Complainant

Respondent

Parties

Fergal Ryan

Dalata Hotel Group PLC

Representatives

Barry Creed, Solicitor

Aaron Shearer, BL

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00038892-001

24/07/2020

The complainant joined the Dalata Group in May 2015 as a relief general manager.  In June 2016, he was appointed acting general manager of the Clayton Hotel in Sligo.  He was dismissed in January 2020 following a disciplinary investigation into allegations of misconduct.  In response to the complaint of unfair dismissal, the respondent submitted more than 800 pages of documents which record the events that ended with a disciplinary hearing on December 3rd 2019.  The following is an outline summary of those events:

Chronology Leading to the Complainant’s Dismissal

May 2019:  The Complainant’s Letter to his Line Manager

On May 7th 2019, the complainant had a meeting in Sligo with Des McCann, his line manager and the group general manager of the Clayton Hotels.  The complainant wrote to Mr McCann on May 13th, and, from his letter, it is evident that, at their meeting five days earlier, Mr McCann raised concerns with him about how the hotel was being run, including issues concerning cash payments to employees.  In his letter, the complainant alleged that Mr McCann threatened to “manage him out of the business” if he did not accept a termination agreement.  He claimed that Mr McCann had undermined him and accused him of financial impropriety.

Mr McCann replied on May 16th.  In a letter containing  more than 20 detailed paragraphs, he told the complainant that he had “wholly mischaracterised the nature and content of our various discussions” and had invented events that never happened.  He said that he had passed the complainant’s letter to the head of HR, and that he would make a formal complaint about the allegations it contained.  At paragraph 8, Mr McCann addressed the complainant’s allegation that he had been accused of financial impropriety:

“You stated that I alleged that you were ‘guilty of financial impropriety’ and that you will work hard in defending your good name.  We have very strict monetary, cash-handling and payment procedures and it is never acceptable, under any circumstances, to make cash payments to any member of staff, casual or otherwise.  If you are suggesting that I claimed that you stole money, I most certainly did not.  I did however have to raise issues with you regarding compliance with, and adherence to, company policies and procedures especially relating to payment mechanisms.  Apart from the risk of being very open to abuse, it raises serious revenue and control issues.  That is all I was ever saying to you.  You will be aware that there were issues surrounding this previously and that I had already raised the matter with you.  I do not recall the exact words that I used but I do accept that I did say something along the lines that, if you did not take ownership of the matter and accept and agree to follow company procedures, disciplinary action may inevitably result.  I would simply be left with no option but to report the concerns that I had and your lack of co-operation.  As matters now stand, as you have formally written to the Company, I am now stepping back and as stated above, will have to make a full report to the Company.  Any discretion that I may have is now gone and it will be a matter for whomsoever replaces me and the Company to decide what action to take.  I do feel that it is very ironic that if you did write the letter in question to stave off an investigation into your actions, you may very well have brought about the result that you were seeking to avoid.”

On the same day that he sent this letter, Mr McCann submitted a grievance against the complainant on the basis that, in his letter of May 13th, by making “false and outrageous allegations” that he was trying to manage him out of the business, the complainant had misrepresented him.  Mr McCann’s view was that the complainant was trying to intimidate him so that he would back off from dealing with issues in the Sligo hotel that were the complainant’s responsibility to manage.  In the outline of his grievance, he revealed that he had been informed that the complainant told another employee that he would “take the company for €150,000.”

June 2019:  Investigation of Des McCann’s Grievance against the Complainant

Conal O’Neill, the group general manager of the Maldron Hotels, was appointed to conduct an investigation into Mr McCann’s grievance and he met him on May 29th and again on June 13th 2019.  He met the complainant on June 6th.  Mr O’Neill interviewed 12 other employees and he reviewed around 35 emails.  On July 22nd 2019, he upheld Mr McCann’s grievance about the contents of the complainant’s letter of May 13th, finding that the letter was inappropriate and had been sent with an improper motive to “threaten and intimidate Des McCann and to have him ‘back off’ from fulfilling his duties to supervise and manage the Company’s operations in Sligo.”  Arising from his enquiries, Mr O’Neill recommended that a disciplinary investigation be initiated into a cash payment to a former employee and also, into the allegation that emerged during the course of his investigation that the complainant threatened to “take the company for €150,000.”  On July 30th, the head of HR wrote to the complainant to inform him that a disciplinary investigation would be carried out into these and four other issues that arose during the grievance investigation.  In total, six issues were to be investigated:

1.       Payment from petty cash to a former employee on December 25th and 29th 2018;

2.       Payment from petty cash to two porters in February 2019;

3.       Payment from petty cash to a chef for work done in April 2019;

4.       The making of false allegations of intimidation and harassment against Des McCann;

5.       Threatening to “take the company for €150,000” if he was not allowed to do what he wanted in the Sligo hotel;

6.      Leaving a health and safety seminar in the Clayton Hotel in Dublin on May 28th 2019, without informing his manager and returning at 11.40pm.

September 2019:  Disciplinary Investigation

Tony McGuigan, who was the head of procurement with the respondent, was appointed to investigate these six allegations of misconduct.  In the course of his enquiries, Mr McGuigan decided that issues number 4 and 6 should not be included in his investigation.  He added in a new allegation (number 7), related to the performance of security duties by the two porters in February 2019, when they were not registered with the Private Security Authority.  On September 17th 2019, Mr McGuigan recommended that allegations 1, 2, 3, 5 and 7 be the subject of a disciplinary hearing.

December 2019:  Disciplinary Hearing

A disciplinary hearing took place on October 16th and November 4th 2019, chaired by Ms Caitríona Conway, general manager of the Maldron Hotel in Portlaoise.  The complainant then sought an injunction in the High Court to have the disciplinary process halted.  That matter was settled on November 19th when the respondent agreed to appoint a different chairperson for the disciplinary hearing.  The disciplinary hearing re-commenced on December 3rd 2019, with the appointment of Shane Casserly, who was then the head of strategy and development, as chairperson.  In January, the legal representatives of both sides summarised their clients’ positions in final written statements for consideration by Mr Casserly.    

January 2020:  Dismissal of the Complainant

The respondent’s decision to dismiss the complainant is set out in a letter from Mr Casserly on January 30th 2020.  In respect of the five allegations which were the subject of the disciplinary hearing, Mr Casserly reached the following conclusions:

1.              Payment of cash to a former employee on December 25th and 29th 2018.

Mr Casserly concluded that the two instances in which the complainant authorised the payment of cash to a former employee for work done on December 25th and 29th 2019 was a breach of company policy.

2.              Payment of cash to two porters in February 2019.

While the hotel accountant rectified the payment of cash to the two porters and put the payment through payroll, Mr Casserly decided that there was no necessity to request that the porters be paid from petty cash, and that by making this request, the complainant was in breach of the company’s policy.

3.              Payment from petty cash to a chef for work done in May 2019.

Mr Casserly found that there was no requirement for the chef to be paid in cash and that by requesting and approving the payment, the complainant was in breach of company policy.

4.              Threatening to “take the company for €150,000” if he was not allowed to do what he wanted in the Sligo hotel.

Mr Casserly concluded that the complainant made this comment, and that it demonstrated a significant disregard for his responsibilities and obligations as a general manager.

5.              The assignment of two porters to security duties at the hotel in February 2019, when they were not registered with the Private Security Authority to carry out security work.

Mr Casserly dismissed this allegation, finding that the company’s evidence was inconclusive.

At the end of a very long and detailed letter, Mr Casserly concluded that his findings represented a serious breach of the company’s policies and were a serious violation of the company’s values and the trust placed in the complainant as a general manager.  He found that his actions, as a whole and separately, constituted gross misconduct and he was dismissed without notice.

February 2020:  Appeal of the Decision to Dismiss the Complainant

In a letter of February 5th 2020, under 12 headings, the complaint appealed against the company’s decision to dismiss him.  A meeting took place on February 11th, with Dermot Crowley, who was then the deputy chief executive officer, as the decision-maker of the appeal.  Both sides provided written submissions to Mr Crowley after the meeting.  On February 18th 2020, Mr Crowley overturned Mr Casserly’s finding with regard to number 4 above, but he concluded that the sanction of dismissal was “reasonable, proportionate and fully justified in all the circumstances.”

It is the respondent’s case that the decision to dismiss the complainant is based on “repeated, egregious and admitted breaches of the company’s cash-handling policies.”  The fact that the respondent is a public limited company (PLC) is of particular significance.  On four separate occasions, the complainant authorised cash payments to people he engaged to do work for the company.  The first two occasions, in December 2018, involved work done by the complainant’s partner, whose employment as restaurant manager in the Clayton Hotel in Sligo had been terminated in  August 2018.  In the third instance, the complainant promised to pay cash to two long-serving porters, who, were never paid in cash previously, but were alleged by the complainant to have demanded a cash payment to do security work in February 2019.  The final occasion was in May 2019, when a cash payment was offered to a chef, who is an acquaintance of the complainant.  

