Complainant

Respondent

Parties

Brendan  Harrington

KCI Manufacturing Unlimited

Representatives

  Francis Drumm BL

 Jacob and Twomey Solicitors LLP

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-00058736-001

08/09/2023

The Complainant commenced employment with the Respondent on the 19 January 2009.

He commenced working as a Technical and Commercial Program Manager and over time obtained a final promotion in September 2018 to that of Global Manufacturing (Brought in Finished Goods) Manager.

His working week was 39 hours and his basic annual salary was €162,654.77 plus bonus payments, pension contributions, stock options, car allowance and other benefits.

The Respondent is an Irish registered company that owns and operates a manufacturing plant in Athlone, Co Westmeath.

In 2019 the Respondent was acquired by 3M. This was not a transfer of undertakings.

The Complainant brought an Industrial Relations claim to the Labour Court in June 2021 under LCR22438. The recorded referral by the Complainant in the Labour Court Recommendation set out 'Implementation of Appropriate Redundancy Terms'. The background of the case set out that it concerned a claim of 'constructive dismissal'. Under the section ‘Unions Arguments’: the recommendation set out

"the Company has undermined and downgraded the Claimants role without consultation and agreement. He is now in a diminished junior management role. He does not have decision-making authority or an ability to contribute to the organisation. This has impacted his security of employment and undermined his employment in the company and any prospects of promotion. He feels diminished in his role, isolated in the workplace, and removed from strategic decisions which have a personal impact on him. This has led to the Complainant to request redundancy.

The Labour Court recommendation was that the Employer should engage in a full process of consultation and discussion with the Worker regarding any changes to his role and/or working arrangements.

‘The Court notes the Employer's insistence that the Worker's role is not redundant and there are no plans to make the road redundant. Therefore, it is not necessary for the Court, at this point, to make any recommendation regarding possible redundancy terms.’ (emphasis added in italics). The Labour Court hearing took place on 10 June 2021.

The Complainant resigned from his employment by letter dated 23 January 2023 with effect from the 16 March 2023.

He commenced employment for a competitor of the Respondent on 11 April 2023.

The Complainant explained at the start of the hearing that his financial loss was three weeks salary amounting to just over €12,000.

The Complainant's evidence in chief was short but his cross examination was detailed.

The Complainant's case was that following a takeover of the Respondent by 3M in 2019, the Respondent made unilateral changes to his role without consultation, discussion, or agreement. He described this as "death by a thousand cuts".

He explained this as the descoping of his role and as a result he was left in a minor administrative role. His evidence was that this took place from February 2020 until his departure in March 2023. He described this as "frustrating personally and professionally".

He explained how a new commercial structure was implemented in the organisation in 2020 to deliver activities that were previously managed by him. Key parts of his role were removed and assigned to the new structure and its staff. His evidence was that he was retained "due to his knowledge and skill set".

He set out that by mid-2021 the total number of suppliers under his responsibility had been reduced by over 50% since the company takeover.

He was advised that his role was going to focus more on ‘effectiveness and efficiency’ but his future in the new structure was never clarified.  He was demoted from Senior Director to Manager without any dialogue or consultation.   His role on decision-making tasks were removed from his control and transferred to Switzerland. He set out that at the time of his departure from the Respondents employment he was in a greatly diminished role in terms of scope, responsibility, effectiveness and importance in the organisation. He said this effected his security of employment and undermined this position with the Respondent and in the eyes of his peers and team. His evidence was that he had "no other option" but to resign.

His set out that he had raised a grievance with two functional line managers, three separate HR managers and executive leadership. He received no response. He said that the Respondent refused to engage with him in a meaningful way and to provide any clarity whatsoever on his role and future.

He said he sought guidance from the Labour Court in relation to what the Respondents Redundancy process would be. He was not happy with the outcome from the Labour Court.

As his contracted role was eliminated, this had consequences in terms of his security of employment and this in turn undermined his position with the Respondent and future prospects of promotion.

