Complainant

Respondent

Anonymised Parties

Manager

Furniture supplier

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-00022575-001

11/10/2018

The Complainant commenced working with the Respondent on the 20th of May 2015. Her employment ended on the 24th of May 2018.

She was initially employed as an accountant in the accounts department.   She was promoted to a joint managerial position and finally in or around May 2017 she was promoted to the position of General Manager.

She had no issues with her employment until around April 2018.

The Finance Director (also described as the Financial Controller) gave evidence for the Respondent. He said that he was appointed as a director in January 2018. He spoke to the Complainant two to three times a week.   His evidence was that his instructions to the Complainant was that if she had an issue, she should consult with him. Her role was debtor control.

The Sales Manager only travelled to the warehouse once or twice a year.

The Managing Director is based in Asia. He doesn’t travel to the warehouse and doesn’t contact the Irish staff on a regular basis.

An issue arose in relation to a customer receiving stock despite having a substantial balance of money due for past deliveries. The Complainant was instructed by the Sales Manager who was based in Ireland to continue selling stock to this customer on a cash on delivery basis.

In or around the 11th of April 2018 this Sales Manager instructed the Complainant to recommence selling to the customer on a credit basis. The Complainant was uncomfortable doing this without the authority of the Managing Director or the Financial Controller.   She contacted the Financial controller and the Managing Director to discuss the matter. Only at this stage did the Managing Director and financial controller only became aware that the customer had been provided with stock on a “cash on delivery” basis.

The customer in question owed the Respondent £31,000.00 (Pounds).

The Complainant’s case is that she acted on the direction of the Sales Manager.

Her case is that she had no option but to hand in her letter of resignation around the 19th of April 2018.

She gave evidence about to her loss of earnings. While in employment with the Respondent she was in receipt of an annual salary of €50.000.00. She applied for various jobs advertised in local newspapers. She registered with three recruitment agencies. She gave evidence that she sought alternative work for a period of one month. She received an offer of employment as a book keeper/accounts person. However, this job came with a significant pay drop.   She was not a director in this company and the job had less responsibilities than she previously had.   Her evidence was that she had no choice but to take up this employment. She said she would have preferred to get a higher paying job and since taking that job she has been looking out for a better job. She feels that recruitment has “cooled off”.   She admitted she had not continued to actively seek a higher paying job.

Under cross examination she admitted that the new job was closer to her home namely about a ten to fifteen-minute drive as opposed to a forty-minute drive when she was in employment with the Respondent.

Her evidence was that she did everything to mitigate her loss. She was prepared to travel in the surrounding counties to take up work.

She confirmed that she was only offered one position and she took that position as she was coming close to the end of her employment with the Respondent.

As regards the substantive matter, the Complainant explained how the only Irish based director was the Sales Manager. He occasionally visited the warehouse but was mainly engaged in selling on the road.   The Managing Director was based outside Ireland as was the Financial Controller.

The Complainant’s evidence was that the customer in question was very slow in paying his account. She gave evidence that the Sales Manager instructed that he was happy to supply goods to this customer and that he “would make up any shortfall in payment himself”.

Her evidence was that she wasn’t confident about the situation and for that reason she decided to let the Financial Controller and Managing Director know what was being proposed.

On the 13th of April 2018 she received a telephone call from the Financial Controller. It was communicated to her in the call that she should resign, and she had until the end of May or June to do so.

She spoke with the Sales Manager and he advised her that she had a choice either resign or she would be asked to leave immediately.

She was furnished emails from the Sales Manager on the 18th April 2018 that confirmed this understanding that she had. The Respondent’s directors had decided that she had two options, either hand in her notice or expect her employment to be terminated immediately.

On the 17th of April 2018 she thought about her options and she decided she would resign.

The Complainant’s evidence was she had no option but to hand in her notice.   She couldn’t risk her employment being terminated immediately. She had a mortgage to pay and wanted to maintain her position and income for as long as possible.

She felt a decision had been made about her ongoing employment namely either way “she had to go”.

She was aware of the disciplinary process and she confirmed she had taken part in a disciplinary investigation in the past. However, her view was that in her case the decision makers were the people that she was engaging with already namely the Sales manager, the Financial Controller and the Managing Director. They had made their decision.

She was aware of the grievance procedure. She was unhappy that she had to leave but she felt there would be no change in the decision that had been made by them.

By letter the 20th of April 2018 the Complainant gave notice of her resignation to the Respondent. She stated that her employment would finish on the 20th of June 2018. By email the 9th of May 2018 she updated the Respondent with her leaving date to the 24th of May 2018.

The Respondent’s case was that it was the Complainant’s responsibility to keep debt owed to the company under control.

It was specifically mentioned to her as part of her promotion and increased salary of €50,000.00 that it was her responsibility to manage debt.

The Respondent’s case is that they were very shocked with the ongoing facilities given to this customer and they suspected that the Complainant may have engaged in mismanagement. However, before they were able to investigate their suspicions, she had resigned.

There were also issues with cheques presented by the customer in question bouncing and this was not brought to the attention of the Financial Controller.  

Its case was that the Complainant had not engaged in proper accounting procedures and she was painting a “rosier picture” of the customer’s account than what was happening.

The Respondent was adamant that nobody forced the Complainant to resign.   The person on which she relied for direction was the sales director and he was not able to dismiss her as he was not her direct line manager.

In 2017 the senior management had a meeting in Prague which the Complainant and the sales director attended. The Managing Director made it clear that he was not happy with the legal process to recover debts in Ireland or the mentality in Ireland about paying balances.   He was not happy about the length of time it took to process claims through the Irish Court system.   Overall his view was that the Irish team were too relaxed on credit control and he wanted this to stop.

