Complainant

Respondent

Anonymised Parties

A Restaurant Manager

A Restaurant Owner

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-00015605-001

06/11/2017

The Complainant commenced employment in a well know Dublin restaurant in 2006. He was promoted to manager a short time later. He worked approximately 30 hours per week. He was dismissed on 17th September 2017.   He lodged a complaint with the WRC on 6th November 2017 and a hearing took place on 17th July 2018.

The Respondent provided a detailed written submission.

The Respondent submitted that the Complainant was employed as a manager in a

restaurant located in Dublin. He commenced employment with the Respondent at its inception in January 2014. The customers were familiar with the Complainant as the face of the restaurant, as Front of House Manager.

Around the beginning of September 2017, the Respondent was approached by Ms A, a business neighbour, only two doors away from the restaurant, who told the Respondent that she wanted to meet him as soon as possible regarding something she felt strongly about.

The next day and she told the Respondent something that he believed was set to seriously or fatally damage the business of his restaurant and the livelihood of 16 staff working in it.

Ms A told the Respondent that his manager and assistant manager were both in serious negotiations about opening a similar restaurant in opposition to him in Ms A’s family's recently closed restaurant two doors away from his restaurant.

The Respondent was shocked when told this by Ms A. The loss of front of house figures who knew a lot of the local customer and then also to have them compete against him only two doors away would probably have been the end of the restaurant and loss of 15 jobs.

The Respondent submits that the Complainant realised the effect this would have had on the restaurant due to its financially vulnerable position. Not only that, but the Respondent submits that the Complainant’s actions contravened his contract of employment where a condition explicitly states under paragraph headed Undertakings and Restrictions that

" During the period of this contract, you will devote the whole of your time and attention to the business of the company and you undertake thot during the period of this contract, you will not engage in any other activity which is likely to prejudice your ability to serve the company, nor will you engage in any other business avidity which may cause a conflict of interest with the business of the compony".

The Respondent submits that the Complainant was in breach of his contract and that had not Ms A not alerted the Respondent of the Complainant’s behaviour there would have been devastating results on the business as many of the customers of the restaurant would have moved their business to the new restaurant.

The Respondent does not dispute the Complainant’s right to start a new business in opposition to him but not while he was an employee of the restaurant.

The Respondent submits that he subsequently met up with the sons of Ms A (one of whom owned the closed bistro) who told him that they had been asked initially by the assistant manager, Mr X, who was making the initial investigations on the terms and conditions of the restaurant lease, but shortly after this they had met with the Complainant and had had a long discussion, 40 minutes approximately, with the Complainant asking detailed questions about equipment and costs. One of the sons told the Respondent that the Complainant had definitely taken the lead in the discussions and they had no doubt that it was the intention of the Complainant to start up a restaurant in opposition to the Respondent.

The Respondent submits that having spoken to the family involved with bistro it was decided to evoke the disciplinary process.

The Respondent met with the Complainant on 10th September and gave him a letter informing him of the allegations against him, inviting him to a disciplinary hearing and informing him of his rights.

The disciplinary hearing took place on 14th September 2017 at which the Complainant was represented by a full-time SIPTU official. Two members of the family which owned the bistro attended the hearing and gave evidence. Based on the disciplinary hearing and the gathered evidence the outcome of the disciplinary hearing (a dismissal) was communicated the Complainant in a letter which included his right to Appeal.

The appeal took place on 19th October and was carried out by an external consultant. The Complainant was again represented by his full-time SIPTU official.   After the appeal hearing the consultant made further enquiries into the matter. However, he concluded that dismissal for gross misconduct was justified and upheld the decision to dismiss the Complainant. The Complainant was duly informed by letter.

The Respondent submitted that this situation was one of the most difficult of his business career and the upheaval caused has created severe difficulties for him and the business.

In direct evidence at the adjudication hearing the Respondent stated that the Complainant had not challenged any of the evidence given by the witnesses at the disciplinary hearing. The Respondent also clarified that it was he, the Respondent, who had taken the decision to dismiss the Complainant.   The owner of the bistro also gave evidence. He confirmed that it was he who had set up the meetings with his brother and the Respondent. The owner’s brother also gave evidence confirming what had been outlined in the Respondent’s submission in relation to meeting with the Complainant and the assistant manager.

The witness stated that it was the Complainant who had asked most of the questions pertaining to the equipment in the bistro, he stated that the assistant manager, Mr X, had not asked any questions.

In response to questions from me, the Respondent stated that he had considered the representations made by the Complainant’s representative at the disciplinary hearing but what was said was at odds with the evidence. The Respondent was sure the Complainant had received a copy of his contract of employment which included the Undertakings and Restrictions clause.

