ADJUDICATION OFFICER DECISION

Adjudication decision reference: ADJ-00000399

Complaints for Resolution:

Date of Adjudication Hearing: 25/02/2016

Workplace Relations Commission Adjudication Officer: Kevin Baneham

Procedure:

1. On the 2^nd November 2015, the complainant referred complaints to the Workplace Relations Commission pursuant to the Terms of Employment (Information) Act and the Unfair Dismissals Act.
2. The complaints were scheduled for adjudication on the 25^th February 2016. The complainant attended the adjudication and was represented by her husband. Michael Morrissey, BL, instructed by Killian O'Connell, solicitor represented the respondent. The former CEO and the current CEO of the respondent attended as witnesses.
3. In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 8(1B) of the Unfair Dismissals Act, 1977, as amended, following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Complainant’s Submission and Presentation:

2. The complainant was initially engaged in a Jobbridge position and later obtained a contract of employment with the respondent. She held administrative roles with the respondent, an English language school. In the complaint form, she outlines that her employment commenced on the 2^nd September 2013 and came to an end on the 30^th October 2015. Her gross pay was €2,400 per month. In April 2015, the then CEO (referred to in this report as the “former CEO”) informed the staff that the respondent language school would be relocating from west of the city to the city centre. The former CEO told that complainant that her pay would be increased and that the respondent would pay for a monthly bus ticket to compensate the claimant for having to commute to the city centre. The complainant was promised a new contract of employment reflecting the new location, new working hours (increasing from 30 to 40 hours per week) and an increase in salary of €475 gross per month plus a monthly bus ticket (value €147). She was only later paid €100 for the bus ticket. The complainant outlined that that the language school opened in the city centre on the 11^th May 2015. This was a busy time and she seldom left work at the scheduled time of 5pm. She referred to one day in July 2015 when she worked until 11.30pm to complete a return to the accreditation body. She also often worked on Saturdays.
3. In respect of her contract of employment, the complainant outlined that she received the contract in June 2015. This was provided only after she had sought her contract on many occasions. She had asked for a new contract to record her extended hours of work. She was later asked to prepare her own contract of employment. The respondent did not follow through on the undertaking to increase her salary, and in actual fact, underpaid the complainant in the amount of €470 for each month between May and July 2015. The complainant further said that she did not get paid at all for the months of August, September and October 2015. The only payment she received in this period was €300 in cash on either the 30^th September or the 1^st October 2015.
4. The complainant outlined that she availed of annual leave in September 2015, departing on the 31^st August and returning to work on the 28^th September 2015. On her return to work, the respondent offered her a part-time role, dealing only with accounts. She was to have no more dealings with students or with the GNIB. The complainant outlined that she had a full-time and permanent contract with the respondent. The accounts were already in poor order and she was not qualified to take on this role. Her duties had been assigned to a named part-time office manager. At this time, she emailed the former CEO about the duties of her new role.
5. The complainant outlined that she was taking a period of annual leave from the 27^th to the 31^st October 2015, so the 23^rd October 2015 was to be her last day. A scheduled meeting with the former CEO and the new CEO was meant to take place. The complainant had been meant to start her new role on the 3^rd November 2015. The meeting on the 23^rd October 2015 never took place and the complainant handed in her resignation. In her letter of resignation, dated the 23^rd October 2015, the complainant raised the issues of the non-payment of her wages, the systematic transfer of her duties to others and the unilateral reduction in her working hours.
6. After the end of her employment, she was not paid the outstanding wages due to her. There was also a delay in issuing her P45 and the P45 later issued gave the wrong date of the end of her employment. Addressing matters arising after the end of her employment, the complainant outlined that she had been applying for jobs, giving a supermarket and a school as examples. She had not applied to other language schools. She had hoped to get her job back with the respondent. She and her husband had met with the respondent, most recently fortnight before this adjudication. She had asked for her job back and they had also discussed the issue of her unpaid wages. The matter of her wages was being pursued separately via the Inspectorate division of the Workplace Relations Commission and she was not looking for redress for this at this adjudication.
