ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00032541
Parties:
| Complainant | Respondent |
Parties | Oliver Dixon | Francis Brophy & Company Chartered Accountants |
Representatives | Michael Quinlan Dixon Quinlan Solicitors LLP | Mr.C Hanaway |
Complaint(s):
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00043138-001 | 19/03/2021 |
Date of Adjudication Hearing: 26/05/2022
Workplace Relations Commission Adjudication Officer: Jim Dolan
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015, following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
Background:
The Complainant commenced employment with the Respondent in October 2004 as a trainee accountant. As his career progressed, he became an accounting technician and eventually a qualified accountant. Employment ended in on 29th September 2020.
This complaint was received by the Workplace Relations Commission on 19th March 2021.
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Summary of Respondent’s Case:
Background
1. The Respondent set up in practice in August 1990 and moved into their current offices in February 1999. The practice has grown steadily over the years and there are currently 10 people working full-time in the office. They are a traditional, small accounting practice and engage in accounts preparation, auditing, personal and corporate tax compliance, personal and corporate insolvency, company secretarial compliance, accounts processing and payroll.
2. The Company regularly take on accounting students either at school leaver or university graduate level. The Complainant joined the practice on 26th October 2004 as a trainee accountant having completed his leaving certificate the previous Summer. He qualified as an Accounting Technician in 2006 and progressed to study the Certified Public Accountancy exams. He was unsuccessful in this study and for a while did not engage in exams. In 2011 he returned to part-time accountancy studies and qualified as an ACCA in February 2019.
3. As a business, the Company operate in a highly regulated environment requiring adherence to rigorous accounting standards and ethical behaviours. Reference to ethical standards and the requirement to be familiar with policies and procedures are explicit in the Complainant’s contract of employment. Finance professionals are also personally bound by the same standards and can be subject to disciplinary action by the relevant accountancy bodies where they fail to uphold professional standards[1].
4. Within the business, a certain amount of private work was approved for employees. There were three provisos well understood in the business: the work should not interfere with the performance of the individual’s work with the firm; there should be a clear distinction, in all respects, between private work and work for the firm; and private work should be completed in a way which is fully compliant with professional standards and ethical practice.
5. At the same time that Principal of the Firm, became concerned that the Complainant may have engaged in unauthorised work with private clients, the Complainant was not fulfilling his assigned work or required CPD when not working in the office. The matters of concern which the principal set out in a letter to the Complainant on 9th September inviting him to attend a disciplinary hearing were:
Alleged fraudulent activities in the workplace – further particulars being that it is alleged that the Complainant completed accounts and assurance letters for private clients of his with no connection to the Company, yet he completed and presented those documents as though they had been prepared by the Company.
Allegedly taking part in activities which could cause the Company to lose faith in his integrity, namely it is alleged that he issued documents to private clients on the firm’s headed paper which looked as though those documents were prepared by the Company.
Alleged refusal to follow instructions from a Partner – namely instructions to: 1. Complete a day of training courses on 18th June 2020. 2. Bring home work and perform chargeable work for a priority client while working from home on 25th June 2020. 3. Bring home work and perform chargeable work for a priority client while working from home on 2nd July 2020. 4. Bring home work and perform chargeable work for a priority client while working from home on 9th July 2020.
Alleged false declarations being made by the Complainant on the time recording system, further particulars being that it is alleged that: 5. In respect of courses on FRS102 and FRS105, Audit & Accounting Technical Update and Solicitor’s Accounts – the Complainant’s own timesheets stating time spent on these courses differ from the records held by Mercia. • The Complainant only completed 2 hours of courses and 2 hours of AML update reading whilst working from home on 11th June 2020 and completed no further work, yet his timesheet states that he completed 7.5 hours of training that day. • The Complainant only completed 2.5 hours of courses whilst working from home on 18th June 2020 and completed no further work, yet his timesheet states that he completed 7.5 hours of training that day. • The Complainant only completed 1.5 hours of courses while working from home on 25th June 2020 and completed no other work, yet his timesheet stated he completed 7.5 hours training that day. • The Complainant did not complete any courses whilst working from home on 2nd July 2020 and completed no other work; yet his timesheet states he completed 7.5 hours of training that day. • The Complainant only completed 2 hour long courses whilst working from home on 9th July 2020 and completed no further work, yet his timesheet states that he completed 7.5 hours of training that day.
