ADJ-00013116

ADJUDICATION OFFICER DECISION/RECOMMENDATION

Adjudication Reference: ADJ-00013116

Parties:

Complaint:

Date of Adjudication Hearing: 04/10/2018

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Procedure:

In accordance with Section 8 of the Unfair Dismissals Acts, 1977 – 2015following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

Background:

The Complainant was employed as a Lending Manager and Head of Business Development by the Respondent. He commenced his employment on 5th July 2016. He submitted that on 30th January 2018 he was informed that following an emergency Board meeting on 28th January 2018 it was decided to terminate his position due to poor performance and a possible merger. He was paid one month’s notice and was asked to leave the premises immediately.

Summary of Respondent’s Case:

The Respondent denied that it unfairly dismissed the Complainant.

The Respondent submitted that the Complainant was on a fixed term contract which specifically disapplied the application of the Unfair Dismissals Acts 1977 to 2007, and where the Respondent contended this was agreed by the parties in the signing of the contract. The Respondent maintained that the Complainant was on his second fixed term contract which was due to expire on the 5th of July 2018.

The Respondent contended that the Complainant had been underperforming and that concerns existed with regards to his competencies and capabilities to carry out his role. The Respondent submitted correspondence between the Complainant and his manager in which the Respondent   indicated that concerns existed following an external audit and where the auditor was submitting her concerns in a management letter to the Regulator.

The Respondent explained that over the previous months before the dismissal meetings had taken place between the Complainant and his manager where concerns were expressed regarding a number of loan accounts. The Respondent maintained that on a weekly basis from October 2017 the manager had expressed concerns regarding the Complainant’s management of different member accounts, and loan files. Copies of correspondence that the Respondent maintained were given contemporaneously to the Complainant were also provided at the hearing. The Respondent argued this correspondence detail the level of concerns it had regarding the loan accounts and a poor growth in the loan book that the Complainant was responsible for. Overall the Respondent maintained that these records demonstrated the concerns it had regarding the Complainant’s performance and the fact that it had been expressing these concerns with the Complainant in the months prior to 30 January 2018.

The Respondent maintained that it has an employee handbook which referred to performance appraisals and submitted that this handbook was for guidance only, and not a legal requirement. The Respondent maintained that the Complainant would have received an appraisal regarding his performance when he was issued with his second fixed term contract in July 2017. The Respondent maintained at this time it was outlined to the Respondent that concerns existed regarding his budgeting, and where he was told that he was required to grow the loan book in order to warrant the level of his salary, which was €60,000 per annum. At that time the Complainant was told that the Board of Directors agreed to extend his contract for a second period on the basis that he would respond to these performance concerns. The Respondent also maintained that it continued to appraise the Complainant on his performance by way of the aforementioned communication between the Complainant and his manager.

The Respondent submitted that despite its repeated requests the Complainant failed to carry out a series of tasks in accordance with this contract where instructions to complete these tasks included requests for the Complainant to complete loan reports, to evaluate feasibility on new products, to maintain up-to-date knowledge of competitor rates, to maintain and analyse the membership database, to prepare a strategic plan on how to increase the organisation’s profile, to use market analysis and market research to support the marketing objectives, to manage production and control of sales support material, to develop and maintain an online social media presence, to have interaction with the website, to interact with the newsletter, to compile and co-ordinate the annual report, and to manage the Respondent’s data protection requirements. The Respondent maintained there were regular meetings with the Complainant to address these matters, but no improvement was noted.

