Complainant

Respondent

Anonymised Parties

A General Manager

A Car Dealership

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-00009538-001

3/Feb/20173/Feb/2017

The Complainant was described as a General Manager with the Respondent Car dealership. The Complainant was approached by a member of staff who wanted to secure a commercial vehicle for her Husband. The Complainant assisted in that process.

Subsequently the paperwork in relation to that transaction was called into question by the third-party finance company. The Complainant never denied that he had prepared the relevant paperwork but was of the view that what he done was non-contentious, did not result in any loss, and simply operated to facilitate an employee.

The Employer took an immediate and firm view that the transaction was irregular and questionable. The Employer conducted an internal Investigative and Disciplinary process which resulted, per letter of the 18th October 2016 to the Complainant, in his immediate dismissal for actions constituting gross misconduct.

There was an Appeal process which reduced the sanction imposed to that of a demotion with associated reduction in pay. This was rejected by the Complainant.

The Complainant gave his own evidence which was tested by the Respondent representative. The Complainant accepted that he had created a document knowing that the content thereof was incorrect. The Complainant believed his actions certainly might have warranted a sanction but not a dismissal. The Complainant submitted a comprehensive booklet of documents which were opened to me in the course of the three days of hearing. The Complainant made the case that the Investigation and Disciplinary processes were unfair and chaotic. The Complainant’s representative suggested that the Respondent has tried in the Adjudication process to shore up it’s case in an attempt to deflect from how inadequate the procedures had been.

The Respondent’s case is that the Complainant was fired for manufacturing a deliberate deception.

Section 6(4) of the Unfair Dismissals Act 1977 reads:

“Without prejudice to the generality of Subsection (1) of this section the dismissal of an employee shall be deemed for the purposes of the Act not to be an Unfair Dismissal if it results wholly or mainly from one or more of the following:

…

(b) The conduct of the employee,

The Respondent’s case is that the conduct of the employee resulted in his dismissal and that the Respondent decision to dismiss (or to demote on Appeal) was justified and reasonable in all the circumstances. The Respondent stood over its procedures and asserted that the wrongdoing required a serious sanction. There was a breach of Trust, which was all the more serious given the Complainant’s seniority on the management ladder

The Respondent says the reduction of sanction on appeal was a genuine offer which was rejected by the Complainant at his own peril.

I heard evidence from the investigator and the Group Finance Manager and the two people who handled the Disciplinary process and the Appeals process. All evidence was tested under cross examination and I have considered and reviewed my note of all the evidence. Again, I was provided with a comprehensive book of relevant documents.

I have carefully considered the evidence adduced in the course of three days of hearing. The Complainant was a General Manager who had worked with the Respondent company for three years. The Respondent is a busy car dealership dealing in thousands of new and used car sales.

The Complainant was approached by a junior employee (CJ) who was looking to purchase a motor vehicle for her husband. The vehicle needed to be a commercial van. The Complainant and the employee sourced an appropriate vehicle which had a marked down price of €18,000.00. CJ’s personal circumstances were such that she was not in a position to put up the deposit which would normally have been in the sum of up to 10%.

To get around the lack of deposit the Complainant, without consulting anyone higher up the management chain, proceeded to create a document (Invoice 9242) which gave the van in question a greater and fictional book value of about €19,800.00. The Complainant deducted a fictional deposit of €1,800.00 which was never paid and thereafter effectively submitted a financing package application for €18,000.00 which constituted a 100% finance application. The paperwork was submitted in early July 2016

The Complainant could see no particular difficulty with this as he said that figures were always being massaged or grossed up so as to meet the criteria with respect to a deposit having to be put up. The Complainant gave evidence that this allowed garages to get over the unavailability of part or all of a deposit especially where trade-ins were effectively worthless.

The manual invoice 9242 did not match up with the Hire Purchase Agreement which was presented to the Respondent financing company (which deals exclusively with car financing) and which disclosed the full price for the vehicle at €18,000.00. There can be no doubt that the proposed transaction raised alarm bells almost as soon as it had left the shop floor. In fact, the creation of the manual Invoice seems to have been a crude act which was always going to jar with the truth of the value contained in the Agreement. The representative from the finance company spotted the difficulty and immediately queried the inconsistent figures with Respondent Management and in particular the Financial Controller (WB).

