High Court

Tierney v An Post 

1996/247 JR 

7 July 1998 

MCCRACKEN J: 

The Applicant was appointed Postmaster at Termon, Virginia, Co Cavan on 30 May, 1983 on the retirement of his father, who had served as Postmaster for over forty years at that time. On 15 March, 1996 the Respondent notified the Applicant of its decision to terminate its contract with the Applicant. The Applicant appealed this decision, and an oral hearing of the appeal took place on 28 May, 1996. On 10 July, 1996 the Applicant was notified of the Respondent's decision to deny the appeal, and the Applicant's contract was terminated as of 26 July, 1996. In these proceedings the Applicant seeks Orders of Certiorari setting aside both the original decision of 15 March, 1996 and the decision in relation to the appeal, an Order of Prohibition prohibiting or restraining the Respondent from terminating its contract with the Applicant as a result of these matters and Declarations that the Applicant was entitled to a warning prior to the termination of the contract. THE FACTS 

I would emphasis that it not the function of the Court in proceedings such as this to determine whether the decision of the Respondent was or was not correct in all the circumstances. It is the Court's function only to consider the method whereby that decision was reached. However, in order to understand what occurred between the Applicant and the Respondent, it is necessary to outline the factual position. 

Termon Post Office is a sub-Post Office in the small village of Termon, near Virginia, Co Cavan. As I have already said, the Applicant was appointed a Postmaster on 30 May, 1983, and I will consider the terms of that appointment in more detail later on in this Judgment. As commonly occurs in country sub-Post Offices, the Applicant also ran a grocers shop in the same premises, and in conjunction with the sub-Post Office. Both the sub-Post Office and the grocery shop undoubtedly provided a very important service to the local community. In latter years, in common with all Post Offices, the sub-Post Office provided a number of services which are not strictly related to the postal service, and in particular provided a means for customers to discharge their telephone accounts. Customers would frequently use one of the Respondent's services and at the same time make purchases from the shop, and would pay for both by way of a single cheque. Indeed, the Applicant would also facilitate customers by allowing them to write a cheque for a larger amount, and paying them the difference in cash. 

The head Post Office for the area was situate at Kells in County Meath and all monies received by the Applicant had to be sent to that Post Office. The procedure in relation to monies received for payment of telephone bills was that the money was sent by registered post to Kells Post Office, which in turn forwarded it to Telecom Eireann. 

In 1990 and 1991 there had been some problems in relation to telephone accounts paid to the Applicant, and the Applicant was instructed to ensure that monies in respect of paid telephone accounts should be remitted to the Kells office on a daily basis. No further complaints appear to have arisen until October 1995, when two customers queried arrears on their telephone accounts which they had paid to the Applicant. On 16 October, 1995 the Head Post Master at Kells wrote to the Applicant seeking explanations on three specific complaints. These briefly were:- 

(1) The sum of £76.31 was paid by Mr James Clarke as his telephone account on 25 August, 1995. The payment was not received by Kells until 12 October, 1995 after the subscriber had queried the arrears on the following account. 

(2) The sum of £66.84 was paid by Mr Patrick McCabe in late July 1995 and had not yet been received at Kells. 

(3) The sum of £91.11 had been paid by Mr Patrick McCabe on 27 September, 1995 and was not forwarded to Kells until 13 October, 1995. 

On 18 October, 1995 the Applicant replied to these matters. In relation to (1) above he disputed the date of payment and stated the reason for delay was "no photocopier", in relation to (2) above he stated that payment had been forwarded by registered post and in relation to (3) he disputed the date of the alleged payment to him. 

The Respondents then appointed Mr Martin Walsh, a senior Investigation Officer in the Respondents, to investigate the matter. He interviewed Mr Clarke and Mr McCabe, and on 1O November he interviewed the Applicant. The Applicant handed him six documents dealing with these accounts, which were the portion of the telephone accounts retained on behalf of the customer. Five of these did not bear any Post Office stamp, and the sixth bore a stamp on which the date was illegible. The Applicant also made a statement to Mr Walsh at this meeting in which he acknowledged that he omitted to date stamp the documents, but still disputed the dates on which the customers paid their bills. He further stated that he was satisfied that Mr McCabe's account of £66.84 had been paid by him to Kells Head Office, but he was unable to say on what date he did so. He acknowledged that in the future all accounts would be date stamped clearly, and legibly to the best of his ability. 

