Complainant

Respondent

Anonymised Parties

An Engineer Surveyor

An Engineering Company

Representatives

Michael McCormack BL

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-00027459-001

02/04/2019

The respondent is part of a UK public limited company providing inspection services for heavy lifting equipment. They employ 25 engineers in Ireland and the complainant commenced working with them on February 12th 2013. He was a home-based engineer, travelling to clients in his company car to carry out inspections on lifting equipment in the engineering and transport sectors. In January 2016, he took up a role as a part-time Associate Lecturer in Engineering in an Institute of Technology.

Chronology Leading to the Complainant’s Dismissal

On March 5th 2018, while he was an employee of the respondent, the complainant registered an engineering business in his own name with the Companies Registration Office (CRO).   He and his wife are listed as directors and his wife is the company secretary.   Under the NACE code (nomenclature of economic activities), the company is categorised under the activity of “engineering and inspections.” The evidence given at the hearing was that, In July 2018, the complainant’s Line Manager became aware that he had set up this company.

On November 22nd, the complainant was invited to an investigation meeting that took place on November 29th. At the meeting, he was asked to explain his intention in setting up the company and why he did not inform his Line Manager. He was also asked to explain alleged anomalies in his mileage and travel during July 2018. He attended the investigation meeting accompanied by his colleague from Unite.   Following this, a disciplinary hearing meeting was held on December 11th, at the end of which he was dismissed.

On December 15th 2018, the complainant submitted an appeal against his Line Manager’s decision to dismiss him and a meeting to this effect was held on January 10th 2019. A further appeal meeting chaired by the Head of Engineering and Inspection took place by conference call on January 24th. The complainant argued that the investigation that preceded his dismissal was procedurally flawed, and the Appeal Manager upheld some of his points in this regard; however, he concluded,

“I believe there has been a clear breach of Company policy in failing to declare a material conflict of interest which is a direct conflict with (the respondent’s) business. You should have been aware of the Statement of Business Principles which was made available to you as part of the annual regulatory tests and your failure to declare this conflict represents a serious breach of trust and confidence. Therefore I believe, against the evidence presented, dismissal on the grounds of gross misconduct is the appropriate sanction to apply.”

It is the complainant’s case that his dismissal was unfair. Due to difficulties in his relationship with his Line Manager, he claims that the decision to dismiss him was not unbiased. He said that no conflict existed between his company and the business of his employer and furthermore, that the Statement of Business Principles was not adequately communicated to him. He said that no account was taken of his unblemished disciplinary record and his outstanding performance and he claims that no consideration was given to a sanction short of dismissal.

Opening the respondent’s case, Mr McCormack said that the complainant completed regulatory training in December 2017 and in January 2018, he signed a form to confirm that there were no conflicts of interest between him and the business of his employer.   In March 2018, following the snow storm known as “the beast from the east,” the complainant and his Line Manager had a discussion about work to be made up as a result of the time off during the bad weather. It appears that there was a misunderstanding regarding whether the complainant was to make up for the work not done or the time not worked. It was then that the complainant set up his company.

Evidence of the Investigation Manager

The Investigation Manager is an Area Technical Development Manager in the UK. The Regional Manager asked him to carry out an investigation into a possible conflict of interest by the complainant. In his evidence, he said he received a pack of information from the complainant’s Line Manager in advance of the investigation meeting on November 29th. He said that the complainant brought a CRO document to the meeting that showed that he set up a company on March 5th 2018. The complainant’s travel and mileage record during July 2018 was also raised at the meeting but, following his explanation concerning his travel record during the 10 days under investigation and one typographical error, no action was taken regarding this.

The Investigation Manager said that, after the meeting on November 29th, he phoned the complainant to ask him to confirm the work his company carried out. He said that he established that the complainant’s company was established to do health and safety audits and training and that this work could have been done by a division of the respondent’s business.   The Investigation Manager said that he sent a note to the complainant’s Line Manager and to the HR Department and he had no further involvement in the matter.

Cross-Examining of the Investigation Manager

Following his direct evidence, the complainant cross-examined the Investigation Manager. He agreed that he and the complainant’s Line Manager were colleagues. He said that, in advance of the investigation meeting, the Line Manager sent him 57 pages of documents.

The complainant asked the Investigation Manager if the respondent had ever offered health and safety audits or training in Ireland and he replied that it had not. He agreed that following the investigation meeting on November 29th, he phoned the complainant who told him that he had done health and safety and audit work for a company where he used to work. He agreed that the complainant told him that he regularly called in to this company to catch up with his friends.

The complainant asked the Investigation Manager if he had any concerns that during his employment with the respondent, he wasn’t doing his job. The Investigation Manager replied that he was concerned that there was a potential conflict of interest; however, he did not reply when he was asked what the conflict was.

Evidence of the Line Manager

The complainant’s Line Manager made the decision to dismiss him on December 11th 2018.   He said that the complainant has reported to him since March 2014. He said that he did quarterly reviews with the complainant and his performance was very good.

Mr McCormack asked the Line Manager about an email that the complainant sent to him and the Regional Manager in March 2018. The Regional Manager is the Line Manager’s boss. The Line Manager said that the complainant thought he was being asked to make up the lost days, but he expected him to make up for the work not done.

In July 2017, the Line Manager said that he sent out a Conflict of Interest Disclosure Form to the 25 engineers who report to him. A year later, in July 2018, one of his team told him that the complainant had set up a company. He said that he checked the CRO record and he established that the complainant set up a company in March 2018. He notified the Regional Manager. In September, he said that he gathered together the information required for an investigation and in mid-November, he gave the documents he had compiled to the Investigation Manager. On November 22nd, the Investigation Manager sent the complainant a letter by email, and asked him to attend an investigation meeting on November 29th. On November 23rd, the complainant sent a letter of resignation to his Line Manager. In his letter he said that he had “recently gained some qualifications that have allowed me to deliver training courses and work on health and safety projects with a company …and, after careful consideration, I have decided that I would like to pursue this type of work.” In his letter, the complainant said that his last day at work would be January 2nd 2019.

