Complainant

Respondent

Anonymised Parties

A bank official

A bank

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-00009720-001

15/Feb/2017

The Complainant was an employee of the Respondent bank and had commenced employment in December 2006, the initial contract of employment was a fixed term contract for a duration of two years. In December 2007, the Complainant applied for and was successful in securing a permanent position with the Respondent.

In the period, 2013 to 2015 the Complainant’s annual performance reviews showed that he had achieved a performance rating of “Partially delivered against expectations” for the years 2013 and 2014. In 2015 his performance rating was “Failed to deliver against expectations”.

Such a performance rating in 2015 resulted in the Complainant entering the Respondent’s Performance Improvement Process (PIP). Adjudication Decision ADJ – 00004792 contains a comprehensive appraisal of the PIP process.

The ultimate outcome of the PIP process was the dismissal of the Complainant.

Preliminary Argument – “Out of time”.

The date of dismissal is 3rd August 2016, there can be no ambiguity about the Date of dismissal. The decision letter dismissing the Complainant is dated 6th July 2016 and states that the date of dismissal is 3rd August 2016. The dismissal date on the P45 issued to the Complainant is 3rd August 2016 and the Performance Improvement Process (PIP) quite clearly states:

“The fact that an employee has appealed against the decision to dismiss him does not affect the running of the notice period (or the termination of his employment with a payment in lieu of notice). Where an employee is reinstated as a result of an appeal against dismissal then he will be compensated for any loss of pay and his period of continuous service with the Respondent will not be affected”.

Section 41(8) of the 2015 Act states that:

“An Adjudication Officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause “

The Respondent then quoted the following legal cases to support the argument that the complaint was out of time:

Cementation Skanska v Carroll – Labour Court Determination DWT0338 (2003).

Department of Finance v IMPACT [2005] 16 ELR 6

Substantive Issue

Background.

The facts of this case provide a substantial basis for the termination of the Complainant’s employment on competence grounds.

Two primary documents will be relied upon by the Respondent to illustrate the factual background.

The Performance Improvement Process Form and Report dated 25th May 2016.

The Complainant commenced employment with the Respondent in late 2006. He was promoted swiftly thereafter in February 2007. The Respondent bank productively and regularly engaged with the performance of its staff and all the records of the Complainant’s performance reviews are available. Of the 8 years of the Complainant’s employment he only received a ‘fully met’ performance rating for 3 years. There can be no dispute: a trend of underperformance had developed in respect of the Complainant. The Respondent Bank’s PIP policy was introduced in 2013. However, it was not until 2015 that the Complainant was invited to participate in the formal PIP. The Complainant formally entered the PIP process I February 2015.

The action plan for the PIP was agreed with the Complainant in February 2015 and meetings to support and discuss the action plan were held with the Complainant on the following dates:

27/02/2015; b) 13/03/2015; c) 27/03/2015; d) 02/04/2015; e) 08/04/2015; f) 13/04/2015 and g) 16/04/2015. 7 meetings in total.

Notwithstanding all of the meetings, the Complainant did not avail of the opportunity to add his comments to the PIP despite being reminded that he should and that he should fully participate in the process. A formal Verbal Warning was issued to the Complainant on 17/04/2015.

As the Complainant did not make sufficient progress at this stage of the process he was moved to the second stage.

On 17th April 2015 the Complainant entered the second stage of the process. Significantly during this stage of the process agreement was reached with the Complainant that a number of his core activities would be removed to allow extra time to catch up on his backlog. This was a response to the Complainant’s assertion that his workload was excessive and over burdensome. Despite performing in this diluted role there was no consistent improvement in the Complainant’s performance and accordingly the PIP process was moved to the next stage. The Complainant was issued with a Written Warning on 20th May 2015.

Meetings were held with the Complainant on the following dates:

20/05/2015; b) 29/05/2015; c) 11/06/2015; d) 26/06/2015; e) 24/07/2015; and f) 07/08/2015

It was agreed to support the Complainant further by reducing his role even further. This stage of the process was extended for an eight-month period however at the end of this period there was no evidence of any sustained improvement. The Complainant then appealed this stage but was unsuccessful in his appeal.

