UDD2647

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00046448 (CA-00057393)

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer to the Labour Court on 19 February 2024 in accordance with Section 8A of the Unfair Dismissals Act 1977 to 2015.

A Labour Court hearing took place on 6 November 2025.

The following is the decision of the Court.

DECISION:

1Background to the Appeal

This is an appeal by Kashan Carpets t/a Lynfrae Trading Company Limited against Adjudication Officer’s Decision ADJ-00046448 CA-00057393-001 given under the Unfair Dismissals Acts 1977 to 2015 (the Act’s) in a claim by a previous employee that he was unfairly dismissed. The Adjudication Officer held that his complaint was well founded and awarded compensation of €18,000. The parties will be referred to in this decision in the same manner as they were at first instance with Fergal Mc Grath (Complainant) and Kashan Carpets t/a Lynfrae Trading Company Limited the (Respondent).

The complaint was lodged with the WRC on 28 June 2023, appealed to the Labour Court 19 February 2024. A correction order was received on 6 January 2025, and a hearing was held in Dublin on 6 November 2025.

The Complainant was employed by the Respondent from 17 November 2021 until he was dismissed on 16 June 2023. The Complainant was dismissed for gross misconduct on that date. Dismissal is not in dispute. At the commencement of the hearing the Complainant indicated he wished to proceed by way of submission and not sworn evidence.

2 Summary of Respondents submission

Mr O Riordan, Solicitor on behalf of the Respondent, submitted that the Complainant had been employed since 2021 and was informed when he commenced that his annual sales target would be €35,000 per month. The Complainant never reached this target and was averaging about €20,00 in sales per month. In March 2023 the company van the Complainant was using for work was badly damaged. The van was left into the garage, and it cost €7,620.60 to repair. The Complainant provided no explanation as to how this level of damage had occurred. The Respondent’s insurance premium increased on foot of this incident. While the van was being repaired the Respondent had to hire an alternative vehicle for the Complainant at a cost of €1,295.39.

In April 2023 the Respondent’s bookkeeper noticed payments on the company credit card that were not in keeping with why it had been provided. The Respondent as a practise does not issue company credit cards to sales managers. The normal practice is that the sales manager incurs the cost of accommodation travel etc and then reclaims it based on receipts provided. The Complainant informed the Respondent he could not afford to do this, and he was provided with a company credit card. The card was to be used strictly on days the Complainant was travelling away from home or office to cover accommodation, food and fuel for the van. The Complainant was informed of this when he was given the credit card in April 2022. When the bookkeeper reviewed the credit card transactions, she noticed that the card was being used in the Complainant’s local pub outside of working hours. In the period 4 August 2022 to 25 May 2023 there were over 30 transactions at that venue. There were also ATM withdrawals made on the card. During the same period the Complainant was using his work email to apply for other jobs and to sign up to dating sites.

On 16 June 2023 the Complainant was called to a meeting in the Respondent’s CEO’s office. The issue of the damaged vehicle, the lack of explanation re same and the transactions on the card were raised with him. It was also raised with him that he had not met the agreed sales targets. The Complainant was informed that he was being dismissed and that he would be paid two weeks’ pay in lieu of notice.

The Respondent opened a number of cases to the Court Audrey Burtchaell and Premier Recruitment international Limited UD1290/2002 and Governor and the Company of Bank of Ireland v James Reilly [2015] IEHC 241 in support of their position that in this case the trust had been completely broken and therefore the decision to dismiss fell within the band of reasonableness. 

Mr O Riordan confirmed that the Respondent did not provide the Complainant with a contract of employment and does not have a grievance or disciplinary procedure. It was accepted that there were procedural deficiencies in the way the matter was handled by the Respondent. However, the Complainant action mitigated substantially against any monetary award. The Respondent submitted that despite procedural deficits the nature of the breach of trust was such that the dismissal still ought to be considered a fair dismissal and fall within the band of reasonableness. They also opened Elstone v Coras Iompair Eireann Circuit court 1987 No 5, O’ Neill v Bus Eireann Circuit Court (Dublin)no 1/90 Mc Carthy V Coras Iompair Eireann Circuit Court 1984 No 63. It was submitted by Mr O Riordan in reliance on these cases that the issue for the Court is in a case of this nature where it is not disputed that no procedures were followed, whether the denial of those procedures is sufficient in and off itself to state that the dismissal was unfair. It was his submission that it was not, and that in this case there was substantial grounds justifying the dismissal.

3 Witness for the Respondent

Mr Hance informed the Court that he was the Managing Director and Owner of the company. It was his evidence that there were three issues a) his performance, the Complainant had consistently failed to reach the agreed sales targets) b) the damage to the Van and his failure to follow up with the garage to endure there was no delay in getting it back on the road and c) the issue of the credit card.  There were transactions even when he was not working, at weekends and over the Christmas Holiday all in his locality. The job was Monday to Friday so there was no need to use the card at the weekend. He confirmed that cash withdrawals on the card were never sanctioned. The trust was broken and that was why he decided to dismiss the Complainant.

