O'Carroll v Norbrook Laboratories Ltd  (Constructive Dismissal )  (18 February 2002)
THE INDUSTRIAL TRIBUNALS

CASE REF:	00454/99UD

APPLICANT:	Conor O’Carroll

RESPONDENT:	Norbrook Laboratories Limited 

DECISION
The unanimous decision of the tribunal is that the applicant has failed to show that there had been a fundamental breach of his contract by the respondent and therefore his claim that he was constructively dismissed must fail.     

Appearances:
The applicant was represented by Ms Mary Larkin, Barrister-at-Law, instructed by P J McGrory & Co, Solicitors.
The respondent was represented by Mr F O’Donoghue, Barrister-at-Law, instructed by R A Mullan & Son, Solicitors.  

1.	The applicant was in the employment of the respondent for 3½ years and at the time of the termination of his employment he was Production Manager in the Marketing Department.  When the applicant joined the marketing team they were tasked to produce a new company brochure with CD-ROM and Website.  Shandwick Design had been engaged to assist.  In the month of July 1998 Dr Haughey expressed his dissatisfaction with Shandwick’s work and dismissed them from the contract and took over responsibility for the control of the contract himself.  He subsequently awarded the contracted to Manley Communications.  Proceedings were issued against the respondent in respect of the Shandwick contract and the applicant and Andrew Smith, who was International Product Manager, were asked by the company’s legal advisor to attend a consultation with Mr Nick Hanna QC on 21st October 1998.  Both the applicant and Mr Smith reported at that consultation that they had no fault with Shandwick and subsequently Mr Hanna advised the respondent to settle.  

2.	The applicant and Mr Smith gave evidence that Conor McGahon, who was the company’s legal advisor at that time, had said to them prior to the meeting with counsel that they should forget about their Christian values, both took this to mean that they should tell lies if necessary.  Mr McGahon did not attend the tribunal hearing to give evidence, however the tribunal had no reason to doubt the evidence of the applicant and Mr Smith in this matter.  

3.	The applicant and Mr Smith were advised by Mr McGahon that Dr Haughey was not pleased with their input to the meeting and they were summonsed to attend a meeting with Dr Haughey on 23rd October 1998.  The applicant had provided a typed copy of his notes of the meeting which he had complied shortly afterwards.  They were both asked to detail their involvement with the Shandwick contract, he questioned them on their experience and qualifications.  Dr Haughey stated that the Marketing Department was a shambles and indicated that he was considering moving the Department to the UK and at the conclusion of the meeting asked the applicant would he be prepared to move to the UK.  The applicant gave what he described to be a provisional “yes”.  The applicant’s view of this meeting was that his career, experience and qualifications had been torn apart.  

4.	The applicant said that things changed following the meeting on 23rd October.  During the follow week little work came their way and only a few telephone calls were received.

5.	On 29th October the applicant received a telephone call from Dr Haughey regarding the use of the company phone for private use.  The applicant was not surprised to receive the call as he had been made aware that Andrew Smith had already received a similar call from Dr Haughey.  Dr Haughey put it to the applicant that he had been seen in Alan Jeffers’ office and that he had been using the office phone whilst there.  Alan Jeffers’ office was normally locked and access could only be gained by requesting a key, in his absence.  At this time A Jeffers was on a foreign business trip.  The applicant denied using the company phone but admitted that he did make a call from his mobile phone.  Dr Haughey asked the applicant for information regarding the call but the applicant refused to divulge to whom he was talking and when asked a second time again refused to say.  At this stage Dr Haughey told the applicant that he was suspended forthwith.   The applicant’s evidence was he was escorted from the premises by Clodagh Sands and Peter McConville.

