THE INDUSTRIAL TRIBUNALS

CASE REF: 1678/08

CLAIMANT: 		Conor Gallagher

RESPONDENT: 	 	Finrone Ltd

DECISION 

The unanimous decision of the tribunal is that the claimant was not unfairly dismissed.  The unanimous decision of the tribunal is that the claimant is not entitled to a payment in respect of breach of contract.  The unanimous decision of the tribunal is that the claimant is entitled to a payment of £1400.00 in respect of unauthorised deduction of wages relating to expenses claimed and not paid.

Constitution of the Tribunal:

Chairman: 		Ms F. Oliver

Members: 		Ms L.Gilmartin
                 		Mr J. Hughes 

Appearances

The claimant appeared and was represented by Ms. Rachel Best B.L. instructed by Messrs Logan & Corry Solicitors

The respondent was represented by Mr T. Sheridan of Peninsula Business Services Limited

Sources of Evidence

1.	The tribunal heard evidence from the claimant and from Dr. Lorna Lawrence an employee of the respondent.  The tribunal was also referred to a bundle of documents provided by the claimant and a further small bundle from the respondent.

The Claim and the Defence

2.    The claimant claimed unfair constructive dismissal, breach of contract in respect of a bonus payment and unauthorised deduction of wages in respect of expenses incurred and not reimbursed. The respondent denied that the claimant had been constructively dismissed.  The respondent denied that the claimant was entitled to a bonus payment and therefore denied that there had been a breach of contract. The respondent also denied that the claimant was entitled to be reimbursed for the expenses incurred as the claimant had failed to submit details of personal petrol expenses which were to be offset.  

Issues

3.     The issues for the tribunal were:

(i)	Was the claimant constructively dismissed from his employment? 

(ii)	If the claimant was constructively dismissed, was the dismissal unfair?

(iii)	Was the claimant entitled to a bonus?

(iv)	Was the claimant entitled to be reimbursed for expenses incurred in the course of his employment?

Analysis of the evidence

4.     Although there was a conflict in some of the evidence, many of the factual events were not in dispute and the dispute often centred on the interpretation placed on the events.  There were also disputed issues which we felt it unnecessary to resolve for a fair hearing of the case.

We found the evidence from Dr. Lorna Lawrence to be consistent and convincing.  We did not find the claimant’s evidence consistent in some respects and where there was a dispute between the two witnesses, we generally preferred the evidence of Dr. Lorna Lawrence.  We considered that the claimant was not entirely open about the sequence of events which led to his decision to resign.  We noted the discrepancy between his written statement in the IT1 regarding the rumours in the community and his very definite evidence to the tribunal regarding when these incidents occurred.  We also noted the suggestion from the claimant that the letter suspending him on full pay came as a complete surprise whereas it would appear from other evidence that there had been meetings prior to this which would have alerted him to disquiet among the directors.

Findings of Fact

5.
5.1     The claimant commenced employment as an employee of the respondent on 15 January 2007 and he resigned on 15 July 2008.  

5.2   The claimant was employed as a general manager in the respondent company (the company)

5.3    The company is involved in the agriculture sector making buildings for pigs. It employs 50-60 people.

5.4     The company became unhappy with the standard of work provided by the claimant and took legal advice from Peninsula regarding its options.  The company asked for advice regarding the possibility of making the claimant redundant.  At the same time it is clear that the claimant was not happy with his employment and in April 2008 he looked for other work.  

5.5    There were two meetings on 29 April 2008 and 29 May 2008 when the state of the company was discussed and the tribunal formed the view that the claimant must have been aware after these meetings that his work was under scrutiny.  We accept that these meetings did not form part of any disciplinary process and did not result in any formal warnings to the claimant.

5.6     On 11 June 2008, the claimant was suspended on full pay on the grounds of gross negligence and failing to carry out his duties efficiently.  The letter of suspension outlined 10 areas of concern. Dr Lorna Lawrence a technical director of the company was appointed by the company to carry out an investigation into the allegations.

5.7     On 13 June 2008 the claimant’s solicitor wrote to Dr. Lawrence asking for further details of the allegations and also asked for the release of documents. 

5.8    An initial meeting took place on 16 June 2008.  Present at the meeting were Dr. Lorna Lawrence, the claimant and a minute taker.  The meeting lasted approximately 1 1/2 hours and the issues raised in the suspension letter were explored in greater detail.  

5.9     Dr Lawrence explained that she would speak to other employees within the firm to get a better picture of the issues.  The claimant reiterated the claim made by his solicitor for documents to be released to him and Dr. Lawrence asked for him to be more specific. 