The final stage of the PIP took place between January 2016 and April 2016, on 22nd January 2016 the Complainant was issued with a Final Written Warning, the letter advising the Complainant of his Final Written Warning also clearly advises him that his performance would continue to be formally reviewed and if he did not bring his performance to an acceptable level that he would have reached the stages of the process where his reviewer would request the Head of Human Resources for his business area to consider terminating his employment. The Complainant was free to appeal the issue of the Final Written Warning. He chose not to appeal the issue of a Final Written Warning.

On 21st April 2016, the Applicant received notification from his reviewer that she had no alternative but to refer his case to the Head of Human Resources for his business area with a request that she consider terminating his employment with the Respondent as he had not illustrated any level of improvement in his performance during the PIP process.

The PIP process progressed to the dismissal stage in line with policy. A report outlining details of the Complainant’s underperformance was forwarded to the Head of Human Resources for the business area in line with the PIP policy and process. The Head of Human Resources appointed Mr X as an independent manager (Decision Maker) to review the process. On 6th July 2016 Mr X issued his decision to terminate the Complainant’s employment with four weeks’ notice. The Complainant was entitled to appeal this decision and exercised this right to appeal. The Respondent appointed an Appeals Officer, Mister Y, to hear the appeal and this meeting was held on 29th July 2016. On 15th August 2016 Mr Y issued the appeal decision and that was not to uphold the appeal. The date of dismissal as per the letter of Mr X issued on 6th July 2016 was 3rd August 2016.

Respondent’s Case.

Firstly and fundamentally, the Complainant’s trade union have not accurately recounted the provisions of the Unfair Dismissals Acts 1977 – 2001. They contend that:

“[….] under the Unfair Dismissal Act, 1977 -2001, it is incumbent on the employer to prove that the decision to dismiss an employee is fair. In order for the case to be fair it must be proven under the grounds of:

·         Capacity;

·         Conduct

·         Redundancy

·         Contravention of statutory entitlement”

This description of what the Unfair Dismissals Acts permit is, simply put, inaccurate and it would be dangerous to proceed on the basis of an inaccurate assertion of the fundamental legal and statutory principles under review in this case.

Section 6(4) of the Unfair Dismissals Acts states:

“Without prejudice to the generality of subsection 1 of this section, the dismissal of an employee shall be deemed, for the purpose of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following: -

The capability, competence or qualifications of the employee for performing work of the kind which he was employed to do……”

It is a point of fact and law that the Unfair Dismissals Act expressly provides that it may be lawful for an employer to terminate the employment of an employee if it reasonably views its employee to lack the requisite competence to perform work of the kind which he was employed to do.

Kerr in his annotated Irish Employment Legislation states: -

“……. The Tribunal takes the view that subsection 4 merely sets out potentially fair reasons for dismissal. The Tribunal also takes the view that it is not the function of the Tribunal to establish whether the employee, for example, is in fact incompetent or incapable. If an employee is dismissed for one of the reasons it is sufficient that an employer honestly believes on reasonable grounds that the employee is incompetent or incapable…….”

Fair procedures must apply to arrive at any decision. The Respondent’s position is that fair procedures did apply in the Complainant’s situation.

It must be clearly stated that the Respondent’s PIP is not a disciplinary policy. It is a policy and procedure for addressing difficulties with underperforming employee and is entirely separate and distinct from its policy for addressing misconduct / disciplinary matters.

The Respondent does not treat inadequate performance in the same manner as it treats misconduct. Options short of dismissal, such as demotion or removal of duties can be explored as part of the PIP.

The ASPIRE process, incorporating the PIP process, are neither disciplinary nor grievance processes, and therefore the Code of Practice (S.I. No 146 / 2000) has no application to the PIP process. However, notwithstanding this, the PIP complies in full with the requirement for natural justice and fair procedures as required by the Code of Practice.

The PIP process in relation to the Complainant took 18 months to complete and it is submitted this was a reasonable timeframe within which the Complainant could have illustrated improved performance. At no point during the course of the PIP process at which the Complainant was represented by an experienced trade union official was there any objection taken to the process or the objectives set for the Complainant. In all of the circumstances, the Respondent submits that the decision to terminate his employment was a fair one and these proceedings should be dismissed.

