Reinstatement of Dismissed Employee-A Warning for Employers

unfair dismissal-1

Are you an employer?

If you have dismissed an employee you are almost certainly aware that a successful claim against you by your former employee can lead to an award of compensation of up to 2 years’ salary.

But did you know that there are 2 other remedies that can be awarded if the employee’s claim succeeds?

Yes, the Workplace Relations Commission adjudicator, in an unfair dismissal hearing, can also order that the employee be reinstated or reengaged. This can be the worst possible outcome for some employers.

It is not a frequent outcome to an unfair dismissal claim and more often than not the employee will only tick the box on the WRC claim form seeking compensation. If this is the case then the adjudicator has no decision to make once he decides the employee has been unfairly dismissed.

But sometimes an employee will seek reinstatement to their old position. He may do this for tactical reasons-for example, it may encourage the employer to attempt to settle the claim before it goes to a hearing at WRC for fear of losing.

On other occasions, however, by virtue of the nature of the industry or specialised nature of the job, the employment prospects for the dismissed employee may be poor. If this is the case the employee may be perfectly happy to resume his old job, or an alternative position in the same organisation, which can be an equally bad result for the employer, who would be happy to never see the employee again.

This can cause a major headache for the employer who will doubtless argue that the relationship between employer and employee has broken down and there is a lack of trust and confidence between the parties and they should not be forced into resuming the old relationship.

This is a widely used and accepted argument. But it’s not always successful.

A Banker v A Bank Adj ADJ-00001266

The WRC adjudicator, on 28th March, 2018, made an order for re-instatement in this case involving a banker versus his former employer, a bank. The banker, a trader, was dismissed for gross misconduct and brought a claim for unfair dismissal.

Without going into all the details (there is a link below for full details of the decision) the decision of the adjudicator, Mr. Kevin Baneham, was that the unfair dismissal claim was to succeed due to the imperfections and flaws in the bank’s disciplinary procedure which led to the dismissal. The next step to be decided was the appropriate redress for the employee.

The redress sought by the banker, once he succeeded in his claim, was re-instatement. The adjudicator agreed that re-instatement and re-engagement were possible awards as the banker was a popular employee whose performance appraisals were good and was a good team player.

Mutual trust and confidence/disharmony

The bank, however, argued that re-instatement was not appropriate as it could lead to a poor relationship between the parties in the future, there would inevitably be disharmony, and the relationship of mutual trust and confidence between the parties was shattered. The adjudicator did not agree.

The adjudicator had regard for the fact that the banker operated in a strictly regulated environment and industry and a dismissal would possibly be fatal to obtaining alternative employment in such an industry, given the relatively limited options. For this reason the adjudicator ordered that the employee be re-instated as it was ‘just and equitable in this case’.

For the reasons provided in this report, I find that the complaint of unfair dismissal is well founded and, pursuant to section 7(1)(a) of the Unfair Dismissals Acts, I order the re-instatement by the respondent of the complainant 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.

You can read the full decision in this case here: ADJ-00001266

Lessons for employers and employees

If you are an employer ensure you or your advisor checks the WRC complaint form to see if the redress sought by the employee includes re-instatement or re-engagement.

If you are an employee you may consider nominating those options as redress you are seeking as it may put some pressure on your former employer to settle the case before it goes to hearing, for fear you will win and an order for re-instatement is made.

2 Years’ Salary Awarded to Van Driver in Unfair Dismissal Case

the labour court

The maximum amount that can be awarded in an unfair dismissal case is 2 years’ remuneration (section 7, Unfair Dismissals Act, 1977).

I had never seen it awarded until this case, DHL Limited and Michael Coughlan, in which Mr. Coughlan was awarded €72,042.88 by way of compensation.

On the 28th July, 2017 the Labour Court handed down its decision in an appeal by the employer of the previous WRC adjudicator decision in the employee’s favour.

Background

The background to this case is an WRC adjudicator decision of 30th January, 2017 to decide that the employee should be reinstated in his job as a DHL driver.

Mr. Coughlan was employed as a van driver for 11 years until his summary dismissal in November, 2015.

Mr. Coughlan brought a claim for unfair dismissal to the WRC and the Adjudicator decided that the sanction imposed on Mr. Coughlan for an accident involving his vehicle was, “disproportionate having regard to all the circumstances.” She ordered reinstatement from September, 2016, when the WRC hearing was held.

