ADJ-00005426

ADJUDICATION OFFICER DECISION 

Adjudication Decision Reference: ADJ-00005426

Complaint for Resolution:

Venue: Lansdowne House, Dublin 4.

Dates of Adjudication Hearings: 23/02/2017 & 27/02/2017.

Workplace Relations Commission Adjudication Officer: Eugene Hanly

Procedure:

In accordance with 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.

Attendance at Hearing:

Background

The Complainant was employed as a Business Development Manager from 17^th September 2013 to 9^th August 2016. He was paid €34,000 + commission (total earnings in 2015 €76,000). He has claimed that he was constructively dismissed and has sought compensation.

Complainant’s Submission and Presentation:

His representative stated that after almost three years of working for the Respondent (“the company”), the Claimant was forced to resign on the 9^th August 2016. In light of the conduct of the company, and in particular the manner in which he was treated by senior management in the company, his position became untenable and he was left with no alternative but to resign.

It is his position that the unreasonable behaviour of the company, in particular its CEO, which included bullying, shouting and offensive language - justified his actions in resigning. It is submitted that this is particularly so having regard not only to the bullying perpetrated by the CEO on him but the manner in which his own complaints in respect of this bullying, were dealt with by the company.

The company provides online education and training courses. He started in the company on the 17^th September 2013 as a sales executive and his job title at his date of dismissal was Head of Global Strategic Partnerships. The job was heavily results-orientated with sales targets set by the company each month. There was a basic pay and commission linked to targets. He therefore made large commissions when he met or exceeded his targets and made little or no commission when he failed to meet his targets. Given the significant variation in remuneration between months when targets were met as opposed to months when targets were not met, the question of achieving the set targets was a matter of some significance to employees affecting as it did, in a very substantial way, their take-home pay. Indeed, on a number of occasions he sought advances on his pay, which were provided for by the company.

As will be outlined in his evidence, the meeting or otherwise of targets was an important issue in the company. When employees met their target and were performing well they were praised and rewarded financially. Where they were not meeting their targets they received no commission and were criticised. This applied to him as it did other employees, who in certain months met and achieved his target goals and was rewarded both financially and praised by the company. At other times when he did not meet his targets he was subject to criticism and disparagement.

While no complaint can be made about such a system where fair and reasonable targets are set, he will state that the manner in which such censure was made was often unfair, nasty and vindictive (often accompanied by the use of offensive language) and it was not uncommon for the failure to meet targets or other failures to be circulated by senior management in such a way as was designed to humiliate him. As such, it will be his position that the company provided not only a workplace which was highly stressed and targets driven (about which there can be no complaint) but went much further in creating a toxic atmosphere where a failure to meet targets was dealt with in an unprofessional and unreasonable fashion. It is his case that the behaviour of the company, in particular the often capricious and impulsive behaviour of the CEO contributed towards a work environment, which for him became untenable.

As a result of the workplace environment described above, the question as to the appropriateness or otherwise of increasing target levels (and the linked commission) became a matter of contention/dispute between him and the company. This matter culminated in a meeting between him and the CEO on the 5^th July 2016 in which the CEO called him into his office and treated him in an extremely aggressive and bullish fashion. His job was threatened extremely inappropriate language was used and he was called various derogatory names. The CEO said that he should look for a new job and that he would be foolish if he were not doing so already. He was demoted and told his accounts would be taken from him. On the 20^th July 2016, he came into work to find his desk had been moved and that he was no longer sitting with his team. This was done without notice.

On the 21^st July 2016, the CEO again called him into his office where he spoke to him in a threatening and aggressive manner and informed him that he would not have a job this time next week and that he wanted him out of the company. He further told him that he should be looking for a new job and that he would be an idiot not to be doing so.

As a result of the foregoing, he raised a complaint with the Co-founder of the company on the 22^nd July 2016. He indicated that he was very upset about his treatment at the hands of the CEO which had resulted in him feeling insecure as to his future in the company and that the worry and upset resulted in his attending his GP as these matters were affecting his health. He said that he was not sure who to escalate this to as there is no internal HR procedures or employee handbook and so he felt that it was best to go directly to the Co-Founder. He asked for the chance to talk this through with him at a convenient time with a view towards resolving these issues as he felt that he was being forced out.

He went on stress leave for 2 weeks on the 22^nd July 2016 and provided a medical certificate in respect of same. He responded on the 25^th July 2016 and while this email will be referenced in full, the following points are salient: The Co-Founder said that “escalation is not possible” as the CEO was the highest authority in the company; While the Co-Founder could not comment on the appropriateness or otherwise of the language used, in his experience the CEO always acted in the best interest of the business in an extremely effective manner;

-          that demotion for lack of performance is the way the business operates which may result in termination of employment if necessary;

-          That the CEO would not “force” people out but would initiate a termination in the best interest of the company if he deemed it necessary;

-          In respect of his health issues, it was stated that if he liked his job he should do it - if he didn’t, he should leave. If his boss does not realise that he is performing than he could always leave;

-          That the Co –Founder’s door was always open but that he has to realise that neither he nor the world, owes each other anything and that all business is an exchange of value without the “need for drama”.

On the 26^th July 2016, the CEO emailed the Complainant in which he confirmed safe receipt of the doctor’s letter certifying him unfit for work due to stress related illness. The CEO then set out in considerable detail his complaints as to his performance. He stated that he was surprised by this ‘work related stress’ (stated in quotations) and the direction he was taking. The CEO then set out in some detail his complaints about his performance and included formal notice that August was a busy month and if monthly objectives were not met he would be terminated.

The Complainant resigned on the 9^th August 2016 in which letter he disputed the criticism made by the CEO and in particular outlined the unacceptable fashion in which his complaint about the CEO was handled. He stated that he found himself in a position where his role had become untenable having being demoted from the role he was employed for and stripped of his clients in a humiliating manner. He further stated that he found the work environment toxic having been bullied constantly and subjected to shouting and offensive language.