Given the seriousness of the alleged issues, particularly in relation to the work for private clients, an investigation was set up under the firm’s disciplinary procedure based on strong documentary evidence. The outcome of the investigation, conducted by Graphite HRM, was that the Complainant had a case to answer in relation to three issues:
6. 1. Fraudulent activities in relation to the preparation of accounts for private clients presented as though prepared by the Respondent company. 7. 2. Refusal to follow instructions in relation to work to be completed from home. 8. 3. False declarations made on the time recording system. 9. Disciplinary Hearing A disciplinary hearing was set up arising from the outcome of the investigation report. The alleged offences included: 1. 1. Fraudulent activities. 2. 2. Activities likely to cause the loss of faith in the Complainant’s integrity. 3. 3. Failure to follow instructions in relation to training and professional work. 4. 4. False declarations on the time recording system.
The seriousness of the allegations was set out in the letter sent by the Respondent to the Complainant inviting him to the disciplinary hearing as was the Complainant’s right to representation. The outcome of the disciplinary hearing was the decision to issue a letter of termination of employment.
Appeal Hearing In his email to the Respondent appealing the outcome of the disciplinary hearing the Complainant set out six grounds of appeal, these are as follows: • 1. Lack of fair procedures afforded to him by his employer. • 2. The proportionality of the sanction. • 3. The abdication of management and legal responsibilities by his employer. • 4. The lack of management responsibility of his employer. • 5. The lack of accountability from his employer. • 6. The lack of credibility of his employer’s claims.
The Appeal Hearing was conducted by an independent HR consultant from SHRC Limited.
The outcome of the appeal hearing was that the appeal was not upheld.
SummaryThe process followed was fully compliant with the firm's disciplinary procedure and the national Code of Practice in relation to disciplinary processes. Two independent, external parties were engaged to conduct the disciplinary hearing and the appeal hearing. Every effort was made to ensure that the process adopted by this small firm was fair.
The nature of the offences was such as to constitute gross misconduct. The decision to dismiss was within the bounds of reasonable responses which an employer might make. Ref: PTSB case UDD 1968. The offences had persisted over a long period of time during which the Complainant had been undergoing training, in the course of which the ethical requirements of his work were continuously emphasised to him. Accordingly, the critical basis of trust and confidence essential to the continuance of his employment was fundamentally broken by the Complainant. Legal Position The Unfair Dismissals Act sets out the substantive grounds which would render a dismissal to be fair. These grounds include the conduct of the employee. The tests which employers must satisfy to demonstrate the reasonableness of their actions are set out by the Labour Court in in Noritake Ltd v Kenna (1983) • Did the company believe that the defendant had misconducted himself? • If so, did it have reasonable grounds for that belief? • If so, was the penalty of dismissal out of proportion to the alleged misconduct?
The Company had good reason to believe that the Complainant had been guilty of a number of serious breaches of his duty as an employee based on documentary evidence available to it. The Respondent engaged an independent HR consultancy to conduct an investigation which established a number of cases to answer in relation to the conduct of the employee.
The findings of the investigation, which were not rebutted in the disciplinary hearing demonstrated that the conduct of the employee, in a number of different ways, justified dismissal.
In this regard, the employee not only breached his contract of employment, he also breached the rules of his profession and compromised the position of his employer with regard to key stakeholders for the business.
The band of reasonableness is well established in the test by which the fairness of a dismissal is assessed. It was established in Irish jurisprudence in AIB v Purcell (2012 23ELR 189). It states quite simply that if a reasonable employer might have dismissed the employee, then the dismissal is fair.
The Complainant in this case, was engaged as an accountant in a strongly regulated sector where ethical standards are supposed to be followed to the highest degree. The employee in this case: • Presented a set of accounts (for a number of clients over a prolonged period of time) as though they had been completed by the company for which he was employed rather than as private work. A third party seeing these statutory financial statements, would have believed that they had been completed by the Respondent Company. • Written assurances in relation to financial information, were presented on company letterhead as though they had been given by the Company when they were completed on a private basis. • Timekeeping /work recording records were falsified.
In such circumstances, where strict compliance and integrity are the basis on which a firm of auditors operate, then a dismissal clearly falls within the bands of responses which a reasonable employer would consider.
This position is confirmed in a number of cases including Looney & Co. Ltd -v- Looney UD 843/1984 and JVC Europe Ltd -v- Panisi (2011) IEHC 279.
The nature of the instances of wrongdoing in this case, over a prolonged period of time, give grounds for a determination that there is a breach of trust and confidence in the employment relationship. In a case concerning a revenue protection officer in a transport company (ADJ-00007662), the Adjudication Officer recognised that trust and confidence is especially important in some roles. Clearly, this case is a prime instance of that point. The importance of trust and confidence in certain roles is emphasised also in Brendan O’Callaghan v Dunnes Stores (UD54/2012).
