November 01, 2022
Key Learnings
When an Employee makes a Claim of Unfair Dismissal, the burden of proof rests with them to set out the facts that show that, because of the actions of the Employer, they had no alternative but to resign.
This Case highlights that where the Employer’s conduct is proven to amount to a repudiatory breach of the Employee’s contract or to be so unreasonable that the Employee could not be expected to tolerate it, that a resignation in this context may be deemed to be reasonable, provided that the Employee can demonstrate that they too acted reasonably by using the Employer’s grievance procedure to try to resolve the issues that are threatening to lead to resignation.
The non-payment of wages by the Employer in this Case, and their failure to communicate with the Complainant, to respond to her phone calls and emails, or to give her any indication of their intentions regarding her job, was found to be a fundamental breach of contract and unreasonable conduct.
Background
The Complainant claims that her employment ended on December 16th 2021, when she was constructively dismissed, due to the failure of the Respondent – a Company engaged in sales and marketing to the Construction Industry - to uphold her terms and conditions of employment.
Summary of Complainant’s Case
Having commenced employment in June 2020, the Complainant began to have concerns about her employment when she didn’t receive her wages in July 2021. She was eventually paid for July on August 17th but received no wages after that date. She said that she heard from a colleague that the Respondent had run out of money. Despite numerous phone calls and emails, she got no response to her queries about her wages and in September 2021, she heard that the rent had not been paid in the serviced offices where she and the General Manager were based. They began working from home from then on.
The Complainant said that she continued to deal with customers’ queries. The Company had booked stands at the trade show of the Hardware Association of Ireland in the RDS and at the trade show of Architecture Ireland. She cancelled the stands that the Respondent had booked at both shows and she also cancelled advertising space in various publications. She said that she was involved in “damage control” on behalf of the Respondent, but she said that she felt that her own reputation was also at stake, because she was well-known and had been well-regarded in the Construction Industry.
Around the end of October 2021, the Complainant said that her access to the company’s computer server was cut. Through her union, she continued to seek answers to why she hadn’t been paid, and to her queries about her pension. The Respondent was on notice that the Complainant would have to resign if she was not paid her wages and if the provisions of her contract of employment were not honoured. Apart from one email she received from a Company Director in October 2021, the Complainant had no further communication from anyone in the Company. On December 16th, she wrote to the Respondent to let them know that she was resigning.
Summary of Respondent’s Case
The Respondent did not attend the Hearing and did not send a Representative.
Findings and Conclusions
In a Constructive Dismissal Case, the burden of proof rests with the Complainant to set out the facts that show that, because of the actions of her Employer, she had no alternative but to resign.
Section 1 of the Act envisages two circumstances in which a resignation may be considered to be a constructive dismissal. The first of these, referred to as “the contract test,” occurs when the Employer’s conduct amounts to a repudiatory breach of the Employee’s contract. In such a circumstance, the Employee would be entitled to resign her position.
The employment contract is grounded on a premise that trust and confidence exists on both sides; the parties agree that they will preserve and maintain the interests of the other. From the evidence of the Complainant, it is apparent that, by December 2021, she had completely lost trust in her Employer and that her contract had been repudiated.
The Adjudicator noted the conduct of this Employer in respect of their treatment of the Complainant and their view that a breach of her contract occurred when the Complainant wasn’t paid her wages, and that she was effectively abandoned by her Employer when they failed to communicate with her or to give her any explanation about why she wasn’t paid and what was happening to the company.
The Adjudicator noted that every Employee comes to work with a sense of trust that their wages will be paid. It must be the case therefore, that the most obvious and serious breach of a contract of employment is the failure of an Employer to pay the wages of his or her Employee. No Employee wants to walk away from a job, and it is evident that the Complainant did not want to do so either, making every effort, as she said to carry out a “damage control” exercise to preserve both her own and her Employer’s reputation.
Apart from the non-payment of wages, the failure of the Respondent to communicate with the Complainant, to respond to her phone calls and emails, or to give her any indication of their intentions regarding her job, was upsetting, insulting and callous.
In respect of the Complainant in this case, the Adjudicator found that the contract test was met and that the essential requirement for mutual trust and confidence was severed by her Employer and that the Complainant was justified in her decision to resign.
The second test, known as the “reasonableness test,” may be relied upon in combination with or as an alternative to the contract test. This requires the Employee to show that their Employer acted so unreasonably that they could not be expected to tolerate it and they had to resign. Reasonableness goes both ways, and the Employee is also required to act reasonably, by using their Employer’s grievance procedure to try to resolve the issues that are threatening to lead to resignation.
Many of the issues that resulted in the repudiation of the Complainant’s contract, also go to the heart of the issue of reasonableness. It was entirely unreasonable and unconscionable for the Company Directors not to respond to the Complainant’s request for information about her wages and about what their intention was regarding her job. The Adjudicator noted that the Complainant’s efforts to deal with the circumstances in which she found herself were reasonable, making strenuous efforts to seek information and enlisting the help of her union when her own efforts came to nothing. It is to the Complainant’s credit that she tried to protect the reputation of the business, when there was no reciprocation on the part of her Employer to protect her interests.
Having examined the Complainant’s evidence, and, in the absence of any rebuttal from the Respondent, the Adjudicator found that the Complainant’s contract was repudiated and that her treatment by the Respondent was disrespectful and unlawful. The Adjudicator was satisfied that the Complainant has discharged the burden of proving that it was reasonable for her to resign from her employment and that the cause of her resignation was the manner in which she was treated by her Employer.
Decision
The complaint is well-founded and the dismissal was found to be unfair. Considering the amount to be awarded in redress, it was noted that the Complainant commenced working in a new job on February 1st 2022. She was therefore unemployed for almost seven weeks. The Respondent was therefore ordered to pay the Complainant €6,730.78 – an amount equivalent to seven weeks’ gross pay.