On 15 January, 1996 Mr Pat Rooney of the Respondents wrote to the Applicant in the following terms:- 

"Dear Mr Tierney, 

The standard of accounting at Termon sub-Post Office, for which you bear contractual responsibility, has again become a source of concern to the company. 

Contrary to the arrangements agreed with you in relation to earlier irregularities, telephone account payments made by Mr James Clarke and Mr Patrick McCabe at your office at various dates up to 10 November, 1995 were not remitted on a daily basis to Kells Head Office. 

Contrary to Paragraph 3.25 of the Postmaster's Manual, five of the six accounts concerned were not date stamped and the date stamps on the remaining account are illegible as regards date. 

Your failures in the above instances have seriously inconvenienced the individual customers concerned and brought the company into disrepute with a major agency customer. 

You previously came under notice in relation to similar irregularities in August 1990 and again in November 1990. On 4 September, 1990 you acknowledged a formal warning in the matter from the Head Postmaster, Kells. You were similarly warned by the Head Postmaster in May 1991 in relation to the renewed irregularities in November 1990. 

The question of recommending termination of your contract is now under consideration. In order to afford you an opportunity of furnishing any explanation or making any representations you may wish to offer, no further action will be taken for a period of fourteen days. 

Yours sincerely, " 

At this point the Applicant consulted the Irish Postmasters Union, of which he was a member, and on 6 February, 1996 they wrote on his behalf to the Respondents. This did not really add anything to the earlier statement made by the Applicant, although it did point out forcefully the good service provided by the Applicant to his customers and the effect which termination of the contract would have, both on the Applicant and his family and on the local community. The letter ended by saying that the Union was available for discussions in relation to the matter. The Respondents never replied to this letter. 

On 15 March, 1996 the Respondents wrote to the Applicant in the following terms:- 

"Dear Mr Tierney, 

Please refer to the letter of 15 January, 1996 in which you were informed that termination of your contract was under consideration for the reasons stated. 

Following consideration of your case, I now have to inform you that the company has ceased to have confidence in your ability to manage the office and consequently it has been decided to terminate your contract as Postmaster, Termon with effect from 29 March, 1996. You will be given three months scaled payment in lieu of notice. Should you wish to appeal this decision, you or your representative should do so within seven days. 

I am sorry that your contract with the company has had to end in this way. 

Yours sincerely, " 

Oddly enough this letter does not make any reference to the representations made by the Irish Postmasters Union, nor was a copy of it sent to the Union. In response, the Applicant wrote to the Respondent on 21 March, 1996 in the following terms:- 

"Dear Sirs, 

I refer to your letter of the 15 inst, signed by the your Mr Pat Rooney. I hereby notify you that I wish to appeal your decision to terminate my contract as Postmaster with purported effect from the 29 inst. 

Further I hereby request an oral hearing of my appeal. 

With respect I submit that the alleged reasons which you set out in your letter of the 15 January last are not of such a nature as to cause you to cease to have confidence in my ability to manage the office as stated in your letter under reply. I would appreciate if you would confirm if these were the sole reasons considered prior to making the decision to terminate. 

As I will require some time to prepare my appeal I request a stay of execution in relation to the proposed termination on the 29 inst pending the outcome of said appeal. 

Yours faithfully," 

There was no direct reply to this letter, although there was further communication in relation to the date of the appeal. On 2 May, 1996 the Applicant again wrote to the Respondent saying:- 

"Dear Sirs, 

My letter of the 21/3/96 and the issues raised therein. As of yet I have not received a reply to same. 

I would be obliged if you would address these matters at your earliest convenience. 

Yours sincerely," 

Again, the Applicant received no reply to this letter. A hearing was ultimately arranged for 28 May, 1996. 

