FULL RECOMMENDATION
SECTION 8A, UNFAIR DISMISSAL ACTS, 1977 TO 2015 PARTIES : G HOLLAND LTD T/A HOLLAND TCS (REPRESENTED BY BARROR & CO.SOLICITORS) - AND - MS LAURA DENNISON (REPRESENTED BY CLARKE JEFFERS SOLICITORS) DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Marie Worker Member: Mr Hall |
1. Appeal of an Adjudication Officer's Decision No ADJ-00021743 CA-00028463-001.
BACKGROUND:
2. The Employer appealed the Decision of the Adjudication Officerto the Labour Court on 21 October 2019 in accordance with Section 8(A) of the Unfair Dismissals Act 1977 to 2015.A Labour Court hearing took place on 11 February 2020. The following is the Determination of the Court:
DETERMINATION:
This is an appeal by G Holland Limited T/A Holland TCS against the decision of an Adjudication Officer ADJ-00021743, CA-00028463-001 under the Unfair Dismissals Acts 1977 – 2015 (the Acts) in a claim of constructive dismissal by Ms Laura Dennison. The Adjudication Officer held that the Complainant was constructively dismissed and awarded her the sum of €15,000 in compensation.
For ease of reference the parties are given the same designations as they had at first instance. Hence Ms Laura Dennison will be referred to as “the Complainant” and G Holland Limited T/A Holland TCS will be referred to as “the Respondent”.
The Complainant commenced employment with the Respondent as a Sales Manager on 7thJune 2016. The Complainant tendered her resignation on 23rd October 2018 which took effect on 20th November 2018. The Complainant submitted a claim of constructive dismissal under the Acts to the Workplace Relations Commission on 16th May 2019.
Background
The Respondent is involved in selling and providing safety courses to companies in the private and public sectors, including the construction sector and for public contracts awarded subsequent to successful tender.
The Complainant was employed as from 7th June 2016 to the date of her termination of employment on or about 20th November 2018 as a Sales Manager with the Respondent.
Summary of the Complainant’s Case
The Complainant was represented by Mr Donnchadh Morgan, B.L., instructed by Clarke Jeffers & Co. Solicitors. Mr Morgan submitted that the Adjudication Officer’s findings were correct and ought to be upheld. He contended that the Respondent had constructively dismissed the Complainant as she had to leave her employment due to the conduct of her employer and/ or others at her workplace.
The Complainant commenced employment as Sales Manager having been approached by Mr George Holland to work for him. It was an express term of her contract that the company would meet or exceed a sales target of €1,250,00.00 in the first year. As part of the employment package, it was agreed that a car would be supplied for her use six months into her role.
Mr Morgan maintained that the Respondent was constantly shifting ground beneath the Complainant as Mr Holland’s refused to be tied down to detail and to commitments from the very beginning of her employment with the Respondent. He said that as early as October 2016, the arrangement with regard the provision of a car to the Complainant was the subject of significant disagreement and confusion.Mr Holland wanted her to accept as a loan payment the sum of €9,500 which was the deposit on the car, which she would repay, interest free, over a period of 36 months. Despite the Complainant disagreeing with this arrangement, she eventually acquiesced to the Respondent’s insistence and she signed the document as requested by Mr Holland on 24th January 2017. The agreement outlined the repayment plan for the loan and stated that fuel, insurance, and tax would be paid for by the Respondent. Mr Morgan said that the Respondent indicated that in the event that the Complainant was with the company in three years’ time, the ‘balloon payment’ would be paid by it at the conclusion of the loan period.
On 6th June 2017, at a meeting with Mr Holland the Complainant was informed that the company had failed to reach the said sales targets for that financial year, as the achieved figure was €1,104,831. She was presented with two options: redundancy or demotion. The proposed demotion would see the Complainant working as Sales Executive with personal targets, a wage cut of €10,000 per annum, but with €10,000 in bonuses should targets be achieved (to be based on achieving 65% of the company’s Gross Margin). This period would continue for a period of 24 months at which time it was proposed that she would return to her original position. During the meeting, Mr Holland emphasised that this demotion was based solely on the issue of figures. The Complainant agreed to the demotion, on the basis that she would not perform the managerial tasks she had carried out to date. It was agreed that her day to day duties, minus the managerial tasks, would be listed and her holiday leave allocation would be increased.
