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Despite Seriously Flawed Procedures, Zero Compensation Awarded for Unfair Dismissal

In Bridget Clarke v Paul Connolly[1], the Adjudicator found that the Respondent had unfairly dismissed the Complainant as he had not afforded the Complainant with her the basic rights of natural justice before making the decision of dismissal. However, due to the Complainant’s lack of evidence of mitigation of her loss and her not having repaid the Respondent any of the overpayment of her salary, even after the dismissal, the Adjudicator awarded her zero compensation.

Facts: The Complainant commenced employment with the Respondent as a bookkeeper on 6th August 1985. Initially she worked a 5 day week and was paid €15.50 per hour.  In 1995 her hours were varied to a 4 day week which remained the case until 2008 when she commenced a job-share role working 9.30a.m to 3pm four days a week.  Her agreement in relation to pay was both informal and verbal.  The Complainant gave evidence that as she was always at her desk at 9a.m the Respondent had informed her that she should be paid time and a half for this extra half hour of work. The Complainant was responsible for paying the wages on a weekly basis and in order to do so, she retained a notebook with each employee’s hourly rate noted in it. This notebook was also accessible by the Respondent.   The Respondent paid her for lunchtimes as she ate at her desk and she was paid time and a half for five hours on a Monday in relation to extra work she carried out, overseeing customers private appointments, which were facilitated on the business premises.  In or around 2014, the Respondent requested that the Complainant revert to working a full time four day week, as the person with whom she job shared retired.  She agreed to do so.  She was given incremental pay increases from 2014 until 2020 when the Pandemic affected business.   The Complainant was paid on foot of the Temporary Wage Subsidy Scheme for 22 weeks during the pandemic.  At the end of that period, she was informed that she should not work during her lunch breaks,  and instructed to reduce her hours by four per week and take her lunch breaks.  She had no difficulty with this and proceeded to do so.

Shortly before Christmas 2020, the Respondent requested the Complainant’s notes of wages in order for him to undertake a wage review.  The Complainant provided the notes and then went on her holidays.   A few days after her return to work the Respondent provided her with a letter stating that discrepancies in her pay had been uncovered and that he required an explanation in writing within seven days of the date of the letter.  The Complainant responded to this letter, in writing, stating she should have reminded him of the varied hours and her agreed rates of pay.  She sincerely apologised for this and offered to repay the overpaid amount. The Respondent alleged that he had a meeting with the Complainant before she responded to his letter.

Almost 2 weeks after receiving the Complainant’s letter, the Respondent replied to her again in writing stating that the investigation was complete and that she was dismissed with immediate effect for gross misconduct. No invitation to discuss the matter or right of appeal was notified to the Complainant.

Subsequently it was discovered that the Complainant had in fact overpaid herself by two hours each week and this was the cause of the overpayment. At the Workplace Relations Commission (“WRC”) hearing, the Complainant accepted the overpayment and gave evidence that it was a genuine error only discovered when she investigated the matter after being dismissed.

Decision: In relation to the Unfair Dismissal claim before the WRC, the Adjudication Officer (“AO”) was required to determine:

Was the dismissal within the band of reasonableness?

Was the dismissal a proportionate sanction?  

Was the dismissal procedurally fair?

The AO found that although the parties differed on the intent behind the overpayment there was an overpayment.   Faced with the facts at the time of the dismissal ‘the dismissal was within the band of reasonable responses’ open to the employer and it was both reasonable and substantively fair.  However, turning to whether the dismissal was procedurally fair, the AO, in considering the Respondent’s argument that he was a sole trader and did not have the personnel for an independent disciplinary hearing, reiterated the importance of complying with natural justice and fair procedures.  The AO stated that the Respondent should have engaged two independent consultants to carry out the disciplinary hearing and the appeal, if required.  The AO quoated Walsh J. in Glover v BLN Ltd [1973] IR 388 which stated

“the obligation to give a fair hearing to the guilty is just as great as the obligation to give a fair hearing to the innocent”. 

The AO also quoted Megarry J in John v. Rees [1969] WLR 1298 in which the Judge stated:

As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change.”

Based on these authorities, the AO found that no matter how inadequate the Complainant’s explanation were during the investigation or how sure the Respondent was of the Complaint’s fraud, a person accused of wrongdoing is entitled to a fair hearing in accordance with the rules of natural justice. However, the Complainant was never afforded the opportunity to make her case in person before a decision was made on her dismissal. It was noted by the AO that the request for the Complainant to make her case in writing could not satisfy the requirement to be heard in accordance with natural justice.

The AO also found the Respondent “over-stepped his role as Investigator which was to establish facts” by making a finding of gross misconduct.  No independent disciplinary hearing or right of appeal to the decision of the Respondent was ever afforded to the Complainant.  He found that there are no exceptions to the rules of natural justice in respect of a company’s size and this did not excuse the Respondent for such a breach of fair procedures. Therefore, the AO found the dismissal to be unfair.

In respect of the award, the AO confirmed that neither reinstatement nor re-engagement were appropriate in the case as the relationship between the parties had irretrievably broken down. Therefore compensation was the only option for him to consider.  In determining the amount of compensation, the AO first looked at the Complainant’s duty to mitigate her loss. He cited the case of Sheehan v Continental Administration Co Ltd (UD 858/1999) which held that

“a claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work.  It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work… The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss”.

The AO, then took the Complainant’s conduct in respect of contributing to her own dismissal into account. The AO held that the AO had 100% contributed to her dismissal as she acknowledged overpaying herself, albeit allegedly in error and there was no evidence to suggest that she refunded the Respondent with any of these overpayments either at the time of her dismissal or afterwards. Therefore, he found that the amount of compensation that was just and equitable in all the circumstances was nil.

Takeaway: This case demonstrates the importance of ensuring fair procedures in carrying out an investigation and disciplinary procedure regardless of the size of the company.  It further demonstrates to employees that a flawed procedure, even to the extent that occurred in this case, does not guarantee an award will be made.   Employees who are dismissed are required to provide proof of significant efforts to mitigate their loss. Furthermore, employees should consider how their own conduct contributed to their own dismissal and whether or not they made any attempt to remedy that situation, even after the dismissal, before bringing a claim to the WRC.

Link – https://www.workplacerelations.ie/en/cases/2022/august/adj-00034380.html

Authors – Nicola MacCarthy, Anne O’Connell 30th September 2022

[1] ADJ-00034380, 5th August 2022.

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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