UDD2428

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00033099 (CA-00043814-009)

BACKGROUND:

The Worker appealed the Decision of the Adjudication Officerto the Labour Court on 14 October 2022 in accordance with Section 8A of the Unfair Dismissals Act 1977 to 2015. A case management meeting was held on 23 May 2023. The Court held hearings on 1 February 2024 and 16 May 2024.

The following is the Decision of the Court.

DECISION:

This is an appeal by Christian Porter (‘the Complainant’) of a decision of an Adjudication Officer (ADJ-00033099 – CA-00043814-009 dated 30 September 2022) under the Unfair Dismissals Act 1977 (‘the Act’).

Christian Porter did not attend the hearing at first instance and the Adjudication Officer held that, in the absence of any evidence to the contrary, the complaint of constructive unfair dismissal by him against his former employer Excell Roofing Systems Limited (“the Respondent”)was not well-founded.

The appeal was lodged to the Labour Court on 14 March 2022. A case management meeting was held on 23 May 2023. This case is linked to PWD2444, DWT2421 and TED2411. The Court heard the four appeals across two days on 1 February 2024 and 16 May 2024.

Background

The Complainant was employed as a senior manager in a construction company and was laid off from his employment in January 2021.  He raised several issues about his employment with the managing director during the period of layoff. It is accepted that the Complainant was not provided with a written contract on commencing employment. In March 2021, the Complainant was provided with a draft contract of employment and details of a formal grievance procedure. He was invited to attend a meeting on 22 March 2021. That meeting did not take place. He resigned his position on 25 March 2021.

Position of the Complainant

The Complainant commenced employment with the Respondent on 1 July 2019 as a Project Manager and was subsequently promoted to the position of Contracts Manager.

The Complainant was placed on lay-off on 2 January 2021. He resigned his employment on 25 March 2021 in circumstances where the Respondent demonstrated a clear intention to repudiate the Complainant’s contract of employment by implementing the lay-off without pay.

The Complainant was entitled to resign as the breach of his contract of employment was so significant that it went it the root of the contract itself and demonstrated that the Respondent no longer intended to be bound by its essential terms. The Respondent made blatant attempts to change his core terms and conditions of employment including by, inter alia, demoting him to an operative role. Furthermore, a new employee at a senior managerial level was recruited during this time.

There is no obligation to invoke a grievance procedure where the contract test is satisfied.

Position of the Respondent

The Complainant was laid off from his employment due to the Covid-19 pandemic which resulted in unprecedented challenges for employers to keep their business afloat. Many employers had to make the difficult decision to place employees on layoff or short time in order to avoid redundancies, as happened in this case.

To succeed in a claim of constructive dismissal the Complainant must discharge a high burden of proof and demonstrate that they were justified in their decision and that it was reasonable for them to resign.

The Complainant in this case unreasonably terminated his employment on 25 March 2019 without availing of any grievance procedure or allowing the Respondent an opportunity to respond to the issues he raised. The contract test does not apply in this case as there was no erosion of the core components of the Complainant’s contract of employment. 

Evidence of Christian Porter – the Complainant

The Complainant was appointed as a project manager in July 2019 and, subsequently, became a senior project manager with responsibility for overall delivery of contracts on various construction sites.

He was due to return to work on a contract site in Harold’s Cross, when the managing director, Mr Crowe, contacted him by phone on 2 January 2021 and placed him on layoff due to a downturn in business. He could not accept the rationale provided, as work was ongoing and there was no downturn. He wrote to Mr Crowe by email raising several matters. He queried his selection for layoff, the length of the layoff, and his payment for annual leave. In subsequent correspondence, he advised Mr Crowe that his legal advice was that he was entitled to full pay in the absence of an express provision in a contract of employment. He never agreed to a unilateral reduction in his wages.

Mr Crowe wrote to say that the layoff was due to Level 5 Covid restrictions, rather than a downturn in business. Mr Crowe stated that the layoff commenced on 11 January 2021 and that he would receive payment and annual leave for unpaid days up to that point. He was told that he could use his annual leave as an alternative to lay-off if he wished. He was later advised that 4 and 5 January had been added back to his annual leave entitlement.

The Complainant referred to various correspondence where he sought replies to queries. He queried why he was removed from a WhatsApp group at the contract site and why his employment was recorded as ceased on the Revenue website on 19 January 2021. In reply, Mr Crowe advised that the notification to Revenue was an error, and that the WhatsApp group was not administered by the Respondent, and he believed it was no longer in use.

