Complainant

Respondent

Parties

Patrick  O'Shea

MBC Products (Ireland) Limited MBC Project

Complainant

Respondent

Anonymised Parties

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Representatives

Brian Sugrue BL,   Cashell Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00040545-001

22/10/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00040545-002

22/10/2020

Complaint seeking adjudication by the Workplace Relations Commission under Section 12 of the Minimum Notice & Terms of Employment Act, 1973

CA-00040545-003

22/10/2020

The Complainant was employed as a senior sales representative from 1st November 2017 until 29th May 2020.

CA-00040545-001

The Complainant was unfairly dismissed, fair procedures were not complied with on dismissal.

The Complainant’s contract of employment was revised on 1st January 2019 and 1st May 2019 when his salary increased to 45,000 euro and a schedule of targets and commission. The Respondent purported to dismiss the Complainant on 29th May 2020 which was in breach of fair procedures. The letter alleged the Claimant was guilty of neglect, carelessness and recklessness, causing financial and reputational damage, sharing company information with a competitor, and making unsubstantiated commitments to customers. The letter also listed seventeen clients which allegedly had made complaints. The allegations were never put to the Claimant, nor investigated, nor were they part of a disciplinary process or formal warning. At no point had the Claimant been put on notice that his performance was being reviewed, or that the views of his co-workers (none of whom were identified) had been canvassed. The dismissal was fundamentally unfair, and there was no right of appeal.

In March 2020 when claims had been made that he was not reaching his targets, the Complainant set out a full response arguing his case. His sales figures from 2019 show that there was no cause for complaint in relation to his performance and monthly targets.

The Complainant relies on Redmond on Dismissal Law 3rd edition para 13.58:

“Natural and constitutional justice demands that alleged misdemeanours of an employee be brought to his notice and that he be given an opportunity to defend himself. Although written representations may be regarded as satisfying the test of fairness it is preferable to provide an oral hearing to an employee. “

There was no warning of any threat of dismissal to the Complainant and he relies on In Dodder Management UD 311/1978, which states an employer cannot dismiss without, where appropriate, giving an employee warnings. No opportunity was given to the Complainant to rectify any issue.

The Complainant also relies on the failure of the employer to provide any appeal as set out in An Employee v. An Employer (ADJ-0000381). The Complainant submits that due to the failure to provide any procedures the dismissal was fundamentally unfair.

The Complainant was out of work and obtained alternative employment in June 2020. He has a monthly loss of 2,505.00 euro.

CA-00040545-002

The Complainant complains of unlawful deductions during the period 1st January 2020 to 13th June 2020, in respect of salary 15,994.36 net, Commission due January 2020 net 1,258.78, February 2020 8,479.30, commission due March 2020 8,664.10, wages 11,250.00, total due 32,340.02.

CA-00040545-003

The Complainant claims unpaid notice of 1,458.00.

The Respondent is an Irish business specialising in the supply and installation of doors and windows.

The Complainant was initially employed as a Sales Manager & Technical Advisor on 1st November 2017. He changed his role to Senior Sales Representative on 1st January 2019.

The Respondent denies the Complainant has been unfairly dismissed and is owed any monies. The Complainant was dismissed due to his conduct in accordance with S6 4 (b) of the Unfair Dismissals Act 1977 and a breakdown of trust and confidence with his employer. He was paid two week’s notice due.

Mr. Labedz will say that the conduct of the Complainant was causing damage to the business and its reputation. They did not have HR advice but followed the contract of employment with the Complainant which had a Review clause.

REVIEW

“Your employment may come under review If the Company has reasons to be strongly unsatisfied with your actions.

Such reasons Include, but are not limited to: persistent failure to perform your duties as set out in this contract: difficulties in or lack of communication with you for customers and colleagues; negative feedback that we receive from customers and/or colleagues towards you; irresponsible treatment or unauthorised use of Company property made available to you, such as Company car, laptop, phone: any action taken by you which is in breach of this agreement.