When asked why he didn’t resign earlier than 2023, the Complainant said that he was given to believe that things would get better. However, he said that his trust was shattered by the end of 2022.

In relation to his new employment, the Complainant stated that he was 'approached' by [redacted company] at the start of January 2023 and offered a new job at the end of January 2023. His role with that company is Senior Director of Operations. The Complainant declined to give evidence on the nature of the role or his renumeration package and said it was confidential.

The Complainant did not accept when it was put to him that the real reason that he resigned from his position was his new work arrangements. In response, he repeated that he was demoted and stripped of all responsibility in his role from 2020 to 2023, he had no terms and conditions, the six-month consultation process he underwent in 2023 was "a farce". He set out that he would never have left his old role with the Respondent. He advised that he had turned down job offers on previous occasions.

When asked was it reasonable to believe that nothing could change with his role in the workplace, the Complainant responded saying "the only given thing in life is change".

The Complainant's denied that he was aware of the changes to his role before they took place, he said that it was only after the changes had been implemented that he was communicated with. He said it was incorrect to say that his line manager consulted with him when he was aware of changes that were to take place.  This did not take place.

He said he couldn't apply for other roles within the organisation as these were limited to the outside of the jurisdiction.

He disputed that his team were unchanged between 2020 and 2023 and that just one of four key aspects of his role had changed. He didn't agree that his job remained as it was and that there was no redundancy situation in place.

The Respondents case is that the Complainant expected or wanted to receive a redundancy package following the acquisition by 3M in 2019.

The Respondent submitted that the current complaints was little more than a repackaging of the same dispute that was considered by the Labour Court in 2021.

It submitted that the Complainant spent much of the last three to four years of his employment with the Respondent attempting to claim that his position was redundant and that he was entitled to an enhanced redundancy lump sum.

The Respondent on the other hand valued his experience, skills and expertise and wanted to retain him.

The Complainant failed to utilise the Respondents grievance procedure prior to his resignation defect on 17 March 2023. 

The Respondent’s HR manager wrote to the Complainant on the 23 January 2023 asking the Complainant to reconsider his resignation and offered him the options of mediation or using the company grievance procedure to resolve any concerns that he might have had. The Complainant failed to avail of either option. The Respondent submitted that the failure of the Complainant to do this was fatal to his constructive dismissal complaint.

The oral evidence in this case was presented over two and a half days. The legal arguments for both sides were well made. I found both witnesses to be truthful in their direct evidence. The fact of dismissal was in dispute. The Complainant resigned from his employment on the 23 January 2023 effective 16 March 2023. The burden of proof is on him.

Overall, I found the Complainant to have a genuine belief in his complaints against the Respondent.  I found it was difficult for him to accept the changes to his work environment despite being repeatedly informed of what was to occur.  Overall, I felt that the claim was brought on a point of principle. In terms of the monetary loss claimed by the Complainant versus the effort of bringing the claim, the Complainant was by his own words "he was not here by choice" and he found the whole process upsetting.

My role is to decide on whether the Complainant has reached the threshold to claim constructive dismissal.

Dismissal as a fact is in dispute and therefore it is for the Complainant to establish as a matter of probability that his employment came to an end in circumstances amounting to a dismissal as that term is defined by the Act and that such dismissal was unfair within the meaning of the Act.

Constructive dismissal is defined in s.1 of the Unfair Dismissals Acts 1977 as amended (the “UDA”) as:

“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 1 of the Act envisages two circumstances in which a resignation may be considered a constructive dismissal. Firstly, where the employer’s conduct was of such a nature as to entitle the employee to terminate his employment.  This requires the conduct of the employer to amount to a repudiatory breach of the contract of employment such that the employee would be entitled to regard himself or herself as having been dismissed. This is often referred to as the ‘contract test’.