In his letter confirming the dismissal of the complainant, Mr Casserly referred to the explanation that, on Christmas Day 2018, there were exceptional circumstances that required him to ask his partner to work in the hotel:

“Leaving this particular aspect aside however, even if exceptional circumstances did arise that required Kasia to be engaged to work on Christmas Day, the procedure is that an invoice would be sought and obtained and paid through accounts.  It is perfectly possible that an exceptional event may have occurred that required the last-minute engagement of a replacement member of staff.  What had not been explained is how, even if it was an exceptional event, there was any justification for the payment of Kasia by cash rather than through payroll or accounts through the issue of an invoice in the usual and accepted manner.”

In his submission at the hearing, Mr Shearer said that this is the central finding made by Mr Casserly and “it is logic which applies equally to the payments of cash made to Kasia, the two Polish employees and to the chef at Easter.  There is and was no reason for payment by means other than through payroll or accounts.”

In defence of his actions, the complainant suggested that he was not made aware of the cash-handling policies, or that, alternatively, they did not apply to him.  He claimed that the policy was a draft and that he had not been made aware of the “ins and outs” of the details.  Mr Shearer submitted that a transcript of the evidence at the disciplinary hearing shows that the complainant knew about the policy and its applicability.

It is the company’s position that the complainant was aware at all times that petty cash could not be used to pay wages, but he was certainly aware following the Christmas Day 2018 incident, when he was informed by the hotel’s accountant, that wages were not to be paid through petty cash.  Three further breaches of the company’s cash-handling policy occurred after that incident, conduct which the respondent decided was inexcusable.

The complainant’s contention is that exceptional circumstances in each case resulted in the need to pay wages from petty cash.  In accordance with the respondent’s policy on petty cash, in exceptional circumstances, employees may be given a cash advance, but none of the payments investigated were a cash advance.  On two occasions, when the former restaurant manager was paid in cash, and when the chef was paid cash in May 2019, the individuals who received the payments were not employees.  The company’s case is that no exceptional circumstances arose that necessitated cash payments for work done in the hotel.  

At the meeting to appeal against the decision to terminate his employment, the complainant argued that that finding reached by Mr Casserly of gross misconduct was a “cumulative” finding and that it could be upset if one of his findings was overturned.  The company’s disciplinary procedure provides that a breach of the cash-handling policy is gross misconduct and its position is that its each of the four findings are findings of gross misconduct warranting the dismissal of the complainant. 

The complainant argued that the decision to terminate his employment was too severe a sanction and that it was unreasonable.  The company’s position is that the cash-handling policy is of critical importance and the fact that the company is a PLC with strong reporting and compliance requirements was a critical factor in their decision.  The fact that there wasn’t just one, but four breaches of the policy and that three occurred after the complainant was instructed by the hotel’s accountant that what he was doing was wrong, was relevant to, and supported the decision to dismiss the complainant.

The respondent submits that the findings made against the complainant at the disciplinary hearing that commenced on December 3rd 2019, were reasonable and proportionate and supported by the evidence.  They argued that the sanction of dismissal was provided for in the disciplinary policy and that it was fair, reasonable and proportionate in the circumstances.

I have carefully considered the evidence given by the four witnesses on behalf of the respondent on August 3rd and October 21st 2021.  It is my view that the most critical witness was Mr Casserly, as he decided that the complainant should be dismissed.  I have therefore given most attention to Mr Casserly’s evidence and I have very briefly summarised the evidence of Mr McGuigan, the group internal auditor, Ms Wynne, the group head of HR and Mr Crowley, then the deputy chief executive, who heard the complainant’s appeal against his dismissal.

Evidence of the Group Internal Auditor, Mr Macarten McGuigan

Mr McGuigan has been the group internal auditor since 2014, when the company became a PLC.  He said that he was responsible for creating the Accounting Procedures and Controls Manual (APC Manual) and he worked with a team in his department to distil 16 or 17 separate documents into one manual.  Section 4 of the manual, dealing with “Income Audit and Hotel Revenues, Cash Management and Bank Accounts” was submitted in evidence and it is a comprehensive document dealing with every aspect of finance and cash-handling in the respondent’s hotels.  Section 4.5 sets out the company’s petty cash policy.  The section opens with the statement,

“4.5.1.1  Petty cash is only to be used for minor, sundry and non-recurring items to the value set by the individual property.”

Section 4.5.2 deals with “Petty Cash Exclusions and Exceptional Items.”

“4.5.2.1  Petty cash is not be (sic) used for the following:

Reimbursement of staff expenses which are to be processed through payroll, as a non-taxed item, in line with Company policy.

Wages and salaries, which must be processed through the hotel’s payroll system and paid by bank transfer or cheque.”

Mr McGuigan explained that, if it is approved by the HR manager, the policy provides that an employee may be paid wages in advance, which must then be processed through payroll by the hotel accountant.  The advance is then repaid through wages over an agreed number of weeks.  An employee who does not yet have a bank account may be paid their wages in cash, if the wages are processed through the payroll in the first instance.  This cash payment must be supported by a payslip.

When he was asked what should have happened with regard to the payments to the former restaurant manager in December 2018, Mr McGuigan said that she should have been asked to submit an invoice to the hotel.  The same applies to the chef who worked in the hotel in May 2019. 

Cross-examining of Mr McGuigan

Mr Creed put it to Mr McGuigan that, in her evidence at the disciplinary hearing, the hotel accountant in Sligo said that she wasn’t aware of the APC Manual.  Mr McGuigan replied, “how could she comply for months and months if she didn’t know about the policy?”  Mr McGuigan said that the accountant should have had a copy of the document, because when audits are carried out in the hotels, they are carried out in accordance with the APC Manual.

Mr Creed pointed to an email from the head of HR to Mr McGuigan of June 17th 2019 in which Ms Wynne asked for a copy of the cash-handling procedures.  This suggests that the HR department hadn’t got the Manual.  Mr Creed suggested that the policy is for finance staff, but Mr McGuigan replied that it contains a policy on cash payments which is relevant to hotel managers. 

Mr Creed said that it is the complainant’s position that, while the cash payments were organised, the questions is, “was Mr Ryan acutely aware of the policy?”  He asserted that he was not aware.

Referring to the provision in the APC manual for exceptional cash payments, Mr Creed described the “unusual, rare and exceptional circumstances” that occurred on Christmas day 2018 when the head chef could not attend work due to the death of his father.  Mr McGuigan said that he would have expected a fall-back plan to be in place to cover the chef in those circumstances.

Evidence or Mr Shane Casserly, Head of Corporate Development

Mr Casserly conducted the disciplinary hearing on December 3rd 2019.  This followed the compromise outcome from the complainant’s application to the High Court to have the disciplinary hearing halted.  In his evidence, Mr Casserly said that he was aware that a previous manager heard evidence in October 2019 and he received a transcript of that evidence.  He read the evidence of the two Polish employees who were employed as porters but who provided a security service in February 2019 and he read the evidence of the food and beverage manager regarding the hiring of a temporary chef around the May public holiday that same year. 

Referring to what he labelled as “Allegation 1” concerning the payments to the former restaurant manager on Christmas Day and December 29th 2018, Mr Casserly described the absence of the chef as “a challenging episode” and he said that it may have been necessary to bring in an external person.  He said that the breach of procedure occurred when that person was paid out of petty cash.  He said that an invoice should have been produced.  He said that he found that no effort was made to find a solution that was consistent with corporate controls.    

Mr Casserly said that, when the hotel accountant was asked to pay the former restaurant manager €60 for working on December 29th, she “contested” the €200 in cash that was paid to the same person on Christmas day.  The complainant attempted to arrange a cash payment for December 29th, but this was “blocked by the accountant” who subsequently agreed to issue a gift voucher. 

Mr Shearer referred to “Allegation 2,” the payment of cash to the two porters.  Mr Casserly said that he has no doubt that the complainant was aware of the petty cash policy in February 2019.  Mr Shearer referred to the third incident at the May bank holiday, when the complainant brought in a temporary chef.  He suggested to Mr Casserly that this seemed like repetitive behaviour.  Mr Casserly said that there was no reason not to pay through the normal channels.  

Asked if he considered any sanction other than dismissal, Mr Casserly said that he assessed the breaches and the company’s policy is clear.  He said that he couldn’t see any other option.