 If the review period is initiated, you will be notified of it in writing and it will be in place from the date of the notification until the reason for and the circumstances around the review are expounded. Your employment coming under review may result in a reduction of your remuneration, financial penalties, suspension of your Company fuel card, revoking your right to use the Company car.

If the review concludes that you are a burden to the Company and don't act with its best interests in mind, your employment may be terminated.

 In such case, the notice that the Company shall be obliged to give you is one week.”

The Complainant received his contract of employment on 1st November 2017. This was revised on 1st January 2019. He was offered another job in April 2019 and his contract was re-negotiated to 45,000 annual salary, 500 euro monthly bonus for achieving the monthly sales target, and commission of 4.5% above the monthly sales target. On 1st July 2019, the Respondent said the contract terms were revised to be calculated only on the basis of signed contracts and after checking the profitability of the agreements.

On 15th July 2019, the Complainants’ monthly target was increased to 80,000 net a month from 1st August 2019. The Respondent began to have issues with the Complainant not handing in his paperwork which impacted the year end accounts. On 3rd October 2019 the Respondent emailed looking for the paperwork, and warning they would have to suspend the Complainant’s commission for September. The Respondent sent a performance improvement plan to the Complainant on 14th October 2019 with a list of 9 areas to improve on and a list of clients where errors were made. The Complainant disputed these issues.

The Respondent emailed the Complainant on administrative issues regarding contracts in November 2019.The Complainant was signing deals but not submitting the contracts or following up on paperwork. The Managing Director met the Complainant in January 2020 to discuss his performance. The Complainant sought information regarding commissions. The Managing Director said he could not identify payments to the company, and asked to meet the Complainant on 10th January 2020. The Complainant raised an issue with the Managing Director selling to clients in his area and the Managing Director said he had to take on clients, as clients were not hearing back for a number of weeks.

On 25th January 2020, the Complainant attempted to resign, and the Managing Director put him on review. He asked him for his 2019 sales report. Due to discrepancies the deadline was extended to 31 January. On 8th February 2020 the Managing Director wrote to the Complainant seeking his sales report due to inconsistencies and information missing. On 9th March 2020, the Managing Director wrote to the Complainant reminding him that he did not have his sales report for 2019. The Complainant was seeking his commission. He was informed he was being given a warning and that dismissal could follow if he failed to provide the required documentation. The Managing Director said there were large discrepancies in the amounts of commission owed and income.

On 15th March 2020, the Complainant’s sales report was eventually provided. The Managing Director said he had been overpaid commission for 2019. The company increased his sales target to 100,000 per month. The Complainant was not providing weekly sales reports required. A sales assistant was hired for the area.

On 31st March 2020, the Respondent informed staff they would pay 70% of their salaries and they were placed on the Temporary Wage Subsidy Scheme.

On 3rd April 2020, the Complainant provided a monthly sales report. On 7th and 9th April 2020, management raised issues regarding authorisation of discounts being given by the Complainant and guidelines were given. The Respondent was having great difficulty paying where contracts were not provided, or discounts given which were unprofitable. The Respondent was becoming frustrated with the Complainant who was looking for commission when he was under review, and on a performance improvement plan.

On 29th May 2020, the Respondent terminated the Complainant’s employment by letter as there had been no improvement and set out the damage to their reputation. The Complainant was asked to work one week and given one week’s garden-leave which he did not work. He was paid two week’s notice.

While it is accepted that there may some procedural issues surrounding the dismissal, it is submitted this does not necessarily negate the fairness of the outcome. The Respondent relies on the Review clause in its contract of employment. The Respondent did not see an improvement in the Complainant’s standard of work after October 2019, there were issues with sales reports, sales, and sales not making a profit. The Complainant was put on a performance improvement plan and was given a formal warning.

The Respondent relies on Elia Erian Aziz v The Midland Health Board [1995] E.L.R. 48, where the Circuit Court held that:

“(3) While a disciplinary body exercising quasi-judicial functions is bound to adopt fair procedures, a bona fide defect in the procedures adopted is not necessarily fatal to the legality of the ultimate decision made.

