ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00001680

Complaint for Resolution:

Date of Adjudication Hearing: 04/05/2016

Workplace Relations Commission Adjudication Officer: Pat Brady

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and/or Section 8(1B) of the Unfair Dismissals Act, 1977, following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

Complainant’s Submission and Presentation:

The complainant is a ‘Personal Trainer’ who had been employed by the respondent for nine years. She had an impeccable record including a glowing letter of commendation from the company in 2013.

The company uses a ‘voucher’ system which requires the client to purchase a number of vouchers entitling them to one session. Following this the trainer would submit the voucher and get paid for the session.

The complainant had developed a practise of permitting a customer to avail of only part of the session covered by the voucher with the option to complete it on another occasion.

So, even though the voucher was not fully utilised following the first ‘part’ session the complainant would apply for payment for the full value of the voucher.

When the customer came to redeem the balance due on the voucher, the complainant would fulfil her obligation to do so but would not make any further claim for payment.

She had been doing this for about six years and believed it was a standard practice in the facility, or at least known and tolerated.

On one occasion when she was delivering a deferred session a visitor; the sister of a regular customer, sustained an injury to her jaw following a fall. The accident appeared minor to the complainant at the time and no accident report form was filled in.

However, the following day it emerged that the injured customer had felt the need to have an x-Ray and on hearing this the complainant went to the respondent and reported what had happened.

The complainant says that there was no dishonesty involved in her use of the ‘part’ session system in that she did not gain any personal benefit from the arrangement. Indeed she felt that the flexible arrangement, which suited many of the respondent’s customers, was good public and customer relations for her employer.

When the matter of the injury came to light following the complainant’s bringing it to the attention of her employer a disciplinary process ensued. In the course of this, the complainant made a full and frank declaration of all that she had been doing, stressing that her primary motivation was to oblige the clients and that this was to the benefit of the respondent.

In due course the decision was taken to dismiss her for ‘gross misconduct’.

She felt that the questions for the disciplinary process were prepared in advance, that the decision was disproportionate, and that no regard was had to her previous good record, especially the commendation she had received in 2013.

Respondent’s Submission and Presentation:

The respondent says that the practice of deferring the full voucher session was explicitly prohibited by the company in a revised policy in 2013. The complainant was fully aware of this and the policy document was opened in evidence.

It describes the practise as dishonest and one which was not amenable to normal management controls and oversight. The respondent could have no idea what the level of outstanding sessions might be as no record was maintained of unused sessions.

It is also effectively prohibited by the terms of the company ‘Personal Training Procedure Document’ wherein it states that ‘Trainers can only claim for sessions they have provided’.

This document and its contents were known to, and signed by the complainant on January 18^th 2012. The Procedure Document also provides for management to instigate disciplinary action in the event that claims being submitted are not accurate or where ‘improper’ payments are being claimed

The respondent also says that the complainant did benefit from the way she operated the voucher system by making herself eligible for an incentive type bonus payment based on the volume of vouchers submitted.

The respondent says that the actions of the complainant raised an issue of trust and confidence. The issue was not just the accident that befell the visitor but the breach of trust.

The respondent says that the disciplinary process was fair in all respects.

An initial investigation meeting took place on November 27^th 2015 at which the complainant freely admitted to the facts of what happened and a second investigation meeting took place on December 1^st. The complainant was suspended and given the reasons for her suspension and a disciplinary hearing was arranged for December 10^th.

The complainant was given notice of the meeting in writing and advised of the detailed allegations, the possible sanction of termination of her employment and her right to be accompanied at the hearing. A copy f the company Conduct and Disciplinary Policy was enclosed with the notice of the meeting.

The hearing took place and the complainant was provided with notes of the meeting that same day. In due course she was sent a letter on December 14^th outlining the outcome of the disciplinary hearing which was that her employment was being terminated for ‘the deliberate falsification of records over the course of three months in 2015, involving a ‘false declaration of hours and a false claim in advance for payment for hours not yet worked’.

The complainant’s action was seen as ‘a fundamental breach of your contractual terms which irrevocably destroys the trust and confidence necessary to continue the employment relationship’.

The notice of termination was to have immediate effect and there was to be no notice period or payment.

Further the complainant was barred from any future membership of the facility or its associated or linked member and banned from entering nay such club as a guest or ‘for any other reason’.

The complainant did not appeal the decision despite having been notified of the appeal process.

The respondent concluded that the process was fair; there had been a fair and thorough investigation and disciplinary process, the complainant was at all times provided with the opportunity to defend herself and the decision was a fair one which was not taken lightly by the company.

Conclusions and Findings

I have reviewed all the relevant written and oral evidence that was laid before me prior to, and in the course of the hearing.

There are three ‘pillars’ which are helpful in assessing whether a decision to terminate an employee’s contract of employment is a fair one.

