Complainant

Respondent

Parties

Ciprian  Toader

The Historic Flooring Company Ltd

Representatives

  Self -represented

Self -represented

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-00058470-001

23/08/2023

The complainant submitted a claim under Section 8 of the Unfair Dismissals Act, 1977, on the 23rd of August 2023.  The complainant submits that he was constructively dismissed from his employment with the respondent on the 15th of February 2023.   

The complainant submits that

he had been employed by the respondent since November 2019,

he submits that he had not received wages  for the four weeks of work in January 2023, which is a clear violation of the employment agreement and a breach of the fundamental terms of his employment contract.

He submits s that  the lack of payment has placed him in a deeply distressing situation, affecting his  ability to meet his financial obligations

The complainant submits  that he had no choice  but to consider himself constructively dismissed.

The complainant submits that he advised the respondent orally and again by letter dated 30th of January 2023 that he would be left with no option but to resign and consider himself constructively dismissed if he did not receive the outstanding wages within 7 days.

The respondent submits that.

The  business, operating in Co. Wexford, specialises in sustainable timber products sourced primarily from the USA, an industry susceptible to market volatility.

The business  financial performance is heavily impacted by various factors, including fluctuating exchange rates, global shipping conditions, and material costs which are directly influenced by labour availability. The industry underwent a severe shipping crisis following the 2O2O|2O21 pandemic, coupled with a significant decrease in the US/Euro exchange rate and a notable scarcity of labour in the USA, resulting in escalated raw material costs. As a consequence of these external circumstances, the company faced a decline in cash flow from the end of 2022 through the beginning of 2023.

The respondent submits that upon resuming operations after the Christmas break, a number of options were explored to keep the company afloat including, closing the business, temporary layoffs or withholding wages for a period of four weeks.

ln anticipation of much improved cash flow by mid-February and to maintain business continuity in a highly competitive market it was agreed to withhold wages for a short period.

The respondent submits that he consulted with staff in respect of this in early January 2023 and while  some expressed obvious dissatisfaction, there was a clear understanding and acceptance of the rationale considering the available alternatives.

The respondent submits that on 30th of January 2023, he received a letter from the complainant  outlining that a Constructive Dismissal case was imminent if outstanding salaries were not reimbursed within 7 days.

The respondent submits that he was taken aback by this development as the decision had been openly discussed with all employees.

The respondent further submits that

During the second week of the delay, he offered the complainant cash compensation for the missed wages, but he declined.

By February 13th, the cash flow improved, and he immediately started the reimbursement process for the four weeks of missed wages. However, on February 15th, the complainant abruptly left his employment without prior notice or communication.,

The complainant agreed to return to work on April 7th but only under a different job title and job responsibilities, which would also have entailed a pay increase which was discussed and agreed upon before his return.

The complainant returned again on April 11th to complete recertification for forklift driving with the respondent  company.

As a responsible employer he removed the complainant from the payroll on request as he had started new employment.   The respondent submits that he formally notified the complainant of this on June 12th.

The complainant submitted a claim under Section 8 of the Unfair Dismissals Act, 1977, on the 23rd of August 2023.  The complainant submits that he was constructively dismissed from his employment with the respondent on the 15th of February 2023.   The WRC wrote to the complainant on 31 August 2023 advising that his claim was submitted outside of the 6 months’ timescale and requesting a submission in respect of reasonable cause for granting an extension of the time limits.  The complainant replied to this on 1 September 2023.

Section 41 (6) and (8) of the Workplace Relations Act, 2015 states as follows

“(6) Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

(8) An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause”.

These provisions are mirrored in Section 8(2) of the Unfair Dismissals Acts, 1977 wherein it states that:

“(2) A claim for redress under this Act shall be initiated by giving a notice in writing (containing such particulars (if any) as may be specified in regulations under subsection (17) of section 41 of the Act of 2015) to the Director General—

(a) within the period of 6 months beginning on the date of the relevant dismissal, or

(b) within such period not exceeding 12 months from the date of the relevant dismissal as the adjudication officer considers appropriate, in circumstances where the adjudication officer is satisfied that the giving of the notice within the period referred to in paragraph (a) was prevented due to reasonable cause”.

