Complainant

Respondent

Parties

Clare  Bevins

Jamestown Manufacturing Limited

Representatives

Alastair Purdy & Co. Solicitors

Rosemary Mallon BL, instructed by Gore and Grimes Solicitors

Act

Complaint Reference No.

Date of Receipt

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

CA-00049067-001

08/03/2022

The complainant alleges constructive dismissal due to the alleged unreasonable conduct of the respondent. The respondent denies that the complainant was treated in a manner which amounted to constructive dismissal under the Acts.

Evidence of Ms Clare Bevins (“the complainant”)

The complainant commenced employment in 2002. She was appointed Finance Director for the respondent company Jamestown Manufacturing Limited, and the group of companies Brandyford Limited, in 2014. The complainant also had responsibility for IT, quality/compliance, health and safety and production processes and for HR within her own finance team.

The complainant reported directly to Mr Charlie Sherling from 2014. Mr Sherling was 100% shareholder of the business but not an employee. In addition to the complainant there were two other directors, Mr Fiacre Creegan, Managing Director (“the MD”), who also reported directly to Mr Sherling, and Mr Ian Crabbe who was based in the UK and held a silent role. The complainant had weekly meetings with Mr Sherling, usually in person. The MD participated in most of these meetings. The complainant submitted that conversations were robust, that Mr Sherling dominated meetings and he was not the easiest to deal with, but the relationship between her and Mr Sherling was positive and uneventful until 2019.  

The complainant submitted that in 2019 Mr Sherling’s behaviour towards her changed. Meetings became intense and Mr Sherling’s behaviour was erratic. He began questioning business decisions which were made years previously, many of which Mr Sherling, the complainant and the MD had collaborated on and were approved at the time. Mr Sherling was negative and critical. Everything was wrong – wrong decisions, wrong people, wrong processes – the complainant stated she felt she was always on the defensive. While many a meeting was positive, Mr Sherling’s humour could flip. He would roar, shout and curse. He demanded to know where profits were gone and what money was being spent on. The complainant believed that the catalyst for the change in Mr Sherling’s behaviour was due to business pressures he was experiencing in the UK and personal difficulties. Mr Sherling’s behaviour continued as described throughout 2020 and 2021.

The complainant highlighted several examples of the behaviour she was subjected to. On one occasion at a meeting Mr Sherling shoved a CV in the complainant’s direction and said “look at his travel and degrees, what do you know? What have you done?”. The complainant felt embarrassed, insulted, and demoralised in front of her colleagues. The MD was present at that meeting. On another occasion, after Mr Sherling has exhausted all other avenues of questioning, he asked “remind me of what your oul man did for a living” which the complainant felt was done to put her in her place. The complainant cited another example of a time when Mr Sherling’s email was not working. The complainant tried to assist Mr Sherling over the phone, but he roared and cursed. The complainant stated that it was not a professional work environment.

The complainant stated that there were times she defended herself. This would result in being ignored or side-lined by Mr Sherling. The complainant did not work Thursdays. Mr Sherling, who was based in the UK, started to attend the premises on Thursdays and request financial information from others.   

The complainant described a challenging business environment. Cashflow was always an issue and there were legacy debts. Mr Sherling made business decisions which were of concern to the complainant. However, he would reassure the complainant in relation to these concerns and on occasion provided personal finance and personal guarantees to the Irish business. He offered further supports in terms of additional personnel and working space. The complainant denied that she made decisions in relation to the purchase of properties, and she stated that refurbishment, repairs or decorating of the premises was only carried out if there was money available to do so. Mr Sherling was fully aware at all times of what was being spent and how it was being spent.

The complainant stated that at no time did she seek to be a shareholder of the business.

The complainant stated Mr Sherling was aware of his negative behaviour. On one occasion he stated “ye may think I am coming down here to bash you”. The complainant agreed with Mr Sherling that the atmosphere was negative. The complainant stated she was always courteous and professional in her dealings with Mr Sherling. She did not use foul language and was never disrespectful towards him.

