Complainant

Respondent

Parties

Juan Jose  Martinez

Sugarloaf Ventures Ltd.  

Complainant

Respondent

Anonymised Parties

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Representatives

Barry Crushell Crushell & Co Solicitors

Aoife McDonnell 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-00045768-001

23/08/2021

The Complainant commenced employment with the Respondent on 21 August 2018.  His employment ended on 9 August 2021, he was employed as Food and Beverage Manager. A complaint was received by the WRC on 23 August 2021. A hearing of the case took place on 28 June 2022. This is a claim for Constructive Dismissal.

The Complainant provided a detailed written submission.

The Complainant submits that he was compelled to resign dure to a breach of contract on the part of the Respondent.  The Complainant had worked in the hospitality industry for approximately 20 years when he started employment with the Respondent.  He had held a number of supervisory and managerial roles. While working for the Respondent he had responsibility for approximately 100 staff members.  Although much of this responsibility was delegated to managers, the Complainant enjoyed overall responsibility.

During the Covid-19 pandemic the Respondent implemented a number of significant changes to the business. One such change was that the Complainant’s direct manager was made redundant; a Director of Food & Beverage was appointed, who effectively assumed the responsibilities the Complainant had had during the previous three years.  The Complainant was never informed, notified nor consulted in relation to this change.  The Complainant submits, that this change, in reality, amounted to a demotion, in breach of his contract of employment.

The Complainant subsequently raised a grievance which he contends was poorly managed and did not resolve his issues.

As a result of the changes referred to above, the changes in his terms and conditions of employment, the diminution of his responsibilities and the significant reputational impact this had on him, both internally and externally, the Complainant felt he had no other option but to resign.

In a written Personal Statement, the Complainant states that the role of the Director Food & Beverage, appointed by the Respondent, was basically what he had been doing for the last three years.  The decision to create this post was made without any consultation with him. Although the reporting downward did not change, if the Complainant wanted to make a decision he now had to check with this new person. In the Complainant’s words, “any decision or any power, any responsibility I had was with him instead of me.”

The Complainant states that he raised a grievance with the Respondent and that his grievance was processed as per the hotel’s grievance policy.  The outcome of the was negative, he was told simply that he used to answer to an operations manager, and he was now going to report to a food and beverage director.  The Complainant felt the grievance was not dealt with very well, that the Respondent went against their own procedures, against what was written in the Employee Handbook. The Complainant stated that he was never told he could have someone with him at the first meeting he had (with management).

In his written Persona Statement, the Complainant states that he experienced great stress during the grievance process and was very upset by the way he was treated. The Complainant states that the new Food & Beverage Director wanted to impose new things, “so I lost all my authority, I couldn’t be there, everything I said was wrong.”  He felt there was no place for him in the hotel. He subsequently contacted “head-hunters” but felt the fact that he had not been appointed Director of Food & Beverage with the Respondent, negatively affected his chances of getting a job.

The Complainant gave oral evidence at the hearing. The Complainant stated that he had been successful throughout his career. When initially working with the Respondent he had reported to a Director of Operations, who was acted more as a counsel than someone who made decisions, he guided the Complainant. The Complainant was happy he was kept on in the hotel when the pandemic lockdown was implemented.  Around this time the ownership of the hotel changed hands and a lot of changes were made, for example most of the senior management team changed.

On 28 May 2021, the Complainant was informed that a new a Director of Food & Beverage had been appointed. When informed he was told by a senior manager that in an ideal world, he should have been given the opportunity to apply for this role, but he had not been given the opportunity.  The Complainant was shocked at what had happened and stated that he would have applied for the role if it had been advertised.

The Complainant explained that in his role to that point he had been responsible for a large number of managerial roles/tasks which indicated he was a senior manager but now someone else was put in place above him.  When the submitted an email to his manager outlining his concerns at this turn of events, he was told that he was different levels of seniority and if he was not happy, he could submit a grievance. The Complainant stated at the hearing that he “was angry with what they had done and how they had done it.” The Complainant felt that the appointment of a Food & Beverage Director was to all intents and purposes equivalent to him being demoted; that he would no longer lead the department.  The Complainant did think the Respondent was trying to “get rid” of him.