(4) Where a defect in the procedure adopted or in the conduct of the proceedings is alleged, the applicant in order to succeed must establish that the complaint is well founded and that the defect complained of raises a reasonable possibility that an injustice may have been done.

(5) Accordingly, where there is no reasonable possibility that an injustice may have been done to the person under investigation as a result of the defect complained of, the decision is lawful and has the same effect as it would have had if no such defect had been found.”

The Respondent submits the Review process was signed and agreed to by the Claimant in his 2019 contract of employment. The Respondent also relies on Loftus and Healy -v- An Bord Telecom (13 February 1987, unreported, HC) where the High Court stated that the it was not simply a question of whether or not the employees were deprived of a fair procedure but rather “whether the denial to them of such procedures is such that the defendant must be deemed to have failed to establish … [the basis of its dismissal] as the whole or main reason for justifying their dismissal” and Pacelli -v- Irish Distillers (UD 57I / 2001) where the Tribunal stated that: “…in determining this appeal we must look at the substance of the complaint and beyond mere defects of form.

The Respondent submits it acted reasonably and proportionately in the circumstances. It relies on the ruling in Looney & Co. Ltd. v Looney UD843/1984, where the Employment Appeals Tribunal said it is their responsibility to “consider against the facts what a reasonable employer in his position and circumstances at that time would have done and decided and to set this up as a standard against which the employer’s actions and decision are to be judged.”

CA-00040545-002

The Complainant was paid €1516.67 on the 26th of June 2020, he was on the Temporary Wage Subsidy Scheme at this time.

Section 6(4) of the Payment of Wages Act, 1991 requires a complainant to submit a complaint within 6 months of “the date of the contravention to which the complaint relates”.

The Complainant has taken his claim on the 22nd of October 2020 and as such can only seek payments on contraventions from the dates between the 2nd of April 2020 and his dismissal on the 29th of May 2020. The Respondent submits that the Claimant is out of time for claims “Commission due (non-taxable) January 2020 € 1,258.78 Commission due (non-taxable) February 2020 € 8,479.30 Commission due (non-taxable) March 2020 € 8,664.10”.

The “date of contravention to which the complaint relates” means was considered in the High Court decision of McDermott v HSE, 2014, IEHC 331. Justice Hogan observed; “In other words, time runs for the purposes of the Act not from the date of any particular contravention or even the date of the first contravention, but rather from the date of the contravention to which the complaint relates…….. everything turns, accordingly, on the manner in which the complaint is framed by the employee. “If, for example, the employer has been unlawfully making deductions for a three-year period, then provided that the complaint which has been presented relates to a period of six months beginning “on the date of the contravention to which the complaint relates”, the complaint will nonetheless be in time”.

CA-00040545-003

The Complainant has made a complaint seeking notice pay which is a duplication.

I have heard and considered the submissions and evidence of the parties and their witnesses.

This case was heard over four days on 26th November 2021, 24th March 2023, 20th July 2023, and 16th November 2023.

Section 6 (1) of the Unfair Dismissals Acts 1977 as amended provides that a dismissal of an employee shall be deemed to be an unfair dismissal, unless having regard to all the circumstances there were substantial grounds justifying the dismissal. Section 6 (4) (1) of the Acts provide that without prejudice to the generality of Section 6 (1), the dismissal of an employee shall be deemed for the purpose of the Act not to be an unfair dismissal if it results wholly or mainly from one of the following:

(a)    the capability, competence and qualifications of the employee for performing work of the kind that he was employed by the employer to do:

(b)    the conduct of the employee,

(c)     the redundancy of the employee, and

(d)    the employee being unable to work or to continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under statute or imposed or under any statute or instrument made under statute.

Section 6 (1) (6) of the Act provides in determining whether the dismissal of the employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal.

Section 6 (1) (7) of the Act provides 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 as the case may be, considers it appropriate to do so-

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

(b)    to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee with the procedure referred to in S14 (1) of this Act, or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals Amendment Act 1993) of section 7 (2) of this Act.