I have to be mindful of the fact that there was an immediate and swift reaction to the creation of the invoice which did not tally with the figures being sought. The act was seen as sufficiently out of the ordinary as to merit decisive reaction. There was certainly something wrong here.

WB sought an explanation from the workplace team on the 15th of July 2016 and in response to this the Complainant came forward and said that he had created the Invoice 9242. The Complainant did not attempt to conceal his actions. At this point it seems matters were escalated with the Respondent contacting a Ms. D from the Human Resource Department in the UK. I accept that there is a not inconsiderable delay between the 15th of July 2016 and the 9th of August 2016 and that the Complainant was probably on the backfoot in attending a meeting which was not flagged as an investigation or disciplinary meeting in advance. The Complainant said in his evidence that he was horrified at the way he was treated. He noted that Ms. D had selectively interviewed people in the run up to this meeting and that he had no chance to consider their statements.

Much was made of what conduct was being investigated, and the use of the word “falsification” was questioned as was the idea that the Complainant’s conduct had brought the company name into disrepute. The allegation under investigation was:

“The falsification of records of a manual invoice to RC deliberately at a higher amount and bringing company name into disrepute”

I would have to accept that the allegation is a little confused and I accept that the concept of bringing the company into disrepute seems to have been tacked on at the end and never really substantiated or dealt with in the meeting.

The meeting concluded with the Complainant being suspended with pay pending the outcome of the investigation.

Again, I have to be mindful of the fact that the Complainant although taken unaware at the tone of this preliminary investigation meeting did nonetheless re-iterate several times that he had “made a mistake” and that the creation of the invoice had been “an error of judgement”. Not long after this meeting the Complainant was invited by letter dated the 15th of August 2016, on foot of the outcome of the investigative process, to a disciplinary meeting to answer the following:

“The allegation against you is that you were involved in the falsification of records with the objective of securing 100% finance from the…Banque Branch Ireland in breach of company procedures which is a fraudulent misuse of the Company’s procedures and could bring the company name into disrepute. This allegation is very serious.”

I have to accept that as per the letter from Ms. D the Complainant was on notice that disciplinary sanction up to and including dismissal would be considered if the allegation was to be substantiated

In his evidence the Complainant indicated that he was surprised that this matter had reached this stage. He believed he had genuinely assisted a staff member and that other members of staff knew the rationale behind what he had done and that they never believed that there was wrongdoing. The Complainant was of the genuine view that he had gained nothing and that his Employer had lost nothing. The Complainant said that staff members were either selectively not interviewed or where interviews had been conducted he was not allowed to probe any assertions made. It is curious, I must note for example, that CK amongst others was never interviewed and whilst WB made a statement through an email the Complainant was never given the opportunity to challenge same.

I would also have to accept that Ms. D has widened the scope of the Disciplinary process to include an allegation of fraud when that allegation did not form part of the investigative process she herself conducted, wherein falsification was at issue. This is a big jump, and I note that the Complainant’s uninvited representation made much of this change in allegation at the first Disciplinary meeting conducted by a Ms. B. on the 23rd of August 2016. I would also have to accept that it is surprising where a high-level HR Manager has apparently been flown in from Head Office in the UK to conduct a high level and serious investigation that a comprehensive investigation report has not been prepared. There were no terms of reference for the Investigation, no summary of meetings held, no right of reply, no findings of fact and no conclusions drawn. Unusually, the investigator herself has triggered a Disciplinary process and had herself declared the matter to be serious, which would not be considered best practise in my experience. So, I have to acknowledge that the Complainant was at a disadvantage in the Disciplinary process when he was being accused of a fraud without knowing the process which brought the Investigator to that allegation. I can understand the Complainant’s reluctance to co-operate without some clarification – albeit his representation appears to have inflamed the situation somewhat.

