ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00000513
Complaint for Resolution:
|
Act | Complaint Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 |
CA-00000725-001 |
09/11/2015 |
Date of Adjudication Hearing: 19/02/2016
Workplace Relations Commission Adjudication Officer: Patsy Doyle
Procedure:
In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 7 of the Terms of Employment (Information) Act, 1994, 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 commenced work as the company Acting Financial controller on 25 August, 2010. He was recruited via a reputable Head hunting Agency and offered the position for a six week period. Following a recommendation of the Board of Directors and an interview with the company chairman, the complainant was offered and accepted a permanent position of Financial Controller for the respondent company. The agreement surrounding the appointment was of a verbal nature and covered
1 Salary
2 Reporting relationship
3 The Company would not contribute to a pension
4 The role was autonomous and without assistant accountants.
The respondent company was trading in an extremely challenging environment and the complainant applied his position in full to assisting in the eventual successful turnaround and recovery of the company.
He did not receive a contract of employment and worked over the years on the verbal agreement with the company chairman, good will and the usual business flexibilities. He took a great pride in his contribution to the company and the mutual benefits that derived from this. Apart from one casual enquiry by the respondent in 2013, there was no mention of a written contract of employment by either the complainant or the Management Team.
The respondent introduced the topic of a contract of employment early in 2015 and the complainant engaged in lengthy discussions on exploring the potential for agreement on this issue.
In June 2015, the complainant received a proposal from the company to sign a contract of employment which would incorporate their legal obligations under the Terms of Employment Act 1994 and 2001 (as amended). The complainant was dissatisfied with this proposal as he understood that there were a number of unacceptable clauses which deviated from the presiding agreement made at the commencement of his employment with the company chairman.
In addition , a number of custom and practice matters had also evolved in the intervening period in particular in relation to ,Time in lieu for additional days worked, organisation and notification of annual leave of annual leave . The complainant returned the proposed contract and job description without agreement. He formalised his disagreement with the proposals to alter his “undocumented contract of employment”. The complainant submitted his complaint to the WRC on 9 November 2015.
The complainant accepted, in response to evidence given by the respondent that he had engaged with an external Hr company investigation into the contract issue which resulted in a further proposal to him to sign a revised contract compiled by the external Hr Company on December 17 2015. He refused to sign this contract and asked the Adjudicator to order the respondent to make adjustments in the following:
- Commencement Date
- Chronology of changes in reportage
- Time in lieu for additional days work
- Provision for “ decrease in salary”
- Organisation and Notification of annual leave
- Retirement Age
- Restrictive covenant on external employment
- Pension contribution from the company
- Changes in the course of employment
- Changes to a job description,
The Complainant made some supplementary comments on the claim on 23 February 2015, attaching a completed draft document entitled “Written Statement of Terms of Employment “from WRC for my consideration. The complainant populated the aspects of the document as they related to him in a bid to move the matter forward. It is his express wish that a written contract would accurately reflect his current undocumented contract of employment and that the company would not be permitted to change his position, reduce his salary or change reporting relationships without agreement.
Respondent’s Submission and Presentation:
The respondent recruited the complainant to the position of Financial Controller with the assistance of their Auditing Agency during a time of significant challenge in trading. The initial six week appointment was to assist the then CEO in a rescue/ recovery procedure. The respondent company closed for a period of time thereafter which resulted in restructuring.
The respondent confirmed that the complainant had not been provided with a written contract at that time, nor had the complainant sought a contract. The matter lay dormant until late in 2014, when discussions took place between the parties focussed on agreeing a contract.
On 27 January, a proposed contract was issued to the complainant. This was not accepted. A series of meetings between the then CEO, company chairman and the complainant followed but did not result in agreement. The respondent submitted some extracts from these discussions which emphasised the impediments to agreeing the contract between January and June 2015:
- Reportage
- Retirement Age
- Fluidity in conditions of employment.
- Weight given to the undocumented contract and personal assurances given to the complainant
In July 2015, the company commissioned an external Hr Company to investigate among other matters “Issues rose by the complainant in relation to his contract of employment” The complainant engaged with the external investigator on 4 occasions. This culminated in a revised proposal centred on a new contract on 17 December 2015.