Mr. Coughlan had previously accumulated written warnings, with a duration of 12 months each, for a couple of incidents involving his driving, but had no such incidents for 2 years prior to the incident in 19th October, 2015 which led to his dismissal. Mr. Coughlan, at the investigation meeting, admitted that he had misjudged the space available to him while passing another vehicle at the Cork Depot of the employer, and apologised. The damage to the van cost €2,500 to repair.

Following the disciplinary hearing the employer decided to dismiss Mr. Coughlan for gross misconduct involving the incident and damaging of company property. However, the employer’s letter advising him of his summary dismissal made reference to his previous driving problems, even though the last warning he had was expired for some time.

The employer, in its response to Mr. Coughlan’s appeal, relied on his previous record of driving incidents and written warnings, and gave evidence that DHL could not rely on the employee to drive the company vehicles safely and no other option, for example, redeployment, was open to the employer on this occasion.

The head of operations of the employer gave evidence that he felt it appropriate to take the previous driving record of Mr. Coughlan into account when hearing his appeal to the dismissal, notwithstanding that the previous warnings had expired.

Labour Court Findings

The Labour Court found that Mr. Coughlan was confronted with multiple accounts of misconduct at the disciplinary hearing, even though there was no reference to multiple allegations in the letter inviting him to the hearing. The letter only referred to his failure to protect and safeguard company property (the van).

The Labour Court also found that the employer’s decision to dismiss was motivated, partly, by what it saw as its duty of care to the public, and safety grounds; however, this was completely different from the subject matter contained in the letter inviting Mr. Coughlan to the disciplinary hearing as the letter stated he was being invited to meet the allegation of failure to protect and safeguard company property’.

The Labour Court also found that the grounds for summary dismissal without notice are very restricted, as can be seen from established jurisprudence in relation to dismissal, and a reading of Section 8 of the Minimum Notice and Terms of Employment Act 1973, which requires very bad behaviour of such a kind that no reasonable employer could be expected to tolerate the continuance of the relationship for a minute longer.

As the allegation against Mr. Coughlan was that he failed to protect and safeguard company property it was held that this could not constitute gross misconduct justifying summary dismissal, that is, without notice.

The Labour Court also found that the employer did not give due consideration to alternative sanctions short of dismissal, nor did it allow him to offer to pay for the damage to the vehicle.

Furthermore it found that the employer gave too much weight to the previous incidents concerning Mr. Coughlan’s driving, and noted that his previous written warnings had expired by the time of this incident.

The Labour Court, for the reasons set out above, decided Mr. Coughlan was unfairly dismissed.

It took into account Mr. Coughlan’s attempts to mitigate his loss by seeking new employment: He told the Court that in the period since October 2015 he has applied for some 23 or 24 jobs without success. He applied for various roles including that of courier, driver, general operative, cleaner and store person. The Respondent was called to a small number of interviews by named employers but no job offer ensued from any of them.

The Labour Court awarded him €72,042.88 by way of compensation, being the equivalent of 104 weeks’ remuneration, which it viewed was the employee’s financial loss to date attributable to the dismissal.

You can read the full case here.

A Constructive Dismissal Story (Agnieszka’s Story)

constructive dismissal story

There’s a Polish woman (Agnieszka) from outside Maynooth who came to me one day about 15 months ago.

She told me a story I found hard to believe.

But I can assure you it was true.

She told me she came to Ireland about 12 years ago and got a job in a shop. Agnieszka was excellent at her job, friendly with customers and colleagues, worked hard and did everything that was required of her.

She got on well in the job, so much so that after 27 months she was promoted to manager of the shop. She continued to do a good job, and got great feedback from her bosses and from the shop’s customers, and her colleagues.

Then, approximately 6 weeks before she came to visit me, she was visited in her shop by the company accountant/financial controller (Phillip) and a director (Sinead).

“We need to speak to you urgently Agnieszka”, they said.

“No problem”, Agnieszka responded. “Nothing serious, I hope?”

“Actually, there is a serious problem which we have just uncovered. Can we speak to you in the store room?”

“Sure”.

Agnieszka was puzzled, but not yet overly concerned.

Once they entered the storeroom Phillip and Sinead quickly got down to business.