The Complainant sought a return-to-work date, as he understood operatives were back on site in Harold’s Cross. He received a reply stating that some sites had reopened on a greatly reduced capacity, with the need for managerial jobs reduced.  He was aware that a Director of Operations was recruited during this time, which was a role that he could have undertaken.

On 26 February 2021, the Complainant was advised that he was welcome to return to work as an operative. The Complainant understood the offer to be a demotion, and that he was being asked to return to work and report to those who reported to him.

On 3 March 2021 he wrote to Mr Crowe stating his concerns that there was a concerted effort to oust him from his job, and that Mr Crowe was attempting to implement unilateral changes to his terms and conditions of employment. He noted he had not been provided with a contract of employment or a grievance mechanism.

On 15 March 2021, he received a contract of employment for review, and a request to meet to discuss his grievances.  He had various issues with the contract of employment: the job title was stated as “Senior Project Manager” rather than “Contract Manager”; his place of work was stated to be Cavan, not Harold’s Cross; the layoff clause was backdated; another clause stated that the entire document superseded any other contract. He replied to say that he was seeking legal advice and would be in contact in due course.

The Complainant had lost trust and confidence in Mr Crowe by that point due to the different narratives about the reason for his layoff. Firstly, he was told that it was due to a downturn in business, then that it was due to Covid. The reason for the layoff mattered. Social media posts were highlighting the company’s increased turnover, and a Director of Operations was recruited during his lay-off period, which he believed that he could have filled that role. In his view the grievance procedure and offer to meet was a red herring. 

On 25 March he resigned his employment. He had no option but to resign, as he had bills to pay and needed to work. He interviewed for a role with another subcontractor on the Harold cross site and took up employment a week later.

Under cross examination, the Complainant said that he had no missed calls or voicemail messages from Mr Crowe after 2 January 2021. He could not recall being copied on emails from the main contractor on 2 January or any attachments to an email from Mr Crowe on 30 January 2021.

The Complainant said that his contract of employment was breached as his employer refused to pay him during his layoff. His employment was ceased on the Revenue website. He was not aware of other contract managers who were laid off, other than two that he mentioned in an email to Mr Crowe. He did not accept that he was offered an operative role on a temporary basis, although it stated so in writing. The offer was demeaning. He accepted that he was never demoted.  He was removed from the WhatsApp group. He accepted the WhatsApp group was set up by the main contractor.

When asked if the offer to meet with the Mr Crowe precipitated his resignation, the Complainant said that the contract of employment was the final nail in the coffin, as he was given permission to use the title ‘Contract Manager’ and understood the lay-off clause would be back dated which would mean that he was laid off without pay.  He accepted that the company headquarters are based in Ballyjamesduff.

The Complainant accepts that he did not use the grievance process. He said that he had already raised grievances about his pay, his annual leave, his contract of employment and his lay off.  He felt that he was not respected. He had lost trust and confidence in Mr Crowe.

The Complainant received a Social Welfare PUP payment when laid off. When asked to comment that he accepted the layoff was Covid related as PUP payments only applied to those on lay off due to COVID, he replied that he submitted the documentation received from the employer to Social Welfare.

Replying to questions from the Court, the Complainant said he received legal advice before resigning. He never disputed his lay off during the first lockdown in 2020, which he felt was a legitimate lay off due to COVID, even though there was no contractual clause in a contract of employment proving for layoff at that time. He did not believe Covid was a factor in the reason for his lay him off in 2021.

Evidence Jonathon Crowe

The Complainant was due to return to work on 4 January 2021. On 2 January 2021 the main contractor notified Mr Crowe by phone call and email that the Harold’s Cross construction site would not re-open as scheduled.  The email was copied to the Complainant.  Only for the decision of the main contractor, the Complainant would have returned to work on site.

Mr Crowe phoned the Complainant to advise him of a temporary lay-off situation, as the site would not reopen as scheduled. By 8 January 2021 all sites were closed. He wrote to all employees, including the Complainant, advising that they were laid off due to Covid.

The Complainant raised various issues by email. There was a lot going on at the time, but in his view, he responded to all issues raised. The Complainant wouldn’t answer his phone, and the communications from him became very formal and aggressive in tone. When the Complainant said that he was seeking legal advice, he felt immediately he was being pushed in a certain direction. He was afraid to respond without getting his own advice.