Mr Morgan said that meetings to confirm her new title and tasks were agreed but were postponed, ignored or simply failed to take place and the Complainant continued performing her former role including the management responsibilities which she had been told would be removed. He said that her demotion was not known to staff and that there was no real material change in role before or after 7th June 2017.
On or around this time, the Complainant’s access to the company’s accounting package, SAGE, had been removed, and she was unable to determine if 65% of the Company’s Gross Margin had been achieved for the purpose of identifying if bonuses would be awarded. The Complainant requested access be restored on numerous occasions. Mr Morgan said that she was told by Mr Holland to calculate this manually if she wanted to know.
On or about 2nd October 2017, the Complainant met with Mr Holland, he made positive references to her work, as sales figures had increased. Mr Holland denied that she was being “managed out of the door”. He agreed to reinstate her wages and that she could continue in her role as Sales Manager. Wages and back pay were furnished to her on 26th October 2017. Mr Morgan disputed the Respondent’s characterisation of this as a pay increase. In fact, he said it was a restoration of the Complainant’s original pay level. Mr Morgan disputed the authenticity of a document produced by the Respondent, purported to have been created around 2017, which set out a new package without bonuses. The Complainant denies this document was ever presented to her at the time or ever and the agreement it alleges to express is entirely disputed.
In or around August 2018, the sales targets for the financial year 2017-2018 had been achieved and on foot of this the Complainant requested a meeting in order to seek guidance on the workings of the bonus scheme. The Complainant indicated she was unsure what year to go on in calculating her bonuses, where sales targets over the two years combined had been achieved.
Mr Morgan said that the Complainant was told by Mr Holland to shred the document as it was old and obsolete, that she was performing badly and that the bonuses were not awarded on the basis of figures alone. Mr Holland agreed to come back to the Complainant in the coming days.
Mr Morgan said that Mr Holland never reverted as promised and the bonuses, which accrued during the course of her employment, remain outstanding and have remained so since the termination of her employment on 20thNovember 2018.
The Complainant contended that there was a change in the atmosphere at sales meetings held in October 2018, where she described the atmosphere as toxic and she said that she felt undermined by Mr Holland.
Mr Morgan said that as a result of the increasing pressure and stress the Complainant contracted pneumonia and was signed off by her doctor from 10th to 18th of October. On her return to work she was invited to a performance review meeting with Mr Holland and to discuss sales figures. Mr Morgan said that the Complainant felt ambushed at the meeting. The following day, Mr Holland arranged a further meeting at very short notice, to take place that afternoon. The Complainant sought to defer it however, he insisted on the meeting going ahead. The Complainant went through her issues and concerns with Mr Holland and at the conclusion of the meeting handed in her notice. Mr Holland accepted her resignation by email on 24thOctober 2018. This email also indicated his willingness to waive the loan provided for the deposit on the car, which the Complainant indicated by way of reply that there had been no loan in the first instance and therefore the point was moot. The Complainant met with Mr Holland on 25th October 2018. She explained her reasons for leaving and was then placed on garden leave. Her employment terminated on 20th November 2018.
Mr Morgan said that the Complainant had sought to resolve matters by way of engaging with the Respondent in circumstances where she and the Managing Director both occupied management positions. However, he submitted that the Respondent failed refused and/or neglected to address the issues raised by the Complainant. She said that as her complaints related to issues between Mr Holland and herself, both members of management, there was no other forum to make her complaint to.
Summary of the Respondent’s Position
Mr Aaron Shearer B.L., instructed by Barror Co Solicitors, on behalf of the Respondent disputed the Complainant’s contention that she had no alternative other than to tender her resignation in October 2018. He said that the Respondent denied any interactions with the Complainant, at any time, were designed to undermine her position at work. There were issues with the Complainant’s performance at work and in or about October 2018 the Respondent initiated a performance appraisal. The Complainant responded negatively to her employer’s legitimate efforts to appraise and improve her performance and two days following the appraisal meeting she tendered her resignation. The Complainant’s resignation was a cause of significant surprise to the Respondent. The parties had specific discussions about how the Complainant’s performance could be improved. The appraisal did not form part of a formal disciplinary process and no basis for the Complainant’s resignation was obvious to the Respondent.
Mr Shearer said that no documentary evidence of complaints about a failure to pay bonus was adduced. In the third quarter of 2017 the Complainant’s salary was increased from €45k per annum to €55k per annum. Where once a bonus element attached to the Complainant’s salary, that ceased to be the case when the new salary was agreed. He said that the Complainant was relying on an earlier outdated, salary structure to support her claim for an unpaid bonus. The document relied upon by her had ceased to be relevant. Furthermore, he alleged that the Complainant had provided no evidence or detail of the manner in which the sum claimed for unpaid bonus was been calculated.