The Acts allows for an initial timeframe of six months within which a complaint must be lodged. It also allows for an extension of a further six months where a person was prevented from doing so due to reasonable cause.

The test for determining if an extension should be granted for reasonable cause was set out by the Labour Court in Cementation Skanska (Formerly Kvaerner Cementation) v Carroll DWT 38/2003 as follows:

 “It is the Court’s view that in considering if reasonable cause exists, it is for the Complainant to show that there are reasons which both explain the delay and afford an excuse for the delay. The explanation must be reasonable, that is to say it must make sense, be agreeable to reason and not be irrational or absurd. In the context in which the expression reasonable cause appears in the statute it suggests an objective standard, but it must be applied to the facts and circumstances known to the Complainant at the material time. The Complainant’s failure to present the claim within the six-month time limit must have been due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the Complainant should satisfy the Court, as a matter of probability, that had those circumstances not been present he/she would have initiated the claim in time.”

The complainant advised the hearing (and previously the WRC by email dated 1st of September 2023)  that he had in fact submitted his claim on the 9th of August and had resubmitted on the 23rd of August after contacting the WRC by phone when he had not received a claim reference number but his brother whose claim was submitted at the same time had received a claim reference number. 

The complainant advised the hearing that he had on the 9th of August 2023,  submitted his complaint form to the WRC as did his brother as both had been employed by the same respondent.  The complainant advised the hearing that he awaited confirmation that the complaint had been lodged  and  became concerned when his brother received the required confirmation along with a complaint ref number on the 21st of August and he himself did not receive any complaint reference number  even though both he and his brother had submitted their complaints together on the same date.    The complainant stated that he then decided to contact the WRC by telephone and spoke with an individual from  WRC information services who advised him to submit a new complaint form to WRC which he duly did.

The complainant  advised the hearing that the fact that his complaint was not recorded by the WRC was not as result of negligence on his behalf however, he acknowledged  that an error could have been made when the two applications were submitted on the same date with the same complainant surname and the same respondent’s name.

I am satisfied that the complainant’s brothers’ complaint does have a date of receipt of the 9th of August and was acknowledged by the WRC on the 21st of August.  I asked the complainant at the hearing for details of the method of his complaint submission and he advised the hearing that he had printed off the claim form and filled it in manually before faxing the forms to the WRC.   He stated that the did this with both complaint forms and received a return email from WRC submissions dated 9th of August 2023.   The complainant showed this email to the hearing as proof that the claim forms were received by the WRC on the date in question.  The complainant went on to state that on the 21st of August his brother received an acknowledgement of his claim form along with a CA reference number but the complainant did not receive one and so he became concerned and phoned the WRC to ask why his claim had not been acknowledged.  He submits that he was advised to resubmit his claim which he did on the 23rd of August 2023.

The complainant states that his form was submitted with the 6 months timeframe as it was submitted on the 9th of August as demonstrated in the acknowledgement email from submissions at WRC dated 9th of August 2023.

The complainant also added that he had also submitted a separate claim to the Inspection services in February 2023.

I note in this case that the complaint under consideration has a date of receipt of 23rd of August 2023.    The complainant himself states that he left the respondent employment on 15th of February returning on 2 separate dates in April firstly to complete a day’s work on the 7th of April and secondly to undertake recertification for forklift operator on 11th of  April.  In addition, I note that the respondent wrote to the complainant on 12th of June 2023 stating that he was still on the respondent payroll and confirming that he would be removed from the payroll as of that date.

This letter of 12th of June also requested a formal resignation from the complainant and referred to the fact that the complainant on 31st of May requested his p45 from the respondent informing him that he was commencing work with a different employer.

I note the complainant’s position that the claim was in fact originally submitted on the 9th of August.   The complainant at the hearing presented as an honest and credible witness and I am satisfied having heard the explanation advanced by the complainant  that the explanation provided does in fact fall within the parameters of reasonable cause and having considered all of the circumstances I am satisfied that his claim does in fact fall to be considered as coming within the timelines specified in the Act. 