Regarding the procedures utilised during the disciplinary process the Respondent confirmed that the Complainant had not been given anything in advance of the disciplinary hearing other than the invitation. The Respondent agreed that there had been a minimal investigation but this was because of time constraints and the fact that there was very little to report on (investigate), it was a straightforward process. The Respondent explained that the Complainant had been replaced by a restaurant manager who was known to the bistro owner, and she is still working in the restaurant.

In closing, the Respondent stated that it was clear from the evidence, and not denied by the Complainant, that he had been the main man in the attempt to open a restaurant in competition to the Respondent’s restaurant. It was also clear that there was a non-competition clause in the Complainant’s contract of employment. The Respondent reiterated that it had been a very difficult decision to dismiss the Complainant.

The Complainant provided a detailed written submission.

The Complainant submitted that the sanction of dismissal was not warranted, the Respondent did not follow fair procedures and natural justice and all the circumstances were not taken into account.    

The Complainant started his employment on the 7th of October 2006 as an assistant manager. His duties were to recruit, train, roster employees, be at the front house of the restaurant, looking after reservation and looking after employees’ documentation. Quite soon he received a promotion to a manager.

Prior to the dismissal he did not have any warnings, as he was an exemplary employee throughout his whole employment.

Around 2014 the Restaurant was sold to another person. During that time the Complainant received a document with written terms and conditions which he signed and returned to the new owner for countersignature. He did not receive the document back.

Around 2016, the Restaurant went back to the previous owner.

From around 2017 The Complainant was expected to do more than his normal duties, i.e. cleaning toilets or taking work to his home. However, shortly before his dismissal his hours of work were reduced.

The Complainant submitted that like any other manager of a restaurant, he dreamt that one day he could open his own restaurant. However, given his personal circumstances, and financial constraints, that idea always was as his unreachable prospect, a dream only.

Between the 5th and 10th of August 2017 the Complainant was approached by his assistant manager, Mr X, who asked him to go with him to see a place which was near his restaurant. The venue was a closed bistro, which could be used for a restaurant. The Complainant agreed to go with his colleague.

On the day the Complainant and Mr X spent approximately 40 minutes there and spoke on two occasions with the brother of the owner, Mr A. These conversations lasted 4 minutes in total. Following the visit, the Complainant went to his work and worked as usual. He did not visit it again, or approach in any way the owner of the Bistro Bar.

A month later, around the 10th of September 2017, the Complainant received an invitation to the disciplinary meeting and was suspended from work. No rationale was given for such a suspension, but the Complainant’s job was given to a new manager who started her work on the day the Complainant was suspended.

The allegations were that a) during the period of his employment he engaged in negotiations to open a similar restaurant near the restaurant where he worked, in conflict with his contract of employment and his Respondent; b) he issued a €100 voucher and recorded the sale as €50.

During the proceedings, the second allegation was withdrawn. However, the Complainant suspension was not lifted.

The Complainant submits that there was no investigation process, the Complainant was invited directly to a disciplinary meeting chaired by an outside Consultant on the 14th of September 2017. The owner was in attendance also. However, prior to the disciplinary hearing the Complainant was furnished with a piece of paper claimed by the Respondent to be part of the Complainant’s contract of employment. The relevant part was that “During the period of this contract, you will devote the whole time and attention to the business of the Company and you undertake that during the period of this contract you will not engage in any other activity which is likely to prejudice your ability to serve the company, nor will you engage in any business which may cause a conflict of interest with the business of the company”. However, the Complainant strongly denies receiving such document.

At the disciplinary meeting two witnesses were called, one witness said that she had spoken over the phone with another person, Mr X (the assistant manager), who was interested in seeing the bistro bar. She stated that it was clear to her that Mr X wanted to buy it with another person.

The second witness said that he met with the Complainant and his Mr X during their visit and it was the Complainant who asked for the price, renting arrangements and other matters including the gas system.

The Complainant explained that he has no intention of buying anything as he did not have money to do so, and he did not buy nor was he involved in any business activity which could cause a conflict of interest with the Respondent. Mr X, the assistant manager was not interviewed as a witness.

On the 17th of September 2017 the Complainant was dismissed with an immediate effect. The Respondent concluded that the Complainant wanted to open another restaurant near his Respondent’s restaurant, in direct competition. It was further stated that he “(…) have commenced that process while in the employment of NAME. This represents a complete and irrevocable breakdown in the employer/employee trust as a manager and contravenes your contract of employment (…)”.

The Complainant appealed the decision on the following day. The appeal meeting was held on 19th of October and was chaired by an external consultant. The Complainant explained again that he was only curious about the other place and assisted his colleague on his trip to see the place. His union shop representative explained again, that if somebody is checking on a house ‘on sale’, it does not mean that he/she wishes to buy it. The Complainant explained that he was not the one who arranged the visit. He only spoke to the brother of the Bistro owner for 4 minutes in total while being there and forgot about the whole viewing when he got back to his own work.