Conclusion

It is respectfully submitted that having regard to the aforementioned actions of the company, and in particular the CEO and the manner in which his grievance was dealt with, the company’s behaviour was unreasonable and his resignation was justified. It is respectfully submitted that in circumstances where a serious complaint had been made in relation to bullying made by the Complainant and his subsequent certification as unfit to work due to work-related stress, the company dealt with the situation in a callous and inappropriate manner such as to render their actions unreasonable. In all the circumstances of the case, it is respectfully submitted that he was constructively, and unfairly, dismissed.

Respondent’s Submission and Presentation:

The claim is of constructive unfair dismissal and accordingly it is a matter for the Complainant to prove his claim. The fact of the dismissal is in dispute. It is the Company’s case that the Complainant was not constructively dismissed but that he resigned voluntarily from his employment with the Company. He did not raise any grievance or make any allegation of bullying during his three years of employment with the Company. The first time bullying was mentioned was after he resigned from the Company. It should be noted that the person that he accuses of bullying him the CEO of the Company, had lived outside Ireland (in the UK and then India) for at least two years prior to his resignation. The facts of his resignation are not consistent with a constructive dismissal. Without prejudice to the Company’s position that it acted in a fair and reasonable manner towards him at all times, if he had a concern about a workplace issue, he should have raised a grievance under the Company’s Grievance Policy. Despite claiming that he was "constantly bullied, shouted at and belittled", he resigned without raising a formal grievance under the Company’s Grievance Procedure or engaging with either of his line managers or the Company’s appointed HR contact.

His contract of employment with the Company dated 17 September 2013 specifically refers to the Company's grievance procedures as contained in the Staff Handbook. The contract states: “If you have a complaint relating to your employment you should discuss the matter with your supervisor in the first instance. If the complaint is not resolved to your satisfaction, you should raise a grievance in accordance with the Company’s grievance procedure as set out in the staff handbook. The Company's grievance procedure does not have contractual effect."

The Company’s grievance procedure is contained in the Staff Handbook, which was available to and assessable to him at all times during the course of his employment. At the commencement of his employment, he was advised that a copy of the Staff Handbook was available from the Co-Founder of the Company. Despite being explicitly advised of the grievance procedure, he took no steps to progress a grievance formally and refused to engage with the Company prior to and after his resignation in relation to these issues, despite frequent requests by the Company. The Company submits that he has not satisfied the well-established legal tests for constructive dismissal and requests that the complaint is dismissed.

BACKGROUND OF COMPANY AND TARGETS

The Company was established in 2013 and provides live online webinars on a number of third-level and professional educational topics to students across the world. The Company currently employs over 200 full-time staff globally, who are primarily engaged in online teaching, technology, business development or support roles. The Company generates student leads in a number of ways and those under discussion at present are based on partnership models, whereby the Company engages with partners to market its products to the world at large and or their own audiences.

The two partnership models relevant here are Premium and Freemium. Premium would involve the Company advertising its courses on the partners’ website at a reduced rate (e.g. a mark down of $350 from the RRP). Students pay the partner to attend the online course run by the Company. The partner retains some or all of said amount paid by the student for the course. The Company would benefit from this arrangement by acquiring leads in a cost efficient manner and those leads would subsequently result in revenue from later purchases from the Company. In the Freemium partnership model, there is no upfront user cost. The Company provides free sample courses to students on its partners’ websites. The Company then shares with the partner the revenue from the student leads generated by the free sample.

The Complainant was employed as a business development manager in the Company. He worked in the Premium stream until July 2016, when he moved to the Freemium stream. Business development managers were allocated client accounts by the Company. Potential clients were, in the vast majority of cases, identified by the Company and the Company developed the client relationship in the first instance. Business development managers would be required to build on and maintain the existing client relationships. The Company assigns accounts to business development managers based on company objectives and individual specialities, and other factors. Business development managers in the Company receive commission based on achieving their targets. Targets for business development managers are set by the Company and are based on achieving specified levels of students signing up for the Company’s courses. Each business development manager would have a different number of products that they may advertised on their partners' websites, for example as English speaking business development manager may have 40 products to sell whereas a business development manager focussed on Spanish market might have 4 products and Japanese market might have 1, hence their targets would be quite different for this and many other reasons. Targets are set as follows: the Company projects the maximum student leads who could access the advertisement on the partners’ website and who could potentially sign up for a course with the Company. This projection would be based on previous student leads generated from previous advertisements for products on the particular partner’s website. Where it is the first time for such a partnership to go live, there are no targets until evidence is gleaned from pilot runs. This also acts to incentivise staff as they can hit their overall target easier should they prospect and find new partners. This number of potential users would then be reduced by 50% - to make attainment of targets easier than financial modelling and incentivise staff to over achieve. The Company also factored into its targets the trajectories of how products previously sold for the partner, or similar partners and the different phases of a product being introduced would have different targets. The below example is based on one of the Company’s large clients managed by the Complainant, Living Social USA, based on one (of the 40 products) advertised:

The role of the business development manager would be to engage on a very frequent basis with the partner to test the viability of the product, make changes to the advertisement and most importantly to reach market agreements and then to ensure what was contracted for actually is done by the parties.

CHRONOLOGY OF EVENTS PRIOR TO RESIGNATION

The Complainant commenced employment with the Company as a full-time Inside Sales Account Manager on 18 September 2013. In October 2013, he and the Company agreed to change his job title to Business Development Manager. He was promoted to junior management in June 2015.

His role consisted of managing client accounts and marketing the Company’s online education courses. He was allocated client accounts initially by the CEO and Co-Founder and subsequently by his line managers. His role involved engaging with his partners to post advertisements for the Company on partner’s website at a certain time to achieve the strategic goals of the Company. One of his key functions of his role was to maintain the strong relationships with the account manager in the partner (which had already been developed by the Company) by telephone, face-to-face meetings and by email. His targets were set by his line manager at the time of his departure. He earned commission at various rates if he achieved his targets. As the Company’s business and product-range expanded, His accounts and targets increased.

