Complainant

Respondent

Parties

Shubham Sotwal

Geraghty Energy Consultants Limited

Representatives

  self

Mr Shane Geraghty

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00036413-001

29/05/2020

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

CA-00036413-002

29/05/2020

On the 26th of March 2020 the Company terminated the Complainant’s employment.

The Complainant was on a fixed term contract that was to run for 2 years commencing on the 3rd of September 2018 and was to run until the 2nd of September 2020. However, a second fixed term contract was agreed to which stated that the fixed term contract commences on the 1st of January 2019 for 24 months, which would end on the 31st of December 2020.

The Complainant was employed as an Electrical and Energy Engineer.

The contract was ended arising from the decline in income linked to shut down during Covid on or about the 26th of March 2020, several months prior to the agreed expiry date.

The notice clause in the contract required the employee to give notice depending on grade of 1.5 months and for senior staff 2 months.

Where there is no work or a decline in work the contract at section 7 provides for short time work or temporary lay-off.

The Complainant’s salary was €2666.67 a month.

The Company is small, and another employee was retained in the interest of the viability of the entity.

The Complainant stated that he was let go without receiving any notice or compensation. He also stated that he was due unpaid wages, overtime, and holidays.

The Respondent had no choice but to terminate the contract as there was no work and allowing for the fact that he could be placed on lay-off, he believed that terminating the contract was the right course of action.

The Complainant and Respondent are lay litigants. Based on the evidence provided at the first day of hearing the Adjudicator detailed the issues in contention and wrote to the Complainant on the 15th of August 2022 as follows:

The Respondent in July 2022 had submitted the following in reply to the complaints made:

Dear Mr Dalton,

Firstly, I would like to apologise for the slight delay in submitting this documentation.

My response to the claimant’s latest claim for alleged under payments is as follows:

1. Monthly Payroll, Salary and Payment of Employment Permit

Apart from a small under payment of €31.63 which was due to a bookkeeping error, I can confirm that the claimant was paid in full during his time as an employee of my company.

Net monthly pay from each pay slip and payments made to the claimant are detailed in the attached table labelled ‘Summary of Monthly Payroll and Payments’.

I can also confirm that his Employment Permit was paid for by me at a cost of €1000, even though we had no verbal or written agreement that I would cover this substantial cost.

A copy of my credit card statement showing the charge on 19 Dec is attached.

As you can see from the attached ’Summary of Monthly Payroll and Payments’, the underpayment of €913.70 in November 2018, was settled in May 2019.

Payment of the Employment Work permit more than covers the slight underpayment of €31.63 noted above.

2. Extra Time

I can also confirm that the claimant was paid for all after hours work. In the attached table labelled, ‘Summary of Monthly Time Attendance’, the required work duration and extra time is tabulated for each month.

The difference of 13.64 hours between extra time from the time attendance program and extra time on the payslips is because the lunch period was changed from 30 minutes to 45 minutes on 22 October 2018.

The extended lunch break was specified in our Employment Agreement under clause 4, as attached.

The work duration for each month is taken from time attendance records for each month of the employee’s employment. These are attached in the compressed folder labelled Monthly Time Attendance Records.

3

The total work duration for each month includes public holidays. In the summary table, public holidays have been deducted from the ‘required work duration’ and ‘recorded work duration’.

I would like to point out that despite numerous verbal and written requests, the claimant never used the time tracking program provided in order for him to submit a weekly time sheet that would allow me to approve extra time.

This requirement was specified in the Employment Agreement under clause 5, as attached.

3. Holiday Entitlement for year 2020

Holiday pay for the period 1 January to 23 March 2020 was 4.4 days.

The claimant returned on 13 January (after leaving the country on 29 Nov) and as he had taken 7 days leave from his entitlement of 20 days in 2020, I deducted 2.6 days from his pay.

The claimant was paid for all public holidays as standard including 17 March 2020. He had no annual leave to carry over from the previous year and had not accumulated any holiday entitlements while he was abroad in January.

2020.

4. Notice Period

Due to the exceptional and unprecedented circumstances caused by the Covid 19 pandemic, a short notice period was justified, unfortunately.

The following documents which I have attached clearly show that the claims are in no way justified.

1. Employment Agreement

2. Summary of Monthly Payroll and Payments

3. Summary of Monthly Time Attendance

4. Monthly Time Attendance Records

5. Proof of Payment for Employment Permit

6. Monthly pay roll for all colleagues including complainant

Thank you for your time.

Dear Mr. Geraghty,

At the last day of hearing the parties could not agree on what monies if any were due.

I note the extensive analysis completed by you and submitted which covers a period of payment from June 2018 to March 2020 and shows a net difference of €31.63. You state that payment for the Employment Work Permit of €1000 more than compensates for this.

