High Court of Ireland Decisions

1. The Plaintiff is the holder of a Diploma in Hotel Management and has been employed in the hotel industry for most of his working life. In February 1990 he was offered the position of General Manager of Shannon International Hotel, which at the time was owned by Aer Rianta and he was then employed by them under the terms of a written contract dated 8th February, 1990. I will deal with the specific terms of the contract below.

2. Not long afterwards, the hotel changed hands and became part of the Great Southern Group owned by the Defendant, and its name was changed to “Great Southern”. It became one of a group of hotels owned by the Defendant, and the Plaintiff’s position became part of the Defendant’s management structure.

3. While the Plaintiff’s appointment was to the Shannon Hotel, he was in fact asked to and agreed to move to the position of General Manager of the Great Southern Torc Hotel in Killarney where he remained for several years. In 1997 he resumed his position as General Manager of the Great Southern Shannon, again under the terms of his original contract.

4. The administrative structure of the Defendant at the relevant time was that Mr. Eamon McKeon was Chief Executive with overall responsibility for all the hotels with several managers reporting to him, each of whom was responsible for their particular aspect of management for all hotels in the group. In particular, Mary McKeon was Group Operations Manager and Catherine Cronin was Sales Manager. As General Manager of the Shannon Hotel, the Plaintiffs immediate superior in relation to the operation of the hotel was Mary McKeon.

5. These proceedings arise out of the purported dismissal of the Plaintiff by the Defendant as General Manager of the Hotel, which took place by letter dated 24th February, 2001.

6. The contract was contained in a letter dated 8th February, 1990 from the Assistant Chief Executive of Aer Rianta, the Plaintiff’s employment to commence on 19th March, 1990. It contained most of the normal provisions of such a contract, including a specific provision in relation to a bonus. The relevant clause for the purpose of these proceedings is headed “Notice of Termination of Employment”, which reads:-

7. This clause is notable for several reasons. Firstly, the contract was not for any fixed period, and the notice provision refers to an intention to extend the employment up to 65 years of age, but does not state in so many words that it is an appointment for that length of time. Secondly, it permits termination of the contract by six months notice for good and sufficient reason, without in any way indicating what is meant by that phrase. Thirdly, nowhere in either the agreement in general nor in the termination provision in particular does it contain any disciplinary provisions or any reference to misconduct.

8. It is quite clear that commercially the hotel had not prospered since the Plaintiffs return in 1997. There is no doubt that at least part of the reason for this was the lack of any efficient sales personnel attached specifically to this hotel. There had been several appointments to that position, but the appointments had proved short lived, and there had been several periods in which there was no Sales Assistant. Ultimately in March 2000 Ms. Denise Hickey was appointed by the Plaintiff, with the approval of his superiors, to this position at an annual salary of £15,000. In the second half of the year 2000, probably due to a considerable extent to Ms. Hickey’s efforts, the business of the hotel increased considerably. Unfortunately, and I am quite satisfied on this point on the evidence of Ms. Hickey herself, she was working under some considerable difficulties. She was not allocated an office of her own, which was the matter of a number of complaints by her, and she was asked to undertake some secretarial and administrative duties which not only were not part of her job, but also took away from the time available to her for sales. I am also satisfied that, while the Plaintiff may not have fully realised it, Ms. Hickey was not comfortable working with the Plaintiff and felt intimidated by him. The outcome of all of this was on 12th January, 2001 she submitted her resignation in writing.

9. The events of this weekend are of vital importance to the case, and there has been some conflict of evidence as to what exactly took place. I have listened carefully to all the witnesses concerned, and I think that on the balance of probabilities the following is an account of the events of those days.

10. On the afternoon of 12th January, Ms. Hickey told the Plaintiff that she was resigning and handed him her letter of resignation. He made very little comment except to say he was sorry to hear it, and did not ask for the reason for her resignation. Later that evening Mary McKeon called to the hotel and was told by the Plaintiff that Ms Hickey had given her notice. By this time, her resignation was common knowledge in the hotel, and it appears to have been generally rumoured that she had left for a job which was paying double her then salary. A discussion then took place about the value of Ms. Hickey to the hotel and Mary McKeon’s evidence is that she gave the Plaintiff an instruction to talk to Ms. Hickey and to try and persuade her to stay. The Plaintiff's account is that he suggested that he should contact Ms. Hickey, and that no instruction as such was given to him. Indeed, his evidence was that the hotel did not operate by a regime of formal instructions, but rather by consensus. I am satisfied that, whoever may have initiated the suggestion, there was not only an agreement between the Plaintiff and Ms. McKeon that he would approach Ms. Hickey personally, but that this was the strategy to try to get her to stay which was agreed between the Plaintiff and his superior and which he undertook to his superior to put in place.