6.	Mr Paddy Brennan, Management Accountant, was asked on 2 November to carry out an investigation into the suspension of the applicant.  He was unable to commence this investigation immediately as there were internal auditors in the office that week.  He gave evidence that he contacted C Sands and obtained statements on file and having read the statements he interviewed Andrew Smith, Ms J McGrenaghan and Conor McGahon.  He concluded the matter could be dealt with more appropriately by the applicant’s line manager, Mr Jeffers, when he returned from his trip.  He telephoned the applicant on Friday 6th November and told him of his conclusions and asked the applicant to return to work on Monday when Mr Jeffers would deal with it.  The applicant told Mr Brennan that he had an appointment on Monday and Mr Brennan said then that Tuesday would be alright.  Mr Brennan had no objection to the applicant taking Monday off as he had delayed the start of the investigation so he was not going to complain.

7.	The applicant did not report for work on Tuesday 10th November as proposed by Mr Brennan.  Following the telephone conversation with Mr Brennan the applicant sent a fax to Mr Brennan dated 9th November to the effect that he was not going to return to work until certain matters were clarified, namely:-

	(i)	the reason for his suspension;
	(ii)	details of the behaviour which was not appropriate for Norbrook or its image;
	(iii)	what precisely was being investigated?
	(iv)	the conclusion which he had come to as a result of his investigation;
	(v)	the applicant’s status in the company on his return.

8.	The applicant had received a letter dated 29th October 1998 from Clodagh Sands, Personnel, informing him that “he had been suspended for behaviour which is not appropriate for our company and its image”.  The applicant had sought information of the conduct which was not appropriate in faxed letters to Clodagh Sands on 1 and 4 November.  He further faxed on 9th November 1998 to Mr Brennan seeking answers to the questions.  Mr Brennan replied on 9th November stating his request was for the applicant to return to work so that the investigation could be completed.  The applicant was invited to attend at the Station Works on 11th November to enable the decision to be made as to whether further disciplinary action should be taken or that he should return to work.  The applicant faxed Mr Brennan on 10th November stating that he would attend on 11th November but would confine his submissions to the issue of the telephone conversation with Dr Haughey.

9.	After the applicant’s suspension two further allegations were made against the applicant.  Mr Connor McGahon made a statement regarding comments the applicant was alleged to have made to him at the time of the consultation which Mr McGahon found threatening.  It appears that this statement was made following a conversation with Dr Haughey on 23rd October.  A statement had also been made by Janice McGrenaghan complaining about remarks made by the applicant which she felt intimidated by.  This statement was made on 29th October.  Neither of these persons attended the tribunal hearing to give evidence or permit the applicant to cross-examine on these allegations.  The tribunal therefore was not prepared to attach any weight to these statements.  

10.	Mr Brennan had been provided with these statements at the meeting on 11th November 1998.  Those in attendance were Mr Brennan, Clodagh Sands and the applicant and Bronagh Boylan was there to take notes.  The applicant was questioned about his telephone conversation with Dr Haughey on 29th October.  The applicant read from notes which he had prepared following the telephone call and which he considered to be a verbatim report as to what was said.  He accepted that when Dr Haughey phoned him regarding the phone calls made from Mr Jeffers’ office that he had admitted he had made phone calls whilst in Mr Jeffers but these calls were made on his own mobile phone, not the company phone.  He would not disclose to Dr Haughey who he had been speaking to.  The applicant said that he had not been aggressive or cheeky to Dr Haughey.  Mr Brennan sought details of the telephone numbers that the applicant had called to check against numbers that he had extracted from the company records, however the applicant was not prepared to answer.  He was asked on several occasions regarding this matter but was only prepared to say they were not relevant.  He reiterated he was only prepared to discuss Dr Haughey’s telephone conversation.  When it became apparent that the applicant was not prepared to discuss telephone numbers Clodagh Sands then referred to the complaint by Janice McGrenaghan.  The applicant made no comment and asked for the allegations to be put in writing.  He was advised that he was not helping the investigation by not answering questions.  The meeting concluded with Clodagh Sands telling him that he would remain suspended until all information was collated and a decision taken as to whether disciplinary action should be taken.  

