ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00002881

Complaint:

Date of Adjudication Hearing: 22/03/2017

Workplace Relations Commission Adjudication Officer: Aideen Collard

Procedure:

In accordance with Section 8 of the Unfair Dismissals Acts 1977-2015, following referral to me by the Director General, I inquired into the aforesaid complaint of constructive dismissal received by the Workplace Relations Commission (hereinafter ‘WRC’) on 20^th April 2016 and gave the Parties an opportunity to be heard and to present any relevant evidence at a hearing on 22^nd March 2017. Both Parties represented themselves. I confirmed that the Complainant understood the nature of his complaint and was happy to proceed without representation. A HR Coordinator presented the case on behalf of the Respondent and two witnesses attended on its behalf. The documentation referred to herein was furnished by the Parties before and during the hearing. All oral evidence, written submissions and supporting documentation presented have been taken into consideration.

Background:

This is a claim for constructive dismissal brought under Section 8 of the Unfair Dismissals Acts 1977-2015, in circumstances where the Complainant contends that he was forced to resign from his position as a Maintenance Supervisor with the Respondent Charity on 27^th November 2015. The Complainant had been employed by the Respondent since 7^th March 1988 under a permanent contract of employment and therefore meets the minimum 12 months’ service required to bring this claim. He earned circa €48,880 gross per annum and seeks compensation as a remedy. Owing to his medical condition he has been unavailable for work and/or on disability related Social Welfare since his resignation. He was aware that the maximum award open to the WRC in such circumstances is four weeks remuneration. The Respondent contends that he resigned voluntarily from his position.

Summary of Complainant’s Case:

The Complainant attended with his wife and gave evidence confirming his employment details as set out above and outlined the sequence of events leading to the termination of his employment with the Respondent. He is a man of 63 years of age. Arising from a work-related injury to his right elbow / shoulder, he went on six months sick leave from 25^th May 2015, comprising of three months on full pay and three months on half pay. He underwent a medical assessment with the Respondent’s Occupational Specialist and although a Report dated 8^th June 2015 concluded that he “…remains unfit permanently for any heavy handling duties”, it also stated that he would be fit to return to work upon his return from vacation on 31^st June 2015 “with accommodations”. However he was never offered any light duties by the Respondent which he contends were readily available.

From June-November 2015, he had a number of meetings with the Respondent’s HR Coordinator (on behalf of the Committee) who conveyed to him that there was no longer a role available for him with the Respondent. He was asked to avail of its Permanent Health Insurance (PHI) Scheme which would pay him half of his salary up until the date of his retirement at 65. After considering the terms of the Scheme, he explained to the HR Coordinator that this would put him in terrible financial difficulty as he had just moved house and had borrowed money to carry out renovations. If he was no longer on a full salary, he would require access to his pension lump sum to repay his loans. He was told to go away and restructure his loans. At a meeting on 13^th July 2015, he stressed the difficulties he would have surviving on PHI and was told that there was no guarantee that he would be accepted on the Scheme anyway. He was also told that his role would cease to exist and he would not be replaced hence a redundancy situation had arisen. Redundancy terms were discussed with the HR Coordinator stating that the Respondent would not go beyond a year’s salary. He said this would be acceptable and by the end of the meeting, felt that they had reached an agreement.

The Complainant said that he was therefore surprised when on 21^st August 2015, the HR Coordinator contacted him to ask him to suggest a reasonable severance deal and said he thought they had already agreed on a year’s salary. He was called to a further meeting with the HR Coordinator which he assumed was to finalise the redundancy package but to his shock he was told that the Committee had no appetite for a redundancy package and were still pressing for him to accept the PHI Scheme despite placing him in an impossible financial situation. He felt that he was being pressured to accept the PHI. In mid-November he was called to another meeting with the HR Coordinator where he was offered €30,000 as a gratuity payment and asked to sign a compromise agreement in full and final settlement. As the basic statutory redundancy he could expect to receive for his 27.5 years service was circa €33,708 he said that he felt this was totally unfair but was told: “Well we can always keep you on the welfare.” and “We can’t have you claiming for unfair dismissal.” His Solicitor advised him not to sign the compromise agreement. He felt trapped and compelled to resign in order to access his pension lump sum of circa €69,000 to pay off his debts. He has since parted ways with his Solicitor and although he was of the view that personal injury proceedings should have instituted against the Respondent, its HR Coordinator confirmed that none had yet been served.