I would have to accept that the Respondent’s letter of the 30th of August 2016 confused matters somewhat. In that letter it is suggested that the investigation was into:

“the falsification of a record with the objective of securing 100% finance from the Bank…”

This appeared to move away from a fraud having been perpetrated though I note that in subsequent Disciplinary meetings the Respondent held onto an allegation of fraud. Reading through the notes of the various meetings conducted by Ms. B, I can see how frustrating they were to her. However, I have to keep sight of the fact that the complainant’s job and his livelihood was on the line here, and I have to accept the contention that the process lacked competency and professionalism. For example, saying that you give the allegation of fraud it’s “common context” meaning, is both meaningless and unhelpful, and does not stand up to the exacting standards required in conducting workplace investigations and disciplinary procedures.

The Complainant in his evidence said that the goalposts kept moving around and that that of itself, was unfair. I am inclined to agree with the Complainant. In the course of meetings, the Respondent does indeed seem to be reconfiguring the allegations in response to issues raised in real time. The main difficulty from the Respondents point of view was the failure at the outset to formulate a coherent allegation and simply stick to it. The Complainant has never denied that his action was wrong – and in fact (in my opinion) the allegation contained in the 30th of August letter most closely represents the wrongdoing. Attempts to assert loss and reputational damage were spurious.

I note that the Disciplinary process got entrenched in legal row and legal definition but I also note that it was being used to rectify and ameliorate a wholly inadequate Investigative process. The Complainant sought to interview witnesses or at least probe statements made – most of which should have been already covered off in an investigation process. This option to put questions at that late stage was cumbersome and unsatisfactory. Ms. B goes on to confirm that she has been having ongoing interviews with certain witnesses but fails to disclose content simply stating they were spoken to “simply to clarify in order to make a decision on the points raised”.

Too many important additional issues were getting aired at the Disciplinary stage such as family schemes and the raising of invoices none of which had been raised at the Investigation as the Complainant was not given any opportunity to consider and prepare a response at that stage. Also, the issues of loss to the company and bringing the company into disrepute are never substantiated but are left open ended.

In the middle of this process the Complainant suggested that an independent legal review might be a satisfactory route through the impasse. This offer was not taken up and that is regrettable.

The Complainant was dismissed for gross misconduct on the 18th of October 2016 in a letter penned by Ms. B. The assessment given by Ms B is that:

“I have concluded that [..the Complainant’s..] actions amounted to Gross Misconduct in light of company policy and given that you are in a position of trust as a Senior Manager. Through your action in breaching company policy the company has lost all trust and confidence in you”

It seems to me that the suggestion is that the Complainant’s role as a senior manager seemed to have a bearing on whether his actions would be considered Gross Misconduct? Such an assessment is unusual.

I find in general that the letter of dismissal is confusing. Whilst falsification, fraud and bringing the company into disrepute all remain the allegations none is specifically addressed and instead the letter dwells on practises and non -practises within the company.

On balance, I would have to find that the Complainant may well have committed an act which on the face of it could constitute conduct which would justify a dismissal. He has never denied that the preparation of the invoice was a misconduct (though has maintained it be not serious misconduct). However, I cannot accept that the process and procedures utilised to arrive at the point of dismissal were anything other than flawed and unfair. This is an enormous multi-million, pan-european company which must be expected to operate to the highest standards and has apparently failed to so operate in every conceivable way.

I accept that the Complainant’s representative was challenging, but a process that leads to the potential financial ruin of a heretofore exemplary employee, must be able to withstand a robust challenge.

I note that the Appeal’s process sought to ameliorate the position by reversing the dismissal and offering the Complainant a demoted position within the workplace but I have to accept the Complainant’s view that too much damage had been done at that point. He described being made to feel like a criminal.

The Complainant has moved on with his life and has obtained employment elsewhere albeit at a reduced rate. The Complainant’s representative has provided me with a breakdown of the losses, and these were provided after the date of hearing and I have considered this documentation. The Complainant had been in receipt of earnings in an amount in excess of €100,000.00 and is now earning somewhere in the region of €40,000.00.

In assessing compensation for remunerative loss, I have remained mindful of the fact that the Complainant himself conceded that he had made a mistake and whilst he has minimised the mistake the facts are that it caused an immediate and negative reaction.

Pursuant to Section 7 of the Unfair Dismissals Act 1977 (as amended) I find that the Complainant is entitled to be compensated for Financial Loss in the sum of €40,000.00.