Complainant

Respondent

Anonymised Parties

Senior Consultant

Research and Development Financial Facilitiators

Representatives

William Kelly BL                               Nicola Dowling Solr.                                         Williams Solicitors

Padraic Lyons BL                                  Emmet Whelan Solr.,                         Byrne Wallace

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00026111-001

07/02/2019

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

CA-00026111-002

07/02/2019

The Complainant worked in sales and was recruited in Canada to work for it’s operation in Ireland. The Complainant was unable to achieve the expected target sales and came under pressure from her Employer in this regard. The Complainant tendered her resignation and is now claiming that her decision to resign was the only option open to her because of her Employer’s unreasonable behaviour.

The Complainant provided me with a comprehensive submission setting out facts and law. The Complainant herself gave evidence and was cross-examined. The Complainant believes her Employer’s conduct was such that she had no reasonable alternative other than to tender her resignation.

I heard from two of the Respondent’s witnesses. I was also provided with comprehensive submission and argument by the Respondent.

I have carefully considered the evidence adduced over three days of hearing. I have additionally considered the closing submissions made by both parties at the conclusion of the oral evidence and have considered the written submissions which were provided at an earlier stage.

The Complainant herein commenced her employment with the Respondent company in March of 2015. She is a Canadian national and was recruited by the parent Canadian-based company to move to Ireland to head up the Company’s drive to expand and oversee its client base in Ireland. The Company provides Tax and Revenue support for new and established businesses which might qualify for grants and reliefs in the area of Research and Development. The Irish Taxation system is similar to that operating in Canada, and hence Ireland was identified as a natural market for expansion purposes. There is no office in Ireland and the Complainant was to operate on her own with support provided from Canada and/or whatever operations and staff might be available in Europe. The Complainant was not particularly daunted by the task she was undertaking and had worked successfully in sales in the past.

A comprehensive Contract of Employment was signed by both parties at the end of February 2015. The Complainant’s basic salary had been settled at €50,000.00. A Commission system was also to operate :-

“You will be paid commissions at a rate of 5% of paid sales. To the extent your paid client sales exceeds €300,000.00 within the October Fiscal Year, you will receive a bonus of 15% on client sales over that amount. For the purpose of this offer, client sales are defined to be new or renewal sales to a client for R&D tax credit services or R&D audit support.””

Lest there be any doubt, I am satisfied that the ordinary meaning of the above words asserts that a commission rate of 5% will ordinarily apply and in the event that the Complainant should go over €300,00.00 of sales - a 15% rate of bonus will apply. I do not read into this paragraph that there is an onus or obligation on the Complainant to achieve €300,000.00 of sales in a fiscal year. Additionally, I would say that the Contract does not draw a distinction between new sales and renewal sales for the purpose of calculating commission. This recognises the fact that long-term clients need as much attention as new clients. I am therefore perfectly satisfied that the Complainant’s understanding of what was expected from her in this employment could be deduced from the operation of the Commission clause. I am also satisfied that the Complainant had worked previously generating annual sales of up to €1.2 million.

The Complainant reported directly to Mr. FF the Chief Operations Officer (based in Canada) and was also in constant contact with D (based in Toronto) who was systematically going through the data bases of potential Irish companies to direct the Complainant to potential leads.

Fourteen months into this role (May 2016) the Complainant received a letter from FF stating that her performance to date has been mediocre and that she is 50% behind where they expected her sales to be. The letter advises that the Complainant will be given four months (up to end of August 2016) to turn her performance around …”otherwise you will no longer be employed by the respondent”. I agree with the Complainant’s assessment that this letter is most irregular. It certainly does not have it’s genesis in the Disciplinary Procedure attached to the Contract of Employment and the threat of summary dismissal is most unfair and heavy handed as an opening position.

The Complainant challenged the content of the letter and was rebuffed by FF who asserted his entitlement to call her performance into question. It is noted that at this point the Respondent has asserted that the Complainant’s objective is to achieve sales in the amount of €300,000.00 per annum. FF confirms that he has confidence in the Complainant but it is clear that the company’s bottom line is one of sales having to be generated.

As it happens, the Complainant secures a number of sales in the aftermath of this first letter threatening termination for mediocre performance and she is considered to have met her goals and is taken off “probationary status” – per email dated the 21st of July 2016.

In her evidence the Complainant stated that she was now under a lot of pressure to secure new Contracts in the value of €300,000.00 - which was not her initial understanding of how her Contract of Employment was to operate.

In addition, the Complainant identified that the leads being supplied by D (or others) in Canada were not always practical and very often would not relate to qualifying companies. This was possibly a consequence of the impracticality of D not being on the ground. The Complainant stated that being the sole operative in the jurisdiction meant that she wasted a lot of time trying to chase down and determine which were the valuable clients. I do not doubt that the Complainant received support from her Senior Management team in Canada (FF and others) and there is email evidence of this. However, the Complainant was not generating the sales that she herself would have hoped for and that her Employer wanted. It is clear, however, that this was not because the Complainant was not putting in a tremendous effort at her end. It is clear that she was and was in constant contact with management regarding her efforts.

