Complainant

Respondent

Parties

Maria Inmaculada  De La Torre Ruiz

Hamilton Uk Services Limited

Complainant

Respondent

Anonymised Parties

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Representatives

  N/A

Kevin Bell BL instructed by Matheson 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-00061173-001

24/01/2024

The Complainant was hired as a Financial Accountant by the Respondent on 6 July 2021 pursuant to a written contract of employment on an annual base salary of €47,500 gross. Her annual base salary increased each year and amounted to €63,000 gross at the time of termination.

The Complainant was informed of the decision to dismiss her in correspondence dated 27 July 2023 and was paid three months’ notice in lieu. She asserted that the dismissal was unfair. The Respondent accepts that the dismissal was effected without cause.

The Complainant asserted that her dismissal was unfair and stated that she was not informed of any reason behind the decision.

The Respondent accepted that the dismissal was effected without cause.

As the Respondent accepts that the dismissal was effected without cause, I find that the Complainant was unfairly dismissed.

Section 7 of the Unfair Dismissals Act, in relevant part, states that:

(1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer, considers appropriate having regard to all the circumstances:

(a) re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or

(b) re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or

(c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances,

(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to—

(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,

(b) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employee,

(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,

(d) 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 subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved of by the Minister,

(e) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the said section 14,

(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.

3) In this section—

“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;

“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.

Analysis:

I find that the Complainant was unfairly dismissed for the reasons set out above.

The Remedy

In deciding on a suitable remedy, I must consider reinstating the Complainant, particularly since she is still seeking employment, despite her statement that she was only seeking compensation.

In making this decision, I have regard to the findings of the Supreme Court in An Bord Banistiochta, Gaelscoil Moshiolog v The Labour Court, where it was stated that “the remedy of reinstatement is exceptional in nature,involving as it does the imposition of a contractual relationship which is not only personal, but involves a high level of mutual trust and confidence, on an unwilling party…. It is wrong to view reinstatement simply as punishment for wrongdoing on the part of the employer”

Considering the foregoing, and notwithstanding the egregious conduct of the Respondent in relation to the dismissal, I am satisfied, based on the evidence presented to me, that the trust and confidence required for the resumption of an employment relationship no longer exists.  Accordingly, I have decided to make an award of compensation.

The Calculation of the Complainant’s Remuneration

In assessing the amount of compensation to award, I must calculate the Complainant’s remuneration in accordance with the Act in the first instance.

In this regard, I note that she earned a base salary of €63,000 per year at the time of her dismissal and that she also benefitted from an employer pension contribution of 12.5%, namely €7,875. She further asserted that the Respondent paid for her Chartered Accountants Ireland membership of €636 as well as fees for her continuous professional development in the amount of €1,050 per annum. I find that all of these elements of her package constitute remuneration for the purposes of the Act.

She also asserted that her unvested VAP share awards as well as the bonus she received annually should be deemed remuneration.

In considering firstly whether her bonus constitutes remuneration as set out in the Act, I note in the first instance that Regulation 4 of the Unfair Dismissals (Calculation of Weekly Remuneration) Regulations 1977 (SI No. 287 of 1977), only provides for “any regular bonus or allowance which does not vary having regard to the amount of work done and any payment in kind”. I also have regard to clause 5 of her contract of employment which states that the Complainant was eligible to receive an annual bonus “at the Company’s discretion” and note the decision of the Employment Appeals Tribunal in Bunyan v UDT (Ireland) Ltd that benefits which are “a consequence of the exercise of a discretion” do not constitute remuneration.   I therefore find that her bonus does not constitute remuneration for the purposes of the Act.

In assessing whether the unvested share awards constitute remuneration as set out in the Act, I agree with the findings of the AO in Grainne Sherlock v Pluralsight Ireland ADJ 44941 who found that she was “ not satisfied that any unvested stock options can be included in an assessment of financial loss”

Considering all of the foregoing, I find that the basis for the calculation of the award of compensation is a weekly figure of €1,395.40 (€72,561 per annum), and includes her annual salary, the employer pension contribution as well as the additional benefits she received, namely the payments for her professional membership and her course of studies.  The maximum award permissible under the Act is therefore €145,122.