Cross-examining of Mr Casserly

Mr Creed suggested to Mr Casserly that he placed a huge importance on the evidence of the hotel accountant.  Mr Casserly agreed that her evidence formed “a strong tenet of my conclusions.” 

In response to Mr Creed, Mr Casserly set out the issues he was asked to investigate:

1(a) and 1(b):  Mr Casserly said that the former restaurant manager, who is the complainant’s partner, finished working in the hotel in August 2018.  Mr Casserly said that he was informed that, because of her relationship with the complainant and his role as the hotel manager, this former employee left her job in the hotel on agreed terms.  On December 25th 2018, she was paid €200 in cash for working in the hotel on that day.   When she did staff training in the hotel on December 29th, the complainant requested a cash payment of €60, but, following the intervention of the accountant, this was paid as a gift voucher. 

2.  In return for providing security duties at the hotel on February 15th, the complainant requested that two porters be paid €70 in cash.   This was subsequently processed through the payroll.

3.  A local chef used to work in the hotel, but he left at the end of 2018.  The complainant arranged for him to work on Easter Sunday and requested payment of €100 in cash. 

4.  The complainant’s threat to “take the company for €150,000.”  Following the appeal hearing, this allegation was not upheld.

5.  The allegation that the complainant asked the two porters to provide security duties when they were not licensed to do so by the Private Security Authority.  Mr Casserly found that the company’s evidence on this matter was inconclusive.

Referring to allegation 1(a), Mr Casserly would not acknowledge that the absence of the head chef on Christmas Day was an exceptional event.  He said, “hotels hit these events.”  He said that the complainant should have talked to his line manager, Mr McCann, or other managers and, perhaps, he could have brought in his partner, but he should have paid her “through the books.”  Mr Casserly said that Dalata has relationships with agencies and they have another hotel in Galway, which was two hours away from Sligo.  He said that he complainant could have reached out to the executive head chef for support.  He said that every manager has their mobile phone switched on and if he had reached out for advice and, if the conclusion was that no one was available, then he could have brought in his partner.

Asked about allegation 2, the funeral in February, Mr Creed asked Mr Casserly what the complainant could have done differently.  Mr Casserly said he had no issue with the porters working on that day, but he said that the complainant had attempted to pay them in cash.   Mr Casserly said that the emails between the Finance and HR departments were evidence that the complainant intended to pay the porters and that he was insisting on paying them in cash.  In the end, the payments authorised by the complainant were processed correctly by the accountant.

In his cross-examining of Mr Casserly, Mr Creed referred to allegation 3, as the “Easter incident.”  Easter Sunday in 2019 occurred on April 21st, although the payment to the chef was previously said to have occurred in May 2019.  (There appears to be some confusion regarding whether the local chef worked on Easter Sunday, April 21st 2019 or on the May public holiday, on May 6th.  The exact date on which he worked is not material to the outcome of this hearing and I will assume that he worked on Easter Sunday).  Mr Creed pointed out that the respondent’s executive head chef was on holidays and couldn’t be contacted for support.  Mr Casserly replied that the deputy executive head chef was available, but Mr Ryan did not contact him.  Mr Casserly said, “he reached out to no one.”

Mr Creed asked Mr Casserly what was so bad about what the complainant had done.  He replied that in a large organisation and a PLC, he was acting independently, “off on a tangent” and other employees were witnessing this.  On December 28th, the hotel’s accountant had made it clear that cash payments were not permitted but the complainant authorised wages to be paid out of cash again on December 29th, and on two further occasions in February and May.

Re-direction of Mr Casserly by Mr Shearer

Mr Shearer referred to the notes of the evidence of the hotel accountant when she was interviewed during the disciplinary investigation on October 16th 2019.  She said that she came back to work after Christmas on December 28th and she looked for the petty cash book.  She noted that €200 had been paid in cash to the former restaurant manager who is the complainant’s partner.  She said that the complainant told her that he had to bring her in to work or “Christmas Day would have been a shit show.”  She said that she asked for an invoice but that the complainant “declined to give me an invoice for Christmas Day.”

Mr Shearer asked Mr Casserly what significance he placed on this evidence.  Mr Casserly said that Ms Walsh is the hotel accountant. 

Mr Shearer asked Mr Casserly if he considered that it was the hiring of the former restaurant manager, or the two porters or the chef in May to do work that was the problem, or was it the cash payments?  Mr Casserly replied that it was the payments that was the problem.  He referred particularly to the hiring of the chef in May and the payment to him of €100 from petty cash, having been specifically instructed by the hotel accountant not to pay wages in cash.

Mr Shearer referred to the transcript of the complainant’s evidence at the disciplinary hearing on December 3rd 2019.  At the meeting, he agreed that his partner left her job in the hotel in August 2018, that she received a severance payment and that she “left at the request of the company due to the nature of our relationship.”  Mr Casserly said that it is not appropriate for partners to work in the same property and that it was understood that they would not work together.

At the conclusion of Mr Casserly’s evidence, Mr Creed asked me to consider the total evidence of the hotel accountant, which he said is important.

Evidence of Ms Dawn Wynne, Group Head of Human Resources

Ms Wynne was called to give evidence by Mr Creed, on behalf of the complainant, and she was not called to give direct evidence.

Mr Creed referred to documents sent to the respondent’s side on the morning of October 21st 2021 and copied to the WRC.  The first of these is a draft termination agreement, prepared for the complainant, in anticipation of his departure from the company on May 10th 2019.  Ms Wynne said that this was produced “on the back of a request from Des McCann” in early May.  The offer was of an ex-gratia payment of €25,260 and she understood that the complainant sought further enhancements and was offered an additional €15,000.

Mr Creed then referred to the letter from the complainant to Mr McCann dated May 13th 2019 in which he accused Mr McCann of trying to manage him out of the company.  Ms Wynne said that she got this letter after the draft termination agreements were sent to the complainant.  Mr McCann then submitted a grievance about the complainant’s conduct towards him in the letter and Ms Wynne appointed Conal O’Neill to carry out an investigation.  Ms Wynne said that her engagements with Mr McCann were all on the telephone.  Ms Wynne was not able to say when the complainant received the draft agreement.  She said that the complainant’s letter of May 13th was not given to her on that date, and she thinks that she may have received it on May 16th.  She wrote to the complainant on May 17th advising him of his right to submit a grievance against Mr McCann.

Mr Creed referred to a third document, a copy of an email from Ms Wynne to Mr McGuigan and Mr Stephen Clarke in the finance department in which she said,

“I have a query around cash payments and petty cash.  Is there any policy or SOP that was sent out to the properties that you could share with me please?  I need this today if possible.”

In response to Mr Creed, Ms Wynne said that her role was to facilitate the investigation into Mr McCann’s grievance and she wanted to ensure that people had the documents they needed.  She said that she was aware that there was a document about cash management in existence but she hadn’t got it in her files.

Following this evidence, there was some debate between the representatives and Mr Creed submitted that “everything kicked off” from the point when the complainant didn’t accept the termination agreement.

Evidence of Mr Dermot Crowley, then the Deputy Chief Executive

On February 11th 2020, Mr Crowley heard the complainant’s appeal against his dismissal.  In his direct evidence, Mr Crowley said that he was never asked to consider if the process that ended with the termination of the complainant’s employment was a fair process. 

Mr Crowley referred to the “de-centralised” model of managing the hotel properties and he described the appointment of a general manager as a “key appointment.”  He also referred to the importance of having controls over cash and the critical importance of processes to manage cash.

Mr Shearer asked Mr Crowley if he was certain from the evidence of the hotel accountant that the complainant had knowledge of the cash-handling policies.  Mr Crowley replied that he was certain of this.  He said that further cash payments were made in February and again at the end of April.  He said that each of the four incidents were breaches of the company’s policies, and three occurred after the conversation the complainant had with the hotel accountant in which she told him not to pay wages in cash.

Asked about the exceptional circumstances that prevailed on the four occasions, Mr Crowley said that sudden absences are not exceptional.  In respect of the funeral in Sligo in February, he said that hotels deal with potential flashpoints on a regular basis.  The staff shortage at Easter 2019 was not exceptional.  He said that he could see no basis for considering that exceptional circumstances existed that required the payment of wages in cash.  He said that the policy is clear, and that wages may only be paid in cash as an advance, or as a temporary measure for a new employee.

Mr Shearer reminded Mr Crowley that the former restaurant manager and the chef who worked at Easter 2019 were not employees.  He said that there was no reason that they could not have submitted invoices.

Mr Shearer referred to the allegation that the complainant had threatened to “take the company for €150,000.”  Mr Crowley said that it appeared to him that there was confusion about whether the complainant had denied the allegation and he felt that there was enough doubt not to uphold Mr Casserly’s findings on the issue.

