Compensation

 A recent Labour Court recommendation where a former employee was awarded €25,000 in compensation for Unfair Dismissal illustrates why employers should make sure to attend any hearings that involve them.   The case in question concerns a former employee's claim that he was Unfairly Dismissed after he used the Company premises without the permission of his employer. In accordance with section 20(1) of the Industrial Relations Act, 1969, this particular worker referred his case to the Labour Court in June of 2013. He agreed to be bound by the Recommendation of the Labour Court. A Labour Court hearing took place in February of this year; however, the Company declined to attend the hearing and did not appoint any representation. This meant that the evidence submitted was solely that of the Claimant. The Court found it 'regrettable' that the employer declined to attend the hearing in any form and found it disappointing that the Company did not avail of its opportunity to present the version of events leading to this dispute from their perspective. The former employee accepted that he had used the Company's premises without prior consent. However, he did not accept that his behaviour constituted gross misconduct and, consequently, he contested the gravity of the punishment. The employee argued that his dismissal was disproportionate to his actions and maintained that the dismissal was unfair. Based on the uncontested submissions of the employee (the Claimant) the Court was satisfied that the penalty of dismissal was inconsistent with the actions of the employee and the Court determined that a warning would have been more appropriate in the circumstances. According to the Court, the dismissal was both procedurally and substantially unfair and so the Court recommended that the Company pay compensation in the amount of €25,000 to their former employee in respect of his Unfair Dismissal. This figure was to be in full and final settlement.  

The difference between Constructive and Unfair Dismissal:

Constructive Dismissal is the term used when an employee terminates his or her employment based on the conduct of the employer. Unfair Dismissal is slightly different in that unfair dismissal cases arise when the employee feels as though he or she has been dismissed by the employer on unfair grounds. Unlike in an unfair dismissals case where dismissal is deemed to be unfair unless proven otherwise and justified by the employer - in constructive dismissal instances the onus is on the employee to prove that their resignation was based on poor employer conduct. Employees claim constructive dismissal/unfair dismissal under the Unfair Dismissals Acts 1977-2007. If it is found that the employee has been unfairly dismissed he or she could either be awarded compensation for the loss of earnings suffered by the dismissal or could be placed back in their original role – However, this is not common practice due to the expected tension or strained relationship between employer/employee and due to the amount of time that is likely to have passed between the termination of the employment contract and the resolution of the case. Typically, an employee needs to have accrued 52 weeks’ continuous service with the employer. However, it is crucial for the employer to bear in mind that 52 weeks’ continuous service is not always an essential element. Employees dismissed for trade union membership or because they are pregnant/exercise their right to parental leave, for instance, do not have to have accrued 12 months’ continuous service prior to claiming unfair/constructive dismissal under the Acts.   If the employer acts unreasonably towards the employee or breaches the contract of employment (or demonstrates that they no longer intend to adhere to the terms and conditions outlined therein) then the employer is at risk of a claim under the Acts. It is important for employers to be aware of everything that occurs in their workplace as even other employees’ behaviour that goes unchecked by the employer could contribute to a constructive dismissal case. It is also very important for employers to attend Labour Court hearings if they are scheduled so they can give evidence in support of their decision. Also, the Court can look less favourably upon employers who fail to attend and can award higher levels of compensation to the employee.  

Constructive Dismissal is the term used when an Employee terminates his or her employment based on the conduct of the Employer.Unlike in an Unfair Dismissals case where the dismissal is deemed to be unfair unless proven otherwise and justified by the Employer - in Constructive Dismissal instances the onus is on the Employee to prove that their resignation was based on poor Employer conduct.

 If it is found that the Employee has been Unfairly or Constructively Dismissed then he or she could either be awarded compensation for the loss of earnings suffered as a result of the termination of employment or could be placed back in their original role. Reinstatement is not common practice (particularly in Constructive Dismissal cases) due to the expected tension/ strained relationship between the Employer and the former Employee and due to the amount of time that is likely to have lapsed between the termination of the employment and the resolution of the case. Often the Employee has entered in to a new employment contract elsewhere.