The complainant frequently discussed Mr Sherling’s behaviour with the MD, while trying to refocus and remain positive. She did not share her concerns with anyone else within the workplace and engaged in coping techniques outside of work. The company had a grievance procedure. It also engaged the services of an external HR Consultant, who came on site every fortnight. The complainant did not utilise the grievance procedure. She did not engage with the HR Consultant. She did not raise a grievance with the MD or directly with Mr Sherling. The complainant felt there was no point in raising a grievance with the HR Consultant or Mr Sherling directly as he was the owner, and it would have been fruitless to raise the issue with him. She did not seek external advice.

On 27 October 2021, Mr Sherling pulled the business out of a significant project that the directors/business had been working on for a considerable period. The complainant and the MD called Mr Sherling to query why, so that they could explain to the other party the reason for the decision. The Mr Sherling was aggressive in tone and stated that the other party could wait until the morning for an explanation. The complainant described the use of foul language by Mr Sherling during the call.

Mr Sherling, the MD, and the complainant arranged to meet the following morning. The complainant stated that she dreaded this meeting. At this stage she had enough and had made up her mind that she was going to resign. The complainant stated that while she was accustomed to a male dominated and pressurised environment, Mr Sherling’s erratic behaviour had become intolerable. The complainant had considered resignation for some time. As early as 2020, she said to her husband “don’t be surprised if I come home having resigned”. However, the actual decision to resign was not a decision she made lightly.

The following day the meeting commenced with Mr Sherling stating, “don’t look so f***ing dumb, I can close this place tomorrow”. The MD started to read a letter of resignation. Mr Sherling then turned to the complainant, pointed a finger in her face and said, “now you next”. The complainant explained she could take no more and resigned also. She confirmed her resignation in writing later that day. In this letter the complainant outlined the reasons for her resignation, namely, the behaviour of Mr Sherling. The complainant offered to do a handover. The complainant stated she had no idea that the MD intended to resign that morning also.

The complainant did not hear from Mr Sherling until two weeks later when he corresponded by letter expressing his surprise and shock at her resignation. He accepted her offer to do a handover and committed to not directly engaging with her during that time. The complainant worked for the respondent until 31 December 2021. The complainant stated that at no time, whether on receipt of her resignation letter or at any time during that 2-month period, did Mr Sherling invite her to utilise the grievance procedure or to engage the services of the external HR Consultant.

The complainant presented a detailed written submission on her efforts to mitigate her loss, which included details of 124 job applications. Other than periods of holidays or ill-health and attending to family concerns, the complainant spent time each day searching vacancies, speaking to agents, or submitting applications via online portals.  The complainant stated she was open to private and public sector roles, full or part-time, permanent, or temporary and within a reasonable commuting distance of her home. She was willing to take a considerable pay cut. The complainant secured a position on a less favourable remuneration package commencing on 17 October 2022.

Cross Examination

In cross examination the complainant confirmed that she was open to all offers of employment within a reasonable commuting distance of her home. She confirmed she had not refused any offers of employment because of the salary on offer or the duration of the contract. Counsel opened several emails in the complainant’s submission on mitigation. It was put it to the complainant that these emails suggested that the complainant had placed several restrictions on her job search. In addition, the complainant could not explain why some of the emails specifying certain restrictions, which had been in the first written submission on mitigation, had been removed from a revised submission on mitigation which the complainant had put together.

The complainant confirmed that she made no effort to raise a grievance with the respondent. Various options open to her to voice her concerns were put to the complainant. The complainant accepted that she did not utilise any of these channels as she presumed there was no point given Mr Sherling was the sole shareholder of the company. The complainant accepted that Mr Sherling was not on notice of her grievance at any time before her resignation, but the complainant added that once Mr Sherling was placed on notice on 27 October 2021, he did nothing to remedy the situation before her last date of employment on 31 December 2021.

It was put to the complainant that the work environment was always robust; that she engaged in that behaviour herself; and there was no change in Mr Sherling’s behaviour in 2019 or anytime thereafter. The complainant acknowledged that she may have used colourful language in banter but was never disrespectful to Mr Sherling.

