ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00032718

Parties:

Complaint:

Date of Adjudication Hearing:  13/09/2021

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Location of Hearing:  Remote Hearing via Webex Platform

Procedure:

This complaint pursuant to Section 8 of the Unfair Dismissals Act 1977 was referred to the Workplace Relations Commission (hereinafter ‘WRC’) on 30th March 2021.  Following delegation to me by the Director General, I inquired into this complaint and gave the Parties an opportunity to be heard and to present any relevant evidence.  I held a remote hearing on 13th September 2021 pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and S. I. 359/2020, designating the WRC as a body empowered to hold remote hearings. The Parties represented themselves and did not call any witnesses.  The hearing was held in public and evidence was taken on oath pursuant to the Workplace Relations (Miscellaneous Provisions) Act 2021, amending the Workplace Relations Act 2015.  The Parties were made aware that their names would be published.  As this is a complaint of constructive dismissal, the burden of proof rested with the Complainant and accordingly, he gave evidence first followed by the Respondent.  Post-hearing documentation was received from the Complainant and nothing material arose from same requiring a further hearing.  All of the evidence, submissions and documentation submitted have been considered herein.

Background:

The Complainant claims that he was constructively dismissed by the Respondent arising from the manner in which he was treated during the course of his employment and particularly during the Covid-19 Pandemic.  He has taken up new employment and seeks compensation.  The Respondent contends that the Complainant is still an employee and hence there is no basis for this complaint. 

Summary of Complainant’s Case:

The Complainant gave evidence outlining the circumstances giving rise to his complaint of unfair dismissal.  He confirmed that he was seeking compensation for constructive dismissal owing to the Respondent’s adverse treatment of him during his employment and particularly during the Covid-19 Pandemic.  It is common-case that there was no express dismissal or resignation.  From 13th November 2014, the Complainant was employed as a Refrigeration Engineer by the Respondent, the owner of a small business providing electrical, refrigeration and air conditioning services.  He had never been furnished with a contract or a statement of the written terms of his employment.

In March 2020, the Complainant was laid off by the Respondent owing to business closure during the first Covid-19 Pandemic lockdown.  The Complainant claimed the Pandemic Unemployment Payment (PUP).  He did not avail of Jobseekers Benefit or seek alternative employment as he was repeatedly promised the resumption of work by the Respondent.  Through a third party source he became aware that the Respondent had resumed operations in Summer 2020 and other staff were back in employment at a time when the Respondent had claimed otherwise.  The Complainant requested redundancy but this was refused with the Respondent maintaining that he had broken the Complainant’s contract half way through by leaving him off work for a week.  The Complainant unsuccessfully tried to call the Respondent.  He also attempted to contact the Respondent by text message and email but apart from the communications outlined below, received no confirmation of his expected return to work date.  He submitted a copy of his text messages to the Respondent confirming that they were largely unanswered.  He had last spoken to the Respondent in October 2020 and their last email exchange was in mid-December 2020.  Upon hearing nothing further, the Complainant considered his employment to have terminated such that he was constructively dismissed from December 2020.  He commenced new employment from January 2021.  He had earned €600 net per week with the Respondent and significantly more in his new employment. 

The Complainant referred his complaint of unfair dismissal to the WRC on 30th March 2021.  Thereafter, the Respondent corresponded directly with the WRC setting out his position as outlined below and maintaining that the Complainant was still in his employment.  However, he did not indicate any resumption of work or contact the Complainant directly confirming a return date.

The Complainant raised other issues with his employment.  There had been delays in payment of his wages and outstanding annual leave and public holiday pay had not been discharged until May 2021, some fourteen months late.  He contended that this had only been paid because he had referred this complaint.  He had never been furnished with any payslips confirming payments made to him or on his behalf.  To compound matters, the Complainant had just received a letter from the Department of Social Protection seeking repayment of his PUP on the basis that records showed that he was not employed on the eligibility date.  Overall, he felt that the Respondent had kept him hanging on for work before washing his hands of him.  As a consequence of this treatment, he has suffered from extreme anxiety requiring professional support.  The Complainant submitted that in all of the circumstances he was entitled to treat the employment relationship as having terminated constituting constructive dismissal.  As he had moved on to better-paid employment from January 2021, he confined his claim for compensation to the wages he would have earned being €10,000.