In his evidence, the Line Manager said that he contacted the complainant on the afternoon of November 23rd and he told him that the disciplinary investigation would continue, regardless of his decision to resign. On November 26th, in an email to his Line Manager, the complainant withdrew his resignation saying, “I acted in haste and I do not want to leave the company in this way.”

On November 30th, the complainant was suspended pending an investigation into “a potential breach of … standards and possible gross misconduct.”

Counsel for the respondent asked the Line Manager about the disciplinary hearing that he chaired on December 11th 2019. The Line Manager said that neither the complainant or his union representative raised an issue about bias on his part.

Mr McCormack asked the Line Manager if he considered a sanction other than dismissal. Before the meeting on December 11th, he said that he got advice from two people in the HR department about the reasons why he might come to a conclusion regarding dismissal. He said that, at the disciplinary meeting, the complainant admitted that he was a director of a company and he admitted using his company car in the course of business for that company. The Line Manager said that he considered issuing a final written warning, but he said that he believed that the complainant was aware of the conflict of interest policy and that his actions constituted gross misconduct. In making the decision, he said that he took account of the complainant’s previous good record and his family circumstances. The complainant has a young son with special needs.

Asked to summarise the reason he dismissed the complainant, the Line Manager said that the complainant breached the company’s Statement of Business Principles and the disciplinary procedure and he didn’t inform him that he was setting up a company.

When he was asked if he had any further involvement with the complainant after the meeting of December 11th, the Line Manager said that he called to the complainant’s house to collect his car and company equipment.

Cross-examining of the Line Manager

The Line Manager agreed with the complainant that he received an “outstanding” rating in his 2018 review, which meant that he was in the top 10% of performers on the UK / Ireland engineer / surveyor team of around 600 employees.

The complainant then referred to an issue he raised with the respondent’s Health and Safety Manager in September 2017 about the company’s lone working policy. He had questioned if the company’s clients who were also insured by the respondent were aware of the policy. Following this query, the complainant said that his Line Manager told him that he needed to “watch himself.” Due to the snow storm in February 2018, the complainant couldn’t get his car out of his driveway for about a week. He said that his Line Manager told him that he would have to make up for the lost time and he sent an email to the Line Manager and the Regional Manager. He claimed that his Line Manager was irate because he “went over his head” and he told him that he would “sort him out.” The complainant said that he phoned his Unite representative at 5.11pm after he had this conversation with his Line Manager. The next day, he sent an email to his Line Manager and said, “if you want to sanction me, that’s your choice.”

The complainant then asked his Line Manager why he compiled a report about his mileage record and he replied that the reason was to get information about his working week.   The complainant referred to the fact that the data included information from 6.00am until 12.00 midnight and the Manager replied that he wanted to check if the complainant was claiming mileage as part of the company he had set up.

The complainant referred to the Line Manager’s evidence that, in July 2018, he was informed that he had set up a company. He asked him why it took until November to commence an investigation and he replied that it took him some time to gather information. He said that he established that there were mileage anomalies; however, the complainant said that these were subsequently unproven.   He said that he had to get details about the company.

The evidence in the respondent’s book of papers shows that, on November 22nd 2018, the Line Manager phoned the complainant and told him that he knew he had set up a company. The complainant recalled that he told his Manager that he had done some health and safety training. He reminded the Line Manager that his response was, “we have you on the mileage” and that it was “a sackable offence.” The complainant reminded the Line Manager that he told him that the Regional Manager “wanted me gone.” The complainant said that he was “floored” by the conversation and the next day, he sent in a letter of resignation. He said, “because you told me that the allegations were so serious, the prospect of getting fired for gross misconduct is a career-ending event. I had no option but to resign.” The complainant said that his Manager said that he wouldn’t accept a resignation effective on January 2nd and that it would have to be immediate.

The Line Manager said that he got advice from the HR officer and he was informed that, if the complainant continued in employment while he was working out his notice, the investigation into his conduct would go ahead. He said that he was also advised that if the outcome from the disciplinary hearing was that the complainant had engaged in gross misconduct, the disciplinary procedure provided that he could be dismissed.

Referring to his dismissal two weeks before Christmas, the complainant said that, at the disciplinary investigation, he pleaded for a chance to rectify the situation and he asked the Line Manager if he appreciated the serious effect a dismissal would have on his life. The Line Manager said that he believed that what the complainant had done warranted dismissal.

The complainant asked the Line Manager if he thought there was any conflict of interest between the fact that he had been involved in compiling the information that led to the investigation and his role as the manager in charge of the disciplinary hearing. He replied that, as he was the complainant’s Line Manager, he was the appropriate person to do the investigation.

Referring to the notes of the disciplinary hearing, the complainant recalled a conversation he had with his Line Manager about his part-time lecturing job and his interest in getting into training. The Line Manager agreed that they had this conversation but he said that the thought the complainant’s interest was related to a training role with the respondent. The complainant said that he wrote a health and safety statement and a risk assessment document for the company where he used to work. He said that the respondent doesn’t offer this type of service and yet, the Line Manager dismissed him because of a conflict of interest that doesn’t exist. He agreed that he visited this company during his working day, but he said that he did this on his own time. He said that he has occasionally worked more than 50 hours a week for the respondent, whereas his commitment is 35 hours. He disagreed with the minutes of the disciplinary meeting which notes that he said “yes” when he was asked if he travelled to his previous employer’s company on the respondent’s time. He asked his Line Manager if there was a problem about what he did once he completed 35 hours’ work for the respondent and the Line Manager said that he didn’t dispute this. However, he said, “if you’re doing work that (the respondent) can do, there could be a conflict.” He said that the respondent has a Special Services department that could do the work that the complainant offered to his former company. He said that he decided that the complainant had breached the company’s Statement of Business Principles and that dismissal without notice was the appropriate sanction.