Constructive Unfair Dismissal

The complainant advised the hearing that he had been left without wages by the respondent after Christmas 2022 for the entire month of January 2023.  He stated that he had received payslips but that no funds were transferred to his bank account. The complainant as evidence of this submitted payslips and bank statements.  The respondent did not dispute this.  The complainant advised the hearing that he asked the respondent for his outstanding wages on a number of occasions and each time the respondent cited cashflow problems with the business.  The complainant stated that he had also never received a contract from the respondent and was not allowed to take holidays although he did receive holiday pay and that this was also a matter which he had raised with the respondent previously.  

The complainant stated that this was not the first time he had been left without wages as it had happened a week or two here and there on a number of occasions previously.  The complainant advised the hearing that he issued a letter to the respondent on 30th of January 2023 asking again for his outstanding wages of €2,720.91 and requesting payment of same within 7 days.  This letter also stated that continued non receipt of the wages would leave the complainant with no choice but to refer the matter to the WRC.

The complainant stated that the respondent still did not pay him the outstanding wages which by the time of his leaving the employment amounted to seven weeks of unpaid wages.     The complainant added that to make matters worse he knew that other employees were still being paid while there was apparently no money to pay him.    The complainant advised the hearing that he had helped the respondent to build up the business and had been willing to help out in any way he could to help the business prior to this but he felt at this point that the respondent was taking advantage of him and mocking him when he left him without wages for weeks on end while others were paid their wages.  The complainant advised the hearing that it was only when the respondent heard that he was going to the WRC that he then paid him 2 weeks of the outstanding 7 weeks which were due to him.

The respondent did not dispute that he had left the complainant without wages for a number of weeks but argued that it was 4 weeks and not 7 weeks that he had left the complainant without pay.

The respondent stated that the failure to pay wages was due to cashflow problems within the company and stated that he had decided that the solution to this in the short term was to hold off on paying wages.   He stated that he consulted with and discussed this with employees beforehand.  The complainant denied that there was any consultation with him in respect of this decision not to pay wages. 

The respondent added that he had during the second week of missed wages offered the complainant some money to tide him over, but the complainant had told him to keep it to pay the rent on the business premises.  The complainant agreed that this conversation did take place at the beginning of the second week without pay and he stated that he was trying to be understanding of the respondent’s situation and thought it more important that the respondent use the money to pay rent as the complainant could get by himself at that stage.  He added that it was only when it went on for a number of weeks and when he realised others were being paid when he was not that he started to insist that the respondent pay him what he was owed.   The complainant stated that even after threatening to leave if he was not paid his wages the respondents reply was that he did not care.  He stated that the respondent had also threatened to sack him if he went to the WRC.

Both parties advised the hearing that the complainant had been asked by the respondent to return to work in April which he had done for 1 day on 7th of April but left again after a disagreement over a  contract.  The complainant advised the hearing that he had previously not had any contract and so he told the respondent that he would return to work on the basis that he would provide him with a contract.  The respondent told the hearing that he had offered the complainant a contract at that time, but the complainant refused to sign it.  The complainant stated that the respondent had produced a contract and asked him to sign it there and then without reading it.  The complainant stated that there was also a line included in the contract stating that the complainant had to agree that he would not make any claim to the WRC in the event of a disagreement or argument with the respondent. 

The complainant stated that he firstly would not sign a document which would take away his entitlement to lodge a claim with the WRC and also, he asked that he be allowed to read the contract before signing it.    The complainant advised the hearing that the respondent then agreed that he would bring the contract to the complainant’s house after work that evening in order that the complainant could read and sign it.  The complainant stated that the respondent never came to his house with the contract despite promising to do so.   The respondent did not dispute this but stated that the complainant was requesting a contract with a higher rate of pay and which would allow him to cherry pick his work.

The complainant stated that he had at this point been willing to try again and was giving the respondent the benefit of the doubt in hoping that he would provide him with a genuine contract, but it did not happen.   The complainant added that the respondent had written to him on the 14th of March advising him that he had “taken steps to implement new contracts, including job descriptions, time sheets, and an employee handbook, as recommended by the WRC”.  This letter was submitted in evidence.

The Relevant Law – Constructive Dismissal

 Section 1(b) provides as follows:

 “dismissal,” in relation to an employee, means –

(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.”

Significant legal precedent exists which establishes that, for a constructive dismissal claim to succeed, it has to satisfy either one or a combination of both of the following “tests”.