The Complainant stated that when he looked for clarification on the matter, he did not get any answers. Things changed in his day-to-day role; sometimes when he gave directions they were contradicted by the Food & Beverage Director. The Complainant felt the only option left to him was to raise a grievance. However, the Complainant was neither satisfied with the outcome of the grievance investigation nor the appeal of that investigation, he was of the view that the Respondent was only defending itself.  The Complainant felt unsupported by his HR colleagues.  Because of the toll these matters were taking on his mental health he had no option other than to resign, which he did on 9 August 2021.

Following his resignation, the Complainant applied for many jobs but because of what had happened during the last weeks of his employment with the Respondent he believes some potential employers looked at him questioningly.  Due to the high cost of rents and living in Ireland the Complainant decided to look for work elsewhere and he moved abroad.

In cross examination, the Complainant stated that he had accepted the new Food & Beverage Director as his manager and did as he was asked.  When asked about the three-week timeframe of his grievance being submitted, his appeal being heard, and the issue raised by the Complainant of the recommendations included in the grievance outcome not being implemented, the Complainant stated that those three weeks were “hell” for him, that he had lost all his authority and that staff did not know whether to listen to him or not. When asked if he had given the Respondent enough time to engage with him, the Complainant replied that if there had been actions within the first two weeks (things might have been different) but there were none.

In conclusion, the Complainant submits that there was a breach of contract, that there had been no consultation with him before the new Director of Food & Beverage was appointed, resulting in a unilateral change to his terms and conditions of employment. The Complainant put forward that the Respondent had admitted that they had deviated from best practice in how they had dealt with this matter.

The Complainant submits that he had exhausted the grievance process, including appealing the outcome of the grievance investigation, but to no avail. Of the recommendations in the grievance outcome, which were reaffirmed in the appeal outcome, not one had been implemented by the time he resigned.  The Complainant had by that time, because of the length of time and the non-implementation of the recommendations, lost all trust and confidence in his employer.

The Complainant submits that primarily, the unilateral change to his terms and conditions of employment constituting a breach of contract was the primary reason why he had no other option but to resign. The manner in which this change was affected caused him a considerable amount of stress and anxiety as all his previous reporting employees were made aware that he was effectively being replaced.

The Complainant submits that he attempted to exhaust the internal grievance procedure but to no avail. The Respondent did not show any real appreciation of his concerns.

The Complainant also maintains that, after his many years of loyal service, professionalism and dedication, the manner in which he was terminated constituted a breach of trust and confidence between the parties. In addition, the Complainant contends that he attempted to exhaust the internal grievance procedure, but to no avail.  The Respondent did not show any real appreciation for the concerns of the Complainant.

The Respondent provided a detailed written submission

The Respondent refutes the claim and puts forward that it is within its rights to structure the Company in whichever manner it pleases.  The Respondent moved the director role from a sister property to this property as part of a strategic move.

By way of background, the Respondent explained that the MHL Collection is a collection of unique and individual hotels in key city and resort locations throughout Ireland. There are 10 hotels in the collection. The Complainant was appointed to the role of Food & Beverage Manager with the Powerscourt Hotel in 2018, he resigned from this position on 9 August 2021.

 In May 2021, following the initial effects of the Covid-19 pandemic, the Respondent identified that there was a strategic gap in the director level of the Powerscourt Hotel and that changes were required. Following a restructuring process the Director of Operations role in the hotel was made redundant. Prior to this the Food & Beverage Manager and the Head Chef would have reported into the Director of Operations. It was decided that the Director of Food & Beverages from another hotel would be relocated to this hotel. The Director of Food & Beverages role focussed on the strategic management of the department rather than the day-to-day tasks.

On 28 May 2021, Mr Peter Borralnan, the General Manager of the Powerscourt Hotel at the time, informed the Complainant that the Director of Food & Beverages from another hotel (which was closed at the time) was to be relocated to the Powerscourt Hotel. The Complainant raised concerns about this change to Mr Borralnan.  This was covered in a daily management meeting.  In or around this time the Complainant informed Mr Borralnan that he would accept a redundancy payment.  Mr Borralnan looked into this and decided that redundancy was not applicable here, as the role of Food and Beverages Manager remained very much the same.