Mr Crowley said that it was clear to him that the cash-handling policy had been breached on four occasions, and that three instances occurred after the complainant was told by the hotel accountant not to pay wages in cash.  With regard to an alternative sanction to dismissal, Mr Crowley said that if there had been just one breach, a final written warning may have been appropriate.  He said that a general manager not respecting cash procedures and the fact that there were four instances made it crystal clear to him that a finding of gross misconduct was the right outcome.

Cross-examining of Mr Crowley

Mr Creed asked Mr Crowley about the charges that the complainant was expected to address.  Mr Crowley said that he addressed each of the 12 points raised in Mr Creed’s letter of February 5th 2019, concerning the grounds of appeal. 

There was some disagreement at this point in Mr Crowley’s evidence about the number of cash payments that were investigated, and Mr Casserly’s division of the December 2018 incidents into 1(a) and 1(b).  Mr Creed said that cash was not paid out on December 29th and only three incidents should have been considered.

Mr Creed suggested that the cash-handling policy was not well known in the hotels.  Mr Crowley said that he relied on the evidence of the hotel accountant about cash payments.  Mr Crowley did not accept that the complainant relied on the accountant’s advice on Christmas Day.  In February, when he asked the porters to work overtime, he directed that they be paid in cash, and the accountant objected.  Then she discovered that the chef had been paid €100 for working at Easter.

Concluding his cross-examining, Mr Creed asked Mr Crowley if there was any loss to the company as a result of the complainant’s actions.  Mr Crowley relied that “we don’t operate in the hope that Revenue don’t find things.”  He said that the fact that there was no loss is not relevant.

In two submissions comprising more than 50 paragraphs, provided to the WRC in advance of the hearing of this complaint, Mr Creed set out the complainant’s position that the findings reached by the respondent were incorrect and flawed and the process was unfair.  I will now attempt to summarise the basis of the complainant’s case in this regard.

Of the five allegations made against the complainant, three breaches of the company’s cash-handling procedures were upheld.  An allegation that, by threatening to “take the company for €150,000,” the complainant caused harm to the hotel’s reputation, was not upheld.  The fifth allegation, an alleged breach of the licensing requirements associated with the provision of private security, was not upheld.

In his submission, Mr Creed claimed that the three breaches of the company’s cash-handling procedure were known to the complainant’s line manager, Mr McCann, who decided not to initiate a disciplinary investigation.  In May 2019, the complainant was offered a severance package and when he didn’t accept this offer, the complaints and allegations were made against him.

Mr Creed listed the complainant’s grounds of appeal against the respondent’s decision to dismiss him:

A.              Four Allegations of Breaches of the Cash-handling Policy were Considered

On September 18th 2019, the head of HR wrote to the complainant, informing him that, based on the recommendations of the manager who conducted the disciplinary investigation, she intended to proceed to a disciplinary hearing into five allegations of misconduct.  (See page 3 and 4 above).  In January 2020, in his letter to the complainant confirming his dismissal, Mr Casserly divided the first breach of the cash-handling procedures into 1(a) and 1(b), and, by the time he finalised his letter, he was referring to four breaches of the cash-handling policy.  He decided that, based on these four breaches, and the complainant’s threat to “take the company for €150,000,” he should be dismissed.  He found that there was no substance to the allegation that, by asking two porters to do security work in February 2019, the respondent was in breach of the licensing regulations of the security industry.

Mr Creed submitted that a fourth allegation concerning a breach of the cash-handling procedure was never formally put to the complainant.  He argued that the respondent reached a decision to dismiss the complainant “by considering the charges on a cumulative basis” and he submitted that this renders the overall decision ill-founded and unsafe. 

Allegation 1(a) – Christmas Day Payment

Mr Creed referred to the fact that the hotel was full on Christmas Day 2018 and the head chef was absent due to the death of his father.  The complainant called in the former restaurant manager in because he had confidence in her skills and familiarity with the hotel.  Mr Creed submitted that, because what he referred to as the “draft petty cash policy” provides that wages cannot be paid in cash to employees, the complainant did not breach the policy, because the former restaurant manager was not an employee on Christmas day 2018.  As the payment was recorded as “restaurant wages” by the hotel’s accountant, Mr Creed submitted that the petty cash policy was not contravened, as alleged by the respondent.

Mr Creed referred to the respondent’s description of the petty cash policy as “a promulgated company policy.”  He submitted however, that, while the document may have been known to employees in the finance department, the minutiae of its operation was not well known to employees who worked “at the coal face” of operations.  Three senior financial managers were called to give evidence on this point and none could say when the policy was formally adopted in the company.  Mr Creed referred to emails sent in August 2015 which were produced in evidence during the disciplinary hearing, and which the complainant was copied on.  He said that these emails lack credibility because the policy itself was not produced until September 2015.  He also referred to the fact that the policy was intended for use by “hotel accountants and regional financial controllers” and as “a reference for hotel management.”

Mr Creed claimed that confusion about the policy is best evidenced in the email from the head of HR, Ms Wynne, to Mr McGuigan and Mr Clarke in the finance department, in which, referring to a query about cash payments and petty cash, she asked, “Is there any policy or SOP that was sent out to properties that you could share with me please?”  If the policy was widely promulgated, Mr Creed questions how Ms Wynne could have been unaware of its existence.

In his evidence to the disciplinary investigation in October 2019, Mr McGuigan stated (page 54 – 56 of October 16 transcript) that the policy would not have been issued to every hotel manager, whereas, in their findings, the respondent stated that Mr McGuigan gave evidence that all senior managers were aware of the policy.  The accountant at the Clayton Hotel in Sligo confirmed that she had not received a copy of the policy.

Mr Creed argued that this evidential discrepancy calls the accuracy of the finding of gross misconduct into question.

B.              Evidence not Correctly before the Decision-maker

Allegation 1 – Payment to the Former Restaurant Manager

In reaching the conclusion that the complainant should be dismissed for gross misconduct, the respondent referred to a confidential severance agreement entered into by the former restaurant manager which, it was claimed, contained a provision that she could not work in the hotel again.  During the appeal hearing, the respondent conceded that no such document was ever submitted in evidence, and it is the complainant’s case that the finding regarding this allegation is incorrect.

Mr Creed submitted that the fact that the former restaurant manager is the complainant’s partner should not have been a material consideration in the respondent’s finding regarding a breach of the cash-handling policy.  He claimed that it should not have been a consideration when imposing an additional sanction.  The respondent alleges that the breach of the policy took place despite the existence of a severance agreement which precluded the former restaurant manager from working in the hotel.  This finding is incorrect and is not supported by the evidence and it calls into question the accuracy and safety of the respondent’s overall findings.

Allegation 2 – Payment at the time of the Funeral in February 2019

Mr Creed referred to the payments of €70 each to two porters in return for providing security at the hotel in February 2019.  He noted that that the hotel accountant “grossed up” the payments and put them through payroll and that this was approved by the group financial controller, Mr Clarke.  It is the complainant’s case that this shows that his approach to the payments was supported by the hotel accountant.  Mr Creed submitted that “these arrangements had been put in place by the Accountant before the gentlemen were paid.” 

Allegation 3:  Payment to the Chef at Easter – April 28th 2019

Easter Sunday in 2019 fell on April 21st, although the complainant’s submission refers to Easter being April 28th.  There were 450 guests in the hotel and, of five chefs on the roster, only one was available for work.  The hotel didn’t have a relationship with a temporary agency and the food and beverage manager contacted the complainant, who he arranged for an experienced local chef to come in to work for a day.

Mr Creed’s submission asserts that it is uncertain if the petty cash policy was contravened, because the chef was not an employee.  Aside from this, he argued that the payment was covered by the “exceptional circumstances” provision at clause 4.5.2.2 of the draft policy.

C.              Exceptions to the Policy – Payments for an Exceptional Event

The complainant’s position is that he did not breach the cash-handling policy and that the payments he arranged should have been considered to be for “exceptional events,” with his actions taken for the good and benefit of the business.  The complainant’s position is that there is no definition in the policy of what is an exceptional event or an exceptional circumstance.

Mr Creed submitted that Mr McGuigan, the group internal auditor, stated in evidence that it was acceptable for the payments that the complainant authorised to be paid out by petty cash and subsequently put though the payroll by the hotel accountant.  He said that this demonstrates that the three allegations were “undoubtedly deemed to be exceptional circumstances.”  Mr Creed asserted that the respondent failed to consider the evidence of Mr McGuigan or the evidence of the executive head chef, when determining what is an exceptional circumstance and acceptable use of petty cash.

