Complainant

Respondent

Anonymised Parties

A Business Dev elopement Manager

A Healthcare Company

Representatives

Solicitor               Solicitors

     DAS Group

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-00019411-001

24/05/2018

The Complainant was employed by the Respondent as a business development manager on the 1st of February 2017. He was notified of his dismissal on the 30th of November 2017 and he was paid 3 months contractual notice.   He is claiming that he was unfairly dismissed. The Respondent submits that the Complainant has not got a year’s service and therefore he is not covered by the Unfair Dismissals Act and I have no jurisdiction to hear the case.

The Complainant said that he was called to a meeting on the 30th of November 2017 by the CEO of the Respondent company. During the course of that meeting he was dismissed from his employment with no forewarning, without explanation and without being offered his constitutional right to fair procedures. He was not afforded the opportunity to have a representative present nor was he given any opportunity to seek legal advice.

The Complainant's solicitor submitted that the Complainant’s contract of employment provides at clause 10 in relation to a termination notice that the “... employment may be terminated at any time by either you or the partnership giving the other party at least 3 months prior written notice, or statutory notice if greater.”

It was submitted that he is entitled to add on the 3 months’ notice to the 30^th November 2017 and this gives a termination date of the 28^th February 2018 and therefore the Complainant has a year’s service. In this case, the contractual notice provision supersedes the Complainant’s entitlement under the Minimum Notice and Terms of Employment Act, 1973 to 2005. Therefore, the Complainant is entitled to 3 months’ notice of termination.

He submitted that the Complainant’s contract of employment also provides for a number of scenarios where the employment may be terminated without prior notice including if the employee is guilty of misconduct.  However, no allegations of misconduct were outlined to him, in accordance with the Disciplinary and Grievance Procedures of the Respondent, nor were any such reasons provided to him by the Respondent.  He was not given any reasons by the Respondent for the dismissal, other than been told that it was a no-fault dismissal.

It was submitted that the date of termination of employment can be the date that the employment relationship is physically terminated and the employer ceases to work. However, in conjunction with the notice period there is a separate date of dismissal which may be a point in the future, which is the case here.  Any ambiguity in relation to this point is clarified by Desmond Ryan in “Redmond on Dismissal Law”:

“the Unfair Dismissals Act, as amended, deems the date of dismissal to be the date on which the notice, had it been given, would have expired. In practice, this can mean there is a crucial distinction between the employee’s date of termination (when he ceased to be an employee pursuant to the contract of employment) and his or her date of dismissal (the date that is reckonable for the purposes of establishing the length of service qualifications and the time limit rules under the Unfair Dismissals legislation)”.

It was submitted that, where there is a clause in the employee’s contract to trigger a dismissal on a certain day by paying in lieu of notice, an employer is prohibited from avoiding the reckonable service accrued by an employee for the purposes of establishing the length of service required pursuant to the legislation.

I was referred to a WRC case decided in July 2018, An Employee v A Technology Company ADJ-0001670, the AO considered whether paying an employee in lieu of notice could impact on that employee’s entitlement to take a claim for unfair dismissal.  in that case the Complainant was dismissed prior to completing 12 months service with the company. She argued that she was entitled to the benefit of the applicable notice period in determining the date of her dismissal for the purposes of the Unfair Dismissal Act. The employer contended that she was paid in lieu of notice, and she was 4 days short of the 12-month service required service of I year to bring a claim. The AO acknowledged that the original contract expressly enables the employer to pay in lieu of notice. However, the AO confirmed that the date of dismissal for the purposes of the Unfair Dismissals Act must be construed in accordance with that Act and found that the notice period was reckonable for the purpose of the service required under the Acts.

Section 1 (1)b of the Unfair Dismissals Acts 1977-2015 specifies the “date of dismissal” means

(b) where either prior notice of such termination is not given or the notice given does not comply with the provisions of the contract of employment or the Minimum Notice and Terms of Employment Act 1973, the date on which such a notice would have expired, if it had been given on the date of such termination and had been expressed to expire on the later of the following dates-

(i)    The earliest date that would be in compliance with the provisions of the contract of employment

(ii)  The earliest date that would be in compliance with the provisions of the Minimum Notice and Terms of Employment Act 1973

It was submitted that the relevant notice period applicable in this case is that provided for in the Complainant’s contract of employment, which is 3 months.