The Respondent provided Mr. O’ Shea with a contract of employment which he signed when he commenced employment on 1st November 2017. The Review clause in his contract of employment provides:

“Your employment may come under review If the Company has reasons to be strongly unsatisfied with your actions.

Such reasons Include, but are not limited to: persistent failure to perform your duties as set out in this contract: difficulties in or lack of communication with you for customers and colleagues; negative feedback that we receive from customers and/or colleagues towards you; irresponsible treatment or unauthorised use of Company property made available to you, such as Company car, laptop, phone: any action taken by you which is in breach of this agreement.

 If the review period is initiated, you will be notified of it in writing and it will be in place from the date of the notification until the reason for and the circumstances around the review are expounded. Your employment coming under review may result in a reduction of your remuneration, financial penalties, suspension of your Company fuel card, revoking your right to use the Company car.

If the review concludes that you are a burden to the Company and don't act with its best interests in mind, your employment may be terminated.”

Mr. O’ Shea’s contract of employment was subsequently revised by the parties on two occasions, on 1st January 2019 and 1st May 2019. On 15th July 2019, the company raised Mr. O’ Shea’s monthly target to 80,000 net a month from 1st August 2019. Mr. O’ Shea did not agree to the change. The company raised issues with Mr. O’ Shea’s paperwork. Mr O’ Shea was warned in October 2019 the company would have to suspend his commission for September, and he was given a performance improvement plan. There were further notifications, and a meeting regarding Mr. O’ Shea’s performance in January 2020.

On 25th January 2020, Mr. O’ Shea attempted to resign, and was informed by email he was being put on review. Mr. O’ Shea was requested to provide his sales report due to discrepancies in the figures. On 9th March 2020, Mr. O’ Shea was given a warning as he had failed to provide his sales report for 2019, and told dismissal could follow if he failed to provide the report. The report was provided to the company on 15th March 2020. During this period Mr. O’ Shea was seeking unpaid commission.

Mr. O’ Shea was informed he had been overpaid commission for 2019 which would be deducted from his wages. The company increased Mr. O’ Shea’s sales target to 100,000 per month without his agreement.

On 31st March 2020, the company informed staff they would pay 70% of their salaries on the Temporary Wage Subsidy Scheme.

In April further issues were raised by the company regarding authorisation of discounts given by Mr. O’ Shea. The company said it was having great difficulty paying where contracts were not provided, or discounts given which were unprofitable. By letter of 29th May 2020, the company terminated Mr. O’ Shea’s employment.

The letter of 29th May 2020 referred to the company and its co-workers giving numerous chances to Mr. O’ Shea to improve, but no improvement has been seen and referring to losses by the company. It refers to allegations by the company and co-workers of Mr. O’ Shea’s failure to manage projects, refusing to take responsibility for mistakes, failing to complete accurate contract details, disputing the remuneration structure and demanding additional payments, sharing internal company information with a competitor and a list of client cases where issues of neglect, carelessness or recklessness arose.

Mr. O’ Shea’s contract of employment does not contain a grievance and disciplinary procedure in compliance with Statutory Instrument 146/2000 Industrial Relations Act 1990 (Code of Practice on Grievance and Disciplinary Procedures (Declaration) Order 2000. At paragraph 6 this requires companies to comply with the general principles of natural justice and fair procedures:

“That details of any allegation or complaints are put to the employee concerned

That the employee concerned is given the opportunity to respond fully to any such allegations or complaints…..

These principles may require that the allegations or complaints be set out in writing, that the source of the allegations or complaint be given or that the employee concerned be allowed to confront or question witnesses”.

The Supreme Court in Mooney v An Post [1998] 9 ELR 238 stated an employee is entitled to fair procedures but what fair procedures demand will depend on the circumstances surrounding the proposed dismissal.

The High Court in Flanagan v University College Dublin [1989] ILRM 469 found where there are serious adverse consequences for an individual the criterion for fair procedures to be applied must be the consequences for the person of an adverse verdict. No information has been provided regarding any company investigation being carried out which provides precise details of the allegations, and to allow Mr. O’ Shea to respond to these fully at a hearing prior to any decision to dismiss being made by the company or on appeal.