Continuing his cross-examination, the complainant asked the Line Manager if he gave any consideration to his defence that his never saw the Statement of Business Principles document. The Line Manager said that the complainant should have let him know that he had set up a company. He acknowledged that the complainant may not have seen the Statement of Business Principles document.

Referring again to the minutes of the disciplinary meeting, the complainant said that, contrary to these notes, he never agreed that he was in conflict with his employer and he does not accept that the work that he did for his previous employer could be offered by the respondent.

The complainant asked what the consequences were for the company of his dismissal, based on the fact that the Line Manager felt that he should be summarily dismissed. The Line Manager responded, “you became a director of a company and you had the potential to engage with (the respondent’s) clients. You used the company vehicle when you were doing work for your own company and you were not insured to do so.”

Re-direction by the Respondent’s Counsel

Mr McCormack asked the Line Manager about the data he compiled regarding the complainant’s mileage record. The Line Manager agreed that he could only track the complainant when he was in his car.   He said that the tracking remains active when the GPS device is paused and it records the duration of the pause.

Regarding the provision of health and safety training by the Special Services department, the Line Manager said that, of the respondent’s clients, he couldn’t confirm who had availed of this service.

The Line Manager said that, before reaching his decision to dismiss the complainant, he took account of his good service record. He also said that, during the investigation, the complainant answered all the questions honestly.

Evidence of the Appeal Manager

The Appeal Manager said that two regional managers report to him, and both of these have around 25 area managers reporting to them. The Line Manager is one of these area managers. The company employs around 600 engineer surveyors, of which the complainant is one.

Asked about the respondent’s Special Services department, the Appeal Manager said that this department did not come under his jurisdiction and he asked his colleague to summarise the work carried out. A detailed document to this effect was submitted in the respondent’s book of papers. The Appeal Manager said that the work of the department is carried out on a 50/50 basis by in-house staff and out-sourced contractors. He said that health and safety training could be provided in Ireland. At the January 2017 team briefing, the presentation referred to the revenue generated by the Special Services department. Since January 1st 2018, he said that this unit is part of the company’s core business.

The Appeal Manager said that he was the decision-maker in respect of the complainant’s appeal against his dismissal. He said that the company’s disciplinary procedure provides that he can appoint someone to hear the appeal. He delegated this task to one of his regional managers and the HR Manager.   They had a meeting with the complainant on January 10th 2019 and he was briefed by them the following day. Around January 16th, the Appeal Manager said that he received the notes of the disciplinary meeting. The HR Manager provided him with the notes of the appeal meeting on January 10th and he had the complainant’s letter setting out the grounds of his appeal.   He said that he also had a note of the investigation meeting of November 29th. On January 17th, he had a phone conversation with the Line Manager and the HR Executive who advised the Line Manager in advance of the disciplinary hearing. He said that he wanted to explore the complainant’s allegation that the Line Manager was biased against him, but he said that he found no evidence of this.  

On January 24th, the Appeal Manager had a teleconference with the complainant, who was accompanied by his union colleague. He referred to this teleconference as “a reconvened appeal meeting.” Following a 30-minute adjournment, he confirmed to the complainant that his dismissal was upheld.

Mr McCormack asked the Appeal Manager if he was aware that, following the complainant’s resignation on November 23rd, the Line Manager told him that the disciplinary investigation would proceed, regardless of this. The Appeal Manager said that he spoke to the Line Manager and he said that he did not tell the complainant to resign or that he would be fired.

Referring to the fact that the Line Manager said that he spoke to the HR Executive before the disciplinary investigation and he was informed that the complainant could be dismissed, the Appeal Manager said that this advice was “conditional on certain scenarios.”

Asked about the fact that the Line Manager was involved in the initial investigation and that he then chaired the disciplinary hearing, the Appeal Manager said that the disciplinary investigation was carried out by the Investigation Manager and then the Line Manager did the disciplinary meeting. He said that he had no concern about this.

Considering the severity of the sanction, the Appeal Manager said that he would have reached the same conclusion. He said that a final written warning was not appropriate because the complainant had set up a business in competition with his employer. He said that he was satisfied that the complainant did not see the policy that states that an employee may not set up a company unless they inform their line manager. He said that the complainant should not have become a director of another company that could be in direct competition with the respondent. He said that the complainant had five years of experience as a fully trained inspector with the respondent, and it would be very easy to get business. He accepted that the complainant offered to wind up his company, but “in the end, it was a serious breach of trust.”  

Cross-Examining of the Appeal Manager

The complainant asked the Appeal Manager why the company has not provided any evidence that the respondent provides risk assessments and safety statement services in Ireland.   He said that at the appeal meeting, the Regional Manager said that the company had never done safety statements in Ireland. Evidence to this effect was set out in the notes of the appeal meeting. Referring to the document submitted in evidence about the services provided by the Special Services unit, the complainant said that the document is written for the UK market and refers only to UK legislation. The Appeal Manager said that 97% of the business of the Special Services unit is carried out in the UK, but engineer surveyors in Ireland are expected to advertise this business.

In his note of the teleconference of January 24th to hear the complainant’s appeal, the Appeal Manager said that he acknowledged that the complainant was not aware that the Special Services Department could offer services in Ireland.   The complainant asked who the third party is that could provide this service in Ireland on behalf of the respondent. The Appeal Manager did not answer this question, but he said that, “for me, the crux of my decision is based on the fact that you set up a company that could do audits and examinations.”

