EMPLOYMENT APPEALS TRIBUNAL
CLAIM(S) OF: CASE NO.
Andrew Murphy UD1033/2013
- claimant
against
Popular Motors Limited
- respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. K.T. O'Mahony BL
Members: Mr. D. Hegarty
Ms. S. Kelly
heard this claim in Cork on 4 November 2014 and 22 January 2015
Representation:
Claimant(s):
Mr. Cian Cotter BL instructed by
Ms. Georgina O’Halloran for Mr. John Boylan, McNulty Boylan & Partners, Solicitors, Clarkes Bridge House, Hanover Street, Cork
Respondent(s):
No legal representation
Summary of Evidence
DM and DQ (hereafter the directors), are accountants and directors of the respondent holding company for a group of companies having VW and Audi dealerships in Fermoy and at Cork and Skibbereen. Prior to his employment by the respondent the claimant had developed an accounting reporting system for another car dealership. He approached DQ and proposed designing an accounting reporting system for the respondent’s business. The directors found the report very impressive and employed the claimant in the newly created position of group financial controller from October 2010, with a salary of €85000.00 per annum. The claimant was to structure the accounts department. He reported to the directors. Both directors had previously performed the duties attached to that role. The claimant had previous experience as a group financial controller in a Charleville dealership and had been general manager in two other dealerships. The claimant recruited staff to report to him and was given a free hand. The claimant did not get a job spec but the directors’ position was that preparing a job description fell within the claimant’s function as financial controller restructuring accounts section within the group of companies.
In March 2012 the directors were becoming concerned but in September 2012 they became seriously concerned about the pressure on their bank account. Management accounts were showing a profit of €700,000 but the respondent’s overdraft was constantly being exceeded and the respondent was under pressure from the banks. In October 2012 the respondent’s auditors raised their concerns about the accounts. Two management letters from the auditors addressed to the directors in 2011 and 2012, giving their opinion on the management of the cash flow, had been retained by the claimant and not brought to the attention of the directors. From 18 of October to 2November 2012 the directors worked on the background to the accounts and found several significant errors, one being €200,000 and the reported profit of €700,000 became a loss of €800.000. The respondent had been in a very precarious position. One company had 238 creditors but DQ worked on these and reduced the number to around ninety. Employees’ pension contributions had not been paid for five or six months. The directors began to suspect that the claimant was failing in his duties as a financial controller but they were hoping that with his assistance they could establish what went wrong and help them resolve the problems. .
On 2 November the directors met with the claimant to discuss the accounting errors. They sought an explanation for the state of the books and records and how the errors arose. They asked him to produce a plan to quantify the errors, to correct them and to ensure it would not happen again. On 6 November the claimant produced a plan but it lacked specifics and the directors asked him to return the next day with a detailed plan but the respondent was not satisfied with the plans produced by the claimant either on 7 or 8 November; the latter plan was theoretical, it did not provide solutions to the problems and it failed to address any of the issues. DA’s position was that it was not the claimant’s fault that the respondent was trading badly but as financial controller it was his fault that due to his accounting errors the respondent was not aware of how badly the business was trading and therefore was not in a position to make any changes. The claimant’s evidence was that at the meeting on 2 November he was told that he was not doing his job. He understood the directors were considering taking over his job and when he asked had a decision been taken he was told it had not. He was concerned about the cash flow problems and forgot what the job was about. He was asked for a plan for the reorganisation of accounts and the future role of the financial controller. When he produced plans the respondent wanted more detail and more process. He felt he was being side-lined.
When the claimant failed to produce an adequate plan the directors decided to make the position of financial controller redundant and they would revert to carrying out those duties, as they had formerly done. The claimant was offered the position of financial accountant in the respondent’s VW dealerships in Cork on the terms and conditions attaching to that position. The claimant accepted the position in Cork and started there on 19 November 2012. Although the new position, with a drop of almost €50.000 in salary, was a demotion and embarrassing for him the claimant accepted it because he wanted to prove he could do the work rather than walk away. DA accepted that it was not easy for the claimant to accept this demotion but it was the only position available at the time and the claimant was a married man with a family; he had been given the option to take redundancy. As a result of the failings the respondent missed all filing deadlines for 2011 accounts and incurred penalties
Shortly after commencing the new position in Cork DM raised questions about having the claimant’s wife on the car insurance policy and why SX had been given a pay rise but the claimant reminded him that it was he (DM) who had arranged the former and suggested the latter. At a group after sales meeting on 22 November DA “tore into him” when he told him there was a problem with the accounts.