Furthermore, there is an ambiguity in the contract in relation to the date of termination in clause 17.1 (the post termination restriction clause) and the clause 10 (the termination clause).  The termination date is defined in clause 17 as “the date and which notice of termination expires, or in the case of a payment being made in lieu of notice, the date on which the termination takes effect”.  However, this definition is intended to apply solely to this clause, as evident in the preceding words, “For the purposes of this clause 17”.

It was submitted that a notice to terminate will be construed strictly against employer and contra proferentem rule will apply, i.e. any ambiguous clause will be resolved in favour of the employee. The case of Publicis Consultants UK Ltd v O’Farrell UK EAT/0 430/10 restated that where a document was drafted by the company and could be interpreted in two ways, it must be interpreted in the least favourable manner to the author.

It is noteworthy that the Respondent in seeking to avoid the application of the Complainant's notice period for the purposes of calculating service pursuant to the Unfair Dismissals Act, it is satisfied to rely on the restrictions contained in the contract. The Complainant's notice period is 3 months, the length of the restriction period is 6 months. The Complainant was expected to abide by this term of contract, which he did resulting in consequential financial loss as he was unable to accept employment in the relevant industry for six months post termination. The Complainant was dismissed on the 30th of November 2017 and as specified in his contract, the noticed he ought to have received was 3 months therefore, the date the notice would have expired was the 28th of February 2018. The effective date of his dismissal was the 28th of February 2018 and therefore the Complainant has a year’s service to bring a claim for unfair dismissal.

It was further submitted that while a contract of employment between the parties is dated 31st January 2017, the employment relationship between the parties existed and predates this contract. The Complainant was initially tasked to act as a business development manager for the Respondent company in 2014. His position remained unchanged from when he initially commenced working with the company until his dismissal on the 30th of November 2017.  Accordingly, his date of commencement as an employee is unclear. However, it is apparent that the Complainant was in effect an employee far in advance of the employment contract date of the 31st of January 2017 been executed. 

The Complainants was on a contract for services and as he was not being paid on a regular basis he requested that the relationship between the parties be formalised into a contract of services in or around October 2016 pending the issue of a formal contract of employment. Negotiations were ongoing, and the contract was eventually issued and signed on the 31st of January 2017. From the commencement with the company in 2014 until his dismissal there were no change in the nature of his employment with the Respondent. In light of the foregoing it is submitted that is without doubt that prior to the contract being signed by the Complainant that he was an employee of the Respondent company.

It was submitted that the Complainant has not got a year’s service pursuant to the Unfair Dismissals Act.  The Complainant accepted pay in lieu of notice and it was submitted that this discharged the contract pursuant to the Minimum Notice Act.

Section 2 of the Unfair Dismissals Act provides:

“Except in so far 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,”

Minimum period of notice.

4.—(1) “An employer shall, in order to terminate the contract of employment of an employee who has been in his continuous service for a period of thirteen weeks or more, give to that employee a minimum period of notice calculated in accordance with the provisions of subsection (2) of this section.

(2) The minimum notice to be given by an employer to terminate the contract of employment of his employee shall be—

(a) if the employee has been in the continuous service of his employer for less than two years, one week, …….

(5) Any provision in a contract of employment, whether made before or after the commencement of this Act, which provides for a period of notice which is less than the period of notice specified in subsection (2) of this section, shall have effect as if that contract provided for a period of notice in accordance with this section. …..

7.—(1) Nothing in this Act shall operate to prevent an employee or an employer from waiving his right to notice on any occasion or from accepting payment in lieu of notice.

(2) In any case where an employee accepts payment in lieu of notice, the date of termination of that person’s employment shall, for the purposes of the Act of 1967, be deemed to be the date on which notice, if given, would have expired.”

It was submitted by the Respondent’s barrister that I have no jurisdiction to hear the case under the Unfair Dismissals Act as the Complainant does not have a year’s service in accordance with Section 2(1) of the Unfair Dismissals Act. The terms of the contract are clear and unequivocal. The contract provides that the contract may be terminated at any time by either the Complainant or the Respondent

“giving the other party at least three months prior written notice or statutory notice, if greater.”