The Complainant confirmed that the Respondent had furnished him with his P.45 and had also paid him a €5000 gratuity on leaving. He also confirmed that he had used his pension lump sum to pay off his debts. He accepted that he had not raised a formal grievance before resigning but said he had expressed his difficulties throughout the aforementioned meetings with the HR Coordinator. It was put to him that accommodating him with light duties had never been an issue as it was quickly accepted by both Parties that he would be unable to remain working in his position owing to incapacity. He was unable to provide evidence of any requests for reasonable accommodation with light duties. He accepted that having felt aggrieved after his resignation, he attempted to sell a piece of the Respondent’s equipment on an online sales website and received a Garda adult caution. He confirmed that he is seeking an award of compensation in respect of constructive dismissal.

Summary of Respondent’s Case:

The HR Coordinator confirmed that the Respondent wholly refutes the Complainant’s claim of constructive dismissal and gave a slightly differing account of the sequence of events leading to his resignation. He said that his position as Maintenance Supervisor was a hands-on role entailing the carrying out of most maintenance tasks directed by the Property Service Manager with the assistance of three other personnel. He confirmed that the Complainant had gone on sick-leave from 25^th May 2015 after alleging that he had sustained an injury to his right elbow / shoulder, caused when undertaking a root removal task a number of weeks previously. Following an assessment by the Respondent’s Occupational Specialist, the aforementioned Report of 8^th June 2015 confirmed a history of injury to the Complainant’s right elbow dating back to the 1990's. It concluded that along with severe degenerative changes, he will continue to suffer flare-ups if he carries out heavy physical duties and found him unfit permanently for heavy manual handling duties. Upon an examination of the opportunities for suitable light work which would not expose him to further deterioration of his medical condition, regrettably the Respondent had no such role.

The HR Coordinator confirmed that a series of cordial meetings were held between the Parties with the Complainant’s wife present. The Complainant had one agenda only which was to negotiate a severance package and he was clear from the outset that it should be one year’s salary. He had spoken to him about the difficulty of keeping him occupied full time with light duties that would not cause a flare up of his elbow / shoulder. At the meeting of 13^th July 2015, it was agreed without much discussion, that based on his current prognosis, he was unfit for his current role and there was no suitable role with the Respondent which would restrict him to light duties. It was also confirmed that should the position change he would be assessed again before a return to work. The Respondent’s position was confirmed in a follow-up letter of 17^th July 2015, setting out his entitlement to three months sick leave at full pay and three months at half pay and confirming that its PHI Insurer would contact him regarding an application under the Scheme. A note from the meeting set out the sick pay calculations for the six month period. It also stated: “Redundancy does not arise at present: however, the statutory figure on a September end assumption is:” and set out the calculations assuming that the Complainant was in a statutory redundancy position. He confirmed that this was prepared for the purposes of negotiating a voluntary severance package.

The HR Coordinator said he had been mandated by the Committee to do one of two things in his discussions with the Complainant: (a) to come up with a reasonable severance package and on failure of this, (b) let the sick leave pay scheme (three months full pay and three months half pay) run its course and then apply the Respondent’s PHI Scheme which would give him half pay up until his retirement age of 65 years, provided he qualified upon making an application for same. In the course of these negotiations he had informed the Complainant that if the Parties failed to arrive at a severance agreement, he was free to make a personal injuries claim which would be vigorously fought. Based upon same, an offer of €30,000 severance was made on a ‘without prejudice’ basis but was rejected by the Complainant on the basis that he could not survive on this sum.

By letter dated 7^th August 2015 to the Respondent, the Complainant quoted professional advice he had obtained and sought a redundancy package paid in a tax efficient manner as being his preference. This was rejected by the Respondent as he had to be replaced and which was subsequently done. The Complainant also rejected requests for co-operation with the PHI Scheme as this would require him to remain an employee and he would not get access to his pension lump sum unless he ceased employment. He confirmed his position in a letter to the PHI Insurer dated 6^th October 2015 and in a similarly worded email of 17^th October 2015 to the Respondent stating: “In response to your letter I fully recognise that the PHI would be a much better deal for me in the long term and it would be my first preference if it was viable. The problem is, as you already know, I have loans and living expenses that the PHI monthly payment just won’t cover. If there was any possible way that I could get my pension lump sum I could then clear my loans and be able to live on the PHI payment. However, to my knowledge I can’t access my pension until I officially leave…” He also confirmed his position that he considered a year’s salary to constitute a satisfactory severance package given that his early retirement would save the Respondent four years’ of contributions.