His basic salary commenced at €27,000 and he received variable rates of commission on top of this salary. His basic salary increased to €34,000 in June 2015.

In the first quarter of 2014 he moved from business-to-consumer sales to business-to-business sales as it became apparent that he did not want to make the necessary telephone calls, which were required for the previous role. The Company gave extensive training to him for the performance of this role. The Company, over time, allocated him responsibility for some of the Company’s largest accounts when, for example, the individuals who normally managed those roles were on maternity leave etc. The Company had advised him of performance concerns from early stages of his employment. For the purposes of this submission, the Company has focussed on the performance issues raised in the latter half of his period of employment (i.e. from 18 June 2015 to 9 August 2016).

Throughout 2015, he and the Company corresponded by email and had various discussions in relation to his performance and commission. By email dated 18 June 2015, he expressed concern to the CEO that he would not meet his targets, which would result in him receiving no commission. He also requested that the targets be reviewed. On 2 July 2015, he was informed of his commission for the month of June. He was advised that he received commission despite not reaching his targets, but this would not continue. He was also advised that he was awarded “employee of the month” and received an additional €1,000 by way of award.

On 6 August 2015, the CEO emailed him to advise that he had not met his targets. He was advised that his minutes spent talking to the client partners were "shockingly low" and that his team did not perform well. He was advised that the Company would pay €2,000 commission on an exception basis given that he had managed the team in the absence of the directors of the Company during their annual leave. Between September and November 2015, there was further engagement between him and the Company in relation to his commission and failure to meet his targets. By email dated 25 November 2015, he advised the Company that he projected that he was aiming to bring in 100,000 students for January 2016 courses – which was around four (4) times his usual monthly target range. Despite this projection, the Company did not increase his targets. In an email dated 26 November 2015, the CEO set out what steps he needed to take to improve sales and achieve his targets. He acknowledged this and stated “Thank you J. for the Kind words, belief and support."

On 12 December 2015, the CEO emailed him in relation to his failure to meet his targets. In this email, it explained how he could have met his targets by taking certain specific steps. Later that morning, he emailed the CEO stating that without receiving commission for the past three months, he was "financially crippled". The CEO responded on the same date stating that he should have managed his sales accounts as directed by the Company, and with due haste, and had he done so, he would have made "a fortune and so would the Company. By email dated 14 December 2015 to the CEO he expressed his eagerness to achieve his targets and move forward with the Company. He sought the CEO’s feedback in relation to his performance for 2015, and the CEO's views on where he would be in the Company for 2016. The CEO responded confirming that the Company "believed in him greatly" and arranged a call with him to discuss the matters raised in his email. On the call, the CEO discussed the key focus areas, of closer relationships with partners, the necessity for telephone calls to maintain rapport and the importance of emphasising all of the unique features and benefits of the ever increasing product range. He reiterated his enthusiasm, and stated that he was grateful for the continued support and emphasised his expectations of greatly exceeding all targets.

By email exchange on 15 April 2016 he raised with the CEO the issue of not being allocated certain client accounts. The CEO advised him that he was not the preferred candidate to take over the accounts, and that his performance was not reaching the required standard. In particular the CEO expressed concern over the fact that his primary way of contacting his clients was by email, as opposed to the preferred method of communicating by telephone or in face-to-face meetings. This had been communicated to him on many occasions over the previous years. All business development managers were required to travel regularly to conduct face-to-face meetings with their clients, and the other business development managers in the Company fulfilled this expectation fully. The CEO responded that the fact that he had not met any of his clients face-to-face was a matter of grave concern. The Company has prepared a log of calls made by him during his employment. The document demonstrates that he did not engage with his contacts by telephone on any significant level. This was directly contrary to the directions of the Company, and led to him failing to develop his client relationships to a sufficient level to allow him to achieve his targets. His performance continued to be an issue of concern for the Company. On 9 June 2016 he wrote to the CEO expressing that he had been “blowing hot and cold” as far as work was concerned and advised that he would work to improve his performance. In this email, he stated: “You know I am capable, I know I am capable, I just need to cop on and stand up and be a man, yes I had bad months and yes I didn’t get badly needed commission recently but I handled it completely wrong. I hope to be going on a holiday tomorrow which I am going to take as a serious time to reflect on things and reassess my goals both personally and professionally. I want to come back with a fresh head, strong and determined to have a new start and prove to everyone that I am the best on the BD team and deserve to be here. I want to take on more responsibilities and manage a team and prove to everyone I can do it. ... I need you to have faith in me and understand that this is where I both want and deserve to be and I will not let you down. My goal has always been to progress within this company to a more senior role and to contribute to growing the company to what we all know it is capable of. At present, I cannot expect you to see this as a possible option but I want the opportunity to prove to you without a shadow of a doubt, that this is where I should be and you would be confident and excited to offer me a key position within the company in the future.” The email of 9 June 2016 is especially important in light of what occurred thereafter. In advance of going on his annual leave (as referred to in the above email), he requested an advance on his salary, and the CEO duly obliged. He sought, and was granted a further loan of €500 from the Company on his return from leave. He expressed his gratitude by email dated 17 June 2016. This email demonstrates that he was given favourable treatment by the Company – receiving loans and regular advances on salary. On his return from holiday the following week, the Company noted that his attitude had changed, and it appeared to the CEO and management within the Company that he no longer wished to engage with the Company to seek to improve his performance. On 5 July 2016, the CEO called him to a meeting. During this meeting, the CEO raised performance issues with him, including his continued failure to meet the performance standards required by the Company, failure to present for work on time, failure to contact clients by telephone (and only using email to contact clients), taking long smoking breaks throughout the day, leaving early and his attitude in the workplace. The CEO did not raise his voice or swear at him at any point during this meeting. The meeting ended with the CEO agreeing to his request that he be transferred from the Premium sales division to the Freemium division. The CEO agreed to facilitate this move, despite the difficulty for the business in moving an experienced salesperson to a different division, as it was clear to both him and the CEO that he was not performing well in the Premium division. In order to move him closer to his new-line manager he was allocated a different desk; however, he was still in the same open-plan office space which he previously occupied. His desk was around 12 feet from his previous desk. A further meeting took place between him and the CEO on 21 July 2016. He was invited to this meeting to discuss his continuing performance issues, and in particular, his failure to use the telephone to contact clients. At the time of this meeting, the Company was placing a particular emphasis on his business development managers clocking up time speaking on the telephone with clients. On the day in question, he was not engaging in any significant telephone-engagement with his clients, which was a cause of concern for the Company. Following the meeting on 21 July 2016, he had cleared out his desk, removing all personal items and throwing out all other items. He was taking a day off the following day to attend a funeral. It was not Company practice for employees to clear their desks prior to taking a day off, and he had not previously cleared his desk before taking a day off previously. His actions strongly suggest that he had made the decision not to return to work following his day's annual leave. On 22 July 2016, he emailed the Co-Founder and Director of the Company. He blind copied his personal email account with this email. He stated that: “I am writing to seek your help in resolving a problem that I am experiencing in work... I hope in doing so we can deal with the issue quickly confidentially and amicably. "He continued: “On Tuesday the 5th of July, J. called me into his office. He accused me of badmouthing the company and having a terrible attitude due to my lack of commission in recent months. The language used was extremely inappropriate and he threatened my job security and called me several unjust names. He advised me to look for a new job and said I would be foolish if I was not already. During this meeting he informed me that I am being demoted and would no longer be a team leader and that not just my key accounts are being taken from me, but in fact, all of my accounts. “He continued that the CEO "spoke to me in a threatening and aggressive manner. He informed me that I would not have a job this time next week and that he wants me out of the company...” He stated that “I am not sure who to escalate this to as there’s no internal HR procedures or employee hand book so I felt it best to go directly to you." The CEO emphatically disputes his description of the meeting on 5 July 2016, as set out in his email to the Co- Founder. Specifically: no inappropriate language was used; no threats were made; he was not called names, unjust or otherwise; he was not asked to leave the Company, or look for another job; he was not demoted; and/or he was not told by the CEO that he wanted him out of the Company. The Co-Founder responded to this email on Monday 25 July 2016. The Co-Founder advised him that he was on annual leave, and could not deal directly with the issues raised in the email until his return. He stated to the Complainant that the CEO and joint owner of the business and there was no level of management higher up than him. The Co-Founder referred him to the internal grievance procedures contained in the Staff Handbook, and advised him that if he did not already have the Handbook, he could request it from the appointed HR contact within the Company. He stated that the process for raising grievances is that the employee should raise the matter with his/her line manager in the first instance. He confirmed that "his door was always open".