From the notes submitted in evidence, it is apparent that the Appeal Manager consulted with several people, but, before reaching his decision to uphold the complainant’s dismissal, he did not engage directly with the complainant. At the teleconference on January 24th, he summarised the record of the meeting with the Regional Manager and the HR Manager who were delegated to hear the complainant’s appeal on January 10th. The Appeal Manager said that he took a 30-minute break during the teleconference, after which he confirmed the outcome.

In response to a question from the complainant, the Appeal Manager said that he acknowledged the strained relationship between the complainant and his Line Manager, saying, “maybe the relationship wasn’t the best.” However, he pointed out that the Line Manager did not have to rate the complainant as a top performer, which he had done. Regarding the complainant’s dismissal, he said that he would have made the same decision.

The complainant referred to his conversation with his Line Manager on March 1st, during which his Manager said, “you’ll regret crossing me.” The complainant said that he set up his company four days later because he “needed a plan B.” The Appeal Manager said that he considered that information, but it was not material to his decision.

In the company’s disciplinary procedure, under the heading, “Dismissal with Notice,” this course of action is said to apply when an employee has “significantly breached the conduct expected and there are very serious consequences.” The complainant asked the Appeal Manager what the consequences of his conduct were?   He replied that the issue for him is the breach of trust and integrity. The complainant then pointed out that the Appeal Manager agreed that he never saw the Statement of Business Principles policy but he did not give him the benefit of the doubt regarding the setting up of his company.   The Appeal Manager said that the possibility that he didn’t see the document is not a defence and that common sense must also apply.

Re-direction by the Respondent’s Counsel

Mr McCormack asked the Appeal Manager if he heard submissions from the complainant at the teleconference on January 23rd and he replied that it was a two-way conversation.

He said that the work of the Special Services unit was a key element of the team meeting of January 2018 and he went on to name the third-party provider of health and safety advice.

Legal Authorities

In support of their case that the dismissal of the complainant was not unfair, the respondent submitted 19 legal precedents addressing the admissibility of evidence, the fair and substantive reason for a dismissal and the calculation of losses.   At the close of the hearing, Mr McCormack referred to a selection of these:

Allied Irish Banks plc v Diamond, [2012] 3 IR 549

Addressing the nature of the relationship between an employee and an employer in the context of an employee’s plans to move on, Mr Justice Clarke stated,

“…an employee owes a duty of fidelity to an employer as part of the mutual relationship at the heart of a contract of employment.   That duty of fidelity prevents an employee, while still employed, from taking actions in competition with the employer concerned. However an employee is entitled to take preparatory steps for life after the contract of employment has ended.”

The Governor and Company of the Bank of Ireland v Reilly, [2015] IEHC 24

Referring to the requirement for the employer’s response to an employee’s conduct to be reasonable, Mr McCormack noted the comments of Mr Justice Noonan at paragraph 38 of this judgement:

“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 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 judgement as to whether the dismissal was reasonable for that of the employer. The question rather is whether the decision to dismiss is within the band of reasonableness responses of a reasonable employer to the conduct concerned...”

Fairbrother v Stiefel Laboratories (Ireland) Limited, UDD665/1985

Dr Fairbrother was dismissed because his wife set up a company that manufactured and sold a skincare product similar to a product developed by Stiefel Laboratories.   Finding that his dismissal was not unfair, the Tribunal concluded,

“The claimant was made aware of the likely consequences if the conflict of interest was not resolved and he was given every opportunity to resolve it. We are satisfied, having regard to the evidence, as furnished to the Tribunal, that the respondents acted reasonably, and that, in all the circumstances they had substantial grounds to justify the dismissal of the complainant, which we hold was not unfair.”

Samuel J Frizelle and New Ross Credit Union Limited, [1997] IEHC 137

Referring to this seminal decision of Mr Justice Flood, the respondent’s counsel referred to page 2 of the judgement and the final premise determining the fairness of a decision to dismiss an employee:

“The actual decision, as to whether a dismissal should follow, should be a decision proportionate to the gravity of the complaint, and of the gravity and effect of dismissal on the employee.”

A Coach Driver v A Coach Company, ADJ-00007142

Referring to the process followed by the respondent in their decision to dismiss the complainant, Mr McCormack said that any procedural flaws were minor. He submitted that the complainant’s appeal amounted to a new hearing and that “any flaws were cured.” In this regard, he referred to this decision of the adjudicator, Ms Aideen Collard, and her comments on the fact that the complainant in that case may not have been provided with a copy of the respondent’s Social and Digital Media Policy and Guidance, “he was aware that his actions in posting the photo and related commentary in question could lead to his dismissal.”

In his direct evidence, the complainant said that he is now aware that he breached the respondent’s policy by not informing his Manager that he set up a company.   Since he joined the respondent in 2013, the complainant said that he has been a high performer. He said that there is no provision in his contract that states that he cannot work anywhere else. In 2016, he got a part-time job as an Associate Lecturer in an Institute of Technology. He told his Line Manager he had applied for and got the job and he discovered that his manager had also applied, but wasn’t successful. After that, the complainant said that he “started to have problems” with his Manager. The issue of making up time after the snow in 2017 is one example. He would also pick out trivial things, such as a mis-spelling in a report and “would be very condescending.”

In 2016, the complainant said that he was very unhappy with his relationship with his Manager and he applied for a job in a competitor company. In 2017, he was concerned about what he thought was an unethical practice and he expressed his opinion about this. As a result, he said that his Manager told him that “people in the UK are not happy” with him.

