Constructive Dismissal - What Gets an Employee Over the Bar?

Where claims of constructive dismissal are made, it can often be difficult to predict the outcome. Muireann Coveney of McCann FitzGerald assesses what gets the employee over the bar in such cases.

Statute and Tests

Constructive dismissal is defined in the Unfair Dismissals Acts 1977 – 2007 as “the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”.

The statutory definition contains two tests either or both of which may be argued by an employee:

1. The “contract” test. Here the employee claims an entitlement to resign on the basis that there has been a significant breach of contract by the employer which goes to the root of the contract or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract;
2. The “reasonableness” test. Here the employee claims that it was “reasonable” for him to resign.

The EAT often does not divide its analysis so neatly as between the two tests.

The employee bears the burden of proof as to dismissal and, therefore, goes into evidence first at an EAT hearing. The EAT examines the conduct of both the employee and the employer, although more focus will be on the employer. While employees are generally expected to invoke the employer’s grievance procedure in an effort to resolve their grievance before resigning, in sufficiently serious circumstances, this may not prove fatal to a constructive dismissal claim.

I have set out below an analysis of recent cases where employees managed to get their constructive dismissal cases over the bar and cases where employees fell short of this threshold.

Over the Bar

In Laird v Health Service Executive, the EAT focused on the fact that a member of management had attended a staff meeting at which aggression was exhibited towards the claimant personally as well as towards management following a controversial shift change (she received a premium payment to work this shift). The EAT found that what occurred at that meeting was extraordinary and the Respondent should have taken immediate action to improve the situation. In the absence of evidence to the contrary, the EAT found that it was credible that the claimant had suffered from being isolated and bullied within the workplace and they further found the claimant had suffered by the Respondent’s failure to properly investigate the allegations made for the period of a year. The Tribunal awarded €28,536.

An award of €28,000 was made in favour of the employee in Glynn v River Island Clothing Company (Ireland) Limited. The EAT found that the individual dealing with Ms Glynn’s disciplinary hearing did not have a full grasp of her case and appeared to “rubber stamp” the investigating manager’s finding of gross misconduct. The EAT were also critical of a three-month delay in hearing Ms Glynn’s appeal.

In Carmela Simpson v The Finglas Adult and Child Centre, the Circuit Court upheld the EAT’s finding of constructive dismissal. Prior to an investigative meeting, Ms Simpson was under the impression that a “deal was done” between the employer and her union whereby, if the claimant admitted responsibility for a breach in protocol, she would not face the sanction of dismissal. On that basis, Ms Simpson made a full admission. The following day, she was informed that her only option was to resign (with some benefits) to avoid being dismissed for misconduct. The Circuit Court upheld the EAT’s finding that undue pressure to resign was put on Ms Simpson by her employer and the union. This case should be a cautionary tale for employers who believe themselves to be involved in “without prejudice” discussions with employees.

Another notable success on the employee front was Melligan v Karmarton Limited in which a sales executive successfully asserted constructive dismissal after his sales targets were trebled before any bonus would be payable. The EAT said that it was “bound to find that the contract of employment and the terms and conditions of his employment were being interfered with to such an extent that he could no longer continue in the workplace.” Mr Melligan was awarded €60,000.

The employee also reached the bar in Kane v Willstan Racing (Ireland) Limited. In that case the claimant had informed three senior managers that she felt intimidated and bullied by her new manager. The EAT found that no serious consideration was given to these matters by any of these persons and the claimant was indeed entitled to terminate her contract. The EAT also looked at the resignation of the employee under the heading of reasonableness and said that this must be considered with reference to all of the circumstances of the case and especially where there have been changes to the terms, conditions or personality of a workplace which the employee may find difficult to accept.

The decision in Derek Dooley v GE Security Ireland Holdings Limited demonstrates that the EAT will reduce the level of a compensation award where the claimant contributed to the predicament in which he found himself. Although the EAT found that the respondent had never adequately dealt with complaints of bullying and harassment, the award was only €7,500 as the claimant had refused three requests to attend grievance meetings.

Below the Bar

In Freely v Fresenius Medical Care, the EAT found that there had not been a breach of a significant term of the claimant’s contract. The EAT went on to find that the failure to invoke an employer’s grievance procedure or speak to a trusted manager about her concerns were fatal to the constructive dismissal claim. In addition, the EAT found that the employee had not allowed enough time to pass to firmly establish whether her superior’s behaviour towards her was as detrimental to her employment future as she believed.

Dunnes Stores successfully defended two recent constructive dismissal claims. In Donovan v Dunnes Stores, the EAT noted that, while a failure to use the grievance procedure is not necessarily fatal in a constructive dismissal case, the omission by the claimant to do this had greatly damaged her case. Added to that, the EAT noted the absence of medical evidence to support her contention that she suffered from work-related stress.

The second case was McCormack Core v Dunnes Stores, which involved a claimant with 32 years of service. Ms McCormack Core had sought a part-time working arrangement which had been refused but she was instead offered a flexible contract. The EAT indicated that there is a high burden of proof on an employee to demonstrate that he or she acted reasonably and had exhausted internal procedures, formal or otherwise, in an attempt to resolve the grievance with his or her employers. The EAT said that the employee would need to demonstrate that the employer’s conduct was so unreasonable as to make the continuation of employment intolerable. They found that the claimant did not meet the requisite threshold.

Finally, in the case of Garry Keogh v JTM Jumpstarters Limited, the employee failed on the basis that he had not brought his grievance to the Respondent in spite of the fact that there was no grievance procedure in place. The EAT found that this did not outweigh the claimant’s duty to have attempted all reasonable means within the company to resolve his grievances before resigning.

Conclusion

A brief review of the recent cases emphasises the importance of employees notifying their employer of their grievance, formally or informally, before resigning. For employers, the message is to address issues raised by employees quickly, proactively and fully and to exercise a degree of caution in accepting resignations immediately.