ADJUDICATION OFFICER RECOMMENDATION

Adjudication Recommendation Reference: ADJ-00003509

Dispute:

Date of Adjudication Hearing: 09/01/2017

Workplace Relations Commission Adjudication Officer: Aideen Collard

Location of Hearing: Lansdowne House, Ballsbridge, Dublin 4

Procedure:

In accordance with Section 13 of the Industrial Relations Act 1969, following referral to me by the Director General, I inquired into the aforesaid dispute received by the Workplace Relations Commission (hereinafter ‘WRC’) on 10^th June 2016, and gave the Parties an opportunity to be heard and to present any relevant evidence. I note that there was consent from the Respondent to the investigation of this dispute by an Adjudication Officer. This matter had to be adjourned on a number of prior dates for various reasons but proceeded to a full hearing on 9^th January 2017.  Both Parties were represented, the Complainant by IMPACT and the Respondent by IBEC. All oral evidence, written submissions, supporting documentation and case law presented by both Parties have been taken into consideration when coming to the recommendation as set out hereunder.

Background:

The Complainant seeks resolution of a dispute under Section 13 of the Industrial Relations Act 1969, pertaining to sanctions imposed by the Respondent including demotion following a disciplinary process, and essentially seeks reinstatement to her former position as an Assistant Store Manager.

Summary of Complainant’s Case:

The Complainant has been employed by the Respondent for the past twenty years and had worked her way up the ladder from Sales Assistant to Assistant Store Manager. Up until the disciplinary matter giving rise to this dispute, she had an unblemished work record, had never given the Respondent any reason to question her integrity, honesty and lawfulness and had won awards for the Best Team Manager in her area in 2014 and 2017. As an employee, the Complainant receives a staff discount on purchases made instore and online with the Respondent. Upon logging onto the Respondent’s website, it automatically identifies her as a member of staff entitled to a staff discount and calculates and applies the applicable staff discount. The Respondent’s staff are actively encouraged to register their details on its website and make purchases from the Respondent.

On two occasions whilst at home in December 2015, the Complainant logged on to the Respondent’s website to make purchases of goods on special offer which were intended as Christmas gifts. She selected the products, put them in her online basket and checked out. The system automatically calculated the amount due to be paid which she duly paid and requested delivery to her place of work. She confirmed that at the time she was very busy, both in work and at home preparing for Christmas with her young family and had not given the purchases made a second thought. On the evening of 23^rd December 2015, the Complainant was called into the Office by her then Store Manager, Ms A who asked her had she made purchases online, in response to which she replied that she had. Ms A then read from a company prepared script (which was only provided after this dispute was submitted), stating that she had received excessive staff discount on the purchases and could either bring the goods back or repay the difference. The Complainant was shocked and asked for written confirmation of the breakdown of the discount she had allegedly received in writing, and means by which the difference could be repaid or goods returned. Whilst Ms A provided her with a handwritten note stipulating the amount of discount received, she was not provided with any means by which the difference could be repaid or goods returned. The next the Complainant heard about the matter was when she was handed a letter dated 8^th January 2016 by Ms A inviting her to an Investigation Meeting on 12^th January 2016 for the following reason: “Allegation of transactions where greater than normal staff discount was obtained.” The Respondent commenced an investigation process with Ms B appointed as the Investigation Manager and the Complainant attended at investigation hearings on 12^th January 2016 and 3^rd February 2016. Arising from this process, she was informed in March 2016 that the matter was being brought to disciplinary. It was contended that the Investigation Report contained alarming inaccuracies and clarification of precisely what policy breaches were being alleged were not immediately forthcoming.

A disciplinary hearing was held on the 9^th March 2016 with Mr C appointed as the Disciplinary Manager. Throughout the process, the Complainant maintained that she had been shopping from home in her capacity as a customer, she did not realise that an excessive discount had been applied and simply believed that the purchases were great value. She denied any knowledge that there was a technical glitch in the system giving rise to larger discounts than normal and that she had done anything wrong. She further denied that as an Assistant Manager, she should have realised that the discount applied was erroneous given its excessiveness and in that capacity, should have brought it to management’s attention. Mr C issued his Disciplinary outcome at a meeting on 1st April 2016 finding the Complainant guilty of gross misconduct and imposed the following disciplinary sanctions: (1) demotion from the position of Assistant Manager to Customer Assistant with immediate effect, (2) corresponding reduction in salary from €43,486 to €25,058, (3) ineligibility for promotion for 24 months, (4) removal from the Company Bonus Scheme for that financial year, (5) removal from the Staff Discount Card / Scheme for five years and (6) transfer to a different store (no longer an issue).