“Where the notice of termination of your employment is given, whether by you or the Partnership, the Partnership will have a right have the right to:

 “Pay in lieu of notice the amount your entitlement to basic salary in respect of all or part of such notice period;”

By letter dated 30th of November 2017, the Respondent terminated the Complainant’s employment on giving of notice and exercised its right to pay the Complainant in lieu of notice.  At no time did the Complainant, who was legally advised from the outset, contest that his employment had not validly terminated in accordance with the contract. In the solicitor’s letter of the 20^th December 2017 sent on his behalf there is a reference to the fact that Complainant was being paid in lieu of notice and that the Complainant “is no longer an employee of” the Respondent

Accordingly, while the Complainant alleged that of dismissal was unfair it has never been alleged that it was ineffective. The date of dismissal for the purposes of the Unfair Dismissals Act 1977 was the 30th of November 2017.  The Complainant’s contract was validly terminated on that date in a manner that was in accordance with both his contract and the provisions of the Minimum Notice and Terms of Employment Act, 1973. The provisions of section 7 of the MN 1973 Act only adds one week to the date of dismissal meaning that the Complainant still has far less than a year’s service.  If the date of termination was the date on which the payment in lieu of notice was accepted, this extends the date of termination to the 17th of December 2017 and even then, allowing for an additional week as per section 7, the Complainant service stills for falls short of one year. 

The 1973 Act specifically provides that nothing in the Act prevents an employee from agreeing to accept payment in lieu of notice.  In this case, the contractual notice period of 3 months was far longer than the period provided for under the Act and the Complainant agreed to accept payment in lieu of notice. Accordingly, the termination on the 30th of November 2017 by a payment in lieu of notice was entirely in accordance with the 1973 Act. The definition of the “date of dismissal” specifically refers in both legs of the definition to compliance with the contract. The termination of the 30th of November 2017 by payment in lieu of notice was in compliance with the contract.

They decision of the WRC relied upon by the Complainant does not assist his case. In that case, the Adjudication Officer found that the date of dismissal was the date on which notice was given and payment in lieu of notice was made plus one week notwithstanding that the contract provided that Complainant could be paid in lieu of notice. The decision does not refer at all to the provisions of section 7 of the 1973 Act. However, it does not assist the Complainant as the AO clearly reached the decision by determining that the later date for the purposes of the second leg of the definition of “date of dismissal” was the date on which the one week's notice required by the 1973 Act, would have expired not the date of the contraction notice would have expired and did not address that the !973 Act, which provides for payment in lieu of notice.

There's no authority or statement in any textbook for the contention that the “date of dismissal” is a date on which a contractual notice period would have expired if there was no right to pay in lieu of notice. There's no support for the proposition in either of the 1973 Act or the 1977 Act.

Furthermore, there's no ambiguity in the contract in relation to notice of termination the provisions of clause 17 of the contract are entirely harmonious with the payment in lieu of notice and garden leave provisions. They provide that the maximum length of restriction will be six months from when the employees stops working.

The first matter I must consider is whether the Complainant has a year’s service in accordance with Section 2(a) of the Act.  The Complainant’s contract of employment commenced on the 31^st January 2018 and he was dismissed on the 30^th November 2018.  His contract of employment provided for 3 months’ notice.  The Complainant’s solicitor submitted that the date of dismissal is the date that the notice in the contract expired and therefore his dismissal date is the 28^th February 2018.  The Respondent submitted that I have no jurisdiction in the matter as the Complainant has less than one year’s service.  The Complainant was paid 3 months’ salary in lieu of notice on the 17^th December and the date of the termination of the employment is the date of the acceptance of the payment in lieu of notice.  The payment in lieu of notice is sufficient to discharge the terms of the contract.

Section 1 (1)b of the Unfair Dismissals Acts 1977-2015 specifies the “date of dismissal” as follows

(b) “where either prior notice of such termination is not given or the notice given does not comply with the provisions of the contract of employment or the Minimum Notice and Terms of Employment Act 1973, the date on which such a notice would have expired, if it had been given on the date of such termination and had been expressed to expire on the later of the following dates-

(i)    The earliest date that would be in compliance with the provisions of the contract of employment

(ii)  The earliest date that would be in compliance with the provisions of the Minimum Notice and Terms of Employment Act 1973”,

 Section 7 of Minimum Notice and Terms of Employment Act 1973 states that;

(2)“In any case where an employee accepts payment in lieu of notice, the date of termination of the person’s employment shall, for the purposes of the Act of 1967, be deemed to be the date on which notice if given would have expired.”