At the hearing, the Applicant was present together with a Ms McMahon, who is a friend and neighbour of the Applicant, and is also a qualified solicitor. I accept, however, that she was not present in her capacity as a solicitor. The hearing took place before a Mr Michael O'Connell, the Manager of Customer Services for the Respondents, and in the presence of Mr Nick Mullen, also of the Respondents, who took notes of the meeting. I have had evidence from Mr Tierney, Ms McMahon and Mr O'Connell as to what took place at the meeting and their accounts do not vary greatly, except in one regard. The meeting seems to have had very little structure, and nobody outlined the position on behalf of the Respondents. Both the Applicant and Ms McMahon addressed Mr O'Connell, and made various points. They urged that the termination was totally unjustified and that the two subscribers concerned did not in fact know for certain when they made their payments. It was also pointed out by Ms McMahon that Paragraph 3.25 of the Rules, which was referred to in the letter of termination, only provided that the documents being sent to the Head Office should be stamped, and did not oblige the Postmaster to stamp the portion being returned to the customer. Towards the end of the hearing, Mr O'Connell asked if they considered they had had sufficient time and a fair hearing, and asked if there was anything else they wished to raise. Ms McMahon then asked whether the appeal was being decided on the two items of complaint from Mr Clarke and Mr McCabe, or whether there were any other items being considered, and Mr O'Connell replied that there were a number of other items, namely, delays in sending accounts to the Head Office, failure to date stamp accounts and illegible date stamping. Ms McMahon's evidence is that she pressed him as to what these items were and he said he would have to look at his file. Mr O'Connell does not recollect this taking place. although he does say that he had the full file in front of him, but he had not in fact read all the material in it. I was generally very impressed with Ms McMahon's evidence, and I think it probable that Mr O'Connell did make some reference to consulting his file. 

After the meeting concluded Mr O'Connell undertook further enquiries on issues on which he was not fully satisfied. He went to Kells Post Office and looked at date stamps on a number of documents there, and went back to Mr Clark and Mr McCabe. His evidence was that at Kells Post Office he saw some clear stamps on documents coming from the Applicant and that as a result of these enquiries he had serious doubts about the Applicant's credibility. In the course of the hearing the Applicant had told him that he had problems with his date stamp for years and that he had a bad date stamp and a lack of ink for ink pads. 

It should be added that Mr O'Connell also had received letters from Mr Clarke and Mr McCabe in which they both said they could not remember when they paid the accounts which were in dispute. 

On 10 July, 1996 the Respondents wrote to the Applicant in the following terms:- 

"On 28 May, 1996 you were afforded an oral hearing in College House, Dublin to appeal against our earlier decision to terminate your contract. 

Following consideration of your case, the Chief Executive has decided to deny your appeal. Your contract with the company, the termination of which was held in abeyance pending the outcome of your appeal, will now end with effect from 26 July, 1996. The office will then close on a temporary basis pending a review of services in the area. 

The Head Postmaster will be in touch with you shortly to make the necessary arrangements." 

It is quite clear that when making his decision or recommendation, Mr O'Connell had before him the entire file of the Respondents relating to the Applicant, a report from Mr Walsh on his initial investigations, and the results of investigations made by him or on his behalf subsequent to the hearing. None of these matters were disclosed to the Applicant at any time. 

THE APPLICANT'S CONTRACT 

The contract consisted of a document headed "Appointment of Postmaster" which was signed by the then Postmaster at Kells and by the Applicant. It acknowledges that "The appointment of Mr Sean GJ Tierney as scale payment Postmaster at Termon has been approved on the usual conditions, which include medical examination". It also contains an acknowledgement by the Applicant that he had received certain documents. including Rules for sub-Postmasters, which has subsequently been replaced by what is known as the Postmasters Manual. It also provides:- 

"I agree to be bound by the Rules contained in the Rule Books referred to overleaf, subject to any amendments or additions thereto duly notified. 

I acknowledge that I am responsible for the whole of the official cash, stock of stamps, etc, both as regards those I hold myself and those I entrust to a subordinate officer and that I am liable to make good, without delay, any loss or default which may occur from any cause whatsoever. I also acknowledge that my financial responsibility does not cease when I relinquish office and I will be required to make good any loss incurred during my term of office which may subsequently come to light. 