The Complainant submitted a sick certificate citing "workplace stress" on Monday 25 July 2016.In response to receiving the sick certificate, the CEO emailed him on 26 July 2016, stating that he was not being "forced out" and set out key focus areas for him . The email concluded "Iremain genuinely hopeful that you can get back in as soon as possible to demonstrate that you can add value and commitment to the business during this crucial time. Furthermore, I hope that the time we have all spent on this matter via email and the countless performance based meetings over the years is seen as representing out commitment in attempting to help you in your role, we do so whilst maintaining our duty of care to act in the best interests of the company and your 230+ full time colleagues and we do so naturally." On 9 August 2016 he emailed his letter of resignation to the CEO. In this letter he states that he had raised a grievance with the Co-Founder about what had occurred on 5 July 2016, however, "the reply by the Co-Founder did nothing to assuage [his] concerns.” He continued, “I now find myself in a position where my role has simply become untenable having been demoted from the role I was employed to do and stripped of all my clients in a humiliating manner. In addition, I have found the work environment toxic having been bullied constantly and subjected to shouting and offensive language on a continual basis.” He informed the Company that he was resigning with immediate effect. The CEO responded on 9 August 2016. In this email the CEO emphasised all the steps that he and the Company had taken to support him. The CEO that: he was allocated all the best client accounts by the Company and the Company had designed the targets to be achievable; the Company acceded to his request to move roles, as he expressly advised the Company that he did not want to work in the Premium division any longer; that his change in seating location was to put him closer to his new manager. The CEO continued that the Company had always been supportive of him. He advised that “We are still happy to sit down and discuss this in a reasonable manner for one simple reason, we do believe in you and we believe in the training and investment we have made in you - we do truly believe, as we have always said, that if you applied yourself you could achieve great things.”Following this email, the Company made further attempts to engage with him but he declined the Company's invitation to engage, and stated, in an email 12 August 2016, “My position remains as is”. By email dated 16 August 2016 he advised that he did not accept that the Company supported him at all times. He stated "Unfortunately, I don't see the point in engaging in continual email contact when we are completely at odds with our respective positions. There is no "messing" as you put it. The offer of the "olive branch" is too little too late for me given how untenable my position has become. The time I needed support it wasn't available. I don't see how I could ever work in such a toxic environment again." On 22 August 2016, the CEO emailed him stating that his P45 had been processed, and stated "We view this all as highly unfortunate, and not how any of us wanted this to end. We would like this all to end positively and to be able to support you in the future."

By letter dated 30 August 2016, the Company wrote to him again confirming his resignation, and denied all allegations of bullying. The CEO stated: "I also refute your assertion that you have out-performed all of your team on a continual basis, however, I do not propose to reiterate your performance issues which have been dealt with at length previously. You have previously acknowledged that there were serious issues in relation to your own performance which were required to be addressed and since then, the Company has attempted to engage with you in an effort to resolve any issues raised by you and to assist you in your role.”

THE APPLICABLE LAW

Constructive Dismissal Under the definition of dismissal contained in Section 1 of the U.D. Acts, “constructive dismissal” is defined as: “the termination by the employee of his contract of employment with his employer whether prior notice of the termination was or was not given to the employer in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled or it was or would have been reasonable for the employee to terminate the contract of employment without giving prior notice.”