In Western Excavating (ECC) Ltd v Sharp [1978] IRL 332 it was held that to meet the ‘contract test’ an employer must be ‘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’.

Secondly, the Act at Section 1 addresses the issue of reasonableness. It is settled law that the Court, in considering a complaint of constructive dismissal, must consider this issue either as an alternative to the contract test or in combination with that test. This test asks whether the employer conducted his or her affairs in relation to the employee so unreasonably that the employee cannot fairly be expected to put up with it any longer and, if so, he is justified in leaving.

The statutory definition contains two tests either or both of which may be argued by an employee. These tests in practice are interchangeable. The focus is on the conduct of the employer.

I note that the consultation process commenced in July 2022 as to the Complainant’s role in the Respondent and that it was at risk of redundancy.    Alternatives to the Complainant being made redundant were proposed by both sides.  Proposals were offered by the Respondent in November and December 2022.  The Complainant received an email from HR on the 13 December 2022 stating that there would be no changes to his current role.  The Complainant responded to this on the 23 December 2022.  The Complainant set out among other points that he felt the proposal was a very short-term solution and would only last 6 months. 

The Complainant unilaterally decided to end the employment relationship in January 2023.  At the time of his resignation, he confirmed that he had been approached by a competitor. He declined to give information about this approach or the terms of his new employment, however it is reasonable to surmise that on the basis that he limited his financial loss to the three weeks salary between ending his employment with the Respondent and taking up his new employment, that his new terms and conditions were equal to or better than the terms he had with the Respondent.

I accept that the Respondent still wanted to work with the Complainant as he had a range of skills valued by the Company.  It was acknowledged by the Respondent that the Complainant’s role was undergoing change.  The evidence from Respondent line manager Shaun Morley was that he was delighted that the Complainant’s role was not made redundant, and the Company activity would remain in Ireland and not split away.  

The Complainant referred to having no option but to resign. I do not accept that this was the case. I found that he was very unhappy in his role for a considerable period of time and engaged with his line manager and HR (and the Labour Court in 2021), but he did convince me that his role was descoped or changed to such a degree which would have been a significant breach of contract by the Respondent which went to the root of the contract or which indicated that the Respondent no longer intended to be bound by one or more of the essential terms of the contract.  In fact, the consultation process between July 2022 and December 2022 indicated to me that the Respondent wanted to keep the Complainant in some sort of role rather than make him redundant. 

Therefore, in answer to the first of the two tests setting out the definition of Constructive dismissal in s.1 of the Unfair Dismissals Acts 1977, I find that the Complainant has not met the contract test.

I also find that the Complainant did not meet the reasonableness test. I do not accept that he had no alternative but to resign. In constructive dismissal cases I must examine the conduct of both parties. 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 he or she may have. The Complainant must demonstrate that he/she has pursued their grievance through the procedures laid down in the contract of employment before resigning (see Conway v Ulster Bank Limited UD 474/1981).

I am not satisfied that there were factors present which might excuse the Complainant’s failure to formally complain to the Respondent before resigning. The Respondent had a grievance procedure in place and the Complainant was aware of its existence.  He had brought a complaint to the Labour Court in 2021 which was described by the Labour Court in its recommendation LCR22438 as concerning a claim of constructive dismissal.  The Labour Court recommended that the Respondent engage in a full process of consultation and discussion with the Complainant regarding any changes to his role and or working arrangements.  This took place between July and December 2022 and even though the outcome of the process was that the Complainant remained in employment with the Respondent, the Complainant was not happy with the outcome. 

An employee is entitled to resign for his own reasons, but to bring a complaint of constructive dismissal, he needs to meet the definition as set out in the Unfair Dismissals Act.  I am also influenced in my decision making on the new position obtained up by the Complainant around the time of his dismissal.

In this case I find that the Complainant did not meet the tests to succeed in his complaint.  The bar for a constructive dismissal claim is very high.

This complaint is not well founded.

Constructive dismissal.