The complainant said that he was required to complete certain online tests, one of which is administered by the Financial Services Authority in the UK. He said that due to the poor broadband signal where he lives, he didn’t download the documents indicated to assist with the questions on the test. He said that he didn’t read the Statement of Business Principles which states that an employee must inform their line manager if they become a director of a company and he didn’t realise the importance of this document.

Describing his attitude to the respondent, the complainant said that his job was “like gold dust” to him, paying him an annual wage of €65,000, with the benefit of a company car and other perks. Every week, he worked six or seven hours beyond his contractual hours. He said that it was never his intention to interfere with the business of his employer. From the beginning of the investigation, he volunteered information to his Line Manager that he did a safety statement and a risk assessment for the company that he used to work for. He said that he then “went from being an outstanding performer to a pariah.”   He didn’t believe that any conflict existed between this work and his job with the respondent. The work that he did was done on his own time and did not interfere with any of the respondent’s customers.

On January 8th 2018, the complainant said that he completed a yes/no conflict of interest disclosure form, indicating that he had no conflicts with his employer.   On March 1st, he had an altercation with his Manager about making up time as a result of time lost during the bad weather when he was snowed in. He sent an email to his Manager and to the Regional Manager at 3.27pm on March 1st and around 4.00pm, he said that his Line Manager phoned him and, in an aggressive tone said, “you’ll regret that.” At 5.00pm, the complainant said that he contacted his union representative and told him that he felt that his manager was “out to get him.” From then on, he decided to avoid him.

On March 5th, the complainant said that he registered his company “to have a back-up plan” because he thought that his time with the respondent was coming to an end. He was doing a master’s degree in teaching and learning and he thought that he’d like to get into training. He said that if he had a limited company, he could carry out training with limited liability. He did some training with his former employer, and he submitted that this did not interfere with his work with the respondent.

The complainant asked why his Line Manager suggested to him that he should resign? He said that this doesn’t show that he had any interest in keeping him on. When he handed in his resignation, he felt that he had no choice. When he informed his line manager that he was giving notice that he would leave at the beginning of January, his response was that this wouldn’t be accepted and that he should resign immediately.

In advance of the investigation meeting, the complainant said that he received 57 pages of documents, showing where he was day and night for five months. He referred to the company’s disciplinary policy which states that an investigation will be carried out as soon as practical.

Describing his encounter with the Investigation Manager as “very fair,” he said that the meeting on November 29th did not address any problem with him using his company car or working during the respondent’s time, and yet, these issues came up at the disciplinary hearing.

The complainant said that he was scheduled to have surgery on December 13th 2018 and he asked his Line Manager to postpone the disciplinary hearing he had scheduled for December 11th; however, the Line Manager wanted to proceed and the meeting went ahead. The company’s disciplinary hearing provides that “the hearing will be chaired by a Band C manager, or above, who has not carried out or has not had any previous connection to the investigation.” It is the complainant’s position that his Line Manager was not the right person to chair the disciplinary hearing because he had already compiled the information for the investigation.

Referring to his appeal against his dismissal, the complainant said that the Appeal Manager didn’t engage with him or to his representative and that he made his decision based on information provided by the Regional Manager and the HR Manager, neither of whom, he claims, were well disposed towards him.

In his evidence regarding losses, the complainant said that he was unemployed for eight weeks and he started work with a new employer in mid-January 2019. His annual salary with the respondent was €65,000 plus a company car and other benefits and he now earns €38,000, plus a small income from his own company. Due to the fact that his current job requires him to be away from home more frequently, he has not been able to continue his part-time lecturing job, and consequently, he is also at the loss of that income.

Cross-examining of the Complainant

Mr McCormack referred to a document in the respondent’s book of papers, the “Question Bank for (the respondent’s) Ethical Standards.” This document has 19 questions, each of which is answered by selecting an “a” or “b” response. In answer to the question, “In order to avoid conflicts of interest, what should you do when you have a connection to a supplier, customer or broker?” the complainant answered correctly by selecting option “b,” “I should disclose the connection immediately to my manager to enable responsible decision-making and to protect everyone involved.” The complainant said that he knew the correct answer to this question using his common sense.

Mr McCormack put it to the complainant that he never mentioned to his Line Manager or the Regional Manage that he had set up a company in case he needed to look for a job. He put it to the complainant that he didn’t raise any concern about his Line Manager chairing the disciplinary hearing. The complainant said that he thought that at the hearing, he would be able to explain his reason for setting up a company and that he was not in competition with his employer. He said that he did not expect to be dismissed.

Evidence of the Union Representative

The complainant’s colleague said that he never saw the Statement of Business Principles which provides that, if an employee becomes a company director, they must report this to their Line Manager. The colleague said that he spoke to a number of other engineer surveyors and that they had not seen the document either.

The colleague recalled the complainant contacting him after the bad snow storm in March 2018, when he raised his concerns about his relationship with his Manager. He said that the complainant told him that the Line Manager threatened him with dismissal. He said that they discussed their options and they decided that they were limited.

The colleague said that he was not aware that the respondent could provide a service to draw up health and safety statements.

In the opinion of this witness, the Regional Manager and the HR Manager were not independent, but closely aligned with the Line Manager. The Regional Manager would not take any account or even acknowledge that the Line Manager was involved in the initial investigation. No account was taken of the fact that many of the complainant’s colleagues on the engineer surveyor team had other jobs.   Some were farmers and others had property rented and they often travelled to their farms or properties during the normal working day, using their company cars.

At the conclusion of the hearing on December 17th, the union representative submitted emails from seven of his colleagues on the engineer surveyor team. Each of these employees confirmed that, until the complainant’s dismissal, they were not aware of the respondent’s Statement of Business Principles document. Most had been working for the company for many years and had completed their annual Financial Services Authority tests.

