Complainant

Respondent

Anonymised Parties

A Warehouse Manager

A Chemical Supply Company

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00012681-001

20/07/2017

The case concerns a claim of Constructive Dismissal by a Warehouse Manager against a Chemical Supply Company.

The Complainant and his Legal Representatives made a detailed factual and Legal presentation over the course of two days of hearings.

In summary his case was as follows.

The Respondent is a medium sized company which prepares chemical mixes for use in mainly Pharmaceutical products. In early February 2105 an issue arose regarding the unauthorised removal of stock and onward private sale of chemicals on e-Bay by a staff member. The Gardaí were alerted and a staff member (not the Complainant) was arrested. He admitted his guilt and maintained that he had acted alone. In the course of their investigation the Gardaí interviewed a number of staff members but stated that no one else had a case to answer.

In August the Complainant, the Warehouse Manager, was invited by the Respondent to attend a series of 6 “Investigative” meetings regarding the issues that had led to the earlier stock losses. The tone of these meetings was accusatory and aggressive by Management.

This was followed in January 2017 by a series of Disciplinary meetings culminating in the suspension on full pay of the Complainant in February 2017. In March 2017 a Disciplinary decision was issued placing the Complainant on a Final Written Warning; to stand for 12 months. The Respondent offered an Appeal to the Complainant which was unsuccessful. Due to the stress and anxiety he was being placed under the Complainant was on sick leave for the period following the end of the suspension.

The Complainant was requested to return to work. This did not happen and the Complainant resigned from his position on the 19th June 2017.

In main points the Complainant argued that

The Investigative Process had been extremely accusatory, vindictive and grossly unfair to him. The attitude of the MD, the main decision maker was clearly biased and had a predetermined “guilty” view regarding the Complainant. The Respondent personnel involved in the Investigation lacked any Independence of view and basically denied the Complainant any right of a reasonable reply or explanation of events.

The Stock Control procedures in the Respondent organisation were loose and completely inadequate. This inconvenient fact was glossed over by the Respondent during the Investigation.

The Disciplinary process had been equally unfair.

The main parties on the Respondent side, particularly the MD, had been involved at all stages in the Investigative and Disciplinary processes. The processes were not Independent in any real sense. The Outside Consultants involved by the Respondent at various stages were not truly independent and the “He who pays the piper chooses the Tune” syndrome was clearly evident.

The decision to Suspend on Pay the Complainant in February 2017 while the Disciplinary processes were underway was a clear penalty and gave rise to huge reputation damage to the Complainant in a small local community. In was, in effect, the imposition of a major sanction, before any processes had been completed. It caused the Complainant considerable stress and anxiety.

The Final Warning decision regarding the Complainant and the failed Appeal Hearing, set in this context of overt Bias and lack of Natural Justice, left him with no reasonable option but to resign his position.

In summary the Respondent failed, at a most basic level, from the earliest stages, to respect their legal and contractual duties and obligations of an employer to the Complainant. The entire edifice of the Disciplinary and Appeal process was based on this grievously flawed foundation and cannot be seen as a defence to the Constructive Dismissal claim.

Detailed written and oral submissions were also made by the Respondent.

In summary their position was that a very serious stock loss situation had arisen in the Company. The person charged by the Gardaí had admitted his guilt. The area of responsibility of the Complainant was that of Warehouse Manager with responsibility for stock. It was fair and proper of the Respondent to carry out a thorough investigation into all the circumstances surrounding the considerable stock losses.

The Investigation and Disciplinary processes had been thorough and professional. The rights of the Complainant had been scrupulously observed and he was afforded professional representation from a very early stage. The assistance of clearly Independent Outside Parties, of the highest integrity, had been availed of by the Respondent at both the Disciplinary stage and the Appeal Stages. The Appeal process had been extremely detailed and carried out by an Independent party of the highest professional integrity.

The final sanction of a final Written Warning was proportionate and a reasonable decision for an employer in the circumstances. The Suspension during the Disciplinary process had been a proportionate step in view of the small size of the Company and could not be seen as a prejudged penalty prior to the outcome of the Disciplinary hearings.

The action of the Complainant in tendering his resignation was unwarranted. It was a completely unnecessary step particularly in a situation where the Respondent had always held the Complainant in a high regard and was anxious that he return to work.

3:1     The Law

The Unfair Dismissals Act, 1977 and SI 146 of 2000 – Statutory Code of Practice on Grievance and Disciplinary procedures together with relevant Legal precedents.

A landmark case is the Frizelle v New Ross Credit Union Ltd, [1997]IEHC 137 where Flood J. stated that where a question of unfair dismissal is in issue, there are certain matters which must be established to support the decision to terminate employment for misconduct.

In this case there was not a Termination but rather the imposition of a Final Written Warning but the clear comments of Flood J on Natural Justice apply equally. The relevant extract from the Judgement is quoted below.

“1.