There are two tests to determine whether an employee has been constructively dismissed. The first is based on being entitled to terminate (the “contract test”) and the second is on the grounds of ‘reasonableness’ (the “reasonableness test”). In summary, the Complainant must prove that he had no option but to resign.

Contract Test

The test is summarised in Western Excavating (ECC) Ltd. v Sharp [1978] ICR 221, 226. In that case Denning MR described the test as follows: “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”.

Reasonableness Test

Denning MR also outlined the “reasonableness test” in the following terms: “whether the employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, [if so] the employee is justified in leaving”.

Relevant Case law

In Conway v Ulster Bank Ltd (UD 474/1981, the Employment Appeals Tribunal held that an employee is required to invoke the employer’s grievance procedures in an effort to resolve the grievance before resigning from their position. The Tribunal considered that the employee in that case did not act reasonably in resigning without first having ‘substantially utilised the grievance procedure to attempt to remedy her complaints’.

In Rock v Irish Custom Extruders Ltd (UD614/2013), the claimant was given an office promotion following positive reviews of her work on the factory floor. The managing director of the company subsequently became aware that the claimant was making frequent errors in her work. The respondent issued a number of warnings to the claimant. After a final written warning had been delivered, the respondent determined that the claimant should cease office work and return to her position on the factory floor, without loss in salary. The claimant found this offer unacceptable and resigned. The claimant argued that her workload had become too heavy for just one person, and denied being offered any assistance. She rejected the suggestion that she should have asked for more training, saying that she had not needed it and again stated that her workload was simply too heavy. Following the termination of her employment and her refusal to engage with the respondent after the fact, and despite attempts by the respondent to re-engage her in her old position with no decrease in salary, the claimant began attending a college course. The Employment Appeals Tribunal found that there was no unfair dismissal in this case. There were clearly performance issues that, despite many attempts, could not be addressed. The Tribunal found that the respondent would have been within its rights to dismiss the claimant on competency grounds but instead, offered her a reasonable alternative to re-engage in her previous position. The Tribunal held that the claim must fail.

In Byrne v Horwath Bastow Charleston Wealth Management Ltd (UD67/2014), the claimant was employed as a financial planning consultant by the respondent. The claimant submitted a complaint about her manager’s treatment of her, claiming that she had felt bullied by her manager’s aggressive attitude to her. The claimant complained to Human Resources, who provided a step plan for improving the relationship, however, the claimant submitted despite this she continued to have to report to her manager and felt it was thus pointless to make further complaints. The claimant then continued for the next 12 months, but any efforts to resolve issues with the manager were rebuffed. She ultimately resigned from the respondent. In the course of the evidence before the Employment Appeals Tribunal, the claimant conceded that she was aware of the company handbook, which included sections on bullying and grievances, but had lost confidence in utilising these procedures. When the claimant gave notice of her intention to resign, one of the respondent directors met with her to discuss the situation and, while the respondent was reluctant to lose her, they were unable to give her the job guarantees sought by her. The Tribunal held that the onus on the claimant to establish that she had been constructively dismissed was not met in this case. The Tribunal referred to the decision of Martin v. Xtra Vision Ltd (UD265/2006) in which it was held "before embarking on this course of action it is important that the Claimant exhaust all other avenues, in particular any existing "harassment" or "grievance procedures". This was not done. The Tribunal also referred to the case of Carthy v. Clyde Investments (UD 265/2006), in which the Tribunal held “the burden of proof in such cases is an onerous one, in that the Claimant must prove not only that the Respondent’s behavior was unreasonable but also that the Claimant's response to resigning was reasonable”. The Tribunal concluded that at all times, the behavior of the respondent was reasonable and the Tribunal noted it had made reasonable and genuine attempts to resolve and defuse the situation. While the Tribunal noted that the claimant may well have had a grievance to a limited extent, it was not sufficient to justify her claim of constructive dismissal; thus the claim could not be upheld.

SUBMISSIONS ON BEHALF OF THE COMPANY

It is settled law that the employee bears the burden of proof as to the alleged fact of dismissal and of either his entitlement to so resign or as to the reasonableness thereof. It is established that only in very rare circumstances will an employee be entitled to treat himself as constructively dismissed. A heavy onus of proof rests on any employee alleging that he has been constructively dismissed.

The Complainant’s claim for constructive dismissal is unsustainable where: None of the issues raised by him constitute bullying, harassment or unreasonable treatment; He never raised these issues to his immediate managers and never made a formal complaint under the Company’s Grievance Procedure; the Company did not breach any term of his contract of employment; the Company did not conduct itself in such a manner that would justify his resignation.

No unreasonable treatment – targets were not set at an unreasonable level

It is important to point out that the setting of targets, commission and allocation is at the Company’s discretion and is provided for in his contract of employment.

The Company rejects the assertion that his sales targets were pitched at an unreasonable level. The accounts assigned to him by the Company, based on his level of sales experience with the Company, yielded a high volume of student leads. In fact, the total potential value of his accounts is estimated to be 60% of the Company’s overall total potential leads from Premium partnerships. That said, his targets were not based on this maximum potential leads figure. His targets were usually around 25,000 student leads per month. Given the fact that his clients had a high potential for generating student leads, he could achieve his monthly targets through effectively managing his client relationships. For example, one of his clients, was accessed by a high number of individuals, and usually resulted in 2,000 student leads per month per product. The Company estimates that out of the 40 products to be advertised, even if he only secured advertising for half of those products, Living Social USA alone would have the potential to generate 40,000 student leads per month (20 products times 2,000 students). It was only one of his clients. Separately this partner, when running at an optimum leave had resulted 15,000 students signing up for one product in one campaign. He was not asked to prospect for clients. The Company had already developed the client relationship for over 95% of his clients. He was required to simply maintain and grow the pre-existing relationships, and was provided with clear instructions of how to do so by via comprehensive training materials, via workshops and coaching with line managers and also the CEO. It should be noted that notwithstanding that he had high yielding client accounts, his targets were often half that of another employee in the Company, who started working with the Company after him. As set out in the table at paragraph 3.3 above, the Company lowered targets for different phases of products being advertised. He advised the Company that he could achieve 400% times of his target. On 25 November 2015, he emailed the Company saying that he projected that he could achieve target of 100,000 students for the Company’s courses per month. He had made this assertion on a number of occasions to the CEO. This indicates that he did not believe his targets were too high – in fact, he indicated that could achieve four (4) times his monthly targets. The Company did not increase his target to match his own projections, and his targets remained at around 25% of this figure. It is the Company's position that he could have easily met his targets had he followed the repeated directions of his manager and the CEO, which he refused to do. He did not formally request that his targets be reduced, and in correspondence between him and the Company near to the resignation date, he sets out how he intended to meet his targets.