11.	Following the conclusion of the meeting and after some consideration Mr Brennan wrote to the applicant on 11th November asking him to attend a disciplinary hearing on 13th November at 9.00 a.m.  The applicant faxed a letter to Mr Brennan on 11th November seeking information as to what matters were to be considered at the investigation meeting.  In particular he sought reasons as to why he had not been made aware of the allegations by Ms McGrenaghan and Mr McGahon before the investigation meeting and sought information in writing regarding the allegations made against him.  Mr Brennan responded on 12 November stating the applicant was thoroughly appraised of the allegations made against him at the meeting but the applicant had refused to answer questions other than those concerning Dr Haughey’s telephone conversation.  Mr Brennan was not prepared to let the applicant have copies of the statement at this stage.  

12.	A disciplinary hearing was held on 13th November 1998.  In attendance were P Brennan, C Sands, A Jeffers, Bronagh Boylan, the applicant and Barra McGrory.  Mr McGrory, who was the applicant’s solicitor, attended as a friend.  Clodagh Sands read out the statements by Dr Haughey, Janice McGrenaghan and Conor McGahon.  The applicant asked to be given copies but this was refused.  He asked for an adjournment as he only had been aware of the contents of the allegations.  The respondent would not agree to an adjournment.  The applicant said he needed time to consider the allegations and get some information regarding the phone numbers the respondent was referring to.  He was not prepared to answer any questions.  The applicant and Mr McGrory left the meeting.  They were informed that a decision could be made without them in attendance and he replied, “yes, make your decision without me”.

13.	The outcome of the disciplinary hearing was that the suspension was lifted and the applicant was given a final written warning and told to report for work on 16th November 1998.  A final written warning was issued on 13th November 1998.  

14.	The applicant failed to attend work on 16th November and the first written warning was issued re: unauthorised absence in accordance with the employee’s handbook.  The applicant responded by letter dated 16th November saying that following the investigation and the disciplinary hearing he had no faith whatsoever in the ability of Norbrook to conduct a fair appeal hearing.  He indicated he would seek his remedies elsewhere and considered it unwise to return to work at this juncture.  

15.	When the applicant failed to attend on 17th November a final written warning was issued which drew attention to the fact that he was likely to be dismissed and if his conduct gave rise to further complaint.

16.	The applicant responded on 18th November by letter saying that because of the company’s behaviour he was left with no alternative but to regard himself as having been constructively dismissed.  On the same date the company sent a letter to the applicant regarding his continued unauthorised absence and gave him one month’s notice of the termination of his employment.  

17.	The tribunal were referred to the company handbook, disciplinary procedures and in particular to the provisions dealing with Gross Misconduct.  Matters considered to be gross misconduct which were pertinent to the applicant’s case were:-

			“All deliberate refusals to carry out lawful reasonable requests from management.
			All deliberate breaches of confidentiality.
		Deliberately providing inaccurate information/withholding important information from management.”

	These procedures also provided that where an employee had committed gross misconduct they could be suspended with pay.  It was part of the applicant’s case that the respondent had been in breach of contract because it had failed to follow correctly the disciplinary procedures.  He at no time accepted that his conduct was gross misconduct and therefore considered that suspension was not the correct way of dealing with the issue.

18.	Mr Smith was also interviewed by Dr Haughey and when it was put to him that he had been in Alan Jeffers office he admitted he had been.  He said he had been in A Jeffers’ office on a regular basis in connection with work.  He was asked did he make a telephone call from the company phone and he admitted he had.  He said he was unaware of the provision in the handbook which prohibited the use of the company telephone to make private calls.  Mr Smith provided information as to the calls which he had made and understood the matter was closed.  However Mr Smith was subsequently disciplined and issued with a first written warning.  

