Complainant

Respondent

Anonymised Parties

A shop manager

A network of charity shops

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-00014745-001

03/10/2017

The respondent is a subsidiary of a registered charity and has around 100 shops in Ireland, set up to raise funds for its services. The complainant commenced employment as a shop manager in the Celbridge shop on August 31st 2015. She went on maternity leave on May 23rd 2016. Although she was employed on a fixed-term contract which was due to end in August 2016, on November 28th 2016, she re-commenced as a shop manager, but in the Maynooth shop, and on a slightly higher salary of €380 per week compared to €360 on the first contract. Her employment was terminated on April 22nd 2017 because she failed to meet the sales target for her shop. Her complaint is that when the respondent made the decision to dismiss her, fair procedures were not followed.

Setting out the service qualification in the Unfair Dismissals Act, section 2(1), as amended, provides that:

“Except insofar as any provision of this Act otherwise provides, this Act shall not apply in relation to any of the following persons:

(a) an employee (other than a person referred to in section 4 of this Act) who is dismissed, who, at the date of his dismissal, had less than one year's continuous service with the employer who dismissed him.”

Section 4 refers to the dismissal of apprentices in the period of six months following completion of their training and in not relevant to this complaint.

Respondent’s Position

As a preliminary matter, Mr McKay argued that the complainant did not complete one year of service and that she is not entitled to claim protection under the Unfair Dismissals Act. Their position is that the complainant accepted an offer of a fixed-term contract from August 31st 2015 until August 17th 2016. In February 2016, she informed her manager that she was pregnant and that her maternity leave would start on Monday, May 23rd 2016. She finished working with the respondent on Friday, May 21st and her fixed-term contract came to an end on August 17th.   She was then offered a new fixed-term contract commencing on November 28th 2016 until November 27th 2017.   She also benefited from a salary increase of €20 per week. She was dismissed while she was on probation under this contract. The respondent’s position is that this is a second fixed-term contract and the complainant has service of just under five months.

Complainant’s Position

Having commenced employment on a one-year fixed-term contract on August 31st 2015, the complainant went on maternity leave on May 23rd 2016. She presented a letter in evidence dated February 22nd 2017 from the accounts manager at the company confirming approval of her request to take maternity leave:

“Dear (name of complainant)

“I refer to our conversation with (name of the complainant’s line manager) and wish to confirm your maternity leave dates, finishing on Saturday 21st May 2016 and returning back to work on Monday, 21st November 2016, 26 weeks.”

Ms Breathnach argued that this letter treats the complainant’s contract as not ending on the stated end date of August 17th 2016, and in fact, treats her as an employee whose contract extends to November 21st 2016 and beyond.

Further correspondence presented in evidence shows that staff in the Payroll and HR Departments treated the complainant as if she was not on a fixed-term contract. Before she went on maternity leave, an administrator in payroll sent this e mail to the accounts manager:

“(Name of complainant) will be on maternity leave from 23 May to 21 November.   She can also opt to take an additional 16 weeks unpaid after 21 November and must inform you of her plans by 21 October at the latest.

“During the first 26 week period there are 3 public holidays and she will be entitled to take them on her return.

6 June

1 Aug

31 Oct

“She will also be entitled to any annual leave that has accrued for the year.

“It might make sense to get her to take the public holiday entitlement and some or all of the annual leave entitlement before she returns to work. She should be paid for this leave.”

Although the complainant’s fixed-term contract was stated to end on August 17th 2016, six weeks later, on September 28th, the accounts manager wrote to the payroll administrator:

“(Name of complainant) is out since the 23rd May 2016, on maternity leave. She is wishing to extend her return to work date and use up any entitlements she has i.e. Bank Holidays etc…or any other days she may be due. Can you let me know her full entitlements please?”

The last piece of correspondence submitted in evidence was from a member of the payroll team to the Director of Corporate Services (who attended the hearing):

“(Name of complainant’s) maternity leave ends on the 20th November. She is taking her annual leave accrued from the 21st Nov – 21st Dec.”

In her evidence, the complainant said that she had a meeting with her area manager around four weeks before she was due to return to work. At this meeting, she was informed that she would not be returning to the Celbridge shop which she managed just before she went on maternity leave. She was assigned to the shop in Maynooth, which had opened recently. She said that this was inconvenient for her and that she was upset at the change, but she had to accept it.

The complainant’s position is that she was never treated as an employee whose employment was terminated on the end date of her fixed-term contract. When she went on maternity leave in May 2016, she expected to return in November. She returned on December 21st, having been back on the payroll from November 21st, using up her accrued holidays. She was not issued with a P45 and no member of the staff in the respondent company communicated with her after August 17th 2016 as an ex-employee. It is her view that her former employer considered her employment as continuous from the date she commenced in August 2015.