Undoubtedly, Mr. O’ Shea was aware he was under review for performance issues, this had been raised over a six month period prior to dismissal. However, he was entitled at a minimum to be given the opportunity to respond to details of allegations, through an impartial process prior to his dismissal or on appeal. I find the company’s decision to dismiss procedurally unfair.

Mr. O’ Shea obtained alternative employment in June 2020. He has ongoing financial loss of 2,505 euro per month. The appropriate redress is compensation. In the circumstances, I direct payment of 30,000 euro financial loss by the Respondent to the Complainant.

CA-00040545-002

Mr. O’ Shea complains of a breach of S5 of the Payment of Wages Act 1991 and seeks unpaid wages of 33,519.87 and notice of 1,458.00. His complaint form was received by the Workplace Relations Commission on 22nd October 2020. Mr. O’ Shea submits that all monies were due and payable on termination of his employment on 29th May 2020 which is the first date it became apparent the company was reneging on its obligation to pay monies due.

Mr. O’ Shea has provided a calculation of the figures based on Mr. O’ Shea’s contract of employment of 14th December 2018, which provides for a monthly bonus of 1,000 and 6% commission on sales above target. He rejects the increase in his targets, commission and change to monthly bonus notified by the company as he says it was never agreed.

The Respondent says Mr. O’ Shea is out of time for his complaints regarding commission due as the relevant period of six months claim pursuant to S4 of the Act is 22nd April 2020 to 22nd October 2020.  Mr. O’ Sheas terms were revised in April 2019, and July 2019.  He delayed in providing figures so should not benefit from his misconduct. Ultimately, the Complainant continued to work as normal and did not raise any grievance regarding the changes, therefore he accepted the new terms.

The Respondent says there was an overpayment to the Complainant in 2020 based on the figures. No issue was taken with the overpayment of 4,000 euro. The Respondent disputes commission is due on a number of contracts and is not owed any commission for 2020.

I have considered carefully the submissions and evidence of the parties and witnesses in relation to this claim.

Mr. O’ Shea contends that an increased salary of 45,000 euro was agreed with the Managing Director in April 2019 but there was no variation to the other terms of his monthly bonus, targets or commission. An email of 1 May 2019 from Mr. O’ Shea has been provided in response to the offer made by the Managing Director, where he says no other changes were agreed. The Complainant repeatedly raised his unpaid commission with the Managing Director during this period. As the response by the Complainant was not a clear and unconditional acceptance of the Managing Directors offer of 30th April 2019, the email of 1 May 2019 is a counter-offer. There is no evidence this was accepted by the company. I find that negotiations were ongoing during this period by the parties on the issues and the sum claimed became payable when Mr. O’ Shea’s employment was terminated on 29th May 2020.

I find the complaint is well founded. I accept 17,549.55 euro gross unpaid commission and bonus for 2019 is due to Mr. O’ Shea by the Respondent. The Respondent disputes a number of the commissions claimed by Mr. O’ Shea for 2020. However, compelling evidence has been given by Mr. Shea. In the circumstances, I find the sum of 15,970.32 euro gross for commission and bonus is due to Mr. O’ Shea total 33,519.87 euro and direct payment by the Respondent.

CA-00040545-003

The Complainant has sought full payment of two weeks’ notice which was paid but reduced to 70% as staff were on reduced wages with the TWSS during the pandemic. I find the Respondent’s wages were reduced during his period and the complaint is not well founded.

CA-00040545-001

The Complainant was unfairly dismissed and I direct payment of 30,000 euro financial loss to be paid by the Respondent.

CA-00040545-002

The complaint is well founded. I find the sum of 33,519.87 euro gross for commission and bonus is due to the Complainant and direct payment by the Respondent.

CA-00040545-003

The complaint is not well founded.

Unfair dismissal, contractual terms, commission and bonus