I also hereby acknowledge that the letter box at this office is the property of the Department. 

I undertake to arrange to convey, when required, sealed letters and parcel mails between the office and any conveyance which serves it. 

I shall be prepared to make proper provision, including the lighting, heating and cleaning of the premises, for postal, telegraph and telephone work and to provide at the standard rate of payment for a continuous telephone service, if at any time required to do so; also to provide the necessary facilities (pen, ink, etc) to the public to complete documents at the Post Office. I am aware that canvassing with the object of diverting business from another office, or any practice having this effect, is forbidden. 

I agree to the condition that should I desire to resign my office I must give three calendar months notice in writing, failing which I should be liable to bear any expense incurred by the Department in consequence. 

I understand that I will be liable for any expenditure I may incur on the improvement of premises or fittings. 

I also understand that the appointment is an unestablished one; that it does not entitle me to the privilege of free medical attendance, sick pay or annual leave at the expense of the Department; that it does not confer any claim to an established appointment or entitle me to compensation for loss of office or award under the Superannuation Acts and that if it be deemed necessary at any time to alter the duties, to withdraw any part of the work of the office, or to introduce a salaried system of payment, I have no claim to compensation for any disappointment or loss of emoluments which may result from the change." 

It should be noted that this appointment was made prior to the formation of An Post, and was in fact an agreement with the then Department of Post and Telegraphs. However, it is common case that the terms of the agreement continued in force when the Post Office came under the control of An Post. 

THE RULES 

Under the terms of his appointment, the Applicant agreed to be bound by the rules contained in certain rule books subject to any amendments or additions thereto duly notified. It is common case that the relevant rules are now contained in a loose leaf folder entitled "Postmasters Manual". In Clause 1.1 of this document it is stated "The rules in this book contain the general regulations of An Post applicable to Postmasters at sub-offices". These rules are divided into thirteen sections and comprise in all almost one hundred pages. They cover every aspect of a sub-Postmaster's work in detail. As the Applicant agreed to be bound by these rules, in effect they form part of the terms of his contract, and it is relevant to quote at least some of them. Among the provisions are:- 

"2.1 Salary etc 

(a) the emoluments of a Postmaster are fixed by scales which regulate the amounts in proportion to the volume of business. Postmasters are paid monthly. 

(b) the emoluments of Postmasters are considered sufficient to provide for the efficient performance of the duties, for the adequate remuneration of any assistants who may be employed by the Postmaster, for the cost of providing office accommodation, fittings, lighting, heating, cleaning, and also necessary facilities (pen, ink etc for the public to complete documents at the Post Office)." 

"2.5 Control 

Postmasters are under the control and direction of the Regional Manager and are also subject to the immediate direction of their respective Head Postmaster, to whom in case of doubt arising on any point, reference should be made for instructions." 

"2.20 Representations and Official Matters 

(c) through Staff Associations 

recognised Associations of Post Office servants may make representations on official matters effecting the interests of members in accordance with the following procedure:- 

(i) representations on general questions, eg remuneration, hours of duty, and also appeals in discipline cases (for which see rule 2.39) can only be accepted from the central body of an Association . . ." 

"Appointment of Sub-Office Assistants 

2.25 Age 

The minimum age at which persons may be employed at a sub-office is sixteen years. The authority of the Head Postmaster is required for the employment at sub-office. 

2.26 Declarations 

Before any person is employed, either temporary or permanently, he/she must sign an official declaration that he/she has read and been given a copy of Sections 37 and 84 of the Postal and Telecommunications Services Act, 1983, and no person should be permitted to have access to letters, or to perform any official duty whatever, until this declaration has been made and signed." 

"2.34 Bankruptcy and Insolvency. 

If a Postmaster or other servant of An Post, whether permanent or temporary, becomes bankrupt or insolvent, he/she must immediately notify his/her superior officer. Failure to do so will be regarded as grave misconduct which may result in dismissal . . ." 