They told Agnieszka the gross profit margin for the last 6 months in her store was unacceptably low, and had dropped from 23% to 19%, and they concluded there must be a “serious problem” in the shop. As Agnieszka was the manager they were there to get an explanation from her.

Agnieszka was completely flummoxed and taken aback. It was like a bus had hit her. She noticed, too, that the demeanour of Phillip and Sinead was less than the usual friendly tone they adopted with her.

They told her they were going to have a meeting the next day at head office, and Agnieszka was to be there, but she was not told what type of meeting it was.

Agnieszka spent that evening and next morning worrying about the issue raised, and what might have caused the problem of the falling profit margin.

Could it have been an error with the stocktake? Could it have been a mistake in entering a delivery or invoice?

She was also concerned about the change in tone, and the way that Phillip and Sinead had spoken to her when they came to the shop.

The next day Agnieszka waited anxiously in reception at head office at 2.30 pm, waiting for the meeting.

She chatted with Sheila, the receptionist, trying to take her mind off the anxiety she felt in the pit of her stomach.

When Sinead and Phillip arrived, they immediately said to Agnieszka, “you can bring in Sheila to the meeting, as a witness”.

“Why do I need a witness?” Agnieszka asked.

“You might be more comfortable”, Phillip replied.

Agnieszka went in alone as she did not know Sheila very well, and, besides, she could not understand why she would need a witness if they were only going to have a meeting to try to sort out the apparent problem with one profit margin report.

Once inside the office it was clear that Phillip and Sinead had one thing in mind: Agnieszka’s resignation from her job.

They produced a sheet of paper, typed up, with a space at the bottom for Agnieszka’s signature.

It was a resignation letter. Agnieszka was stunned, and became upset.

They quickly pointed out that if she resigned they would give her a reference, and she could get another job easily enough; if she didn’t then there would be no reference and she would have great difficulty getting a job in Ireland again.

Agnieszka was astounded at the turn of events. She could not believe it. It seemed like a bad dream.

She had done nothing wrong, was in the job 12 years, had worked extremely hard and showed great diligence and loyalty, and, finally, it came down to this.

She refused to sign. No way was she signing that letter of resignation, it would look terrible, and she needed this job.

Her husband, Wojciek, had recently lost his job in a warehouse and she was the only breadwinner in her household, and they had two young children.

But the pressure mounted, the afternoon dragged on, the veiled threats became more explicit, and Agnieszka was reduced to tears.

After what seemed like the afternoon, but was probably no more than 1.5 hours, Agnieszka relented in order to have the meeting and the pressure stop, and just get out of there and go home,  and she signed her resignation letter.

Phillip and Sinead shook hands with her, reassured her she had done the “right thing”, and wished her well for the future, told her she would have her P45 and final pay within days.

The next day Agnieszka could not believe what had happened, and had a sick feeling in her stomach for weeks.

She began to do a bit of research online, and Googled terms like “unfair dismissal”, “constructive dismissal”, “forced resignation”, etc. The more she learned, the angrier she got.

Eventually, after some prompting from friends and Wojciek, she made an appointment to see me to see what her rights were, and what redress she may have, if any.

Constructive Dismissal?

It seemed to me that she had a strong case to bring a claim for constructive dismissal. The factors that would support her claim were:

  • The absence of a fair disciplinary procedure,
  • not knowing in advance she was being invited to a disciplinary hearing,
  • not being told she was entitled to representation,
  • not being given the chance to put her side of the story,
  • being pressured into resigning her employment,
  • not being given a letter in advance setting out the allegation in sufficient details that she could challenge it
  • being threatened with no reference if she did not resign and was dismissed.

I submitted a claim to the WRC for constructive dismissal and we were eventually given a hearing date approximately 20 weeks later.

Just before the hearing, a solicitor acting for the employer in this case contacted us and offered a derisory “nuisance” type sum of money to settle the claim.

I had to advise Agnieszka that I could not advise her to accept is, although it was entirely her decision.

She agreed with me, though, and the case went ahead on the scheduled day.

Constructive dismissal cases can be difficult cases to win because the burden of proof of an unfair dismissal shifts from the employer to the employee-remember it is the employee who has terminated the employment in a constructive dismissal case, not the employer.