On 30 November DM met the claimant to discuss another serious error that had come to light. The 150 members of staff throughout all four companies had been allocated the wrong tax credits for the year resulting in an underpayment to Revenue and the entirety of their earnings over the next four weeks would be taxed, reducing their net pay significantly coming up to Christmas. Because of its financial situation the respondent neither had nor could get the funding to deal with this problem by some alternative arrangement at this time. DA became annoyed and upset with the claimant. The claimant found DA’s approach abusive and left the meeting. DM’s position was that the claimant’s lack of concern and co-operation as he sat there smiling and shrugging his shoulders was the last straw for him and he said things he should not have and regretted. The claimant explained to the Tribunal that payroll had changed a parameter and one could not detect it. DQ met the claimant on 30 November and asked for the background to what had happened. The claimant gave very little feedback. The claimant’s position was that DQ asked him what his plans were and DQ commented that he knew DM and that there would be constant friction; the claimant regarded this as tantamount to a dismissal.
That evening DA sent an e-mail to the claimant explaining to him that he could not resolve the issues that had arisen in company’s finances without his co-operation; he had questioned him because he needed to know the reasons for the accounting failings so he could introduce corrective internal controls to safeguard the future of the company. In this e-mail DA was also seeking information surrounding a contract the claimant had signed off on, which the respondent neither needed nor could afford and which committed the respondent to long term significant costs, which it could not get out of without incurring major penalties; the claimant did not have the authorisation of the directors to enter this contract.
The claimant responded by e-mail stating: he was shocked and had never been subjected to such a personal attack of name-calling and having his ability called into question; he alleged that DA’s behaviour constituted bullying and harassment; he informed DM that he was under stress and would not attend the meeting that had been arranged for Monday.
In his response the following day, DA referred to the pressure the directors and accounting staff were working under and would continue to be under for the following two months to deal with the problems and further stated:
“I really cannot accept your continued refusal to co-operate….I know you say you are co-operating but your reasoning is to blame everyone within the accounts department and not give me the specific reasons for failure in our accounting systems of internal controls. As I said this is really urgent and I do not have the time to talk to each member of the accounts department to find out what they are doing and what went wrong. I am not looking to blame anyone as my urgency lies in sorting things out. I need to be more specific about all the different areas where we have serious problems in order to resolve these problems. I cannot accept the cash flow response from you any longer.”
DM acknowledged that he got angry at the meeting on 30 November and made inappropriate remarks such as asking the claimant if he was a man or a mouse; saying to him that he would keep asking him questions until he got answers; asking him had he any self-respect but he denied uttering expletives and making other vulgar remarks.
DA’s position was that he did not invoke the disciplinary procedure because his focus was on establishing how the error occurred and how it could be remedied. DM removed himself from the process because of the claimant’s allegation of bullying and harassment and DQ engaged with the claimant thereafter. The claimant went to the doctor on the following Monday and he was advised to return to work before Christmas. The claimant submitted sick certificates to the respondent, initially on a weekly basis and later on a monthly basis. He was paid until the end of December 2012. When DQ contacted the claimant in early January 2013 his response was that he was under doctor’s orders and not to contact him again.
The claimant returned to work on 15 April 2013, having given the respondent a week’s prior notice and met with DQ. There is a dispute as to whether both directors were at that meeting. There is a dispute on the crucial fact as to who raised the issue of redundancy. In May 2013 the respondent advertised for a financial accountant for the Cork dealership. On 18 April 2013. €3,636.00 for redundancy was paid to the claimant in a redundancy departure payment. The claimant also got pay in lieu of notice and for holidays at the higher salary. The claimant had the company car throughout his four and a half month absence on sick leave and had run up 15,000 kilometres on it during his sick leave.
The claimant commenced employment with another company around four weeks later on a salary of €59,000, which was significantly higher than the €38,000 he had been earning with the respondent in the position of financial accountant in Cork
The claimant’s evidence was that he has a good overview of the financial controller’s role but he made mistakes and kicks himself. He was taken aback at the cash flow problems in the respondent. He made changes and put systems in place but he made mistakes and cost the company money. He spent too much time on cash flow and took his eye off the accountants. He accepted that he could have done better.
The respondent’s evidence was that if it were not for the co-operation of the respondent’s bank the respondent would have gone out of business. Two-and-a-half years on DM and DQ are still doing the job and they have not got to the bottom of what had gone on.
Determination:
The claimant’s employment with the respondent was terminated in mid April 2013. The issue to be determined in this case is which party suggested the termination of the employment relationship at that time. The Tribunal considered all the evidence, it took cognisance of the fraught relationship that existed between one of the directors and the claimant, the claimant’s failings in his work and the inappropriate comments/statements of DM to the claimant, it noted the claimant’s behaviour following the meeting of 30 November viz his refusal to have any contact with the respondent apart from sending in medical certificates and then his return to work on 15 April 2013, albeit on his doctor’s advice, about four weeks before he commenced in a much more lucrative position with another employer, and it finally notes that in May 2013 the respondent advertised and filled the position of financial accountant vacated by the claimant in mid April 2012. Having weighed these factors the Tribunal unanimously and on the balance of probability accepts the respondent’s version of how the employment ended. Thus, as the termination was at the claimant’s request his claim under the Unfair Dismissals Acts 1977 to 2007 is dismissed.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)