The Union appealed this decision by way of letter dated 4^th April 2016 and upon the Respondent insisting that the Complainant appeal personally, grounds of appeal were submitted by way of letter dated 6^th April 2016. An appeal hearing took place on 27^th April 2016 with Mr D, Pharmacy Director, appointed as the Appeal Manager. Mr D issued his appeal outcome by way of letter dated 20^th May 2016 upholding the decision of the Disciplinary Manager, Mr C. He also upheld the sanctions save for reducing the amount of time from 24 months to 12 months, before the Complainant could apply for a promotion and in recognition of the significant reduction in her salary, staggered the reduction over a nine month timescale. Thereafter the Union referred this dispute to the WRC on 10^th June 2016, seeking removal of the sanctions imposed and reinstatement of the Complainant to her former terms & conditions and position as Assistant Store Manager. Her Union Representative had attended at all the meetings concerned and made exhaustive arguments and representations on her behalf. These included (1) the fact that the website automatically calculated the discount to be applied, (2) management had been aware of the technical glitch in the system causing excessive discounts but had not taken any action to correct the error or inform staff not to buy the affected products until an internal memo of 16^th December 2015, (3) the benefit of the doubt should be afforded to the Complainant given that she had never come to the adverse attention of the Respondent before, (4) although it was not accepted that any disciplinary action should be taken, the sanctions themselves were also disproportionate, onerous and open-ended whilst other (non-managerial) colleagues had only received a 12 month written warning, (5) documentation sought had not been furnished and (6) there had been excessive delays in completing the process.

The Complainant gave evidence reiterating her position throughout, that she had not knowingly set out to do any wrongdoing. She also confirmed the humiliation, upset and stress she had experienced as a result of being subjected to the investigation and disciplinary process along with the hardship caused by the reduction in salary on her family as the main earner. Notwithstanding same, she has continued to work loyally for the Respondent and has since taken up a new position as Healthcare Assistant (with a slightly higher salary than Customer Assistant but not considered a promotion) in another Store. She is also currently undertaking a specialist course provided by the Respondent which may allow for a promotion in the future but not at the same salary as Assistant Manager and not guaranteed. When questioned, it was clear that she greatly regretted making the purchases in question and would not have done so had she had any idea of what would ensue.

The Union Representative for the Complainant took issue with numerous aspects of the disciplinary process in question and outlined the following issues as giving rise to his main cause of concern:

(1) The Complainant should not have been subject to the disciplinary action in question, and the investigation and disciplinary process adopted was unfair. In particular, it was contended that Mr D had pre-determined the appeal before concluding same, by stating during the appeal hearing that that given the Complainant’s experience, he found it hard to believe that she was unaware of an error on the system when making the purchases in question and asking why he should believe her.

(2) The excessive time taken to investigate this matter and delays in bringing the disciplinary process to a conclusion caused undue upset and stress to the Complainant.

(3) Without prejudice, the sanctions imposed are disproportionate to the alleged misconduct. In this respect, reliance is placed on the recommendation of the Labour Court in Shaws Department Store -v- A Worker AD1582, which referred to a similar factual situation, also brought as a dispute under Section 13 of the Industrial Relations Act 1969. In that case, a member of management also with an unblemished record had received more punitive sanctions (including demotion resulting in a loss of earnings) than other members of staff found guilty of the same misconduct. The Labour Court found that her demotion was ‘disproportionate’ and reinstated her to her former position.

(4) Accordingly, the Complainant seeks removal of the sanctions imposed, reinstatement to her position as an Assistant Store Manager on the same terms & conditions and repayment of her loss of wages to date. At the time of hearing, her loss of wages accrued were circa €3,812.73.