The Performance Improvement Process was never agreed with the Union for the very reason that the Union could not support a flawed process.

On the subject of natural justice, all employers are encouraged to explore to review all options in advance of the ultimate option of dismissal. In this case, no other option was considered, a fact that is highlighted in meeting notes and outcome letters.

The decision to dismiss was made by Mr X who, according to Mr Y (the appeals officer) had the option to dismiss or not to dismiss. Was this a fair option?

Where was the option of further support and guidance, the sideways move to another role, where is the demotion option? Where is the option to exit the employment with dignity and respect?

The Complainant, like all employees had some good years and some bad years in employment. The Respondent has chosen to concentrate on the bad performance, take no account of the good performance and ignored personal circumstances highlighted in the process.

The point was made that the Respondent normally only dismisses in situations of Gross Misconduct. This is clearly not the case of Gross Misconduct.

There were personal circumstances involved and the Respondent gave little or no consideration to these at all.

The Union also raised the point of the Complainant’s promotion to assistant manager. The Respondent bank promoted the Complainant after he, the Complainant, had successfully applied for the position. The Complainant’s representative makes the point that a flawed internal selection process was used to promote the Complainant who subsequently struggled in this role. Instead of admitting their failure in promoting him and instead of demoting him back to his previous role, the Respondent decided to performance manage him out of the business. This point was raised at the appeal and ignored in the outcome of the appeal by Mr Y.

On the question of the outcome of the appeal Mr Y has made some points in his outcome letter. It is mentioned that he was comfortable that the process provided to the Complainant was followed. He was comfortable that the consequences of continued underperformance were clearly outlined and finally he was comfortable that that the Complainant’s duties were diluted to a major extent and yet the Complainant failed to perform to the level expected of an Assistant Manager. None of these matters were in dispute between the parties at the time, however he has failed to grasp the basis of the appeal which was and continues to be the flawed process. Mr Y failed to consider any possible alternatives to dismissal.

All of the aforementioned points were addressed by the Adjudication Officer in the Workplace Relations Commission who following an extensive review of the Respondent company’s PIP process found: - “In the case in hand the PIP booklet is laden with references to dismissal - the semantics in the Employee Guidelines ( section 3B of the Employee Guidelines is a good example) are all focussed on Dismissal “ He goes onto say:

“It is my view based on common understanding of what is good HR Practice in large companies and a review of the literature available from CIPD and IBEC that the average employee would regard an invitation to participate in the Respondent PIP with some justifiable anxiety. Once an employee is in the scheme it might appear that there was an almost inevitable momentum building to a yes/no dismissal decision”.

Case law quoted:

·         The Code of Practice on Grievance and Disciplinary Procedures – S.I.146 of 2000.

Preliminary Argument – “Out of Time”.

Following a hearing on 14th November 2016 the Recommendation of the Adjudicator was that the question of the Complainant’s claim of unfair dismissal was “well within time to lodge a claim under the Unfair Dismissals Act 1977 and that is the correct forum for this element of the claim”. For whatever reasons this Recommendation was not issued by the Workplace Relations Commission (WRC) until 14th February 2017, at which stage it was out of time. I note that the complaint made under s.8 of the Unfair Dismissals Act was lodged with the WRC on 15th February 2017.

In consideration of the arguments presented by the Respondent I cannot overlook the fact that there was a time delay between conducting the hearing and issuing the Decision. The Complainant’s representative as soon as the Decision was received made a second complaint under the Unfair Dismissals Act 1977 and this was received by the Workplace Relations Commission the next day.

Under these circumstances, I am ruling that the complaint is within time and will hear the complaint.

Substantive Issue

In consideration of the substantive issue I have read through the literature on the Performance Improvement Process (PIP) in some detail and would make the following observations.

The explanatory document is well laid out and easily understood, it contains sections on the Introduction, Scope and Operation, Application, Initial Stage, Stage 1 – Verbal Warning, Stage 2 Written Warning, Stage 3 – Final Written Warning, Dismissal Stage, Appeals against Verbal and Written Warnings, Appeals against Final Written Warning, Appeals against Dismissal and five more paragraphs on miscellaneous matters in relation to the process.