19.	The applicant’s father, who is a partner in the firm of solicitors Wells & O’Carroll, Monaghan, gave evidence regarding the phone calls made by the applicant on his mobile phone.  The applicant had stated that he had phoned a cousin in Dublin regarding a job on the 29th October.  There was some confusion over the dates of phone calls and as his father had arranged to pay the applicant’s mobile phone account, the invoice of account was produced by him.  The account showed that the call to his cousin would appear to have been made on 27th October and he could only offer the explanation that his son was mistaken in his evidence as to the date of when he had phoned his cousin.

20.	Dr Haughey gave evidence that the respondent was one of the largest veterinary companies in the world.  The pharmaceutical industry is highly competitive and tends to paranoid in relation to technical and marketing confidentiality.  They manufacture for 9 out of 10 major companies, who require the respondent to enter into strict confidentiality agreements and require them to ensure that employees follow the same obligations.  He admitted that he was very sensitive about confidentiality.  This was illustrated by the fact that a section of the handbook deals specifically with “confidentiality, security and inventions”.  Dr Haughey recalled the meeting of 23rd October.  He had not been satisfied with the Shandwick contract but he did not consider either the applicant nor Mr Smith were culpable for the quality of the brochure.  He had not met the applicant before this although he knew the applicant’s father was a solicitor in Monaghan as his wife’s practice in Newry had instructed the applicant’s father to act for them in respect of commercial matters in the Republic.  He also knew Connor McGahon's father who was a TD.  He had become aware that Mr McGahon had some difficulties when practising in Dundalk and he had offered him a job.  When he became aware of the issues arising between C McGahon and the applicant he had asked him to make a statement to Clodagh Sands, although he formed the view that C McGahon was strong enough to look after himself.  He considered this matter was totally unrelated to the Shandwick issues.

	He was told by Jackie D’Arcy, Public Relations, who handled press and public relations that it had been reported to her that two staff had been in Mr Jeffers’ office making private phone calls while the door was locked.  This caused him to be alarmed and he was concerned regarding the confidentiality of staff in the office.  Why had it been necessary to use the office and why had the door been locked?  Why had they got the key when it was forbidden to enter Mr Jeffers’ office?  

	The first thing he did was to ask for a printout of the computer records of all phone calls made from the office.  He asked staff to identify the numbers.  One call was to the Belfast Telegraph.  This caused him concern as they had dealings with the Belfast Telegraph regarding press releases and placing advertisements.  He wanted to know why phone calls were being made to the Telegraph.  One number could not be identified and Dr Haughey concluded he needed an explanation quickly.  He telephoned Mr Smith first and Mr Smith admitted that he had been in the office, that he had made a phone call to the Telegraph regarding a job.  He was asked about another number which Mr Smith said he had no knowledge of and that he did not make it.  Dr Haughey then contacted the applicant and asked him what he had been doing in the office and put it to him that he had been using the phone to make private phone calls.  The applicant denied using the company phone and stated that he had used his private mobile.  He was asked why go into the locked office to do that.  He asked the applicant whom he had been calling and his recollection of the applicant’s reply was “it was a personal call, it is none of your business”.  He was concerned that the applicant had been in the office, unauthorised, and his attitude was very disrespectful.  He formed the opinion the applicant was telling lies and having considered the matter to be very serious he decided to suspend the applicant.  He then phoned personnel to inform them of what had happened and asked them to see that the applicant left the premises.  Although it had not been mentioned at the time to the applicant Dr Haughey considered it to be gross misconduct.  Dr Haughey did not consider the statements taken from C McGahon and J McGrenaghan had any relevance to his decision to suspend.

	Dr Haughey had no further input in to the procedures following the suspension.

21.	Both Ms Larkin and Mr O’Donoghue appearing for the parties provided written submissions and also written replies to those submissions.  The tribunal took both the submissions and the replies into consideration when making its decision.  

22.	Ms Larkin referred the tribunal to Article 127(1)(c) The Employment Rights (Northern Ireland) Order 1996 being the provision relating to termination by the employee.  