D.             Nature of the Complainant’s Conduct and Outcome

It is the complainant’s case that any reasonable employer would not consider the complainant’s actions to reach the threshold of gross misconduct, warranting the dismissal of a valuable employee.  Even if the allegations could be properly proven, Mr Creed submitted that they do not amount to acts of gross misconduct for which dismissal is the appropriate and reasonable response.  Mr Creed referred to the decision of the former Employment Appeals Tribunal (EAT) in the case of Lennon v. Bredin, M160/1978, where the Tribunal stated:

“We have always held that this…applies only to cases of very bad behaviour of such a kind that no reasonable employer could be expected to tolerate the continuance of the relationship for a minute longer; we believe the legislature had in mind such things as violent assault or larceny or behaviour in the same serious category.”

Mr Creed submitted that the uncertainty surrounding the operation of the draft policy and the respondent’s departure from the most basic consideration of evidence leaves the complainant in a position whereby he has been treated unfairly and, on the balance of probabilities, none of the allegations presented at the disciplinary hearing ought to be upheld as matters of fact.

The respondent’s case is that, because the complainant disputed the allegations against him, and “in failing to accept his guilt,” this led to an irreparable breach of trust between the parties.  This conclusion has incorrectly taken account of what it considered to be the complainant’s general approach to matters.  The complainant accepted in evidence that, if he had been aware of certain issues, “he would most certainly do things differently in the future.”  On this basis, the complainant argues that the conclusion reached is unfair and the penalty was unreasonable and draconian.

Mr McGuigan, in his evidence to the disciplinary investigation, confirmed that there had never been a complaint made against the complainant in relation to financial matters.  Despite the respondent’s concern about exposure to a Revenue audit, Mr McGuigan confirmed that there had never been an auditing problem in the Clayton Hotel in Sligo.

Mr Creed argued that the facts show that the complainant dealt with circumstances which were outside his control in a responsible and reasonable manner, in keeping with the hotel’s obligations to guests and its statutory obligations to ensure that the premises “are as safe as reasonable care and skill can make them.”  He argued that, if the complainant had not acted as he did, he would have been guilty of gross misconduct.

Arriving at their decision to dismiss the complainant, the respondent failed to place any importance on the complainant’s unblemished work record over 30 years in the hotel business, and for over five years with the Dalata Group.  The conduct for which he was dismissed was not considered to be so serious that he was suspended at the commencement of the disciplinary investigation.  This contradicts any finding of a breach of trust or of gross misconduct. 

In summary, the complainant submitted that the termination of his employment was not an appropriate response to his actions.  A decision to dismiss should be proportionate to the gravity of the complaints and proportionate to the gravity and effect that the dismissal would have on the employee, who has three young children.  For all of these reasons, the complainant asked me to find that his dismissal was unfair.

Evidence of the Former Restaurant Manager, Ms Kasia Smolinska

Ms Smolinska said that she is the complainant’s partner and she started working in the Clayton Hotel in Sligo in 2012.  She said that she left on good terms in 2018, when she agreed to accept a termination settlement.  She then opened a café in Sligo.  She said that she was never told that she could not go back to work in the hotel.  She named two managers who, since then, asked her to go back.

Referring to Christmas 2018, Ms Smolinska said that the operations manager, Mr Noel McLeish, phoned her on Christmas eve and said that he was “stuck” and asked her if she could work the following day.  Although she said that Christmas Day was her only day off that year, she wanted to help him out and she couldn’t say “no.”  She worked from 10.00am until 8.00pm in the restaurant and Mr McLeish paid her €200.  A few days later, she said that Mr McLeish asked her to go in again to train the staff on the Micros software used in the restaurant.  On December 29th, she said that she worked for four hours and, two months later, she was given a €60 “One For All” voucher by the HR manager.  

Cross-examining of Ms Smolinska

Ms Smolinska said that she handed in her notice in the Clayton Hotel in Sligo in August 2018 with the intention of setting up a café.  She said that she didn’t ask for a termination payment and she got it because “people thought I did a good job.”  Before she left, she agreed with Mr Shearer that she was offered a job in one of the company’s hotels in Galway or Derry. 

Mr Shearer suggested to Ms Smolinska that she left because she was in a relationship with the complainant, who was the hotel manager.  He said “one of you would have to leave.”  Ms Smolinska replied that she didn’t know.  Mr Shearer said that the company decided that they shouldn’t work together and that this was the reason she was offered a severance payment.  Ms Smolinska said that she wasn’t at meetings, and Mr Shearer reminded her that she was at the meeting at which it was agreed that she would leave on agreed terms.

Ms Shearer asked Ms Smolinska about her café and how she pays her staff.  She replied that she pays them in cash.

Mr Shearer asked Ms Smolinska about Mr McLeish’s phone call and his request to her to come to work on Christmas Day.  Ms Smolinska said that he told her that the head chef’s father had died.  She said that she didn’t talk about money and that she didn’t insist on cash.  She said that she doesn’t know why she was paid cash. 

Mr Shearer referred to the copy of the petty cash docket dated December 25th 2018 for €200 which is stated to be authorised by “Fergal” and received by “Fergal”.  Ms Smolinska’s first name, Kasia, is also on the document and she agreed that she signed the docket on Christmas day.  She told Mr Shearer that she insisted on being paid cash. 

On December 29th, Ms Smolinska said that after she did the training, she was approached by a staff member and told that she would have to sign for a cash payment.  She said that she got a One For All voucher two months later.  When she finished working on December 29th, there was no one in accounts.  She said that she signed for cash and not a voucher and she thought she would get cash.  Mr Shearer asked Ms Smolinska if, when Mr McLeish asked her to come in on December 29th, she had insisted on cash and she replied, “no.”

Evidence of Mr Noel McLeish, Operations Manager

Mr McLeish said that he started working in the Clayton hotel in Sligo in 2015 and he left in 2019.  He now manages a pub in the town. 

Mr McLeish said that on Christmas eve 2018, he heard that the head chef’s father had died and that he wouldn’t be in the following day.  He asked the complainant if he could ask Ms Smolinska to come in and he phoned her and asked her to come in a run the restaurant.  He thought she would have to work for around nine and a half or 10 hours.  He said that he had a discussion with her about pay for the day.  When she worked in the hotel, she earned roughly €15.00 per hour and he thought he should pay her double for Christmas day.  He signed the page which is attached to the petty cash voucher which states, “€200 wages.  Extra cover Restaurant Christmas Day.” 

Mr McLeish said that he was asked to contact Ms Smolinska about training on the Micros system for a few hours on December 29th.  He agreed that he spoke to the complainant about bringing her in to do the training, but he said that he only arranged payment for Christmas Day.

Mr McLeish said that, until today, at the hearing, he was not aware of the company’s cash-handling policy.

Cross-examining of Mr McLeish

Mr Shearer asked Mr McLeish about his knowledge of cash-handling procedures and he replied that all he knew was that the safe had to be kept locked.  He said that the issue of paying staff by cash never arose.  

Mr Shearer referred to Mr McLeish’s evidence that he phoned Ms Smolinska on the night of December 24th.  Mr McLeish said that he spoke to the complainant beforehand and that he wasn’t too happy.  He said that he told him he needed help.  Asked about the payment of €200 in cash, Mr McLeish said that he “knew no other way of paying her.”  He said that it was his decision.  Mr Shearer referred to the petty cash docket which was shown to be authorised by “Fergal” and received by “Fergal.”  Mr McLeish said that he hadn’t got a petty cash voucher on the night.  He said that the complainant wasn’t in the hotel when he signed the note. 

Referring to the training that Ms Smolinska did on December 29th, Mr Shearer asked Mr McLeish how this was arranged.  Mr McLeish said that “HR said that we need someone to do the training.”  Mr Shearer referred to the transcript of the record of the disciplinary hearing at which he asked the complainant what the emergency was.  The transcript shows that the complainant said that he was asked at the 11.00am meeting to get someone to train the staff on Micros and he said, “leave it with me I’ll see what I can do.”  That morning, he arranged for Ms Smolinska to come in after 6.30pm.  Mr McLeish replied, “Fergal spoke to HR and they came to me.” 

At the opening of the third day of the hearing, Mr Shearer, for the respondent, referred to the petty cash voucher written out by a staff member in the hotel, at the request of the complainant.  He explained that the petty cash docket is from a petty cash book and it is attached to an unrelated document, which has a hand-written authorisation on the back.  The docket is said to be authorised by the complainant and the €200 is said to be received by him on December 25th 2019.  We know from Mr McLeish’s evidence that he wrote “€200 wages Extra cover Restaurant Christmas Day” on the page to which the docket is attached.  The page is signed by him and the complainant.

Evidence of the Complainant, Mr Fergal Ryan

The complainant said that he was the general manager for four hotels managed by the respondent since 2014.  He was assigned to properties to get them into profit, to build the staff teams and to “tidy up.”  He was paid a salary of €101,000 plus pension contributions. 

