The Workplace Relations Commission (“WRC”) case of Paul Burke v Dungarvan Insulation Limited ADJ-00035692 involved a number of complaints under the Unfair Dismissals Acts, the Minimum Notice & Terms of Employment Acts, the Protection of Employees (Fixed Term Work) Act, and the Payment of Wages Act 1991.In a decision dated 10th July 2023, the Adjudicator, Mr Seamus Clinton, found that the Complainant was unfairly dismissed, and that the Complainant had not been afforded the requisite minimum notice. The Adjudicator did not uphold the complaints relating to the Protection of Employees (Fixed Term Work) Act 2003 and the failure to make payments in relation to sales commissions and accrual of annual leave under the Payment of Wages Act 1991.
Facts: The Complainant was employed by the Respondent on an informal basis from 4th August 2020, and on a formal basis from 2nd November 2020 on a three-month contract which was extended thereafter although not formally renewed. The Complainant continued to work for the Respondent on the same terms and conditions until he was dismissed on 20th August 2021. On 20th August 2021, the Respondent contracted the Complainant to say that his employment was being terminated and requested that he return the company van that morning. The Complainant was given just two hours’ notice that his employment was ending and there was no procedure in place for him to respond.
At the WRC, the Complainant argued that he was working under an implied contract of employment from his first day of employment, 4th August 2020, meaning that he satisfied the one year’s service requirement under the Unfair Dismissals Acts.
The Respondent argued that the Complainant did not have a year’s service, as the Complainant’s formal contract of employment only commenced on 2nd November 2020. The Respondent also denied that the Complainant was owed monies for sales commission and annual leave. The Respondent submitted that the reason for the Complainant’s dismissal was due to a customer complaint. The Managing Director, Mr Power, confirmed that he ended the Complainant’s employment without investigating the complaint, nor did he offer the Complainant an opportunity to reply. He confirmed that the Respondent did have a disciplinary procedure, but it was not followed. No notice was given to the Complainant in respect of his dismissal.
Decision: The Adjudicator firstly addressed the issue of whether the Complainant had sufficient service in accordance with section 2(1)(a) of the Unfair Dismissals Act. The Adjudicator noted that “[i]t is common case that an employment relationship can exist as an implied contract without the formalities of a contract.”
The Complainant had given evidence of emails, sales sheets, work activity and other communications with the Respondent from July 2020, and there was email evidence that there was an employment relationship from August 2020. There was conflicting evidence as to whether the Complainant was paid by the Respondent from August 2020, however it was established that he was paid travel and lunch expenses. The Adjudicator held that in the circumstances, he was satisfied that the Complainant’s employment began in August 2020 and accordingly he met the one year’s continuous service requirement under the Unfair Dismissals Acts.
The Adjudicator then proceeded to consider whether the Complainant’s dismissal was an unfair dismissal within the meaning of the Unfair Dismissals Acts. The Respondent confirmed to the WRC that the Complainant was dismissed on the spot, and that no investigation into the customer complaint took place. Furthermore, the Complainant was not afforded the opportunity to reply to the complaint. There was no evidence of the Complainant having any performance or misconduct issues in the course of his employment. While the Respondent company did have a disciplinary procedure, it failed to follow its own procedure in this case.
The Adjudicator noted that in the circumstances, the approach taken by the Respondent was “extreme” and found that due to the lack of fair procedures and due process, the Complainant was unfairly dismissed. As there had been a breakdown of trust and confidence between the parties, the Adjudicator decided that compensation would be the most appropriate remedy in this case. The Adjudicator considered the extent to which the Complainant had made efforts to mitigate his loss and the Respondent’s submission that his efforts fell short of what was required. The Adjudicator decided that due to the Covid-19 pandemic, “I do not see the complainants attempt to seek work at this time as being particularly unusual.” The Adjudicator awarded the Complainant €11,960, totalling five months’ pay, as compensation for his unfair dismissal.
The Adjudicator went on to consider the Complainant’s claim under the Minimum Notice and Terms of Employment Acts. He referred to section 4 (2) which provides that:
“The minimum notice to be given by an employer to terminate the contract of employment of his employee shall be—
(a) if the employee has been in the continuous service of his employer for less than two years, one week”
As the Complainant was dismissed without notice, the Adjudicator upheld his claim for minimum notice and directed the Respondent to pay the Complainant one week’s pay as compensation.
Takeaway for Employers: This case highlights two important points for employers. The absence of a formal contract of employment does not diminish an employee’s employment rights and length of service accrued. Evidence of an employment relationship including correspondence and payments for work and expenses may be sufficient to demonstrate the existence of a contract of employment for the purposes of the Unfair Dismissals Acts. Interestingly, the Adjudicator in this case was satisfied that an employment relationship existed notwithstanding the conflict of evidence regarding whether or not the Complainant was paid during August, September and October 2020.
Secondly, this case emphasises the importance of due process and fair procedures in the employment relationship. An employer is obliged to follow fair procedures and should adhere to their disciplinary procedures when dealing with issues such as complaints or allegations of misconduct. Failure to do so may result in a finding of unfair dismissal.
Link – https://www.workplacerelations.ie/en/cases/2023/july/adj-00035692.html
Authors – Jane Holian, Jenny Wakely, Anne O’Connell