There was a phased reopening of sites from the end of January. Managerial roles were not required during that time. In all, three or four sites reopened, while five or six others remained closed. Three workers were allowed to return to the Harold’s Cross site. Before the lockdown the company had twenty workers on that site.  The Complainant clearly wanted to return to work. The offer of a general operative role was not made to any other manager, as no one else was as anxious to get back to work. Everyone was back on site by the start of April 2021.

He recruited a Director of Operations role in February or March 2021, which was not advertised. He headhunted the person appointed, and his role was to bring in new business, oversee the entire company operations and deal with contracts and tenders. It was a more senior role than the Complainant, who did not have the skills or experience in that area. There was no agreement with the Complainant about using the title “contracts manager”.  Aside from one email from a delivery driver, there are no references to him as a “contract manager” on any other company documents.

Mr Crowe sent the Complainant a standard contact of employment on 21 March 2021 and invited him to a meeting as he wanted to sit down and sort things out. The Complainant did not attend the meeting and did not avail of the grievance procedure. 

Cross examination

Mr Crowe acknowledged that the Complainant was the only person laid off on 2 January 2021. He was the first person contacted, as the most senior person on site.  It was incorrect to say the site closed due to work drying up, as the opening was deferred due to Covid. The site fully closed on 8 January 2021. He did not advise the Complainant about the phased re-opening of the Harold’s Cross site, but had tried to call him.

Mr Crowe disputed that he did not address all of the Complainant’s queries. He repeatedly told the Complainant by email not to hesitate to contact him. He referred to correspondence addressing annual leave queries which explained why he could not pay him in lieu of annual leave. He acknowledged that he did not specifically address the query about lay off selection, but it was clear all sites closed due to Covid. Mr Crowe said the Complainant was recorded as “ceased” on the Revenue website on 19 January 2012 in error, and the matter was addressed when he learned about it. He accepted that the tone of emails from the Complainant querying his lay off were not aggressive.

Mr Crowe acknowledged that there was no grievance procedure in place until 2021. If workers had an issue, they could contact him directly, or by phone or email.  When asked if it was appropriate for him to ask to meet with the Complainant in March when the grievance was against him, Mr Crowe replied that he thought it was appropriate that they meet to discuss matters. In his view, it was an informal discussion and in line with the grievance procedure.

When asked to comment on the Complainant’s evidence that he had lost confidence in Mr Crowe, as he was the only one laid off, Mr Crowe said there was no trust issue.  When asked to comment on an email recalling the Complainant from annual leave in September 2021, Mr Crowe said there was an issue on site that needed to be sorted, as the main contractor had threatened to throw the respondent company off site.  There are always issues on sites, and the complainant was responsible for that site.

The Relevant Law

Section 1(b) of the Act defines a constructive dismissal for the purposes of the Act as follows: -

“(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”.

Section 6(1) of the Act states:

“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.”

Deliberation and Findings

To succeed in a claim of constructive dismissal under the Act, the Complainant must demonstrate that his decision to resign his employment resulted from either a repudiatory breach of his contract of employment by the employer, or such unreasonable behaviour by the employer that he could not fairly be expected to put up with it any longer.

In this case, the Complainant contends that he was entitled to resign as the Respondent demonstrated a clear intention to repudiate his contract of employment by putting him on lay-off without pay, and there is no obligation to invoke a grievance procedure in circumstances where the contract test is satisfied.

The Respondent contends that the Complainant unreasonably terminated his employment without availing of the grievance procedure or allowing the Respondent an opportunity to respond to the issues he raised. It submits that the contract test does not apply in this case as there was no erosion of the core components of the Complainant’s contract of employment. 

Was there a repudiatory breach of the Complainant’s contract such that he was entitled to resign his employment?

The test by which a repudiatory breach of contract can be identified was set out by Lord Denning M.R. in Western Excavating Limited (ECC) v Sharp [1978] IRLR 332 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.” 

In this case, the Complainant’ gave evidence that the Respondent was engaged in a concerted effort to oust him from his employment, and that his contract of employment was breached when the Respondent (i) laid him off from his employment, (ii) failed to pay his wages, (iii) recruited another member of senior management, and (iv) attempted to change his core terms and conditions of employment and (v) attempted to demote the Complainant to the role of operative.

The Court heard extensive evidence from the Complainant and from the managing director Mr Crowe. An amount of correspondence exchanged between the parties was also opened to the Court.

Rationale for the lay off

The Complainant contends that his lay-off prior to other colleagues was not linked to the Covid-19 but was part of a concerted effort by the Respondent to oust him from his employment. 

