Categories
Unfair Dismissal

Employee paid in lieu of notice-when did employment end for unfair dismissal purposes?

If you are unfairly dismissed and you are paid in lieu of notice when does your employment end? When you have been given the notice and payment, or when the notice period would have expired?

This is of huge significance because if you want to bring a claim for unfair dismissal, for example, you need 12 months’ service in the workplace. What happens if you are fired just short of reaching the 12 months’ service period?

This was the issue in the case of Action Health Enterprises Limited and Michael D’Arcy. D’Arcy brought a claim for unfair dismissal to the WRC and had been awarded €45,000. This decision was appealed to the Labour Court.

The facts

The dates in this case are of vital importance; D’Arcy commenced as an employee on 31st January 2017 and was dismissed on 30th November 2017. Even though he had a 3 month notice period entitlement in his contract of employment he was given a letter telling him that he was being paid for the 3 months but his employment ended immediately.

He received the payment on 17th December 2017 after his solicitor had sent a letter seeking payment. His contract had provided

Termination with Notice:

“… employment may be terminated at any time by either you or the Partnership giving the other party at least three months ‘prior written notice, or statutory notice, if greater.”

“Where notice of termination of our employment is given, whether by you or the Partnership, the Partnership will have the right to:

Pay you in lieu of notice the amount of your entitlement to basic salary in respect of all or part of such notice period;”

Action Health Enterprises Limited appealed the WRC decision to the Labour Court on the basis that D’Arcy did not have the necessary 12 months’ service to bring an unfair dismissal claim.

Action Health argued that the employment ended on the giving of notice and brought the employment to an immediate end by exercising its contractual right to pay him in lieu of notice.

He argued that the Minimum Notice and Terms of Employment Act 1973 does not prevent the parties agreeing to accept payment in lieu of notice and, accordingly, the date of termination was 30th November 2017. If this was accepted then D’Arcy did not have the 12 months’ service to bring the unfair dismissal claim.

It was also argued that even if no notice was given to the employee the earliest date of termination would be the date that complied with the provisions of the Minimum Notice and Terms of Employment Act 1973. This would be 1 week later giving a date of dismissal of 7th December 2017 which would have been insufficient for the employee to bring the claim.

The argument was that there is nothing in the Minimum Notice and Terms of Employment Act 1973 or in the Unfair Dismissals Act 1977 preventing an employee from agreeing to pay in lieu of notice.

Sections of “Dismissal Law in Ireland” by Mary Redmond were advanced by the employer’s legal representative:

“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 whichever is the greater”.

As an aside, it is worth noting that the only circumstances in which the legislature saw fit to provide that notice should be automatically added onto service was for the purpose of calculating the amount of a redundancy payment.

Section 7 Minimum Notice and Terms of Employment Act, 1973 states:

7.—(1) Nothing in this Act shall operate to prevent an employee or an employer from waiving his right to notice on any occasion or from accepting payment in lieu of notice.

(2) In any case where an employee accepts payment in lieu of notice, the date of termination of that person’s employment shall, for the purposes of the Act of 1967, be deemed to be the date on which notice, if given, would have expired.

D’Arcy’s legal team argued that the contractual notice provision supersedes the Complainant’s entitlement under the 1973 Act, therefore, the Complainant was entitled to three months’ notice of termination. They argued that the date of dismissal for the purpose of the Unfair Dismissals Act 1977 includes the notice period, whether worked or not.

They relied on Redmond on Dismissal Law which states:

“the Unfair Dismissals Act, as amended, deems the date of dismissal to be the date on which notice, had it been given, would have expired. In practice, this can mean there is a crucial distinction between the employee‘s date of termination (when he or she ceased to be an employee pursuant to the contract of employment,) and his or her, date of dismissal (the date that is reckonable for the purposes of establishing the length of services qualification and the time limit rules under the Unfair Dismissal legislation)”.

