Lack of meaningful grievance process costs company over €30K in a WRC case

In the case of A Financial Controller vs a Property Development Company (ADJ-00015393), the former employee made three claims with the Workplace Relations Commission (WRC) which proved to be a costly error for the company.

The complainant began their employment as a Financial Controller from 4 July 2017 until 28 May 2018. They were paid €1,270 gross per week and worked nearly 50 hours a week. They lodged three claims under the following Acts:

 

  1. Payment of Wages Act – The former employee was owed wages from April 2018 and from the 1 to the 19 May 2018 which came to €9,350.56. They were also due 7.92 days of annual leave which came to €2,178.31. The company did not dispute this and the amount was paid back to the former employee.
  2. Terms of Employment (Information) Act – The former employee never received a statement in writing of their terms of employment which is in breach of the Act. The company did not dispute this, and they were ordered to pay the former employee €2,500 in compensation for this breach.
  3. Unfair Dismissals Act – The former employee took a constructive dismissal claim against their employer.

The Financial Controller stated they had no option but to terminate their employment based on the following factors:

  • They were hired as a Financial Controller but soon after they started, they were given additional duties from the Contracts Manager who had left. They advised the Managing Director that this was outside of their expertise, but their complaint was dismissed.
  • Two other staff members left the company and the Financial Controller was given their duties as well. When they complained about this, this issue too was ignored.
  • The employee was out sick for two days in early April and 3 days a week later. When they returned to work their access to the banking facilities was removed. This made it impossible for them to complete tasks in their role.
  • Around 10 April 2018, the managing director attempted to “misconstrue” the employee’s grievances as a resignation. They responded saying it was not a resignation but that he wanted a copy of his employment contract.
  • It came to light during the adjudication hearing that the former employee had sent an email on 17 April outlining their work issues which demonstrated that they had not resigned from their role which the company argued they had.
  • The former employee went out on sick leave due to work related stress from 30 April 2018 until they requested their P45 on 28 May. The company did not follow up on this.
  • No grievance policy was in place.
  • The company did not engage with the original letter from the former employee’s solicitor on 3 May 2018 which outlined all their grievances.  The only correspondence sent to the solicitor was a request to return back the company files, documents and keys.

The adjudicator stated in this case that the “Complainant had some serious concerns in relation to his employment” and that their employer “did not take any meaningful action to address these concerns.” The adjudication officer determined that the behaviour of the employer was unreasonable, and they awarded the former employee €30K for their losses.

Lessons for employers

This case highlights the importance of issuing either a written statement of terms of employment or contract. More importantly, employers must manage grievances that arise as ignoring these issues can become very costly and time consuming. To avoid these issues, the SFA recommends that businesses:

  • Have a grievance policy in place and ensure they act on it when they receive a complaint.
  • To be aware that a grievance can come in the form of a verbal or written complaint either by letter or email.
  • Deal with issues as they arise. Dismissing, ignoring or minimising employee issues means that the grievance will mostly likely escalate, and the working relationship will deteriorate further.
  • If an employee requests a copy of their contract or written statement of terms of employment, businesses are bound by law to issue them. It is worth bearing in mind that this case was heard before the Employment (Miscellaneous Provisions) Act came into force in March of this year and the penalties for not providing an employee their core basic terms of employment within five days of them starting employment is significantly higher both in terms of cost but also the risk of imprisonment up to twelve months.

If you would like to receive a more in-depth understanding of the recent changes to contracts or dealing with grievance issues, come to the SFA employment law seminar on the 3 October in Limerick or 17 October in Dublin where we will be exploring both issues in depth.

If you have a query or need further advice please contact Helen at helen.quinn@sfa.ie or on 01 605 1668 or visit the SFA website on www.sfa.ie/advice.

 

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