It is important for Employers to be aware of everything that occurs in their workplace as even other Employees’ behaviour that goes unchecked by the Employer could contribute to a Constructive Dismissal case. Constructive Dismissal scenarios can be extremely costly to employers as was proven in a recent Health Service Executive (HSE) case. The claimant in this case was the Head of Ambulance Services for the HSE. The claimant, who lives in Derry, inappropriately used a HSE fuel card for private purposes and, while this would likely have seen him disciplined had he remained in employment, the claimant discovered that he had been found guilty at an early stage and, fearing dismissal/a Garda inquiry, he resigned from his position in 2010. The claimant’s employer (the HSE) found that he was guilty without first giving him the opportunity to defend himself which meant that the process was seriously defective. The HSE exposed itself with this fundamental flaw in its process and, after his resignation in March 2010; the former Head of Ambulance Services claimed that he had been Constructively Dismissed. The Employment Appeals Tribunal found that the claimant, who resigned from his approximately €100,000 per year role out of anxiety after learning that he was found guilty of the fuel card offence, had in fact been Constructively Dismissed. However, the Tribunal did not award any financial compensation because of the nature of the employee’s actions prior to his departure. The claimant appealed the decision not to compensate and, in December 2013, the Circuit Civil Court awarded €250,000 (minus €50,000 for the misuse of the HSE fuel card) because of the catastrophic affect that the Constructive Dismissal had on the claimant’s career. On the 22^nd January 2014, the Health Service Executive was dealt a further blow when the Circuit Civil Court ordered it to pay the legal costs. The HSE is liable for an estimated €200,000 in legal costs that built up during the course of the Court and Employment Appeals Tribunal Hearings.

Equality Officer Awards €40,000 to Anne Delaney in response to complaint made against the Irish Prison Service. Anne Delaney took a case against the Irish Prison Service because she was discriminated against by her employer on the grounds of gender in relation to promotion, training and conditions of employment. In 2011, Ms. Delaney referred a complaint against her employer under the Employment Equality Acts 1998 to 2008 to the Equality Tribunal. She alleged that the Irish Prison Service discriminated against her on grounds of gender when she applied for numerous posts over several years. Junior or less suitable/less experienced male candidates were appointed to the roles ahead of Ms. Delaney on all occasions.    

After reviewing all of the submitted evidence, the Equality Officer was satisfied that the complainant, Ms. Delaney, had established a link between the incidents that she complained about. The Equality Officer considered the incidents as separate manifestations of the same disposition to discriminate. The Equality Officer criticised the lack of transparency stating that she was unsure of the fairness of the selection procedures that were followed. There were no marking schemes available for review and no records to help her to assess what grounds the hiring decisions were based on. It also became apparent that the same senior personnel were involved in the selection process for all posts.

The Equality Officer’s investigation of the complaint concluded that the Irish Prison Service discriminated against Ms. Delaney on gender grounds when she applied for a gym instructor course in 2001, when she applied for an Operational Support Group post in 2009, when she was asked to step down from the post of Acting ACO in August 2010 and again in September 2010 when she applied for an allowance carrying post in the Detail Office.

As a result of her findings the Equality Officer tasked with making the decision on the case ordered that Ms. Delaney be appointed to the position of Acting ACO, and placed on the permanent roster for that position. The Equality Officer backdated this appointment to the 5th of August 2010 and ensured that all consequential employment rights and entitlements, including remuneration and recognition of service, were upheld.

The Equality Officer found that Ms. Delaney had been subjected to discrimination on the grounds of her gender on numerous occasions during her career with the Irish Prison Service. The Equality Officer considered a compensatory award of €40,000 to be just and equitable in response to the distress suffered by Ms. Delaney as a result of the discrimination that she suffered. The Equality Officer felt as though €40,000 was a proportionate, effective and dissuasive sum to award. That component of the award was not in the form of remuneration and, consequently, was not subject to the PAYE/PRSI Code.

The Equality Officer found that the Irish Prison Service’s selection process for the allowance carrying post in the Detail Office (a post applied for by Ms. Delaney in September 2010) was deficient and non-compliant with Equality Legislation. The Equality Officer ordered that the Irish Prison Service ensure that a fair selection process be adopted in all future selections. She also ordered that the selection panel must be trained in the process and that it must set down the criteria in writing before embarking on the selection process. The Equality Officer also ordered that a marking scheme must be adopted and that the weighting should be given under each element. She also directed that notes must be retained for future reference.

DEC-E2013-155

DECISION NO: DEC-E/2013/155

Anne Delaney Vs Irish Prison Service

FILE NO: EE/2011/292

DATE OF ISSUE: 19th of November, 2013

Unfair Selection for Redundancy Claim succeeds leading the Employment Appeals Tribunal to award €8,500 in compensation. After hearing statements from the former employee (the claimant) and the respondent (a car dealership), the Tribunal was satisfied that a redundancy situation existed, however, the Tribunal concluded that the process was defective and, therefore, determined that the claimant was entitled to a significant award. The respondent failed to consult the claimant about his redundancy and did not appear to properly consider alternatives before finalising the decision to make the employee redundant – For instance, the employee could have suggested that he work a shorter working week/reduced hours or that he take a reduction in pay. The respondent is obliged to consider these suggestions over a period of consultation, however, the claimant was not afforded this entitlement and was only told the reasons behind the decision to select him for redundancy after asking for these.     The Tribunal found that the claim under the Unfair Dismissals Acts, 1977 to 2007 was justified which is why the claimant walked away with €8,500. This sum was in addition to the redundancy lump sum that he had received when the redundancy first occurred.