In other words even where the parties agree to contractually bring the contract to an end the parties cannot override the statutory provisions of  the Unfair Dismissals Act 1977 concerning the date of dismissal.

Labour Court Decision

The Labour Court had to decide whether the date of dismissal for the purpose of the Unfair Dismissals Act 1977 was 30th November 2017 or 3 months later when the notice period would have ended. If it was 30th November 2017 he did not have the necessary service to bring the claim; if 3 months’ later he did have the necessary service.

Firstly, the Labour Court recognised that this was a complex issue and was not “definitively settled”.

Secondly, they held that the employee could waive his right to notice in accordance with the 1973 act as follows:

“Nothing in this Act shall operate to prevent an employee or an employer from waiving his right to notice on any occasion or from accepting payment in lieu of notice”.

It noted that when he was dismissed he did not receive any pay in lieu of notice. He only received it when his solicitor wrote to the employer seeking it.

This action, the Labour Court held, approbated or approved the contract because he sought the payment pursuant to the term of the contract which referred to terminating the contract without notice and the employee accepting payment in lieu.

The Labour Court held that the date of dismissal is 30th November 2017 as that was the date the employment came to an end in accordance with his contract of employment. That being the case he did not have the necessary locus standi to bring the unfair dismissal claim under the Unfair Dismissals act 1977.

The Labour Court overturned the WRC decision. Read the full decision here.

Categories
Redundancy Unfair Dismissal

Disciplinary Record and Attitude Cannot Be Used in an Objective Selection for Redundancy

redundancy claims
Redundancy selection criteria must be objective

This case involved a man who brought a claim for unfair dismissal arising from his redundancy. His claim was founded on his contention that he was unfairly selected for redundancy and subjective criteria, which are personal to the employee, should not have been considered.

Background

The employer in this case was funded by a Government Department but funding was only going to continue to be available for 7 supervisors, from 9, into the future. One supervisor took voluntary redundancy and one further redundancy was needed.

A redundancy selection matrix and procedure was adopted but the Complainant was sceptical about the criteria being used. An interview panel was set up and interview meetings, along with an application form which had been completed by all supervisors, was used to arrive at the choice of who would be made redundant.

The Complainant was chosen for redundancy and he appealed this decision. His appeal was unsuccessful and the employer’s position was that the Complainant was chosen for redundancy because he had the lowest score of all the applicants.

He received a redundancy payment of €9,336.

The employer defended the redundancy procedure adopted and pointed out that it involved an external HR consultant and a matrix of criteria which would allow scores to be given to the employees.

The employer argued that the function of the WRC was not to look behind the matrix and procedure adopted unless there was manifest unfairness.

The Complainant argued that he had unfairly received a verbal warning in the course of employment and it was unfair, and that the matrix adopted by the employer was unfair and unbalanced. He also argued that last in first out should have been used,which would have saved his employment.

Moreover, he argued that it was improper to use attendance, disciplinary record and attitude towards colleagues in the matrix because these criteria were linked to the person, not the position that was being cut.

He relied on JBC Europe Limited –v- Jerome Ponisi [2012] 23 E.L.R 70 as authority for the proposition that redundancy cannot be used as a cloak for weeding out employees who are perceived to have competence or health or age-related issues.

The complainant also pointed out that a supervisor with 5 years less service scored higher than him in the matrix adopted, and he disagreed with this.

Findings of the WRC adjudication

The adjudicator pointed out that the redundancy must involve a genuinely fair selection process and the termination must arise from a real redundancy. The burden of proof was on the employer to prove it was genuinely redundancy related and must be able to justify the selection process.

The WRC adjudicator was satisfied that a genuine redundancy existed and this was the reason for dismissal. Regarding selection for redundancy she referred to Boucher v Irish Productivity Centre R92/1992 which held:

“to establish that he acted fairly in the selection of each individual employee for redundancy and that where assessments are clearly involved and used as a means for selection that reasonable criteria are applied to all the employees concerned and that any selection for redundancy of the individual employee in the context of such criteria is fairly made”.

