Gross Misconduct, Position of Trust and Right to Appeal

Background

The case of Ioan Pop v City Break Apartments Limited (ADJ-00045335) examines the circumstances under which an employer will be deemed to have acted reasonably when terminating the employment of an employee for gross misconduct.

Mr. Pop (the Complainant) brought a complaint under S.8 of the Unfair Dismissals Act, 1997, against City Break Apartments Limited (the Respondent) to the Workplace Relations Commission (WRC), alleging his summary dismissal was unfair. Crushell & Co. Solicitors acted on behalf of the Respondent company.

During the course of the Complainant’s employment, a number of directors of the Respondent, had formed a close personal bond with him. The Complainant was given a significant degree of latitude, as to how and when he carried out his task. Furthermore, the directors of the Respondent had advanced personal loans to the Complainant to the value of approximately €40,000.00. There subsequently emerged allegations of misuse of company expenses with respect to claimed fuel allowances. It was submitted by the Respondent that given the unique trust that had been placed by the company in the employee, misuse of that trust and confidence constituted gross misconduct.

Having subsequently dismissed the Complainant, the Respondent offered him a right of appeal, which he declined to utilise. The Complainant later claimed that there were procedural flaws in the investigation and disciplinary process. However, on behalf of the Respondent, Crushell & Co argued that any such flaws could have been remedied by the Complainant lodging an appeal, but he failed to utilise this process. 

Legislation and Case Law

In relation to the summary dismissal, we submitted that the applicable legal test is that of the “band of reasonable responses” test, as set out by Mr Justice Noonan in the High Court case of The Governor and the Company of Bank of Ireland -v- James Reilly (2015) IEHC 241, wherein he stated:

“It is thus clear that the onus is on the employer to establish that there were substantial grounds justifying the dismissal and that it resulted wholly or mainly from one of the matters specified in s. 6(4), which includes the conduct of the employee or that there were other substantial grounds justifying the dismissal. Section 6(7) makes clear that the court may have regard to the reasonableness of the employer's conduct in relation to the dismissal. That is however not to say that the court or other relevant body may substitute its own judgment as to whether the dismissal was reasonable for that of the employer. The question rather is whether the decision to dismiss is within the range of reasonable responses of a reasonable employer to the conduct concerned - see Royal Bank of Scotland -v- Lindsay UKEAT/0506/09/DM.”

We noted that having considered the matter and the testimony of the witnesses to be called, the decision to dismiss was within the range of reasonable responses of a reasonable employer.  We further noted the case of Looney & Co. Limited -v- Looney (UD843/1984), we contending that any employer faced with similar circumstances to those that pertain to this case, would have acted in the same way.

Section 6 of the Act provides:

“6-(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all of the circumstances, there were substantial grounds justifying the dismissal.

(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal if it results wholly or mainly from one of more of the following:

…..

(b) the conduct of the employee.

In deciding if the dismissal was unfair, it is not for me to establish the guilt or innocence of the Complainant, but rather consider whether the Respondent acted reasonably in the matter of the dismissal. 

The Employment Appeals Tribunal held, in Looney & Co v Looney UD843/1984 that:

“It is not for the Tribunal to establish the guilt or innocence of the complainant, nor is it for the Tribunal to indicate, or consider whether we, in the employer’s position, would have acted as he did in the investigation, or concluded as he did .. to do so would substitute our mind and decision for that of the employer…our responsibility is to consider against the facts what a reasonable employer would have done in the same position.”

In deciding that the dismissal was fair, we noted that it was not for the adjudication officer to establish the guilt or innocence of the Complainant but rather to consider whether the Respondent acted reasonably in the matter of the dismissal.

Decision

Ultimately, the Adjudication Officer decided that the dismissal was not unfair, taking into account, in particular, the trust and confidence that had been placing in the Complainant and the failure to appeal the decision to dismiss him.

The Adjudication Officer determined that the special position the Complainant has with the directors of the company was of significance:

“The complainant was employed with the respondent over an extended period of time. The two parties had built up a relationship of trust to such an extent that the respondent gave the complainant loans of in excess of €40,000 in order to renovate his home. This relationship goes way beyond a normal employer-employee relationship. The complainant and one director in particular had developed a lasting friendship, and this director was prepared to vouch for the complainant when advancing various loans to him. The issue of a breach of trust arises in these unique circumstances.”

The Complainant was given a five-day timeframe within which to appeal. He sought to extend the timeframe, but it appears that he did not engage with the respondent to any degree thereafter. Although there was a suggestion that the Complainant may have lodged an appeal, the Adjudication Officer did not find that this was borne out by the evidence.

Although the adjudication officer alluded to their potentially being procedural flaws in investigation and disciplinary process, he noted that they could have been remedied through an appeal which the Complainant failed to utilise.

“In the circumstances where there may have been flaws in the initial investigation, if the complainant had appealed than any flaws could have been considered and perhaps rectified. The complainant had the complainant chose not to appeal.”

Takeaway

The evidence given by a number of witnesses indicated that the Respondent gave consideration to alternatives to dismissal but discounted them for various reasons, not least of which was a breach of trust, a unique level of trust, between the complainant and the directors.

In circumstances where there was a breach of trust to the degree outlined in evidence, when taken into account along with the high level of trust afforded to the complainant, the WRC found that the Respondent acted reasonably in the circumstances. Having regard to those circumstances, the WRC found that this dismissal was not unfair.

In any circumstance where there is a breach of trust and confidence, it is important for an employer to carry out an independent investigation, disciplinary process, an afford an employee an opportunity to appeal any decision, if they are to have a strong chance of defending a subsequent unfair dismissal claim before the WRC.

Further information

This article was prepared by Barry Crushell for informational purposes only. For further advice, please email contact@crushell.ie or contact the offices of Crushell & Co Solicitors.