5.10   On 23 June 2008 the claimant sent Dr. Lawrence a list of documents which he required. 

5.11    As part of her investigation, Dr. Lawrence interviewed two employees both foremen in the company and she also interviewed the managing director, Mr Gordon Forbes.

5.12  The minutes of the meeting of 16 June 2008 were forwarded to the claimant for his approval by e-mail on 6 July 2008 and by and large the claimant agreed with the minutes by return e-mail. He did ask that it be noted that Dr. Lawrence had indicated that it may take three or four meetings to properly progress the matter. 

5.13   By e-mail of 8 July 2008, Dr. Lawrence offered to meet with the claimant to discuss the comments made by the claimant regarding the minutes and it was suggested that a meeting take place on 9 July 2008.  At this stage, copies of the minutes of the three interviews with the two foremen and the managing director were forwarded to the claimant.  The e-mail ends with the comment:-

“I invite you to review these and attend tomorrow’s meeting should you wish to present any additional information in support of your position”

5.14   The appellant by letter of 10 July 2008 asked for further time to review the information. It is interesting that the claimant starts his letter by stating:-

“I refer to tomorrow’s proposed meeting, which, as I understand it, is part of the ongoing Disciplinary Investigation against me”.

5.15   In this letter the claimant also asked again for sight of documents which he had requested on 23 June 2008.  He requested that the meeting be postponed until the company satisfactorily answered the request for documents.  The claimant ends the letter by stating:-

“In the event of your failing to accede to this request, I shall consider the said failure as a fundamental procedural breach in any disciplinary investigation and refer all matters to my solicitors”.

5.16   By letter of 11 July 2008, Dr. Lawrence responded by indicating that the company had provided the information relevant to the investigation and continued:-

“In some cases the additional information you have requested over  and above that already provided is commercially confidential, concerns accounts outside of Finrone’s business and in some cases does not exist”.

5.17    Dr. Lawrence rearranged the meeting for 15 July 2008.  A letter formally inviting the claimant to attend a disciplinary hearing was sent to the claimant on 11 July 2008.

5.18    At 2.55pm on Tuesday 15 July, the claimant telephoned Dr. Lawrence        
and resigned from the company.  He did not attend the meeting    arranged for 3pm on 15 July 2008.

5.19     By letter of 15 July 2008, the claimant was given an opportunity to    
 reconsider his position but he did not do so.

The claimant’s submissions

6.    The claimant contends that he has been constructively dismissed on the basis that the disciplinary procedure was flawed and that it was a sham.  He contends that a decision to dismiss him had already been made and that the disciplinary process was unfair. As evidence of flaws within the process he asserts the following:-

(i)	His first notification of any issue regarding his conduct was by letter dated 11 June 2008 inviting him to a disciplinary hearing.

(ii)	There was a lack of clarity regarding the naming of the meetings which took place.

(iii)	He was refused access to his laptop.

(iv)	He did not receive documents which he asked for.

(v)	It was not appropriate for Dr. Lawrence to carry out the investigation due to her subordinate position within the company and due to her lack of knowledge.

The respondent’s submission

7.    The respondent asserts that the disciplinary process was fair and appropriate and that it was inappropriate for the claimant to claim constructive dismissal when he did not give the company the opportunity to complete its investigations and reach a decision.  The respondent asserts that the claimant resigned for some other reason namely his fear of dismissal and points to the fact that the claimant had been applying for another job three months previously.

The Law

8.   Article 126 of the Employment Rights (Northern Ireland) Order 1996 gives an employee the right not to be unfairly dismissed.

Article 127 of the 1996 Order provides:-

(1)	For the purpose of this part an employee is dismissed by his employer if ...

(c)	the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.

This is commonly known as constructive dismissal. 
In order for the employee to be able to claim constructive dismissal, four conditions must be met:
(i)   There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach.
(ii)  That breach must be sufficiently important to justify the employee resigning, or else it must be the last in a series of incidents which justify his leaving. 
(iii)  He must leave in response to the breach and not for some other, unconnected reason. 
(iv)   He must not delay too long in terminating the contract in response to the employer's breach, otherwise he may be deemed to have waived the breach and agreed to vary the contract.
The following propositions of law can be derived from the authorities:-

1)	The test for constructive dismissal is whether the employer’s action or conduct amounted to a repudiatory breach of the contract of employment:-

Western Excavating (ECC) Ltd v Sharpe [1978] I QB 761

2)	It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee:-

Malik v BCCI [1998] AC 20.  This is often referred to as the implied term of trust and confidence.  