The complainant said that he had no induction or training in cash management and no training on petty cash.  He gave an example of using petty cash to buy oranges when the hotel had none in the kitchen.  He said that the first time he saw the ACP manual was in September 2019 during the disciplinary investigation.  He said that he knew there were policies in place, but he was not familiar with the details of the manual.  He said that he knew that cash payments were to be “kept tight” and he said that petty cash was only needed two or three times a week.  He said that if petty cash was requested, the reason had to be stated, a docket signed and a receipt submitted.  When he started in the Clayton Hotel in Sligo, the complainant said that around €5,000 per month was spent from petty cash and that he got this down to about €2,000 a month.

Asked about what happened on December 25th 2018, the complainant said that the head chef’s father died.  He managed a team of around 24 people and they were already understaffed.  He said that the operations manager, Noel McLeish “asked Kasia to come in.”  He said, “she came in.  He paid her.”  The complainant said he worked until 5.30pm on Christmas day and he then went to Galway.  He left the hotel before the payment was processed.  On December 26th, he said that Mr McLeish came to him in the restaurant and he “counter-signed” the page on which he had written “€200 Wages  Extra Cover Restaurant Christmas Day.” 

Referring to December 29th, the complainant said that he attended the 11.00am meeting with the heads of departments.  Around eight or nine staff attended and he was chairing the meeting.  The food and beverage manager was upset because staff didn’t know how to use the cash registers.  The complainant said, “I said I’d get training organised.”  He said that he suggested that Ms Smolinska could do the training. 

Later in his evidence, the complainant referred to a conversation he had with the HR manager in January 2019.  The HR manager was informed that Ms Smolinska had worked on Christmas day and on December 29th and she instructed the complainant that she was not to work in the hotel again.  The complainant said that when he had this conversation, he learned that Ms Smolinska was not to work in the hotel.  He said that, with 450 guests, there would have been chaos if he hadn’t brought someone in.

Mr Creed asked the complainant about February 2019 and his decision to ask the porters to work overtime to provide security.  The complainant said that he was informed by the Gardaí that all the bars in the town were to be closed and he thought that the hotel needed more security.  He contacted two employees and asked them to help. 

With regard to payment for the porters, the complainant said that the hotel accountant gave him two options; to get the porters to submit invoices or to deduct the cash from their wages.  The complainant said that he didn’t think he was doing anything wrong; he said, “no one said, don’t do this.”  Mr Creed said that the transcript of the interview with the hotel accountant shows that she said, “you can’t do that.”  The complainant said that on December 29th, in a conversation in a corridor, he told the accountant about the cash payment to Ms Smolinska on Christmas Day.  Mr Creed said that the accountant’s evidence is that she asked the complainant to get an invoice.  The complainant replied, “no.”

Mr Creed moved to the payment to the chef at Easter 2019.  The complainant said that he was at work on Good Friday until 4.00pm.  On Easter Sunday, April 21st, he got a call from the manager on duty, who, he said, was distressed.   He had 240 “covers” in the restaurant that evening and he only had one chef.  He was in a panic, having contacted all the chefs employed by the hotel.  The complainant said that he knew of a chef who had worked in the  hotel previously, and he agreed to come in to work on Easter Sunday and the duty manager paid him €100.  The complainant said “I signed off” on the payment.

Mr Creed referred to a document with the title “Nominal Ledger Transaction Drill-down” which has the transaction date May 31st 2019 and shows a payment of €100 under the account name “F&B Chef’s Wages.”  The complainant said that he had no “physical involvement” in the payment to the chef.

Mr Creed referred to the draft termination agreement between the complainant and Dalata dated May 10th 2019 which was given to him by Mr McCann.  The complainant said that he got this on May 8th 2019 from Mr McCann.  He disputed Ms Wynne’s evidence that it was provided at his request, and not at the initiative of Mr McCann.

Cross-examining of the Complainant

Mr Shearer pointed to the company’s disciplinary procedure and the behaviours listed under the heading of gross misconduct.  One of these is “Failure to follow procedures regarding cash-handling.”  The complainant said that he understood that he had breached the cash-handling procedures.  He reiterated that he knew that petty cash was to be “kept tight,” dockets were to be signed by a manager and receipts provided.  He said that he wasn’t aware of the detail of the operations control manual. 

Mr Shearer suggested that the complainant’s understanding of the use of petty cash in exceptional circumstances suggested a familiarity with the procedures.  He asked the complainant about the significance of him not seeing the ACP manual.  The complainant replied, “If I was aware of the detail, I would have observed it.  If it had been brought to my attention, I would have complied.  If I was informed that I was doing something wrong, I would have stopped doing it.”

Mr Shearer suggested to the complainant that he knew enough about petty cash to reduce its use from €5,000 to €2,000 a month.  The complainant replied that “petty cash can be a loose item.  I knew enough to reduce it.” 

In relation to the termination of Ms Smolinska’s employment, the complainant said that she was on good terms leaving and that no one ever said anything about her not returning to the hotel.  He said that she left because “people were uncomfortable with us having a relationship.”  He mentioned two senior managers who suggested that either he or Ms Smolinska could look for a job elsewhere.  He said that Ms Smolinska “was never told that she had to leave.”  Ms Shearer suggested that Ms Smolinska was paid a settlement because she had to leave and that he didn’t leave because he was earning more than her.  The complainant replied that “no one was forced to do anything” and that things were handled very professionally.  He said that they thought it was better if they didn’t work together and there was no insinuation that she wasn’t to return.  Mr Shearer said that it was obvious in August 2018 “that one of you had to leave.”

In relation to the payment to Ms Smolinska on Christmas Day 2018, the complainant said, “McLeish paid the cash, I counter-signed it.  I stood over his decision.  In hindsight, I know this was wrong.”  Mr Shearer asked why the complainant didn’t arrange to pay Ms Smolinska by some other means rather than cash.  He agreed that on Christmas Day, people are normally paid treble time.  Mr Shearer asked why he didn’t pay Ms Smolinska €100 or €250 more than what she would normally earn in a day.  The complainant said that she would have done the work for nothing and that money didn’t matter.

Mr Shearer suggested to the complainant that the only reason that the €200 was attractive was because it was paid without deductions.  The complainant disagreed.  Mr Shearer asked why Ms Smolinska was paid in cash and the complainant replied that, in the absence of his knowledge of the ACP manual, he didn’t know how else to pay her.  Six months later, when he refused a severance payment, this became an issue.

Mr Shearer referred to the complainant’s submission in preparation for this hearing in which Mr Creed said that the complainant “contacted an ex-staff member…in whom he was confident of both her skills and familiarity with the hotel.”  Mr Shearer said that this contradicts Mr McLeish’s evidence, in which he said that he asked Ms Smolinska to come in on Christmas Day.  Mr Shearer suggested that, in Mr McLeish’s evidence, the complainant was trying to distance himself from what happened.  The complainant replied, “I shouldn’t be sacked when I had no knowledge that I was doing something wrong.”

Mr Shearer put it to the complainant that Mr McLeish’s evidence “was serving you” and that it conflicted with his evidence to Mr Crowley at the appeal hearing.  The complainant referred to his conversation in a corridor with the accountant on December 29th in which he said that he told the her about the cash payment.  He said that he told her to “get dockets and sort it out for tax.”  Mr Shearer asked the complainant if he recalled telling the accountant that he had to bring Ms Smolinska in or there would have been “a shit show.”  Mr Shearer reminded the complainant that he told the accountant that he brought Ms Smolinska in and now he was saying that Mr McLeish asked her to come in.  The person who filled out the petty cash docket wrote that it was “authorised by Fergal” and “received by Fergal.”  The complainant replied, “I don’t know why it says ‘authorised’ by me.”  He said that if he had authorised it, he would have signed it.

Asked about the Micros training on December 29th, the complainant said that this could not have waited for another few days because there was no one to operate the register that evening.  Mr Shearer asked how the restaurant managed on Christmas Day and the complainant said that different people were rostered on Christmas Day.

Mr Shearer referred to an email from the complainant to the hotel accountant on December 30th 2019 in which he said,

“Laura, will you organise €60 for Kasia who conducted till training Saturday evening 29/12/2018 with seven restaurant staff.”

The complainant said that he and the accountant had a conversation the following day and Ms Smolinska was given a voucher.  Mr Shearer said she was paid by voucher because the accountant told the complainant that a cash payment was not permitted.  The complainant said that he had “no allegiance” for the payment to be in cash and that the HR manager suggested that a voucher be given instead.  On February 15th, the complainant wrote to the HR manager and the accountant asking,

“Is there a problem with this voucher or why has it not been given yet six weeks later.  What has happened with the cash docket that was signed by Kasia to process the payment?”