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Summary of Complainant’s Case:
Background The Respondent is a firm of Chartered Accountants under the control of the Managing Partner, Mr B. The Complainant commenced employment with the Respondent at the age of 17 in October 2004 following his Leaving Certificate exams. He initially qualified as an accounting technician before embarking upon his Association of Chartered Certified Accountants (ACCA) studies in 2011. The Complainant qualified as a Chartered Accountant in December 2018 and was admitted as a member of the ACCA in February 2019. Throughout his career, the Complainant enjoyed an exemplary work record and a strong personal and professional relationship with the principal of the firm Mr B. He regularly received excellent feedback from clients and consistently received positive appraisals from his employer for his work performance. On Monday 20th July 2020, the Complainant was asked to meet with Mr B in his office. Following a pleasant conversation about the previous weekend, Mr B presented the Complainant with a written correspondence outlining the following: “I am writing to you in connection with a very serious matter. I have discovered the following: 1. Emails sent from your office email account showing that you gave assurance letters to private clients of yours on my letterheading – purporting to come from my Office. I was not aware of any of this. 2. Accounts drafted for MC – a client of yours, purporting to be certified by my practice I was not aware of any of this. ….. As a result of this, I am notifying you that I am going to immediately search the boxes in the office that contain files relating to your personal clients …” The Respondent then handed the Complainant a further correspondence requesting the Complainant to provide full written details of all works carried out by him on behalf of any personal clients he may have involving the Respondent practice. The Complainant was asked to immediately carry out this task. Then, within an hour of his initial meeting, the Complainant was handed a further letter by Mr B, confirming his immediate suspension from work with pay pending a formal investigation into allegations of misconduct by the Complainant, described as follows: 1. Alleged fraudulent activities in the workplace – further particulars being that it is alleged that you completed accounts and assurance letters for private clients of yours with no connection to the Respondent (name redacted), yet you completed and presented those documents as though they had been prepared by this company. 2. Alleged refusal to follow instructions from a Partner …[with particulars of the allegation included]. 3. Alleged false declarations being made by you on your time recording systems … [with particulars of the allegation included].” The Complainant was duly required to remove his personal effects and leave the office. At no point was the Complainant given an opportunity to address these issues save in the context of a formal disciplinary process. Instead, the Respondent had already appointed Graphite HRM to handle the investigation process. Terms of Reference for the investigation on Graphite headed notepaper was provided to the Complainant. Investigation and Disciplinary Hearing The Complainant attended an interview for the investigation by remote online platform with Mr Y of Graphite HRM on 6th August 2020. Mr. GM , a colleague of the Complainant’s also attended in support of the Complainant. It appears that Mr B participated in a separate online meeting with Mr Y on 10th August 200. Mr Y’s Investigation Report was produced on 27th August 2020. For reasons not explained, same was not furnished to the Complainant until 4th September 2020. The Investigation Report purported to make “findings of fact” against the Complainant and recommended a Disciplinary Hearing which was fixed for 9th September at 12 noon. The Investigation Report also made a recommendation that: “The Investigation recommends that the Firm put in place a written policy to outline and define the parameters that staff must follow if they are undertaking work for private clients whilst making use of the Firm’s computer software.” The Complainant received notice of a disciplinary hearing by letter dated 4th and 9th September 2020. The day before the hearing was due to commence, the Complainant received the following email from Mr B: “Good afternoon, I am writing to you in connection with the disciplinary hearing that was set for tomorrow at 12.00 noon. To ensure fair procedures, I am deferring the meeting until 3.30 pm on Thursday 10th September 2020. I will be taking witness statements in connection with the allegations and will forward them to you in good time tomorrow so that you may have an opportunity to review them in advance of the disciplinary meeting. If you have any queries regarding this, please do not hesitate to contact me. Please acknowledge receipt of this email at your earliest convenience. Kind regards. The correspondence enclosed typed statements of five colleagues in response to questions arising out of the Complainant’s alleged conduct. Those interviewed included the abovementioned Mr GM who attended the investigation meeting with the Complainant on 6th August and who was also due to attend the Complainant’s Disciplinary Hearing as support. As is apparent from the transcript provide, Mr GM expressed his discomfort at being asked to participate by his employer to be interviewed as part of the investigation into the alleged misconduct of the Complainant. The Complainant responded to Mr B’s email at 16.16 hours requesting an adjournment to allow him to review the statements furnished and take advice, however, Mr B responded 8 minutes later at 16.24 refusing this request and confirming that the disciplinary hearing would proceed the following day regardless. The Disciplinary Hearing did proceed the following day and after an entirely