was presented with this document by GF. The claimant was provided with a target for new business and a target for existing territory, whereas prior to this he had not been issued with sales targets other than in the first year of his employment. There was no reference in the contract of employment to a new business target. The claimant was now being asked to achieve an increase in sales of 10%. He was not asked for input into the new business development target nor the existing accounts target. GF used what he referred to as a “crystal ball exercise” in relation to the targets. The claimant did not consider a 10% increase to be achievable given the number of businesses that were closing. There was no discussion as to where the new business might be acquired. The claimant was instructed that 10 days per month were to be allocated to existing customers, 5 days allocated to sourcing new business and 5 days for canvassing and problem-solving. The total sales increase expected of him was 40% which meant he would have to increase sales by €1,250 per day in 2012. The number of customers also increased from 68 to 128 and they were to be attended to within ten days.
The claimant was quite upset and shocked when he was provided with the targets as he knew they were not achievable. Given everything else that had happened over the previous months he was not completely surprised though, as he believed it showed the company’s plan for him and the pressure that he was subjected to. He was unaware that the company’s new business sales were declining from 2009 to 2011 and the loss of profits.
By letter dated 23rd January 2012 the claimant wrote to the respondent and he received a response from the company dated 27th January. In relation to this correspondence the claimant stated that he was not given sales reports throughout 2011, he disputed that he was provided with sales targets after 1999 and he was unaware that GF was engaged by the company to “facilitate the development of the sales function.” In addition the claimant stated that CMC had not set out the figures for commission.
Following correspondence between the company and a representative on behalf of the claimant the claimant was invited to attend a meeting on 8th February 2012. The targets were the topic of the meeting. The claimant stated that €348,000 was the annual target for 2012 so he could not understand how the company could say that he had suggested a target of €364,000 for two months.
In an email from CMC to the claimant dated 8th February 2012 the claimant stated that the word “underperformed” was utilised for the first time. The claimant wrote a letter dated 22nd February 2012 and forwarded an overall sales figure of €610,963. It was indicated to him that CMC was quite prepared to land him with a target of over €1m for 2012 which was an increase of 69% on 2011. The only person the claimant could bring his grievance to was CMC and he was the person the claimant had the grievance with. He could not bring his grievance to IM as she was the mother of CMC. Subsequently, the claimant asked for his grievance to be referred to the Labour Relations Commission. He did not ever think of taking his grievance himself to the LRC.
As the claimant had not received a response to his letter of 24th February 2012 he again wrote to CMC stating that if he did not receive a reassurance in respect of his employment by no later than 12th March 2012 he would resign immediately. On 12th March 2012 CMC wrote to the claimant. The claimant felt he was being accused of being argumentative. The claimant was only trying to protect his job and felt that anything he had said was not taken on board. The claimant was judged only on legacy sales of €593,000.00.
The first time the claimant had a performance review was 2012. He had not previously been informed if anything had been wrong with his performance.
The claimant had worked for the company for twelve and half years. He did not want to walk away from the company but he was at the end of his tether and his wife had encouraged him to leave. He could not recall ever receiving the company’s disciplinary procedures. He had been passionate about the company. He felt demeaned by the company. He was certified unfit for work and proposed that his employment should end on 16th March 2012.
Since the termination of the claimant’s employment he was interviewed for ten different positions but was unsuccessful in securing an alternative position.
On 15th April 2013 he set up his own small coffee business.
Respondent’s Case:
CMC is Managing Director and owner of the respondent company. He took over the running of the company following his father’s death. He recruited GF into the company. Structures and systems had to be put in place and a sales team had to be co-ordinated. GF had experience in running a sales team in Ireland and he brought much experience to the company. There was a need for an increase in sales. CMC was unhappy with the sales the claimant had secured in 2011 and he needed to increase that figure.
It was in a letter from the claimant on 23rd January 2012 that CMC first became aware that the claimant had a grievance. The claimant believed that he was setting unreasonable targets for him and CMC was criticising his performance. CMC at this time needed to maintain and grow the business. The company had suffered losses and the family had put money into the business to make it sustainable.
At the meeting on 8 February 2012 the claimant only wanted to discuss targets. The claimant sent several emails to CMC with his concerns about targets that had been set for him. He found the correspondence from the claimant to him to be argumentative at times. CMC wanted two separate targets and the claimant was not prepared to provide these. The claimant asked that his grievance be referred to the LRC. CMC viewed this as an internal matter and felt it should be dealt with internally. CMC wanted a two part target but the claimant only produced a single target. He told the claimant he could seek the assistance of GF but the claimant refused this.
It was only on 13 March 2012 that CMC became aware that the claimant had been suffering from work related stress on two previous occasions. When the claimant tendered his resignation that day CMC wrote immediately to the claimant and asked him to re-consider his position and gave him seven days to do so. He was willing to discuss matters further with the claimant.
On 23 March 2012 CMC accepted the claimant’s resignation.
GF is Sales Strategy/Sales Co-ordinator and commenced employment in July 2011. He engaged daily with the claimant. He was responsible for sales strategy and forecasts for the company. He had wide experience in forecasting and budgeting for companies. Together with the claimant he had forecasted sales for the company. He had a very good working relationship with the claimant. He emailed targets for 2012 to CMC in early January 2012. The total sales figure for the company was €2.8m. His reckoning was that there was a 10% increase for 2012 over 2011. He was conscious the claimant had issues with targets. GF believed the claimant’s target was reasonable and achievable but not easy. Sales were open to negotiation and there could be compromise with both parties.
Determination:
The Tribunal carefully considered the evidence adduced during the course of this three day hearing.
The claimant worked for the company for twelve and a half years and had a significant role under the father of his current employer.
Based on the figures submitted to the Tribunal, on any analysis, the respondent appears to have set unrealistic targets for the claimant which by any standards would be impossible to achieve.
Prior to the discussions held in January 2012 the claimant’s sales performance had been acceptable given the trading conditions.
Based on the minutes of the meetings, there appears to have been no real consultation with the claimant regarding the setting of realistic sales targets for him. The respondent appears to have increased the claimant’s targets by 69% (which was agreed at the hearing by both sides as the correct figure) at a time when sales had been reducing for a number of years.
Notwithstanding a request to bring in outside mediation (the LRC) the respondent ignored this request and adhered to his original position. It appears to the Tribunal that this approach taken by the respondent was an effort to freeze the claimant out of the company by setting such unrealistic targets which made his position untenable.
There was an onus on the claimant to pursue his grievances himself which he failed to do. Consequently, the Tribunal awards him €70,000.00 under the Unfair Dismissals Acts, 1977 to 2007.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)