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Employee Awarded €9,000 For Constructive Dismissal Due To Employer Giving A Bad Reference

It should be noted that the Respondent did not attend at the WRC hearing, using Covid-19 as his reason for not attending. Therefore, although this claim was uncontested and may be appealed, it is interesting to note that the Adjudicator determined that it was reasonable for the Complainant to resign where the Bond of Trust was irrevocably broken, and hence she was constructively dismissed.

Facts: The Complainant was employed as an Office Administrator from 2011 to 18th December 2019, when she resigned from her position. The Complainant worked for 2 Directors, one of whom left the Company in early 2018 and the Complainant continued to work for the remaining Director. Following a transfer of undertaking, the Company name changed but the Complainant continued to work under same terms of service. In October 2018, the Complainant interviewed for the post with the Public Body and it was confirmed in writing that she was successful, subject to reference etc. Although the Complainant found one of the directors more difficult to work for, the Complainant submitted the names of both Directors as referees. While the Director who left gave the Complainant highest ranking, the other remaining Director submitted his reference, with 3 categories marked highest level, 8 at satisfactory and 5 as unsatisfactory.

On 16th January 2019, the Complainant was advised by the Public Body that due to an  unsatisfactory reference, she was unable to continue with processing for the position. Feeling devastated, the Complainant went off work due to stress and attended her GP. The Complainant had never received a poor review or adverse feedback from the director before. She felt that the bad reference was given deliberately in order to block her from leaving the Respondent. The Complainant claimed that the bond of trust had completely broken down and after months of being on sick leave the Complainant resigned in line with her medical advice and claimed that she was constructively dismissed, even though she had not raised any internal grievance process.

Issue: The Complainant’s claim was that of Constructive Dismissal, where the burden of proof lies on the Complainant. Referring to Western Excavating ECC Limited –v- Sharp, the Adjudicator noted that if the adjudicator is not satisfied with the “Contract Test”, then it is obliged to consider the “reasonableness test”, “The employer conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, then the employee is justified in leaving”.  In the instant case, the Adjudicator found that the issue was more of “reasonableness” than “contractual”. While noting that it was not for the Adjudicator to determine which of the two references provided by the Directors was true, the Adjudicator relied on the evidence by one of the Directors and the colleague and noted the Complainant’s unblemished service. The Adjudicator pointed out that the “broken bond of trust” is often used by the employers to dismiss an employee, however maintained that it is applicable to both parties equally. The Adjudicator further referred to the UK case of Malik and Mahmud v Bank of Credit and Commerce International SA [1997] UKHL 23, to reflect on the concept of mutual obligation of the Bond of Trust between the employers and the employees.

The Adjudicator referred to the Western Excavation (E.C.C) Ltd and Conway V Ulster Bank Limited UD 474/1981 to discuss the importance of exhausting the internal grievance procedure in a Constructive Dismissal case. The Adjudicator noted the grievance issue was not internal work related but more of a personal career choice and trust issue between the Complainant and the Respondent. The Adjudicator also justified not using the grievance as there was no reference to a grievance procedure in the contract that the Complainant signed and in the second contract that was disputed by the Complainant only referred to a limited grievance process with no appeal and no provision for an external investigation. Therefore, as the issue was with the Owner then the grievance process, as drafted, would have served no purpose.

Decision: The Adjudicator found that the Complainant had an uncontested evidence that she had significant grounds to resign without invoking a grievance procedure due to the bond of trust being irrevocably broken. The Adjudicator found that the Complainant was unfairly dismissed but held that the Complainant had contributed to the issue by giving the difficult Director’s name as a referee without first checking what his views would be. Therefore, he only awarded €9,000 compensation.

Takeaway for the Employers: While it is true that the Constructive Dismissal cases require that the employee utilise and exhaust all internal grievance procedures, the employers must note that if the grievance procedure is insufficient to address issues with the top person and the procedure is not communicated to the employees then the WRC may find it reasonable for the employee not to utilise the internal procedure before resigning. It is also worth noting that the conduct of the employer that made it reasonable for the employee to resign was the provision of a bad reference for a job elsewhere. Employers should be very careful when giving references on behalf of employees.    

Link  – https://www.workplacerelations.ie/en/cases/2020/september/adj-00026208.html

Authors – Anne O’Connell & Chaitra Girish Mallya

27th October 2020

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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