“I have redrafted a contract of employment, copy attached, I recommend that this should now be adopted by the Board and placed on the Complainants employment law file “
This was rejected by the complainant who, by December 17th, had already referred his case to the WRC.
The respondent was clear that the provisions of each contract issued i.e. January, June, December 2015, satisfied the requirements under the Act. The respondent had complied with their obligations to deliver a statement of terms and conditions within the meaning of the Act and the complainant had failed to establish a contravention of SS. 3,4,5,6 of the Act.
The Respondent asked the Adjudicator to consider that the Act was not designed to deal with the matters at the core of the complainant’s case i.e., a contract does not have the potential to address “every historical change or possible future event between the parties “
The respondent has a grievance procedure to address the issues and events currently anticipate by the complainant .The Respondent contended that an Adjudicator does not hold the jurisdiction to supplant the contract, which had been the end product of an extensive consultation, engagement and finally an investigative process in the workplace. The Respondent submitted the recent labour court finding TED161 in support of the closing argument that he complainant had not suffered nor could suffer a detriment from any of the omissions that he complained of.
Decision:
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.
SS 3, 5, 6 of the Terms of Employment Act, 1994 requires that I make a decision in relation to the claim consisting of a grant of redress in accordance with section 7 of the 1994 Act. .
Legislation involved and requirements of legislation:
Section 7 of the Act provides that :
1) An employee may present a complaint to a rights commissioner that his employer has contravened Section 3,4,5 or 6 in relation to him and if he does so, the commissioner shall give the parties an opportunity to be heard by the commissioner and to present to the commissioner any evidence relevant to the complaint
(2) A recommendation of a rights commissioner under subsection (1) shall do one or more of the following: |
(a) declare that the complaint was or, as the case may be, was not well founded, |
(b) (i) confirm all or any of the particulars contained or referred to in any statement furnished by the employer under section 3 , 4 , 5 or 6 , or (ii) alter or add to any such statement for the purpose of correcting any inaccuracy or omission in the statement and the statement and the statement as so altered or added to be deemed to have been given to the employee by the employer . (c) Require the employer or cause to be given to the employee concerned a written statement containing such particulars as may be specified by the commissioner. ( d ) order the employer to pay to the employee compensation of such amount as is just and equitable having regard to all the circumstances , but not exceeding 4 weeks remuneration in respect of the employees employment calculated in accordance with regulations under section 17 of the Unfair Dismissals Act 1977.
And the references to the foregoing paragraph to an employer shall be construed, in a case where ownership of the business of the employer changes after a contravention to which the complaint relates, as references to the person who, by virtue of the change, becomes entitled to such ownership.
ISSUES FOR DECISION: I have given careful consideration to the written and oral presentations of both parties. I am struck by the current impasse surrounding the apparent extensive delay surrounding the provision of the obligatory written statement on the particulars of the terms of the complainant’s employment. What should have been a simple straightforward matter in a company which employs c 26 employees in Autumn/Winter 2010 , has now developed into an issue which has the potential to cause a deep fault line in the inter personal relations within the senior management team of the respondent company , if left unresolved . This is in nobody’s interests given the exemplary record and the mutual achievements in the financial performance of the respondent company over the past 5.5 years. Both parties were clear at the hearing that they shared a common goal of building on this success. There have been a number of high profile salutary statements which have emerged in case law in relation to contracts and respective party’s interpretations of the parameters of these contracts over the past number of years. Hernandez v Vodafone Ireland ltd [2013] IEHC 70 (restrictive covenants), Fuchs and another v Land Hessen C 1 -160-10 (mandatory retirement age) Conway v HSE 2016 IEHC (injunction on investigation procedure) The common denominator in these cases was the broad divergence in the opinions of the respective parties on the actual meaning of the contract of employment. I believe that both parties need to reflect on the impact of these cases, with a view to returning to the table to settle on a clear understanding in both writing and by operation of the complainant’s role in the company based on a model of business efficacy .
This claim refers to the Terms of Employment Act, 1994 (as amended) which provides for the obligation of the employer to provide a signed document to an employee containing 13 components. This is a separate and distinct process to the provisions of a contract of employment or indeed a job description. Therefore, I am limited by the provisions of Section 7 of the Act in my decision; however, I will seek to address the submissions made by the parties at the hearing.