The Complainant submitted a grievance about the matter and a grievance meeting was held on 10 June 2021, follow on meetings took place on the matter. The outcome of the grievance investigation was issued via email on 23 June 2021.  The Complainant immediately appealed the outcome.

An appeal hearing took place on 30 June 2021. On 7 July 2021, the person who had heard the appeal issued a letter to the Complainant informing him that the grievance investigation findings were upheld.

On 8 July 2021, the Complainant submitted a medical certificate which signed him unfit to work until 18 July 2021.  The recommendations from the outcome of the appeal were not implemented as the Complainant was on sick leave.  On 16 July 2021, the Complainant submitted a medical certificate which signed him unfit to work for a further four weeks. 

On 9 August 2021, the Complainant resigned from his position as Food & Beverages Manager. The Respondent responded to the resignation and informed the Complainant that they would allow for “a period of reflection up until Friday 20th August”, which would give the Complainant an opportunity to reconsider his decision to resign.

The Complainant responded 29 minutes later, stating that he did not want any further time to reconsider and that he would not work his notice period.

The Respondent submits that it neither acted unreasonably nor did it breach the Complainant’s terms and conditions of employment such that the Complainant could legitimately resign and seek relief for constructive dismissal.  The Respondent submits that it acted appropriately at all times in addressing the Complainant’s concerns; a full investigation was carried out on receipt of the written complaint. However, the Complainant did not give the Respondent an opportunity to work with him to resolve any outstanding concerns as he resigned from his employment.

The Respondent submits that changing the reporting line, from one director to another does not breach the terms and conditions of the Complainant’s contract of employment.

Mr Peter Borralnan, who was general manager of the hotel at the time, gave oral evidence at the hearing.  He stated that changes were needed because the hotel’s results were not what they should have been and a new strategic role was required. He stated that the role of Food and Beverage Manager still exists, that the position had to be refilled immediately when the complainant resigned.

Mr Borralnan stated that he had a meeting with managers in the hotel, including the Complainant, to explain the role and the strategic alignment of the hotel.

In cross examination, Mr Borralnan stated that he did not know how the Complainant could have felt insecure as he was told the scope of his job and his responsibilities had not changed.  He simply had a new line manager. He did not agree that this was a diminution of the Complainant’s role.

Mr Eamonn Casey gave oral evidence at the hearing (remote).  He was General Manager of another hotel at the time in question and was asked to investigate the complaint made by Mr Martinez.  Mr Casey stated that he had had two meetings with Mr Martinez about his complaint.  He did not uphold any of the four complaints made by Mr Martinez.  Mr Casey issued a report which contained six recommendations.

In cross examination, Mr Casey agreed that the Complainant was upset by the way the appointment of the Food & Beverage Director had handled and that on reflection, because he was upset, it could have been one on a one-to-one basis.

Mr Eddie Sweeney, who heard the appeal of the of the outcome of the grievance investigation, also gave oral evidence at the hearing.  He stated that nothing new was revealed in the Complainant’s appeal that had not been covered in the original complaint. He believed the six recommendations issued in the investigation report were thoughtful.  He did not think the Complainant’s role had been lessened by the appointment of a Food & Beverage Director, as the roles are very different, but clarification was needed on how both would work together.

In conclusion, the Respondent submits that asking the Complainant to report to the Director of Food & Beverages was not adding another layer, there was always a layer, previously the Director of Operations and Director and Manager roles are not similar.

The Respondent submits that the timeline of events was so tight, at a time when the hotel was at its busiest, did not afford the Respondent time to carry out the recommendations contained in the grievance investigation report.

The key facts are not in dispute in this case; the Respondent appointed a Director of Food & Beverages without consultation with the Complainant.  The Complainant was not given the opportunity to apply for the new post. The Complainant had to report to this newly appointed Director. A complaint was made by the Complainant about the situation, an investigation took place, recommendations emanated from the investigation, these recommendations were not implemented.

It is in the interpretation of these facts that the parties digress. 

