Complainant

Respondent

Parties

Vicky  Gregory

Hazel Boshell trading as Tresses and Talons

Representatives

  In person

Peninsula

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00053097-001

03/10/2022

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

CA-00053097-002

03/10/2022

The complainant was employed by the respondent from July 2011 until 24th September 2022. The complainant was paid one week’s notice. At the time of her resignation, the complainant was a senior stylist. The complaint is a constructive unfair dismissal complaint. This places the burden of proof on the complainant to show that due to the conduct of the employer, she had no option but to resign from the employment. A further complaint relates to the calculation of holiday pay with regard to 1) the correct number of hours per week and 2) the inclusion of commission in the holiday pay calculation.

Both parties availed of the opportunity to submit additional information post hearing. The final submissions in respect of CA-00053097-002 were received on 6th December 2023.

The complainant represented herself at the adjudication hearing. She outlined a situation that occurred in July 2022 in respect of a holiday pay issue. The complainant stated that her brother, who is also a stylist in another Salon informed her that holiday pay should include an average of the commission paid to staff in the 13-week period preceding the period of annual leave.

The complainant stated that she met with an officer of the Citizens Information Service (CIS) and was informed that her holiday pay should have included commission payments. The complainant stated that the respondent undertook a review of remuneration with the assistance of an external provider.

The complainant contends that the relationship deteriorated with the respondent after the holiday pay issue and that the complainant was subsequently invited to a meeting to discuss the holiday pay query on 2nd September 2022. Prior to the commencement of the meeting, the complainant stated that she was informed of an increase in sales targets before commission would be paid and that the meeting itself was mostly an opportunity for the respondent to convey a number of points to the complainant in relation to her work and changes that were coming into force.

The complainant stated that an email then issued to all staff noting the changes to holiday pay calculations to include commission, but that VAT would be deducted from commission going forward, and that tips should also be recorded by all staff and notified to revenue at the end of each year. It was further clarified to all staff that commission would be calculated weekly on products and services.

The complainant sought the minutes of the meeting from the Manager who had been at the meeting as a note taker. The minutes that were provided to the complainant were provided by the respondent principal and in the view of the complainant were not a true record of what had been said to the complainant at the meeting.

The complainant stated that she formally invoked the grievance procedure on 8th September 2022 and was subsequently asked to sign a new contract which contained provisions that she did not agree with. The complainant stated that the atmosphere in the workplace and the effect that everything had on her health, had left her in a position where she felt she had no option but to resign from her employment. The complainant stated that she submitted her resignation. The complainant stated that the respondent wanted to proceed with the grievance process. The complainant stated she was not in a position to go through with the grievance process as she did not feel the process would be fair given that a fellow employee was chosen to chair the grievance process and that the complainant’s colleagues would be present while she spoke about her feelings and the effect that recent issues had on her. The complainant stated that she sent an email confirming her resignation and felt that the unilateral contract changes were brought about to force the complainant to resign, which she subsequently did.

The respondent refutes that the complainant was forced to resign due to the conduct of the employer. The respondent stated that the complainant resigned and commended working immediately in another salon where her brother was employed.

The respondent stated that there was no increase to the complainant’s sales target prior to the payment of commission. The respondent contends that the complainant raised a query in relation to commission being included in holiday pay and that this issue was rectified. The issue of VAT not being deducted from the payment of commission also arose while the commission issue was being clarified.

The respondent contends that the complainant raised the issue of commission being included in holiday pay and when this was rectified and notified to staff, as well as the VAT on commission issue and the issue of recording tips. the complainant then began to feel stressed as she perceived that her colleagues would be unhappy with her for raising these issues. The respondent contends that the complainant has outlined an untrue narrative in respect of the atmosphere in the workplace to justify her resignation and claim constructive unfair dismissal, when, in reality, the complainant resigned to commence work elsewhere.

The respondent cited a number of cases in respect of the well-established “contract” and “reasonableness” tests associated with claiming constructive unfair dismissal. In summary, the respondent contends that the employer did not behave in such a way that left the complainant with no other option than to resign from her employment. The respondent further contends that complainant did not act reasonably in resigning without substantially utilising the grievance procedure and giving the employer an opportunity to rectify issues of dissatisfaction to her.

The Applicable Law

Constructive Dismissal is defined under Section 1 of the Unfair Dismissals Act, 1977 as follows:

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.

There are two tests in relation to proving that a Constructive Dismissal has occurred. These are the “Contract Test” and the “Reasonableness Test.” Both relate to the behaviour of the employer.

In Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 the “contract test” is summarised 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 other performance.”

Addressing the “reasonableness test” the decision summarises the conduct of the employer as follows:

 “whether the employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so the employee is justified in leaving.”

The requirement to exhaust internal procedures is an essential element of succeeding in a claim of constructive dismissal. This is set out in the case of Conway v Ulster Bank Ltd (UD 474/1981) whereby the EAT said that:

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

In relation to availing of a grievance procedure, the Labour Court held as follows in Mr O v An Employer (no. 2) [2005] 16 E.L.R. 132:

“The Court accepts 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”.