Details of this case can be found on the Workplace Relations Website (Case No. UD450/2012) - http://www.workplacerelations.ie/en/Cases/2013/November/UD450_2012.html

This case stresses the importance of following the approved procedures when it comes to redundancy. Not only do you have to prove that a redundancy is required in order to keep the business viable – you must also be able to justify why you made one employee redundant over another. The employer must be able to show that the redundancy process was not flawed. Employers should use a Selection Matrix so he or she cannot be accused of subjectivity (which is what the employee claimed in the above-mentioned case). The employer is obliged to invite the employee to a meeting making them aware that it concerns redundancy. Employers are obliged to give the employee notice of the redundancy and the reasons why the redundancy scenario came about along with why they were selected.   The employer should have asked the employee in question if they could think of any alternatives to the redundancy and the employer should have allowed for a period of consultation of at least three days before making their final decision. It is also important to allow employees to be accompanied to meetings like this.

According to the Employment Appeals Tribunal Annual Report 2011 the number of cases annually referred to the Tribunal increased three fold during the Irish economic recession (to a high of 9,458 cases in 2009). The average number of annual referrals before the recession had plateaued at approximately 3,500. Statistics for Unfair Dismissals cases: The average compensation awarded by the Tribunal in Unfair Dismissal cases has risen dramatically in recent years. For the year ended 31^st December 2009 the average compensation in Unfair Dismissals cases was €11,476. In 2010 it was €16,064.05 and in 2011 it was €18,047.85. This is a trend that employers really need to pay attention to as large sums of money like this can seriously damage a company. It is crucial to stay up-to-date with employment legislation and to follow appropriate procedures when dealing with employee matters.

Constructive Dismissal is the term used when an Employee terminates his or her employment based on the conduct of the Employer. Unlike in an Unfair Dismissals case where the dismissal is deemed to be unfair unless proven otherwise and justified by the Employer - in Constructive Dismissal instances the onus is on the Employee to prove that their resignation was based on poor Employer conduct. If it is found that the Employee has been Unfairly or Constructively Dismissed then he or she could either be awarded compensation for the loss of earnings suffered as a result of the termination of employment or could be placed back in their original role. Reinstatement is not common practice (particularly in Constructive Dismissal cases) due to the expected tension/ strained relationship between the Employer and the former Employee and due to the amount of time that is likely to have lapsed between the termination of the employment contract and the resolution of the case. The Employee has often entered in to a new employment contract elsewhere. It is important for Employers to be aware of everything that occurs in their workplace as even other Employees’ behaviour that goes unchecked by the Employer could contribute to a Constructive Dismissal case. These can be extremely costly. Here is an example of a case where the Employee (the Claimant) was awarded €9,000 after the Employment Appeals Tribunal found that he had been Constructively Dismissed. The Claimant in this case started working for the Respondent in 2007. There were no issues until late 2010 when a Technician was promoted to Technical Manager. This immediately created a hostile environment and relationships became strained. The Claimant experienced problematic scenarios in the workplace as a result of the Technical Manager’s temper on numerous occasions. The final occurrence led to the termination of employment for the Claimant. On the Claimant’s final day working for the Respondent the Technical Manager, a physically intimidating individual, entered the shop where the Claimant and his colleague were working. The Technical Manager lifted the Claimant up from his chair by his arm and proceeded to shout at him. The Claimant, who was frightened, attempted to avoid confrontation and turned away. The Technical Manager again grabbed the Claimant, this time by his shoulder, and spun him around while demanding that he not complain. The Claimant said that he didn’t complain, he just answered questions. The Claimant was pulled closer and then told to leave by the Technical Manager. The Claimant did as he was told but the Technical Manager proceeded to follow him, grabbing him by the neck. At this stage the Claimant was in a state of shock and told the Technical Manager that he was simply working his way through college. The Claimant’s shirt was torn, there were marks on his neck and his hand was bruised after the incident. After the event, the Claimant called a Senior Manager and told him what had happened. The Claimant returned his keys to the shop and arranged to collect his jacket from his colleague. A series of meetings with the shop Manager and other Senior Managers were arranged. The Claimant was offered a transfer to another shop, however, this other shop was located far from the Claimant’s home and, therefore, was not a suitable alternative – he could not accept this transfer proposal. As a result of the meetings the Claimant was given a written warning, however, as no arrangements were made for him to return to a safe workplace he had no option but to resign. The Claimant established loss for the Tribunal and it was determined that the Claimant was Constructively Dismissed. The Respondent failed in its responsibility to the Claimant by not responding adequately. Under the Unfair Dismissals Acts, 1977 to 2007, the Claimant was awarded €9,000 as compensation for being Constructively Dismissed. The appeal was heard at Dublin on 14^th October 2013. Case Number: UD669/2012.