The complainant accepted that Mr Sherling was entitled to challenge business decisions, but not to hold her accountable for them as she was never the sole decision maker. Nor was it appropriate for Mr Sherling to questions decisions made years previously and to revisit them repeatedly. The complainant denied that the reason for her resignation was due to being challenged on legitimate business decisions and/or concerns. The complainant denied she looked for an exit strategy when she was told she would not be made a shareholder.

The complainant confirmed that it was towards the end of 2021 when Mr Sherling’s behaviour really impacted her. While she didn’t consider resignation at this point, phrases such as “I don’t know how much more of this I can take” were shared in “post-mortem conversations” with the MD following difficult meetings with Mr Sherling.

The complainant confirmed that she did not go into the meeting on 28 October 2021 with an intention to resign. Rather it depended on how that meeting would go. However, she resigned when Mr Sherling opened the meeting in a disrespectful manner.

Evidence of Fiacre Creegan, Managing Director (“the MD”)

The MD stated that he worked very closely with the complainant. He stated that Mr Crabbe was a silent director who was not involved in the operation of the respondent business. The MD confirmed that he had responsibility for liaising with the external HR Consultant whom he met every fortnight.

The MD described the behaviour of Mr Sherling as unprofessional and deeply personal at times. The worst example of that behaviour was the digs he made at the complainant regarding her father such as “you wouldn’t know, what did your father do?”. The MD reacted by saying to Mr Sherling “that’s a bit harsh” or “that’s a bit strong” but his interventions did not carry any weight.

Comments the MD heard Mr Sherling say to the complainant included “you don’t know”, “what would you know”, “you don’t understand these things”, “you haven’t a clue”. The MD gave examples of comments and remarks that were made to him by Mr Sherling about the complainant including: “do you know what her f***ing problem is, she wants to be a man”. The MD gave an example of a CV being shoved in front of the complainant and described the commentary and language used, including “look at that for f***sake …”what the f*** have you done?”. The MD felt that Mr Sherling had no sense of what dignity at work meant. Mr Sherling would come on site the day he knew the complainant was off and would ask finance related questions and ask, “where the f*** is she?”.

The business-related questions Mr Sherling asked were often genuine questions. Other questions were repeated questions relating to debts belonging to a previous failed group. No matter what was done it was never right. Comments such as “your people are no good”, “your paperwork is s***e”, “you are stuck in a rabbit hutch”, were levied at him and the complainant.

The MD stated that the change in Mr Sherling’s behaviour began around the end of 2019. He felt it was not personal but rather due to the pressures on Mr Sherling arising from difficulties with his UK based businesses.

The MD stated he was aware there was a grievance procedure. He stated that he spoke to the HR Consultant regarding Mr Sherling’s behaviour but concluded that nothing could be done given Mr Sherling’s position as the sole owner of the business. He communicated this to the complainant. The MD did not know Mr Crabbe well enough to raise the matter with him.

The MD stated that he could not raise the issue of Mr Sherling’s behaviour with him. That is not the relationship he had with Mr Sherling. The MD submitted that Mr Sherling dominated them and that you could not complain about him. That is not how things worked.

The MD described the significance of the “C” project and the work that was put into same by him, the complainant, and others in the business. The MD described how Mr Sherling communicated the decision not to continue with that project and the foul language used.

The following morning the MD resigned. He described the commentary and language used by Mr Sherling that led him to resign. The complainant also resigned that morning having told Mr Sherling she “could no longer tolerate his systematic bullying behaviour”. The MD stated that there was no agreement between him and the complainant to resign that morning.

Cross Examination

It was put to the MD that the nature of the relationship between him, the complainant and Mr Sherling was a robust relationship over the years and that both directors were more than able to defend themselves in discussion over legitimate business concerns. The MD confirmed that on occasion that was the case.

The MD confirmed that he did not raise a grievance with Mr Sherling on the complainant’s behalf, nor did he contact anyone on her behalf notwithstanding his position as managing director. He confirmed that the complainant never asked him to intervene on her behalf. He confirmed that he did not write to the external HR consultant to raise the grievance or engage an external person to see if any other form of intervention might work. Nor did he contact Mr Crabbe. The MD accepted that he did not utilise any of these channels before the complainant’s resignation.