The notice of dismissal was given to the Complainant on the 30^th November 2017 and his contract of employment stipulated he was entitled to three months’ notice of dismissal and the employer subsequently paid him in lieu of notice on the 17^th of December 2017 which terminated the contract. However, the date of dismissal and the date of the termination of the contract may in certain circumstances be two different dates.

The date of dismissal for the purposes of the Unfair Dismissals Acts 1977-2015 must be construed in accordance with that Act. The Act provides that where there is contractual notice the “date of dismissal” means “the date on which that notice expires.”

I have considered and applied the caselaw of the EAT in the case of Eric Kinziger v Marketo Emea Limited UD876/2015, which has similar facts to the case herein, in relation to the date of dismissal and the contractual notice period. The Complainant had less than 52 weeks service, but the contract of employment provided for 4 weeks’ notice and the Complainant argued that adding on the notice gave him 52 weeks service.  The Respondent argued that as he was paid in lieu of notice that the provision in his contract of employment applied and his employment was terminated on the payment of such notice. The EAT stated as follows:

“The Tribunal considered the Respondent’s submission that the part of this section which states:

“where the company exercises its right to pay you in lieu of notice, your employment will terminate with immediate effect and you will not be entitled to any further payments or benefits from the company”

does not operate to circumvent the strict notice requirements set out in the Act. An employer and employee cannot “agree” to disregard a statutory construct- in other words to disregard the provisions of the date of dismissal as defined in the Act.”

The EAT in holding that the Complainant the requisite service to bring the claim under the Unfair Dismissals Act went on to state:

 “The Tribunal determines that clause 18.3 does not operate to limit the claimant’s entitlement to contractual notice to which the claimant was entitled to under the Act.

If the legislature had intended that the payment of the required notice in monetary terms could reduce the protection afforded by the Act, then it would have set this out accordingly in the Act.”

Applying the above jurisprudence, I am satisfied that the date of dismissal for the purposes of a complaint under the Act is the date the contractual notice expired which is the 28^th February 2018. Therefore, I find that the Complainant has 12 month’s continuous service under the Unfair Dismissals Acts and is entitled to make a complaint under the Acts. I find I have jurisdiction to hear the complaint.

Substantive Issue

I will now consider if there were substantial grounds justifying the dismissal pursuant to Section 6 (1) of the Unfair Dismissals Act.

The Respondent stated that it was not putting forward any evidence in relation to the dismissal.

The Complainant said that he was self-employed for about 10 years mainly sourcing and developing facilities in the health facilities area.  The Respondent wished to get involved in the area and he said that he agreed to provide a consultancy service to him from November 2014 and he invoiced the Respondent for the work he carried out.  He became an employee of the Respondent in January 2017.   He said that he developed the business and was successful in getting between 12 to 14 of the projects to an advanced stage.  About a week before he was dismissed he was asked by the Respondent to provide a list and details of all his contacts and a status update on all of the projects. He said he complied with the request and provided all the information requested.   On the 30^th November 2017 he was called to a meeting and dismissed. He was given no reason for the dismissal other than being told it was a no-fault dismissal. 

As the Respondent did not put forward any evidence to justify the dismissal, I find that the dismissal was both substantially and procedurally unfair.    

The Complainant submitted evidence of his efforts to mitigate his loss. He said that he had a 6-month restriction clause in his employment contract following the termination of the employment which prevented him from taking up work in health facilities area. He said that he was very familiar with this area and he had built up contacts and he was offered work which he could not take up because of the restriction. The Complainant said that he lives in a small town in County Galway and he worked from home while he was employed by the Respondent. He said he applied for jobs and was successful in getting jobs in Dublin, but he could no longer work remotely and due to his family circumstances, he could not move to Dublin to take up these jobs. He said that he started back working as self-employed and he earned €11,000 during 2018.  I also note that the Complainant was paid up until the 28^th February 2018.

In assessing redress and taking all of these factors into account, I award the Complainant redress in the amount of €45,000.

I find that the Complainant has the required service pursuant to section 2(1)(a) of the Unfair Dismissals Act to bring a claim of unfair dismissal.

I find that the complaint made pursuant to the Unfair Dismissals Act is well founded and I order the Respondent to pay the Complainant redress in the amount of €45,000.

Unfair Dismissals Act, Section 2(1) one year’s service, contractual notice period, payment in lieu of notice, date of dismissal.