Summary of Respondent’s Case:

The Respondent gave evidence outlining his position with reference to his submission to the WRC dated 21st April 2021.  He agreed that he had employed the Complainant as a Refrigeration Engineer from 13th November 2014 and had not furnished him with written terms.  He confirmed that his business provided electrical, refrigeration and air conditioning services and had eight employees.

The Respondent maintained that the Complainant had never been dismissed and was still in his employment.  On Monday 16th March 2020, the business had been forced to close owing to the Covid-19 Pandemic and all employees including the Complainant were verbally informed of a lay-off situation and paid for the following week.  This was confirmed in a follow-up letter sent to all employees, also informing them of their entitlement to apply to the Department of Social Protection for Pandemic Unemployment Payment (PUP).  The Complainant had agreed to this lay-off. 

On 22nd October 2020, the Respondent had a telephone conversation with the Complainant wherein he explained to him that whilst the business had re-opened there was only work available for electricians and there was no work for him as a Refrigeration Engineer.  As confirmed in a follow-up letter he explained that the Complainant had not been made redundant and was still an employee.  The letter cited Section 29 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 (in operation from 13th March 2020 until 30th September 2021) providing that employees on lay-off or short-time due to Government measures required to limit the spread of Covid-19 could not seek redundancy for the duration of the emergency period.  He also informed the Complainant that when he had work available for him he would be in contact.  He contended that he had acted reasonably towards the Complainant in difficult circumstances and had also suffered from financial hardship. 

On 9th December 2020, the Respondent received an email from the Complainant requesting annual leave pay, a redundancy review and asserting discrimination.  On 15th December 2020, he wrote to the Complainant confirming again that there was no intention of making him redundant and as there was no work he was on ‘lay-off’.  Once work resumed, he would contact the Complainant.  He refuted the discrimination allegation.  He confirmed that outstanding annual leave would be paid.

The Respondent considered that the Complainant was still an employee and his job was open to him.  Whilst the business had resumed some trading in Summer 2020, it had to be closed again during the subsequent lockdowns.  He maintained that it was only very recently that the business was fully back open and in receipt of work suitable for the Complainant.  He maintained that all of the previous work undertaken by the business since the Pandemic was electrical work in respect of which the Complainant was not qualified.  He accepted that he had not contacted the Complainant to arrange for his return to work.  He said he had been afraid to contact him following their last telephone conversation in October 2020 which had been heated.  He had not sought any professional advice in terms of meeting this complaint.  Nonetheless, he still refuted the complaint.

Regarding the other complaints made by the Complainant, the Respondent conceded that he was not in fact paid his outstanding annual leave and public holiday pay until until May 2021 as per a payslip submitted to the WRC.  He said that this was due to an administrative oversight by his Accountant and that public holiday pay had also been omitted but both were now paid up to date.

The Respondent accepted that he should have provided the Complainant with a statement of the written terms of his employment.  He maintained that the Complainant’s payslips had been available to him by email from his Accountant but no evidence that they had been furnished was adduced.  Finally, he offered to assist the Complainant with confirming to the Department of Social Protection that he was in his employment as at the eligibility date for Pandemic Unemployment Payment (PUP). 