The adjudicator held that selection criteria cannot be based on subjective assessments of employees. The assessment must have independent, objective and verifiable criteria.

She held: In Bunyan v United Dominions Trust (Ireland) Ltd [1982] I.L.R.M. 404 the EAT endorsed and applied the following view quoted from NC Watling Co Ltd v Richardson [1978] IRLR 225 EAT (ICR 1049)

“the fairness or unfairness of dismissal is to be judged by the objective standard of the way in which a reasonable employer in those circumstances in that line of business, would have behaved. The tribunal therefore does not decide the question whether, on the evidence before it, the employee should be dismissed. The decision to dismiss has been taken, and our function is to test such decision against what we consider the reasonable employer would have done and/or concluded.”

The adjudicator held that the Complainant was unfairly dismissed because he was unfairly selected by reason of the use of subjective criteria of disciplinary history, attitude towards his managers and not being a cooperative colleague were taken into consideration and should not have been.

She held that a “fair scoring system” was not in place for selection.

The adjudicator noted that he had not suffered any financial losses because he had received a redundancy payment and had secured new employment but awarded him 4 weeks gross remuneration-that is, €2,688.00-to reflect the finding that he was unfairly selected and therefore unfairly dismissed.
Read the full decision of the Workplace Relations Commission here.

Categories
Unfair Dismissal

Data Access Request Uncovers “Smoking Gun” Evidence to Win €50,000 Constructive Dismissal Case

This employee was awarded €50,000 in a constructive dismissal claim and what won the case for her was the emails she discovered between certain of her employer’s management.

There are a number of unusual and noteworthy features in this case.

Firstly, it is worth remembering that winning a constructive dismissal claim is extremely difficult because the bar is “very high” for an employee:

 “The contract test is more stringent than the test of reasonableness. Yet they have been provided in the form of alternatives. Whichever test is applied, as was observed by the Employment Appeals Tribunal in one of its last constructive dismissal determinations ‘[t]he bar for constructive dismissal is very high’.”(Redmond on Dismissal Law, 3rd edition)

Avail of internal procedures first

And the advice that I, and other employment lawyers, would always give an employee is you must exhaust the internal grievance procedures in the workplace in order to have any chance of succeeding with a constructive dismissal claim. For you must give the employer the chance to put right what you say is wrong and allow him to amend his unreasonable behaviour.

Yet in this case the employee did not avail of any such procedures and still won.

Background

The employee worked in sales and had been recruited in Canada to work in Ireland. Her sales figures saw her being put under pressure in the workplace as to her performance and she ultimately resigned her position and brought a claim for constructive dismissal.

The hearing went on for three days and was fully contested by both sides with the assistance of solicitors and counsel for both parties.

The difficulty the employee faced in this case was two fold, in my view:

  1. The inherent difficulty in winning a constructive dismissal claim
  2. Her failure to avails of whatever procedures were open to her prior to her resignation

Data Access Request

However, the complainant had made a data access request at some point and this request was complied with between the second and third day of the hearing. This is where the smoking gun(s) were to be found.

First, though, counsel for the employer claimed legal privilege over these emails. This argument was rejected by the adjudicator who found there was no legal context to the emails and they were merely communications about the complainant between two senior managers of the respondent.

Counsel also argued that they should be “contextualised” but the adjudicator found the meaning of the emails was clear and unambiguous and was satisfied she understood the context. Some of the emails included the following:

“I have a call scheduled tomorrow with our lawyer to discuss options with V. Remember that Irish laws are a bit more towards the employee (the EU is socialist don’t forget…)..”

On the 5th of April he states :

“But V hasnt put much effort on generating her own leads. Ive made up my mind I am letting her go in the next few weeks…”

Again:

“V is a problem that needs to be fixed”

Mr B states on April 5th:

“I am concerned that we are dismissing her without written notice, at the very least we should have a quick conversation with our accountant or a lawyer. The cost of not doing so could be very significant.”