biased, prejudiced, and unfair hearing, the Complainant was duly dismissed. Evidence will be adduced of the fact that Mr B elected to chair the meeting and was the ultimate decision maker notwithstanding the fact that he was the complainant and primary witness against the Complainant. Evidence will also be adduced of the supposedly considered decision communicated by letter dated 29th September 2020 whereby Mr B failed to meaningfully consider any of the explanations offered by the Complainant, failed to consider all possible alternative sanctions and concluded that there were no mitigating factors to take into account when reaching the decision to dismiss. The Complainant lodged an appeal of his dismissal dated 30th September 2020 which set out the following grounds of appeal: a) Lack of fair procedures by employer. b) An abdication by management of its legal responsibilities. c) Lack of management responsibility by employer. d) Lack of accountability by employer. e) Lack of credibility to employer’s claims and f) The proportionality of the sanction. The appeal was conducted by Mr CH on 14th October 2020 and his report dated 23rd October 2020 refused the appeal and confirmed the decision to dismiss. In all of the circumstances, the Complainant was subjected to an investigation and disciplinary process that was unfair, prejudiced and was conducted with a predetermined outcome. The Complainant’s Evidence The Complainant emphatically denies that he perpetrated a fraud upon the Respondent in the manner as alleged or that he deliberately acted to the detriment of the Respondent’s business. Instead, the Complainant freely admitted that he was retained by three private clients, and he carried out this work for many years in his own time and using the office software system as well as Mr B’s Tax Agent number. This he did openly and with Mr B’s express consent. Allegation of Fraud At all material times, the Complainant openly and with the express blessing of Mr B provided accountancy services to three private clients with whom he was personally associated. The firm did not have an express policy about staff doing private work using work facilities, but it was permitted save with the express agreement of Mr B. The Complainant was aware of a number of colleagues who carried out work for private clients after hours and who were allowed use the firm’s accounting software system to process returns etc. Mr B had no difficulty with any of this provided that the work was carried out outside of office hours. Consequently, the Complainant approached Mr B in 2009 to ask if he could similarly take on a private client. This private client was his brother-in-law, Mr J M, who was a small business operator and who had very general accounting needs. Mr B confirmed he had no difficulty with this. The Complainant expressly asked Mr B if he would agree to this private client being processed under Mr B’s tax agent number for the purpose of filing tax returns as the Complainant did not have a tax agent number. Mr B did not have an issue with what he was being asked. From that onwards, the Complainant filed the appropriate returns using Mr B’s tax agent number with his full knowledge and consent. The Complainant added a second private client Mr T L in 2012/2013. Mr L was known to the Complainant and is a personal friend of Mr M’s. The Complainant then added a third client Mr M C in 2013/2014. All three of the Complainant’s private clients were openly processed through the Respondent’s accounting software system with the prefix “OD” attached to signify that these were the Complainant’s own files. Previously, Mr B forwarded correspondence to the Complainant that he had received to the office from the Revenue Commissioners concerning one of the Complainant’s private clients. This he did without issue. The Complainant issued a letter on headed note paper in reply. All three private clients involved low risk work of a general nature. The Complainant continued to carry out this work using Mr B’s Tax Agent number for over 10 years until the Complainant successfully rectified his Tax Agent status with the Revenue Commissioners in May 2020. For the avoidance of doubt, had Mr B expressed any reservation or if he had refused the Complainant’s request, the Complainant would have duly complied and would not have used Mr B’s Tax Agent number. At all material times, Mr B actively reviewed and oversaw all aspects of the business. He was aware of the custom and practice and even handed the Complainant a letter from the Revenue Commissioners which was addressed to Mr B as Tax Agent as this letter concerned one of the Complainant’s private clients. When in 2018 Mr J M became estranged from the Complainant’s sister, the Complainant suggested to Mr B that Mr M could thereafter become a client of the firm. No issue was raised at this and Mr M’s file was passed over to the firm. A review of the file at that time would have clearly shown that Mr B was already named as the Tax Agent and that correspondence had issued on the firm’s headed notepaper. Evidence will be adduced that Mr B regularly reviewed all active files and he could not have missed the fact that his and the Respondent’s details therein. In relation to the allegation that the Complainant refused to follow instructions from a Partner in respect of working from home, the Complainant emphatically denies that he failed, refused and/or neglected to carry out a direct instruction by Mr B as alleged by Complaint No. 2. At all material times, he complied with any express instruction. Furthermore, he appraised Mr B of the professional training he proposed to complete and for the balance of the time, he worked on his own initiative to carry out other administrative but entirely work-related tasks. The Complainant will adduce evidence that: Allegation of failure to follow Instruction a) Since Covid-19 restrictions were introduced, the Complainant had continued to work