The Calculation of the Complainant’s Financial Loss Attributable to The Dismissal

In calculating the financial loss attributable to the dismissal from 27 July 2023, I note that Charleton J in Panisi, in assessing loss, stated as follows: 

My task is to assess the financial damage which the dismissal has brought about and then to place the measure of that damage against the maximum amount of compensation that is available. In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages. Where the quantum of damage is more, then the jurisdiction is limited to that maximum and the amount of damages must thus be reduced to that maximum sum. Where the measure of damages on dismissal is more than the maximum but contributory fault is found in respect of the dismissal against the employee, the reduction is on the totality of those damages, and not on the maximum award. If the result is to reduce compensation within the maximum award, that sum is appropriate. Where the reduction in total damages for contributory fault putsthe damages above the maximum award, then the maximum award is the correct measure of compensation for unfair dismissal.

As set out above, I must therefore assess the overall loss attributable to the dismissal. I have calculated this, as set out below,  by deciding on what date the Complainant was dismissed in the first instance prior to assessing her financial loss both before and after the WRC hearing.

(i)                  The Date of Dismissal

In deciding from what date the Complainant’s financial losses accrue, I note that she was paid three months’ salary in lieu of notice on 27 July 2023. In deciding that this was the dismissal date, I have regard to the decision of the Labour Court in Michael D’Arcy and Action Health Enterprises (UD/19/41) and that of Dr Mary Redmond who states as follows in ‘Dismissal Law in Ireland’, at paragraph 21.77.

‘If a contract lays down a notice period, it will technically be a breach of contract to give pay in lieu of notice unless this right is reserved to the employer. If it is, and an employee accepts payment of wages in lieu of notice, the date of dismissal will be the date on which termination takes effect, as the contract will have been determined in accordance with its terms. If there is no right to give pay in lieu of notice in the contract, the EAT will treat the case as a no notice one and will add on the contractual or statutory notice which ever is the greater.

(ii)                The financial loss from the date of dismissal to the date of the WRC hearing

Having established that the date of dismissal was 27 July 2023, I note that the Complainant was unemployed from then until 15 January 2024. As this is a period of 24 weeks, I calculate the financial loss to be €33,490.

The Complainant then obtained a 9-month fixed term contract from 15 January 2024 until 11 October 2024 and earned €48,900 during this period. As the Complainant would have earned €54,421 in this period, in terms of remuneration under the Act, I find that her financial loss in respect of the 39 week period from 15 January 2024 until 11 October 2024 is €5,521.

In deciding if her financial loss under the Act continues after 11 October 2024, when her fixed term contract ended, I note that in Courtaulds Northern Spinning Ltd. V. Moosa [1984] IRLR 43, it was held as follows “But if … another case occurs in which the delay is so great that at the time of assessment it is clear that the new employment has endured long enough to be protected by the unfair dismissal legislation the Industrial Tribunal should treat the loss flowing from the original dismissal as coming to an end at the start of the new employment.”

It is clear from this decision that the loss only stops when further permanent employment is secured, and I must therefore consider the ongoing loss after the nine-month contract expired on 11 October 2024 because the Complainant was still unemployed at the date of the hearing.

I further note that there was a 13-week period between the date on which the nine-month contract expired on 11 October 2024 and 7 January 2025, the date of the WRC hearing and find that the financial loss in respect of this period amounts to €18,140.   

(iii)              The financial loss after the date of the WRC hearing

While it is quite straightforward “to assess the financial damage which the dismissal has brought about” (Charleton J in Panisi) in the period from the date of dismissal to the date of the WRC hearing, I am required to consider the “estimated prospective loss of income”, namely the Complainant’s overall estimated future loss. The complications for an Adjudication Officer in making such an assessment are highlighted by Desmond Ryan BL in Redmond on Dismissal Law:

“The Workplace Relations Commission can face difficulty in calculating the amount of compensation under s 7 (1) ( c ) of the 1977 Act….. The Workplace Relations Commission is therefore faced with imponderables: it is required to put immediate cash values on items such as.. future loss of wages and the likelihood of re-employment”

While Charleton J did so by examining how long he believed the Complainant in that matter would likely have stayed in his employment following his unfair selection for redundancy when compared to a colleague who had not been dismissed on the redundancy ground, it is more difficult to estimate a figure in this instance because a redundancy situation did not arise and no comparator was presented.

In assessing her prospective loss after the hearing date, I note the Complainant’s assertion that the fact that she was dismissed without cause has made it very difficult and will continue to make it very difficult for her to secure a new role. This was strongly disputed by the Respondent who stated that the prospects for her ability to find a new role should not be affected by whether her dismissal was with or without cause.