Summary of Respondent’s Case:

The Representative for the Respondent confirmed that prior to the instant disciplinary process, the Complainant had an impeccable work record and she had held a number of positions of trust during the course of her employment including stepping up to Store Manager on two occasions. However, it was contended that the disciplinary process adopted was fair, findings were correct and sanctions imposed (also fully reconsidered and reduced on appeal) proportionate. I heard a full read through of the process adopted including the agreed minutes and findings at each stage with Ms A, Ms B, Mr C and Mr D all giving evidence as to their respective roles. The Complainant’s Union Representative was afforded the opportunity to question each witness as to the alleged fairness of the process. Nothing material arose, save that it was clear that the Complainant had not been provided with a clear mechanism by which she could either bring the goods back or repay the difference.

Specifically, the following points and arguments were made by the Representative on behalf of the Respondent in relation to the misconduct itself and ensuing investigation/disciplinary process:

(1) In relation to her two online purchases giving rise to the disciplinary action, the Complainant received discounts of 53% and 99% respectively versus her staff discount entitlement of 12.5%. Given that the goods when purchased together were already heavily discounted, in monetary terms, the loss to the Respondent was just circa €75. The main issue from its point of view was that as an Assistant Manager, the Complainant would have known that the standard staff discount is 12.5% and therefore that the discounts applied were excessive, and it was simply not credible that she was unaware of the excessive discount. She had further acknowledged that where ‘double discount’ i.e. 25% is applied, this incentive is communicated to staff in advance, and the applicable discount is therefore clear and unambiguous. She had acknowledged that as a member of management in a position of trust, she had a duty to report this excessive discount as required by company protocol. Instead she had maintained that she had been acting as a customer rather than as an employee at the time of purchase, a position which was inconsistent with availing of a staff discount.

(2) The Respondent contends that there was no issue with the fairness of the investigation and disciplinary process. Following a thorough process wherein the Complainant was represented throughout and was afforded the opportunity to state her case, Mr C had properly concluded that her actions amounted to gross misconduct having considered all the evidence and in the absence of any satisfactory reasoning for her actions, finding: “The act of purposely benefiting from the fault in the employer’s system rather than notifying the company of this error represents a fundamental breach of the trust and confidence necessary for us to allow you to continue as a leader in this business. It is an expectation of a person in a managerial position such as an Assistant Manager to act honestly and in the best interests of the company. Therefore the company has no option but to take disciplinary action.” Whilst the sanctions as outlined above were imposed on the Complainant, it was also pointed out that this finding could have justified the more severe sanction of dismissal.

(3) In relation to the appeal process, it was submitted that the Complainant was given the opportunity to state her grounds of appeal and position and once more, Mr D gave due consideration to same stating: “It is reasonable for the Disciplinary Manager to believe that you should have recognised that the discount being applied to your purchases was too high and rather than flagging this to your line manager, you subsequently continued to make a further purchase, benefitting from an unrealistic level of discount, that any employee and especially an Assistant Manager would be expected to notice. Once it had been brought to your attention, you did not immediately pay back the monies or return the stock.” Mr D did however consider carefully the level of hardship imposed by the sanctions and staggered the financial impact of the demotion. He also reduced the timeframe of the Complainant’s ineligibility for promotion from 24 to 12 months.

(4) At the hearing, it was confirmed on behalf of the Respondent that at the material time, there had been clusters of staff availing of the excessive staff discount which the Respondent accepted was due to a technical glitch on its system. One of these clusters related to the Complainant’s Store although there was no independent evidence to confirm that she had been aware of this glitch from other members of staff. All of the staff involved had been subject to disciplinary action and those at managerial level had received a more severe sanction than those at non-managerial level, as it was considered that there had been a greater breach of trust involved given their position of authority.

(5) In support of its position that I should not interfere with its findings, the Respondent relies on the Labour Court decision in Bord Gais Eireann -v- A Worker AD1377 which stated: “It is not the function of the Court to form a view on the merits of complaints giving rise to those investigations nor can it substitute its views for those of the investigators appointed in either case. Rather, the role of the Court is to establish if the procedures used by the Company conformed to the generally accepted standard of fairness and objectivity that would normally be used in cases such as these.”