in the office each day. In May 2020, the Complainant asked if it were possible to work from home one day a week in June 2020. Mr B agreed to this proposal without issue. It was agreed that the Complainant would start working from home each Friday commencing 5th June. The Complainant also raised the fact that he needed to bring his Continuing Professional Development (CPD) training up to date and that he also wished to undertake a number of work relevant courses. He suggested to Mr B that he might do same on the day he was working from home. Mr B was supportive of this particularly because he had organised a number of online courses that he wanted accountants in the firm to undertake. b) The Complainant was relying on his own personal laptop which was not capable of work tasks beyond training and those web and email-based tasks which the Complainant duly carried out on the days in question. c) The Complainant was not given any specific instruction to carry out any particular task, but of his own initiative, he used his time to deal with work matters that he could safely undertake from home. Initially, the Complainant was not set up to securely work from home. Initially, he attempted to access the server via TeamViewer, however, the Respondent’s IT provider Sync IT raised an issue with him doing this as it was not a secure medium to use. The Complainant notified Mr B of this fact and Mr B confirmed that he would organise with IT for the Complainant to have secure access from home. After a number of requests, access was eventually provided on 9th July. d) After secure access was provided and minor computer issues were dealt with, the Complainant did carry out chargeable and secure work from that date onwards. e) Prior to that, the Complainant did not perform chargeable work from home because he did not have secure access to the system. He did complete online training and also attended to other web and email based administrative work which absorbed his time and was necessary but not actually chargeable. When the Complainant was working from the office, he was dealing with a particular file (Client Number 5). This was not a suitable file to work on from home given that it had advanced past the initial stages and required access to extensive physical documentation. It was not prudent to remove this file from the office for security reasons given its size etc. Similarly, another prominent file the Complainant was working on (Client Number 84) was not suited to working from home as it had similarly advanced past the initial stages. Instead, the client did bring home an anti-money laundering folder and also, of his own initiative, started a new folder dealing with Covid-19 subsidy scheme supports. f) For the avoidance of doubt, the Complainant worked his expected hours and used his time appropriately given the constraints he was operating under. Given that this was the first time that the Complainant had worked from home, it would be reasonable for himself and Mr B to review progress and discuss any issue arising. No such review was ever held and the first the Complainant knew about Mr B’s lack of understanding was when he instituted a formal investigation process. In relation to the allegation that the Complainant made false declarations on the Respondent’s time recording system, evidence will be adduced that: Allegation of False declarations a) Mr B organised a series of Mercia training courses which the Complainant duly completed over a series of days. b) The Complainant also completed ACCA courses which was related to his work. c) On one occasion, the Complainant didn’t complete his training course on the day he started it, but he finished it the next day when he was able to resume where he left off. d) On those occasions where the Complainant completed his training hours and was not in a position to do billable work, he attended to administrative duties including email and web-based tasks, including Revenue related tasks. The Complainant invited the Respondent to review his email files to confirm the work he did on the relevant dates. e) Whereas the timesheets should also have included time marked for “administration” each timesheet completed is an honest and true declaration of his work time on each occasion. The Complainant will also adduce evidence of the following points in mitigation which the Respondent deliberately failed to have any regard for during the investigation or disciplinary process: a) The Complainant consistently received positive work reviews by Mr B. b) Throughout those 16 years, the Complainant consistently received positive feedback on his work performance from clients and has played an active part in building up the reputation of the business for many years c) The Complainant frequently represented the firm at “on-site” client meetings and was frequently called upon to deal with difficult tasks or challenging clients. d) By improving client relations, the Complainant was instrumental in increasing profitability for the firm. e) The Complainant enjoyed what he believed to be an excellent working relationship with his colleagues and was always available to assist any colleague when asked and considered himself very much a team player. f) The Complainant had not received any prior written or verbal warnings in relation to any other matter. g) The Complainant at all times acted in good faith. The Respondent conducted an entirely defective disciplinary process that was not in any way fair. The Respondent nonetheless decided to dismiss the Complainant which of itself was an entirely disproportionate step to the offences contended. Unfair Dismissal Section 6(1) of the Unfair Dismissal Act 1977, as amended, deems the dismissal of an employee to be an unfair dismissal for the purposes of the Act unless, having regard to all circumstances, there were substantial grounds justifying the dismissal. Section 6(7) states in determining if a dismissal is an unfair