It is also worth noting that in August 2017 (a full year after the first issue of the Complainant’s performance was raised) the complainant was invited to be given a Directorship of the Irish operation (to satisfy residency criteria) with a raise in salary. Whilst this was ultimately declined by the Complainant, I would see the offer as indicative of an overall confidence in the Complainant.

On the 29th of March 2018, FF emails the Complainant stating that the lack of new Contracts is a problem. The Complainant knows this, and they do explore what can be done including whether a dedicated Inside Sales person would help to target better leads. The company is becoming increasingly worried that the fees being generated do not represent a good return on their presence in the Irish market. The Complainant has at least one lengthy conversation with FF on the subject (as documented by her on the 16th of April 2018) but she is once again sent a letter concerning her poor performance (on the 17th of April 2018). This letter allows the Complainant one month to achieve two new sales otherwise a final written warning would issue. The Complainant was allowed to appeal this sanction.

Unbeknownst to the Complainant, earlier in that same month of April 2018, FF had also been in contact with Mr B the company owner and Director - by email. These emails only came to light on the last day of the hearing before the WRC and were discovered as a consequence of a Data access request having been complied with between the second last day of hearing and the last day of hearing. Once they came to light Mr. F, who had flown in from Canada to give oral evidence, declined this opportunity.

It was put to me by Counsel for the Respondent that the said emails were privileged by reason of their legal nature but this was not in fact borne out as the emails are communications between two senior members of the Complainant’s higher management team and concern the Complainant herself. There is no legal context in which they came be created.

It was also put to me that the emails needed to be contextualised, but I have determined that the emails are unambiguous and capable of having an ordinary meaning applied to them. If FF wanted to add something to their meaning, he was available to do so and had made the decision not to do so. Mr. FF had the benefit of a full legal team giving him advice.

In any event the emails in question very much go to the mind set of Mr.FF (and Mr. B) where on the 2nd of April he says:

“I have a call scheduled tomorrow with our lawyer to discuss options with V. Remember that Irish laws are a bit more towards the employee (the EU is socialist don’t forget…)..”

On the 5th of April he states :

“But V hasnt put much effort on generating her own leads. Ive made up my mind I am letting her go in the next few weeks…”

Again:

“V is a problem that needs to be fixed”

Mr B states on April 5th:

“I am concerned that we are dismissing her without written notice, at the very least we should have a quick conversation with our accountant or a lawyer. The cost of not doing so could be very significant.”

FF writes:

“Like I said Im having our law firm come up with our options in order to avoid any wrong doing on our part.”

On the 17th of April an email between the men confirms that they are looking at a replacement:

“I don’t want to hire (her) until we are quite sure V will not be around”

It has been put to me by Counsel for the Complainant that in early April of 2018 an unambiguous decision has been made by senior management to manage the Complainant out of the Respondent company. In this context, the “First written advisory for poor performance” letter dated the 17th of April 2018 is meaningless and intended as a mere procedural sop to address the “Irish” or “socialist” laws which afford Irish employee’s rights and protections in this jurisdiction.

As it happens, the Complainant did Appeal the imposition of this First written sanction and the details of the Appeal are detailed in a letter to FF dated the 23rd of April 2018. The Appeal was heard by none other than Mr. B. who has opted not to rule himself out in circumstances where he and the Complainant’s line Manager had clearly engaged in lengthy communication on how best to remove the Complainant. Indeed on the very same day as the purported Appeal hearing (conducted over the phone on the 2nd of May 2018) there is communication between the two men which incudes Mr FF stating that he does not think that the Complainant has “anything else to offer”, and that the time had come, per their legal advice, to submit the letter- presumably to the Complainant.

Of course, the Complainant did not know in May of 2018 that her fate was sealed in the way that it seemed to have been, and I still have to have regard to the reasonableness or otherwise of her decision to resign her position.

On the 9th of May the Complainant was advised by Mr. B that the outcome of her Appeal was unsuccessful.

Then on the 10th of May the Complainant is advised that the next disciplinary step will not now be taken as there have been the required number of sales since the 17th of April letter went out. In her evidence the Complainant said the whole process continued to be a noose around her neck. The antagonistic approach was taking it’s toll on her. She knew that a job that required her engaging her own legal team was inherently wrong.

Seven weeks later the Complainant is given a “Final Written Advisory for Poor Performance” dated the 2nd of July 2018 again requiring her to close a certain number of sales within the next eight weeks. Not achieving this means she “will no longer be employed with the respondent”. The Complainant in evidence points out that there is no lead up to this final letter. She has not been notified that there are issues and that there is likelihood of jumping straight to a final warning.

