February 01, 2021
Labour Court Determination - Non-payment of an Employee’s bonus found to be an unlawful deduction.
Lee Overlay Partners Limited v Stephen Kiely [PWD2038]
This is an appeal by Lee Overlay Partners Limited against the Decision of an Adjudication Officer under the Payment of Wages Act 1991 (‘the Act’) by Mr Stephen Kiely against his former Employer. He claimed that the Respondent failed to pay him a sum of €6,300 on 31st January 2019 in respect of two bonus payments which were due from reviews in 2016 and 2017. This failure he claimed constituted an unlawful deduction under the Act.
By Decision dated 23rd April 2020, the Adjudication Officer found that the claim was well founded. The Respondent appealed the Decision on 2nd June 2020.
Background
On the commencement of his employment, the Complainant was given a contract of employment stating that he was offered future Discretionary Incentive Compensation Awards of €4,000 to be paid on 31st January 2017, €3,000 to be paid on 31st January 2018 and €3,000 to be paid on 31st January 2019 subject to meeting various conditions and targets. The Complainant met the relevant targets on 31st January 2017 and 31st January 2018 and received the appropriate payments.
On 18th January 2018, he was offered future Discretionary Incentive Compensation Awards of €3,300 to be paid on 31st January 2019 and €3,000 to be paid on 31st January 2020 subject to meeting various conditions and targets. He was informed that on the date the instalment becomes payable, each of the following conditions must be met:
-
You must be employed by the Company,
-
You have not given notice to the Company of the termination of your employment,
-
You have received a ranking of 5 or above in your most recent performance appraisal; and
-
You have not been subject to the Company’s disciplinary procedure in the preceding 12 months.
The bonus payments due from the financial years 2016 and 2017 which were due to be paid on 31st January 2019 were withheld as it was deemed by the Respondent, that he did not satisfy criteria 4. None of the remaining criteria were in dispute.
Position of the Parties
The Complainant submitted that while the Respondent alleged that he did not follow procedures in respect of an incident which occurred while he was out of the office on 19th December 2018, an investigation of the matter found that there was no breach of procedures.
Ms Mary Paula Guinness, B.L., instructed by Philip Lee Solicitors on behalf of the Respondent stated that the Complainant did not meet the relevant targets and conditions for the incentive payments which fell due on 31st January 2019 therefore he was not paid the two payments. Ms Guinness therefore, submitted that there was no unlawful deduction of wages. The Respondent alleged that the incident which arose on 19th December 2019 occurred as the Complainant unilaterally and without authorisation changed the firm’s procedures and verbally instructed those amendments to his direct report.
Ms Guinness said that all Employees were reminded on 2nd August 2018 that any breach of the Firm’s procedures would automatically result in that Employee being subject to the Firm’s disciplinary procedures. Therefore, on 22nd January 2019, the Complainant was required to attend a disciplinary meeting with management. At the conclusion of the meeting, the Firm considered that the matter had been adequately resolved and there was no necessity to progress further through the disciplinary procedure. Therefore, she argued that as the Complainant had been the subject of disciplinary procedures on 22nd January 2019, he did not meet the conditions for the awards due on 31st January 2019.
The Complainant disputed the Respondent’s contention that the meeting held on 22nd January 2019 was a disciplinary meeting, he said that he was not given notice of the purpose of the meeting beforehand, he was not informed of allegations against him prior to the meeting and he was not advised to bring a representative. All of which he contends were required by the Respondent’s disciplinary procedures. He also denied receiving minutes of the meeting. Furthermore, he was not subjected to any form of disciplinary sanction as a result of the meeting, instead he carried on his duties as normal.
Findings and Conclusions of the Court
The Act at Section 5 makes it clear that a deduction made by an Employer is unlawful except in circumstances where the Employee has given his or her prior consent in writing. Subsection (6)(a) of Section 5 of the Act provides, in effect, that where the total amount of wages properly payable to an Employee is not paid, the deficiency or non-payment is to be regarded as a deduction.
The Court noted that while the Complainant was not furnished with the minutes of the meeting, held via a conference call, it was not disputed that he was not informed of the purpose of the meeting, he was not presented with allegations of any breach of procedures prior to the meeting and he was not advised of the need to have a representative present at the meeting.