dismissal, regard may be had to – (a) To the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and (b) To the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with fair procedures – as outlined in section 14 (1) of this Act or with the provisions of the code of practice regarding Disciplinary and Grievance procedures in S.I. No. 146 of 2000. [2]. Regulation 4.6 of S.I. No. 146 of 2000 states: “The procedures for dealing with such issues reflecting the varying circumstances of enterprises/organisations, must comply with the general principles of natural justice and fair procedures which include: · That employee grievances are fairly examined and processed. · That details of any allegations or complaints are put to the employee concerned. · That the employee concerned is given the opportunity to respond fully to any such allegations or complaints. · That the employee concerned is given the opportunity to avail of the right to be represented during the procedure. · That the employee concerned has the right to a fair and impartial determination of the issues concerned, taking into account any representations made by, or on behalf of, the employee and any other relevant or appropriate evidence, factors, circumstances. Taken compendiously, it is submitted that the statutory and regulatory provisions oblige an employer to act fairly in dismissal situations. In that regard, if an employer breaches fair procedures, there will more than likely be a higher award for the unfairly dismissed employee. As to whether there were substantial grounds for the Complainant’s dismissal on the ground of gross misconduct in the context of Section 6 of the Unfair Dismissals Act 1977, the applicable legal test is the “band of reasonable responses” test, as comprehensively set out by Mr Justice Noonan in the High Court decision 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 or 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”. Having regard to all the circumstances, it is submitted that the Respondent’s response was not reasonable and in order for the Respondent to advance a claim that it reached a decision within the band of reasonableness, it would first have to demonstrate that its disciplinary process was beyond reproach and that it properly took into account all matter, including points of mitigation, when reaching its decision. Arising therein, the Respondent failed to consider a more appropriate sanction in relation to the breach contended. In circumstances where the Complainant had not received any prior written or verbal warnings in relation to any other matter and given his positive work record up to that date, it is submitted that a sanction of dismissal was inappropriate, disproportionate, and unfair in all of the circumstances. It is submitted that the Respondent’s decision to dismiss the Complainant without firstly affording him an opportunity to reasonably address the allegations and given that the work was always done in the utmost good faith and integrity, is unfair in all the circumstances. In the case of Hennessey -v- Read and Write Shop Limited, the Tribunal established in cases of dismissal for “conduct” that the test of reasonableness applies with regards to: a) The nature and extent of the investigation carried out by the Respondent prior to the decision to dismiss the Complainant and b) Whether the procedures adopted were fair and reasonable and c) The reasonableness of the conclusion arrived at by the Respondent Arising therein, the onus is on the Respondent to demonstrate that the disciplinary process was robust and that appropriate efforts were made to ensure the fairness of the process especially where the allegations were denied and/or the facts are in dispute and that all conclusions reached were achieved on the basis of fairness and reasonableness and without any element of predetermination. In considering fair procedures in relation to the suspension of a consultant psychiatrist, McMahon J considered the meaning and value of fair procedures as follows: “… Fair procedures are necessary for the common good … What does fair procedures mean? At the very minimum, it means that the person at whom a charge is levelled has proper notice of the charge, that he has proper opportunity to take legal advice and to prepare for hearing, that no one is to be a judge in their own cause, that both parties are given a full opportunity to be heard and that the judge is free from bias”. In circumstances where the Complainant orchestrated the investigation process without taking any step to ascertain the true facts and where the Complainant then proceeded to conduct the disciplinary hearing and determine the ultimate sanction, it is clear that the instant claim is devoid of fairness and cannot be upheld. Proportionality of sanction It is submitted that the disciplinary process failed to have regard to all material matters raised by the Complainant and abjectly failed to have any regard for the many points of mitigation that the Complainant reasonably expected would be taken into account when making the decision to sanction. It is submitted that a sanction of dismissal was inappropriate, disproportionate, and unfair in all of the circumstances. In the case of Samuel J Firzelle -v- New Ross Credit Union [1977] IEHC 137 the High Court set out the following legal principles to be observed: “Where a question of unfair dismissal is in issue, there are certain premises which must be established to support the decision to terminate employment for misconduct. The actual decision, as to whether a dismissal should follow, should be a decision proportionate to the gravity of the complaint, and of the gravity and effect of dismissal on the employee. Put very simply, principles of natural justice must be unequivocally applied”. Even where there is found to have been bona fide grounds for a disciplinary step, an employer is bound to act in a manner that is proportionate and reasonable in