Conclusion

The evidence in support of the respondent’s case is that the complainant was issued with and signed two fixed-term contracts. There was a gap in between the two contracts of four months. The second contract commenced on November 28th 2017 on a higher salary and the complainant was dismissed five months later on April 22nd 2017.

It is my view that the complainant’s employment was continuous from her start date on August 31st 2015. I have reached this conclusion for the following reasons:

1. Although the complainant’s first contract had an end date of August 17th 2016, even before she went on maternity leave, in February 2016, the staff in payroll and HR confirmed a return date of November 21st.

2. From when the complainant went on maternity leave to the commencement of her “second contract” (May 23rd to November 28th 2016) is 27 weeks. This is comprises the complainant’s maternity leave plus three days in lieu of public holidays and two days’ annual leave. When she left to have her baby, it is apparent that the HR and payroll staff treated the complainant as if she was on maternity leave and not on a fixed-term contract.

3. If the complainant’s contract had been terminated in August 2016, she should have been issued with a P45. When he was asked about this at the hearing, the Director of Corporate Affairs said that the failure to issue a P45 was an administrative error. It’s difficult to accept that an error occurred, as the staff in payroll, who are responsible for issuing P45s, believed that the complainant’s employment was continuous. It seems to me that this is the reason a P45 was not issued.

4. If the complainant’s employment had been terminated at the end of her first fixed-term contract on August 17th 2016, there would have been no discussion of accrual of holidays up to November 2016, or payment in lieu of a public holiday arising on October 31st.

5. The complainant said that while she received a new contract from November 28th 2016, she did not start back in the shop in Maynooth until December 21st but she was paid for the four weeks in lieu of holidays not taken during her maternity leave. If her employment had terminated on August 17th 2016, in accordance with her contract, she would have been paid then in lieu of holidays up to that date, and there would have been no further accruals.

6. While the fixed-term contracts give the impression that the complainant was employed on two separate contracts with a gap in between, the reality of the of the situation is that her employment was not terminated at the end of her first fixed-term contract. She was treated by the HR and payroll departments in the company as an employee whose employment was continuous from the start date of her first contract, through her maternity leave and continuing on after a break of 26 weeks’ maternity leave plus 22 days’ holidays.

As I am satisfied that the complainant has more than one year’s service with the respondent, she has the service required to give her an entitlement to a hearing of her complaint under the Unfair Dismissals Act.

When the complainant was appointed to the store in Maynooth, she was given a sales target of €1,175 for the first six months of 2017 and €1,325 for the second half of the year. The respondent’s position is that she fell considerably short of these targets.   The evidence presented at the hearing shows that in the first quarter of the year, to the end of March 2017, the takings were an average of €712 per week.

The respondent’s position is that the complainant was on probation for the first six months of this contract. Coming up to the end of the third month, on March 24th 2017, she had a review meeting with the area manager, who was also her line manager. At the meeting, the area manager discussed the poor sales and the fact that the results were considerably short of the weekly target of €1,175 for January to June.

The review document submitted at the hearing shows that a detailed discussion took place between the complainant and her manager, during which she complained that she did not have enough volunteer staff and that donations of clothes and other items for sale in the shop were of poor quality. Apart from the shop manager, most of the staff are volunteers in the respondent’s stores, and some are on “social activation” employment support programmes. The complainant had one person on an employment support programme, but no other staff.

At the hearing, the Director of Corporate Affairs said that one of the jobs of the shop manager is to recruit volunteers, and that they do this through their own networks and by advertising in the shop.

The review document that was written up after the March 24th meeting sets out a plan of action to address the issues raised by the complainant. This included consistency of pricing, all the stock to be dated, more frequent stock-changes, clutter to be removed, more emphasis on ladies’ rather than men’s clothes and a table outside the shop for bric a brac. The Facebook page for the shop was considered to be “very good” and the shop window was “very strong,” so the emphasis was on stock and staff.

On April 7th, the area manager met the complainant again. At this meeting, the complainant was informed that she “was not being confirmed in her probation” due to performance standards and targets not being met. She was given two weeks’ notice of the termination of her employment and she finished up on April 22nd 2017.

The respondent’s position is that the complainant was dismissed during her probation and, in accordance with her contract of employment, during probation, “the full rigours of the disciplinary process may not be applied prior to dismissal.”