11. It is common case that the Plaintiff did not in fact talk to Ms. Hickey personally. Instead, he spoke to another employee, a Ms. Denise Glendenning, who he believed was a friend of Ms. Hickeys, and asked Ms. Glendenning to speak to Ms. Hickey to find out why she was leaving. This conversation probably took place on the Friday evening. On the following Monday, 15th January, Ms. Glendenning’s evidence is that she met Ms. Hickey during the coffee break and had a cup of coffee with her and Ms. Hickey told her she had a new position with a better package of £30,000 a year and certain other benefits. Ms. Glendenning did not make any effort to persuade her to stay, nor had she been asked to, and reported back later on the Monday to the Plaintiff. Ms. Hickey says she does not recollect such a conversation ever taking place, but on balance I think it probably did in a very informal way. I certainly accept that Ms. Hickey was not told that any enquiries were being made of her on behalf of the Plaintiff.

12. Later on the Monday Mary McKeon telephoned the Plaintiff to find out what had happened. I am quite satisfied on the evidence that the Plaintiff told her that he had talked to Ms. Hickey and further told her that Ms. Hickey was not going to stay.

13. On 26th January Mary McKeon sent a four page memorandum to the Plaintiff concerning a number of issues which she said were causing her and Eamon McKeon concern and needed to be discussed with the Plaintiff. The issues referred to can briefly be summarised as follows:-

14. The Plaintiff was requested to attend a meeting at the Great Southern Hotel in Dublin Airport on 5th February to discuss these matters. In the course of the letter it was stated that following a meeting of 29th June, 2000 in relation to Ms. Hickey, “You left us in no doubt that you fully understood the consequences for the hotel and for yourself if her appointment did not work out”. It was also stated that “Eamon and I had made it very clear to you what the consequences were for you of not maintaining sales continuity”. The memorandum ended as follows:-

15. On the morning of 5th February the Plaintiff indicated that he intended to bring his solicitor to the meeting, and accordingly the Defendants also arranged to have its solicitor present. At the meeting, therefore, were the Plaintiff, his solicitor, Mary McKeon, Eamon McKeon and the Defendant’s solicitor. As well hearing evidence from the people concerned in relation to the meeting, I have been furnished with the attendances taken by both solicitors. Before the meeting the Plaintiff had been advised by his solicitor to say as little as possible.

16. At the outset of the meeting the Plaintiff’s solicitor asked what was the purpose of the meeting, and was told that it was to discuss the issues raised in the memorandum of 26th January. She then complained that the memorandum lacked coherency and that she was not clear what issues were to be discussed . After some short time Eamon McKeon stated that the meeting was a disciplinary meeting but that if satisfactory answers were given by the Plaintiff the matter would not go any further. He conceded that he had not given written warnings to the Plaintiff in the past, but emphasised that he had raised concerns about the Plaintiff’s performance at meetings. Eamon McKeon then sought to question the Plaintiff in relation to the events of 12th to 15th January. Initially the Plaintiff objected to being questioned and then said that he did not get any instruction because it was his suggestion that he would meet Ms. Hickey and that although he did not meet her, he spoke to a friend of hers. He then said he was not prepared to discuss it any further. The atmosphere at the meeting appears to have been very fraught and it broke up with no conclusion having been reached, although the Plaintiff was offered a further meeting should he request it. At the meeting the Plaintiff had also asked that the matter should be adjudicated upon by the chairman of the company, who was not an executive, and that Ms. Hickey and Mr. McDonald should be present to give their account of what was alleged to have taken place.

