EMPLOYMENT APPEALS TRIBUNAL
CLAIM OF: CASE NO.
Patrick Durkin -claimant UD996/2012
Against
McSweeney Assets Group Holdings Limited
-respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr. T. Ryan
Members: Mr F. Moloney
Ms. N. Greene
heard this claim at Dublin on 7th January 2014
and 26th June 2014
and 27th June 2014
Representation:
_______________
Claimant: Mr. Alastair Purdy, Purdy Fitzgerald, Solicitors, Kiltartan House,
Forster Street, Galway
Respondent: Ms Niamh McGowan B.L. instructed by,
Arthur Cox, Solicitors, Earlsfort Centre, Earlsfort Terrace, Dublin 2
Summary of Evidence
The respondent is a group of pharmacies. The claimant was initially employed as a pharmacist in 1993 and later became the manager of all of the pharmacies in the group. The claimant had a share in the company.
The respondent was in expansion mode until 2008 when the recession significantly impacted on the business. This resulted in the closure of half the respondent pharmacies. Due to severe financial difficulties the respondent chose to go into examinership. An examiner was appointed by the High Court in 2011. The claimant was to lead this process as ‘the face of the examinership’ as the respondent owner in based outside of the jurisdiction. The company exited examinership successfully on the 14th of March 2012.
The examinership was proceeding well until ‘a clash’ on the 9th of February 2012 following a meeting held on the 8th of February 2012. The claimant was asking for a 24.9% share in the new company that would emerge post examinership. The respondent owner had discussed the possibility in December 2011 but had not made any official agreement with the claimant. The respondent owner was not in a position to agree to anything until the examinership process was concluded. The claimant asked for a meeting with the owner but he was not in a position to meet with the claimant. The respondent owner accepts that for a number of years previous this share agreement had been discussed on a number of occasions with the claimant but nothing had ever been agreed.
By letter dated the 9th of February 2012 the claimant resigned from his position. The respondent believed that the examinership would consequently fail as ‘the key person was walking away.’ The claimant’s resignation was accepted by letter dated the 16th of February 2012. The respondent owner spoke to a few members of staff and informed them that the claimant had resigned from the company. The respondent later acknowledged that the claimant was only resigning as a Director as per his letter and not as an employee of the respondent. The respondent owner appointed two new Directors on the 17th of February 2012.
The respondent owner was very concerned that the claimant would withdraw his affidavit lodged as part of the examinership and what he may say in the High Court. As a result a Board meeting was held on the 28th of February 2012. At that Board meeting the Chairman (respondent owner) proposed and it was resolved that;
‘(the claimant’s) employment be and is hereby terminated for serious misconduct, and that each Director of the Company be and is hereby authorised to issue notice of such termination to (the claimant) on terms that such director may, in his absolute discretion, deem fit.’
The claimant was dismissed as “he was a threat to the company.” The claimant appealed this decision but the respondent owner refused to have an appeal, this was communicated by his legal representative. The respondent owner is “fully aware that we didn’t follow our own procedures.” The respondent owner does not recall writing the letter of the 23rd of February 2012 urging the claimant to accept ‘garden leave’ or else he would be suspended. The respondent owner never informed the claimant that he had serious concerns about his behaviour but “someone else could have.”
The respondent owner had no direct communication with the claimant after the 8th of February 2012. All communication and negotiations was carried out by (MA), a ‘client relationship and tax partner’ from KPMG. MA accepts that the share agreement was discussed extensively with the claimant but no agreement was ever reached.
The claimant gave the letter of the 9th of February, resigning as a Director, to MA. As far as she was concerned the claimant was resigning completely from the company; there was no distinction between the role of Director and General Manager. The claimant did not contact her by phone prior to his resignation.
The ensuing email correspondence between MA and the claimant was opened to the Tribunal. A number of proposals on how to move forward were discussed between MA and the claimant. These negotiations failed as the respondent owner was adamant that he did not want the claimant to ever work for the company again and the claimant would not accept the offer of garden leave. The negotiations that took place after the 9th of February were only to ensure that the claimant did not interfere with the examinership process; the respondent owner made it clear that the claimant was never to work for the respondent again. MA had communicated her opinion that the decision to dismiss the claimant was the right course of action but had no involvement in making the decision.