The basic rule for the construction of a contract is that stated by Lafon J in UPM Kymmene Corporation v BWG Limited (unreported, High Court, 11 June 1999) [1999] IEHC 178 thus: The basic rules of construction which the Court must apply in interpreting the documents which contain the parties' agreements are not in dispute. The Court's task is to ascertain the intention of the parties, and the intention must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract. Moreover, in attempting to ascertain the presumed intention of the parties, the Court should adopt an objective, rather than subjective approach and should consider what would have been the intention of the reasonable persons in the position of the parties. (My emphasis).
In August 2015, the respondent’s obligations to the complainant under the Act were clearly overlooked. It is common case that the critical trading difficulties were the dominant objective and contractual issues were settled between the respondent and the complainant in the form of a “ gentleman’s agreement “ which was added to over the following five years within an informal culture . The respondent now wishes to formalise this informality by incorporation of its obligations under the Act into a contract of employment on a mutually acceptable basis .
Decision: 1.1 In accordance with Section 7(2)(a) of the Act , I find that the complaint is well founded and I now need to examine the potential provided for in S.7(2)(b)(c)(d) to recommend a resolution to the impasse between the parties . The complainant submitted a document at the hearing which outlined a list of his proposed changes in the Terms of Employment particulars contained in the proposed Contract of 17 December 2015. I propose to address the 13 components alone permitted to me by Section 3 of the Act. Section 3 (1) (a) Has been satisfactorily addressed by the proposed contract. (b) This has been satisfactorily addressed in 3.3.1 ( c) This has been satisfactorily addressed in 3.3.1 (d) This has been satisfactorily addressed in section 2.2.1 (e) This needs to be adjusted to reflect 25 August 2010. (f) N/A The complainant is permanently appointed to his position. (g)(h) This has been satisfactorily addressed in 5. 5.1 And 5.5.3 and 22. (i) I suggest that clause 4.3 be adjusted to reflect the legacy practice of
(j) I recommend that 6.1 be revised to take account of the legacy issue on annual leave. I recommend that the sentence “Except in special circumstances……..be replaced by the following clause. “In the event that the request for leave exceeds 10 working days, early notification and approval is required by the CEO within the first quarter of the leave year “Section 9 covers Force Majeure Leave. (k) (1) This is satisfactorily addressed in Section 8 and the company handbook. (ii) This is satisfactorily addressed in section 12.1 as it incorporates the legacy arrangement. ( l) This is satisfactorily addressed in 21.1 ,21.2 (m) There were no collective agreements referenced by either party. The complainant accepted the supplementary document of the Company Handbook.
Section 5 of the Act 2.1 It is of particular note that the provisions of section 5 of the Act are inserted on a more preferential footing in Section 27 of the proposed contract on “Changes to your Terms of Employment” and should remain. I recommend that the complainant considers the following clause in 5 (2) in terms of the potential to cover his concerns regarding unilateral changes . “ Subsection (1) does not apply in relation to a change occurring in provisions of statutes or instruments made under statute or of any other laws or of any administrative provisions or collective agreements referred to in the statement given under Section 3 and 4 “ Taken in tandem with section 25.1 of the proposed contract , the presiding legislation in the Payment of Wages Act 1991, The Information and Consultation Act 2006, and the Safety Health and Welfare at Work Act, 2005 and the forthcoming Bill on Employment Equality ( Abolition of mandatory Retirement Age) Bill 2014 serves to address the complainants concerns on the anticipatory need for enhanced protection in the face of any proposed change. This is well flagged with the respondent and both parties are familiar with the protections provide in the grievance procedures referred to in section 15 of the proposed contract. There is a clause provided for in the proposed contract on Arbitration to address any “controversy or claim arising out of in connection with this agreement “. I respectfully suggest that this enhances the disputes resolution framework for the complainant. Therefore, in conclusion I recommend that the respondent implement the recommendations contained herein in to fulfil its obligations under the Act and provide these revisions to the complainant within 10 days of acceptance of this decision. That will conclude the respondent’s responsibilities under the Act. Having regard for all the circumstances of the case, I am not making an award for compensation.
Patsy Doyle Adjudicator
DATED : 20 May 2016 |