She referred to the 4 conditions which must be met in order to establish a claim for constructive dismissal:-

(i)	There must be a breach of contract by the employer which may be actual or anticipatory;

(ii)	The breach must be sufficiently important to justify the employee resigning, or else must be the last in a series of incidents which justify his leaving.  Possibly a genuine albeit erroneous, interpretation of the contract will not be capable of constituting a repudiation in law;

(iii)	The employee must leave in response to the breach and not for some other unconnected reason;

(iv)	An employee must not delay too long in terminating the contract in response to the breach, otherwise he is deemed to have waived the breach and agreed to vary the contract.

She drew the tribunal’s attention to the fact that many forms of unreasonable conduct may in fact constitute a breach of contract.  The courts now accept that where an employer acts in a matter which is calculated or likely to damage the relationship of trust and confidence between the employer and employee that this can constitute a breach of an implied term of the contract.  She referred the tribunal to the case of Malik –v- BCCI SA [1997] HL IRLR 462 and Brown –v- Merchant Ferries Limited [1998] RLR 682 which she submitted supported the argument that if the employer’s conduct was likely to destroy the relationship of trust and confidence they could be deemed to have repudiated the contract of employment.  The tribunal’s response to her submissions on the facts of the case are dealt with in the tribunal’s consideration of its findings.

23.	Mr O’Donoghue’s submission also referred to the 4 conditions to be met in the constructive dismissal case.  He referred the tribunal to the case of Pedersen –v- Camden London Borough Council [1981] IRLR 173 which provided that a tribunal should consider –

	(i)	What are the terms of the contract of employment?

	(ii)	Do the facts as found by the tribunal constitute a breach of contract by the employer?

		(iii)	Does the conduct of the employer amount to a fundamental breach of contract?

	He drew the tribunal’s attention to the company handbook and the provisions regarding what constituted gross misconduct, the fact that an employee guilty of gross misconduct could be suspended with pay.  Further that the use of the company telephone was prohibited and particularly the matters relating to confidentiality and communication with the media.

	He referred the tribunal also to the following cases –
McClory –v- Post Office [1993] 1 All ER 457, 
Malik –v- BCCI [1997] IRLR 462
Courtaulds –v- Sibson [1987] ICR 329.

	He accepted that there was an implied term in each contract of employment relating to trust and confidence.  He commented in detail upon the evidence given as he perceived it and which should be considered by the tribunal as relevant in determining whether there had been a breach of contract.  He submitted there was no relevant identifiable breach of any term or condition of the applicant’s contract of employment.  It was the applicant who was flagrantly and persistently in breach by his own conduct and there was no evidence to support that there had been a fundamental breach by the employer.

24.	The tribunal’s findings on the facts are as follows:-

(i)	The tribunal accepted Mr McGahon did say to the applicant and Mr Smith that they should forget their Christian values at the time of the consultation on the Shandwick meeting but the tribunal also accept that Dr Haughey had not instructed C McGahon to do this and had no knowledge of that fact until the tribunal hearing.  

(ii)	The tribunal do not accept that it was reasonable for the applicant to consider his career ‘was obliterated’ after the meeting on 23rd October with Dr Haughey.  His own notes of the meeting show that it ended with him being offered a job in the UK to which he gave a provisional yes.  

(iii)	The tribunal did not have an explanation from either C McGahon or J McGrenaghan as to why they made their statements as neither attended the tribunal hearing.  Ms J D’Arcy, who was responsible for obtaining the statements, did not attend to explain the circumstances as to how she obtained them or why.  The tribunal found this unsatisfactory.  It would appear that none of those persons were still in the employment of the respondent at the time of the hearing.  However the tribunal did not accept that the provision of these statements demonstrated some plot against the applicant.  The existence of the statements did not assist those hearing the disciplinary hearing in reaching its conclusions.  What concerned them more was the unwillingness of the applicant to answer any questions in relation to those statements.  