The Financial Director was appointed on the 17th of February 2012. He worked for the respondent before his appointment to Director and consequently worked closely with the claimant. The claimant informed him that he was leaving the company on the 9th of February 2012, he did not qualify this by saying he was only resigning as a Director. He rang the claimant on the 11th of February and pleaded with him to reconsider his position as by leaving he was jeopardising the examinership process and consequently there could be a serious loss of jobs. The claimant did not engage in the examinership process after that or attend work.
The Financial Director agreed with the proposal to terminate the claimant’s employment as he had walked out on the examinership process putting it in jeopardy for no other reason that securing more shareholding for himself; this is serious misconduct.
A partner in Arthur Cox (JD) who acted for the examiner gave evidence that the claimant did not engage in the examinership process after the 9th of February 2012. The veiled threat of the claimant taking an injunction, contained in the letter from the claimant’s legal representative greatly concerned the examinership team. JD was present when the decision to dismiss the claimant was made but was not involved in making that decision; the Directors were fully advised of the legal risk to making the decision to terminate the claimant’s employment. On receipt of the claimant’s notice to appeal the decision to dismiss him, JD responded stating, among other things, ’Your employment has been terminated and you will not be re-instated.’
The claimant was left “shocked and dismayed” on receipt of an e-mail from KMPG (MA) on the 6th of February 2012. The e-mail stated that post examinership the claimant would hold 12.9% of the shares in the new company. After extensive discussion with the respondent owner that had started as early as 2007, they had finalised an agreement in December 2011 that the claimant would have a 24.9% holding in the new company. The claimant and the respondent owner had a very good professional and personal relationship and as a result the agreement reached was not put into writing. The claimant replied to the e-mail querying the shareholding and a number of other issues but did not receive a reply. He became very concerned for his future with the company and had the feeling that “things weren’t right”.
The claimant phoned MA on the 9th of February and asked why there was no reply to his queries, to which she replied that the respondent owner informed her that the shareholding agreement had been put on hold until after the examinership. The claimant had never discussed or agreed to put the agreement on hold. The claimant contacted the respondent owner but he refused to meet with him or discuss the agreement. He then wrote the letter resigning his position as Director and gave it to MA. The claimant had no further contact with the respondent owner. His resignation was not intended to be permanent only “leverage” in the shareholding discussions; he does not believe he prioritised his own position over the company. The claimant declined the invitation to a meeting as he was unavailable on the date the respondent requested the meeting with his solicitor.
The claimant continued discussions with MA; he was under the impression that she was trying as much as he was to come to an agreement on his future. At all times the claimant made himself available to for any tasks required for the examinership. The discussions quickly moved from a ‘side agreement’ regarding the shareholding not to affect the examinership to MA sending him a document on the 13th of February requesting him to sign over all of his shares. The claimant went to a solicitor immediately and outlined his concerns. The discussions progressed and by email of Monday the 21st of February 2012 the claimant accepted the terms of the agreement. On Wednesday the 23rd of February the necessary documentation was sent to the claimant but the terms were altered; instead of garden leave being an option it was a mandatory term. The claimant’s legal representative advised him that mandatory garden leave was the equivalent to being removed from the company consequently the claimant rejected this offer.
On Thursday the 24th of February the claimant received the letter of the 22nd of February stating that an investigation into his behaviour would be taking place and again suggested he either accept garden leave or be suspended. The claimant’s legal representative replied on his behalf threatening an injunction if he was suspended. A further proposal was put to the claimant by the respondent on Saturday the 25th of February; the claimant declined this, as the offer made was conditional on successfully exiting examinership but he would have no input into the examinership process. Finally the claimant received the dismissal letter on Wednesday the 29th of February stating,
‘I confirm that the Board has resolved that your behaviour amounts to serious misconduct warranting dismissal...Your dismissal shall be effective immediately.’
The claimant had not been in contact with the respondent owner throughout this process and had never been informed what serious misconduct might be. The reasons for dismissal as given by the respondent witnesses were never communicated to the claimant. The respondent declined to hear an appeal into the decision to dismiss the claimant.
The claimant gave evidence of his loss and attempts to mitigate his loss.