Mr Shearer moved to ask the complainant about the evening of the funeral in Sligo on February 15th 2019.  He said that there is no doubt that he had a conversation with one of the porters about being paid in cash.  The complainant said that one porter asked for cash and he said that he wouldn’t work otherwise.  The wife of the second porter asked for cash for him.  Mr Shearer said that the porters were never paid in cash previously and there was no reason why they couldn’t be paid through the normal channels.  The complainant said that he asked the accounts department and the HR department what to do.  Mr Shearer asked, “is it not the case that HR had to undo what you did?  You landed the company in a position where they had to pay cash.”

The complainant said that the accountant gave him two options, but Mr Shearer said that the complainant agreed with the porters that they would be paid in cash.  He put it to the complainant that he was complicit in allowing the porters to avoid paying tax.

In response to a question from me about why the complainant didn’t simply agree to pay the porters double time, if there was such an urgent requirement for them to work that evening, the complainant said, “in hindsight, I should have done that.”

Mr Shearer moved to the complainant’s evidence regarding the payment to the chef for coming to work on Easter Sunday 2019.  He asked the complainant how, after “all this,” meaning the consternation over the December payments to Ms Smolinska and the payments to the porters in February, he didn’t know it wasn’t permissible to pay cash to the chef in April?  The complainant replied,

“I wasn’t aware that the payment of cash and regularising it afterwards was not allowed.  I was never made aware that this was an issue.” 

He said that he should have been informed that he was doing something wrong. 

Mr Shearer pointed out that both Mr Casserly who chaired the disciplinary hearing, and Mr Crowley, who heard his appeal, concluded that the complainant knew that what he was doing was wrong.  He also pointed to the transcript of the record of the initial investigation on October 16th 2019 and the interview with the HR manager regarding a conversation she had with the complainant on January 10th 2019 in which she told him that wages could not be paid in cash.

In a closing statement, the complainant said that he loved his job with the Dalata Group.  He said he went into hotels where there was no structure and he worked “close to the ground.”  He had a great relationship with Pat McCann and Dermot Crowley and he is very disappointed that no one came to him.  He said that maybe “the company just grew.”  He said that he apologised if he did something wrong and that he would have discontinued if he had known it was wrong.

The Legal Framework

Section 6(1) of the Unfair Dismissals Act 1977 – 2015 (“the Act”) provides that:

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal, unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

Section 6(4)(b) of the Act provides that;

“…the dismissal of an employee shall be deemed, for the purposes of this Act not to be an unfair dismissal if it results wholly or mainly from …the conduct of the employee.”

The burden of proof rests with the respondent to establish the substantial grounds justifying the dismissal of the complainant in this case.  The grounds for dismissal are set out in a long letter of January 30th 2020 from Mr Casserly, the manager of the disciplinary hearing.  In the final two paragraphs, before he informed the complaint of his right to appeal against his dismissal, he summarised his findings:

“In conclusion while taking into account your length of service with the Dalata Hotel Group, I have already found that you repeatedly acted with complete disregard for company policies and procedures on four separate occasions.  As the most senior person in the Clayton Hotel in Sligo you have a responsibility to ensure that company processes were followed correctly.  Despite it being pointed out to you on separate occasions that petty cash cannot be used for payment of wages, you intentionally continued to breach company policies surrounding this.  As a result, you put the company at risk from an audit, risk and taxation perspective which is unacceptable from any employee, let alone a senior manager, working in Dalata.

“The above findings represent a serious breach by you of Company policies and more importantly are a serious violation by you of our company values and the very considerable trust that we placed in you.  I must therefore conclude that your actions and conduct, as found by me, taken both as a whole and separately, constitute gross misconduct and thus that your employment, role and position within the company is no longer tenable.  I therefore have no option but to dismiss you with immediate effect for gross misconduct without notice.”

Particular Features

While every involuntary dismissal is grounded on its own facts, this dismissal was complicated by some unusual features.  It is not my role to find explanations for every bizarre incident, or to attribute a motivation to the conduct that resulted in the complainant’s dismissal.  I must however, have some regard to the context in which the disciplinary investigation was initiated. 

On May 7th 2019, the complainant had a meeting in the Sligo property with his line manager and the group head of the Clayton Hotels, Des McCann.  Mr McCann met the complainant to discuss  “further issues that had arisen,” one of which must have been the most recent cash payment to the chef who worked on Easter Sunday.  Arising from this meeting, based on the correspondence submitted in evidence, it is apparent to me that the complainant indicated that he was open to leaving his job on agreed terms.  The following day, Mr McCann sent the complainant a draft termination agreement, with an offer of €25,260 which was to be paid tax free, plus €8,083 as one month’s notice, plus €15,000 gross.  Over the next few days, Mr McCann couldn’t contact the complainant by telephone.  Before they spoke again, the complainant sent Mr McCann a letter in which he said, “…I believe that your actions, comments and statements towards me, have been unwarranted and nothing short of acts of bullying.”  He said he had no interest in leaving, and he alleged that Mr McCann threatened to “manage me out of the business.”

It is my view that this letter was intended to increase the pressure on the company to expedite the complainant’s departure on more generous terms.  A different outcome emerged when Mr McCann submitted a grievance against the complainant, claiming that he had made false and untrue allegations about what occurred at their meeting on May 7th.  On July 22nd 2019, the manager who investigated Mr McCann’s grievance concluded that the letter sent by the complainant on May 13th 2019 “was sent with an improper motive and in particular that it was sent with the purpose and intent of seeking to threaten and intimidate Des McCann and to have him ‘back off’ from fulfilling his duties to supervise and manage the Company’s operations in Sligo.”  Arising from this finding, a disciplinary investigation commenced.  In addition to the allegation concerning the threats to Mr McCann, the head of HR included other matters that emerged during the investigation into Mr McCann’s grievance, with the result that, on July 30th 2019, six issues were presented to Tony McGuigan, the manager with responsibility for the disciplinary investigation:

1.       Payment from petty cash to a former employee on December 25th and 29th 2018;

2.       Payment from petty cash to two porters in February 2019;

3.       Payment from petty cash to a chef for work done in April 2019;

4.       The making of false allegations of intimidation and harassment against Des McCann;

5.       Telling another employee that he would “take the company for €150,000” if he was not allowed to do what he wanted in the Sligo hotel;

6.       Leaving a health and safety seminar in the Clayton Hotel in Dublin on May 28th 2019, without informing his manager and returning at 11.40pm.

In a letter to the complainant on September 7th 2019, before he reached his conclusions on the disciplinary investigation, Mr McGuigan wrote to the complainant and informed him that item number 4, the allegation that his letter to Des McCann of May 13th was inappropriate and amounted to bullying, “ought not to proceed as part of this process.”  No explanation was given why this allegation was excluded and the disciplinary investigation was focussed on issues that emerged during the investigation into Mr McCann’s grievance and not on the serious finding that the complainant had attempted to intimidate his manager. 

On September 17th, having eliminated allegation number 4, Mr McGuigan wrote to the complainant setting out his conclusions from his investigation into the five remaining issues.  He decided that allegation number 6 should not be considered as a disciplinary matter but he added in a new allegation, number 7, concerning the licensing of the porters to provide security at the hotel.  The disciplinary investigation which commenced on October 16th 2019 was therefore concerned with the following allegations:

1.       Payment from petty cash to a former employee on December 25th and 29th 2018;

2.       Payment from petty cash to two porters in February 2019;

3.       Payment from petty cash to a chef for work done in April 2019;

4.       Telling another employee that he would “take the company for €150,000” if he was not allowed to do what he wanted in the Sligo hotel;

5.       The licensing of two porters to provide security duties at the hotel on February 15th 2019.

The disciplinary hearing was interrupted in November 2019 with the complainant’s application to the High Court.  It recommenced in December with a new chairperson, Shane Casserly.  On January 30th 2020, Mr Casserly found no evidence that there was a breach of the Private Security Authority’s licensing regulations concerning the duty of the porters.  He decided that the complainant should be dismissed for the following reasons:

1 (a)  Breach of the cash-handling procedures in relation to payment of cash to a former employee on December 25th 2018;

1 (b)  Breach of the cash-handling procedures in relation to payment of cash to the same former employee on December 29th 2018;

2.  Breach of the cash-handling procedures in relation to payment of cash to two employees for work done on February 15th 2019;

3.  Breach of the cash-handling procedures in relation to payment of cash to a local chef for work done on April 21st 2019;

4.  Making an unacceptable and inappropriate comment that he would “take the company for €150,000.”

On February 11th 2020, the complainant appealed against his dismissal at a meeting chaired by Mr Dermot Crowley.  The complainant’s solicitor, Mr Creed claimed that at the disciplinary hearing, Mr Casserly had agreed that the investigation into allegation number 4 above had been “partially botched.”  On this basis, Mr Crowley decided to overturn the company’s findings in respect of this allegation.  The rationale for the decision to dismiss the complainant was therefore reduced to the following three allegations:

1.       Payment from petty cash to a former employee on December 25th and 28th 2018;

2.       Payment from petty cash to two porters in February 2019;

3.       Payment from petty cash to a chef for work done in May 2019.

Having arrived at this point, I am concerned that the conduct for which the complainant was dismissed were matters which came to light during the investigation into a separate issue, his accusation in his letter of May 13th that his manager was bullying him and trying to manage him out of the business.  There is a certain arbitrary zeal in the dismissal of an employee for conduct uncovered during an investigation into another matter, particularly when the original matter is set aside.