The Court had some difficulty with the Complainant’s contention that his lay-off before other colleagues was part of a concerted effort to oust him from his employment. It is clear that the Complainant was contacted before other employees because of his senior position with responsibility for delivery on site. Within a few days the entire workforce was laid off. The Court notes that the Complainant was subsequently paid up to 8 January 2021, which was the point that all other employees were laid off.

In the Court’s view, the business challenges that gave rise to the layoff were clearly linked to an evolving and rapidly deteriorating situation related to a spike in the Covid-19 pandemic. At that time, the country had entered a Level 5 Lockdown, and it was evident to all that severe restrictions were being imposed to curtail the transmission of the latest Covid-19 variant, which in turn would impact the delivery of business.

Having regard to the evidence submitted, the Court finds that the Complainant was laid off due to the impact off the COVID-19 pandemic on the construction sector and, as a result, does not find that his lay-off prior to other colleagues was part of a concerted effort by the Respondent to oust him from his employment. 

(ii) Non-payment of Wages

In a linked complaint taken by the Complainant under the Payment of Wages Act, 1991, the Court determined that the Complainant suffered an unlawful deduction from his wages in the period from 8 January 2021, when all employees on site were laid off, to the date when his employment ended on 25 March 2021.

To amount to a repudiatory breach under the 1977 Act, the employer’s breach must constitute a fundamental breach of the employment contract. The Court must consider whether, in the circumstances of this case, the Respondent repudiated the Complainant’s contract of employment such as to warrant his resignation on 25 March 2021. 

The Court heard that lockdown restrictions were lifted, and all employees returned to site in early April 2021, but the Complainant was not to know that before he resigned his position on 25 March 2021.

In awarding redress in the complaint under the 1991 Act, the Court found it appropriate to consider the wider circumstances in which the deductions occurred.  Likewise, in the within complaint the Court is of the view that the unprecedented circumstances that prevailed at the time, during the height of the global Covid-19 pandemic when enforced lockdowns impacted all employment sectors is a relevant factor to take into account in considering whether the Respondent actions were such that the warranted the Complainant’s resignation on 25 March 2021.

The pandemic had an unprecedented impact on Irish society. The challenges facing employers and employees across all employment sectors were exceptional and significant in scale. Few employers were able to continue to pay employees in those circumstances.  Given the exceptional and extraordinary circumstances that arose at that time, and having regard to the submissions and evidence on this case, the Court is of the view that the actions of the Respondent were not sufficient to warrant the Complainant’s resignation on 25 March 2021.

Having regard to the facts of this case, the Court finds that the non-payment of the Complainant’s wages by the Respondent when the Complainant was laid off from work, because of government-imposed lockdown aimed at minimising the spread of the latest Covid-19 virus variant, was not sufficient to warrant the Complainant’s resignation on 25 March 2021

(iii) Recruitment of a Director of Operations

The Complainant contends that the appointment of a new member of senior management during the layoff period displays further efforts by the Respondent to oust him from his employment. A Director of Operations was appointed to the company in March 2021, and in the Complainant’s view he could have undertaken that role.

Mr Crowe told the Court that the purpose of the Director of Operations role was to oversee company operations, particularly in relation to contract tendering processes and to bring in new business. He said that the role was simply not comparable to the Complainant’s as a senior project manager.  Notwithstanding the Complainant’s references to his title as a “contract manager”, the Complainant’s, in his own evidence to the Court, described himself as a” senior project manager” with responsibility for overall delivery of contracts on various construction sites.

Having regard to the evidence tendered the Court does not find that the role of Director of Operations was comparable to the Complainant’s roles as a “senior project manager”, or that the appointment of a Director of Operations during the period lay-off was part of a concerted effort by the Respondent’s efforts to oust the Complainant from his employment.

(iv) attempted changes to other conditions of employment

The Complainant contends that there was a concerted effort to change other core conditions of employment. The Respondent's position submits that the contract test does not apply where there was no erosion of the core components of the complainant’s contract from employment.

In March 2021, the Complainant was sent a contract of employment for review. The Complainant did not attend the meeting scheduled to discuss the terms set out in that contract. The Court finds that no changes were implemented to the Complainant's contract of employment before he resigned. 

As a result, the Court finds that the Respondent did not repudiate the Complainant’s contract of employment by implementing changes to his other core conditions of employment.

(v) attempted demotion

By letter dated 26 February 2021, the Complainant was given the option of returning to work as an operative on a temporary basis. In evidence, the Complainant accepted that he was never demoted, however, he said that he felt that he was being hoodwinked into taking the role.