Mr Shearer said that it was not accepted that the manner in which the Respondent dealt with legitimate issues concerning the Complainant’s performance at work was unreasonable; nor is it accepted that the Complainant had no option other than to resign from her job. He said that no complaint, formal or otherwise, was ever made by the Complainant whilst she was in the employ of the Respondent. The Respondent denied that it was guilty of conduct such as made the Complainant’s employment with the company untenable. He said that at no stage were specific details of the conduct alleged against the Respondent provided and it was never asked to or given the chance to address.
Summary of Witness Testimony – The Complainant
She was originally approached in April 2016 by George Holland, CEO of the Respondent who offered her the role as Sales Manager with the Respondent, which she joined in June 2016. She said that the terms and conditions of employment were agreed, it was expressly said to her that she was being appointed as Sales Manager with a view to becoming Sales Director in three years, she commenced on €55,000 per annum, with a bonus dependent on sales performance and she would be provided with a company car after six months. She said that discussion commenced on the company car in October 2016. She said that Mr Holland asked her to research cars up to the value of €35,000. However, Mr Holland was concerned with the perception it would give to other members of staff if she was provided with a brand-new company car. Therefore, he requested her to look for a car to the value of €10,000 - €12,000. However, he was then worried about the maintenance of such a car. Eventually she was requested to speak to the Company Accountant on various different options and it was decided to buy a car on a PCP arrangement, the company would loan her the deposit of €9,500, pay the ‘balloon’ payment at the end of three years and all fuel, tax and maintenance would be paid by the company. The arrangement entered into in January 2017, entailed her repaying a monthly payment of €264.00 for three years to repay the deposit and in the event that she left the company, the outstanding balance would have to be paid in full. She said that while she did not agree it was a car loan, she signed the document.
The witness gave details of her demotion in June 2017. She said that Mr Holland explained to her that the expected sales figures had not been met therefore he was in a position of either making her redundant or demoting her. She opted for demotion to Sales Executive and her salary was reduced to €45,000 per annum with €10,000 paid in bonuses. The witness said that despite this her role continued as before and staff were never informed that she was no longer the Sales Manager. She said that she was asked to come up with a new title but felt that that was not her responsibility. She said that she was dissatisfied as she was doing the exact same role as previously but for €10,000 less. Therefore, in October 2017 she had a meeting with Mr Holland to discuss her position. She speculated that this was his way of “managing her out the door”.
At the meeting in October 2017 he said that the sales figures were good, and he was complementary of her work. He agreed to restore her salary to €55,000 and paid her back pay for the months it was reduced. She said that she was satisfied that she was going back to her old role with the previous terms and conditions of employment. She disputed the Respondent’s contention that this agreement to restore her salary also agreed to eliminate her bonus based on sales figures.
In August 2018 when she was of the view that the sales targets had been exceeded, she sought clarity on her bonus entitlement and asked for a performance review. She had the document outlining her bonus entitlement which she had been furnished with when she joined the company. Mr Holland informed her that she was no longer entitled to a bonus payment as it was obsolete since she was placed back on her €55,000 salary. He asked her to shred the document as it would cause tensions in the office. At a subsequent meeting he told her that the targets had not been met in August/September 2018 and that she was preforming badly.
On 1st October 2018, she said that the climate in the office became increasingly toxic and at sales meetings Mr Holland told staff he was dissatisfied with the sales figures for September 2018 period and made negative comments about staff and about the Complainant’s abilities. She said that this caused embarrassment and increased tensions. At a subsequent meeting on 9th October 2018, members of staff, including the Complainant, were singled out which caused rows between staff at the meeting. The Complainant said that she was embarrassed and humiliated in front of her team and felt that she was being undermined in her role. She said that Mr Holland took over the meetings and conducted them in a negative and critical manner.
She told the Court that she felt unwell and was out sick with pneumonia from 10th to 18th of October 2018. On her return to work on 18thOctober, a member of staff told her that her absence did not bode well for her. During her absence there was a row between two staff members, and one had decided to leave. Mr Holland invited her to a meeting at 3.30pm that afternoon to discuss sales figures. She said that she felt ambushed at this meeting. During the meeting, the Complainant contended that there was no decline in sales, however, Mr Holland refused to accept this. The Complainant stated that she was open to learning and to find out what she would need to know in order to address the issues raised. Mr Holland told her that he had discussed her performance with other colleagues during her absence and that this presented an extremely unfavourable view of her. She said that this was not a formal way of giving a performance review and she had never had one like this before and was not happy with it. She said that although Mr Holland had indicated this was a performance evaluation, it had all the feeling and appearance of an ambush of her. She said that after the meeting Mr Holland sent full notes and an action plan.
On 22nd October 2018 Mr Holland said that he wanted to have a further meeting and the Complainant asked to defer it until 25th October to give her time to prepare for it. Initially he agreed but then said he wanted the meeting to go ahead the following day. She told the Court that at that stage she was stressed out and was concerned as her staff were gossiping about her, Mr Holland had listened to them criticise her, she felt completely undermined, she did not know how she was going to continue to do her job. She felt her position was no longer tenable. She said that she prepared a note of concerns which she went through with Mr Holland, however, she did not present the notes to Mr Holland. At the end of the meeting she said she gave him notice of her resignation and agreed to meet the next day. She said that the next day she received a phone call and an email from Mr Holland accepting her resignation. In the email it stated that her finish date would be the end of November 2018 and she would be on garden leave until then. He also made an arrangement to meet the following morning to discuss issues relating to her leaving the company.
The next day they met and discussed outstanding client payment which he wanted her to pursue, to agree on her reasons for leaving the company to be told to staff and clients, details to include on a reference, and he informed her that he was waving her outstanding loan repayments.
On 7th November 2018 he sent her an email seeking the notes she had prepared for the meeting on 23rd October 2018 (at which she resigned). He said that he required them for his records.
On 8th November 2018 she emailed Mr Holland to update him on the client payments and again requested details of her bonus. He responded by email, again seeking the notes and told her that he would revert to her on the bonus issue that which she said he never did.
Summary of Witness Testimony – Mr George Holland, Managing Director
Mr Holland said that the Complainant received the Company’s Employee Handbook on the commencement of her employment, which included a grievance procedure, which she never invoked. He said that if she had done so she could have raised a grievance with him or if that was not appropriate, he could have proposed an outside consultant to hear her grievance.
Mr Holland denied that the meetings held in October 2018 were “toxic”. He described them as “friendly”. He said that apart from day to day issue, the Complainant never raised any significant issues with him. He said that there were ongoing issues regarding her terms and conditions of employment. In June 2017, when the sales targets were not close to those agreed with her when she commenced a year earlier, he gave her the option of being made redundant or being demoted to Sales Executive level, with a reduction in salary and with a monthly bonus payment. She opted for the latter and in October 2017, she was moved back to her original salary and to her Sales Manager role. He said that at that point he made it clear to her that she would no longer be paid a bonus.
With regard to the provision of a company car, he said that it was agreed at the outset that she would be provided with a company car after six months in employment. He said that he was aware that she would be required to pay BIK on the car and as she was not required to undertake much business mileage, he endeavoured to buy a second-hand car. However, he was not confident in the reliability of the cars selected and accordingly permitted the Complainant to speak directly with the Accountant. It was agreed that a deposit would be paid by the Respondent on a new car which she would repay in instalments and the “balloon” payment would be paid by the Respondent at the end of the three-year agreement with the garage.
Mr Holland said that at a meeting in August 2017 the Complainant produced a document which had been issued to her on the commencement of her employment setting out the targets to be met in order for a bonus payment to be paid to her. He became annoyed at this and told the Complainant that this document was obsolete and had been replaced by the option she chose in October 2017, when her salary was restored to €55,000 per annum. He said that he told her so and asked her to shred it as he did not wish other staff to see it.
He referred to the alleged “toxic” sales meetings held at the beginning of October 2018. He said that September is always an indication of sales going forward and as sales at that point were low, he was anxious to look at public sales.
The witness was questioned about the Complainant’s allegation that he undermined her, that there was a sense of re-crimination at those meetings. He described the meetings as robust and that he may have asked rather pointed questions and expected to receive detailed reports from her which he did not get. However, he said that the meetings were not out of the ordinary. On the day she returned from sick leave in October 2018, he organised a meeting with her for that same day to discuss her performance as sales figures were down and he’d had discussions with her staff about her performance. At the meeting with her, he said that he went through the feedback he received from her staff, most of which was not positive and provided her with a document on suggested performance improvements. He gave her time to consider the document and to take time to decide on action plans. He said that a couple of days later she resigned. When asked if the Complainant was blindsided by this performance review process, he said that as a senior manager she should have been able to handle it.
At the meeting on 23rd October 2018, when she resigned, he said that she made a short statement regarding the review process which she was not satisfied with and told him she was resigning. He said he was surprised and disappointed as he felt he had invested in her and in the position and that would now come to nothing. He told her he would come back to her the next day. However, he felt that as she had given up it would be difficult for her to re-engage and therefore, he telephoned her the next day and accepted her resignation and arranged to meet her the following day to discuss outstanding issues.
When he met her the following day, he discussed her outstanding car loan and agreed to waive the remaining payments; he told her she would be on garden leave for the next four weeks; asked her to complete a number of contracts with customers and agreed her outstanding annual leave with her. He said that he wanted to agree with her the reasons for her leaving, this was for the purposes of informing staff and customers about her resignation. He said that she did not provide him with a document at the meeting before she resigned but she did tell him that she was not happy working in the company and was not prepared to continue working under those conditions. He said that she raised the issue of her bonus again and did sent him an email about it on 8th November 2018. He said that while he agreed he would revert to her on it but said that he was tired being asked about it and felt the matter had been finalised in October 2017, therefore he had no intention of doing so. He said that he was anxious about monies outstanding from clients and asked her to follow up on that matter. He said that he let the Complainant believe that he would revert to her on the bonus query, when he had no intention of doing so, in order to maintain good relations with her so that she would recover the outstanding monies form the customers. He said that the meeting was not contentious, but he was amazed that the bonus issue was being raised again.
The Law
Section 1 of the Unfair Dismissals Act, 1977, defines constructive dismissal as follows: -
- “the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”
Section 6(1) of the Act states: -
- 6.(1) 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.
Discussion
As the Complainant is alleging constructive dismissal, the fact of dismissal is in dispute and the onus of proof rests with the Complainant to establish facts to prove that the actions of the Respondent were such as to justify her terminating her employment.
Section 1 of the Act envisages two circumstances in which a resignation may be considered a constructive dismissal. This arises where the employer’s conduct amounts to a repudiatory breach of the contract of employment and in such circumstances the employee would be “entitled” to resign his/her position, often referred to as the “contract test”. This requires that an employer be“guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance”as held inWestern Excavating (ECC) Ltd v Sharp[1978] IRL 332.
Secondly, there is an additional reasonableness test which may be relied upon as either an alternative to the contract test or in combination with that test. This test asks whether the employer conducted his or her affairs in relation to the employee so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so, she is justified in leaving. Mr Morgan informed the Court that the Complainant was relying on the “reasonableness” test in support of her claim.
The question for the Court to decide is whether, because of the conduct of the Respondent, it was or would have been reasonable for the Complainant to terminate her contract of employment.
Court’s Findings
In relation to the termination of the Complainant’s employment, the Court is satisfied that the material timeframe in this case is that from August 2018 until the termination date of 20th November 2018.
The Court does not regard matters in relation to the provision of a company car to be material to the events which led to the termination of the Complainant's employment. Any matters in relation to the car were not sufficiently proximate to the ending of the employment to be of any material significance. In any event, the Court is of the view that there were no matters of any real controversy relating to the company car. Likewise, matters in relation to the Complainant's removal from and reinstatement back to the Sales Manager role, while perhaps not ideal and unsettling for the Complainant, were issues which were resolved to both parties satisfaction at the time and were not live issues sufficiently proximate to or connected with the material events which led to the termination of the Complainant's employment.
Taking account of the detailed and comprehensive submissions of the parties and the witness evidence presented at the hearing, the Court has concluded that the material facts of this case are as set out below. In reaching its conclusions in relation to the material facts the Court has carefully weighed the evidence of the Complainant against that of Mr Holland. Having had the opportunity of hearing and observing both witnesses in evidence under oath, the Court prefers, in many respects, the evidence of the Complainant in resolving the conflicts in evidence that arose:-
- i.In August 2018, the Complainant sought a performance review meeting with Mr Holland based on her view that sales targets for the financial year 2017-18, which had ended on 30thJune 2018, had been achieved. In response Mr Holland’s position was that there was no need for a performance review as sales were in a good place. The Complainant accordingly sought to understand from Mr Holland how her bonus was to be calculated by reference to the positive sales situation. The Complainant produced a document dating back to her employment in 2016 setting out bonus arrangements. Mr Holland’s reaction to this request was, by his own evidence, one of surprise and annoyance. Mr Holland became particularly irate in relation to the 2016 document being produced. He told her the document was irrelevant and to shred the document as he did not wish any other sales staff to become aware of the bonus arrangements set out in it. The meeting ended and Mr Holland undertook to revert to the Complainant on matters.
- ii.A further meeting took place on 21st August 2018. Mr Holland told the Complainant that the 2016 document was old and obsolete, and he told her that she was performing badly in aspects of her work. The meeting became heated and was adjourned with a view to Mr Holland reverting to the Complainant on the matters discussed. This never happened subsequently.
- iii.In October 2018 a series of sales meetings took place at which sales performance for the early months of the financial year, July, August and September were reviewed. At a meeting on 1st October 2018 Mr Holland was unhappy with the sales performance for the preceding period and was openly critical of staff at the meeting, including the Complainant. The meeting was tense, and the Complainant felt embarrassed at certain disparaging comments directed at her by Mr Holland. At a subsequent meeting on 9th October Mr Holland was again openly critical of the Complainant and other staff. Two staff who received criticism from Mr Holland at the meeting engaged in an argument with each other during the meeting. The Complainant found the meeting difficult and felt that she had been singled out.
- iv.The Complainant went out sick from 10th October, returning on 18th October 2018. She provided the employer with a medical certificate which indicated that she had been suffering from pneumonia. Upon her return she learned that two of the sales staff had engaged in an argument with one another to the extent that one of them had left the employment. It was also remarked to the Complainant by a colleague that her absence did not bode well for her.
- v.Just before 3pm on that day, Mr Holland emailed the Complainant to request her attendance at a performance review meeting. Mr Holland told the Complainant that she did not need to bring any materials or documentation to the meeting. The meeting took place at 3.30pm that afternoon.
- vi.At the meeting, the Complainant and Mr Holland disagreed about sales performance, he believing that sales were declining. The Complainant used the company’s accounting software at the meeting to support her position that sales were not in decline. Mr Holland told the Complainant that he had alternative figures that proved otherwise. He did not present those alternative figures to the Complainant.
- vii.At the meeting Mr Holland disclosed to the Complainant, for the first time, that while she had been absent on sick leave he had engaged with and sought and received feedback from the sales and administration staff about the Complainant’s performance. These employees were junior to the Complainant and were staff for whom she had management responsibility. This feedback portrayed the Complainant in a very unfavourable light. The Complainant had no prior notice that Mr Holland was going to engage in such an exercise while she was absent and had no knowledge that this type of performance review would be deployed in the company. Mr Holland confirmed to the Court that it was the first occasion in the history of the company that he had utilised this kind of performance review process for any of his employees.
- viii.By email on 22nd October 2018, Mr Holland emailed the Complainant a document which was his record of the performance review which had taken place on 18th October 2018. The email indicated that he wished to meet the Complainant in one hour’s time. The document, a copy of which was provided to the Court, set out: the issues which were discussed at the meeting; a summary of the views and opinions expressed by the sales and administration staff which had been gathered in the period 12th to 16th October; a summary of Mr Holland’s thoughts; a list of items and associated corrective actions and concluding notes.
- ix.The document, which contained ten points setting out the views and opinions of the sales and administration staff, was substantially critical of the Complainant and portrayed her in a very negative light. The document concluded by indicating her removal from the responsibility and management of certain identified staff.
- x.The Complainant sought to push out the requested meeting as she had had very little notice of the previous meeting and she wished to avail of more time. It was agreed to meet three days later on 25th October. On the following day, 23rd October 2018, Mr Holland emailed the Complainant and arranged instead to meet that afternoon, explaining that he didn’t see why it should wait until 25th October 2018.
- xi.In advance of the meeting the Complainant prepared written notes for herself setting out a list of what she wished to say to Mr Holland at the meeting. A copy of these written notes was provided to the Court. At the meeting the Complainant used the prepared notes to verbally set out her list of issues to Mr Holland. On completion of this, the Complainant verbally gave her resignation to Mr Holland. The meeting concluded.
- xii.The notes prepared by the Complainant and used at the meeting on 23rd October 2018 contained a list of fourteen issues. These issues amount to a substantial and serious complaint or grievance by the Complainant to Mr Holland at the meeting on 23rd October 2018.
- xiii.On 24th October 2018, Mr Holland telephoned the Complainant and confirmed that he accepted her resignation. He asked her not to reveal her decision to other staff until they had met and had a chance to discuss matters in relation to her departure.
- xiv.On 25th October 2018, the Complainant and Mr Holland met and discussed the terms of her departure. The Complainant was to remain employed until 20th November 2018 but would not attend the employer’s premises or engage in her normal duties. She would essentially be on garden leave during her notice period and was required to chase up payments due from customers.
- xv.On 8th November 2018, the Complainant emailed Mr Holland in response to a text message that she had received from him regarding payments due from customers. The Complainant provided a response to Mr Holland’s queries and also queried matters in relation to her bonus. Mr Holland indicated that he would revert to her regarding the bonus query but subsequently did not do so.
Discussion & Findings
It is clear to the Court that from on or about August 2018 there was a significant deterioration in Mr Holland’s perception and view of the Complainant and her performance in her role, a role that he regarded as a senior management position. It appears to the Court that from that point Mr Holland began to intentionally disengage from the employment relationship with the Complainant. He took particular exception to the Complainant raising the issue of a bonus and producing the document setting out her original terms and conditions of employment as agreed in 2016, which he deemed to be no longer relevant and about which he became annoyed as it could cause difficulty if it came to the notice of other sales staff.
It is noteworthy that initially at that meeting in August 2018, Mr Holland, on the back of a seemingly positive sales performance, didn’t deem it necessary to have a performance review with the Complainant when she requested one. However, at a follow up meeting shortly afterwards he stated that he was dissatisfied with the Complainant’s performance.
Thereafter, during October 2018 Mr Holland was openly critical of the Complainant in the presence of junior staff at sales meetings.
Whilst the Complainant was absent on sick leave during October, and unbeknownst to her, Mr Holland sought and received feedback from junior sales and administration staff about the Complainant’s performance in her role. From the evidence put before the Court it appears that however the exercise was conducted the output amounted to negative comments which served to denigrate the Complainant, probably unsurprising, given that these employees were present in meetings where Mr Holland himself had been openly critical and disparaging of the Complainant. The Court is satisfied that this exercise served to seriously undermine the Complainant as a senior manager in the company.
On the day she returned from an 8-day period of sick leave, Mr Holland requested her attendance at a performance review meeting. The Complainant was given some 40 minutes notice of the meeting. The Complainant and Mr Holland disagreed at the meeting regarding sales performance. When the Complainant produced financial results to support her position of a positive sales performance Mr Holland indicated that he had alternative figures to disprove the Complainant’s assertions, but he never produced these to the Complainant. It was at this meeting that it was disclosed to the Complainant for the first time that her performance had been the subject of Mr Holland’s discussions with her sales and administration staff. The Court is of the view that this meeting and the manner and haste with which it was arranged and conducted, together with the exercise immediately preceding it, represented a further significant deterioration in the Complainant’s standing in the company and amounted to very unfair and unreasonable treatment of the Complainant by Mr Holland.
At a follow up meeting, the Complainant, using a pre-prepared written list of her numerous issues, presented her response to Mr Holland. At the close of that meeting the Complainant verbally resigned.
The Court is satisfied that the issues which were presented to Mr Holland by the Complainant at that meeting, notwithstanding that they were accompanied by a verbal resignation, amounted to a very serious complaint/grievance made to the Managing Director/Owner of the company by a senior manager direct report. From that point, Mr Holland was on full notice of a very serious complaint from the Complainant. Mr Holland chose to ignore this complaint and act on the resignation.
The Employment Appeals Tribunal has previously found that for a resignation to be valid, it must be voluntary and not brought about under duress otherwise it will be construed as a dismissal by the employer. In this regard the Court refers to the case ofFlood v Regency Fare Ltd UD1036/1988and to the following extract from the case:
- “The Tribunal is satisfied that the resignation of the claimant was not voluntary and was induced directly by the respondent either by the threat or ultimatum as recalled by the claimant or by the reply of Mr O’Sullivan, when asked if she should resign, that her resignation would be best in the circumstances. We determine that she was dismissed from her employment with the respondent.”