7. In cross-examination, the complainant said that she had worked as an estate agent from 1999 to 2009/2010, and had worked with international students since 2012. She did not accept that she had 20 years’ experience of working with international students. She also did not accept that her contract of employment had been prepared by the respondent, nor that she had been provided with €500 for travel expenses. She did acknowledge the payment of €350 prior to her annual leave. She said that she had not asked for a reference because she would not believe anything the former CEO said. The complainant outlined that she had attended the new city centre offices to clean and prepare them in time for the opening on the 11^th May 2015. She outlined that she had taken annual leave for a hospital visit she was asked about. Asked about her role with the respondent while it was located in the west of the city, the complainant outlined that there were some 65 international students and she had been the office manager. She compiled attendance records and followed up on fees. She outlined that following the move to the city centre, the student population increased to 170 and accepted that this followed the acquisition of an existing business by the respondent. Addressing the issue of student records, she said that it was a very important to maintain accurate student attendance records in order to allow students to work and to travel. The records were inspected by the accreditation body and the loss of the respondent’s accreditation would prevent it from accepting visa students. The complainant acknowledged that she had asked a junior member of staff to compile a set of attendance records and had not checked her work. Errors were identified during the course of an inspection. While the paper record of each class was accurate, the information recorded on a spreadsheet contained errors. She acknowledged that the respondent gave her a verbal warning on the 9^th June 2015, and said that this was illegal. She said that a follow-up performance management meeting did not take place as scheduled on the 25^th June 2015. She acknowledged that two named colleagues had been assigned to assist in these duties and that she had been offered a role just doing invoices. She said that the only training she had received was two hours’ paypal training and did not agree that she had been provided with more. In respect of the inspection of the 8^th October 2015, she denied that there were any discrepancies and said that everything was perfect. The inspectors were totally happy with the records. She denied that the second warning given by the respondent was valid. She also did not accept that she was given the accounts role because of her errors. Asked to comment on the email of the 16^th October 2015, she said that this listed the duties of a part-time accounts technician. She denied refusing to answer the phone and saying that calls should be left go to voicemail. She said that she was not an accounts person and that her original contract of employment still stood. It was put to the complainant that she had resigned her role with the respondent; the complainant said that she had resigned but that her evidence was being twisted.
8. In closing submissions, the complainant outlined that no new contract had been provided following the move to the city centre. There was also no due process provided for the verbal warnings delivered. The fact that the complainant was no longer being paid led her to having to leave her employment. This amounts to a constructive dismissal.
9. The respondent denies the complainant’s claims. It outlined that the complainant had resigned her employment and that she had been issued warnings because of very serious breaches of her duties, which could have led to her dismissal. The complainant had pursued the wages issue by other means and this issue was not before this adjudication.
10. The former CEO gave evidence, saying that she had been the respondent’s CEO but was now employed as its Academic Director. She had ten years’ experience in the industry and was previously a teacher. She denied the complainant’s assertion that the complainant had been asked to prepare her own contract of employment, and said that she may have asked the complainant to type up the document. The former CEO outlined that the complainant had initially been engaged on the Jobbridge scheme in a part-time evening role. The school was then smaller and the complainant’s role was as office manager. She said that the complainant was good at managing accounts. The respondent acquired a business in the city centre and the complainant relocated to this office. The number of office staff increased. The respondent had accreditation in place and it was essential to keep accurate attendance records in the larger school. The former CEO outlined that while the inspection of the 9^th June 2015 was unannounced, it was anticipated as they had recently opened. The inspectors found 130 incorrect files. On the 10^th June 2015, she asked the complainant into her office, where the complainant apologised for the errors. The former CEO said that this was a grievous set of errors and issued a verbal warning to the complainant. She then gave the office manager function to another staff member and assigned accounts to the complainant. Further discrepancies occurred in the inspection of the 8^th October 2015, when attendance issues were again identified. The former CEO said that the threat of losing their accreditation was a serious one and there was a high pressure to be perfect. She said that there were also issues with the accounts, for example there was no creditor list and invoices were not listed. The complainant had been provided with paypal training and training from an accountant, but there remained issues with her performance. The respondent had become over-staffed and the only role available was the part-time accounts role. She described the complainant as being very hostile and refusing to carry out tasks. Addressing the payments made to the complainant, the former CEO outlined that €200 was paid before the period of annual leave in September and €350 was paid afterwards.