Given the conflict in evidence between the parties on this particular point, I note the decision of the Court of Appeal in England where it was stated that expert tribunals, such as the WRC, “do not sit in blinkers and are entitled to make use of their own knowledge and experience in the industrial field”. (London Underground v Edwards (No.2) [1998] IRLR 364 – Applied in Benedict McGowan and ors v The Labour Court and Ors [2010] 21 ELR 277).

Considering this decision and drawing from my experience as a human resources professional, I am not surprised that it has been and believe that it will continue to be extremely challenging for the Complainant to secure alternative permanent employment due to the nature of her dismissal. Job seekers are typically asked in interviews about the reasons for leaving their most recent permanent position, and in my opinion, potential employers would be very reluctant to offer the Complainant a permanent role, especially a reasonably well-paid one, if she is unable to explain, because of the Respondent’s refusal to do so, why she was dismissed from her most recent permanent job.

Considering the foregoing, and given that the Complainant had been unable to obtain a permanent job in the almost 18-month period after her dismissal despite her extensive attempts to do so, I estimate that it will take her at least a further eighteen months to find a new role and decide therefore that her prospective loss from the hearing date is €108,841.   

Calculation of Overall Financial Loss Attributable to The Dismissal

Financial loss from the date of dismissal to the WRC hearing

(i)                  27 July 2023 until 15 January 2024:               €33,490

(ii)                15 January 2024 to 11 October 2024:            €5,521

(iii)               11 October 2024 to 7 January 2025:              €18,140

Total financial loss from the date of dismissal to the WRC hearing :   €57,151

Estimated Financial loss after the WRC hearing:                                     €108,841

Overall Financial Loss attributable to the dismissal:                               €165, 992

Calculation of award

As set out above, I have found that the overall financial loss attributable to the dismissal is €165,992. I must now examine if there is any basis for a “reduction .. on the totality of those damages” as set out by Charleton J in Panisi.

In this regard, the Respondent’s representative highlighted that as the Complainant had failed to sufficiently mitigate her loss, any award should reflect this. In considering this assertion, I note that there is conflicting case law around the calculation of an award of compensation with many decisions focusing solely on the efforts of a Complainant to mitigate their loss and appearing to disregard the conduct of the employer in relation to the dismissal.

Focusing solely on the Complainant’s efforts to mitigate her loss would be wholly inappropriate in this case however, given that the Respondent, by dismissing her without cause, has dealt a severe blow to her future job prospects as outlined above.

Moreover, in my view, a decision to focus solely on the attempts to mitigate loss is at odds with both the legislative provisions and the views of the Adjudication Officer in ADJ 32667, where, in calculating the award of compensation, she stated, inter alia, that: 

“in considering compensation, regard must be had to all of the subsection of Section 7-and the tests are not confined to the efforts of the former employee-or the Complainant in this case. In circumstances where the Respondent is found not to have met the tests set out in subsections (c) and (d) …. and the Complainant made no contribution to the decision to dismiss her under (a) (b) or (f) It would be wholly unjustified to penalise the Complainant solely for a conclusion that she did not make a sufficient effort of mitigate her losses where the balance of unfairness and failure to comply with the terms of Section 7 as a whole lie squarely with the Respondent.” 

In examining section 7(2)(a), I find, as outlined above, that the Respondent acted wholly unreasonably in dismissing the Complainant without cause. In considering section 7(2) (b) and (f), I find that the Complainant made no contribution to the termination of her employment because she was dismissed without cause. Furthermore, I must have regard to 7(2)(d) and (e) of the Act and note that the Respondent accepted that there was not a scintilla of procedural fairness in relation to the Complainant’s dismissal. Considering section 7(2)(c), it is worth noting that the Complainant provided evidence of hundreds of new roles that she has applied for since the termination of her employment by the Respondent. While the Respondent highlighted that she unreasonably refused a very small number of these roles on the basis that they were too far from her home and that the travel involved would have been too significant, I find, on the basis of the evidence presented to me, that it was reasonable that she did so.

Considering all of the foregoing, I find that there is no basis for “a reduction .. on the totality of those damages” in respect of this case. As Charleton J stated in Panisi however, “In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages.”, I am restricted to an award of 104 weeks wages.

I therefore direct that the Respondent pays €145,122 to the Complainant in respect of the unfair dismissal.