Findings and Conclusions:

For a successful complaint of constructive dismissal under Section 8 of the Unfair Dismissals Act 1977, in addition to at least one year’s continuous service, the Complainant must satisfy the definition in Section 1(b) which provides: “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,…”. In Paris Bakery & Pastry Limited -v- Mrzljak DWT1468, the Labour Court set out the ‘contract’ and ‘reasonableness’ tests which may be used either individually or together to assess whether an employee has been constructively dismissed.  The ‘contract’ test arises: “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 other performance.”  The reasonableness test assesses the conduct of the employer and whether the employer conducts “…affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so the employee is justified in leaving.”  According to the Supreme Court in Berber -v- Dunnes Stores [2009] E.L.R. 61, the employee’s response to the employer’s conduct must be assessed objectively: “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.”  Unlike complaints of unfair dismissal, the definition also firmly places the onus/burden of proof on the employee to show that leaving was justified.  The case law also confirms that save for exceptional situations, an employee must have firstly exhausted all alternative avenues before resigning and/or leaving the employment.

In the instant case, the main issue for determination is whether it was objectively reasonable for the Complainant to have treated the employment relationship as having terminated.  As a starting point, the Respondent does not refute his complaint that he was never provided with a contract or a statement of the written terms of his employment.  Whilst a specific complaint under the Terms of Employment (Information) Act 1994 has not been pursued, this is relevant to the instant complaint in so far as the Complainant had no written notice of his employment entitlements or any grievance procedures.  In the absence of a grievance procedure as required by the S. I. No. 146/2000 - Industrial Relations Act 1990 (Code of Practice on Grievance and Disciplinary Procedures), there were no procedures in place to enable the Complainant to air his grievances with the Respondent.  

I am also cognisant that the Respondent is a small employer with limited resources.  I have no doubt that the Pandemic imposed severe operational and financial pressures upon the Respondent as it did on most employers.  To this end, Section 29 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 (in operation from 13th March 2020 until 30th September 2021) inserted 12A into the Redundancy Payments Act 1967 providing: “Section 12 shall not have effect during the emergency period in respect of an employee who has been laid off or kept on short-time due to the effects or measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19”.  This meant that employees in the Complainant’s position on lay-off or short-time due to Government measures required to limit the spread of Covid-19 could not seek redundancy for the duration of the emergency period.  Under the pre-existing system, employees on lay-off or short-time could apply for redundancy in such circumstances so long as they qualified under Sections 11-13 of the Redundancy Payments Acts 1967-2014.  The Acts provide that lay-off occurs where an employer is temporarily unable to provide an employee with the work for which they are employed.  Short-time occurs where an employee’s hours of work or pay are reduced to less than 50% of normal weekly working hours or normal weekly pay.  If an employee has been laid off or on short-time for (i) 4 or more consecutive weeks, or (ii) 6 or more weeks within a 13-week period of which not more than 3 are consecutive, the employee could notify their employer in writing of intention to claim a statutory redundancy payment assuming they satisfy the qualifying criteria, for example, having at least 2 years continuous service.  The notice must be given at the latest within 4 weeks after the lay-off or short-time has ended.  Within 7 days of the employee’s notice, the employer can give counter notice contesting liability to pay a redundancy payment.  This applies if it is reasonably to be expected that within 4 weeks of the employee’s notice, the employee will be permitted to work for at least 13 weeks without being laid off or placed on short-time for any week.  (Cited from the Law Society Guidance and FAQs for Employers on Business Disruption, Lay-off and Short-time) 

Employees including the Complainant who would normally have been eligible for redundancy were unable to avail of this process whilst this emergency measure was in place.  This measure was aimed at easing the position of employers and maintaining the employment relationship such that employers were not forced to pay out statutory redundancy during an emergency situation when they were unable to trade normally through no fault of their own.  However, it did not give a ‘carte blanche’ to leave employees in a lay-off limbo without proper communication as to their prospects of returning to work.  In normal times a strict statutory time-table for communications exists to give employees some certainty as to the status of their employment and prospects of return.  Save for extenuating circumstances, I see no reason as to why regular communications via telephone and email between employers and employees could not be maintained during the Pandemic. 

