EMPLOYMENT APPEALS TRIBUNAL
CASE NO.
UD956/2014
APPEAL OF:
Marjana Maksimova
-appellant
against the recommendation of the Rights Commissioner in the case of:
Hamilton Park Care Centre Limited
-respondent
under
UNFAIR DISMISSALS ACTS 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms O. Madden B.L.
Members: Mr J. Goulding
Mr J. Flannery
heard this appeal at Dublin on 11th September 2015, 7th December 2015 and 4th February 2016
Representation:
Appellant: Mr Grahame Pickett, 32 Green Lawns, Skerries, Co Dublin
Respondent: Mr. Manus McClafferty, Maguire McClafferty, Solicitors, 8 Ontario Terrace, Portobello Bridge, Dublin 6
Respondent’s Case
The respondent owns and runs a nursing home and the claimant was employed there as the HR Manager. The claimant commenced employment with the respondent as a Chef on 18th August 2007 and subsequently moved to the role of Receptionist and then HR Manager.
A director and founder of the company (DP) took over as CEO in controversial circumstances in May 2013. DP told the Tribunal that the company had been defrauded of approximately €600,000.00 over a 4 year period. He also said that management was being over paid while other staff were being under paid. On the advice of a consultant, DB decided that the HR function did not justify a full time HR Manager and that this function could easily be assumed into the duties of the Director of Nursing. Therefore DP asked the claimant to take over the role of Catering Manager on a reduced salary and when the claimant refused this he offered to keep her on the same salary of (€41,000 pa). However the claimant refused to accept this role and DP felt that he was left with no alternative but to make the claimant redundant. A letter informing the claimant that her position was being made redundant with immediate affect issued to her on 10th July 2013. The claimant was paid one month’s notice.
During the time the claimant was HR Manager a HR consultant was also contracted to the respondent and this contract was not renewed once it had expired at the end of 2013. After that another person was engaged on a contract basis for 6 months, then someone else took over on a contract consultant basis and now the Director of Nursing (DL) performs the HR function as a relatively small part of her overall duties.
The claimant was dismissed by way of redundancy and paid a lump sum of €7,440.00.
The Partnership is made up of a group of 13 people (including DP) that borrowed the money to build the respondent property. DP leases the property from the partnership and operates it as HPCF. The business has been operating since September 2007.
DP hired PJM as the CEO of the respondent to manage the business. DP had weekly management meetings with PJM; he subsequently discovered that PJM had been providing falsified accounts to DP. DP took over the management of the business in April 2013. When DP took over the management of the business he discovered a highly dysfunctional management team. It transpired that PJM had designed the management structure in a way that there would be no communication between the various levels and departments. PJM had instructed the management not to go to DP with any problems but to only go to him. The management were all being paid 2-3 times more than the industry norm at the expense of clinical staff. DP became aware (from the Bank) that the business was not financially healthy; it was very overstaffed and was not operating within normal parameters. Good industry practice is to have 1 staff member per resident; in the respondent there were 115 residents and 170 staff.
DP and his accountant would speak to PJM and he would ‘juggle’ things but nothing would actually change. The accounts department and the wages department did not communicate at all; staff costs were very high. The accountant wrote to PJM and quantified the level of over staffing and other issues. The management team were not productive and the staff were running on ‘auto-pilot’ and there was a large turn-over of staff. The management team were so highly paid that there was only enough money left over to pay everyone else a basic wage.
In April 2013 DP had a crisis meeting with the accountant as the Bank had issued new term sheets not to mention the severe ongoing governance problems within the respondent. DP also met with the Director of Nursing and assistant Director of Nursing. They outlined their concerns and highlighted the changes that needed to be made but had been blocked by PJM. The management structure in place was in breach of HIQA guidelines; the ‘Person in Charge’ should be the head of and responsible for everything. Major changes had to be made within the respondent staffing and expenditure areas. There were a number of staff made redundant over the course of 2013, a full list was provided to the Tribunal.
In April 2013 a financial expert in the nursing industry was brought in to evaluate the respondent. Her advice was that a dedicated HR Manager was not necessary in a business of this size; it was normal industry practice for the ‘Person in Charge’ to look after the HR function. She also made a large number of other recommendations.
In May 2013 DP asked the claimant in her capacity as HR Manager to evaluate the Kitchen operations as she had qualifications in the kitchen area. The kitchen was overstaffed but produced poor quality food. The claimant did not act on this request and made no changes.
DP decided that the HR Manager position should be made redundant for the following reasons;
i. It is normal industry practice that the Director of Nursing in her capacity as ‘Person in Charge’ should be responsible for the HR function. This view is upheld in the HIQA guidelines.
ii. The Financial expert specialising in the nursing industry said there was no need for a dedicated HR Manager.
iii. There were huge problems in the Kitchen and given that the claimant’s qualifications are in the catering area she could, as an alternative position, become the head of the Kitchen.
There were a number of concerns voiced by the staff about the claimant’s close relationship to the CEO but this was not considered as part of DP’s decision to make the position of HR Manager redundant. A HIQA report on the respondent from April 2013 was submitted to the Tribunal. Fifteen files were kept in good order and marked so that when HIQA requested a random sample the claimant or the CEO were able to produce good files for inspection. In a second report in November 2013 HIQA selected their own files for inspection and the results were very different. Basic components of the personnel files such as Garda Vetting and Contracts of Employment were absent.