The MD did not accept that the comment made to the complainant by Mr Sherling in relation to her father was not as described but rather a respectful comment.

Legal Submission

The complainant is relying on the reasonableness test and cites Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 and the measure of reasonableness as set out in Berber v Dunnes Stores Limited [2009] 20 ELR61. An Accountant v Accountancy Firm (ADJ-00017674); A Solicitor v A Solicitors Firm (ADJ-000111116); A Dental Nurse v A Dental Practice (ADJ-00015099); and Financial Controller v A Risk Management and Advisory Company (ADJ-00014388) were cited in support of the proposition that an employee may be justified in resigning without exhausting the internal grievance.

Evidence of Mr Charlie Sherling

Mr Sherling stated that he had a robust relationship with the complainant, and he did use bad language on occasion. He stated that the complainant used bad language too. He denied that his behaviour changed in 2019, but rather that the contact between the parties increased from 2019.

Mr Sherling submitted that on one occasion he asked the complainant what her father did for a living. This is a question he often asked people to ascertain if their experience might be of use to the business. It was not a disrespectful comment or asked to embarrass the complainant. He asked this question once only.

Mr Sherling stated that he did not receive a complaint from the complainant at any time before her resignation and that if he had he would have sought legal advice, as was his normal practice if an issue or complaint was received from any party.

On the morning of 27 October 2021 at a meeting with both directors, the MD resigned. He responded “OK” to this. He asked the complainant what her position was and on hearing her resignation he added “OK, off you go”.  

In cross examination Mr Sherling confirmed he was not an employee of the respondent company. He did not accept that he was not subject to the company grievance procedure. He agreed the procedure is silent on complaints which may involve the owner of the business.

Mr Sherling stated he asked one question relating to the complainant’s father and does not recall making three further disparaging comments regarding her father.  

It was put to Mr Sherling that there was no issue with the complainant’s performance. Mr Sherling confirmed this to be the case and stated that he just wanted answers to business questions. He stated he had no reason to address anything via the disciplinary procedure. Mr Sherling denied he engaged in appropriate behaviour as described by the complainant.

Mr Sherling was asked was he not surprised to receive the complainant’s resignation. Mr Sherling confirmed he was surprised but once a person makes that decision, he accepts it. He wasn’t going to try and change their mind. He confirmed that he did not ask the complainant to reconsider her resignation. Mr Sherling did not agree that he should have sought to ascertain why she was leaving and attempt to resolve her concerns. Mr Sherling stated that his philosophy is that if someone wants to leave, they should be free to do so.

The representative for the complainant opened a letter from Mr Sherling dated 11 November 2021. Mr Sherling denied that what he wrote in it confirmed the complainant’s view that it would have been futile to have raised a concern with him. Mr Sherling stated he did not engage the services of the external HR Consultant to intervene as she was on holidays at the time. Mr Sherling confirmed that he did not reach out to the complainant at any time during the two-month handover period, other than appointing a manager to take care of the handover.

Legal Submission

The respondent’s submission set out the law regarding the contract and reasonable test and cited Cedarglade Limited v Tina Hilban UDD 1843 and Western Exacting (ECC) Ltd v Sharp [1978] WLR 344 in support of the requirements of these tests. Other determinations of the Employment Appeals Tribunal were cited in support of the requirement to exhaust the internal grievance procedure. Synergy Security v Paul Dusa (UDD1911) was cited in relation to the obligation to mitigate loss.

The complainant shoulders the burden of proof to establish that her resignation was not voluntary. There are two tests contained within the definition of constructive dismissal at s 1(b) of the Acts, either or both may be invoked by an employee. The complainant in this case is relying on the reasonableness test. Either test may be applied by the Workplace Relations Commission.

Section 1 of the Acts defines dismissal, which includes at (b):

(b) the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer . . . .

Where the contract is terminated by the employee, there is only a dismissal within the meaning of s (1)(b) if, “because of the conduct of the employer”, the employee was “entitled” to, or it was “reasonable” to terminate the contract of employment. Accordingly, the question of the dismissal must be considered under “entitlement” and/or “reasonableness”.