FF writes:

“Like I said Im having our law firm come up with our options in order to avoid any wrong doing on our part.”

On the 17th of April an email between the men confirms that they are looking at a replacement:

“I don’t want to hire (her) until we are quite sure V will not be around”

The adjudicator went on to look at the two limbed test for constructive dismissal: the contract test and the reasonableness test.

As endorsed by the Labour Court in Paris Bakery & Pastry Limited v Mrzljak DWT1468, the classic formulation of the legal test in respect of constructive dismissal was set out by the UK Court of Appeal in Western Excavating (ECC) Ltd -v- Sharp [1978] 1 All E.R. 713. It comprises of two limbs, referred to as the ‘contract’ and the ‘reasonableness’ tests. It summarised the ‘contract test’ 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 other performance.”  

The reasonableness test assesses the conduct of the employer and whether it “…conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so the employee is justified in leaving.”

In Ireland, it is accepted that the two tests are often used interchangeably, but it is very clear, and accepted by all, that the bar for constructive dismissal is “very high” for an employee. See “Redmond on Dismissal Law” (3rd Edition, Para 19.08) where it states:

“The contract test is more stringent than the test of reasonableness. Yet they have been provided in the form of alternatives. Whichever test is applied, as was observed by the Employment Appeals Tribunal in one of its last constructive dismissal determinations ‘[t]he bar for constructive dismissal is very high’.”

Decision

The Workplace Relations Commission adjudicator found, inter alia,

On balance I fully accept that the Complainant’s decision to tender her resignation was reasonable. The Employer herein did not engage with the Employee in a meaningful way. The Complainant had impossible targets foisted upon her. There is no suggestion that the Complainant was not performing the function she was engaged to perform. It is accepted that she was having some success and there is no evidence that the results she generated (as a competent and able salesperson) could have been improved upon by a hypothetical salesperson operating with as little support.

I accept fully that the Complainant felt that the outcome had been orchestrated because, as it happens, it was.

The Complainant did not utilise the grievance procedure and did not give the employer any notice of her intention to resign and claim constructive dismissal and I accept that this was a situation where the outcome would have been the exact same.

Read the full decision here.

Conclusion

It remains sound advice that any employee contemplating resignation should firstly avail of all internal procedures in the workplace before resigning.

It is also sound advice to bear in mind that all communications in the workplace may come under scrutiny later on in the event of a dispute or employment claim once a data access request is made by the employee.

Categories
Unfair Dismissal

Persistent Short Term Absences-Labour Court Approves Dismissal

the labour court

This dismissal involved an employee of a waste company.

The employee was employed from 2007 and had received warnings over the years about time-keeping, absenteeism, and abuse of the sick pay scheme in the workplace.

He was dismissed in December 2016 by reason of his sick leave record that year. He had 17 days of sick leave between April and October of 2016.

WRC

The employee brought a claim to the WRC who held that the dismissal was not unfair, given the circumstances and his record.

He appealed the decision to the Labour Court and made a number of arguments:

  1. The decision to fire him was excessive and disproportionate
  2. The procedure followed by the employer was flawed
  3. The employer had not discharged an alleged responsibility to direct him to an employee assistance programme to help investigate any underlying issues that were causing his absences
  4. The employer placed too much weight on prior warnings for absences
  5. All his absences were certified with medical certificates
  6. The employer should have looked at other courses of action short of dismissal
  7. His absence record compared favourably to the record of employees in the public service

The employer’s position was that fair procedure was followed, the employee had trade union representation every step of the way, and the decision to terminate was a reasonable and justified one given his record.

It also pointed out that the employer referred him for independent medical examination and to staff support services. The employee had never indicated any need for support or medical issues that would have caused his poor record.

The employer denied the decision to fire him was based on previous warnings but based on his record between April and October in 2016 and the fact that he had a live written warning on his file at this time.