The Respondent further maintained that it had meetings with the Complainant on the 29th of April 2017, on the 23rd of June 2017, on the 9th November 2017, and on the 12th January 2018. In each of these meetings and Respondent submitted that the Complainant’s manager spoke to him and raised concerns about his performance. It was submitted that during the meeting on 9th November 2017 the Complainant stormed out after he stated he was not listening. The Respondent also advised during the meeting of the 12th January 2018 the Manager expressed her concerns about the Complainant’s productivity and told the Complainant that she did not want to experience the behaviour again that she had witnessed on 9th November 2017. At this meeting the Complainant was also told that due to the concerns from an external audit his manager had to review all member files which was very time-consuming. At that time the Manager also explained to the Complainant that his productivity was totally unacceptable, and that his performance had dropped compared to another employee. It was outlined to the Complainant that there would have to be a major improvement by the end of January 2018. The Respondent maintained that the Complainant asked if he was being given his P 45 and he was told that if the figures which were unsustainable continued that the Manager would be reviewing the Complainant’s position at the end of January 2018. The Respondent also submitted that the Complainant’s manager had spoken to him about his projections which were totally unrealistic and needed to be re-submitted by the 21st January 2018.

The Respondent advised that the Complainant would have received emails from the Compliance Manager on the 24th of November 2017 outlining what was required from him for a presentation to the Board of Directors. The Complainant’s Manager also emailed the Complainant on the 12th January 2018 expressing concerns that the Compliance Manager did not receive figures and a strategy plan on the 5th January 2018 as agreed at a previous Board meeting. The Manager also expressed concerns that an extended timeline provided by the Regulator had not been met and the Regulator had contacted her twice for an update. The Respondent maintained it advised the Complainant on 16th January 2018 that if it did not receive the information the following day there would be no option but to contact the Chairperson. Concerns were expressed that a failure of the Respondent to meet its obligations as set out by the Regulator could lead to an enforcement order. The Respondent maintained that these matters were left unaddressed by the Complainant.

The Compliance Manager also wrote to the Complainant on the 16th January 2018 explaining concerns regarding the business planning and analysis plans submitted by the Complainant and asked him to confirm that he had received the email and understood its contents. The Respondent maintained the Complainant did not respond to this correspondence which was further concern.

The Respondent submitted that despite the attempts to assist the Complainant in his role its loan book had decreased when compared to competitors. Overall the Complainant had failed to address the concerns. It argued the Complainant had been provided with a timeframe to improve but failed to do so. It therefore terminated his employment maintaining it was entitled to do so in accordance with the contract of employment.

Summary of Complainant’s Case:

The Complainant submitted that he was employed by the Respondent as Head of Lending Business Development. His function was to generate extra business by way of loans for the Respondent. He had been previously employed in financial services industry for over 25 years’ experience where he had worked in banking in Ireland and the UK and had also worked as an Insurance Broker.

The Complainant maintained his time with the Respondent had been successful. Following his first 12-month fixed term contract he was given a further 12-month contract. He maintained that he was never invited to any Board of Management meeting. His dealings were with his manager who was the Branch Manager. He submitted that he grew the loan book within eighteen months in a very competitive sector.

The Complainant advised that he never underwent a formal appraisal in his time with the Respondent. He submitted that he had brought concerns to the Respondent, one of which related to potential breaches of data.

The Claimant also submitted that prior to his termination he was asked to put together a series of figures relating to work he had done. He argued these were presented to management and demonstrated how he grew the loan book. However, he had cautioned that owing to market competitive factors the loan book may not continue to grow the same rate.

The Complainant advised that in August or September 2017 another Officer was taken on whose job was almost the same as that of the Complainant and that person was retained at a lower salary. He maintained appointment occurred without consultation with him, and he expressed the view that there was not enough work for both employees. The Claimant had concerns that at this stage that a decision was being formulated to have him dismissed from his employment.

The Complainant submitted that he was dismissed without any objective justification when he was called to a meeting on the 30th January 2018. The Claimant was told that at that time that the figures which were presented were not sufficient. The Claimant was told his employment would be terminated immediately and there was no justification given as to why this decision had been taken. The Complainant advised he never received any warning as to his behaviour, and that he was never criticised about the quality of his work. As far as he was concerned he was doing his best to bring in business for the Respondent.

