Complainant

Respondent

Anonymised Parties

Director of Client Services

Provider of Merchant Services

Representatives

  Self

Helen Quinn Ibec

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-00038900-001

26/07/2020

The complainant commenced employment with the respondent on 14 September 2014.  He was initially the Customer Services Manager with one section of the respondent and was later appointed as Director of Client Services & Partner Relations (UK).  He worked a 37.5-h week and he was paid €7641.00 gross per month.  The complainant’s employment was terminated by reason of redundancy on 01 April 2020.  He claims he was unfairly dismissed.  He submitted a complainant to the Workplace Relations Commission on 26 July 2020.  The respondent asserts the parties entered into a full and final severance agreement on 07 April 2020 and by the terms of that agreement the complainant has compromised his right to pursue this complaint.

On the morning of 30 March 2020, the complainant was invited to join a conference call at 15.30 that afternoon with the General Manager (UK) and the Head of HR (UK & Ireland).  He was not told the reason for the call.  The General Manager in a brief statement told the complainant that his role was no longer required, and he was to be made redundant.  The Head of HR made a short statement about the details of the redundancy.  The complainant was so shocked he could not take in the details.  It was agreed there would be a follow up phone call the next day from the Head of HR, but this did not take place.

Instead of a phone call the next day, the complainant received an e-mail with a copy of a termination agreement.  He was not offered any other options.  The termination date stated in the agreement was 01 April 2020.  The complainant had the agreement checked by his solicitor.  Several errors were found.  Following a series of e-mail exchanges, the errors were corrected.  He had seven days to finalise the termination agreement.  The complainant received his final salary and redundancy payment on 24 April 2020.

The complainant was extremely distressed and shocked by how the respondent handled his termination.  There was no prior indication that his post was in scope for redundancy.  He was not given the choice to have a representative with him on the call on 30 March 2020.  He had no opportunity to discuss options other than redundancy.  The complainant asserts he was not offered any proper consultation or opportunity to negotiate the termination arrangements.

The complainant claims he was never made aware of his rights and entitlements and he acted under duress when signing the termination agreement.  He was put under pressure to sign the agreement by 07 April 2020.  He relies on the Labour Court decision in Keelings Retail Unlimited Company v Wasim Haskiya UDD2023 to support his submission that he is entitled to pursue his claim of unfair dismissal.

The complainant claims he was unfairly dismissed and that he was treated differently to colleagues who were furloughed or had a deduction in salary.  He claims he was never made aware of the reason why his post was made redundant and that he signed the severance agreement under duress.  He is seeking compensation for the loss he has suffered.  He was unemployed for four months and he has fewer benefits in his new employment.

The respondent asserts that the complainant and the respondent entered into a full and final severance agreement on 07 April 2020 in relation to the termination of the complainant’s employment.  Consequently, the complainant has compromised his right to pursue a complaint of unfair dismissal.

The respondent company provides merchant services to a wide range of clients across the world.  In January 2020 the company had 155 employees in the Irish operation and 33 employees in the UK operation.  As of December 2020, the number of employees had been reduced to 122 in the Irish operation and 21 in the UK operation.  On 30 March 2020 the Chief Executive Officer issued a company video explaining that due to the serious financial impact of COVID-19 the company had no option but to reduce its global headcount by approximately 20%.  Subsequently, the reduction in headcount increased to 25%.

In the afternoon of 30 March 2020, the General Manager (UK) and the Head of HR (UK & Ireland) held a WebEx call with the complainant.  The General Manager told the complainant that due to the impact of COVID-19 and the significant drop in turnover, the company had no option but to make his role redundant.  The company was offering a severance package which would be arranged by HR.

Following that call the Head of HR sent an e-mail to the complainant with a letter setting out the following:

·       Termination date to be 01 April 2020

·       Payment for consultation period of 1 month

·       3 months’ notice, (paid in lieu)

·       Ex- gratia payment as per policy (including statutory redundancy)

·       Benefits to continue until date of termination

Full details and the termination agreement were to be issued the following day 31 March 2020.  Two copies of the severance agreement were sent to the complainant on 31 March 2020 for his review and legal review.  The covering letter noted the complainant was required to seek legal advice on the agreement with immediate effect.  The agreement was to be signed and returned by Tuesday, 07 April 2020.