Moreover, the employer argued that previous warnings, even if they had expired off his file, were relevant as they led the employer to reasonably believe the poor absence record would persist.

Labour Court

The Labour Court pointed out that its job was not to decide whether the decision of the employer was right or wrong; the Labour Court had to decide whether the decision was a reasonable one-that is, did it fall within a band of reasonable responses from an employer.

The Labour Court decided it did fall within this band and therefore the dismissal was upheld.

The factors considered by the Labour Court were:

  • The employee had representation from his trade union representative and had a right to appeal
  • The employee was given many opportunities to remedy his attendance record
  • He received many warnings and was clear that termination could follow if he did not improve
  • The level of absenteeism was unsustainable if replicated across the entire workforce of the employer
  • The disciplinary policy of the employer was clear

The Labour Court held:

The Respondent, having done all that was reasonably possible to explore the reasons for the continued absenteeism and having taken a series of progressive, measured and appropriate steps to reverse it, reasonably formed the view that it had run out of options and that no further action could reasonably have been deployed in the circumstances to secure the Complainant’s regular and efficient service. The fact that he was afforded opportunities to appeal each outcome of the disciplinary process, including the decision to dismiss, strengthens the Court’s view in this regard. Furthermore, in the circumstances of the case, the Court is satisfied that the decision to dismiss falls within the definition of a ‘band of reasonableness’.

Takeaway

There are two things I take away from this decision:

  1. If the employer takes a decision that falls within a band of reasonableness the Labour Court or WRC will not step into the shoes of the employer and decide whether a decision was right or wrong
  2. The disciplinary procedure does not have to be perfect; provided it is fair it will almost certainly be adequate and acceptable.
Categories
Unfair Dismissal

4 Things I Learned at the Employment Law CPD Yesterday

I attended CPD (continuous professional development) organised by Central Law Training yesterday and Marguerite Bolger SC gave an excellent hour-long presentation on dismissals in the employment law module I attended.

Some nuggets which I took away are

WRC or injunction?

One of the most important decisions for the employment law solicitor when advising a client is to decide whether the best course of action will be to go to the Workplace Relations Commission or to the High Court to seek an injunction. Some cases will be suitable for the WRC, some will not.

On the other hand, some cases will not be amenable to High Court injunction proceedings and the factors to consider will be the employee, employer, the circumstances of the case and whether there is a breach of contract or not. If there is no breach of contract or a constitutional right then seeking an injunction would be inadvisable.

Costs in the High Court

Lawyers are most unlikely to have their costs awarded by the High Court in judicial review proceedings. They are, however, likely to be awarded costs in a statutory appeal application. This may explain, in part at least, why some apparently small in value employment cases end up in the High Court on appeal on a point of law.

Reinstatement or reengagement

Reinstatement or reengagement are options as remedies in unfair dismissal cases. I did not know, however, until yesterday that reinstatement will be from the date of dismissal whereas reengagement will be from a specified date, not the date of dismissal.

This has huge implications for the employer and reinstatement, therefore, is possibly the ‘nuclear button’ from a cost perspective if you are the losing employer.

McKelvey Court of Appeal decision

The McKelvey Court of Appeal decision held that there was no general right to legal representation in a disciplinary procedure in the workplace, and this decision was later upheld by the Supreme Court.

But the Court of Appeal held that there was a right to test the evidence, implying a right to cross examine witnesses, and this was not turned over by the Supreme Court. Thus, McKelvey is authority for the proposition that you have, as an employee, the right to test the evidence against you. You will be arguing you have a right, therefore, to cross examine witnesses against you.

Conclusion

The law evolves and changes rapidly, especially in the area of employment law, as a consequence of decisions of the higher courts in various appeals and challenges to decisions of the Labour Court and Workplace Relations Commission.

If I learned only one thing yesterday it would have been worth my time on a Saturday morning coming up to Christmas. Learning four valuable nuggets of employment law wisdom from a senior counsel who specialises in employment law is a true bonus and will allow me to serve my clients better.