The Complainant has submitted that since he was dismissed he has made over 70 job applications for alternative employment but has failed to secure any employment and remained unemployed at the time of the hearing. As a consequence, he maintained that his losses are still ongoing.

The Complainant maintained the decision to dismiss him was uncalled for, and no procedures were adopted in relation to the decision. He argued that he has never received a proper explanation as to why he was dismissed.

Findings and Conclusions:

In the case within the Respondent has argued that the Unfair Dismissals Acts 1977-2015 (The Acts) do not apply to the dismissal as the contract of employment mutually agreed between the parties stipulated this.

In consideration of this defence, Section 2 of the Unfair Dismissals Acts 1997 (the Act) provides protection for employees who have at least one-year continuous service. As the Complainant commenced his employment on 5th July 2016 I am satisfied he has the required continuous service to be afforded the protection under the Act. A contract of employment cannot deny an employee his statutory entitlements. Furthermore, the contract of employment states the Unfair Dismissals Acts 1977-2007 shall not apply to the dismissal consisting only of the expiry of the fixed term of this contract. Accordingly, I find the Respondent’s interpretation that the Act does not apply is incorrect. The Contract is specific that the Act does not apply with regard to the fixed term of the contract, which was stated as having a termination date of 5th July 2018. Accordingly, as the Complainant has more than one year’s continuous service, and as his dismissal occurred some five months before the fixed term termination expired, I find the Unfair Dismissals Acts apply in this case.

In accordance with Section 6(1) the Unfair Dismissals Act, 1977 “the dismissal of an employee should be deemed, for the purpose of this Act, to be an unfair dismissal unless having regard to all circumstances, the were substantial grounds for justifying the dismissal”.

S6(4) of the Act states the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if inter alia it results wholly or mainly from (a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do, and (b) 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 ofdismissing the employee …or with the provisions of any code of practice.

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

As to whether there were substantial grounds for the Complainant’s dismissal 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.”

In considering the reasonableness of the decision to dismiss the Complainant in the case within, I reviewed both the written and aural submission made, and the relevant supporting documentation provided by the parties. The guidelines set down by the Director General of the WRC is for the Respondent to set out a statement of their response within 21 days of receipt of notification of the complaint. This response was not received by the WRC within the specified guidelines. The Respondent’s statement was presented at the day of the hearing.

It was evident at the hearing there was much animosity between the parties, and where in particular the Respondent was frustrated with the Complainant and the Complainant’s contention that he had been unfairly dismissed. There was also much disagreement between the parties in relation to the evidence presented at the hearing. The Respondent maintained that despite the Complainant’s denial, the Complainant had been invited to attend the Board of Directors meeting, but that he did attend. The Respondent also advised that the Complainant’s business development presentation was questioned at this meeting and that the information provided by the Complainant was deemed to be substandard. The Respondent advised that the Complainant was also asked to attend the AGM, but he did not attend. Overall the Respondent argued that the Complainant’s work was substandard and poor, and that he was aware from at least October/November 2017 that matters relating to his performance were being reviewed. The Respondent argued that the Complainant would also have been aware from January 2018 that his position was to be at the end of January 2018 if matters did not improve.

The Respondent had argued at the hearing that the matter was a performance issue and not a disciplinary matter. For that reason, formal procedures leading to a formal written warning before his dismissal were not invoked. It maintained the decision to dismiss the Complainant for poor performance was consistent with the Complainant’s contract of employment and the employee handbook. The Respondent maintained the employee handbook has a provision for dismissal due to underperformance. However, no copy of the staff handbook was provided at the hearing. Notwithstanding, the Respondent had maintained the Complainant’s performance was discussed with the Complainant and a timeframe for improvement was laid out, but no improvement was demonstrated.

For his part the Complainant contended that he was never made aware that his performance would lead to his dismissal, and it was only after his return to work on 30th January 2018 that he was told to leave with immediate effect.