The Performance Improvement Process – Guide to Employees contains similar to the above plus it also contains timeframes and a process flow diagram. It contains explanations on how the process will operate and the timeframes between stages.

The following paragraph appears in the document:

“It is important to be aware that although the PIP is designed to support improvement, continued underperformance at this stage of the PIP may result in further sanctions including dismissal”.

The inclusion of this sentence is important as employees need to be aware of the possibility of dismissal. To include this sentence four times in the space of five pages may be intimidating to employees and consequently the entire PIP process may well be viewed as a version of the Disciplinary Procedure that will ultimately lead to dismissal.

I note that the decision to dismiss or not to dismiss lies with the Decision Maker (appointed by the Head of HR for the business area) and the only person who can vary the sanction is the Appeals Manager.

The Performance Improvement Process Policy (tab 16, point 5.4.5 Respondent Submission – Booklet of Papers) reads as follows:

“If, after holding the meeting and making any necessary enquiries, the Decision Maker is satisfied that the employee has failed to reach or sustain an acceptable level of performance after being given a reasonable opportunity to do so then he may give the employee notice to terminate his employment. The decision to terminate the employee’s employment, the reasons for it and the employee’s right of appeal (see below) will be confirmed to the employee in writing”.

The policy is totally silent on the possibility of a situation where the Decision Maker is not satisfied that the employee has failed to reach and/or sustain an acceptable level of performance. What happens then?

In his submission the Complainant’s representative strongly makes the point the process is flawed and deemed it noteworthy that by letter dated 2nd March 2017, following a recommendation from the Workplace Relations Commission (ADJ – 0004792), the Respondent wrote to the FSU seeking an opportunity to meet to discuss the PIP policy and have their (FSU) full involvement in any changes being proposed to same in line with the recommendation.

Initially it appears that the Complainant was not taking the process seriously, he was not adding his own comments to the PIP form and at the Verbal Warning stage PIP he admitted that he had not read his manager’s comments on the PIP form.

Between 17/04/2015 and 21/04/2016 the Complainant had gone through the Verbal Warning Stage, the Written Warning Stage and the Final Written Warning Stage – the PIP forms strongly suggest that no or little progress was made by him, the only slight improvements were at times when he was being ‘micro managed’ by his line manager. On 21/04/2016 the Complainant received written confirmation from his reviewer that she had no alternative but to refer his case to the Head of HR for his business area with a request that she considers terminating his employment with the Bank.

There is no escaping from the fact that the Complainant’s performance fell far below what could be deemed as acceptable.

In concluding in this case, I must consider the following:

1.       An employee whose performance falls far below an acceptable level.

2.       The PIP process utilised by the Respondent.

I believe the process is flawed in the role and area of Decision Maker and Appeals Officer. There is no scope for the Decision Maker to vary the sanctions outside of dismissal or no dismissal available. Consideration should be given to sanctions as outlined in S.I.146 OF 2000. I note that the Appeals Officer has the right to vary a sanction however in this instant case the Appeal outcome was issued 12 days after the dismissal had taken place. Management and the FSU should hold the meeting suggested by the Respondent in their letter dated 2nd March 2017.

In relation to the Complainant’s performance I accept that the performance was not acceptable over a considerable period, a great deal of time and effort was made by line management throughout the entire duration of the PIP. Many meetings were held with the Complainant in an effort to improve his performance with very little or no positive outcome.

My decision is that the Complainant was unfairly dismissed by the Respondent however due to his very poor performance he has contributed to his own dismissal. A contribution of 50% is, I believe, fair in this case.

Given that the Complainant was unemployed for a period of 3 months, and given that his salary with his new employer was significantly higher than his salary with the Respondent the calculation of compensation must be limited to 3 months and then reduced by 50%. I calculate this to be €6,625.

I order the Respondent to pay the Complainant the sum of €6,625 in compensation.

I would like to thank all parties present at hearing for the very professional way in which they conducted their business at the hearing.

Performance, Unfair Dismissal.