The respondent held meetings with the claimant on the 13th of May, 11th of June, 18th of June, 25th of June and the 10th of July 2013 to discuss her position being made redundant and the alternative position being offered. DP did not consider them to be formal meetings and therefore did not keep minutes. There was no notice of the meetings and the claimant was not offered representation. No appeal was offered to the claimant but she was aware that there was an appeal process available to her.
DP asked the claimant to put forward her own alternatives at every meeting and asked had she considered the alternative position offered. Every alternative DP could think of was offered and refused by the claimant. DP accepts the alternative position would require the claimant to move to a different office and that he tried to change her salary but then changed this position. DP did tell the claimant that he understood “secret letters” had been issued by PJM to some of the management making promises such as cash payments outside of their salary. DP asked the claimant to provide him with any of these letters if she had one and for her contract of employment. DP said he would have to consider any “secret letter” agreements before he would or could honour them. By July 2013 the claimant had taken all her leave; DP was not aware of any verbal agreement the claimant had with PJM for 5 days extra leave for extra duties undertaken.
DP does not recall if he told the claimant that she would be made redundant if she did not accept the alternative position but he was very clear at all times that the position of HR Manager was being made redundant. DP urged the claimant to accept the alternative position telling the claimant that “we really need you.” The claimant refused at every meeting including the last meeting, she did not protest or refuse to accept the redundancy cheque at the final meeting. DL (the Director of Nursing) was not present at this meeting.
The accountant DB gave detailed financial evidence to the Tribunal.
The HIQA designated Director of Nursing (DL) gave evidence. She started with the respondent in January 2015, this being her sixth position as the ‘Person in Charge.’ She explained what her role is and the “mess” she walked into with the respondent. As part of her interview for the position she also had to be interviewed by HIQA; she was informed during the HIQA interview that the respondent ‘had hit rock bottom’. Her role clearly encompasses the HR function.
Claimant’s Case
The claimant is trained as a Pastry Chef/Food Technologist. In November 1999 she started working in the restaurant next door to a nursing home. In 2000 she moved to work in the nursing home which was operated by PJM as a kitchen assistant. The claimant completed a medical receptionist course and was interviewed by PJM for the respondent in 2007. The claimant commenced work on the 17th of September 2007 as a receptionist/medical administrator on a salary of €31,000. The claimant’s role changed and she became the HR Manager from the 1st of May 2008, her salary increased to €40,000 per year.
The claimant’s role as HR Manager included recruitment, interviews, contracts, Induction and training. She reported directly to the CEO PJM and worked closely with the Director of Nursing. As part of her HR role the claimant and PJM went to India to recruit 12 nurses.
The first meeting the claimant had with DP was regarding changes that needed to be made in the Kitchen and the respondent’s financial difficulties. The claimant then changed the kitchen rosters reducing the staff costs.
DP never informed the claimant the head of Kitchen role was an alternative to redundancy; the claimant believed that the kitchen role was in addition to her HR Manager position. DP wanted the claimant to move office which would mean moving further from the Director of Nursing’s Office which “would be awkward”. DP initially wanted to reduce the claimant’s salary also. The claimant felt threatened. The claimant is qualified in Health & Safety and Kitchen Quality Control. The claimant believed that the alternative role was too concentrate on the Kitchen duties, but still fulfil her HR function. The claimant was never informed that the HR role was being given to the Director of Nursing.
The claimant wrote to the respondent on the 3rd of July 2013 outlining her concerns and confusion. The claimant was on sick leave at this time. On her return she was called to the office on the 10th of July 2013. DP told the claimant that ‘this is not working out for us, you are redundant.’ The claimant read the redundancy letter and said to DL “this is not correct” to which DL replied that it was. The alternative was not offered to the claimant again.
The claimant was not aware that her job was at risk, she had no opportunity to respond, no representative was offered, she was not given notice of the meetings and was not offered the right of appeal. The claimant was aware of the staff handbook and took part in writing the staff handbook.
The claimant gave evidence of her Loss and attempts to mitigate her Loss.
The claimant was not aware of the respondent’s financial situation; she does not know why it was explained to everyone else but not her. The claimant was insulted and did not have a clear idea of what was happening at the meetings. The claimant accepts that “of course” the respondent wanted to keep her as she was a good worker.
Determination
Having carefully considered all of the evidence adduced throughout the hearing, the Tribunal are of the view that the claimant was fairly selected for redundancy but the procedures used by the respondent in affecting that redundancy were flawed.
The claimant had unrealistic expectations given the shift in the organisation necessitated by the Bank, HIQA and the financial circumstances of the respondent. The claimant was offered numerous versions of an alternative position but she did not accept any of these.
Given the circumstances the Tribunal varies the Rights Commissioner Decision ref: r-139146-ud-13/EOS and awards the claimant €12,500.00, minus the redundancy lump sum received of €7440.00, which equates to compensation under the Unfair Dismissals Acts 1977 to 2007 of €5,060.00.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)