Legal Authorities

Setting out the legal precedents in support of his contention that his dismissal was unfair, the complainant referred to the following authorities:

Berber v Dunnes Stores, [2009] ELR 61

In this case at the High Court, referring to an employee’s decision to resign because of the conduct of their employer, Mr Justice Finnegan held that,

“In such cases the critical issue is the behaviour of the employer, although the employee’s behaviour must also be considered. Generally, this reference to the employer’s conduct is taken to mean something that is so intolerable as to justify the complainant’s resignation and something that represents a repudiation of the contract of employment.”

The complainant said that his Line Manager’s “attack” in March 2018 had a significant impact on him and his decision to set up a company was a plan for him to move on.  

Allied Irish Banks plc v Diamond, [2012] 3 IR 549

The complainant argued that the nature of the conduct of Mr Diamond in this case was not reflective of the cause of his own dismissal. He claims that his company was never in competition with his employer’s business.

The Governor and Company of the Bank of Ireland v Reilly, [2015] IEHC 24

The complainant believes that the findings of Mr Justice Noonan in this case underlines the requirement for reasonableness in the decision-making. He asserts that his former employer’s decision to dismiss him does not meet the test of reasonableness set out in this judgement.

Fairbrother v Stiefel Laboratories (Ireland) Limited, UDD665/1985

Comparing his circumstances to that of Dr Fairbrother, the complainant said that he was never given an opportunity to resolve the issue that resulted in his dismissal. He said that he “pleaded for an opportunity to close his company.”

Samuel J Frizelle and New Ross Credit Union Limited, [1997] IEHC 137

Considering the issue of proportionality as it was addressed by Mr Justice Flood in this case, the complainant argued that the decision to terminate his employment was disproportionate to the gravity of his actions.

An Employee and a Bus Company, ADJ-00013201

Here, the complainant was dismissed for theft and the adjudicator, Mr Ray Flaherty decided that his dismissal was unfair, mainly because the person who conducted the investigation into the alleged theft also conducted the disciplinary hearing.   In reaching his conclusion, Mr Flaherty relied on the findings of the Labour Court in the case of Joseph Brennan Bakeries v Rogers, UDD1821.

DHL Express (Ireland) Limited and Michael Coughlan, UDD1738

Mr Coughlan was dismissed following an accident with a company van. Reaching a conclusion that his dismissal was unfair, the Chairman of the Labour Court, Mr Haugh, noted that Mr Coughlan was permitted to continue driving the company van for two weeks before he was suspended. The complainant compared this to the fact that he was permitted to continue as a director of his own company from July 2018, when his L Manager said that he became aware of this, until November 30th 2018, when he was suspended.

A Bank Official and A Bank, ADJ-00001402

Similarly, in this decision of the adjudication officer, Mr Eugene Hanly, he found that the respondent’s investigation was flawed due to the fact that the bank permitted the complainant to remain at work for two months after it had identified the conduct for which he was ultimately dismissed.

Michael Caplis and Transdev (Ireland) Limited, UDD1932

Mr Caplis was dismissed when his employer discovered that he occasionally drove a taxi that was owned by his wife. The Labour Court found that his dismissal was disproportionate, as he had not denied his “offence,” he was an employee with 12 years of unblemished service and no consequences arose for his employer as a result of his actions.

A Coach Driver v A Coach Company, ADJ-00007142

This decision of the adjudicator, concerning the complainant’s ignorance of a digital media policy was referred to by Mr McCormack who submitted that it reflected the case under consideration. The complainant rejected this comparison and claimed that his difficulties arose from the fact that his Line Manager, and the decision-maker in his case, was not impartial. He rejected Mr McCormack’s assertion that any flaws were remedied at the appeal hearing.

The Legal Framework

Section 6(1) of the Unfair Dismissals Act 1977 – 2015 (“the Act”) provides that:

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal, unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

This assumption that every dismissal is an unfair dismissal is qualified at section 6(4)(b) of the Act where it states that;

“…the dismissal of an employee shall be deemed, for the purposes of this Act not to be an unfair dismissal if it results wholly or mainly from …the conduct of the employee.”

The burden of proof rests with the respondent to establish the substantial grounds justifying the dismissal of a complainant. In the case we are considering here, the grounds for dismissal were set out by the Line Manager in his letter of December 12th 2019:

“After due consideration, I concluded that you committed the following act of gross misconduct;

“That you breached (the respondent’s) Statement of Business Principles in respect of conflict of interests by becoming a director of another business without our approval. Also that you have carried out work which interferes with our interests including using company property and carrying out activities for your business during your working day with (the respondent).

“I concluded that the appropriate disciplinary action was immediate dismissal.”

A copy of the respondent’s Statement of Business Principles is dated December 2013 and was submitted in evidence. Under the heading, “Personal Conflict of Interest,” the document states that an employee “should not become a director, officer or controller of any other business without our approval in writing.”

Section 4 of the respondent’s Quality Document is headed “General Requirements” and, in a paragraph titled, “Impartiality and Independence,” is this prohibition:

“Staff are not permitted to engage in additional employment that may conflict with their duties within the inspection body.”

Further on, there is a reference to conflicts of interest:

“We also require that all Engineer Surveyors disclose any conflicts of interest both annually and as they happen to their Manager for which if any risks to their impartiality are identified then these are managed accordingly and are logged centrally by the Technical Accreditation Advisor.”

Was the Decision to Dismiss Reasonable and in Proportion to the Complainant’s Conduct?

It is apparent that the complainant was dismissed because he breached one of the respondent’s business principles that employees must seek approval before becoming a director of a company. The dismissal letter adds to this, by concluding that he carried out work that interfered with the company’s interests and that he used the company’s property for his own benefit during working time. I understand that “company property” is a reference to the complainant’s company car.