It is apparent from Des McCann’s reply to the May 13th letter that he was aware of problems with cash payments in Sligo, because he referred to “further issues” and “cash payments that continued to be made” which, he said, could lead to a formal disciplinary investigation.  At that point, it’s clear that Mr McCann knew about the breaches of the cash-handling procedures in Sligo.  In his letter, he said that he went to Sligo “to plead with you to work with me and the Company and to avoid going down that particular road.”  There was definite merit in this approach, as Mr McCann attempted to address the complainant’s conduct outside the disciplinary process, and to encourage him to adhere to the procedures to avoid being dismissed.  I think that most managers would have approached similar behaviour by a senior manager in the same way.  I am concerned that the conduct that Mr McCann was attempting to address in May 2019 through an informal but frank discussion, became grounds for summary dismissal in January 2020. 

Was the Decision to Dismiss Reasonable and in Proportion to the Conduct?

There are many precedents where the issue of the reasonableness of an employer’s decision to dismiss an employee are examined.  In 2009, when he was found to have distributed inappropriate emails to colleagues, Mr James Reilly was dismissed from his job as a sales manager with Bank of Ireland.  In an appeal to the High Court, (James Reilly v the Governor and Company of the Bank of Ireland, [2014] IEHC 241), Mr Justice Noonan observed that:

“An assessment of the reasonableness and proportionality of the employer’s response must have regard to the surrounding circumstances, including the impact of the conduct on the employer as against the impact of the dismissal on the employee.” 

In the case of Pacelli v Irish Distillers Limited, UD 2006/417,the task of the Employment Appeals Tribunal, and now my task, is to consider if the respondent’s decision to dismiss the complainant was consistent with what “a reasonable, prudent and wise employer would have done having regard to the nature of the case.”

The respondent’s disciplinary procedure, like all others, is a step by step, sequential process, progressing from a moderate sanction to a serious sanction all the way to dismissal over a period of time.  Its objective is to give an employee an opportunity to stop doing something, or to do something differently, and, by so doing, to avoid being dismissed.  I note that a breach of the cash-handling procedure is listed under the heading of “Gross Misconduct;” however, I must have regard to the criterion of reasonableness as set out in the case law to which I have referred.  This means that I must take account of the complainant’s senior position in the company and the effect that a dismissal would have on him, compared to its effect on the company.  I must also consider the fact that his manager was attempting to deal with the very serious breaches of the cash-handling policies in an informal way, before he invoked the disciplinary procedure.

Gross misconduct warranting summary dismissal is generally shocking behaviour; in the case of Lennon v Bredin (cited on page 15), the Tribunal refers to behaviour that could not be tolerated for a moment longer, such as larceny or violent assault.  It is my view that the conduct for which the complainant was dismissed was not in this category, and was more worrying than shocking.  The respondent tolerated the complainant’s conduct from January to May 2019 and it is apparent from his letter that Mr McCann was prepared to work with him to address it.  During the disciplinary process, as the more serious conduct fell away, I find that what remained was conduct for which a more appropriate sanction was a written warning or a final written warning.

I agree with Mr Casserly, where he wrote in the letter of dismissal that, as “the most senior person in the Clayton Hotel in Sligo” the complainant was responsible to ensure that company procedures were followed.  As the hotel manager, he had a responsibility to lead by example, and his failure to pay wages in accordance with procedures risked setting a low standard that could be emulated by others.  I accept that his conduct presented a serious risk that others might adopt a cavalier approach to proper procedures, but, based on the evidence presented to me, I am satisfied that managers in accounts and HR were in control of cash and payroll processes.  It is evident that they were capable of and willing to challenge the instructions of the hotel manager and it is clear to me that there was no ongoing risk that procedures would not be adhered to.

Having considered this matter over some time, it is my view that, if the three remaining allegations for which the complainant was dismissed had emerged from a specific investigation into cash-handling procedures, and, if they had been uncontaminated by accusations of bullying and threats to “take the company for €150,000,” a “reasonable, prudent and wise employer” might not have applied the ultimate sanction of dismissal.  I have reached this conclusion because the behaviour complained of was capable of being remedied with an instruction not to pay wages from petty cash, and with the issuing of a warning along the lines of, “if you do this again, you will be dismissed.”

Conclusion

As I have noted earlier, the events that ended with the dismissal of the complainant were unusual and at times unfathomable.  I am not satisfied that he was entirely forthright in his evidence at the hearing.  He gave no credible explanation why it was necessary to ask his partner, a former employee, to work on Christmas Day and she gave no credible explanation why she agreed to do so for the modest sum of €200.  With regard to the training she provided on December 29th, it is my view that this was unnecessary, and all that was required was a tutorial from the software provider, or from a proficient user of the software in another hotel.  It seems to me that, having paid the former restaurant manager in cash, the complainant sought to normalise this by paying cash to the porters in February and to a local chef for working on Easter Sunday.  In the absence of a credible explanation from the only person who can provide one, this is my attempt to understand the reasons for what occurred.

It is clear to me that, when he wrote to Des McCann on May 13th 2019, the complainant severed the relationship of trust that is necessary between an employee and an employer.  By times threatening and patronising, this letter was the genesis of the long-drawn out series of investigations that led to the complainant’s dismissal.  Although Mr McCann’s grievance regarding the contents of the letter was upheld, for some reason which was not given by the respondent, in September 2019, a decision was made to exclude the letter from the disciplinary investigation. 

While the letter was “off the table” from a disciplinary perspective, the severed relationship remained and the evidence given by another manager that the complainant said he would “take the company for €150,000” widened the gap of mistrust.  It is apparent to me, having considered all the evidence, that the relationship between the complainant and the senior managers in the Dalata Group was entirely ruptured by the time the disciplinary hearing got under way in October 2019.  In February 2020, when the reason for dismissal was reduced to four breaches of the company’s cash-handling procedures, it is my view that a reasonable employer in the same circumstances would have dealt with this bizarre conduct by a senior manager in a different way and would not have resorted to dismissal.  The options open to the respondent at that point were to issue a warning, or to re-open the discussion on settlement terms. 

In conclusion, it is my view that the conduct of the complainant when he wrote to Des McCann on May 13th 2019 was an attempt to intimidate his manager and to get him to back off from his oversight of the property in Sligo.  I find also that his letter was an attempt to extract a more generous settlement than what was offered in the draft agreement sent to him on May 7th or 8th 2019.  Unfortunately, this is not the stated reason that the complainant was dismissed, and the stated reason, the instruction to pay wages in cash on four occasions between December 2018 and May 2019, was not gross misconduct, and the sanction of dismissal was disproportionate.  For this reason, I find that the dismissal of the complainant was unfair.

Considering the redress to be awarded to the complainant, I must take account of the impact on him of the loss of his job, and the difficulties he had finding alternative employment.  His dismissal in January 2020 was followed a few short weeks later by the onset of the Covid-19 pandemic when the hospitality sector closed.  At the hearing, the complainant said that he started working again in the middle of June 2021, and that he had a fixed-term contract for 10 weeks.  At the hearing in August, he said that he expected to continue working for two or three days a week until the end of November.  As we know, the hospitality sector closed again before Christmas 2021 and re-opened in Spring 2022.  I am satisfied that, with his contacts and experience, and with the shortage of experienced hotel managers, the complainant will have little difficulty finding a job.

I must also give some consideration to the complainant’s contribution to his dismissal, the conduct that led to the initiation of the disciplinary investigation and the issues that emerged.  I find that, by his conduct, the complainant contributed significantly to the decision of the respondent to terminate his employment.  Taking all the facts into account, I decide that the respondent is to pay the complainant compensation of €50,000, equivalent to approximately six months’ gross pay.  As this award is compensation for loss of earnings, it is subject to the usual statutory deductions. 

Conduct, reasons for dismissal