It is well-settled law that in any employment situation, employers are obliged to act reasonably towards their employees.  What this entails will depend upon the prevailing circumstances.  In the instant case, I acknowledge the difficulties faced by the Respondent arising from the Pandemic and the fact that as a small employer he had limited resources available to him.  With this in mind, however, I remain of the view that his communication with the Complainant regarding the status of his employment fell far short of that which might reasonably be expected from an employer of his size and resources.  I prefer the Complainant’s evidence that in the main the Respondent failed to respond to his phone calls and text messages based upon the evidence adduced including unanswered text messages.  It is also unrefuted that the Respondent resumed trading for a period in Summer 2020 without communicating this to the Complainant who had to learn of same via a third party source.  Furthermore, it is common case that the Respondent did not contact the Complainant after December 2020.  Instead, he opted to communicate his position directly to the WRC.  I also found the Respondent to be vague as to the periods he was trading, the extent to which he was back trading and the nature of work being undertaken.  Had the Respondent genuinely considered that the Complainant was still in his employment, one would have expected him to make direct contact with return to work arrangements, particularly after business resumed fully.  Accordingly, I find that this failure amounts to a fundamental breach of the employment contract going to its very core.

I now turn to consider the other complaints outlined by the Complainant as culminating in his constructive dismissal although some of them could also have been pursued as stand-alone complaints.  The Respondent does not dispute that there had been issues with timely payment and in particular, that there was a fourteen month delay in discharging the Complainant’s annual leave and public holiday pay.  I am further satisfied on the balance of probabilities that the Respondent did not furnish him with payslips in the absence of any evidence to the contrary and as such he could have no certainty as to the payments being made.  Albeit a small employer with limited resources, the Respondent is still obliged to abide by his statutory obligations and to inform himself of same.  Combined with the failure to provide the Complainant with a statement of the written terms of his employment and the absence of a grievance procedure, I am satisfied that the employer conducts his affairs so unreasonably that the Complainant could not be expected to put up with it any longer. 

When the Complainant’s complaints are taken cumulatively and his response is viewed objectively, I am satisfied that he has met both the contract and reasonableness tests.  Accordingly, I find that he was entitled to treat the employment relationship as having terminated from December 2020 and take up new employment.  As such, I find that he was constructively dismissed by the Respondent.

The issue regarding the repayment of PUP is a matter for the Department of Social Protection and its procedures for resolving same.  For the record and based upon the documentation furnished, I am satisfied that the Complainant was employed by the Respondent until at least 31st December 2020.

Decision:

Section 8 of the Unfair Dismissals Acts 1977-2015 requires that I make a decision in relation to this complaint of unfair dismissal, and if successful, that it consists of a grant of redress in accordance with Section 7 of the 1977 Act.  For the aforesaid reasons, I find this complaint to be well-founded pursuant to Section 8 of the Unfair Dismissals Act 1977 and conclude that the Complainant has discharged the burden of proving that he was constructively dismissed by the Respondent.  Section 7 of the Unfair Dismissals Act 1977 sets out the various forms of redress to which an employee shall be entitled upon a finding of unfair dismissal including either reinstatement, re-engagement or financial compensation.  Relevant to the instant case where compensation only is being sought, Section 7(1) of the Act provides for an award of up to 104 weeks remuneration where the employee has incurred financial loss attributable to the dismissal and up to 4 weeks remuneration where no financial loss has been suffered.  Section 7(2) sets out the factors which should be considered when determining the amount of compensation and of most relevance to this complaint is the extent to which the Complainant has mitigated his losses.  In this respect, I am satisfied that the Complainant acted quickly and is to be commended for securing alternative employment at a difficult time thus limiting his losses.  I therefore consider it just and equitable in all of the circumstances to award a sum of compensation equivalent to his losses sought, being €10,000.  The Respondent is therefore ordered to pay the Complainant a total of €10,000 in compensation within 42 days of the date hereof.

Dated:   25th February 20222

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Key Words:  Constructive Dismissal - Sections 2, 7 & 8 of Unfair Dismissals Acts 1977-2015 - Reasonableness & Contract Tests - lay-off / short- time - Section 29 of Emergency Measures in the Public Interest (Covid-19) Act 2020 inserting Section 12A into Redundancy Payments Act 1967