Conclusion

For a complaint of constrictive unfair dismissal to succeed, it must be established that the respondent behaved in such a way that the complainant was left with no other option than to resign from the employment. In the within complaint, the complainant was of the view that having raised a pay related query regarding the inclusion of commission in holiday pay, that the relationship with the employer deteriorated to such an extent that her health suffered and that she was forced to resign from her employment. I accept that the relationship between the parties deteriorated following the holiday pay query and the issues surrounding the new contracts, changes to commission payments, staff handbook and the taxation of tips etc and the concerns of both the complainant and the employer relating to their professional relationship and the continuation of same. However, I find that the complainant did not behave reasonably in resigning without pursuing her grievance. She was informed that the respondent wished to process the grievance. While completing the grievance process may have been difficult for the complainant for the reasons she stated, I find that by not giving the respondent an opportunity to address the issues, the complainant did not act reasonably. Accordingly, I find that the complaint of constructive unfair dismissal is not well founded.  

Mitigation of Loss

The complainant is required to mitigate her loss. The complainant stated that she rang an old employer which has resulted in a new position but that she has not applied for any other full-time employment since her resignation due to other commitments. On that basis, I find that the complainant has made insufficient efforts to mitigate her losses as required by the legislation.

Having considered all elements of the matter, I find that the within complaint of constructive unfair dismissal is not well founded.

This complaint relates to the miscalculation of hours worked with regard to annual leave entitlements and the non-payment of commission in annual leave payments.

The respondent addressed the matter in supplemental submissions as the specifics of the complaints had not been provided at the adjudication hearing. The respondent contends that the complaint is not well founded as the complainant worked 30/31 hours per week on average which includes the weeks she worked in excess of 32 hours. In respect of the commission payments due in the payment of annual leave, the respondent’s position is that there was an overpayment made to the complainant as the respondent inadvertently paid commission on sales inclusive of vat which was an error on its part. The respondent quantified the overpayment from 1st April 2022 – 21st September 2022 at €426.78.

The complainant relating to the calculation of annual leave entitlement was submitted on 3rd October 2022. While part of the complaint relates to the calculation of annual leave, an element of the complaint relates to payments that were due to the complainant when taking annual leave vis a vis the inclusion of commission in annual leave payments.

The cognisable period of the complaint is the six months immediately prior to the referral of the complaint. (4th April 2022 – 3rd October 2022). The complainant asserts that the annual leave calculation is incorrect as she worked 34 hours per week, but her holiday pay calculations were based on 32 hours only. A further complaint relates to the exclusion of commission in the payment of holiday pay.

In respect of the calculation of holidays based on weekly working hours, the complainant was entitled to 8% of the total hours worked. In respect of the annual leave year 1st April 2022 to 21st September 2022, the complainant worked a total of 641.5 hours. The annual leave entitlement based on those hours worked is 51.32 hours. In that period of time and from the records provided, the complainant took approximately 80 hours of annual leave, so I do not find that the complainant’s holiday entitlement was miscalculated or that she was not provided with the correct entitlement in respect of annual leave.

Payslips

Payslips were provided post hearing in relation to the complaint regarding the payment of commission in holiday pay. The weeks relating to the payment of holiday pay were 15/6/22, 22/6/22, 29/6/22 and 10/8/22. Commission payments are included in all the payslips relating to periods of annual leave with the exception of the week of 22/6/2022. With regard to that period of annual leave, the average commission paid in the previous 13 weeks amounts to €198.24.

In respect of the alleged overpayment of commission referred to in the respondent’s supplemental submission, these payments were accepted as an error on the part of the employer. I find that an error made by the employer should not result in the complainant having her entitlements withheld from her. Having considered the matter, I find that the complainant is due to be paid €198.24 in respect of commission that was due to be paid to her with the payment of annual leave on 22/6/2022.

The complaint is well founded in part. The respondent is directed to pay the complainant €198.24 in respect of commission due in the payment of holiday pay in respect of 22nd June 2022.

Constructive Dismissal, annual leave entitlements

Cases cited by respondent:

Coffey v Connect Family Resource Centre Limited (UD1126/2014)

Western Excavating (ECC) Ltd v Sharpe [1978] ICR221:

Debbie Kearns v Silverfern Properties Ltd (UD2428/2010)

Higgins v Donnolly Mirrors Ltd (UD104/1979)

Conway v Ulster Bank (UD474/1981)

Donegan v Co Limerick VEC (UD828/2011)

Ian Flaherty v College Freight Ltd [2009] 6 JIEC 2901

Aryzta Bakeries v Cacs (UDD1812)

An Employee v Employer (UD720/2006)

OCS One Complete Solutions Ltd v Puka (UD/19/30)

Coad v Eurobase (UD1138/2013)