The Complainant contends that the appointment of the new Director and the manner in which this was done was such as to constitute a significant breach of his terms and conditions of employment.  He also contends that the appointment diminished his role, undermined his position in the hotel’s hierarchy and resulted in him losing face vis-à-vis the team who reported to him. The Complainant maintains that the failure of the Respondent to implement any of the recommendations contained within the investigation report brought him to, as he would see it, justifiably, lose his trust and faith in his employer.   This being the situation there was nothing else he could do but resign his post.

The Respondent counters that the appointment of the Director of Food & Beverage was required form the strategic perspective and had to be done as expeditiously as possible. This appointment did not diminish the Complainant’s role, he still had a team to manage and he still had someone to report to, albeit that that person had a different title than that of the person to whom he reported to previously. The Respondent submits that the non-implementation of the recommendations contained in the investigation report was due to a combination of the short timeframe between the grievance, the appeal and the appeal outcome and the Complainant’s absence from work due to ill-health. The Respondent maintains that it did not do anything so unreasonable as to justify the Complainant finding protection under a constructive unfair dismissal.

The complaint is one of constructive dismissal.

The Unfair Dismissals Act and the resulting jurisprudence have set a high bar in relation to what will justify the termination of a contract of employment. It is, after all, a breach of a legally binding contract.

In the case of an employer wishing to do so, there must be cause, a fair process must have been followed and the decision to dismiss must be within the range of reasonable sanctions in relation to the conduct giving rise to the disciplinary proceedings.

It is relatively easy for an employee to terminate their employment by simply resigning and in most, if not all cases an action for breach of contract is unlikely to arise.

When an employee terminates the contract of employment and then makes a complaint of constructive unfair dismissal that is a different matter.

The Supreme Court has said that;

‘The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.’

Per Finnegan J in Berber v Dunnes Stores [2009] E.L.R. 61

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.

In relation to the employee’s behaviour this normally refers to the efforts that a complainant made to bring the matter to the employer’s attention and to have it remedied by means of the grievance machinery.

Having considered the matter carefully, I find the Complainant has not adduced sufficient evidence to prove, on the balance of probabilities, there was sufficient reason to justify his resignation and to ground a claim for constructive dismissal.

I find the appointment of the new Director did not diminish the Complainant’s position; he just had a new person to whom he had to report.  His role with his own team was not changed. The changes made by the Respondent cannot therefore be reasonably considered as diminishing the Complainant’s role.

The Respondent could have and should have handled the appointment better, in that it could have given some forewarning to the Complainant of the imminent change. This failure can be forgiven when the new Director was being moved from one hotel in the group to another, in the teeth of an unprecedented pandemic which was at the time having a devastating impact on the hospitality sector.  Such a failure is not sufficient in either nature or magnitude to qualify the Complainant’s resignation   as justified as a constructive dismissal.

The EAT has made it clear in a series of decisions, and followed by the Adjudication Service that failure to use company procedures to address a grievance is a necessity.

In ‘Dismissal Law in Ireland’ the late Dr Mary Redmond has said (at p340)

“There is something of a mirror image between constructive dismissal and ordinary dismissal. Just as an employer for reasons of fairness and natural justice must go through disciplinary procedures before dismissing, so true an employee should invoke the employer’s grievance procedures in an effort to resolve his grievance, The duty is an imperative in employee resignations. Where grievance procedures exist they should be followed: Conway v Ulster bank Limited. In Conway the EAT considered that the claimant did not act reasonably in resigning and without first having ‘substantially utilised the grievance procedure to attempt to remedy her complaints.”

In this case the Complainant did utilise the Grievance Procedures.

Notwithstanding the fact that the Complainant did initiate a formal grievance and appealed the outcome of the investigation of same, I find he did not give the Respondent sufficient time to put the recommendations of the investigation into operation.  As an analogy, if a person goes to a doctor with a complaint and the doctor prescribes medication it is incumbent upon the patient to give time for the medication to work before going to another doctor for a second opinion. In this case I find the Respondent was ready, willing and able to implement the recommendations, which might have addressed the Complainant’s concerns, but was not given sufficient time to do so before the Complainant resigned.

In conclusion, I find the Complainant has not proven he was entitled to resign and ground a claim for constructive dismissal.

I have decided that the Complainant was not unfairly dismissed.

Constructive dismissal, grievance, breach of contract.