Severance Offer During Performance Management Process Leads to Constructive Dismissal
Background
The Complainant was employed as a Senior Client Manager from August 2022 until she resigned from her employment in January 2024.
The Complainant claimed constructive dismissal, failure to receive payment for annual leave entitlement and failure to receive statutory minimum period of notice on the termination of her employment or payment in lieu thereof.
The Respondent disputed the Complainant’s claims in their entirety.
Summary of Complainant’s Case
The Complainant was invited to a meeting which took place on 26 September 2023 with the Respondent’s Chief Accounting Officer.
The Complainant was informed that she was going to be placed on a Performance Improvement Plan. There had been no advance warning of this process, and no reason to expect that such a process would be invoked against the Complainant. The Complainant was provided with a copy of a Performance Improvement Template. The language, the reprimands, and the corrective actions stated in the document were vague.
The Complainant submitted there were no clear measurable or tangible goals as would normally be expected from a detailed and meritorious performance improvement plan. No specific examples of poor performance were provided and the plan in general was unclear and ambiguous. The Complainant argued that the paperwork was hastily drafted and did not accurately reflect a viable Performance Improvement Plan.
The Complainant gave evidence outlining that she was required to attend a meeting at short notice in October 2023 during which she was offered a voluntary severance package of two months’ salary payment together with a €5,000 ex gratia payment. The Complainant’s contract provided that three months’ notice should be given by either party to terminate the employment relationship. The Complainant submitted that the offer was below her contractual entitlement.
The Complainant submitted that she was alarmed by the sudden offer, instructed to have an answer to the offer by lunchtime that day and told not to contact any of her clients. This was an intimidating experience for her.
The Complainant identified that there was clear proximity between the initial PIP meeting and the voluntary severance package. The Complainant’s solicitors wrote to the Respondent alerting them to the deficiencies in the PIP process as well as the Complainant’s distress at their treatment. The Complainant was absent on medical leave since she received the unexpected offer due to workplace stress.
The Respondent’s solicitors replied by letter and claimed that the PIP had been introduced to address alleged deficiencies in the Complainant’s performance over recent months. The “deficiencies” were not explained and no detail of an alleged client complaint concerning the Complainant were provided.
Further legal correspondence between the parties including a Data Subject Access Request reached no resolution and the Complainant instigated WRC proceedings claiming constructive dismissal.
Summary of Respondent’s Case
The Respondent submitted that following a series of client complaints made about the Complainant, it deemed it necessary and appropriate to invoke its performance management process.
The Respondent submitted that within a matter of days of the initial PIP meeting, a further customer complaint was raised, and a further meeting was scheduled with the Complainant. Following that meeting, the Complainant commenced a period of absence, which for a period was uncertified, with certain back-dated medical certification arriving to the Respondent in late January 2024.
The Respondent submitted that the Complainant did not raise a grievance internally within the Company and that the Complainant’s ongoing absence prohibited it from commencing an investigation into the alleged client complaints. The Respondent submitted its legal correspondence which repeatedly stated its willingness to commence an investigation, and to reconvene the PIP process once the Complainant had returned to work.
Following the exchange of legal correspondence, the Respondent submitted that the Complainant did not reply to queries raised and ultimately resigned her employment by letter dated 30 January 2024.
Findings and Conclusions
The Complainant sought to rely on the Respondent’s actions, namely the explicit threat of termination of employment, failure to investigate or provide details of the alleged client complaint, breach of fair procedures with respect to the PIP and the conduct of the October meeting all of which were cited as being in breach of the contract test.
The Adjudicator opined that there was a great deal of confusion in respect of the PIP and in some ways the PIP appeared to have morphed into a disciplinary procedure as the Complainant understood the scenario.
The Adjudicator noted that the Complainant did accept that performance deficits had in fact been raised with her under cross-examination when a number of specific examples were put to her.
The Adjudicator was of the view that a PIP is business-driven and a business-led initiative. It is not standard practice that the full panoply of fair procedures afforded in the context of a disciplinary procedure apply in regard to the conduct of a PIP. For example, the Adjudicator noted that it would be extremely rare if not unprecedented that an Employee would he provided with the right to be accompanied for a PIP meeting.
The Adjudicator made the point that prior notice of the PIP meeting should have been provided to the Complainant so that she herself could have prepared in advance. The failure to do so however did not constitute a repudiatory breach of contract or such behaviour that would make it reasonable for the Complainant to terminate her employment.
The Adjudicator focused on the agreed facts which were that the Complainant was offered two months’ notice and €5,000 to exit the company. The other disputed facts were immaterial to the finding. This offer was the defining moment where the employment relationship between the Complainant and the Respondent was unequivocally and unambiguously damaged by the Respondent’s severance proposal.
Blindsiding an Employee by inviting her to a meeting at short notice, unaccompanied, and offering two months’ pay and €5,000 to exit the company was deemed to be an action that goes to the very root of the relationship between an Employer and Employee and utterly undermined the implied term of trust and confidence. The Adjudicator therefore found the Complainant had satisfied the contract test and the reasonableness test required to establish a constructive dismissal claim.
Furthermore, summoning the Complainant to a meeting which was three working days after she had been placed on the PIP was deemed to be the embodiment of unreasonable behaviour on the part of the Respondent.
It was noted that the Complainant did not raise a grievance. However, it was also noted that the Respondent’s Employee Handbook did not contain a grievance procedure and the Complainant’s contract made no reference to a grievance procedure. The Complainant’s failure to raise a grievance was not therefore fatal to her complaint as there were no “internal remedies made available to her.”
On the evidence, the Adjudicator found that the Complainant was unfairly dismissed.
Decision
The complaint of constructive dismissal was well-founded and redress of €17,917.50 was deemed to be just and equitable compensation for the unfair dismissal.
Recommendations
In this case, the Respondent made its severance offer to the Complainant without prior notice and only three days after initiating a performance improvement plan. In the circumstances, the Adjudicator deemed the Respondent’s actions to be unreasonable and irrevocably damaging to the relationship between an Employer and Employee.
In general, Complainants making a constructive dismissal claim must access their Employer’s grievance procedures to resolve the complaint or circumstances that forced them to resign. Although the Complainant in this case did not raise a grievance, the Respondent’s Employee Handbook did not include a grievance procedure and the failure to raise a grievance was not therefore fatal to her complaint as there were no “internal remedies made available to her.”
Organisations seeking to resolve an employment-related impasse should also note that direct offers made to an Employee to terminate employment may later be admissible in WRC proceedings as evidence.