Once again, the Complainant appealed this warning and the Appeal, once again, was heard by Mr. B who seems affronted at the tone taken by the Complainant and who rejects all aspects of the Appeal on the 20th of July 2018. In her evidence, the Complainant said (and this was said in the course of the hearing before me long before she ever had sight of the emails which were subsequently disclosed) that for her the outcome of the Appeal seemed pre-determined. She said that everything seemed “orchestrated” a word which she was challenged on in cross-examination and which now seems almost prescient with the benefit of hindsight. She said that that the method and manner of the Appeal process was reprehensible and disrespectful of her.

In the circumstances, the Complainant tendered her resignation on the 16th of August 2018. The Complainant felt she was scapegoated for the lack of sales in the organisation. She says she tried and she worked and that she did so without very much hands-on support. Everything was handled at arms-length. In fact, the Complainant had not met face to face with Mr.FF or Mr. B for a year or more before the end of her employment. The Complainant believes she was being given impossible sales targets which had changed from the ones she had initially signed up to. The Complainant does not believe that generating €300,000.00 of new fees per annum was possible and in the end there was no evidence that it was possible or a reasonable expectation. The Complainant believes that whilst there was talk of support none was delivered and that whatever was available was not tuned into the Irish market.

Section 1(1)(b) of the Unfair Dismissals Act, 1977, defines “constructive dismissal” as “the termination by the employee of her contract of employment with her employer, whether prior notice of the termination was or was not given to employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”.          

The burden of proof in constructive dismissal lies with the Complainant and the onus is on the Complainant to prove her case and the test for the Complainant is whether it was reasonable for her to terminate her contract.

Drawing from the Respondent’s own submission I am accept that:

As endorsed by the Labour Court in Paris Bakery & Pastry Limited v Mrzljak DWT1468, the classic formulation of the legal test in respect of constructive dismissal was set out by the UK Court of Appeal in Western Excavating (ECC) Ltd -v- Sharp [1978] 1 All E.R. 713. It comprises of two limbs, referred to as the ‘contract’ and the ‘reasonableness’ tests. It summarised the ‘contract test’ as follows:

“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any other performance.”  

The reasonableness test assesses the conduct of the employer and whether it “…conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so the employee is justified in leaving.”

In Ireland, it is accepted that the two tests are often used interchangeably, but it is very clear, and accepted by all, that the bar for constructive dismissal is “very high” for an employee. See “Redmond on Dismissal Law” (3rd Edition, Para 19.08) where it states:

“The contract test is more stringent than the test of reasonableness. Yet they have been provided in the form of alternatives. Whichever test is applied, as was observed by the Employment Appeals Tribunal in one of its last constructive dismissal determinations ‘[t]he bar for constructive dismissal is very high’.”

[Referring to Coffey v Connect Family Resource Centre (UD1126/2014)]

According to the Supreme Court in Berber v Dunnes Stores [2009] ELR 61:

“In relation to the test the following matters are to be noted:

1. The test is objective.

2. The test requires that the conduct of both employer and employee be considered.

3. The conduct of the parties as a whole and the cumulative effect must be looked at.

4. The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.”

On balance I fully accept that the Complainant’s decision to tender her resignation was reasonable. The Employer herein did not engage with the Employee in a meaningful way. The Complainant had impossible targets foisted upon her. There is no suggestion that the Complainant was not performing the function she was engaged to perform. It is accepted that she was having some success and there is no evidence that the results she generated (as a competent and able salesperson) could have been improved upon by a hypothetical salesperson operating with as little support.

I accept fully that the Complainant felt that the outcome had been orchestrated because, as it happens, it was.

The Complainant did not utilise the grievance procedure and did not give the employer any notice of her intention to resign and claim constructive dismissal and I accept that this was a situation where the outcome would have been the exact same.

In terms of mitigation I am satisfied that the Complainant looked for alternative employment in this Jurisdiction for as long as her Visa allowed and that this extended beyond the duration of her work permit. I acknowledge did take some personal holiday time in the intervening period. The Complainant has now returned to Canada and is working in retail since October 2019 though hopes to get back into sales in due course. At the moment, the Complainant is on a basic annual salary of $22,000.00CAN. I would accept that the Complainant is at a financial loss since August of 2018.

Regarding the issue of Payment of wages I understand that Commission was being sought and that payments have come trickling in since the issuing of the within proceedings. I understand that another payment is pending as of the time of this decision. As payments become due there is nothing to prevent the Complainant from renewing her claim to any entitlements. At the conclusion of the hearing of these proceedings I am satisfied that there is no unlawful deduction per the Payment of Wages legislation.

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00026111-001 – All deductions made at the time of the issuing of these proceedings have been paid and I make no further decision.

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

CA-00026111-002 – The Complainant herein was Unfairly dismissed and I award the sum of €50,000.00 compensation.