Against the Respondent’s advice, the Complainant rejected the severance deal offered and PHI alternative and indicated a wish to resign so that he could gain access to his pension lump sum. He was offered a final compromise agreement of €5000 that would leave him free to pursue a personal injuries claim but would prevent any other workplace related claims which he also rejected. He wrote a simple cordial letter of resignation thanking the Committee for everything. Although it accepted his resignation, the Respondent was not in favour of this course as confirmed in a letter of 26^th November 2015. The Respondent also acceded to his request that the €5000 offered in the latter compromise agreement would be given to him as a goodwill gesture as it was believed that his resignation was sincere and he had stated that he would only be pursuing a personal injuries claim. Notwithstanding same, he had referred this complaint for unfair dismissal to the WRC on 20^th April 2016. Subsequent to his resignation, it was discovered that the Complainant was attempting to sell a piece of its equipment on an online sales website which he had purchased on behalf of the Respondent but had removed from his workplace prior to his sick leave and severance negotiations. He received a Garda adult caution upon the admittance of theft. The Complainant did not take any great issue with this version of events save than contending that he had been unreasonably treated by the Respondent. The HR Coordinator urged rejection of this claim, contending that he had resigned voluntarily with the benefit of legal advice for the purposes of accessing his pension lump sum to pay off debts when a severance package could not be agreed on the terms he had sought.

Findings and Conclusions:

For a claim of constructive dismissal to be properly brought under Section 8 of the Unfair Dismissals Acts 1977-2015, the Complainant must satisfy the definition in Section 1(b) which provides: “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 of the termination to the employer,…” As endorsed by the Labour Court in Paris Bakery & Pastry Limited -v- Mrzljak DWT1468, the classic formulation of the legal test in respect of constructive dismissal was set out by the UK Court of Appeal in Western Excavating (ECC) Ltd -v- Sharp [1978] 1 All E.R. 713. It comprises of two limbs, referred to as the ‘contract’ and the ‘reasonableness’ tests. It summarised the ‘contract 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 other performance.” The reasonableness test assesses the conduct of the employer and whether it “…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.” According to the Supreme Court in Berber -v- Dunnes Stores [2009] E.L.R. 61: “The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.” Unlike the position where dismissal is not in issue, this definition firmly places the onus/burden of proof on the employee to show that the resignation was justified in all the circumstances.

Whilst many of the facts are not in issue, the Parties have diametrically opposing views as to whether the Complainant’s resignation was justified in the circumstances. I must consider the factual matrix presented in light of the aforesaid law to objectively, reasonably and sensibly judge whether the Respondent behaved in such a way that amounts to a repudiation of the employment contract, such that he was entitled to resign. The only factual issue in dispute is whether the Respondent failed to offer the Complainant alternative light duties when it was confirmed that he was permanently unfit for manual duties. I am satisfied on the balance of probabilities that regardless of whether there were light duties available, this issue did not arise as the Complainant never pursued a return to work on any basis and immediately set about negotiating a severance package. He was unable to provide any evidence of making any such request and the Respondent’s position was confirmed with notes and correspondence arising from the various meetings. Nor was the Respondent’s position that a redundancy situation did not arise contested and indeed the Complainant has not pursued a claim for redundancy. Therefore the only issue for consideration is whether or not the Complainant was forced to resign on foot of the severance negotiations.

Applying the relevant tests to the facts adduced in the instant case, I note firstly that there is no question of any breach of contract arising, and the Complainant asserts the unreasonableness of the Respondent’s conduct to ground his claim. Having assessed the factual matrix presented, I cannot objectively construe the Respondent’s conduct towards the Complainant as being so unreasonable such that he was forced to resign in circumstances where: (i) on his own evidence he resigned when he was unable to achieve a satisfactory severance package so that he could access his pension lump sum in order to meet his current financial obligations, (ii) any pressure he felt arose from his own difficult financial situation and loss of a full salary owing to his medical condition which to date has not been attributed to the Respondent, (iii) there was nothing unreasonable about the reduced salary under the PHI Scheme which were within the terms of his contract, (iv) as he never applied for the PHI Scheme, the potential refusal apprehended cannot be a factor justifying his resignation, (v) the Respondent was not in favour of his resignation and gave him an unconditional €5000 gratuity as a gesture of goodwill upon his leaving and (vi) he had the benefit of legal advice at the material time. Whilst the Complainant’s disappointment at the unfortunate manner in which his lengthy service with the Respondent ended is wholly understandable and regrettable, overall, I am satisfied that he resigned from his employment voluntarily and therefore was not constructively dismissed.

Decision:

Section 8(1B) of the Unfair Dismissals Acts 1977-2015 requires that I make a decision in relation to this claim of constructive dismissal in accordance with the relevant provisions. Based upon the reasoning as set out aforesaid, I find this complaint to be unfounded and accordingly, dismiss same.

Dated:   24^th October 2017

Key Words: Constructive Dismissal - Resignation - Contract and Reasonableness Tests