The complainant availed himself of legal advice and the respondent paid €300.00 towards the legal costs.  The complainant completed the severance agreement and returned a signed copy to the respondent on 07 April 2020.  The complainant received a final payment on 25 April 2020 which included statutory redundancy, payment in lieu of notice, an ex-gratia payment and payment for outstanding annual leave that was accrued.

Under the terms of the agreement, in exchange for a “termination payment”, which included an ex-gratia amount, the complainant agreed under clause 3.1 to waive his rights to “release and discharge of any and all claims”.  Under clause 3.2 the various statues were listed including the Unfair Dismissals Act, 1977 – 2015.

The complainant alleges he was placed under duress; however, the respondent contends this allegation.  The complainant queried several items in an exchange of e-mails with the Head of HR between 31 March and 07 April 2020.  The complainant referred to his solicitor having reviewed the agreement and commenting on parts of the agreement.  The respondent submits these exchanges are not indicative of someone who was under duress but one who was carefully reviewing the terms of the agreement to ensure it was correct.

Legal Submission

The respondent submitted that it is well established in law that a valid settlement agreement, as outlined in Sunday Newspapers Ltd v Kinsella and Bradley [2007] IEHC 324, is one where the employee is:

“advised of his entitlements under the Employment Protection legislation and any agreement or compromise should list the various applicable statutes or at least make it clear the same had been considered by the employee.  In addition, the employee should have been advised in writing to seek appropriate advice of his rights”

The complainant was strongly advised, in writing, by the respondent to obtain legal advice about the severance agreement.  The complainant did obtain such advice and the respondent paid a contribution to his legal costs.  The respondent refutes the complainant was placed under duress as seven days is a reasonable time to consider the contents of a severance agreement.

The respondent relies on clause 14.1 of the severance agreement to confirm the fact that the complainant took legal advice and entered into the agreement without any coercion of any description.

The respondent submits that the terms of the severance agreement are clear, specific and easily understood and are in line with the spirit of the Circuit Court decision in Hurley v Royal Yacht Club [1997] ELR 225.  The respondent relies on the Labour Court decision in Eircom Limited v A Worker AD0720.  The Court held that a settlement agreement entered into by the parties, signed by the appellant, witnessed by her solicitor, constituted a legal agreement between the parties and consequently the Court had no jurisdiction to hear the appeal.

The respondent submits that the Adjudication Officer does not have jurisdiction to hear the complainant’s case based on the signed and executed severance agreement entered into on 07 April 2020.

CA-00038900-001

Complaint under Section 8 of the Unfair Dismissals Act, 1977.

The first issue to be decided is whether I have jurisdiction to hear this complaint.  The respondent submits I do not have jurisdiction as the parties entered into a full and final severance agreement on 07 April 2020 in relation to the termination of the complainant’s employment.  The complainant acknowledged he did enter into the severance agreement, but he claims he did so under duress.

It was agreed by all parties that the complainant was told that his post was to be made redundant on 30 March 2020, that he was given a copy of the severance agreement the following day, and that he had seven days to review the agreement and accept the terms.  The agreement was finalised on 07 April 2020.  The complainant acknowledged that he consulted his solicitor who reviewed the validity of the agreement but, he claims the respondent did not make him aware of his rights and entitlements.  The complainant further claims that as he was not given the opportunity to have a representative with him on the call on 30 March he acted under duress as he was required to return the document as quickly as possible.

I have reviewed the severance agreement and I note that section 3.1 provides that, in consideration of the employee’s (complainant) agreement to the terms and conditions and in full and final settlement, satisfaction, release and discharge of any and all claims the respondent agreed to pay a gross sum to the complainant.  Section 3.2 lists specific statutes referenced in section 3.1.  The list includes the Unfair Dismissals Act, 1977 to 2015. 

Section 13 of the Act renders void any provision in an agreement that purports to exclude or limit the application of any provision in the Act.  It provides as follows:

13.—A provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of this Act) shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with, any provision of this Act.

In Hurley v Royal Yacht Club [1997] ELR 225 Judge Buckley in the Circuit Court considered “under what circumstances can claims be legitimately compromised”.  Holding that claims may be legitimately compromised he stated the following in the context of Section 13 of the Unfair Dismissals Act, 1977, “In several areas of the law the Supreme Court has held that any consent by a person to waive a legal right which that person has, must be an informed consent.  This doctrine must surely apply to contracting out provisions and to Section 13 in particular.”