There are certain required recommendations I would advise any employee contemplating bringing a claim for constructive dismissal. The most important one is that the employee should, if possible, exhaust any internal grievance procedure before resigning.

This did not happen in Agnieszka’s case. So, this was a concern, but not fatal as there is decided case law on this point which supports the proposition that it is not always essential.

Another factor she had to face in the hearing was she was the only witness to support her version of events. On the employer’s side Phillip and Sinead were going to put forward a consistent and different account of what happened at the fateful meeting where Agnieszka resigned.

The case itself was a tough one for Agnieszka because she had no idea whether the WRC adjudicator believed her account or the employer’s, and she was, to a large extent, on her own even though she had me with her to represent her.

She was still the only witness on her side of the dispute, though, and that’s never easy. But she was happy to get a formal forum where she could put her version of events, and describe how she felt about the way she was treated.

She was relieved when the whole ordeal was over, and she said she felt a certain liberation from having the chance to tell her story to an impartial adjudicator, even if she did not win the case.

Thankfully, that adjudicator was sufficiently impressed with her story and the explanations of what had happened, accepted that she was very poorly treated, and that she was constructively dismissed.

He also made a generous award-approximately 9 months’ salary-and was very pleasing to Agnieszka.

She was delighted, and felt vindicated.

She had been badly and unlawfully treated, stood up for herself, put her case before an independent adjudicator at significant personal cost, and the adjudicator had agreed with her.

Conclusion

It is worth repeating that constructive dismissal cases can be difficult to win, and each case will be judged on its particular facts and circumstances.

The facts of Agnieszka’s case were strong enough to support the argument that she was put under significant duress to resign and she was not given fair procedures or natural justice. For those reasons, she won her case.

I hear from people every week, however, who are considering quitting their job and wondering whether they will have a claim for constructive dismissal.

I always tell them the same thing, which is summed up in these two articles on my website:

A Warning Employment Law Story for Employers

employers unfair dismissal story

Let me tell you a story.

Last year a small shop owner in Westmeath, Mick*, faced a claim from a dismissed employee on the grounds of unfair dismissal. The employee, Séamus*, worked for Mick for about 18 months, or so.

The background was typical enough.

Seámus started off well in the job, full of enthusiasm. Mick hoped Séamus would take the pressure off him once he learned the ropes and got a bit of experience.

As time went on, however, and particularly after Séamus had been in the job for 12 months, his performance dropped.

He showed less interest in the job, got himself a new girlfriend, a second hand car, and had much less interest in working at the weekend, especially on a Saturday evening.

His timekeeping got sloppy, too, and there were complaints from customers that his attitude and tone in the shop was poor.

One Saturday in May, Mick had Séamus rostered to work on Saturday because Mick was going to his brother’s child’s First Holy Communion. He was looking forward to the break, and the few pints and a bite to eat with “herself”.

An hour before Séamus was due to start Mick received a call from Séamus’s mother telling him that he wasn’t well and wouldn’t be able to come in.

Mick was furious, absolutely fuming, and suspected the only thing wrong with Séamus was a stonking hangover because he was seen out in the pubs on the Friday night.

Mick had to stay in the shop because he was short staffed,  and had to pass up going to the First Holy Communion. He felt really let down-gutted, in fact.

On Monday, Mick resolved to tackle Séamus about his absence on Saturday and get to the bottom of it.

When Monday came around it transpired Séamus had made a remarkable recovery, so much so that he starred for the local junior team on the Sunday.

When Mick went to discuss the situation with Séamus he was not in the best frame of mind, especially after hearing about the footballing exploits of Séamus the previous day.

The conversation between the two men started off on a bad footing, and soon went downhill rapidly.

It ended up with Mick telling Séamus that he “was taking the piss” and he wouldn’t stand for it any longer He said he was very disappointed with him, and heard he had played football the previous day.

“I can’t trust you now, I’m afraid”.

He told him he could go back home to his mother, and play his football but he wouldn’t be working for Mick anymore.

He would have his P.45 in a few days when the bookkeeper came in.

About a fortnight later a solicitor’s letter arrived at the shop. The letter stated that Séamus had “clearly been unfairly dismissed” and that he wanted, and was entitled, “to be compensated for his loss of income”.

Soon after Mick received a letter from the WRC (Workplace Relations Commission) telling him that an unfair dismissal claim has been made by Séamus.