There are two sets of circumstances in which a resignation may be considered a constructive dismissal.  The law is well settled here, and these tests are known as the “contract” test and the “reasonableness” test.  The first test, that of breach of contract, requires that the contract of employment has to have been breached to such a degree that the employee is left with no option but to resign.  It is now generally understood that an employee must also act reasonably in terminating their employment and that resignation must not be the first option taken by the employee. 

The reasonableness test requires that the employee must satisfactorily demonstrate that the employer behaved or acted in a manner, which was so unreasonable as to make it impossible for the employee to continue in the employment.  The employee must show that his behaviour/action in resigning was reasonable in all the circumstances. 

In Berber v. Dunnes Stores [2009] 20 ELR, the Supreme Court held as follows:

“There is implied in a contract of employment a mutual obligation that the employer and the employee will not without reasonable and proper cause conduct themselves in a manner likely to destroy or seriously damage the relationship of confidence and trust between them.  The term is implied by law and is incident to all contracts of employment unless expressly excluded.  The term imposes reciprocal duties on the employer and the employee.”

In the English case of Western Excavating (ECC) Ltd v Sharp [1978] IRL 332 Denning J stated:

“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 of more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance.”

In considering whether there has been a constructive dismissal I have to determine whether there has been a repudiatory breach of contract by the Respondent, or, if there has been no repudiatory breach, whether the Respondent engaged in conduct which made it reasonable for the Complainant to terminate his contract. 

The Contract Test:

I must consider whether there has been a repudiatory breach of the contract of employment.  On the basis of the evidence as presented to me it is clear that the complainant was left without wages for at least four if not seven weeks of work.  Even though this is not a claim in respect of the Terms of Employment Information Act I am also satisfied that the complainant did not have a written contract of employment.

 I am satisfied from the evidence adduced that there is clear evidence to suggest that the Respondent in this case, by failing to pay the complainant wages for work done over an extended period, and by ignoring the complainant’s pleas to resolve the issue, no longer intended to be bound by an essential term of the contract.  I find that the Complainant has demonstrated that there was a significant,  breach of his contract in this regard. 

The Reasonableness Test:

The Respondent acted in a manner which was so unreasonable as to make it impossible for the Complainant to continue in the employment.     I fully accept the Complainant was disappointed and left in financial distress by the respondent’s failure to pay him the wages for work carried out and also by the respondent failure to respond to his letter of 30th of January seeking the payment of these wages within 7 days.

I find on balance that the complainant was entitled to consider himself constructively dismissed within the meaning of section 1 of the Unfair Dismissals Act, 1977 and accordingly I declare this claim to be well founded.

Mitigation of losses

The decision of Coad v Eurobase (UD1138/2013), outlines the duty to mitigate loss under the Act where the Tribunal noted:

“In calculating the level of compensation, the Tribunal took into consideration the efforts of the claimant to mitigate his losses and finds that these efforts do not meet the standard as set out by the Tribunal is Sheehan v Continental Administration Co. Ltd. (UD858/1999) that a claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. “It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work…the time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss.”

The complainant advised the hearing that following his cessation of employment with the respondent in February 2023 he had not sought work and had not worked apart from  a six-week period in May-June 2023.   The complainant when asked whether he had made efforts to find work during this time stated that he had initially been under the impression that he could not work as he had lodged a case against his employer with the WRC.   He stated that once he became aware that he was not precluded from working he applied for Job seekers allowance and is currently waiting to start a welding course to obtain a qualification in welding.  He advised the hearing that the course starts in two weeks’ time.

In considering the amount of redress to award I must bear in mind the  lack of effort by the complainant to mitigate his loss and the lack of documentary evidence of efforts to mitigate his loss albeit due to the misguided impression that he could not work while waiting for his claim to be heard by the WRC.  Accordingly, I decide it is just and equitable to direct the respondent to pay the complainant compensation for his unfair dismissal in the amount of €8,500.

I find that the complainant was constructively dismissed and accordingly I declare this claim to be well founded.    Having regard to the complainant’s failure to make adequate efforts to mitigate his loss, I am satisfied that the appropriate award is €8,500 and order the Respondent to pay compensation in that amount to the complainant.