(iv)	The tribunal considered Dr Haughey had the right to know the details of the telephone conversation as to whom it was made.  Mr Smith found no problems in answering these questions.  The tribunal accepted Dr Haughey’s main concern was the confidentiality and the failure of the applicant to tell the Managing Director of the contents of a phone call gave rise to serious concern to such an extent that in his opinion it merited suspension with full pay until the matter could be fully investigated.  

(v)	The tribunal accepted the letter from Ms Sands dated 29th October to the applicant regarding his suspension was far from satisfactory as no precise reasons were given in the letter.  Dr Haughey’s evidence was that the applicant was quite clear as to the reasons for his suspension following the telephone conversation with him.  The tribunal do not accept that the failure to be more precise in giving information constituted a failure which gave rise to a breach of trust and confidence.

(vi)	The tribunal accept that Mr Brennan was perhaps not the best person to be in control of an investigation.  He had known the applicant since he was about 7 or 8 years old at his home in Castleblaney.  He was very busy the week in which he was supposed to carry out the investigation.  He formed the initial view that having interviewed A Smith, J McGrenaghan and the applicant the matter should be dealt with by his line manager and he asked the applicant to return to work on the following Monday.  Mr Brennan admitted that he had not looked at the company handbook before carrying out the investigation or being involved in the disciplinary hearing.  The tribunal accept that it would have been better practice to have let the applicant to have sight of the statements.  However the applicant said that he wanted the statements in order to go and speak to those concerned and Mr Brennan considered that this would certainly not have justified giving him copies.  The tribunal accept that the applicant had full knowledge of their contents and therefore was not prejudiced in presenting his case.  

(vii)	The tribunal accept that the applicant was fully aware of the telephone numbers which had given rise to concern with the respondent but he failed to deal with this issue.  The tribunal are also of the opinion that it was not good industrial relations for the investigating officer to be also a member of the disciplinary panel.  However the tribunal do not accept that this constituted a significant breach of a fundamental term of the contract.  It was bad practice and not a breach.

(viii)	The applicant submitted that all these matters had eroded the applicant’s faith and that by the date of the final written warning he had become disillusioned and could not return.  The tribunal found that the attitude of the applicant was unhelpful, he had initially been given the opportunity to return to work to allow the investigation to proceed through his line manager but he failed to do so.  He was afforded the opportunity to respond to questions on all issues but refused to do so.  It became apparent that he was getting advice which meant that the tone of his responses became more legalistic.  If he had returned to work on the Tuesday the matter could have been dealt with by his line manager and perhaps the parties would not have gone down the road which they did.

(ix)	The confusion as to the dates of phone calls was unsatisfactory and at no time was a satisfactory explanation offered to the respondent other than he had phoned his cousin.  The evidence before the tribunal showed that the records of the call to his cousin was 2 days prior to the date on which he had given evidence.  The fact that he must have made a mistake was not a satisfactory explanation.

(x)	The tribunal were satisfied that the telephone issue was of paramount importance to Dr Haughey having regard to the confidentiality provisions and it was reasonable for Dr Haughey to consider that the phone call and confidentiality were inter-related.  The tribunal accept that the applicant had failed to comply with a reasonable request for information from the Chairman and Managing Director of the company, he failed to co-operate with the investigation, he had failed to co-operate with a disciplinary hearing and had walked out during it and when asked to do so had failed to turn up for work on 16 and 17 November 1998 as requested.  The tribunal were of the opinion that although the respondent can be criticised as to their procedures that this failure did not amount to such unreasonable conduct to permit the applicant to claim that it constituted a breach of an implied term of the contract which would entitle him to say that the employer had repudiated the contract.  The tribunal conclude that the applicant had failed to show there had been a fundamental breach of the contract to justify him claiming that he had been constructively dismissed.  His application is therefore dismissed.    

____________________________________

Date and place of hearing:  5-6 September 2001, 31 October 2001,
			           1 November 2001, Belfast

Date decision recorded in register and issued to parties: 18 February 2002