But that was only the start of it as there was also claims for failure to give the required notice, failure to give a written contract, failure to give proper rest breaks, failure to pay the correct pay for annual leave and public holidays.

Mick went to his own solicitor about the case and made it clear he would not consider taking Séamus back, or compensating him.

His exact words were “I’ll have a beard sweeping the floor before I’d give that smart-arse waster his job back or let him back into my shop”.

Approximately 20 weeks later Mick’s solicitor received notice of the hearing date with the WRC in Lansdowne house, Dublin 4.

Mick’s solicitor strongly advised him to try to settle the case because on the unfair dismissal claim alone he was in a very weak position, having failed to follow any procedure at all.

To make matters worse, he was offside in relation to the minimum notice claim and the written contract claim, so these could not be won either.

As for the claim about getting the right rest breaks? Mick was adamant Séamus had got enough breaks, but unfortunately for Mick he had no records that he should have kept in accordance with the Organisation of Working Time Act Regulations.

So, Mick had no choice-he had to settle. It killed him but it could have been worse if the case went ahead to a full adjudication hearing.

All in all, the whole mess cost Mick approximately €23,500.

The maximum Séamus could have been awarded for the unfair dismissal would have been 2 years’ salary, so the €23,500 it cost Mick was being viewed by Mick in that context.

Nevertheless, it was €23,500 of after tax income he could ill afford to be handing out in compensation and could have used it to replace a fridge or help upgrade his deli.

Lesson for Employers

Mick made a fatal mistake in this tale. He dismissed without any procedure, and let his hurt and pride overrule his good judgment.

If an employee is dismissed without a fair or proper procedure, almost always it will constitute an unfair dismissal.

Employers also need to be careful to ensure that all employees have a written contract of employment, and to maintain work records and records of rest breaks and annual leave.

 

*Note: Mick and Séamus are not the real names of employer and employee.

The Range of Reasonable Responses in Unfair Dismissal Cases

unfair dismissal claims

If I am representing an employee in an unfair dismissal case I will nearly always argue that the sanction of dismissal was excessive and disproportionate.

That a reasonable employer would not have gone that far, and a lesser sanction would have been more appropriate.

The employer, or his representative will claim that the action was reasonable.

What is reasonable? What is excessive? Disproportionate?

Who decides? The employer? Or the decision making body such as WRC or Court?

Courts and decision making bodies in unfair dismissal cases, when assessing whether an employer’s response to penalising the employee in an employment law dispute, have long recognised that they will not substitute their judgment for that of the employer.

This means that once the employer’s sanction of the employee falls within a range of reasonable responses, the WRC or Court will not take on the role of employer in deciding what is appropriate in the circumstances. Instead, it will decide whether the employer’s response falls within a range of reasonableness in the circumstances.

What’s appropriate and reasonable in the circumstances will also vary widely, and what may be an appropriate penalty in one workplace may be disproportionate and excessive in another.

Let’s take a look at the principle of the range of reasonable responses, and how the decision making bodies come to an assessment of the employer’s decision.

The Employment Appeals Tribunal (EAT) have held,

“………the task of the Tribunal is not to consider what sanctions the Tribunal might impose but rather whether the reaction of the Respondent and the sanction imposed lay within the range of reasonable responses”. (McGee v Peamount Hospital)

The decision making body will look at the circumstances of each case and decide whether the response of the employer falls within the band of reasonable responses. In doing so, the WRC or Court will look at things like

  • The gravity of the conduct leading to the dismissal
  • The size of the employer’s workforce and resources
  • The employee’s background and length of service
  • Any other relevant facts.

It is important to note that what may be reasonable for one employer may not be held to be reasonable in respect of another employer. This is because a large employer will have far more resources than a small outfit and will be able, perhaps, to consider a sanction short of dismissal, such as redeployment or other alternatives, which will not be open to the small guy.

In the UK Lord Denning, MR, stated in British Leyland UK limited v Swift (1981),

“the correct test is..was it reasonable for the employer to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, the dismissal was fair. It must be remembered that in all cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view”.

Conclusion

Unfair dismissal cases can be expensive for employers, and there is many factors which will be considered in deciding whether the dismissal was unfair or not. Two significant factors are the presence or absence of a fair procedure in deciding to terminate, and whether the decision to dismiss falls within the range of reasonable responses.