Complainant

Respondent

Anonymised Parties

An Employee

A Financial Institution

Act

Complaint Reference No.

Date of Receipt

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

CA-00020805-001

26/07/2016

The complainant was most recently employed by the respondent from June 3rd, 2014 (following a period of earlier employment in 2010) until his dismissal in February 2018. He was paid €36,000 per annum.

The respondent operates a system to ensure that its own employees’ personal financial affairs are in order.

The standards to be applied vary with the degree of responsibility of the role  The system is based on self-declaration by the employee.  

One, the higher standard, which applies to ‘Fitness and Probity’ (F&P) impacted roles requires a specific declaration under the terms of the Central Bank Reform Act, 2010.

The other, while not as onerous, nonetheless requires a pre-employment declaration that an employee’s personal financial affairs are in order. This is to ensure that neither the respondent or the regulatory authority would have cause for concern about the financial affairs of a prospective employee.

The complainant was initially employed in a role which fell within the latter category.

Despite the fact that the complainant had been in significant arrears with his mortgage, he signed the declaration confirming that his financial affairs were in order. Being ‘in order’ is defined as (inter alia) ‘meeting all my debts’.

The declaration also contains a statement acknowledging that ‘any misrepresentation, omission of a material fact or deception will constitute grounds for dismissal’.

The complainant’s signed declaration was submitted in evidence.

In April 2016, two years after his appointment the complainant was appointed on the basis of a fixed term contract to a position which fell within the higher standard referred to above, and in due course applied for a permanent position at the same level of clearance.

He was asked whether he had ‘any relevant information to disclose regarding any issue or concerns not already disclosed’. He answered ‘No’ to this question.

In the letter of appointment, he was reminded that there was a continuing obligation to make the respondent aware of any change in his circumstances which might be a failure of compliance with the F&P standards.

As part of the annual review of F&P compliance the following February the complainant again failed to properly declare the information regarding his personal financial circumstances.

It was only in July 2017, when the complainant approached his manager to discuss the possibility of getting a mortgage that he advised her that he, the complainant had ‘significant financial difficulties’.

She put him on notice that she would have to make this known to HR and her line manager.

At that stage the complainant was asked to complete a further form outlining the detailed position. It emerged that his indebtedness was in excess of €400,000 and that legal proceedings were in train.

The complainant was put on paid leave pending an investigation.

In due course it was decided that he could not continue in the F&P impacted role and he was placed temporarily in a non-impacted role.

He unsuccessfully appealed this decision.

He was also advised that arising from the untruthful F&P declarations that there would be disciplinary proceedings.

He was invited to a disciplinary meeting. Details of the allegations were provided to him, and he was accompanied by his union official. He was advised of the possible range of sanctions including dismissal.

The outcome was a decision to summarily terminate his employment for gross misconduct, although in recognition of the complainant’s cooperation with the process he was to be paid two months’ salary.

He appealed but was not successful and the final letter terminating his employment issued on February 2nd 2018.

The complainant says that he believed that while he was in the lower, (non-F&P-impacted) role, the declaration he made was compliant with the requirements and that he had been financially sound.

He fell into distress in relation to his mortgage as a result of a period of unemployment.

He had told a senior employee of the respondent in the winter of 2016 of his situation, in a way seeking guidance as to what he should do but was not given any. But he believed that the respondent knew about his personal financial difficulty.

Also, it is important to note as a matter of mitigation that it was he who brought the matter to the respondent’s attention.

In particular, he feels that the decision to terminate his employment was harsh and the punishment disproportionate. He had a total of ten years’ service with the respondent and a great deal of experience in the US.

The effect of this decision is not just to terminate his employment with the respondent but to effectively end his career in the financial services sector.

It is easy to feel sympathy for the complainant in this case; he was one of many people to experience mortgage repayment problems as a result of factors outside his control.

The fact that he was employed in a financial institution created a situation where knowledge of those problems was a relevant, indeed critical consideration for a person to initially be considered for employment, and thereafter to remain in that employment.

The respondent has argued that the complainant’s failure to declare his true financial position represented gross misconduct and a breach of the trust required in its employees, both by the respondent itself and by reference to the standards required of it by the external regulator; in this case the Central Bank of Ireland.  

There are three ‘pillars’ which guide the adjudicator to a decision in a complaint of unfair dismissal.

The onus under the Act falls on the employer to justify the dismissal.

In order for a dismissal to be fair there must be some significant grounds to support disciplinary proceedings or other actions against the employee related to performance or conduct. There clearly were in this case as represented by the complainant’s failure to make the necessary declaration under the F&P and related processes.

Secondly, in our employment rights system there are well established procedural obligations placed on an employer who is carrying out disciplinary action in order to protect the rights of the employee or other parties affected and ensure that justice is done.

These are not particularly onerous and are generally well known. They are referred to by such terms as fair procedure and natural, or constitutional justice.

Many, if not most cases turn om the facts not being in dispute and the outcome will normally depend on alleged inadequacies in the procedures and/or the appropriateness of the sanction.

In this case, I can see no flaw in the management of the process that could be regarded as damaging the complainant’s rights to fair procedure. At all stages the respondent met its obligations in that regard and the complainant did not dispute this. He was accorded all the rights that were due to him in the process and he made no complaint on that account

This leads to the matter of sanction on which the complainant rested most of his case. He argued that it was disproportionate and too severe.

A sanction must fall within what is described as ‘the range of reasonable responses’ by the employer. There is widespread authority on the principles and criteria to be applied here.

There is the decision of the former Employment Appeals Tribunal in Looney and Co v Looney UD 843/1984 and the view of Dr Mary Redmond to the same effect that;

It is not for the EAT to establish the guilt or innocence of the claimant nor is it for the EAT to indicate or consider whether we, in the employer’s position, would have acted as it did in its investigation or concluded as it did or decided as it did, as to do so would be to substitute our own mind and decisions for that of the employer.. Our responsibility is to consider against the facts what a reasonable employer in his position and circumstances at that time would have done and decided and to set this up as a standard against which the employer’s actions and decisions are to be judged’.

As will be clear from the text this does not entirely rule out intervention by an Adjudicator but sets the standard to be applied as the actions of ‘what a reasonable employer in his position and circumstances at that time would have done…’

This has been further emphasised in the Superior Courts.

In Allied Irish Banks v. Purcell [2012] 23 ELR 189, the following was decided.

The correct test is; was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view. (British Leyland UK Ltd v. Swift [1981] IRLR 91, Lord Denning MR).

It is clear that it is not for the EAT or this Court to ask whether it would dismiss in the circumstances or substitute its view for the employers view but to ask was it reasonably open to the respondent to make the decision it made rather than necessarily the one the EAT or the court would have taken’.

Also, in Bank of Ireland v Reilly [2015] IEHC 228 the Court held;

‘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 ‘.

In this case, the issues of trust go to the heart of the respondent’s business and even beyond insofar as the state has added certain strict regulatory requirements to whatever standards the respondent might otherwise have applied.

Clearly, the respondent is best placed to assess the significance of a breach of those regulations and its impact on its general culture of ‘Fitness and Probity’ and, based on the evidence adduced at the hearing, I cannot see that it stepped outside the range of sanctions in reaching its conclusions which might reasonably have been appropriate.

Accordingly, by reference to the legal and procedural criteria set out above I find the dismissal was fair.

For the reasons set out above I do not uphold complaint CA-00010805-001 and it is dismissed.