3)	Many of the constructive dismissal cases which arise from the undermining of trust and confidence will involve the employee leaving in response to a course of conduct carried on over a period of time.  This is often referred to as the last straw doctrine:-

In the recent decision of the Employment Appeal Tribunal in the case of Gab Robins (UK) Ltd v Triggs [UKEAT/0111/07], which has been approved in the further recent decision of the Employment Appeal Tribunal in the case of Muschett v Parkwood Healthcare [UKEAT/0361/08], the authorities on the ‘last/final straw’ doctrine in constructive dismissal were reviewed and it was confirmed that the tribunal could look at the cumulative effect of a series of acts of the employer.		

Article 45 of the Employment Rights (Northern Ireland) Order 1996 gives an employee the right not to suffer unauthorised deductions from wages.

Application of the Law and Findings of fact to the Issues.

9.   The tribunal was satisfied that the respondent was entitled to investigate the actions of the claimant and was entitled to commence the disciplinary process in the manner which it did.  These were serious allegations against the claimant and it was appropriate to suspend him on full pay.

10. The tribunal was not satisfied that there had been a fundamental breach of contract entitling the claimant to resign.  We did not believe that there had been a breach of the implied term of trust and confidence.  If there was no fundamental breach of contract either express or implied then the claimant’s claim of constructive dismissal must fail.

11.  We find that the reason the claimant resigned was that he was not prepared to take the risk that he might be dismissed.  He weighed up all the options and he decided that the advantages of leaving before the disciplinary hearing outweighed the disadvantages.  That may have been a reasonable decision for him to make but it does not in our minds lead to a finding of constructive dismissal. 

12. The claimant sought to challenge the appointment of Dr. Lawrence as an investigator and certainly undermined her authority within the company.  We were surprised to learn of Dr. Lawrence’s senior position in the company when she gave direct evidence as this was not the impression which the claimant attempted to portray.  We consider that the appointment of Dr. Lawrence was entirely appropriate.  We believe that Dr. Lawrence came to the investigation with an open mind and we accept her evidence that she was not influenced throughout her investigation by any pressure from the Managing Director to reach a particular outcome.

13.   It is possible that there were flaws in the approach and procedures adopted by the company.  We accept that the request for information could have been dealt with more clearly but we do not believe that this was sufficient for the claimant to form the view that there had been a fundamental breach of contract.  We find the claimant’s letter of 10 July 2008 to be self serving perhaps with a view to setting up a reason for the claimant to resign.  We accept the respondent’s view that much of the information requested by the claimant was commercially sensitive and that some of it did not exist.  

14.  It was unsatisfactory that there was confusion over the nature of the meeting arranged for 15 July 2008.  We consider that both parties contributed to that confusion.  On balance we accept that Dr. Lawrence was still open to hear further explanations from the claimant and that this may not have been the final hearing.  However, we also accept that the claimant may have thought that this was the final hearing and that a decision on the allegations was going to be taken on 15 July 2008.  

15.  However, it is quite possible that such flaws as there were could have been rectified by the full disciplinary process.  We will never know because the claimant did not allow the process to be completed.  Such flaws as there were did not amount to a fundamental breach of contract entitling the claimant to resign.  We did not accept that the respondent’s disciplinary process was a sham and that the outcome had been pre-determined.  We considered that the partly completed disciplinary process was adequate and that Dr. Lawrence had not reached a final decision on the outcome when the process was terminated by the claimant.  We accept Dr. Lawrence’s evidence that she had not made up her mind on whether the allegations of gross negligence were well founded and that she would have been willing to look at options short of dismissal if she had determined that the allegations of gross negligence were well founded.  

16.  The claimant’s representative asked us to draw an adverse inference from the fact that the Managing Director did not give evidence at the tribunal hearing.  We decline to draw any adverse inference as we consider that the evidence provided by the respondent was adequate to address this claim.  

Unfair dismissal

17.  The tribunal concludes that the claimant was not unfairly dismissed from his employment.  

Breach of contract-bonus issue

18.  We do not accept that the claimant was entitled to a bonus as claimed.  The claimant did not produce any documentary that he had received a bonus in the previous year.  There was a lack of objective evidence to enable the tribunal to reach the conclusion that a bonus was payable.  We think it likely that any bonus would have been linked to the claimant’s performance and that the respondent would not be obliged to make a bonus payment in the circumstances of this claim.

Unauthorised deductions

19.  The tribunal finds that the claimant is entitled to be reimbursed for the agreed figure of £1400.00 in respect of expenses incurred.  We accept that the respondent had not in the past insisted that the claimant submit details of private petrol expenses incurred.  

20.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest)
Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing: 28 April 2009, 6-7 May 2009, Belfast	

Date decision recorded in register and issued to parties: