Complainant

Respondent

Anonymised Parties

Office Administrator

A Manufacturer

Representatives

Angela Dempsey Donal Quinn Solicitors

Not present

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-00033406-001

23/12/2019

The Complainant claimed she had to resign from her employment due to a broken Bond of Trust and stress brought upon by the actions of her employer in providing an unfair reference to a third party and claimed constructive dismissal.

The Complainant submitted a claim for unfair dismissal to the WRC on December 23rd, 2019.

The Complainant was employed from 2011 to December 18th, 2019 as an Office Administrator when she resigned her position with the Respondent.

The Complainant worked 25 hours a week, five hours a day and earned 297 Euros per week.

The Complainant enjoyed a good working relationship with both Directors, but one was more demanding than the other. One Director left the Company in early 2018 and the Complainant continued to work for the remaining Director. This was a difficult time for the Company and a transfer of undertaking took place to a new company name but everything else remained the same, including her service.

In July of 2018 the company were going through a difficult business situation and the Complainant applied for a Secretarial/Office position with a Public Body. Workload had increased and there were difficulties with receiving holiday pay.

Up to the time the Complainant applied for a position with a Public Body she had a blemish free sick record and had no warnings and enjoyed her role with the Respondent. The Complainant ran the office and did whatever was asked of her and often stayed late to complete work. The quality of her work was never questioned. She ran the internal office, trained new staff, did the accounts and prioritised work.

In October 2018 the Complainant was interviewed for the post with the Public Body and it was confirmed in writing to her by letter dated October 17th, 2018 that she had been successful at interview subject to reference and Garda checks etc. The Complainant submitted the names of both Directors as referees. The Director who left the Respondent submitted a reference with every one of fifteen categories marked at the highest performance level. The second and remaining Director, after some persistence by the Complainant submitted his reference, with 3 categories marked at the highest level, 8 at satisfactory and 5 as unsatisfactory.

On January 16th, 2019 the Complainant was advised by the Public Body that “due to the receipt of unsatisfactory reference we are unable to continue with the processing of your file for the post”.

This reply devastated the Complainant and she felt the poor and unsatisfactory reference by the Respondents Director was both unfair, untrue, did not reflect her performance and attitude at work and was designed to keep her in the Respondents employment due to her critical role in the Company.

The Complainant went off work due to stress and attended her GP. Two letters from her GP were submitted to the Hearing. The Complainant commenced seeing the GP in February 2019 and was a patient of the practice for several years. One letter dated October 24th, 2019, stated the Complainant suffered from anxiety and low mood secondary to work related stress and was taking anti-depressants and was referred to Counselling. The second letter dated December 18th, 2019 stated that the Complainants best interests “of her physical and mental health that she not return to her current working environment in the future”. The Complainant has now put this stress behind her.

The Director who left the Company gave evidence to the Hearing to support the Complainant and the validity of her work, attendance, attitude and performance and he stood by his rating of Excellent in all of the 15 categories he was asked to assess the Complainant in for her reference for the Public Body. On questioning, he could not understand the poor other reference given.

A former employee of the Company, who worked with the Complainant for 5 years, gave evidence of the Complainants excellent attitude, punctuality, professionalism, performance and willingness to help and train her when she was hired.

The Complainant produced her original contract of employment which did not contain any Grievance Procedure.

The Complainant maintained that the reference given by the Director of the Company was a deliberate attempt to block her leaving the Respondent and was totally untrue based on her past record and her positive attitude. She was left devastated by the news that the Public Body would not be proceeding with her offer and felt trapped in the company. The Complainant suffered stress, anxiety and depression, had to see medical help and Counselling because of the action of the Director and felt the bond of trust was irrevocably broken down between the Complainant and the Director and resigned as a result.

The Complainant was on disability payment since resigning and has applied for two education courses but was physically and mentally unable to look for work due to the situation.

The Respondent was notified of the Hearing on July 23rd, 2020. On July 24th, 2020 the Respondent stated he would not be attending the Hearing as he had concerns due to Coved 19. On the same day the WRC responded that the Hearing would go ahead in his absence and an outcome would issue in the case. On August 21st, 2020 the Respondent again informed the WRC that they would not be attending the Hearing and on August 24th, 2020 the WRC informed the Respondent that the Hearing would proceed in his absence. I am satisfied that the Respondent was notified of the date, time and location of the Hearing.

With regard to the non-attendance of the Respondent I am satisfied that all the public safety protocols for COVID 19 were in place, for all concerned, to conduct the Hearing and the Respondent was notified and aware of the time, date and location of the Hearing but was not present at the Hearing.

Section (1b) of the Unfair Dismissals Act 1977 states “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”.

The claim is one of constructive Dismissal pursuant to Section 1 of the Unfair Dismissal Act 1977. The burden of proof, which is a very high one, lies on the Complainant. She must show that her resignation was not voluntary. As is set out in Western Excavating ECC Limited –v- Sharp, the legal test to be applied is “an and / or test”. Firstly, the Adjudicator must look at the contract of employment and establish whether or not there has been a significant breach going to the root of the contract “if the employer is 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”. 

If the Adjudicator is not satisfied that the “contract” test has been proven, then it is obliged to consider the “reasonableness” test “The employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, then the employee is justified in leaving”.

In this instance the issues more relate to the “reasonableness test” than a “contractual test” but hinge on the Bond of Trust issue, which is an implied contractual term and cuts to the core of the question of whether the Complainants resignation was reasonable and justifiable in all the circumstances due to the action of her employer.

The Adjudicator finds that the ‘contract’ test of “if the employer is 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” has not been satisfied by the Complainant nor indeed put forward as a significant argument in the case.

The Complainants main argument was that the Bond of Trust had irrevocably broken down between the parties by the Respondent deliberately providing a third party with a reference for her that was designed to deny her getting the job at the third party, which she would have got if the reference was positive, and thus keep her at the Respondents employment instead. It is not for the Adjudicator to decide on which of the two totally conflicting references, from the Directors, to the third party was the more accurate. However, from the evidence of the Complainant and the Witnesses , the demeanor and character of the Complainant, the fact that there were never any prior poor performance reviews or disciplinary warnings in the Complainants unblemished time with the Respondent and the absence of any contradictory evidence from the Respondent as to his intentions giving the poor reference it is hard to see past the Complainants version of events and its serious consequences for her not getting the position with the third party and her subsequent stress and medical condition and consequently the bond of trust breaking down between her and the Respondent. The “broken Bond of Trust” is often used by employers to justify a dismissal. However, the concept applies to both parties to an employment relationship and equally it can apply to an employees view of their employer. However, the Complainant must share some of the responsibility for the loss of the third party position in that she made the request of the Respondent without “checking out” what he was likely to say if she put his name forward for a reference check. In her submission she stated the relationship was at times “difficult” and therefore should have been more aware of the possible type of reference she may receive.

The Bond of Trust issue is best set out in the leading UK case of Malik and Mahmud v Bank of Credit and Commerce International SA [1997] UKHL 23 (http://www.bailii.org/uk/cases/UKHL/1997/2, which confirmed the existence of the implied term of mutual trust and confidence in all contracts of employment.

Mr Malik and Mr Mahmud both worked for the Bank of Credit and Commerce International. BCCI went insolvent due to massive fraud, connection with terrorists, money-laundering, extortion and a raft of other criminal activity on a global scale. Malik and Mahmud had both

lost their jobs and they sought employment elsewhere. They could not find jobs. They sued the company for their loss of job prospects, alleging that their failure to secure new jobs was due to the reputational damage they had suffered from working with BCCI.

Nobody, they said, wanted to hire people from a massive fraud operation like that at the company. This raised the question of what duty the company had owed to its employees that had been broken. Although there was no express term in their contracts, Malik and

Mahmud argued there was an implied term in their employment contract that nothing would be done calculated to undermine mutual trust and confidence.

The House of Lords unanimously held that the term of mutual trust and confidence would be implied into the contract as a necessary incident of the employment relation. This was a term implied by law. Lord Nicholls said the following.

“The contrary argument of principle is that since the purpose of the trust and confidence term is to preserve the employment relationship and to enable that relationship to prosper and continue, the losses recoverable for breach should be confined to those flowing from the premature termination of the relationship. Thus, a breach of the term should not be regarded as giving rise to recoverable losses beyond those I have described as premature termination losses. In this way, the measure of damages would be commensurate with, and not go beyond, the scope of the protection the trust and confidence term is intended to provide for the employee. This is an unacceptably narrow evaluation of the trust and confidence term. Employers may be under no common law obligation, through the medium of an implied contractual term of general application, to take steps to improve their employees' future job prospects. But failure to improve is one thing, positively to

damage is another. Employment, and job prospects, are matters of vital concern to most people. Jobs of all descriptions are less secure than formerly, people change jobs more frequently, and the job market is not always buoyant. Everyone knows this. An employment contract creates a close personal relationship, where there is often a disparity of power between the parties. Frequently the employee is vulnerable. Although the underlying purpose of the trust and confidence term is to protect the employment relationship, there can be nothing unfairly onerous or unreasonable in requiring an employer who breaches the trust and confidence term to be liable if he thereby causes continuing financial loss of a nature that was reasonably foreseeable. Employers must take care not to damage their employees' future employment prospects, by harsh and oppressive behaviour or by any other form of conduct which is unacceptable today as falling below the standards set by the implied trust and confidence term “.

Lord Steyn said the term, as it had evolved, was a ‘sound development’. He continued “

Such implied terms operate as default rules. The parties are free to exclude or modify them. But is common ground that in the present case the particular terms of the contracts of employment of the two applicants could not affect an implied obligation of mutual trust and confidence... It was a change in legal culture which made possible the evolution of the implied term of trust and confidence... The motives of the employer cannot be determinative, or even relevant, in judging the employees’ claims for damages for breach of the implied obligation. If conduct objectively considered is likely to cause serious damage to the relationship between employer and employee a breach of the implied obligation may arise. “ This case proves the concept of mutual obligation of the Bond of Trust between employers and employees.

In circumstances were the contract test has not been significantly advanced or satisfied the Adjudicator must look at the ‘reasonableness’ test “The employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, then the employee is justified in leaving”. 

So the core question now for the Adjudicator to address is did the actions of the Respondent, considering the evidence available to the Adjudicator, amount to a significant breach of trust between the parties and did the action of the Complainant by resigning after a significant number of months, while on medical treatment and with medical advice not to return to her place of work, amount to reasonable grounds for constructive dismissal.

When assessing the reasonableness test all of the circumstances of the case must be considered to establish whether or not it was reasonable for the Complainant to terminate her contract of employment.  It is important in a constructive dismissal claim that the Complainant satisfy the test set out by Lord Denning in Western Excavation (E.C.C) Ltd the Complainant, must also show that she exhausted the internal grievance process prior to lodging her claim with any external body. In that regard the case of Conway V Ulster Bank Limited UD 474/1981 is relevant where the EAT stated:-

“In writing the letter of resignation, the appellant did not take the steps outlined in the grievance procedure. The Tribunal has long considered that such agreements, usually described as Union Management agreements, are binding on the parties because they chose to be bound by them”.

However in this case with regards to the use of a grievance procedure the Complainant submitted two contracts of employment . The first was dated August 31st 2012 and contained no grievance procedure. This was the contract the Complainant was engaged on in 2012. The second contract, signed only by the Respondent dated October 17th 2019, but effective August 30th 2018 was sent to the Complainants solicitor on March 13th 2019 and the Complainant stated she never saw or was given that contract until it was furnished to her Solicitor. This contained a grievance procedure, however it was minimal in its effect in that any grievance should be put in writing and the decision of the Owner would be “final and binding” with no right of appeal internally or externally stated in the procedure. The second contracts legitimacy was contested by the Complainant and the dates associated with the contract are unusual, to say the least.

It is clear from the evidence presented that the Complainant was so hurt and disappointed to lose the job with the third party. The grievance issue in question was not internally work related but more of a personal career choice and trust issue between the Complainant and the Owner, with the opportunity for the Complainant to advance her career thwarted by the poor reference from the Owner. It is not for the Adjudicator to apportion motive to the Respondent. He is entitled, as he was asked, to provide the reference. However, he surely must have known that the reference provided would scupper the opportunity for the Complainant to get the job with the third party and it is this action, rather than the accuracy of the reference itself, which contributed to the breach in the bond of trust between the parties. In the context of the issue involved the use of a grievance procedure was both pointless and also unclear if indeed there was one in existence, based on the contractual evidence of the employee.

Overall, I find that the Complainant, in the uncontested evidence provided, had significant grounds to resign, without invoking a grievance procedure, due to the Bond of Trust being irrevocably broken down between the parties and accordingly I find the Complainant to be unfairly dismissed. I award the Complainant 9,000 Euros compensation as a result for breach of the Act.

Constructive Dismissal