11. In cross-examination, the former CEO said that the complainant initially had a Jobbridge contract and was provided an alternative contract in June 2015. She acknowledged that the location of the complainant’s place of work should have been amended to the city centre address and said that things were in a state of flux. She said that the oral warnings had been given to the complainant and written up by the respondent. It was put to the former CEO that the complainant was expected to work for nothing; she replied that she had apologised profusely for the wages situation. She said that at an open company meeting, the staff had decided that the teachers would be paid in priority to office staff. In re-examination, the former CEO said that in October 2015, the complainant had been offered the accounts role.
12. The current CEO gave evidence. He outlined that he became involved with the respondent in late November 2015. The respondent had been subject to a transfer of undertaking on the 10^th December 2015. Its student population was made up of 90% visa students and it had retained accreditation. He had met with the complainant and her husband to address the wages issue.
13. In closing submissions, the respondent outlined that the contract provided to the complainant details her functions and duties. The complainant had acknowledged her mistakes that led to the verbal warnings. The second verbal warning was justified and the complainant’s behaviour was very hostile by this stage. These events were serious enough to justify the complainant’s dismissal, but the respondent offered the complainant an alternative role instead. Even then there had been errors with the accounts. It was submitted that the circumstances were not such to find that the complainant had been constructively dismissed from her employment and that this was a case where the complainant had tendered her resignation on the 23^rd October 2015.
14. Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act, in this case the claim made pursuant to the Terms of Employment (Information) Act. Section 8(1B) of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim in accordance with section 7 of the 1977 Act. Having considered both the written and oral evidence and submissions of the parties, I come to the findings detailed below. The first issue to address is whether the complainant can succeed with her claim of constructive dismissal. The respondent asserts that the complainant resigned her employment after serious issues arose regarding her performance. The respondent also maintains that the issue of unpaid wages is being pursued by other means.
15. The complainant’s letter of the 23^rd October 2015 referred to the following issues when resigning: the non-payment of her wages, the systematic transfer of her duties to others and the unilateral reduction in her working hours (i.e. the part-time role). While it is certainly true that the complainant is seeking to recover the unpaid wages by means other than this adjudication, I cannot see any bar to this adjudication considering the non-payment of the wages in the context of the resignation. This adjudication will not make an award for any amount of the unpaid wages. It was not disputed that the complainant was underpaid by €470 for May, June and July 2015 and not paid at all for the months of August, September and October 2015. There was a dispute whether the complainant received €300, €350 or €500 in or around her annual leave in September 2015. The complainant’s monthly wage was €2,400.
16. In Western Excavating (ECC) Ltd v Sharp [1978] QB 761, the UK Court of Appeal distinguished between the “contract” and the “unreasonable” tests in establishing whether an employer had shown that they had been constructively dismissed from their employment. In respect of the contract test, Denning M.R. held, at page 769, “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once.”
17. Referring to this dicta, the Labour Court in A Worker v An Employer [2005] 16 E.L.R. 132, held (at page 138), “This passage describes a situation in which an employer commits a repudiatory breach of contract. In such circumstances, the employee is entitled to accept the repudiation and consider him or herself to be dismissed. However, not every breach of contract will give rise to repudiation. It must be a breach of an essential term which goes to the root of the contract. This is a stringent test which is often difficult to invoke successfully.”