The Labour Court in Sunday Newspapers Limited v Kinsella and Bradley [2006] 17 ELR 325 held that a provision in a statute prohibiting contracting out does not prevent the parties from lawfully agreeing to settle or compromise claims based on the statute.  The Court, however, noted there was a difference between a genuine bargain to settle which is lawful and enforceable and an attempt to exclude or limit the Act.  The Labour Court in Keelings Retail Unlimited Company v Wasim Haskiya UDD2033 approved the conclusions, as regards relevant legal authorities, reached by the Court in the earlier Sunday Newspapers Limited v Kinsella and Bradley case:

“It is clear from the authorities that a provision in a statute prohibiting contracting out does not prevent parties from lawfully agreeing to settle or compromise claims based on the statute. There is, however, often a subtle but substantial difference between a genuine bargain to settle or dispose of a claim, which is lawful and enforceable, and an attempt to exclude or limit the Act, which is void and of no effect. The case law indicates that the following considerations are relevant in distinguishing the former from the latter:

1. The terms of any waiver must be construed strictly against the party from whom it emanated. Where there is doubt the course of negotiations between the parties should be examined so as to ascertain what was intended.

2. An agreement to waive statutory rights must be supported by adequate consideration.

3. The waiver should normally arise from an agreement reached as a result of meaningful negotiations and professional advice having been sought and given.

4. The waiver should list the various Acts being taken into account.

5. The waiver is only valid if it is based on a free and informed consent given by a person with full knowledge of their legal rights.

6. It is for the employer to ensure that the worker is capable of giving an informed consent and the employer should normally advise the worker in writing to obtain professional advice before inviting him or her to sign a waiver.”

The Court applied these authorities to the facts of the appeal in Keelings Retail Unlimited Company v Wasim Haskiya and held that the waiver document signed on 17 August 2017 did not remove jurisdiction from the Court to hear the appeal.

Applying the above consideration to the facts of this complaint I find the following;

The complainant was shocked to be told his post would be made redundant and he had no warning that the call on 30 March 2020 concerned the termination of his employment.  He had not received the video message delivered by the Chief Executive on the morning of 30 March 2020.  Given that he was not forewarned of the termination of his employment the time allowed to review and accept the severance agreement was short. 

The complainant understood he would receive a phone call the following day from the Head of HR to discuss the severance agreement, but he did not receive a call.  The verbal communications from the respondent to a senior employee, who had worked with the respondent since its establishment in Ireland and who had positive annual reviews, was not well managed.  However, the written communications were clear and in the letter of 31 March 2020 the complainant was required to seek legal advice on the severance agreement, with immediate effect.

The complainant did obtain legal advice.  Based on advice from his solicitor he queried several points in the agreement.  A number of corrections were made before the agreement was finalised on 07 April 2020.

The respondent was aware that the complainant had followed the instruction to take legal advice as in an e-mail, dated 02 April 2020, he wrote “Re termination agreement, my solicitor has reviewed and made the following comments”.  In addition, the respondent made a payment to the complainant’s solicitor as a contribution to his legal costs.

The complainant received a payment from the respondent in consideration of his agreement to the terms and conditions of the severance agreement being in full and final settlement, satisfaction, release and discharge of any and all claims.  The agreement, at clause 3.2, lists the statutes to which clause 3.1 referres, including the Unfair Dismissals Act, 1977 to 2015.

The complainant in Keelings Retail Unlimited Company v Wasim Haskiya did not have the benefit of legal advice whereas the complainant here did consult his solicitor and received advice on the severance agreement. 

Having carefully considered the parties’ written and oral submissions I am satisfied a legally binding severance agreement was concluded between the parties on 07 April 2020.  The complainant, with the benefit of independent legal advice, waived his right to pursue a claim under the Unfair Dismissals Act, 1977.  Therefore, I find that I do not have jurisdiction to hear this complaint.

CA-00038900-001

Having carefully considered the parties’ written and oral submissions I am satisfied that a legally binding severance agreement was concluded between the parties on 07 April 2020.  The complainant, with the benefit of independent legal advice, waived his right to pursue a claim under the Unfair Dismissals Act, 1977.  Therefore, I find that I do not have jurisdiction to hear this complaint.

Unfair Dismissal

Compromise Agreement

Severance Agreement

Jurisdiction