Having reviewed the evidence provided, whilst the Respondent has presented records of meetings, emails, and notes of discussions it supposedly had with the Complainant, there is no record of any formal communication with the Complainant that actually put him on notice of the specific concerns or notice of a precise timeframe for improvement. It may well be that discussions took place between the parties about the Complainant’s performance, and it may also be the case that the Complainant’s performance was a genuine concern to the Respondent. However, in this case the Respondent has failed to demonstrate the actual procedures it applied, the sequence it followed in advising the Complainant of its concerns, and the impact that such performance would have on the Complainant’s employment. The Respondent has also failed to demonstrate how it’s decision to dismiss the Complainant was consistent with its employee handbook. I find it remarkable that the Respondent did not provide a copy of this handbook at the hearing, particularly in light of the reference it made to those procedures in dismissing the Complainant.

The Respondent maintained it verbally advised the Complainant of the reason for his dismissal, on 30th January 2018, and where this decision was made at a Board of Directors meeting on circa 24th January 2018 where a proposal to dismiss the Complainant was seconded and passed by the Directors. The Respondent acknowledged when the Complainant was told of this decision on 30th January 2018 there was no written communication of the Board’s resolution provided to the Complainant. Nor was a record of this decision provided to the hearing within. It is also noted that when the Respondent was advised by the Complainant that it would be hearing from his solicitor, the Respondent thought it better not to provide the Complainant notice in writing for the reason of the decision to dismiss him as it might have disadvantaged their position.

Overall what appears to have occurred is a growing frustration from the Respondent towards the Complainant which culminated in a decision being taken by the Respondent to terminate the Complainant’s position on 30th January 2018. In justifying this decision, the Respondent wishes to rely upon informal discussions it had with the Complainant, questionable notes of meetings, unverified correspondence it had with the Complainant, and a view it was entitled to make the decision without conforming to any transparent process before dismissing the Complainant on 30th January 2018.

Whilst I am satisfied the Respondent was genuinely concerned with the Complainant’s performance, I am not satisfied the evidence supports that the Complainant was provided with a fair procedure before a decision to dismiss him was made.  

The Act requires that in determining if a dismissal is an unfair dismissal, regard may be had to the reasonableness or otherwise of the conduct of the employer in relation to the dismissal.   Based on the evidence provided and for the afore mentioned reasons I do not find the Respondent has behaved reasonably.   I therefore uphold that the Complainant was unfairly dismissed.

Decision:

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

For the aforesaid reasons, pursuant to Section 8 of the Unfair Dismissals Act 1977 I find this complaint to be well-founded and conclude that the Complainant was unfairly dismissed by the Respondent.

Section 7 of the Unfair Dismissals Act 1977 sets out the various forms of redress including reinstatement, re-engagement and financial compensation which may be awarded. Relevant to the case within, where compensation only is sought, Section 7(1)(c)(i) of the Act provides: “…if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances,…”

Section 7(2) of the Act sets out the factors which should be considered when determining the amount of compensation and in such circumstances consideration has to be given to whether the loss was attributable to an act, omission or conduct by or on behalf of the employer; the extent (if any) to which the said financial loss was attributable to an action, omission or conduct by or on behalf of the employee; and the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid. I also have to consider…the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure applied to dismiss the employee… and the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.

The Complainant had five months of his contract left to serve. I find the manner of the dismissal is deemed to be unfair due to the acts and omissions of the Respondent to adhere to a fair procedure when considering the Respondent’s performance, and in the manner it terminated his employment om 30th January 2018. I am also satisfied the Complainant has made reasonable efforts to remedy his loss but was unsuccessful in finding alternative work.

Therefore, I consider it just and equitable in all the circumstances to award the Complainant €25,500 reflecting his loss of earnings due to the dismissal which occurred five months before his termination date in accordance with his fixed term contract. The Respondent is therefore ordered to pay the Complainant a total of €25,500 in compensation (subject to any lawful deductions).

Dated:   April 24th 2019

Workplace Relations Commission Adjudication Officer: Gerry Rooney

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