In all those circumstances, it is difficult to see how that meeting could be considered as invoking the disciplinary process. At best it could be described as a discussion in accordance with Clause 2.1 of the Disciplinary Procedure. There is no dispute that a discussion took place on that day regarding the incident which occurred on 19th December 2018, however, from the facts presented to the Court, it was clear that those discussions lead to the matter being resolved, with no further actions required. On that basis the Court was satisfied that what transpired was a “private discussion” in accordance with Clause 2.1.
The Court was of the view that Clause 2.1 of the Respondent’s Disciplinary procedure was highly significant in that situation, as it is specific on the point at which the disciplinary procedure is invoked, i.e., the point at which an Employee could be considered as being the “subject to the company’s disciplinary procedure”. It clearly states that where such discussion fails to adequately resolve the issue or where the matter is deemed as gross misconduct, the Company’s disciplinary procedure will be invoked. As the matter was resolved in the discussions which took place on 22nd January 2019, then the Court was quite satisfied that the Complainant was not subject to the Respondent’s disciplinary procedure.
Therefore, as the Court was satisfied that the criteria for payment of the bonus awards in question have been met by the Complainant, the Respondent’s failure to pay these payments which were properly payable, is a breach of Section 5 of the Act.
Determination
The Court was satisfied that the Respondent contravened the Act in respect to the Complainant. The Respondent was directed to compensate the Complainant for that breach in the sum of €6,300. The decision of the Adjudication Officer was affirmed.
Our Commentary
The Code of Practice on Grievance and Disciplinary procedures, SI 146/2000, sets out principles which must be adhered to in any disciplinary situation. It sets out the rights of an Employee which must be upheld throughout the disciplinary procedure.
This case highlights the importance for Employers to follow their own disciplinary procedures and ensuring that the policy is developed in line with the relevant Codes of Practice and best practice.
_____________________________________________________________________________
Court found in favour of Employee as the Bullying and Harassment Policy did not meet requirements
Dublin Lettings & Management v Warren Richards [LCR22330]
This is an appeal by Mr Warren Richards (‘the Complainant’) of a Recommendation of an Adjudication Officer under the Industrial Relations Act 1969 (‘the 1969 Act’).
Preliminary Issue
The Court heard the within appeal in conjunction with the Complainant’s appeal under the Unfair Dismissals Act 1977 (UD/19/170). That appeal related to a claim of constructive unfair dismissal. There is a considerable overlap in the factual matrix underpinning both appeals.
The Factual Matrix
The Complainant was employed by the Respondent as an Accounts Receivable Clerk from 3 July 2017 until he resigned his employment on 18 February 2019. He submitted that his decision to resign was as a direct consequence of bullying and harassment he sustained during the course of his employment and the Respondent’s failure to fully address that alleged bullying and harassment.
The Complainant gave evidence of the following events which he says occurred in the workplace. In or around May 2018, he says he discovered a copy of an email chain that had been left on the office photocopier. In the Complainant’s view, this correspondence made a number of direct references to him and included what appeared to be a record of a discussion amongst senior managers that proposed to administer a final written warning to him. It appears the Complainant did not take any action on foot of discovering this email.
On 31 December 2018, the Complainant found a second copy email. This had been placed on his workstation and was a conversation between his line manager (HC) and a colleague (KMcK). The Complainant found the contents of the email chain distressing and upsetting, particularly the reference which named him and suggested “Think he needs the Bullet to F***”.
According to the Complainant, the atmosphere in the office changed noticeably during early January 2019 and his relationship with his line manager, HC, deteriorated. He felt that he was being excluded from conversations in the office and talked about behind his back. He believes he heard somebody referring to his sexual orientation, for example, in extremely pejorative terms. The Complainant confronted his manager about this in order to try and resolve the situation. She accepted that inappropriate things had been said and assured him that the behaviour he complained of would cease.
Matters did not improve according to the Complainant. He, therefore, raised a complaint (verbally and in writing) against his manager to the Respondent’s Financial Controller, Mr Darragh Early. On 25 January a meeting took place between the Complainant and the Respondent’s Managing Director, Mr John Hallahan, in relation to the aforementioned letter of complaint with Mr Hallahan assuring him that the Respondent took all such matters seriously and that it would be handled appropriately. The Complainant received a copy of the Respondent’s UK Employee Handbook on 28 January and was advised that he should note that references to UK legislation should be substituted by reference to applicable Irish legislation. Having considered the procedures outlined in the Handbook, the Complainant elected to have his complaint against HC formally investigated.