The Court cannot find that the letter on 26 February 2021 was an attempt on the part of the Respondent to demote the complainant, or part of a concerted effort to oust him from his employment.  In the letter Mr Crowe clearly acknowledged the hardship caused to employees by the ongoing lay off situation and inquires if the option of a temporary role was something that the Complainant was interested in.

Having regard to the evidence submitted, the Court finds that the Respondent did not repudiate the Complainant’s contract of employment by attempting to demote him. He gave him an option of returning to work as a general operative on a temporary basis. The Complainant did not take up that role.

Having regard to the submissions made and evidence proffered, the Court finds that in the circumstances of this case the Respondent did not repudiate the Complainant’s contract of employment such as to warrant the Complainant’s resignation on 25 March 2021.

Were the actions of the employer so unreasonable that the Complainant was left with no option other than resign his employment?

To succeed in a claim of constructive dismissal - where the contract test is not satisfied - a Complainant must show that he pursued his grievances through any relevant procedures before taking the step to resign. In normal circumstances a Complainant who seeks to invoke the reasonableness test must also act reasonably by providing the employer with an opportunity to address whatever grievance they may have. In this case, it is submitted that it is not fatal to the Complainant’s case that he did not use a grievance procedure, and that, in any event, there was no such procedure in place. The Respondent says that notwithstanding the absence of a formal grievance procedure until March 2021, there was an open-door policy in place.

The question for the Court to consider is whether the cumulative effect of the interactions between the employee and employer, in the period after 2 January 2021 when the Complainant received a phone call about a temporary layoff, crossed a threshold as to damage the relationship to such an extent that it was reasonable for the Complainant to resign on 25 March 2021. In that regard, two very different narratives were presented to the Court.

The Complainant contends that he raised many issues with Mr Crowe after 2 January 2021. He said that some queries were not answered, or the answers given supported his suspicions that the managing director was trying to oust him from his employment. He was not kept informed about the site reopening and felt demeaned and disrespected.  The Complainant accepts that he did not use the grievance process when offered. He said that he felt that the offer to meet in March was a red herring, as had tried to raise many issues before then and he felt ignored.

For his part, Mr Crowe said that the Complainant would not answer his phone, and all email communications became very formal. In his view he addressed all queries raised, but acknowledged some delays when he sought HR advice before responding.  On 3 March 2021 he sent the Complainant a contract of employment, a copy of a grievance policy, and an invitation to meet. That letter was signed off on a positive note and there was a clear commitment and belief from the Respondent that the matter could be sorted, and things allowed move forward.

The Complainant chose not to attend the meeting scheduled on 22 March 2021. By that time, the Complainant rightly or wrongly formed a view that the Managing Director was trying to oust him from the business. The Complainant’s evidence was that in his mind the relationship started to deteriorate the previous September 2020 and he felt things changed after Christmas 2020. By the time he received the letter inviting him to the meeting in March his mind was made up.

While the Complainant may have been distrustful about the situation, in the view of the Court there was an onus on him to meet with the Managing Director to try resolve issues and address his complaints before he resigned. He failed to avail of that opportunity. Instead, the Complainant replied to say he was seeking legal advice and submitted his resignation three days later.

In the view of the Court the decision by the Complainant to resign his position when he did was premature. The Complainant unreasonably terminated his employment without allowing the Respondent an opportunity of reply.

The Act places a high burden on a Complainant in a constructive dismissal case. To succeed in such a claim, a Complainant must establish that the employer’s unreasonable behaviour was such that he was justified in believing that he could not continue any longer in that employment. An employee must alert the employer to his situation by availing of the grievance procedure, where one exists, to allow the employer an opportunity to rectify the problem before resigning.

The issue for the Court to determines is whether the Complainant’s employment came to an end in circumstances of dismissal within the meaning of the statutory definition of that term contained at section 1 of the Act.  The Court has carefully evaluated the evidence adduced during the hearing and has taken full account of the written submissions made by the parties.

Having regard to the facts of this case and the high bar set by the authorities in constructive dismissal cases, the Court finds that the Respondent did not repudiate the Complainant contract of employment or behave in such a manner such as to warrant the Complainant’s resignation on 25 March 2021.

Decision

For the reasons set out above, the Court finds that the Complaint is not well founded.

The appeal fails and the decision of the Adjudication Officer is upheld.

The Court so decides.

	Signed on behalf of the Labour Court
	Katie Connolly
AR	______________________
15 July 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Aidan Ralph, Court Secretary.