The first is whether the respondent had good grounds to initiate the process; i.e. whether a prima facie case existed.

The second is whether the process itself was fair by reference to well established criteria of fair procedure. These are both technical and legal.

Finally, there is the question of the sanction; variously described as having to be proportionate or, less helpfully due to its imprecision and subjectivity, ‘appropriate’.

In this case the first issue is easily enough addressed.

The complainant freely admitted to the facts of the matter at all stages of the investigation and disciplinary process. She had engaged in the practise of deferred sessions. Contrary to her assertion the company investigation concluded that it was not a common practise in the facility. Also it was clearly proscribed by the policy document of 2013 which was exhibited in evidence and of which the complainant ought to have been aware.

In relation to the procedure two issues arise.

In respect of the first, and what might be described as the technical operation of the process it was satisfactory up to a point. There was an investigation and she was properly advised of the disciplinary hearing and her various rights.

The second issue has two parts and concerns important issues in relation to the framing of the breach of discipline as ‘gross misconduct’ and then issues arising around the principle of mutual trust and confidence which are discussed below.

Her case at the hearing was that what happened did not represent a ‘fundamental breach’ of her contract, that the respondent failed to take into account in mitigation her excellent record (citing her high commendation in 2013), her cooperation with the process and the fact that there was no dishonesty or fraud involved. Further, she said that the respondent was the primary beneficiary of the flexibility shown to clients in terms of their ongoing good will.

In her evidence she said she was not aware of any benefit that would accrue to her by making the advance claim and seemed confused about the operation of the company incentive based fee payment, certainly to the point where it did not appear that her actions were calculated to give her a personal benefit, although the difference in the levels of payment was significant.

The respondent stated that she did in fact benefit in a higher hourly rate of pay and improved annual leave entitlement.

This raises the matter of the language used by the company in processing the matter. The respondent relied heavily on the offence being ‘gross’ misconduct and also on the actions being a breach of the mutual duty of trust and confidence.

The respondent does not appear to have a category of behaviour between ‘misconduct’ and ‘gross’ misconduct in its disciplinary procedures.

I turn to this first.

There is a clear difference between ‘gross’ misconduct and serious misconduct. The latter can be at a level sufficient to ground the termination of employment (and I hazard a guess that most fair terminations arise from a simple charge of serious misconduct). This difference is obvious from the plain meaning of the two words in every day usage and it applies equally to the workplace.

Some of the items listed on the company’s Procedure as falling into the category of gross misconduct could well fall within that category e.g. ‘fighting, assault on another person’, ‘being under the influence of alcohol or drugs’.

Some others transparently may not; acceptance of gifts from the company’s customers, refusal to agree to be searched, ‘any’ act of discrimination’ etc. Would acceptance of a bottle of wine from a customer at Christmas, to take an extreme example, represent ‘gross misconduct’?

Deliberate falsification of records is listed as gross misconduct. Clearly the current case can be made to fit that criterion but the question is whether, on its particular facts it represents some objective standard of ‘gross’ misconduct. Is every ‘falsification’ of a record to be ‘gross misconduct’?

A finding of ‘gross’ misconduct has consequences, most normally in allowing for summary dismissal without notice, and most particularly in that a finding against an employee on such a charge will almost inevitably lead to a dismissal. Also, of course there are implications for the reputation of an employee dismissed for gross misconduct which are serious.

For that reason it cannot be a matter for the employer alone to determine whether actions of an employee constitute gross misconduct. It is both a question of fact and of law. In this case it is a matter of some concern that the respondent is forced by its own procedures to characterise anything above a minor infraction as gross misconduct as there is no intermediate category of misconduct.

Related to this is the conclusion reached by the respondent that the conduct of the respondent;

‘has resulted in a fundamental breach of your contractual terms which irrevocably destroys the trust and confidence necessary to continue the employment relationship, to which summary dismissal is the appropriate sanction’.

Letter of December 14^th 2015 communicating decision of Disciplinary process.

The question that arises here is whether it is the actual behaviour of the employee which gives rise to this conclusion or its designation as an act of gross misconduct. The latter, when proved could understandably do so, the former may or may not.

As noted above it also resulted in a ban on membership of, or entering any of the company’s associated enterprises as a guest or for any other reason as a result of the ‘breakdown in mutual trust’

(ibid).

The question that arises is whether any matter which might be characterised as creating a tendency for an employer to have less trust in an employee falls into this category.

It does not. It has been defined as follows.

‘Essentially a term of mutual trust and confidence’ is one that, if breached, renders further performance of the contract impossible’.