The Complainant met with Mr Hallahan on 4 February 2019 to discuss the proposed formal investigation. He was informed it would be conducted by a General Manager in the UK parent company (Mr Declan Sweeney) who would be accompanied by one of the Irish directors, Mr Tom Ginty.
The complaint of bullying and harassment was not upheld as there was no supporting evidence to substantiate the complaint that the Complainant was deliberately excluded from office conversations or that any conversations where threatening, abusive or insulting language had been used occurred. Mr Sweeney further found that the email of May 2018 seemed to relate the Complainant’s work performance only. Mr Sweeney found that the second email chain cited by the Complainant was unprofessional but amounted to little more than a moan between colleagues. Mr Sweeney, however, also determined that the complaint highlighted certain issues within the office that needed to be addressed. He suggested mediation would be appropriate in this regard. He also advised the Complainant that he could relocate to the Accounts Payable Department if he was uncomfortable working with HC into the future. Finally, Mr Sweeney advised the Complainant of his right to appeal further to Mr Hallahan.
On 18 February 2019, the Complainant appealed Mr Sweeney’s findings to Mr Hallahan. The Complainant also submitted his resignation on this date. Mr Hallahan wrote to the Complainant outlining his findings on the appeal and asking the Complainant to reconsider his resignation of 18 February 2019. The appeal was not successful. The Complainant declined to retract his resignation.
The Complainant’s Submission
The Complainant submits that behaviour of his work colleagues outlined above had the purpose or effect of violating his dignity and creating an intimidating, hostile and degrading working environment for him. He felt marginalised and targeted by his work colleagues. As a consequence, he says he suffered anxiety, stress and low mood.
Reasoning and Decision
Having carefully considered the Parties’ submissions, the Court noted that although the Respondent provided the Complainant with a written policy that included both informal and formal processes to address the Complainant’s allegations of bullying and harassment in the workplace it is less than ideal that the document presented to the Complainant following his complaint does not appear to have been previously circulated amongst staff in the Dublin office. Furthermore, the document made reference only to UK legislation and Codes and did not reference relevant Irish legislation. It appears to the Court that the Complainant’s allegations were comprehensively investigated by Mr Sweeney over a two-day period during which he interviewed all relevant parties. Mr Sweeney did not uphold the Complainant’s allegations and the Complainant availed himself of an appeal of Mr Sweeney’s findings as provided for in the Respondent’s policy.
The Complainant’s decision to resign his employment on the very day that he initiated his appeal of Mr Sweeney’s findings to Mr Hallahan was, in the Court’s view, premature. On the other hand, Mr Hallahan’s direction to the Complainant to cease employment that very day and not work out his notice period is incomprehensible, particularly bearing in mind Mr Hallahan’s subsequent request to the Complainant to reconsider his decision to resign. It would have been much more appropriate for Mr Hallahan to have suggested to the Complainant on 18 February 2019 that he withdraw his resignation pending the conclusion of the appeal process that the Complainant had set in train that very day.
It has been well established in the jurisprudence of this Court that an adequate defence of a complaint in relation mishandling by an Employer of bullying and harassment issues in the workplace requires an Employer to demonstrate two things: (a) that it has in place a comprehensive Dignity at Work Policy that reflects the principles set out in the Health and Safety Authority’s Code of Practice on the Prevention of Bullying in the Workplace and that policy is effectively communicated to all staff through training, especially of managers; and (b) that it fully investigates all complaints of bullying and harassment. As noted above, the Respondent satisfies the Court in relation to (b) on the facts of this case. However, it cannot be said that the Respondent had a policy in place that meets the requirements at (a) above; neither had it provided regular and appropriate training to all staff on the implementation of such a policy. Had the Respondent done these things, the unfortunate events that culminated in the Complainant’s resignation may have been avoided.
In all the circumstances, therefore, the Court upheld the appeal and set aside the decision of the Adjudication Officer. The Court measured the appropriate compensation payable to the Complainant in light of the facts as found at €2,000.
Our Commentary
It is important for every Employer to be aware that they are obliged to provide a work environment free from harassment and bullying. Time spent on the promotion of dignity at work policies is often better than the time spent on dealing with individual complaints of bullying and harassment. Where an Employer fails to do this, they can be held liable for the effects of harassment or bullying on their Employees.
Organisation wide training on an annual basis can also enhance awareness of what constitutes bullying and harassment, Employee responsibilities and policies and complaint procedures to be adhered to.