Complainant

Respondent

Parties

Marius Cristian  Gheorghiu

Sienna Star Ltd The Address Citywest Hotel

Representatives

  N/A

Terence O'Sullivan TJOS Solicitors

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-00045885-001

31/08/2021

The Complainant commenced his employment as a Reservations Manager with the Respondent on 11 May 2016 and earned €38,000 per annum. He stated that he was left with no choice but to terminate his employment on 13 August 2021 because of the unreasonable conduct of the Respondent.

The Complainant stated that the Respondent’s hotel in which he worked as the Reservations Manager closed as a result of the Covid pandemic on 20 March 2020. From 21 March 2020 to 12 July 2020 the Complainant received his net pay of €588, made up of €350 receivable under the Temporary Wage Subsidy Scheme, with the remaining €238 per week coming from the employer.

By way of a letter dated 9 July 2020, the Respondent notified the Complainant that they would have to reduce the top-up of €238 per week to €120 per week, effective from 13 July, with no end date for these reduced wages, which when added to the TWSS subsidy of €350 would leave him €117 per week below his net wage of €588. Although he was asked to give his consent in writing to this reduction, the Complainant declined to do so and highlighted that the Respondent failed to consider any other options for him, such as working from home, reduced hours or redundancy. The Complainant also stated that the Respondent in making the decision to reduce his wages failed to factor in his additional receptionist work, duties normally undertaken by the Hotel Receptionist.

In September 2020, the Respondent informed him in writing that his hours would be reduced from 5 days per week to 3 days per week which meant that the reduction in his wages was further prolonged. The Complainant highlighted that he wrote to the Respondent’s HR Manager on 1 and 6 June 2021 wherein he asked when his wages would revert back to his agreed salary of €38,000 per year but stated that he did not receive a response to either email.

The Complainant highlighted the Respondent’s significant investment in a rebranding and development project for their three hotels as evidence of their profitability. He also alleged that he was subjected to excessive and inappropriate micromanagement by the Respondent’s HR Manager and produced two emails to support this allegation.

The Respondent stated that a number of other employees were asked to take a pay reduction and did so given the circumstances that prevailed at the time. It was also asserted that the pay cuts were applied across the board in the Respondent’s three hotels and were intended for the purpose of keeping the hotel afloat.

The Respondent also highlighted that the Complainant failed to invoke the grievance procedure despite this having been included in the contract of employment provided to him.

The Law

The Act at Section 1(b) defines constructive dismissal in the following manner

“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,”

Analysis

It is for the Complainant to establish that his employment came to an end in circumstances amounting to a dismissal as that term is defined by the Act at Section 1 above. That section of the Act, and the case law since its enactment, has established two circumstances where an employee is entitled, or it would be reasonable for him, to terminate the employment relationship.

Contract Test

Firstly, in circumstances where the employer’s conduct amounts to a repudiatory breach of the contract of employment, the employee is entitled to regard himself or herself as having been dismissed. This is often referred to as the “contract test”. It was described by Lord Denning M.R. in Western Excavating (ECC) Ltd v Sharp [1978] I.R.L.R. 332as follows:

“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 discharged from any further performance”.

In plain English, this means that where an employer makes a fundamental breach of an essential term of the contract of employment, the employee may consider him or herself to be constructively dismissed.

Reasonableness Test

Secondly, an unlawful constructive dismissal may arise where an employer’s behaviour is so unreasonable as to mean that the employee is left with no reasonable alternative but to terminate his or her employment. This test of reasonableness, when applied to the within matter, asks whether the employer conducted its affairs in relation to the Complainant so unreasonably that he could not fairly be expected to put up with it any longer. In this context, the Complainant must establish that he also conducted himself reasonably in terms of affording the employer the opportunity to address the issues  which ultimately led to the termination of the employment.

In the instant case, the Complainant alleged that the Respondent fundamentally breached the contract test set out above when they reduced the wages that he was entitled to without his consent. In making a decision on whether or not the contract test was in fact breached by the Respondent, I note that the Complainant previously referred a complaint to the WRC under the Payment of Wages Act, relating to the reduction in his salary, which he is highlighting here as one of the grounds for the reason to terminate his employment. In that case (ADJ-00029892), the Adjudication Officer found in respect of CA-00039553-001 that “the deduction was not unfair, unreasonable or disproportionate given the circumstances confronting the respondent”. Given that the Respondent was operating in the middle of a global pandemic and that its business had effectively collapsed, I agree with the decision of the Adjudication Officer in the above matter and also find that it was reasonable for the Respondent to make unilateral changes to the Complainant’s contractual terms and conditions given the extraordinarily difficult circumstances which prevailed at that the time.

In terms of the reasonableness of the Respondent’s behaviour, I note that the Complainant did send an email to the Respondent’s HR Manager on 1 and 6 June 2021 where he asked when his wages would revert back to his agreed salary of €38,000 per year. I further noted that he did not receive an answer to this correspondence. While the HR Manager should certainly have responded to the emails and the failure to do so was inexplicable, I must also have regard to the reasonableness of the Complainant’s behaviour and note that he did not raise a formal grievance in respect of the reduction in his wages, in accordance with the grievance procedure in his contract of employment.

The requirement on a Complainant to exhaust the Respondent’s grievance procedure has been emphasised repeatedly by the Employment Appeals Tribunal (EAT) and the Labour Court.  The most relevant case in this regard is Conway v Ulster Bank Ltd (UD 474/1981) where the EAT found that:

“the appellant did not act reasonably in resigning without first having substantially utilised the grievance procedure to attempt to remedy her complaints.”

Similarly, in Travers v MBNA Ireland Ltd [UD720/2006] the Employment Appeals Tribunal stated:

“We find that the claimant did not exhaust the grievance procedure made available to him by the respondent and this proves fatal to the claimant’s case. In constructive dismissal cases it is incumbent for a claimant to utilise all internal remedies made available to him unless good cause can be shown that the remedy or appeal process is unfair.”

Desmond Ryan BL also set out the onus on employees in this respect in Redmond on Dismissal Law (2017) at paragraph 19.14: “There is something of a mirror image between ordinary dismissal and constructive dismissal.  Just as an employer for reasons of fairness and natural justice must go through disciplinary procedures before dismissing, so too an employee should invoke the employer’s grievance procedures in an effort to resolve his grievance.  The duty is an imperative almost always in employee resignations.  Where grievance procedures exist they should be followed”

I also noted the Complainant’s assertion that the Respondent acted unreasonably by sending him inappropriate and aggressive emails in December 2020 and May 2021 which he suggested demonstrated micromanagement and unfair treatment on their behalf. Having reviewed these emails, I do not consider that they were either inappropriate and aggressive and find that they were perfectly reasonable and also note that the Complainant did not invoke the grievance procedure surrounding this alleged micromanagement.

It was also noteworthy that the Complainant in his resignation letter highlighted the failure of the Respondent to offer him parent’s leave in the week before he resigned as one of the reasons around his decision to leave his employment, even though he accepted in evidence at the hearing that they were perfectly entitled to refuse and postpone this. The timing of the refusal of the parent’s leave, so close to the date of resignation, leads to me believe that this was the catalyst for the decision to terminate his employment and not the reduction in wages which began in July 2020, 12 months before he issued notice of his resignation, or any other alleged mistreatment by the Respondent.

In light of all of the foregoing, I find that there was no breach of the contract test and that the Complainant acted unreasonably in deciding to terminate his contract of employment.

I find that the Complainant was not unfairly dismissed for the reasons set out above.