Employment Law in Ireland Cox, Corbett and Ryan

While much of the case law on mutual trust and confidence concerns breaches of the principle by an employer in constructive dismissal cases a flavour of the burden of proof can be gleaned from the Supreme Court in Berber v Dunnes Stores Ltd [2009] IESC 10 [ELR 61]

There Finnegan J. defined the test (again noting that it was the employer’s behaviour which was in question) as follows;

The test is objective

It requires that the conduct of both employer and employee be considered

The conduct of the parties as a whole and the accumulative effect must be considered

The conduct of the employer complained of must be unreasonable and its effect on the employee must be judges objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it’

Per Finnegan J.

The principle is one of a repudiatory breach of the contract of employment. The facts in Berber are somewhat different to the current case but it is clear that simply resorting to a high moral tone about trust and confidence will not suffice. The respondent’s own procedures define the standard of seriousness to ground gross misconduct as being one which ‘breaks the trust’; it is not sufficient that it merely undermines or damages that trust.

In that regard the standard, properly applied would be within the Berber criteria.

In the current case there was a clear, and undoubtedly serious breach of the company regulations. It was far from clear from the evidence that the complainant set out to benefit from the practice, or that it was dishonest, although this is how the respondent saw it.

Was it such that the employer ‘could not be expected to put up with it’? Undoubtedly, but bear in mind Finnegan J. asks that question in the context of whether an employee was justified in terminating his contract on the basis of his employer’s conduct. The corollary is whether the conduct complained of gave rise to an ongoing question about the complainant’s honesty and trustworthiness, such as could only be resolved by terminating her employment.

Was the trust ‘broken’ as required by the company’s own procedures, or simply damaged or undermined in such a way as could easily be rectified with appropriate actions short of a termination?

The company described the actions as representing ‘irrevocable’ destruction of the trust and confidence in the employment contract.

One might surmise whether, if the allegations against the complainant had been formulated in a more technical and restrained way e.g. as serious misconduct arising from a breach of a company regulation of which she was properly on notice the decision to dismiss her might have been within the range of reasonable responses to her actions and a fair one.

An adjudicator should be slow to interfere with a reasonable and reasoned decision by an employer in respect of a matter where the charge has been properly framed and objectively justified, and a fair process carried out.

However this is not what happened. The complainant was charged with gross misconduct, and in a very significant way her position was prejudiced from then on. On the basis of such a formulation of the charge, a finding against her on the facts (which she had already admitted) greatly enhanced her prospects of being dismissed. The company procedures say;

If a case is gross misconduct then a likely outcome may be to dismiss you with immediate effect without notice or pay in lieu of notice.

Emphasis added

Distinguish this from the normal formulation given to employees before a disciplinary hearing that the range of sanctions ‘may include’ termination of the employment. There is a significant difference between an objective indication of what may be considered and its elevation to the status of ‘a likely outcome’, not least for the decision maker.

Add to this the language around mutual trust and confidence and it begins to look as if the employer’s case was being shoehorned into a frame which could only result in one outcome. It would be so easy (in general) for an employer to dismiss any employee on the basis of such overstated, subjective charges and easy resort to the convenient language of trust and confidence such as to diminish the essential rules of fair procedure required.

In fact, they must be objectively justified as reasonable having regard to the facts of the case.

I find that her actions did not represent gross misconduct by any commonly accept criteria and the absence of any lesser charge in the company’s procedures is an unusual and serious deficit which carries risk for any proceedings it initiates in the future. Some of its actions in this case lacked objectivity and insight.

The facts of the case are such that the complainant’s actions did not go to the heart of her employment contract or her future trustworthiness as an employee such as to repudiate her contract of employment. There was no dishonesty in the commonly accepted meaning of that word.

It is hard to see how a serious disciplinary sanction accompanied by a very sharp warning as to her future behaviour in this regard would not have terminated the offending practise and allowed the employment relationship to continue. To choose to describe this as representing ‘irrevocable’ destruction of trust and confidence betrays a lack of balance and common sense.

However, I rest my decision on the erroneous, and damaging flaw of framing the disciplinary offence as ‘gross misconduct’, associated as it was with the prejudicial ‘likelihood’ of dismissal, both of which breached the complainant’s rights to an open and fair assessment of the facts of her case on their objective merits, and any mitigating submission she wished to make.

A decision on the appropriate sanction could then have been made by the decision maker free of the nudge towards dismissal contained in the company procedures.

Dismissal may have fallen within the range of reasonable option; but whether or not it did should only arise following a fully fair process and hearing.

Accordingly, for these reasons I find that the dismissal was unfair. In reaching my decision on compensation I take into account the contribution of her actions to the incident.

Evidence was adduced at the hearing that the complainant had in fact been given a statement of her Terms of Employment and I dismiss the claim under the Terms of Employment) Information) Act.

Decision:

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 8(1B) of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

I uphold the complaint of Unfair Dismissal and I award her compensation in the amount of €7,500. This is compensation for breach of her rights under the Act and is not subject to tax.

I dismiss the complaint under the Terms of Employment (Information) Act

Dated:   6^th July 2016