The Court further refers to the case ofAn Employee v An Employer UD2116/2011. This case involved a resignation drafted by an employer and given to an employee in a car in a carpark for signing, which the employee acceded to under threat of dismissal. Applying the Supreme Court judgement inHurley v Royal Yacht Club [1997] E.L.R. 225, where the Supreme Court considered the issues surrounding the enforceability of severance agreements and held that there must be“informed consent by the employee to contract out of his rights…”, the Tribunal in this case said:
- “Whilst the letter of resignation was not a severance agreement the effect was that the claimant was relinquishing his rights to continue in his employment”
In applying the Supreme Court’s dicta to the circumstances of a resignation, the Tribunal went on to say:
- “If an employer prepares a letter of resignation it is important that the employee is signing it voluntarily and that s/he knows and fully understands what he is doing. In the Hurley case the Court also stated that an employee contracting out of his/her right to take a claim should be advised of his/her entitlements under the relevant employment legislation. The employee should be advised in writing by the employer that s/he should take appropriate advice in relation to the severance agreement and as to his/her rights generally, and that there must be informed consent. While the Tribunal accepts that the claimant did not sign a severance agreement, the claimant, by signing the letter of resignation, effectively relinquished his employment rights.”
These cases while not relating precisely to the same circumstances at issue in the instant case are nonetheless illustrative of a point.
The Court is satisfied that, having regard to the circumstances which preceded the meeting on 23rd October 2018, the Complainant’s resignation was verbally tendered under duress and was involuntary. The Complainant relinquished her rights to continued employment in the absence of informed consent. The resignation was therefore invalid such that it should not have been acted upon by Mr Holland. In reality Mr Holland was faced not with a resignation but with a very serious complaint.
Mr Holland told the Court that his response to what was put to him by the Complainant was one of surprise and disappointment, having regard to what he believed to have been an investment by him in the Complainant and the role of Sales Manager, which was a new one in the company. He bemoaned the fact that his efforts in regard to his investment would come to nothing. On the following day he accepted the Complainant’s resignation and focussed on the terms and arrangements for her departure.
In evidence before the Court, Mr Holland stated that had the Complainant raised a grievance that he would have set about arranging for her complaint to be heard by a firm of independent HR consultants. Whatever about the modalities of a formal grievance procedure and how the complaint was labelled, what is undeniable is that the Complainant did raise a very serious complaint with Mr Holland, her Managing Director, to whom she reported. Mr Holland failed to act on the complaint. This undoubtedly begs the question as to why, when he was put on notice of a very serious complaint from his senior manager direct report, he did not of his motion trigger the type of arrangements with the independent consultants to which he referred in order to try to resolve matters. He was given an opportunity to address the issues and he failed or refused to take it.
It is notable that the Complainant’s employment did not immediately end, she was not paid in lieu of notice, and her employment in fact endured for in excess of a further four weeks until her notice expired. She undertook work for her employer during this period. In many similar cases, employees having tendered their resignation immediately leave the employment. This did not happen here, and Mr Holland had ample opportunity to seek to resolve matters. He chose not to take it.
This inaction by Mr Holland in failing to seek to resolve and address the Complainant’s complaints and issues was indicative of what appeared to be his overall intention, that of bringing the Complainant’s employment to an end.
The Court is satisfied that the actions of the employer in immediately accepting the resignation in the circumstances that pertained and in the face of a serious complaint/grievance were not those of a reasonable employer and instead represented the final act of intended disengagement from the employment relationship with the Complainant, which had commenced in August 2018. Such conduct by the employer, together with the events from August 2018 onwards, brought the employment to an end by way of constructive dismissal.
In all the circumstances, the Court is of the view that the Complainant did not act unreasonably in terminating her employment in the circumstances in which she found herself. The Court therefore finds that the Complainant has made out her case of constructive dismissal.
Redress
The Court has taken account of the financial loss suffered by the Complainant arising from her dismissal. The Complainant told the Court that she acquired part-time employment, working one day per week, from the date of her dismissal and she continues in that employment. She also gave details to the Court of her efforts to secure alternative employment since her dismissal. The Complainant told the Court that due to her personal circumstances, she ceased to look for employment from 24th April 2019. Based on her efforts to secure alternative employment and her salary while employed by the Respondent of €55,000 per annum, the Court awards the Complainant compensation under the Act in the amount of €20,000.00.
Determination
Having regard to the evidence tendered in relation to the Complainant’s losses arising from her constructive dismissal and her efforts to mitigate those losses, the Court determines that the appropriate redress is compensation of €20,000.00. The Decision of the Adjudication Officer is varied accordingly.
The Court so Determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
CO'R______________________
28 February 2020Deputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Clodagh O'Reilly, Court Secretary.