The Finance Controller gave evidence was that the Complainant was made aware in no uncertain terms that customers needed to pay their accounts and that customers were not to be supplied outside of agreed terms.  

The Respondent’s position was that they were not aware that this customer had been supplied with goods for months. There was no indication on the debtor reports that the customer was receiving goods. Overall, he felt that there was a manipulation of the accounts and the witness used the phrase “cooking the books”. His view was that the Complainant had not presented the facts in a true manner and it showed terrible judgement on her part.

The Respondent intended to follow its disciplinary procedures and call in an independent consultant to carry out the required steps. The witness pointed out that he was based in Eastern Europe, the sales director is based in Northern Ireland and the Managing Director is based in Asia. All this confirmed that the investigation would have to go to an independent consultant. He referred to page 46 of the staff handbook. This however turned out to be a hypothetical issue as the Complainant resigned before the opportunity arose.

Under cross examination, the Financial Controller agreed that there were instances of supplying customers with large outstanding debts, but this only took place with the specific instructions of the Managing Director.   The financial director differentiated other customers who had substantial debts because their debts were known about and permission was given to continue trading with them.   His evidence was that only the managing director could give approval to continue trading. His position was that incorrect financial reports were provided to him. Ultimately the debt owed by this customer increased.

The Financial Controller explained that nobody told the Complainant that she would be dismissed. He agreed that he had a conversation with her on the 13th of April 2018.   The conversation regarded her poor judgement. Her response to him in that conversation was that she was the only person involved.   She was apologetic, she said she didn’t know what to do and she was looking for him for advice on what to do. He was adamant that he did not say to her that she would be dismissed. His evidence was that he did not force her to resign.

His view was that the Complainant came to the realisation that she had made a significant mistake, that she had misled the company directors and that all trust had been broken. He felt that her resignation was her way of acknowledging that she had done something wrong. He didn’t want to see her go, but the situation in which they all found themselves was terrible.

He was happy she found a job. She never asked for a reference and none was provided.

The witness agreed that the managing director was very angry, and he did write in his email that “there would be consequences”. The witness wasn’t sure what that meant. He accepted that there was a reference to that “the Complainant would leave the employment” but he didn’t accept that this meant that she would be dismissed.

Its case was that the Complainant was applying for jobs before she saw the emails on which she is basing her decision to resign and that rather than allowing an investigation take place, she chose of her own free will to resign.   She prepared a letter of resignation and submitted same to them. The Respondent relied on the fact that she worked a further two months and ten days in employment and that was incompatible with her allegations that she was coerced or bullied.

The Respondent also submitted that the Complainant of her own volition took up a job that was based fifteen minutes from her home on a salary of circa €20,000.00 less than what she was in receipt of when working for the Respondent.  

The Respondent also relied on the fact that the Complainant had the benefit of legal advice before she decided to resign. It submitted that whatever she believed was to happen was just speculation. There was no certainty to the outcome of the disciplinary investigation. She herself had taken part in other investigations and she knew what the procedure would be.

The crux in this case is whether the Complainant voluntarily submitted her resignation or was forced to do so.

I note that the decision of the Labour Court in Millett v Shinkwin [2004] E.L.R. 319 held: “there are occasions in which an apparently unconditional and unambiguous resignation may be vitiated by the circumstances in which it is proffered.”

In the decision in Sheffield v Oxford Controls Co. Ltd [1979] IRLR 133, EAT Arnold J held:

…. where an employee resigns and that resignation is determined upon by him because he prefers to resign rather than be dismissed (the alternative having been expressed to him by the employer in terms of the threat that if he does not resign he will be dismissed), the mechanics of the resignation do not cause that to be other than a dismissal.

The Sales Manager did not give evidence at the hearings. I accept the Complainant was told by him that he had read emails between the Managing Director and the Financial Officer and based on those emails, he was of the opinion that if the Complainant did not resign, she would be dismissed immediately. These emails were later furnished to the Complainant have been submitted to me and are quite damning to read. In the email of the 13th April 2018 the Managing Director wrote

“[Complainant] will leave ASAP.”

In the email from the Financial Director to the Managing Director on the 13th April 2018, the Financial Director wrote

“Overall I support the position taken – [Complainant] is to leave”.

In a further email the Financial Director wrote

“truly mislead by [Complainant] and I cannot support her staying……

…………trust has irretrievably broken down”

The Respondent did not adhere to fair proceedures in forming these opinions.   Accordingly, I do not find that the Complainant resigned of her own free will. I find she was constructively dismissed.

However, I do find that she contributed to the situation she found herself in. I accept the evidence of the Financial Controller about the terms of her promotion and her duties regarding managing debt. Had the Complainant involved the Financial Controller earlier in the decision-making process on this Client, the breakdown of trust between the parties would not have occurred.

I also hold that the Complainant has not done everything in her power to minimise her losses. The Complainant accepted employment on a substantially reduced salary and brought forward her end date to take up this employment. She has since received a minor increase in this salary. The Complainant appears to be happy to remain in this employment. Her ongoing financial loss cannot be entirely attributed to the Respondent’s behaviour.  

In view of the above, I award the Complainant her loss of earnings for 6 months only and this amounts to €8,999.90 which is a gross payment taxable in accordance with Revenue rules.  

The Complaint is well founded.   I award the Complainant €8,999.90 which is a gross payment taxable in accordance with Revenue rules.

Constructive dismissal