Although there were concerns about his performance, he did achieve his targets on numerous occasions and, accordingly, was paid a high level of commission. For example, his P60 for 2016 shows that he was paid €76,515.94 for that year - €42,515.94 of which was commission. This demonstrates that not only were the targets achievable, but that he himself could achieve the targets and was earning far more than was initially indicated in job descriptions. Therefore, it submitted that his claim that his targets were pitched at an unreasonable level is entirely unsustainable. He also refers to the Company demoting him and removing the accounts allocated to him. This is denied. The client accounts held by him were reallocated within the (Premium) sales team following a request by him to be assigned to a different sales division (freemium). His desk was moved so that he would be sitting next to the other team member and his new line-manager. His desk was situated 12 feet from his previous desk, in an open-plan office space, and was not "in the corner” as suggested by him. In the correspondence with the Company he takes issue with the fact that the Company did not allocate him specific accounts. It is entirely consistent with the Company’s policy and essential for the Company’s business to allocate client accounts to employees who will manage the accounts in an effective, professional and strategic way. Due to the long-running performance issues that the Company had with him, it would not have made commercial sense to allocate these accounts to him. The Company raised concern on numerous occasions that he was not achieving the required performance level. His performance was impacting upon the Company's newly established business. He himself makes the point that he was not performing well in emails to the Company. For example, the email dated 9 June 2016 he acknowledges that he was "blowing hot and cold". In his resignation letter he states that he felt that he was not supported by the Company and did not receive a performance improvement plan. As is evident from the correspondence, the Company, and in particular Mr E., provided a high level of support to him. This included regular meetings and follow-up emails setting out the performance issues identified, and clear bullet-point steps on how he could improve his performance and meet his targets. These detailed and numerous emails took a considerable amount of time for the CEO to complete. On commencement of his employment the CEO provided business development and mentoring to him. Subsequently, he was also directly managed by his line manager who provided support to him for two hours per week to assist him in reaching his targets. He received monthly reviews, by way of commission review. He also received regular advances in his salary from the Company to support him during pay periods. Given that the Company was in its very early stages at the relevant period and had a limited cash-flow, the advances made to him caused difficulty for the Company, however; nevertheless, it wished to support him and so agreed to pay the advances. He was regularly praised for strong performances and given support when he did not achieve the required standard. He acknowledged his appreciation of the Company in numerous emails. In addition to the one-to-one support he received, the sales team in the Company had “morning huddles” to discuss company-strategy, and any issues the team was having. The Company also held regular training sessions with employees. Notwithstanding that the Company noted the performance concerns with him in 2014, it did not seek to discipline him, but acted in a reasonable and supportive manner in trying to work with him to assist him in achieving his targets. The Company did not place him on a performance improvement plan but there were clear and specific instructions to him on how to improve his performance, and had he followed these instructions, both he and the Company would have benefited in terms of their respective commission and revenue incomes. He was an experienced employee with a sales background, and could have issue with his targets or sought training or instruction from the Company at any stage - but failed to do so. The Company’s log of calls made by him during his employment emphasises that he despite repeated requests, did not follow directions and engage with his contacts by telephone. His failure to engage with his contacts by telephone was directly responsible for the loss/damage to valuable accounts. It is the Company's position that he did not meet his targets as he did not have sufficient personal contact with his clients to develop the relationship and make the required sales.

No unreasonable treatment – no bullying

In his complaint form he alleges that he suffered constant bullying, was shouted at, belittled in front of colleagues and threatened with being dismissed. He has not provided any specific examples of this behaviour. The Company denies any wrongdoing in this regard, and reserves its right to make further submissions in response to any specific allegations raised by him. He was employed with the Company for almost three (3) years. At no time during his employment did he allege that he was bullied. The first time he made such allegations was after he resigned. Furthermore, his complaints are primarily made against the CEO. It should be noted that the CEO was not living and /or working in Ireland during this time – as he was carrying out work for the Company in the UK and latterly India. Notwithstanding that the relationship was positive between the CEO and the Complainant there was limited interaction between them during the relevant period. His claims of "bullying", being "shouted at" or "belittled" being raised only after he had made the decision to resign is suggestive that he contrived the situation to support a constructive dismissal claim against the Company.

It is evident from the correspondence exchanged between the Company and him that there was a positive relationship between the parties for the majority of his employment. He was awarded "employee of the month" by the Company, and frequently emailed the CEO thanking him for his support. It is submitted that this is entirely inconsistent with the assertion that he was consistently bullied. He was not, at any stage, threatened with dismissal. The Company never attempted to dismiss or discipline him during his employment and engaged with him to seek to improve his performance. The CEO did state that if his performance did not improve, his future with the Company was in jeopardy, however, these comments were made as a result of continuing failure by him to follow instructions and achieve the required targets. As in the case of Rock v Irish Custom Extruders Ltd, the Company could have dismissed him on competency grounds, however, instead it sought to engage with him and support him to resolve his performance issues. He had, on numerous occasions, told the CEO and his managers that he was looking for another role.