There is no dispute that on March 5th 2018, the complainant set up a company, and that it was registered under the NACE code, “engineering and inspections.” In respect of the second part of the reason for his dismissal, he said that he wrote a health and safety statement and did a risk assessment for a previous employer. Some examination of the events that led to the complainant’s dismissal is required before reaching a conclusion on the reasonableness or otherwise of the respondent’s decision.

The Delay Commencing the Investigation

The Line Manager gave evidence that although he was informed in July 2018 that the complainant set up a company, it took time to put together the information required for the investigation. I have examined the information pack that the Line Manager compiled and it contains the following:

(a) The certificate of incorporation of the complainant’s company dated March 5th 2018;

(b) A summary of mileage records for 10 days in July 2018;

(c) The company’s Statement of Business Principles dated December 2013;

(d) A document on conflict of interest extracted from a larger document related to quality.

It is apparent to me that this information was available to the Line Manager at the end of July 2018 and that it probably took little more than a day to collect. The Line Manager’s explanation that he only started to gather this information in September and that it took him until the middle of November to pull it all together is not credible. No new information emerged between July and November. The respondent’s case is that, on November 29th, due to the seriousness of the allegations against him, the complainant was suspended. No explanation was given regarding why he wasn’t suspended in July, when the Line Manager learned that he set up a company.

The complainant relies on the Labour Court case of DHL and Michael Coughlan. Here, the Court found that an employer’s position is weakened when a complainant, whose conduct is at issue is permitted to remain in the workforce with the possibility that the conduct can be repeated or continued. If the Line Manager was satisfied that the setting up by the complainant of his own company had the potential to be a conflict of interest between him and his employer, then he had a duty to address that risk immediately. The fact that he did not do so leads me to conclude that either he was waiting for better and more concrete evidence that the complainant was acting in competition with his employer (which did not materialise), or he was not sufficiently convinced of the seriousness of the offence. Whichever is the case, the delay of four months between becoming aware of the complainant’s company and the commencement of the investigation undermines the finding that the complainant’s cponduct was of such gravity that it merited the immediate dismissal meted out on December 12th.

The Conduct that Resulted in the Complainant’s Dismissal

There are two components to the respondent’s decision to dismiss the complainant:

1 He set up a company without his employer’s approval;

2 He carried out work for another company and this interfered with the interests of his employer.

Regarding the first offence, the respondent’s case is that this was a breach of the company’s Statement of Business Principles, a document submitted at the hearing and dated December 2013. The complainant said that he saw this for the first time when it was sent to him in preparation for the investigation meeting on November 29th.   Although it was “signposted” as part of regulatory tests that he completed each year, he passed the tests without having to read the document. He said that it was difficult to access documents on the company’s intranet because of the slow broadband connection at his rural home.   It was not issued in print and he was not told that it was mandatory reading. We heard evidence from the complainant’s union representative that many of his colleagues never saw this document and they passed the regulatory tests.

The note of the disciplinary hearing on December 11th shows that the Line Manager “accepted that (the complainant) may not have been aware of the (respondent’s) Statement…this in itself was not a defence.” The note of the appeal meeting on January 10th shows that the Regional Manager “confirmed that he believed that (the complainant) may not have seen the policy document.” The note of the second appeal meeting on January 24th shows that the Appeal Manager “was prepared to accept that (the complainant) had not seen this document, but had considered whether it was reasonable that (the complainant) should know about it.”

Because he did not read the respondent’s Statement of Business Principles, it follows that the complainant was unaware that setting up a company without telling his manager would place him in breach of this policy. In his evidence, the complainant described his job as “gold dust.”   If he had known that he would be dismissed for not doing so, I have no doubt that he would have informed his manager that he had set up a company. It is my view that the fact that the complainant did not read the Statement of Business Principles is a clear defence against the allegation that his conduct was so grave that the only reasonable response was dismissal.

The complainant was a part-time lecturer for two hours on one evening a week and, at the time of his dismissal, he was doing a master’s degree in teaching and learning. At his annual review, he told his manager that he was interested in moving into training. During the bad weather in March 2018, he said he was contacted by a previous employer who asked him to write a safety statement. He said that he did risk assessments on some of their machines and he did operator training. He said that most of the work was done at weekends and that he called in occasionally during the week. He said that he paused his GPS device when he called in, and he did not do the work on the respondent’s time. He set up a limited liability company with his wife as a co-director so that he could manage any liability arising from the work with his former employer. He also said that the setting up of a company was part of his plan for a future role in training and consultancy. In September 2018, he registered a domain name for his training company, which contains no reference to engineering or inspection.

It is apparent from his evidence at the hearing that the complainant was planning to move on from the respondent’s business at some stage. This plan accelerated in March 2018, when his relationship with his manager deteriorated further and, having got advice from his union, he found that there was little he could do about it, except maintain his distance.

Some of the complainant’s colleagues are in business on their own account as farmers or landlords and it’s clear from the respondent’s documents on conflicts of interest that the problem for the complainant is not that he set up a company, but that he did not inform his manager. The complainant had no concern about letting his manager know that he was lecturing part-time, and common sense indicates that he should have told him that he was doing work for his previous employer. At the disciplinary hearing on December 11th, the complainant conceded that his action showed a lack of judgement and he said that he did not realise that he could be dismissed. He said that he told some of his colleagues that he was doing training but that it had never come up in conversation with his Manager.

Having listened to the evidence of the Line Manager and the complainant and having observed their demeanour, it is my view that relations between them were such that the complainant would not have confided in his manager about any matter, and particularly about his future plans. He must have considered the possibility that, based on their difficult interactions up to then, if he told his Manager that he had set up a company, the information would not have been well received.