On the 7th of November 2017 the Complainant’s appeal was not upheld. The Complainant then referred the matter to the Workplace Relations Commission.

The Complainant submits that the disciplinary process was unfair for a number of reasons:

a) the Complainant was not given a copy of a complaint

b) there was no investigation process

c) the Complainant was not given a fair warning that some behaviour(s) may be unacceptable and could lead to disciplinary.

e) none of the witness statements were put in writing or signed

f) The company relied on a document which was not given to the Complainant prior to the incident (“excerpt from the contract of employment”)

g) when the Complainant was suspended, his work was immediately assigned to a newly hired employee.

The Complainant contends that if the Respondent wished to discipline any employee for being in breach of some rules, they should have informed him/her about such rules in advance.

Furthermore, there is also the right to a hearing before an impartial, or unbiased, adjudicator: the Complainant strongly believes that in cases of dismissals, the decision-maker must be disinterested, and that the role of prosecutor and decision-maker must be separated, not to mention that the Complainant should not be involved in the whole process. The individual nominated as decision-maker cannot have a personal animus against the employee who is the subject of the dismissal hearing. The Complainant submits that the owner, who suspended the Complainant, was involved in the disciplinary hearing.

The Complainant also submits in mitigation that:

a) the Complainant did not arrange any meetings with the owner of the bistro bar, he merely agreed to assist his colleague named Mr X on the visit and upon his request. That was done in the Complainant’s free time,

b) the Complainant did not talk to the owner of the bistro bar, he spoke to his brother for 4 minutes in total. During the conversation he did not show any indication that he wishes to buy the bistro and open a restaurant.

c) the Complainant did not talk about the bistro with the owners after the visit

d) the Complainant did not engage in any activity which was likely to prejudice his ability to serve the Respondent nor did he engage in any business activity which might cause a conflict of interest with the Respondent’s business.

The Complainant strongly believes that the decision to dismiss him was an unwarranted and unreasonable one.

The Complainant also submits that he was suspended immediately on 10th of September, without any investigation. No rationale was given to the Complainant for such an act. The Complainant is of the view that suspension was completely unnecessary.

In direct evidence at the adjudication hearing the Complainant stated that he had never received a copy of the contract of employment with the non-competition clause in it.

In response to questions from me, the Complainant stated that he was only helping the assistant manager, Mr X. When I put it to him that in the minutes of the disciplinary hearing his representative had said that he was “exploring the possibility”, the Complainant replied by saying that he had no money for the project, that he was only checking it out.

The Complainant also explained his attempts to mitigate his loss since his dismissal. He had tried to find work in the restaurant area but had been unsuccessful until January 2018, when he got work as a waiter, however his weekly pay is €250 less than it had been when he had been working with the Respondent.

In closing, the Complainant submitted that his dismissal was unreasonable and unwarranted and could not be regarded as falling within the range of reasonable responses of a reasonable Respondent. Furthermore, the Respondent failed to observe fair procedures in many aspects.

The Complainant also reiterated there was no reason to suspend him on 10th September and that such a suspension might be an indication that a decision had already been made. And that in such circumstances, the dismissal should be found to be unfair and the Complainant should be compensated.

Having considered the matter carefully, I find that the facts of this case are, to a large degree, agreed between the parties.   There is no disputing that the Complainant was looking at the possibility of either (a) opening his own or (b) assisting a friend, the Assistant Manager, Mr X, to open a restaurant that would have been in direct competition with the Respondent’s restaurant, due firstly to its proximity to the Respondent’s restaurant and secondly because it was going to be of the same or similar ethnic background in terms of its offerings. Where the parties differ is in the extent to which the Complainant’s exploration of such a possibility impacted on the employer/employee relationship. For the Respondent, the fact that the Complainant had taken some steps down this path was enough to irrevocably destroy their relationship. For the Complainant this was a check on what might be possible, nothing more. The Complainant also stated that he would have gone no further down this path without first having informed the Respondent.

S6(4)(a) of the Act states without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from the conduct of the employee.

In addition S6(7) of the Act requires that in determining if a dismissal is an unfair dismissal, regard may be had, if the Adjudication Officer considers it appropriate to do so- (a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and (b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure which the employer will observe before and for the purpose of dismissing the employee …or with the provisions of any code of practice.

I must therefore consider both the fairness of the procedures adopted and substantive issues leading to the dismissal.