The fixed term contract between the Complainant and Company states that the employment commenced on the 1st of January 2019 and was to run for 24 months as a fixed term contract. That contract was signed by both parties on the 22nd of October 2018.

At section 7(headed Salary) of the contract it states that “Every attempt will be made to ensure your continuing employment in the event that the Company is faced with a shortage of work or is unable to provide you with work for any other reason. This could include temporarily placing you on short-time working or laying you off from work; in these circumstances you will be paid for those hours worked.”

At section 13 headed Dismissal it states when a dismissal can take place and that appears to relate to some wrongdoing.

I note there is a clause at section 19 other employment which states that the Complainant must ask the Company permission if he were to work with someone else.

Arising from Covid the complainant stated that his contract was ended on the 23rd of March 2020.

The Complainant is a non-national and was on a critical skills employment work permit valid from 25th of February 2019 to 24th of February 2021.

The Complainant states that he is due a Redundancy payment arising from the early termination of his contract.

He is also claiming extra hours and on a separate spreadsheet the Complainant stated that he was due overtime amounting to €2263.81. He also provided a summary of monthly time attendance and extra time and calculates that he is owed 371.32 hours. You state that all after hours were paid for, and that the Complainant failed to submit proper timesheets and would not use the time tracking system.

You state that he is not entitled to any annual leave entitlement or public holiday entitlement as all payments have been made.

As part of my investigation of this complaint could you please advise what contractual provision allowed the Company to terminate the contract? I note when the contract can be terminated; however, while it provided for layoff, it does not appear to provide for termination other than for misconduct. Please comment?

Could you please provide your letter of termination?

A fixed term contract commits both parties to the contract continuing to the end of the term. What term are you relying on to terminate the contract?

Both parties have provided contradictory documentation. In the interest of Fairness and Efficiency I am reconvening the hearing so that both parties can make final submissions to me.

Yours sincerely,

The Respondent replied on or about the 18th of August 2022:

Dear Mr Dalton,

Thank you for your letter dated 15 August 2022. I am pleased to respond to the points made.

I attach a copy of the layoff letter provided to the complainant.

In regard to the alleged claim(s) for underpayment, I note the following discrepancies.

1. An initial claim of €813.20 was made on 20 July 2020 according to the table of payments submitted by the claimant before the hearing, but no evidence was provided to support this.

2. His subsequent claim on 11 July 2022 which was for a figure of €2263.81 was based on ‘’estimates’’. Again, no documentary evidence was provided to support this claim.

3. His latest claim is for 371.32 hours in extra time which he claims he is owed. This equates to €5,859.42 based on his hourly rate of €15.78. Again, this claim is not supported by any documentary evidence.

I have provided the following documents to the WRC on 26 July 2022 which clearly show that the hours worked have been paid in full, along with the full cost of the work permit application (€1000).

1. monthly time attendance hours (since I have no timesheets).

2. summary of monthly hours.

3. all payslips.

4. summary of monthly payments.

5. credit card statement.

Yours sincerely,

Shane Geraghty

Geraghty Energy Consultants Ltd

On the 14th of April 2020 the Complainant emailed the Respondent and stated the following were outstanding wage payments:

1.       1st of January 2019 a query about payment due-he received €1514.29 and queried if it should have been €2295.99

2.       1st February 2019 any outstanding payment of €29.99

3.       1st December 2-19 €12.05

4.       1st January 2020 €159.04

The Complainant form is lodged with the WRC on the 29th of May 2020. The claims relating to the 1st of January 2019, 1st of February 2019 are out of time.

The claim as particularised relate to 1st of December 2019 and the 1st of January 2020.

Based on the claim as particularised for €29.99; €12.05 and €159.04 there is no evidence to support the Complainant’s claims. There is a shortfall of €31.63 based on the Respondent’s evidence. However, that does not appear to be based on a failure to pay correct holiday entitlement.

CA-00036413-001 section 27 of the Organisation of Working Time Act, 1997:

The redress provided under the Act is:

A decision of an adjudication officer under section 41 of the Workplace Relations Act 2015 in relation to a complaint of a contravention of a relevant provision shall do one or more of the following, namely:

(a) declare that the complaint was or, as the case may be, was not well founded,

(b) require the employer to comply with the relevant provision,

(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all of the circumstances, but not exceeding 2 years’ remuneration in respect of the employee’s employment.

The complaint is not well founded as the Complainant has failed to particularise his complaint. While it appears, there is a small outstanding payment it does not relate to holidays. The employer has provided records that rebut the Complainant’s allegations.

CA-00036413-002 Section 8 of the Unfair Dismissals Act, 1977:

On the evidence the Complainant was summarily dismissed arising from a financial need and cash flow challenges arising from Covid. He was on a fixed term contract that commenced on or about the 1st of January 2019 and was to run until the 31st of December 2020. It was terminated on or about the 26th of March 2020 without notice.