Under cross examination from the Complainant the witness confirmed that he had asked the Complainant to liaise with the garage about getting the van back on the road. He accepted that the Complainant had made one contact with the garage. In respect of the credit card, he accepted that he had not given written guidelines around the use of the credit card but stated that he had given strict verbal instructions. He also confirmed the Complainant was the only employee with a company credit card.

4 Summary of Complainants submission

The Complainant submitted that when he took up employment, he had to put a lot of time and effort into compiling a sales brochure and creating a list of customers by going back through customer invoices. Once he had this completed, he had to collate and resize images for the website so the opportunity to meet the targets did not arise at that time. In relation to the van, he only became aware it was damaged when he was driving it and noticed it was pulling to one side. He submitted that he could only summarise that something had backed into it at a service station whilst he was in the garage. Concerning the credit card, he was never provided with any parameters in respect of the use of the credit card and was never provided with any written terms of employment. The Complainant stated that he used the credit card to get lunch on days he did not stop for lunch. The pub near where he lives is well known for its food and he never used the card to purchase alcohol. He rejected any suggestion that he used the company credit card incorrectly. He was called to a meeting in the office. He was not told the purpose of the meeting or that it was a disciplinary meeting that could lead to his dismissal. It was put to him at the meeting that he had used the card to buy cigarettes and the lotto. He stated that if he had used the card for that it was an honest mistake, and he would repay the money. In relating to the dating sites, they were free, and email was only used as a verification method. Following his dismissal, he struggled to get a new job as he couldn’t ask the Respondent for a reference. He confirmed that he eventually got a job in June 24 with a net salary of €3,000 per month and that he was looking for compensation and not reinstatement or re-engagement as there was no relationship left.

5 The applicable law

Section 6(1) of the Act states.

“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 the circumstances, there were substantial grounds justifying the dismissal”.

6 Discussion and Decision

The Respondent opened to the Court the case of Allied Irish Banks plc v Purcell [2012] 23 EL 189 where Linnane J stated as follows:

“The correct test is: Was it reasonable for the employer to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair.  But if a reasonable employer would have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably takes a different view”

[quoting Lord Denning MR in the UK Court of Appeal case of British Leyland UK Ltd v Swift]

It is clear that it is not for the EAT or this Court to ask whether it would dismiss in the circumstances or substitute its view for the employer’s view but to ask was it reasonably open to the respondent to make the decision it made rather than necessarily the one the EAT or the Court would have taken”

It is not in dispute that no procedures were followed in coming to the decision to dismiss and that no meetings had taken place in advance of the meeting where he was dismissed. The Complainant was deprived of the opportunity to advance his reasoning for not reaching the sales targets. While his response to concerns about the damage to the van based on the photographs of the damaged vehicle provided to the Court lacked credibility, this was only raised with him once the credit card statements became an issue despite happening some months earlier. The Complainant was not afforded an opportunity to give an explanation for the credit card spendings or to set out his understanding of what the arrangement was in circumstances where there were no agreement or written policies in respect of the use of same. In the case law cited by the Respondent the failure to follow procedures or the fact that the procedures were flawed were found on some occasions not to be fatal to whether on balance fair procedure had been followed. However, in this case contrary to S.I. No 146/2000 Industrial Relation Act 1990 (Code of Practice On Grievance and Disciplinary Procedures), the Complainant was not afforded an opportunity to answer the charges against him instead he was called to a meeting and dismissed. On that basis the Court determines that the dismissal was unfair.

The Court having heard from both parties finds that neither reinstatement or reengagement are appropriate remedies in this case and that the appropriate remedy is compensation.

The Complainant’s earnings at time of dismissal were €769.23.  He was unemployed from date of dismissal until June 24 a period of 12 months. When he took up employment in June 2024 his earning were €3,000 per month net.  time fixed-term contract.

The Court is satisfied that total financial loss attributable to the dismissal is the sum of €40,000. This sum must, however, be assessed in the light of the provisions of Section 7(2) of the Acts in order to determine the compensation payable.

With regard to the provisions as set out in Section 7(2) of the Acts, the Court is satisfied that the dismissal of the Complainant was carried out in a manner which was entirely devoid of any process, fair or otherwise. However, the Court is satisfied that the conduct on the part of the Complainant, as envisaged by subsection 2(f) of Section 7, contributed to the dismissal.

With regard to the duty to mitigate, as envisaged by Section 7(2)(c), the Court received little or no evidence of same from the Complainant during the hearing.

Having regard to the above, the Court is satisfied that the total financial loss sum should be reduced by 30% to reflect the measures adopted by the Complainant to mitigate his loss and a further 48% to reflect his contribution to the dismissal. The Court therefore measure the compensation payable to the Complainant to be the sum of €8,800.

The appeal is upheld. The decision of the Adjudication Officer is varied accordingly.

The Court so determines.

	Signed on behalf of the Labour Court
	Louise O'Donnell
AM	______________________
6 January 2026	Chairman

NOTE

Enquiries concerning this Decision should be addressed to Ms Áine Maunsell, Court Secretary.