Lessons for Irish Employers on Constructive Dismissal

In Conflict in the Workplace, Employee Grievances, Ireland, Mental Health, Personal Injury, Stress at Work,

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wrongful-termination1-216x300It is typically not easy for an employer to lose a constructive dismissal – for a claim of constructive dismissal to succeed.  Why?  It’s because the burden of proof is on the employee to show that they were constructively dismissed.

This is in contrast to an unfair dismissals case where the burden of proof is on the employer to prove that the dismissal was fair.  A dismissal is presumed to be unfair unless, as the Unfair Dismissals Acts 1977-2007 say, “there were substantial grounds justifying the dismissal”.

However, employers do sometimes lose such constructive dismissal cases – and for avoidable reasons.   The purpose of this article is to look at what important lessons employers can learn around constructive dismissal from existing case law.

First – let’s look at something that should (but seemingly isn’t) blindingly obvious.  In Kevin Kilkerr vs. Burke Fabrications Limited (UD470/2013, WT70/2013), the Employment Appeals Tribunal (EAT) ruling included this radical thought – that “when an employee provides labour and services to an employer it is reasonable for the employee to expect to be paid for its labour and or services”.  Mr. Kilkerr won his case – the EAT ruling that he was “justified in resigning his employment from the respondent due to the failure on the part of the Respondent to pay his wages”.

So the lesson for employers?  Pay your people!

A more nuanced case was that brought by Olivia Barry against (what was) Quinn Insurance.  If you were to read this Irish Independent article from early January 2012 when she appeared before the EAT you might think that she had a strong case.  She alleged thatthat her complaints to the company over her treatment by a colleague on the commercial claims team were not taken seriously”.  One colleague “spoke down to me like I was a dog”.  She also had raised the issue with human resources.  And she also alleged that “she was treated differently to other team members”.

The EAT did rule that the treatment she received by one particular colleague and his strong language towards her was “unacceptable, but this in itself was not sufficient reason for the claimant to resign”.

Her claim failed because of what the EAT termed a “reasonableness” test.  What is this test?  In their ruling the EAT explained this test as one that “asks whether an employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to tolerate it any longer and justifies the employee leaving”.  In Ms. Barry’s case the EAT did not believe “that the employee was left with no reasonable alternative but to leave”.

So what had the employer done to prevent the EAT drawing the opposite conclusion?  The EAT’s reasoning in this case is sparse – but the salient point is that Ms. Barry “did not appeal the outcome of company’s decision in relation to her complaint of bullying and harassment”.

What had the company done right?

  • It had developed a grievance procedure.
  • It had provided, upon request, a copy of the grievance procedure.
  • It had carried out an investigation in line with its procedure.
  • It had provided the claimant with an update on the investigation.
  • It had offered the claimant alternative roles to return to work.
  • It had advised the claimant of her right to appeal the result of the investigation.
  • It had invited her to a meeting to discuss the investigation’s findings.

The EAT ruled that, “except in very limited situations an employee must exhaust all avenues for dealing with his/her grievances before resigning”.  And Ms. Barry had demonstrably failed to exhaust all the avenues available to her.

Let us look now at another more recent case where, again, all avenues were not exhausted – but in this case for very different reasons.  Sylwia Schonfeld brought a claim for constructive dismissal against her employer – one of Dublin’s biggest gyms.  The EAT heard the claim in 2014.  The problem was the relationship between the claimant and the facility’s general manager – a relationship that reached a point where the claimant felt she has no option but to resign.

The claimant did not utilise the grievance procedure for a few reasons.  Firstly, there was no one in a HR management role at the time.  This meant that the only people more senior to the claimant were the general manager and the owner.  The claimant’s problem was with the general manager so she could not use that route.  Secondly she had only ever seen the owner once on the premises.  So she felt that was not an option either.

In evidence the EAT knew of certain emails that the general manager had sent the claimant.  It had also heard from a witness who said that the general manager “was hostile towards the claimant and at times shouted at her”.  The witness also “confirmed that during the relevant time the respondent did not have a dedicated human resource person or section”.

In its determination the EAT said that “the actions and behaviour of this manager contributed significantly to the decision of the claimant to resign from the respondent. Some of the emails sent by that manager to the claimant were aggressive and offensive. That style of communication was compounded by some of her verbal airings with her.  These developments together with a lack of a clear managerial structure led to the claimant’s resignation.”  The claimant was successful and was awarded €12500.

What could the company have done differently?

  • Exercise greater care with the content of emails
  • Maintain professionalism in verbal communications with staff
  • Ensure that the grievance procedure clearly outlines a valid mechanism for dealing with complaints – particularly for those employees reporting to the general manager

That last point – having the mechanism in place – is problematic for many employers.  They may have neither the personnel nor the expertise to either deal with grievances in the proper way and/or to properly carry out investigations.  When this is the case it can be prudent to use outside experts to help with grievance hearings and/or to carry out investigations.

Another interesting case is that of Katrina Burns versus ACM Community Development Society Limited (UD2166/2011) – a case that illustrates another subtlety in the handling of complaints.  Ms. Burns, a childcare worker, had expressed concern over her new manager’s “way with the children”.   The claimant “was asked to formalise her complaint … but declined this request as she thought it would adversely affect her working life”.   The employer had made the request after their informal investigation had found no substance to the claimant’s complaints.  The request was made, according to the employer, “so they could see the substance of the complaints clearly”.

The claim for constructive dismissal failed with the EAT ruling that “the claimant should have followed through with the complaints procedure.”  What had the company done right in this case that’s not covered in the Barry vs. Quinn Insurance case discussed earlier?  They had asked the claimant to formalise her complaint.  If she had done so it is of course not possible to say what would have transpired.  The company may have decided to have independent investigators carry out the investigation.  But things never developed to that point.

These cases, taken together, offer employers useful signposts on how to protect themselves against successful constructive dismissal cases.  But, given that legislation can never cater to the full complex range of possible scenarios, case law continues to inform.  And the EAT continues to put down markers for employers in how they should handle – or preferably prevent – such claims situations.

So have you a grievance procedure?  Is it robust?  Have you the expert personnel with the time to use the procedure when required and to carry out any required investigations?

To get expert and professional guidance on constructive dismissal call Mary Cullen, Patrick Foley, Keith Connolly or Liam Barton on 056 770 1060 or email mcullen@insighthr.ie.

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