When she went to work in the Maynooth shop, the complainant said that she knew that compared to Celbridge, it would be difficult to meet the sales targets. This was because the population was different, the quality of donations wasn’t as good, the shop wasn’t in a great location and there was no experienced staff. Also, the complainant started in the shop on December 21st and the winter period is the slowest for trading.

At the hearing, the complainant described how she enlisted support from the manager in Celbridge and from staff in the warehouse and in head office, to put good quality stock into her shop. She said that despite this, she still didn’t meet the targets that were set for her. The problem was compounded by the fact that there were no volunteers working with her and she just had one person from the social activation employment scheme working 19 hours per week, but this person had no experience of working in a shop.

At the review meeting on March 24th 2017, the complainant said that the conversation between her and the area manager lasted just 20 minutes. The area manager said that the shop was dark and that weekly targets of €1,175 were not being met. Two weeks later, on April 7th, the area manager told the complainant that her employment was being terminated because she was not meeting the sales targets.

The meeting on April 7th was preceded by a text message from the area manager in which she asked the complainant if she needed stock. The complainant said that she asked for ladies’ clothes.   The area manager replied by text message that she would be in the Maynooth shop in ten minutes. When she arrived, she instructed the complainant to close the shop. She then informed the complainant that she was getting two weeks’ notice and she was being dismissed. The complainant said that she asked who decided that she was being dismissed and she was informed that it was the CEO. The complainant said that she was crying and the area manager said that she could keep the shop closed for half an hour and then open up again.   She worked her two weeks’ notice and finished up on April 22nd. She was not issued with a dismissal letter.

Ms Breathnach said that there is no provision in the complainant’s contract of employment which states that her continued employment is related to achieving sales targets. At the meeting on March 24th, the complainant was not told that she would be dismissed if sales didn’t improve. Even if she had been informed that her job was under threat, two weeks is not sufficient to make the changes that required to achieve the increased targets. In conclusion, Ms Breathnach stated that by not giving her a reasonable opportunity to address the sales problem in the store, and by dismissing her without going through fair procedures, the complainant’s dismissal is unfair.

At the hearing, the respondent did not dispute the fact that no process was followed in the run-up to the complainant’s dismissal. Their position is that the complainant was on probation and that her contract provides specifically that,

“During the probationary process, the full rigours of the disciplinary process may not be applied prior to dismissal.”

I have concluded that the complainant had more than one year of service with the respondent.   Her employment commenced on August 31st 2015, and it is my view that she completed her probation on February 29th 2016. No evidence was presented to indicate that there were issues with regard to her performance in the Celbridge shop when she was on probation there and there was no reason for the complainant to re-commence on probation following her return from maternity leave. For this reason, I find that she was not on probation from the date that she returned to work on December 21st 2016.

Regardless of her status as a probationer or otherwise, as an employee entitled to the protection of the Unfair Dismissals Act, the dismissal of the complainant should have been contemplated only in the context of proper procedures. The respondent argues that it did not have to follow a disciplinary procedure; however, nothing had arisen from a disciplinary perspective. The problem was related to the complainant’s performance and the difficulties she was having meeting the sales target for her shop. In these circumstances, the respondent had a duty to manage the complainant’s performance by setting out what was required, providing support to achieve the sales targets and deciding on a reasonable timeframe in which to achieve them. None of this was done, and the complainant was dismissed two weeks after a review meeting at which she clearly explained what was needed to increase sales. In the absence of any procedures, the only conclusion I can arrive at is that this was an unfair dismissal.

In reaching this conclusion, I am reassured by the determination of the Labour Court of February 2017, in Tapastreet Ltd v Mitchell, UDD175. Balancing the rights of an employer to run their business with the rights of an employee whose performance is less than what is expected, the chairman, Ms Jenkinson stated,

“The Court accepts that an employer has a right to dismiss where it is necessary to protect its business interests, however, the employee’s interests must also be considered. In reconciling these interests, an employer must act fairly and observe fair procedures.”

I have concluded that the dismissal of the complainant on April 22nd 2017 was an unfair dismissal. The complainant selected compensation as the most appropriate form of redress and, in the event of my finding her favour, this was not opposed by the respondent.

At the hearing, the complainant said that she started working again on February 3rd 2018 and she is now earning more than what she was paid by the respondent.   Although she said that she looked for a job, she said that she couldn’t take up employment between the time she was dismissed and February 2018, because her mother returned to Lithuania and she had no one to mind her child until her husband got a job working nights.

Taking all of this into consideration, I have decided that the respondent should pay the complainant compensation of €4,940, equivalent to three months’ pay.