The contract test is used to assess entitlement to terminate the contract and was summarised in a UK Court of Appeal decision by Lord Denning M.R. in Western Excavating (ECC) Ltd v Sharp [1978] I.C.R. 121(cited in Berber v Dunnes Stores [2009] IESC 10) as follows: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance.”

An employee may be entitled to terminate the contract where the employer engages in conduct which results in a fundamental breach of the contract, or which indicates that the employer no longer intends to be bound by the terms of the contract. A general term is implied into every contract of employment that the employer will not impair the ‘trust and confidence’ of the employee. In Malik v Bank of Credit and Commerce International [1997] 3 All ER 1 (cited in Berber v Dunnes Stores [2009] IESC 10), Lord Stein stated: “The implied obligation extends to any conduct by the employer likely to destroy or seriously damage the relationship of trust or confidence between employer and employee”. In Malik the threshold was held to be high - it must “destroy or seriously damage” the trust between the parties, however, it is not essential that the employer be aware of the effect of the conduct. Nor that they intended such an effect.  Similarly In Joyce v Brothers of Charity Services [2009] ELR 328, the Employment Appeals Tribunal held that the conduct “. . . cannot be petty or minor but must be something serious or significant which goes to the root of the relationship between the employer and the employee”.

In Berber v Dunnes Stores Ltd [2009] 20 ELR 61, it was held by the Supreme Court that in determining if there has been a breach in the implied contractual term of mutual trust and confidence, an examination of the conduct of both the employer and employee much be examined as a whole, and the cumulative effect of the conduct must be looked at. The conduct of the employer must be unreasonable and without proper cause and its effect on the employee must be viewed objectively, reasonably, and sensibly to determine if it is such that the employee can no longer be expected to tolerate the behaviour.

The reasonableness test “. . . asks whether the employer conducted his or her affairs in relation to the employee so unreasonably that the employee cannot fairly be expected to put up with it any longer and, if so, she is justified in leaving . . . ” (Cedarglade Limited v Tina Hilban, UDD 1843).

Regardless of whichever test is applied, the threshold for constructive dismissal is very high (Nicola Coffey v Connect Family Resource Centre Ltd, UD 1126/2014 and Calderon & Others v Lootah & Others, UD1219/2013).

It is the complainant’s case that she was subjected to foul language and offensive commentary, commencing in 2019 and leading to her resignation in 2021. Much of what the complainant described was corroborated by the MD. I found the evidence of both the complainant and the MD to be credible and cogent. Mr Sherling accepted that bad language was used but submitted that this should be considered in the context of a robust relationship that always existed between the parties. According to Mr Sherling, all that changed was the frequency of contact between the parties.  I do not accept that the existence of a robust relationship and the frequent use of foul language can lessen its effect or render such behaviour acceptable by any standard. It is common case that Mr Sherling asked what the complainant’s father did for a living. I prefer the evidence of the complainant that this information was subsequently used to belittle the complainant. I find the evidence of the complainant, that she was subjected to repeated and unwarranted criticism, to be credible. Mr Sherling is entitled to hold the complainant accountable for business decisions, but he is not entitled to do so in the manner described by the complainant. On balance I am satisfied that the complainant was subjected to repeated offensive commentary, disparaging remarks and foul language and was required to defend previous business decisions unreasonably and repeatedly. A general term is implied into every contract of employment that the employer will not impair the trust and confidence of the employee. I find that the conduct of Mr Sherling seriously damaged that relationship of trust and confidence.

It is well settled law that an employee must make reasonable efforts to bring the grievance to the attention of the employer before resigning. In O’Gorman v Glen Tyre Company Ltd (UD2314/2010), the Employment Appeals Tribunal noted that “it is crucial in a constructive dismissal case that the claimant informs the employer fully of the complaints being made against him and the employer be given an opportunity to resolve the issues”. At a minimum the employee will be expected to utilise the company grievance procedure. In Conway v Ulster Bank Ltd (UD 474/1981), the Employment Appeals Tribunal noted that “it is not for the Tribunal to say whether this procedure would have produced a decision more favourable . . . but it is possible”.