Findings and Conclusions:

Firstly, I accept that Bord Gais Eireann -v- A Worker AD1377 as relied upon by the Respondent and outlined above sets out my remit in relation to disputes regarding internal investigations, and also extends to disciplinary processes brought under Section 13 of the Industrial Relations Act 1969. Therefore my role is not to substitute my views for those involved in investigating this matter but to establish if the procedures adopted by the Respondent conformed to the generally accepted standard of fairness and objectivity that would normally be used in such cases. For this reason, and given the gravity of the sanctions imposed in this case, I found it necessary to examine the process adopted in detail and to hear from all four of the Respondent’s witnesses involved in the process.

Having examined the process in question, save for a number of immaterial matters, I am satisfied that it conformed to the generally accepted standard of fairness and objectivity that would normally be used in such cases. In particular, I find Mr C’s findings as upheld by Mr D, that as an Assistant Manager, the Complainant should have recognised that the discount applied to her purchases was excessive and have flagged this to management rather than proceeding to benefit from the discount, was one that could be reasonably made based upon all of the evidence. I take the view that the fact that the excessive discount was caused by a technical glitch which the Respondent may have been aware of at the material time and had not warned staff of or resolved, and as such put staff at risk or temptation in their way does not alter such a finding. In a retail environment, opportunities for dishonesty will regularly be put in the way of staff, most particularly at managerial level.

Nor do I regard Mr D putting words to the effect to the Complainant, that given her experience he found it hard to believe that she was unaware of an error on the system when making the purchases in question, and asking why he should believe her, as being an unreasonable matter to put to her at the appeal hearing. I am also satisfied that her position of trust was a reasonable basis for imposing the more onerous sanction of demotion and note that all staff involved were disciplined likewise according to their positions. Although naturally upsetting for the Complainant, given the complexity of the investigation and disciplinary process which involved a number of employees, I do not consider the period of time taken to complete same overly excessive. The only minor shortcoming was the fact that the Complainant was told she could return or pay the difference for the goods in question and her failure to do so was alluded to in the appeal findings, when there was no evidence of a clear mechanism being provided to her for doing so. However, I am satisfied that this does not materially alter the main findings of Mr C and Mr D as set out above. Finally, and unlike the position in Shaws Department Store -v- A Worker AD1582, where there was no clear evidence that alternatives were considered, I am satisfied that on appeal, Mr D gave careful consideration to the sanctions imposed and effects on the Complainant in light of her prior good record before staggering the reduction in salary and reducing the period of ineligibility for promotion. Therefore, I do not propose recommending alteration or removal of the sanctions imposed as reduced on appeal.

However, a year has elapsed since the sanctions were imposed, during which time the Complainant has continued to work loyally for the Respondent notwithstanding same. Although the period upon which her ineligibility for promotion has also elapsed, there is no certainty as to when and if, she may reach Assistant Manager level again. In circumstances where she has proactively worked towards regaining the Respondent’s trust, I am of the view that it is unfair that she should continue to suffer from the consequences of her demotion indefinitely into the future. I therefore recommend that the Respondent reviews its position with a view to setting out a clear pathway by which the Complainant can reach Assistant Manager or equivalent level within a six month period.

Recommendation: (strictly pertaining only to the particular facts of this Dispute)

(1) I recommend that in consultation with the Complainant and/or her Union Representative, within 42 days of the date hereof, the Respondent reviews its position with a view to setting out a clear pathway whereby the Complainant can reach Assistant Manager or equivalent level within a six month period from the date hereof. This might entail identifying positions and training available to the Complainant and considering her in relation to same, subject to any agreed internal procedures or collective agreements regarding promotion and internal recruitment. For the avoidance of doubt, this does not necessarily require precisely the same terms & conditions as pertained to Assistant Manager so long as the salary is close to and/or within €5,000 of her previously held position.

(2) If the Complainant has not reached Assistant Manager or equivalent level within a six month period from the date hereof and maintains an exemplary record in the meantime, I recommend referral back to the WRC for further review of the sanctions imposed by any Adjudicating Officer.

(3) Save from absolutely essential records, I further recommend removal of any records pertaining to this investigation and disciplinary process from the Complainant’s personnel file forthwith.

Dated:   18^th April 2017