In the High Court case of Allied Irish Banks plc v Diamond, which was referred to by the respondent, Mr Justice Clarke held that an employee may not take action in competition with his employer but he is “entitled to take preparatory steps for life after the contract of employment has ended.” It is clear to me that the complainant anticipated an end to this contract with the respondent and he was taking steps to prepare for that.

The second part of the explanation for the complainant’s dismissal was that he carried out work for his former employer that could have been done by the respondent and, in this way, he created a conflict of interest between him and the respondent.   The work that the complainant did for his former employer was not the same as his day-to-day job of inspecting lifting equipment. The respondent’s case is that the health and safety statements and the risk assessments could have been undertaken by their “Special Services” department, or, by a third-party provider nominated by them.

A marketing brochure for the Special Services department was submitted in evidence. All the references are to UK legislation and regulations and there is no comparable document for the Irish market. The evidence on this subject revealed that the Special Services unit has never provided health and safety statements or risk assessments to any client in Ireland. The work carried out by the complainant for his previous employer was a small job, requiring knowledge of Irish legislation and a number of site visits. It is my view that, if the complainant had brought to the respondent’s attention his previous employer’s requirement for a safety statement and a risk assessment, it is unlikely that they would have tendered for the work because of the low value of the job and the need to send an engineer from the UK to carry it out.   I have reached the conclusion there is no substance to the finding that the work the complainant did for his previous employer placed him in competition with the respondent.

To conclude on the substantive matter of the complainant’s dismissal, I find that he was wrong not to inform his line manager that he had set up a company. It is my view that it would have been reasonable to do so, even in the context of their difficult relationship. I find however that this offence does not amount to gross misconduct in the way the case law has determined on the concept as “very bad behaviour of such a kind that no reasonable employer could be expected to tolerate the continuance of the relationship for a minute longer.” (Lennon v Bredin, M 160/1978). We know that for more than four months, the Line Manager tolerated the fact that the complainant had set up a company, thereby neutralising the “grossness” of the impugned behaviour.

I find that no conflict arose from the complainant’s work with his previous employer. Taking my authority from Mr Justice Flood’s cautionary remarks in the Frizelle judgement, that the decision to dismiss should be “proportionate to the gravity of the complaint and the gravity and effect of the dismissal on the employee,” I find that the decision to dismiss the complainant for gross misconduct was disproportionate.   It is my view that, in the same circumstances, a reasonable employer would have taken a more lenient approach.

Was the Process Fair?

Having reached the conclusion set out above, I do not intend to extend this decision unnecessarily with a detailed analysis of the process that resulted in the complainant’s dismissal. I will summarise briefly my findings that the process was also unfair.

As the person who was informed that the complainant had set up a company, and, having monitored his movements from July 2018, the Line Manager was the “initiator” of the entire process that led to the complainant’s dismissal; in the end, he was also the final arbiter. The fact that he was involved at the commencement and the conclusion of the investigation is a serious procedural failing. It is difficult to understand why this occurred in a such a large organisation where many competent senior managers could have been appointed to chair the disciplinary hearing.

From the evidence submitted at the hearing of this complaint, it was apparent to me that the relationship between the complainant and his Line Manager was fractious and dysfunctional. In the note of the appeal meeting on January 24th, the Appeal Manager described the relationship as “strained” but he decided that it was the responsibility of the complainant to request a hearing by an alternative manager. I find this to be an unrealistic prospect, because, despite their poor relationship, the evidence shows that the complainant did not contemplate that his manager would find that his actions were so grave that he would be dismissed.

The complainant was dismissed at the end of a disciplinary hearing on December 11th.   The Line Manager took no time out to consult with a more senior manager or to consider, even for a day, the complainant’s responses to the allegations against him. I find this to be most unusual, particularly where the complainant had been with the company for five years and was a high-performer with no previous record. The disciplinary procedure provides that the decision-maker will seek the advice of a senior HR Manager before making a decision to dismiss an employee. It is worrying that the Line Manager consulted with the HR Manager on December 7th, four days before the disciplinary hearing, and she advised that dismissal was appropriate in response to a finding of gross misconduct. I think that most reasonable managers would have taken the time to re-engage with the HR department and to share the outcome from the disciplinary hearing, before reaching the decision to dismiss.

The respondent’s disciplinary procedure states that dismissal without notice will apply where an employee “has significantly breached the conduct expected and there are very serious consequences” or, where an employee has a live warning on file and a further act of misconduct leads to the decision to dismiss. The complainant here had no warnings on his file and it follows therefore, that the reason he was dismissed without notice must relate to a significant breach of conduct causing very serious consequences. Despite repeated questioning at the hearing, the respondent’s witnesses provided no evidence of any negative consequences for them arising from the complainant’s actions.

I find it disturbing that the complainant’s offer to resign had no effect on the respondent’s decision to proceed with their investigation. His resignation would have achieved their required outcome, his departure from the company. Most reasonable employers would have put the complainant on garden leave for the duration of his notice, or, they would have paid him in lieu of notice.   It is regrettable that no consideration was given to one of these options.

I have reached the conclusion that the complainant was wrong not to inform his manager that he set up a company and that he undertook some consultancy and audit work for his previous employer. Having admitted his error, I find that the decision to dismiss him for gross misconduct was disproportionate and unfair and I find that there were serious failings in the process followed by the respondent, which were not resolved, as argued by Mr McCormack, at the appeal hearing. From a substantive and procedural perspective, I decide that the dismissal of the complainant was unfair.

Since he took up alternative employment in mid-January 2019, I estimate that the complainant is at a loss of income of approximately €25,000 gross each year, not taking account of any bonus or benefits. I decide therefore, that the respondent is to pay him compensation of €40,000. As this award is in the form of loss of earnings, it is subject to the normal statutory deductions.  

Unfair dismissal, gross misconduct, disproportionate sanction