Having reviewed the procedures used in this case I find them to be less than they should have been. Firstly, there was no real investigation. The Complainant was never asked for his version of events until the disciplinary hearing.   There was no real attempt to find the facts relating to the alleged breach of conduct, merely conversations with the owners of the empty bistro.

Secondly, the Respondent failed to give the Complainant a copy of any witness statements (as none existed) in advance of the disciplinary hearing. Providing the alleged perpetrator of an alleged act of misconduct in advance of a disciplinary hearing for them to prepare a defence, is a sine non- qua of fair procedures. This requirement is all the more important when the outcome of the disciplinary process could be the ultimate sanction of dismissal. Although the witnesses did attend the disciplinary hearing and gave statements I do not believe this is enough to satisfy this requirement.

The suspension of the Complainant in advance of the disciplinary hearing was excessive, unwarranted and damaging to the Complainant. In Reilly the High Court noted that the suspension of an employee is an extremely serious measure to take which has the potential to cause irreparable damage to the employee’s reputation and standing, even if the contract of employment provides for suspension. The High Court held that a paid holding precautionary suspension should not be undertaken lightly, and only after a consideration of the necessity for the suspension pending a full investigation of the conduct in question. The comments of Noonan J in respect of suspension in this case are of particular importance:

‘The suspension of an employee, whether paid or unpaid, is an extremely serious measure which can cause irreparable damage to his or her reputation and standing. It is potentially capable of constituting a significant blemish on the employee’s employment record with consequences for his or her future career. As noted by Kearns J. (as he then was) in Morgan v Trinity College Dublin [2003] 3 IR 157, there are two types of suspensions, holding and punitive. However, even a holding suspension can have consequences of the kind mentioned. Inevitably, speculation will arise as to the reasons for the suspension on the premise of there being no smoke without fire. In Mr. Reilly’s case, his evidence was that rumours and reports circulates about his ranging from possibly being involved in fraud to participation in a tiger kidnapping.

Thus, even a holding suspension ought not to be undertaken lightly and only after full   consideration of the necessity for it pending a full investigation of the conduct in question. It will normally be justified if seen as necessary to prevent a repetition of the conduct complained of, interference with evidence or perhaps to protect persons at risk from such conduct. It may perhaps be necessary to protect the employer’s own business and reputation where the conduct in issue is known by those doing business with the employer. In general, however, it ought to be seen as a measure designed to facilitate the proper conduct of the investigation and any consequent disciplinary process.”

The suspension invoked in this case was excessive and should not have happened, particularly for an employee with long and loyal service such as the Complainant.

In considering the procedural aspects of this case I do recognise that the Respondent did bring in external consultants to assist in both the disciplinary hearing and the appeal, and this was commendable. However, the advice came too late to rectify an already tainted process.

As to whether there were substantial grounds for the Complainant’s dismissal on the ground of gross misconduct, the applicable legal test is the “band of reasonable responses” test, as comprehensively set out by Mr Justice Noonan in the context of Section 6 of the Unfair Dismissals Act 1977 in the High Court case of The Governor and the Company of Bank of Ireland -v- James Reilly (2015) IEHC 241, wherein he stated: “It is thus clear that the onus is on the employer to establish that there were substantial grounds justifying the dismissal and that it resulted wholly or mainly from one of the matters specified in s. 6(4), which includes the conduct of the employee or that there were other substantial grounds justifying the dismissal. Section 6(7) makes clear that the court may have regard to the reasonableness of the employer's conduct in relation to the dismissal. That is however not to say that the court or other relevant body may substitute its own judgment as to whether the dismissal was reasonable for that of the employer. The question rather is whether the decision to dismiss is within the range of reasonable responses of a reasonable employer to the conduct concerned - see Royal Bank of Scotland -v- Lindsay UKEAT/0506/09/DM.”

The reason given by the Respondent to the Complainant for his dismissal was, “your intent was to open an X type restaurant in direct competition with your current employer. And, to have commenced a process while in the employment of (name of restaurant). This represents a complete and irrevocable breakdown in the employer/employee trust as manager of (name of restaurant) and contravenes your contract of employment…”

The question to be answered in this case is whether it was reasonable for the Respondent to dismiss an employee of 11 unblemished years’ service for exploring possibilities? I do not think so. I believe the Respondent could have warned the Complainant that if he persisted with his enquiries or attempted to open a restaurant in competition with his employer, then his employment would be terminated. However, he had done nothing more than explore possibilities; his dismissal was premature and as such must be found to be unfair.

I find that this dismissal was unfair. The Complainant was out of work for four months and at the time of the adjudication hearing was working in a job paying less than he had been earing with the Respondent.

In the circumstances I award the Complainant a total of €10,826. As the award is by way of compensation for loss of earnings it is subject to income tax.

Gross misconduct, procedures, suspension, reasonableness