It is also well settled law that an employee may be justified in resigning without utilising the grievance procedure in some circumstances. In Mr O v An Employer (no. 2) [2005] 16 ELR 132, the court accepted “. . . that in normal circumstances a complainant who seeks to invoke the reasonableness test in furtherance of such a claim must also act reasonably by providing the employer with an opportunity to address whatever grievance they may have. However, there is authority for the proposition that this is not a fixed or universally applicable rule and there can be situations in which a failure to give prior formal notice of grievance will not be fatal”.  In Schonfield v. West Wood Club Clontarf Ltd (UD1013/2013), the complainant had no one to complain to about the conduct of the General Manager. The Employment Appeals Tribunal upheld the complaint of constructive dismissal.

It is common case that the complainant in this case did not invoke the grievance procedure. The complainant stated that it would have been futile to do so as Mr Sherling was the owner. The complainant’s contract provided at Clause 10 Grievance Procedure: “If you have any grievance … you have a right to a hearing by your immediate superior or other management as circumstances warrant. If you are unhappy with the outcome of the hearing you may appeal through your supervisor or to a more senior manager”.  I am satisfied that the only person the complainant could have raised her grievance with was Mr Sherling and further that, had she done so before resigning, her grievance would not have been acted upon.

What cannot be ignored in this case, is that the complainant did not leave her employment on the date she resigned, but rather two months later. Mr Sherling did not respond to the complainant’s letter of resignation for two weeks, and when he did, it was not to act upon the grievance but rather to gladly accept the offer of a handover. The respondent was now on notice of the complainant’s grievance and had ample time to do something about it. In Sarah Hickey v Bloomfield House Hotel (UD 384/2012), once placed on notice of the difficulties the employee was experiencing with her manager, the employer engaged the services of a HR consultant to try to resolve the difficulties. Engaging the services of the HR Consultant was an option open to the respondent in this case. It was Mr Sherling’s evidence that the HR Consultant was on leave at the time. I do not accept that excuse. I accept Mr Sherling’s view that if a person resigns their decision should be respected and accepted without question, however, in my view, this is subject to there being no extenuating circumstances. I find that, rather than it being fatal to the complainant’s case that she did not utilise the grievance procedure before resigning, it is fatal to the respondent’s case that, once put on notice of the complainant’s grievance and for two months thereafter, the respondent did nothing to address the complainant’s grievance.

In conclusion, I find that the cumulative effect of the respondent’s interactions with the complainant crossed a threshold such that the complainant was entitled, and it was reasonable for the complainant, to terminate her contract of employment within the meaning of s 1(b) of the Acts and that the complainant was unfairly dismissed.

Redress

The complainant selected the ‘compensation’ option on the complaint form and submitted that her gross loss to date is €94,456 and her net loss is €41,123 plus loss of company car. In assessing financial loss at €101,122.67 in this case, I have had regard to the gross figure of loss as submitted by the complainant (€94,456) and the pro-rata loss of the company car for the period concerned (€6,666.67).

An award of redress must be just and equitable and take account not only of the conduct of the employer but also the employee. This is provided for in s 7(1) of the Acts “just and equitable compensation”. Section 7(1)(c) provides that regard may be had to “the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss . . . .” The extent of the efforts required to mitigate one’s loss was considered by the court in Synergy Security Solutions v Paul Dusa (UDD1911). Excluding a period of leave and time taken to attend to a family situation, the complainant made a considerable number of job applications. However, I accept the respondent’s submission that the complainant placed restrictions on her availability for work in terms of location, duration of contract and remuneration. I understand the complainant may have wanted to be in close commuting distance to her home and that she may desire employment on a package like that enjoyed previously, however, she has an obligation to mitigate her loss. Taking the foregoing into consideration, I have reduced the compensation awarded by 25%.

I decide that the complainant was unfairly dismissed, and that the respondent shall pay to the complainant compensation of €75,842.

Constructive dismissal.