all of the circumstances. In Employer -v- Employee (UD 2114/2010) when considering the proportionality of the sanction imposed by the appellant, the Tribunal took into account the eight year employment record of the respondent and the availability of alternative sanctions to the appellant. In reaching its conclusion that the employee was unfairly dismissed for breaching a specified policy of her employer, the Tribunal held that having regard to all the circumstances, the sanction of dismissal was not warranted by the action of the respondent. In Marshall -v- Conduit Enterprise Ltd (UD 1293/2013) the Complainant who was involved in emergency call answering services, was alleged to have fallen asleep in work. He was dismissed. By a majority, finding that the Complainant had been unfairly dismissed the EAT held that although the breach involved was a serious one and one that could potentially have resulted in an emergency call not being dealt with, the sanction of dismissal for gross misconduct of an employee for a single incident inadvertently caused, was deemed disproportionate. In Rafter -v- Connaught Gold Co-Op, the Tribunal concluded that the Complaint had a strong employment history with the Respondent. He was an employee with ten years’ service. He had an unblemished record and it would appear that, contrary to the evidence furnished at the hearing, no consideration whatsoever was given to these matters, in either the initial investigation or the appeal hearing. In common with all of the foregoing examples, it is submitted that the act leading to the Complainant’s dismissal did not involve acts of criminality or aggression, nor did come in succession to a range of other complaints or failings with respect to the Complainant. At all times, the Respondent had a suite of options available to it to impose a sanction if proven necessary. However, it is submitted that the Respondent failed to have regard to any alternative sanctions and failed to consider any other alternative that would address their apparent concerns as an alternative to dismissal. As a final consideration, according to the Irish Employment Law Reports, as a general proposition: “… it is extremely difficult for an employer to lawfully dismiss an employee for a first offence, even where the conduct is extremely serious”. Losses Section 7(1) (c) of the Unfair Dismissals Act 1977, as amended by Section 6(a) of the Unfair Dismissals (Amendment) Act 1993, provides: “(i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances, or (ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances”. It is submitted that an award of compensation for unfair dismissal is to make reparation for financial loss actually incurred in consequence of the dismissal. In an attempt to mitigate his losses, the Complainant was immediately proactive in seeking new employment. However, evidence will be adduced at hearing of his ongoing losses, to include loss of pension and of earned bonus. Conclusion The Complainant respectfully submits that he was unfairly dismissed in circumstances where the decision failed to have proper regard to the true circumstances which gave rise to the within proceedings; the Complainant at all times acted in good faith, his otherwise exemplary service, the unfairness of the disciplinary process; the failure to consider any mitigating factors and the failure to have regard to all available alternative sanctions.
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Findings and Conclusions:
The Respondent is a company of Accountants and employs 10 full-time employees. The Complainant joined the company in 2004 as a trainee accountant. As a business the Respondent company operate in a highly regulated environment requiring adherence to rigorous accounting standards and ethical behaviours. Within the business a certain amount of private work was approved for employees. In relation to such private work there were three provisos that were well understood within the business: 1. The work should not interfere with the performance of the individual’s work for the company. 2. There should be a clear distinction, in all respects, between the private work and work for the firm. 3. Private work should be completed in a way which is fully compliant with professional standards and ethical practice. On the 20th July 2020 the Respondent wrote to the Complainant outlining what he deemed to be a very serious matter, namely: 1. Emails sent from the Complainant’s office email showing that the Complainant had issued assurance letters to private clients on company letterhead. The Respondent was not aware of this. 2. Accounts drafted for a named private client of the Complainants purporting to be certified by the firm. The Respondent was not aware of this. A second letter was issued on 20th July 2020 informing the Complainant that a formal investigative process had been instigated into allegations of misconduct against him. This letter included Terms of Reference for such an investigation and the Complainant was informed that he was being placed on a period of paid suspension pending the outcome of the investigation and also that an independent investigator from Graphite HRM would be conducting the investigation. The Complainant was also informed that he had the right to be accompanied by a colleague or trade union official at any meetings he was required to attend. The investigation was completed, and an Investigation Report was issued on 27th August 2020. The Complainant, by letter dated 9th September 2020 was invited to a Disciplinary Hearing on 10th September 2020. The purpose of this hearing was to afford the Complainant the opportunity to provide an explanation for the following matters: 1. Fraudulent activities. 2. Activities likely to cause the loss of faith in the Complainant’s integrity. 3. Failure to follow instructions in relation to training and professional work. 4. False declarations on the time recording system.