In his email to the Co-Founder he states that the CEO used abusive language towards him and attempted to "force him out" of the business. The CEO is in a position to refute the specific allegations and he should be put on proof of these allegations. The Company was not attempting to force him out of the business. The Company's profits are dependent on account managers such as the Complainant achieving their targets. It is in the Company’s direct interest to ensure its account managers perform well, and that is the reason it provided consistent support to him in relation to his performance. When he resigned without notice the Company was left in a difficult position where the accounts allocated to him were left unmanaged. The Company could have disciplined him in relation to his performance or imposed a mandatory performance improvement plan, however, it did not do so, which is evidence of its willingness to nurture his performance in an amicable way.

On receipt of his email of 22 July 2016, the Co-Founder advised him that there was a grievance procedure in place and advised him that the policy stated that he should raise the issue with his manager in the first instance. The Co-Founder also stated that he would be available to discuss the issues with him on the CEO’s return from annual leave the following week. This is entirely consistent with the requirements of a reasonable employer. His decision not to pursue a formal grievance was not the Company's doing. Even after receipt of his resignation letter and sick certificate, the Company gave him numerous opportunities to reconsider his resignation and engage with the Company to resolve the issues. It should be noted that the first time he stated that he was suffering workplace stress was on 22 July 2016. The Company was aware that he had a number of non-work related personal issues, which it supported him with. He never asserted work-place stress prior to this. The Company reiterates that it acted in reasonable manner in engaging with him. He was not shouted at, belittled or subjected to any form of bullying at any time during his employment. It is submitted that nothing in the Company's dealings with him could be categorised as a breach in its duty of care or breach of contract.

An Employee is required to invoke Grievance Procedures

As set out in Ulster Bank v. Conway and Byrne v Horwath Bastow Charleston Wealth Management Ltd it is well established that a constructive dismissal claim cannot succeed where the employee has failed to utilise and exhaust (or substantially exhaust) the employer’s procedures. In the Company's view, he did not pursue a formal grievance because he had already determined that he was not returning to work. He had cleared his desk on 21 July 2016, a day before sending the email to the Co=Founder. He sent the email on a day which he had booked off work to attend a funeral, which was followed up the following Monday with him submitting a sick note and his ultimate decision to resign during this sick leave shortly thereafter. It is submitted that these actions appear to be premeditated to attempt to ground a constructive dismissal claim.

FINANCIAL LOSS

In his complaint form, the Claimant has sought redress in the form of compensation. Without prejudice to the fact that there was no dismissal or unfair dismissal in this case, it is submitted that it is for him to satisfy the Adjudicator that he has, in fact, suffered loss and that he has attempted to mitigate any such loss. If he has not suffered any loss, the maximum compensation which may be awarded is 4 weeks remuneration pursuant to Section 7(1) (c) (ii) of the Unfair Dismissals Acts. The Company has written to him seeking that he provides details of his financial loss and attempts to mitigate such loss.

CONCLUSION

It is well established that only in very rare circumstances will an employee be entitled to treat himself/herself as constructively dismissed. For all of the reasons set out above, the Respondent requests the Adjudicator to dismiss this case; The Respondent reserves the right to make additional submissions at the hearing of this case.

Findings

Sec 1(b)of the Unfair Dismissals Act defines constructive dismissal as “the termination by the employee of his/her contract of employment with his/her employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”.

I find that in a constructive dismissal claim the burden of proof shifts to the person making the claim. They also have to demonstrate that they were justified in their decision and it was reasonable for them to resign. The claimant needs to demonstrate that they have no option but to resign. In addition there must have to be something wrong with the employer’s conduct. They must also have raised and exhausted the grievance procedure and given the employer an opportunity to address their concerns before contemplating terminating their employment.

In UD 1146/2011 the EAT held “in such cases a high level of proof is needed to justify the Complainant’s involuntary resignation from their employment, i.e. he must persuade the Tribunal that his resignation was not voluntary”.

The EAT in Donnegan Vs Co Limerick VEC UD828/2011 stated, “In particular, the claimant must show that the respondent acted in such a way that no ordinary person, could or would continue in the workplace”. Also the respondent’s conduct was “not so unfair or so damaging to the claimant’s rights and entitlements that she hid no option but to resign her position”

It is well established that the Complainant is required to exhaust the company’s internal grievance procedures in an effort to resolve her grievance prior to resigning and initiating a claim for unfair dismissal. In UD1350/2014 M Reid v Oracle EMEA Ltd the EAT stated; “It is incumbent on any employee to utilise and exhaust all internal remedies made available to him or her unless he can show that the said remedies are unfair”

Tierney v DER Ireland Ltd UD866/1999 “central to this is that she shows that she has pursued to a reasonable extent all internal avenues of appeal without a satisfactory or reasonable outcome having been achieved”.

I note in the EAT case John Travers v MBNA Ireland Ltd [UD720/2006] it stated, “We find that the claimant did not exhaustthe grievance procedure made available to him by the respondent and this proves fatal to the claimant’s case…In constructive dismissal cases it is incumbent for a claimant to utilise all internal remedies made available to him unless good cause can be shown that the remedy or appeal process is unfair”.

I will consider this case under the following headings:

1) Conduct of the Employer

a) Bullying

I note that the Complainant has alleged that he was bullied, in particular by the CEO. He stated that he had to endure abusive language and his job was threatened if he did not achieve his targets. He stated that the atmosphere was toxic. While out on sick leave he stated that the CEO attacked him about non achievement of targets. He has forcibly moved from Premium to Freemium and his desk was moved without consultation.

I note that the Respondent has rejected these allegations.

I note the conflict of evidence regarding these matters.

I find that the Complainant did not achieve targets for all of 2016.

I note that despite this he was paid commission without achieving targets and he received a loan from the company due to financial difficulties. I find that these actions by the Respondent do not support a claim for bullying and harassment.

On the balance of probabilities I find that the Complainant requested a move from Premium to Freemium based on the evidence adduced at the hearing.

Likewise I find that his desk was moved a short distance to facilitate that move to Freemium, based on a layout chart of the office supplied at the hearing. Therefore I find that this was not an act of bullying.

I find that his contract of employment contained a grievance procedure and he was advised that he could obtain a copy of the Staff Handbook from a named person but he did not do so.

I find that despite claiming that he was “constantly bullied, shouted at and belittled" he never raised a grievance until at the earliest 22^nd July 2016 some days before he resigned his position.

I note that that the Complainant had particularly identified the CEO as the person whom was allegedly doing the bullying and shouting however the CEO had lived outside of Ireland for two years so the opportunities to interact directly with the Complainant was limited.

I find that this was a very driven company and the management style was very robust.

I note the use of bad language in emails presented to the hearing so I conclude that aggressive language was used with the Complainant.

I have no evidence that it was constantly used however under the circumstances of the company’s management style I find it could not be construed as constant bullying.

Therefore on the balance of probability I find that the Complainant was not bullied.

b) Not meeting targets

I note the conflict of evidence regarding the targets.

I find that this is a results driven company.

I find that the management style is robust and they clearly call a “spade a spade”.

I note that the Complainant had worked there for three years and would have known the management style in the company.

I note that he had successes in the first two years however he began to fail to achieve targets and thus elicited a strong a response but at the same time there is written evidence that the company wished to support him.

I note that the Respondent had major concerns that his primary way of contacting his clients was by email, as opposed to the preferred method of communicating by telephone or in face-to-face meetings.

I note that he by email dated 25 November 2015, advised the Company that he projected that he was aiming to bring in 100,000 students for January 2016 courses, which was around four times his usual monthly target range. This was not accepted by the Respondent.

I note that at beginning of 2016 the Company stated in an email that they "believed in him greatly".

I note that on 9^th June 2016 he wrote to the CEO expressing that he had been “blowing hot and cold” as far as work was concerned and advised that he would work to improve his performance. He went on to say by email, “You know I am capable, I know I am capable, I just need to cop on and stand up and be a man, yes I had bad months and yes I didn’t get badly needed commission recently but I handled it completely wrong. I hope to be going on a holiday tomorrow which I am going to take as a serious time to reflect on things and reassess my goals both personally and professionally. I want to come back with a fresh head, strong and determined to have a new start and prove to everyone that I am the best on the BD team and deserve to be here. I want to take on more responsibilities and manage a team and prove to everyone I can do it. ... I need you to have faith in me and understand that this is where I both want and deserve to be and I will not let you down. My goal has always been to progress within this company to a more senior role and to contribute to growing the company to what we all know it is capable of. At present, I cannot expect you to see this as a possible option but I want the opportunity to prove to you without a shadow of a doubt, that this is where I should be and you would be confident and excited to offer me a key position within the company in the future.”

This shows the Complainant’s clear understanding of how he was under-performing and his desire to address this.

I find that the Complainant failed to achieve his targets.

I found no evidence that he was given unrealistic targets in fact the Respondent declined his proposal to quadruple his targets.

Under such circumstances I find that the Respondent was reasonable to take decisive steps to deal with his failure to achieve his targets.

Overall I did not find that the Respondent’s conduct was such that the Complainant had no option but to resign his position as a result of targeting setting.

c) CEO response to medical certificate

I found that the CEO reacted aggressively to the Complainant following the presentation of the medical certificate for work related stress.

I find that the CEO acted inappropriately by commenting on his lack of performance. The e-mail concludes “That this was and is formal notice that failure to meet your monthly objectives will result in termination”.

While the achievement of objectives is essential for business success I find it wholly inappropriate that the CEO should express such stark views to an employee who is out on “stress leave”.

Notwithstanding that response from the Respondent above, I find that this was a reaction to the Complainant’s failure to achieve his targets.

Overall I did not find that the conduct was such that the Complainant had no option but to resign his position.

I did not find that the Respondent’s conduct was a significant breach of contract, while it was not acceptable in parts, it did not go to the root of the contract such that he had no choice but to leave.

2) Raising a grievance/Giving the Respondent an opportunity to address his concerns

I find that the Complainant did not raise a grievance concerning bullying and harassment until 22^nd July 2016 despite alleging bullying for a considerable period of time.

I note that the Complainant e-mailed the Co-Founder on Friday 22^nd July 2016 seeking his help to resolve his problem with the CEO. In this e-mail he set out all his concerns against the CEO and the company.

I note that the Co-Founder was on annual leave and responded on Monday 25^th. I note that the Complainant was advised that he could not deal effectively with his concerns until he got back to work.

I note that he was referred to the company grievance procedure and was told that “his door was always open”. He was then advised that the CEO was the highest authority in the company.

I find that the Complainant did not wait for the Co-Founder to return from annual leave and to progress his complaint through him.

I note that the Complainant sent in a medical certificate on 25^th July and the CEO replied by mail stating “I remain genuinely hopeful that you can get back soon”.

I find that the Complainant has failed to initiate and exhaust the grievance procedure before deciding to resign his position.

3) No option but to resign

I note that the Respondent has asserted that the Complainant had cleared out his desk on 21^st July 2016. This was denied by the Complainant, however when he resigned his position he did not return to remove any personal belongings. Therefore on the balance of probability I find that he cleared out his desk on 21^st and by doing so had decided to resign his position.

I find that the Complainant did not exhaust the grievance procedure.

I find that he has not established that he had no option but to resign.

I find that he could have chosen to wait for the Co-Founder to return from annual leave and to process a formal grievance.

I find that it was unreasonable for the Complainant to resign before he had exhausted the grievance procedure.

Overall findings

I find that the Complainant has not met the benchmarks set out above in order to prove a case of constructive dismissal.

Decision:

Section 8(1B) of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to this complaint.

For the above stated reasons I have decided that this complaint should fail.

Eugene Hanly

Adjudication Officer

Dated:   25 April 2017