The complaint must be a bona fide complaint unrelated to any other agenda of the Complainant.

2.

Where the Complainant is a person or body of intermediate authority, it should state the complaint, factually, clearly and fairly without any innuendo or hidden inference or conclusion.

3.

The employee should be interviewed and his version noted and furnished to the deciding authority contemporaneously with the complaint and again without comment.

4.

The decision of the deciding authority should be based on the balance of probabilities flowing from factual evidence and in the light of the explanation offered.

5.

The actual decision, as to whether a dismissal should follow, should be a decision proportionate to the gravity of the complaint, and of the gravity and effect of dismissal on the employee.

Put very simply, principles of natural justice must be unequivocally applied.”

Si 146 of 2000 – Statutory Code of Practice on Grievance and Disciplinary procedures would very largely incorporate all these principles as a guide to every day operations.

Regarding this case a number of Legal principles and practices are applicable.

In a case of Constructive Dismissal, it is a well-accepted norm, supported by a long line of precedents, that two Legal tests have to apply; these are

·         The Breach of Contract Test

&

·         The Unreasonable Behaviours Test.

It is also accepted that the role of an Adjudication Body or formerly the EAT is not to reinvestigate a Disciplinary case ab inito but rather to satisfy itself that the rules of Natural Justice were observed and the outcome was, following Justice Flood above a “proportionate decision” within the “Band off Reasonableness” for an employer in the Industry concerned.

An additional factor in this case is the question of the Suspension of the Complainant while the Disciplinary processes were underway.

The correspondence and communications surrounding the actual resignation are also of considerable interest to the review of the case.

Finally, as stated by Mr. justice Flood in Frizzell New Ross Credit Union quoted above the role of Natural Justice must be “paramount”.

The fundamental Argument of what could be called the “Edifice of Unfairness” being advanced by the Complainant’s Legal Advisor must be reviewed in this light.

However, allowing due deference to legal precedents, all cases must be seen in their own lights and in the context of their own particular evidence.

3:2     Consideration of the Evidence in the light of the points raised above.

3:2.1 -       The “Edifice of Unfairness” Argument

The basic point raised and relied heavily upon by the Complainant’s Legal Advisor was that the entire process was tainted by the allegedly obvious pre-determined bias of the Respondent and in particular the MD - Mr. XA.

Oral evidence was given by the MD and was subject to cross examination by the Complainant’s Legal Advisor.

The Complainant quoted from minutes of Investigation meetings where the MD made certain remarks that could be seen, it was alleged, as displaying an early and pre-determining bias.

To accept this argument would be to accept the logical sequential that the MD effetely controlled the outcome of the Investigation Process and had a negative or malign, from the Complainant’s point of view, influence over the Disciplinary and Appeal process.

From reviewing the evidence, I could not come to this conclusion. I noted in particular that the Disciplinary Process was Chaired by an independent Consultant, a person of considerable HR and IR reputation. I did not accept that any inference that they were and using the analogy quoted above “Hired Pipers” playing a tune dictated by the MD.

Likewise, the Appeal Hearings were conducted by a firm of well know Independent Consultants. A detailed examination of all the evidence took place, the Complainant had full Legal representation and was afforded all opportunities to put his case.

Again the “Hired Piper” argument of the Independent Consultants ignoring or accepting a biased process was not sustained by any real or concrete evidence.

Both the Consultant at the Disciplinary stage and the Consultant at the Appeal stage have considerable professional reputations which it can reasonable be stated would-not be put at risk by accepting an undue influence from the Respondent management. The Appeal Consultant gave Oral evidence regarding her Appeal process. This evidence was open to cross examination by the Complainant’s Legal Advisor. I found the evidence pointed to a well-run professional exercise.

Overall, I had to find that the Disciplinary and Appeal process fell comfortably with the remits of Natural Justice. I did not accept that there was a malign bias of unfairness, an edifice of unfairness tainting the process from the start.

3:2:2         The Legal Tests of Breach of the Employment Contract and Unreasonable behaviours

(a)         Breach of the Employment Contract.

It is accepted here that any breach being alleged must be fundamental and go to the core of the contract. In this case it was not being alleged by the Complainant’s legal representative that there had been a breach of any significant element such as Salary or Conditions rather that the implied contractual duty of care and reasonableness to the other party (the employee) had been breached by the fundamentally unfair nature of the Investigation and subsequent processes.

In Redmond on Dismissal Law 3 Edition 2017 Bloomsbury Professional the author at section 19.10 states that in pursuing a claim

“difficulties may arise, however where constructive dismissal is alleged in face of breach of an implied term. An employee may encounter problems in identifying such terms, ----------- Examples of terms which have been implied include the maintenance of mutual trust and confidence by an employer ----------------and the right to be treated with respect by an employer and not to have to endure physical violence and humiliation”

P436 section 19:0 of Redmond.