By letter dated 29th September 2020 the Complainant was informed of the outcome. The final two paragraphs of this letter read as follows:
“In view of the findings of the disciplinary hearing above, and in the absence of any mitigating factors, the decision is to terminate your employment with immediate effect for gross misconduct.
You have a right to appeal this decision and may do so by submitting your grounds of appeal to me not later than 5 working days from the receipt of this letter. The Appeal will be heard by our independent HR expert not involved in the process to date”.
By email dated 30th September 2020 the Complainant appealed the Respondent’s decision to dismiss him. Initial grounds of appeal were listed as follows: 1. Lack of fair procedures afforded by the employer. 2. The proportionality of the sanction. 3. The abdication of management and legal responsibilities of the employer. 4. The lack of management responsibility from the employer. 5. The lack of accountability from the employer. 6. The lack of credibility in the employer’s claims.
The Appeal hearing was conducted by an independent HR expert who issued his report on 23rd October 2020. In the final paragraph of this report / letter the Appeals Officer states:
“It was apparent throughout the appeal hearing that you were not aware of the significant professional impact of your actions which have continued to the present day. It should be stated that there was no evidence of fraud in the strict sense of the term. However, the accountancy profession and auditing process rely critically on trust and conformance with accountancy standards and the norms of professional practice. There was no attempt in the appeal to deny what happened. Instead, the main grounds of the appeal focussed on your claims that Mr.FB knew and condoned serious breaches in professional practice. Long service is sometimes considered in mitigation of a sanction. In this case it is offset however by the other issues considered relating to working from home and the apparent falsification of timesheets”.
The appeal was not upheld.
In Looney and Co Ltd v Looney (UD 843 / 1984) the EAT summarised as follows: “It is not for the EAT to seek to establish the guilt or innocence of the claimant nor is it for the EAT to indicate or consider whether we in the employer’s position would have acted as it did in its investigation or concluded as it did or decided as it did, as to do so would be to substitute our own mind and decisions for that of the employer. Our responsibility is to consider against the facts what a reasonable employer in his position and circumstances at that time would have done and decided and to set this up as a standard against which the employer’s actions and decision are to be judged”. The Respondent conducted a professional investigation into all matters, and I am satisfied that the Complainant was provided the right to be accompanied and was, at all times, offered the opportunity to reply. The entire process followed was compliant with the Respondent’s disciplinary procedures and in accordance with the Code of Practice contained within S.I. 146 of 2000. In one of its final ‘legacy case’ determinations prior to the establishment of the Workplace Relations Commission, the Employment Appeals Tribunal held: ‘What is required of the reasonable employer is to show that s/he had a genuine belief based on reasonable grounds, arising from a fair investigation that the employee was guilty of the alleged misconduct and that the sanction of dismissal not disproportionate’. (Abdullah v Tesco Ireland plc UD 1034 /2014, citing Noritake (Irl) Ltd v Kenna UD 88/1983 and Martin v Audio Video Services Centre Ltd UD 617/1991). The High Court has provided a list of “premises” which must be established to support an employer’s decision to terminate employment for misconduct in Frizelle v New Ross Credit Union Ltd ([1997] IEHC 137. 1. The complainant must be a bona fide complaint unrelated to any other agenda of the complainant. 2. Where the complainant is a person or body of intermediate authority, it should state the complaint, factually, clearly, and fairly without any innuendo or hidden inference or conclusion. 3. The employee should be interviewed and his or her version noted and furnished to a deciding authority contemporaneously with the complaint and again without comment. 4. The decision of the deciding authority should be based on the balance of probabilities flowing from the factual evidence and in the light of the explanation offered. 5. The actual decision, as to whether a dismissal should follow, should be a decision proportionate to the gravity of the complaint, and of the gravity and effect of dismissal on the employee. In conclusion I believe the Respondent acted in accordance with fair procedures and concluded that the Complainant was guilty of gross misconduct. The decision to dismiss the complainant, I believe, was a reasonable one and it is for this reason I conclude that the complaint as presented under s.8 of the Unfair Dismissals Act is not well founded. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
In conclusion I believe the Respondent acted in accordance with fair procedures and concluded that the Complainant was guilty of gross misconduct. The decision to dismiss the complainant, I believe, was a reasonable one and it is for this reason I conclude that the complaint as presented under s.8 of the Unfair Dismissals Act is not well founded. |
Dated: 05th January 2023
Workplace Relations Commission Adjudication Officer: Jim Dolan
Key Words:
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