The letter given to the Complainant is headed Notice of Lay-off; however, the narrative in the letter is a termination of employment and not lay-off:

We very much appreciate your contribution to Geraghty Energy Consultants Ltd, and as promised, I will be happy to speak on your behalf to potential employers.

You may be eligible for unemployment benefits….

We wish you the best in your future endeavours.

Another employee who has less service was retained. This employee was not consulted about his selection for termination. There was no redundancy payment made or compensation of any kind made to him.

I note in RedmondDismissal Law 3rd Ed:

[4.04]

It is not always easy to determine whether there has been such a change in circumstances as to frustrate the contract. Indeed, a cogent argument can be made to the effect that the doctrine of frustration as imported from commercial law sits uncomfortably with the contract of employment. Thus, the UK EAT has said:

‘Most contracts of employment are terminable at short notice and are far removed from the type of commercial contract in the context of which the doctrine of frustration was mainly developed. As a matter of everyday practical reality employers and employees alike expect to deal with issues of disability, sickness and absence for other reasons – including imprisonment – within the framework of the employment relationship. The short notice period enables them to do so: even quite unexpected turns of event will have limited financial consequences for an employer. Lawyers are familiar with the concept of frustration because it is taught as part of contract law. But there is no general familiarity with it in industry: the lay members of this Appeal Tribunal had scarcely encountered it in their many years of experience.’ 9

The High Court (Murphy J) declined to find a contract frustrated in Zuphen v Kelly Technical Services 10 where an agency had recruited employees from overseas on the assurance that work would be provided. When the work did not materialise, the plaintiffs’ contracts were terminated. The agency’s plea of frustration was rejected as the contract had not become entirely incapable of being performed.

I note under section 2 exclusions the Unfair Dismissals Act 1977 as amended:

Exclusions

2.— (1) Except in so far as any provision of this Act otherwise provides This Act shall not apply in relation to any of the following persons:

b) dismissal where the employment was under a contract of employment for a fixed term or for a specified purpose (being a purpose of such a kind that the duration of the contract was limited but was, at the time of its making, incapable of precise ascertainment) and the dismissal consisted only of the expiry of the term without its being renewed under the said contract or the cesser of the purpose and the contract is in writing, was signed by or on behalf of the employer and by the employee and provides that this Act shall not apply to a dismissal consisting only of the expiry or cesser aforesaid

In this case the contract was terminated prior to the specified termination date in the fixed contract. As the Complainant had worked for more than 12 months when the contract was terminated the tribunal had jurisdiction to hear the complaint.

While Covid impacted the amount of work and revenue negatively; the employer had the right to exercise short time working or layoff under the contract. However, it decided to terminate the contract on the 26th of March 2020. It could not be said at that time that the contract was frustrated and there was no alternative but to terminate the contract.

While the Employer had the right to lay-off the Complainant it had no contractual right to terminate the contract during the specified fixed period other than for the specified reasons in the contract of employment. The contract does not provide for a situation where there is a reduction in work or a delay in work materialising, to ground a dismissal.

The decision to terminate was taken without any consultation with the employee.

A redundancy arises where (section 7 Redundancy Payments Act 1967 as amended):

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned] the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

Financial loss can be determined by the period up to the contractual expiry which was the 31st of December 2020.

In this case the company was experiencing very difficult trading conditions and it highly probable that the earnings if the Complainant continued in employment would be much reduced.

Section 6(7) of the Unfair Dismissals Act 1977 as amended states:

(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so—

(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal,

The summary dismissal of the employee was not reasonable. There were other options open to the Employer such as short time or layoff. The consequence of the decision was harsh. I find that the Complainant was unfairly dismissed.

I determine financial loss to be 3 months having regard to the length of time to run in the contract and having regard to the fact that the Complainant would not have been in full time employment arising form lockdown. I award the Complainant €8000 in compensation for being unfairly dismissed and that includes his entitlement to notice.

CA-00036413-001 section 27 of the Organisation of Working Time Act, 1997:

The complaint is not well founded as the Complainant has failed to particularise his complaint. While it appears, there is a small outstanding payment it does not relate to holidays. The employer has provided records that rebut the Complainant’s allegations.

CA-00036413-002 Section 8 of the Unfair Dismissals Act, 1977:

The summary dismissal of the employee was not reasonable. There were other options open to the Employer such as short time or layoff. The consequence of the decision was harsh. I find that the Complainant was unfairly dismissed.

In this case having regard to the fact that the term of employment was to expire in December 2020 reinstatement or re-engagement are not suitable redress remedies.

I determine financial loss to be 3 months having regard to the length of time to run in the contract and to the fact that the Complainant would not have been in full time employment arising from lockdown. I award the Complainant €8000 in compensation for being unfairly dismissed and that includes his entitlement to notice.

Fixed Term Contract-Unfair Dismissal-Frustration of Contract