Determination
- According to MA, the tax partner advising the respondent, the owner was adamant that he never wanted the claimant working for the company again. When asked by the Tribunal from what date did the respondent owner not want the claimant working anymore, she confirmed that it was from the 9th of February. This is difficult to reconcile with: (i) MA’s email of the 21st of February 2012 to the claimant’s solicitor confirming that “he (the claimant) is continuing in his role as general manager”, (ii) her email of the 20th of February 2012 to the claimant in which she confirms, inter alia, that “you (the claimant) will retain your position as general manager of (the respondent).”
The Tribunal wishes to acknowledge that MA was in an untenable position trying to deal with an extremely challenging situation in having to deal with a difficult examinership process while at the same time dealing with the claimant’s resignation as a Director and the failure of the respondent owner to deal with the claimant’s grievances. The Tribunal notes that the respondent owner did not engage/speak to the claimant subsequent to the 9th of February 2012.
- The claimant was dismissed for serious misconduct at a meeting of the Board on the 28th of February 2012. Serious misconduct is not defined in the company handbook. Gross misconduct is defined and in that procedure the company reserves the right to dismiss a staff member without recourse to the procedure outlined in stages 1-5 of the disciplinary procedure. The Tribunal notes that; “the express approval of the Managing Director will be required to effect discharge of any staff member.”
The Tribunal notes that the respondent owner did not want the claimant working for the company after the 9th of February 2012 yet he never communicated that to the claimant. The respondent owner wrote to the claimant on the 23rd of February 2012 stating, “as you know I have serious concerns about your behaviour of late, including in relation to your resignation as a Director of the company…in circumstances where those companies are in an examinership process which requires the full attention of management” and that: “I intend to initiate an investigation into the above matters” and “details of this investigation will be furnished to you in due course.” The Tribunal is completely satisfied that the respondent owner did not discuss his serious concerns with the claimant between the 9th of February and the 28th of February 2012 when he dismissed the claimant.
A reasonable employer would have written, as a matter of urgency to the claimant setting out the severity of the situation and the grave consequences of the claimant’s failure to comply with his duties and responsibilities. The Tribunal notes that the claimant’s representative was invited to and was unable to attend a meeting on the 28th of February but this meeting was not with the respondent owner.
It beggars belief that an employer would take a decision to dismiss an employee at a meeting where:
(i) No discussion took place with the claimant in relation to his alleged misconduct
(ii) No warnings given to the claimant
(iii) No notification to the claimant that his position was in danger and that he could be dismissed
(iv) Not advised that he was entitled to attend a meeting and answer the charges against him
(v) Not advised that he was entitled to a representative at such a meeting
(vi) Not allowed appeal the decision to dismiss
It is not acceptable for the respondent owner to say that there was no time to follow the company disciplinary procedures or allow the appeal. It is not in the gift of the Tribunal to forgive blatant and flagrant disregard to the claimant’s natural and constitutional rights as an employee.
The claimant was never given the reason for his dismissal other than what is stated in the letter of dismissal dated the 29th of February 2012 which refers to the claimant’s resignation as a Director during the examinership proceedings. At the hearing of this case on the 7th January 2014 and the 26th & 27th of June 2014 a number of instances of serious misconduct were outlined by MA;
(1) His resignation as a Director of the respondent group when he had signed the affidavit pertaining to the examinership
(2) Alleged threat in the letter dated the 17th of February 2012 from his solicitor, that the claimant may have to revisit the affidavits already sworn
And from the financial director;
(1) He had removed himself as a Director at a key moment in the examinership
(2) Not engaging in the examinership process
(3) Putting himself above everyone else
Far from offering/facilitating an appeal the company ordered the claimant not to attend at the premises and if he did security would be called to remove him.
In relation to the claimant’s contribution to his dismissal, the Tribunal notes that:
(1) He admitted he used the examinership proceedings as leverage to get the money he felt he was owed by the respondent owner, and
(2) He must have been aware that he had the most significant and pivotal role in the examinership proceedings in that he swore the original affidavit for the High Court.
The Tribunal find that the claim under the Unfair Dismissals Acts, 1977 to 2007 succeeds and awards the claimant €50,000 in compensation, taking into consideration the claimant’s contribution to his dismissal.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)