18. Addressing a situation where an employer had ceased to pay an employee, the Employment Appeals Tribunal held as follows in Kilkerr v Burke Fabrications Ltd UD470/2013:"When an employee provides labour and services to an employer it is reasonable for the employee to expect to be paid for its labour and or services. In the present case the Respondent, over a long period of time, made part payment of wages to the Claimant and furthermore requested that the Claimant return to his workplace, on a promise that wages due and owing would be sorted out. The Claimant did not return to work as the mutual trust, which is an essential component of the contract of employment, was breached so many times by the Respondent’s promise to pay his wages and then failing or refusing to do so. False promises, delayed and inconsistent part payments from the employer do not dilute the breach of trust between the employee and employer."
19. In circumstances where an employer had unilaterally imposed a 13% reduction in pay on the employee, the UK Employment Appeal Tribunal held in Industrial Rubber Products v Gillon 1977 IRLR 389, at 390, "The basis rate of pay is a fundamental element in any contract of employment and in our opinion it cannot be said that there is no material breach on the part of an employer who proposes to reduce that basic rate even for good reasons and to a relatively small extent. We are therefore driven to the conclusion that the respondent was constructively dismissed."
20. In circumstances where the complainant had been underpaid for two months and not been paid at all for three months, it is clear that, as of the 23^rd October 2015, she was entitled to regard the behaviour of the employer as repudiatory of her contract of employment. The complainant was entitled to regard herself as dismissed. The respondent had relocated premises and doubled in size. The complainant worked longer hours and also worked later and over weekends to accommodate the launch of the new school. Despite this, the respondent ceased paying the complainant. Given that I have found that the non-payment of wages amounts to a repudiatory breach, it is not necessary for me to apply either the contract or unreasonableness tests to the other breaches put forward by the complainant, i.e. relating to the part-time role and the assignment of duties to others.
21. I have found that the complainant was constructively dismissed by the respondent on the 23^rd October 2015 by way of a repudiatory breach of contract by the respondent in respect of the non-payment of wages. The complainant has asked for re-instatement. I do not believe that this is an appropriate remedy in this case. The complainant referred to her loss of trust in the former CEO, now Academic Director with the respondent. I am cognisant that related to constructive dismissal based on a repudiatory breach is that it is a breach of trust and confidence on the part of the employer (see the Kilkerr decision above). I also note the small size of the respondent and the fact that there is nothing to suggest that the complainant could not find work in another language school. The circumstances in Bank of Ireland v Reilly [2015] IEHC 241 do not arise. Taking these factors together, I do not believe that reinstatement, nor re-engagement, are appropriate remedies.
22. In the light of this and as the complainant has been unfairly dismissed, it follows that she is entitled to an award of compensation. I am satisfied that the complainant sought to mitigate her losses since the end of her employment on the 23^rd October 2015. The next question is what impact should the issues raised by the respondent regarding her conduct and performance have on the amount of compensation awarded. Section 7 of the Unfair Dismissals Act, as amended, allows for an award for any financial loss incurred by the employee as is just and equitable, having regard to “the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.” In relation to the matters raised by the respondent, it is clear that an issue arose for the complainant in June 2015, but it is not at all clear that any issue arose to justify a second warning in October 2015. I also find that the allegations made by the respondent regarding the complainant refusing to answer the telephone are not proven; there is no corroborating evidence to support the evidence given by the former CEO. Given that this dismissal is based on the non-payment of the complainant’s wages; that the non-payment was not related to these conduct allegations and my findings regarding the conduct issues, I find that the complainant did not contribute to the dismissal.
23. Having considered the facts and submissions arising in this case, I determine that an award of 12 months’ salary shall be paid by the respondent to the complainant. Given that the complainant’s monthly salary was €2,400, the total amount awarded for the unfair dismissal is €28,800.
24. I award the equivalent of one week’s pay for the breach of the Terms of Employment (Information) Act. It was the respondent’s own evidence that the complainant had a Jobbridge contract and another one provided in June 2015, but none covering the interim period of employment. The award made under the Terms of Employment (Information) Act is €554.

Respondent’s Submission and Presentation:

Findings and reasoning:

Decision:

The respondent shall pay to the complainant the amount of €29,354 in compensation for the complainant’s unfair dismissal from the employment of the respondent and for the breach of the Terms of Employment (Information) Act.

Dated:  29 April 2016