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Significant Constructive Dismissal Decision – Award Included Financial Loss Which Occurred While Employee Unfit To Work

Facts: The Complainant was employed by the Respondent for just under 29 years. The Respondent operates a hotel/guesthouse and conference centre. The Complainant had no written contract of employment but held the most senior position – Manager/General Manager before the Respondent hired a CEO and carried out a restructure. The Complainant’s responsibilities were transferred to the new role of Hospitality Manager which reported directly to the CEO and a further layer of management was introduced who all reported to the Hospitality Manager. The Complainant was offered the demoted role of Revenue Manager and to report to the Hospitality Manager. Her salary was not going to be altered but her responsibility was diminished. She was presented with a new written contract but refused to sign it.  The Complainant was subjected to further isolation in the new demoted role which had a serious impact on her health and mental wellbeing with the result that she went out on certified sick leave on 3 January 2018 and ultimately resigned her position on 18 May 2018.

Findings: WRC Adjudicator, Enda Murphy, in a very detailed decision, found that the Complainant was constructively dismissed as the manner in which the Respondent unilaterally imposed the demoted role on the Complainant amounted to a breach of the implied term of trust and confidence in the Complainant’s contract of employment.  This was regardless of the fact that the Complainant did no use the internal grievance procedure. He found that as the Complainant had not signed the new contract with the new grievance procedure in it that she was not bound by the new procedure and that the Complainant had brought her grievances to the Respondent’s attention albeit not under the previous grievance process. He also found that the Complainant’s illness which made her unfit to work after she resigned was caused by the Respondent and therefore took that period into account when calculating financial loss for the purpose of the award. Normally any period that an employee is not fit to work would not be included in calculating financial loss under the Unfair Dismissals Acts and this is an unusual decision in this regard. The Adjudicator awarded the Complainant €50,000 for the constructive dismissal where the maximum two year award would have been €89,000.

The Complainant had also brought claims of discriminatory treatment on the ground of disability, failure to provide reasonable accommodation and discrimination on the grounds of disability in relation to her remuneration under the Employment Equality Acts. The Adjudicator went into case law and gave detailed reasoning as to how the incidents which were complained of by the Complainant were outside of the time limit and could not be taken into account as ongoing. He found in her favour in relation to the failure to provide reasonable accommodation and awarded €10,000. The Adjudicator did not find in favour of the Complainant in relation to the different remuneration.

Key for Employers – The lack of engagement with the Complainant in relation to her new demoted role and the failure to give the Complainant the opportunity to apply for the new role which equated to her former role in the restructure business was fatal in this case. The Adjudicator also took into account the Respondent’s immediate acceptance of the Complainant’s resignation without any question or attempt to resolve the matter or delay any such decision until she was medically fit to return to work. Reasonable engagement with employees in any restructure is very important. Where an employee resigns without resolving an ongoing issue, attempts should be made to dissuade such resignation especially when on sick leave.

Authors – Anne O’Connell & Chaitra Girish Mallya

29th May 2020


Anne O’Connell Solicitors

Fitzwilliam Hall

Fitzwilliam Place

Dublin 2


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