"2.35 Borrowing and Lending Money Forbidden A servant of An Post is forbidden, on pain of dismissal, to borrow money from his/her subordinate or from any other of a lower rank than himself/herself, or to lend money to any officer of superior rank . . . " 

"2.39 Appeals in Discipline Cases 

Any appeal against disciplinary decision should he made without delay. The decision, or relevant form should at once be noted 'subject to appeal' and the appeal should be forwarded not later than ten days thereafter, otherwise the right of appeal will lapse. If the punishment be not of a 'serious' nature only one appeal is permitted. In 'serious'' cases up to three appeals are allowed; the first should invariably be made by the officer himself/herself and, if he/she is dissatisfied with the result, he/she has the option of making a second and third appeal to the Regional Manager either on his/her own behalf or through his/her Association . . ." 

2.75 Cheques -- Acceptance of 

(a) cheques should be accepted in payment for . . . accounts for telephone services . . . 

(b) a Postmaster is not required to accept cheques from customers except in the cases and under the conditions specified. If he/she does so without special authority it will be on his/her own responsibility. 

(c) cheques should be drawn in favour of the Postmaster at whose office they are tendered. When the Postmaster remits by accountable receipt, the cheques must be paid into the local bank at once: in other cases they should be remitted the same day. A record of such cheques should be kept. 

(d) IN NO CIRCUMSTANCES SHOULD CHANGE BE GIVEN IN RESPECT OF ANY PORTION OF THE THE VALUE OF A CHEQUE." 

THE APPLICANT'S CASE 

The Applicant's case in general is that the procedure adopted by the Respondent was unfair and was contrary to the rules of natural and constitutional justice. In particular, he complains:- 

1. That he did not know the full reasons behind the termination. He complains in particular that correspondence seeking the reasons from himself and from his Union was ignored, and that even at the hearing he was unable to get a straight answer as to exactly what matters were being considered by Mr O'Connell. 

2. It appears that the Respondent took into consideration several complaints which had been made four or five years earlier, and which had been dealt with at that time. 

3. That even if the Applicant had not complied strictly with the rules, it was a totally disproportionate response to terminate his agreement. 

4. The agreement between the parties was a contract of service rather than a contract for services, and the Applicant was in fact employed by the Respondent. This placed a considerable onus on the Respondent as employer to comply with the rules of natural justice. 

5. The complaints against the Applicant were such that they should have been dealt with in the first instance by a warning being given to him, rather than by disciplinary proceedings. 

6. The procedure in the rules was not followed. The Applicant had a right to two further appeals because this was clearly a disciplinary matter of a serious nature, and he should have been notified by the Respondent of his right to these further appeals. 

7. The Respondent relied on matters which were not notified to the Applicant. In particular, he relied on a report from Mr Walsh which was not furnished to the Applicant and on information gathered by Mr O'Connell after the hearing. The Applicant ought to have had an opportunity to consider all these matters and make representations in respect of them. 

THE RESPONDENTS CASE 

The Respondent accepts that the rules of natural justice should apply to the hearing which took place, but says that those rules, so far as they are applicable to the circumstances of this case, were complied with. In relation to the particular matters raised by the Applicant, the Respondent argues:- 

1. The Applicant knew the case against him perfectly well, as the complaints were clearly set out in the letter of 15 January, 1996, and these were the only matters under consideration. 

2. Insofar as the events of 1990 and 1991 were considered, this was only in the context of a pattern of behaviour by the Applicant, and there was no question of any disciplinary action being taken in respect of those earlier complaints. The decision to terminate the contract was not disproportionate to the complaints. The complaints made were in respect of the payment of telephone accounts, and it was of very great importance to the Respondent to have the confidence of Telecom Eireann, as Telecom Eirearin was a very important customer of the Respondent. 

4. While the rules with which the Applicant must comply are very severe and strict, nevertheless, his contract is to provide a service to the Respondent. The contract was one which either party was entitled to terminate, and while it did not specify a length of notice to be given for termination by the Respondent, the Respondent in effect gave three months notice, which was the notice specified if the contract were to be determined by the Applicant, and this was reasonable notice. 

5. There was no obligation on the Respondent to give a warning to the Applicant. In fact this was a matter of such importance to the Respondent because of its relationship with Telecom Eireann that it was perfectly justified in considering termination without any prior warning. 

6. The Respondent accepts that it did not specifically notify the Applicant of his right to further appeals, but says that the Applicant had a copy of the Rules from which, if he had read them, it would have been quite clear that he had a further right of appeal. 

7. Mr O'Connell conducted the hearing and his investigation into the matter in a fair and impartial manner. Mr Walsh's report was a private and internal matter which the Applicant had no right to see, and the enquiries made by Mr O'Connell after the hearing were made merely to verify certain matters put forward by the Applicant at the hearing. As the Applicant was aware of the matters complained of against him, and had made his submissions to Mr O'Connell, there was no further obligation to inform him of the outcome of Mr O'Connell's enquiries, or to give him a further opportunity to make submissions. 

CONCLUSIONS 

I would propose to deal with the points raised by the Applicant in the order in which I have set them out above. However, before doing so, I would adopt with approval the general principles set out by Barron J in Flanagan v University College Dublin [1989] ILRM 469 at page 475, where he said:- 

"Once a lay Tribunal is required to act judicially, the procedures to be adopted by it must be reasonable having regard to this requirement and to the consequences for the person concerned in the event of an adverse decision. Accordingly, procedures which might afford a sufficient protection to the person concerned in one case and so acceptable might not be acceptable in more serious case. In the present case, the principles of natural justice involved relate to the requirement that the person involved should be made aware of the complaint against them and should have an opportunity both to prepare and to present their defence. Matters to be considered are the form in which the complaint should be made, the time to be allowed to the person concerned to prepare a defence, and the nature of the hearing at which that defence may be presented. In addition depending upon the gravity of the matter, the person concerned may be entitled to be represented and may also be entitled to be informed of their rights. Clearly, matters of a criminal nature must be treated more seriously than matters of a civil nature, but ultimately the criteria must be the consequences for the person concerned of an adverse verdict." 

It is quite clear from this passage, and indeed from other authorities, that there is no fixed standard of natural justice which lays down that certain specific matters must be complied with. The protection to be afforded to a person whose conduct is being investigated will vary according to the circumstances. Bearing that in mind, the following are my conclusions in relation to the points raised by the Applicant:- 

1. In my view the letter of 15 January, 1996 clearly sets out the complaints being made against the Applicant. While the Applicant undoubtedly feared that further matters might be taken into account, I am satisfied that the decision was in fact made purely on the basis of the complaints set out in that letter. I would add, however, that the attitude of the Respondent in not replying to the Applicant's specific queries on this point left a lot to be desired, and, perhaps naturally, sowed seeds of suspicion in the Applicant's mind. 

2. The fact that somewhat similar complaints had been made against the Applicant some years earlier, and had been the subject of a reprimand by the Respondent, would certainly be relevant in relation to making a decision whether to terminate the contract or not. In my view this is so, even though the previous complaints had been made some years earlier, although of course the weight to be given to such earlier complaints would vary according to the length of time which had expired. In my view the earlier complaints were matters which Mr O'Connell was entitled to take into consideration. 

3. Whether the response of terminating the contract was disproportionate to the complaints depends upon the nature of the contract between the parties. If this was a contract for services, then under the express or implied terms of the contract, the Respondent was entitled to terminate it on giving reasonable notice, and indeed under the terms of the contract had no other real remedy. On the other hand, if this was a contract of service, then different considerations must apply. I propose to consider this further under the next heading. 

4. The distinction between a contract for services and a contract of service is one which has come before the courts on many occasions. In many of the older cases a rather simplistic view was taken, namely that if one party could direct the other party as to what to do and how to do it, it was a contract of service, while if he could only direct the other party as to what to do, but not how to do it, it was a contract for services. The modern cases have recognised that this is certainly a matter to be taken into account, but it is not the only test. In Beloff v Pressdram Limited (1973) 1 All ER 241, which was followed by Carroll J in the matter of The Sunday Tribune Limited (In Liquidation) which was the subject of an unreported Judgment dated 26 December, 1984, ([1984] IR 505) Ungoed Thomas J applied the test in the following terms:- 

"Whether on the one hand the employee is employed as part of the business and his work is an integral part of the business or whether his work is not integrated into the business but is only accessory to it or, as Cooke J expressed it, 'The work is done by him in business on his own account'." 

In a recent Supreme Court decision in the case of Henry Denny & Sons (Ireland) Limited v The Minister for Social Welfare (1 December, 1997) Keane J said at page 27 of the Judgment:- 

"It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself. The degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. The inference that the person is engaged in business on his or her own account can be more readily drawn where he or she provides the necessary premises or equipment or some other form of investment, where he/she employs others to assist in the business and where the profit which he/she derives from the business is dependant on the efficiency with which it is conducted by him or her." 

In applying these principles to the present case I must first of all have regard to the actual agreement between the parties, although I must decide the issue, not on the basis of what the parties called their relationship, but on the basis of what that relationship actually was. Nevertheless, the agreement between the parties is of considerable importance. 

The historical situation is that the Applicant was originally appointed, not by the Respondent, but by the former Department of Post and Telegraphs. The actual agreement of 8 June, 1983 refers to the Respondent's "Office" and to the fact that his "appointment is an unestablished one". The latter phrase was one which was in quite common use in the Civil Service, and was not generally used to describe an independent contractor, but rather somebody who was not a permanent Civil Servant. 

As I have already said, the rules contained in the Postmasters Manual form part of the agreement between the parties, and I have set out a number of these rules verbatim in the earlier part of this Judgment. I have done so because they appear to me to be of considerable importance in determining this issue, particularly in so far as control is concerned. In my view the general tenor of the rules show a situation where the Respondent exercises a very strict control over the way in which the Applicant carries out his work, and in the Section which deals with discipline, it uses the word "dismissal" on several occasions. This is a word which clearly relates to a contract of service. 

On the other hand the Applicant conducts a business in his own premises, and, while his income is not directly related to the amount of work he does, it is indirectly so related because his scale of remuneration is calculated on the results of previous years. There is also a strange anomaly, which nobody was able to explain to me, in that the payments to the Applicant are paid gross, and therefore PAYE is not deducted, but on the other hand the Respondent contributes to the PRSI payments on behalf of the Applicant. However, it was held in the Sunday Tribune Limited case that the failure to deduct income tax was not a deciding factor and I would agree with this. 

If I take the test as set out in the Sunday Tribune Limited case, namely whether the Applicant's business is part of the business of the Respondent and integrated into it, I think the Applicant is undoubtedly employed by the Respondent. The Applicant was carrying on the same business as the Respondent carried on at numerous other locations throughout the country. He was under the control and direction of his Regional Manager and was therefore an integrated part of the organisation for the region. He was obliged to conduct the business in the same way as all other Post Offices in the region. A great deal of the business, of which collecting payments for telephone accounts was only one example, was carried out on foot of an agreement between the Respondent and some third party over which the Applicant had no control whatever. 

If one takes the test laid down in the Henry Denny & Sons case, I think the result is the same. For much the same reasons as I have already stated, the Applicant would appear to be performing the services for An Post and not for himself. He does provide the premises, although they must comply strictly with criteria laid down by the Respondent, but the profit which he derives is not greatly dependant upon his efficiency, but rather on how the Post Office business is organised by the Respondent. Furthermore, and this was a matter which was considered to be of importance in the Henry Denny & Sons (Ireland) Limited case, while he is entitled to employ an assistant in the business, he may only employ somebody who has been approved in advance by the Respondent and who has entered into certain undertakings with the Respondent. In my view, therefore, the agreement between the parties is a contract of service whereby the Applicant is employed by the Respondent. 

The effect of this on the question of whether the response of terminating the contract was appropriate to the complaints remains to be considered. The complaints, and the only complaints, which led to the termination of the agreement were that on three occasions the Respondent failed to return monies paid for telephone accounts in a timely fashion, and on six occasions failed to stamp the customer's receipt. Even taking into account that there had been problems some years earlier, it seems to me that dismissal for these matters is out of all proportion to the damage caused to the Respondent. Unfortunately, the Postmasters Manual, despite all its detail, does not specify what remedies may be available to the Respondent where there has been a breach of discipline, or inefficiency by a Postmaster which might cause some loss or embarrassment to the Respondent. However, it is not my function to determine what would have been a suitable response by the Respondent, and all I can determine is that a termination of the contract was certainly disproportionate. 

5. I cannot see any obligation on the Respondent to have actually warned the Applicant about his conduct before initiating disciplinary proceedings against him. In fact, the Applicant had of course been warned some years earlier, but it may well be that a severe warning after the hearing would have been sufficient. In any event I think little turns on this point. 

6. The Applicant quite clearly was in breach of some of the provisions in the Postmasters Manual and was not conducting his business in accordance with the rules laid down therein. In fact, he does not seriously deny this, although he says that his situation made it impossible for him to follow the rules to the letter, and I would have some sympathy with that position in the case of a very small country sub-Post Office such as this. However, there is no doubt that his actions did warrant disciplinary procedure, and that set out in Clause 2.39 of the Postmasters Manual was followed. Indeed, the Respondent may have gone further than they were obliged to do under the strict wording of the clause by having an oral hearing. I do not think the Respondent was under any obligation to notify the Applicant that there were further rights of appeal. as the Applicant should have known this perfectly well had he read the rules. 7. It was decided in Glover v BLN Limited (1973) IR 388 that where there was provision in a contract of employment for some form of disciplinary procedure, it was an implied term of the agreement that any enquiry held under it should be conducted fairly. I have no doubt that that principle applies in the present case. I have already held that the Applicant was aware of the complaints made against him, although, as he had not been furnished with Mr Walsh's report, he was not aware of the detailed evidence which was put before Mr O'Connell. That report has not been put in evidence before me, and therefore I am unable to determine how far it would have effected the arguments to be made by the Applicant at the hearing, but on principle, it seems to me to be a totally unfair procedure whereby the person making the decision is furnished with what is in fact evidence against the Applicant in the form of Mr Walsh's report, which evidence is unknown to the Applicant and therefore he is unable to refute in any specific detail. 

In any event, I think the conduct of Mr O'Connell after the hearing is in breach of all principles of natural justice. Having heard the Applicant, he decided to make further enquiries including an inspection of documents at the Kells Post Office. The Applicant was totally unaware of this, and was given no opportunity either to explain the documents discovered by Mr O'Connell, or to make submissions in relation to them. I should add that I consider it very relevant that Mr O'Connell in his evidence said that after he had visited the Kells Post Office and seen the stamps on other documents he had serious doubts about the Applicant's credibility. I have been referred to a case of Aziz v Midland Health Board (1995) Employment Law Review 48, where it was held that the fact that the hearing officer had discussed the Applicant's situation with some of the doctors concerned after the hearing was not fatal to the decision made. However, in that case there was clear evidence on behalf of the decision maker that his discussions with the doctors did not impinge on his decision and therefore there was no injustice done. In the present case, Mr O'Connell's discussions clearly impinged on his decision, and the Applicant was entitled to an opportunity to make submissions in this regard. 

Accordingly, I am of the view that the Applicant must succeed in these proceedings, both on the basis that the response of the Respondent was disproportionate to the complaints made and also on the basis that the Applicant was deprived of a fair hearing by not being made aware of the evidence against him which was taken into account by Mr O'Connell and that the principles of natural justice were not complied with. 

I will make an Order under Paragraphs (i) and (ii) of the points of claim setting aside the decision of the Respondent to terminate its contract with the Applicant, and setting aside its decision to deny the Applicant's appeal. I will also make an Order under Paragraph (iii) prohibiting the Respondent from determining its contract with the Applicant in respect of the matters complained of in the letter of 15 January, 1996. I will refuse the reliefs claimed at Paragraphs (iv) and (v).