This argument has already been considered above in the paragraph “Edifice of Unfairness”. Having carefully reviewed all the extensive written evidence and the oral presentations I could not come to the view that this argument of a fundamental breach of an implied contract stands.

The process was conducted as fairly as reasonably possible in an employment context. Full rights were afforded and the Complainant had substantial Legal and HR Representation, clearly vigilant of his legal rights, from a very early stage.

The entire process also involved at the Disciplinary stage and the Appeal Stage eminent outside professionals. Their involvement, in my mind, further allayed any reservations I might have had regarding the alleged Unfairness of the processes such as to ground a Breach of Contract claim.

(b)         Unreasonable Behaviours.

In the evidence I could see no evidence of Unreasonable Behaviours by the Respondent. The Complainant was kept in employment and paid his salary at all times during the process. The Investigation process was not a pleasant experience for the Complainant but nothing so extraordinary as to warrant the term Unreasonable Behaviour as required by the Legal test.

The only issue that arose that could have negative implications for the Respondent was the question of the Paid Suspension while the Disciplinary Process was underway.

The question of Suspension has been considered by the Irish High Court in Bank of Ireland v Reilly [2015] IEHC 241. In the judgement the Court referred to the case of Morgan v Trinity College Dublin [2003]3 IR 157 where Kearns J identified two types of suspensions -Holding and Punitive.

The Court referenced the negative effects that even a Holding suspension, as in this case, could have on an employee. This was the situation referenced by the Complainant in this case – he lived in a small Country Town and following the suspension he was, for example cited, too embarrassed by the negative rumours circulating about himself to continue his playing career with the local GAA club.

In mitigation for the Respondent it might be noted that the suspension was of a relatively short duration and the Complainant’s absence from the Premises while a quite contentious Disciplinary process was under way was a legitimate precaution. The case had already seen the interviewing by the Management of a very large number of staff. The Gardaí had also been active on the case. The rumour mill would have been well underway long before the suspension of the Complainant and the suspension would, realistically, not have added much to the story.

On balance and from a solely Employment law position I had to find that the Suspension was probably an unnecessary precaution. It was a decision, however, not of such gravity as to completely undermine the Respondent’s defence.

3:2:3       Correspondence surrounding the Resignation.

The correspondence chain in this situation really began with the letter of the 29th May 2017 from Aylmer Solicitors to the Respondent. Aylmer Solicitors sought inter alia on behalf of the Complaint that the final Written Warning be vacated, the reasoning behind the Suspension which caused “significant reputational and emotional harm” to the Complainant be explained and the Company issue an Apology to the Complainant.

The Respondent replied on the 31st May 2017 to confirm that the disciplinary issues were fully exhausted in procedures and “is now closed”. The question of an Apology was not addressed in the Company letter.

The Complainants Legal Firm -Alymers replied on the 19th June 2017. In this letter they stated that the Complaint “could have no confidence in any grievance mechanism” and in view of all the “intolerable circumstances” could not continue his employment.

In review I had to note that the Complainant had not been dismissed but rather had been given a Final Written warning to stand for 12 months. In the Respondent’s Procedures this was the most serious sanction short of actual Dismissal. However, the Complaint had a position to go back to, following the suspension. I could not see any concrete evidence of a concerted almost malign scenario being created by the Respondent whereby the Complainant was being forced to voluntarily resign.

The entire stock loss situation I gathered from the evidence was a situation of considerable embarrassment to the Respondent and they were anxious to move on. Sacking the Complainant did not appear to be part of the picture.

I noted that the Complainant, advised by his Legal Advisors, felt a lack of confidence in the Respondents procedures describing the process as a “trumped up sham disciplinary process”. However, in a discussion at the Oral Hearing it was not clear why, for example a reference of the Final Warning under the Industrial Relations Acts to the WRC was completely precluded as an alternative to a Resignation.

In final conclusion having considered the evidence and the correspondence, which was written by his Legal Advisors, I failed to see the need to immediately resign his employment.

3:3       Final Conclusion

Firstly, I had to note that the Suspension was not helpful to the Respondent’s case but it did not amount to a sufficiently negative element as to justify the claim for Constructive Dismissal.

Secondly, I did not think there was sufficient robust evidence to justify what I called the “Edifice of Unfairness” argument being advanced by the Complainant. The entire process benefited from the involvement of eminent outside and Independent Consultants at the Disciplinary and Appeals stage. Natural Justice was observed.

Accordingly having carefully considered the evidence, both oral and written and the considerable legal arguments put forward by the respective Legal teams I could not come to the view that the “hurdle or high barrier to a successful constructive dismissal case” as described by the EAT in many previous cases had been surmounted in this case.

The claim for Constructive Dismissal is not found to well-grounded and is dismissed.

Act

Complaint/Dispute Reference No.

Summary Decision /Refer to Section Three above for detailed reasoning.

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00012681-001

Claim for constructive Dismissal is not well founded. Claim is dismissed.