17. Over the next two weeks a number of letters were exchanged. Unfortunately, as is frequently the case, they only served to harden attitudes, and ultimately by a letter dated 24th February, 2001 from Eamon McKeon to the Plaintiff the Plaintiff’s employment was terminated with effect three months from the date of the letter. The Plaintiff was also told:-

18. Nothing was done by the Plaintiff in relation to an appeal, and in a letter dated 14th March, the Defendant’s solicitors stated that they assumed that he was not lodging an appeal. The Plaintiff never appealed nor sought to do so.

19. The Plaintiff acknowledges, although his letter of appointment does not so state, that there could be circumstances which would justify his instant dismissal or his dismissal other than under the termination clause in the contract. However, he maintains that nothing took place in the present case could possibly justify such dismissal.

20. In relation to any purported dismissal under the terms of his contract, the Plaintiff argues that prima facie he was entitled to employment until retiring age, and that if the termination provision in his contract was to be relied upon, natural justice must apply to the procedures which would precede such termination. He contends that natural justice was not complied with by the Defendant in that he was not told that the meeting of 5th February was to be a disciplinary meeting, he was not given any documentation in relation to the complaints against him, he was not given any warning and, very importantly, the person making the decision, namely Eamon McKeon, was in fact one of the complainants against him and had had an admitted input into the drafting the memorandum of 26th January. The Plaintiff maintains that under those circumstances he could not and did not get a fair hearing.

21. Finally, while the Plaintiff contends that his contract cannot be terminated other than under the specific termination clause, and that he is entitled to employment until the age of 65, he puts forward an alternative argument if that should not be the proper construction of his contract. While he accepts that twelve months notice is normally the maximum implied where employment may be terminated on reasonable notice, he makes the case that the terms of his specific contract are such that, if reasonable notice applies, that notice must be quite lengthy. If he is entitled to as long as six months notice where there is good and sufficient reason to terminate his contract, then, if there is no good and sufficient reason, but an implied right to terminate on reasonable notice, that notice must be construed as being considerable in excess of the six month period, and it is suggested it should be a minimum of two years.

22. The Defendant’s primary case is that on the facts the Plaintiff disobeyed a direct instruction from a superior, and this in itself merits instant dismissal. In this regard reference is made to Pepper -v- Webb (1969) 2 ALL E.R. 216 where a gardener refused to obey his employers instructions in relation to certain plants, and it was held that this, coupled with insolent remarks by the Plaintiff justified instant dismissal. This case was approved of by Hamilton J. as he then was in an unreported judgment of 8th February, 1978 in the case of Brewster -v- Burke & Anor . The Defendant further argues that even if instant dismissal was not justified, there clearly was good and sufficient reason in the circumstances of the present case to give notice to the Plaintiff, taking into account the poor performance of the hotel under his management, the specific incident with Ms. Hickey and the Plaintiff’s subsequent attitude. They point out that, by the time the Plaintiff was actually dismissed, all trust and confidence between the Plaintiff and the Defendant had disappeared and it would be impossible to continue the Plaintiff’s employment under those circumstances. They contend that this in itself constitutes good and sufficient reason to terminate the employment.

23. I have already referred to Pepper -v- Webb and Brewster -v- Burke. I would point out that both those cases were decided over twenty years ago, and it could certainly be argued that they do not represent the law as of today. Employment law has developed very considerably over those years.

24. There is no doubt that some at least of the principles of natural justice must apply to a situation where an employee is being dismissed for misconduct. In Glover -v- BLN Limited [1973] I.R. 388 Walsh J. said at p. 425:-

25. In the present case there was no procedure laid down for the conduct of any disciplinary procedures against the Plaintiff, although there were quite detailed procedures in relation to more junior members of the staff. That situation was addressed by the Supreme Court in Mooney -v- An Post [1998] ELR 238, where Barrington J. giving the Judgment of the Court said at p. 247:-

26. Finally, there is authority that a claim that employment is permanent in the sense of being continuous for life or until a pensionable age is not sustainable at common law and that in those circumstances the Plaintiff’s employment is permanent only in the sense of being for an indefinite period terminable by reasonable notice. Walsh -v- Dublin Health Board 98 ILTR 82.

27. While the Plaintiff’s contract is a somewhat unusual one in relation to its termination, I have very little doubt as to its true construction. I do not think that this was ever intended to be a contractually binding contract of employment until the Plaintiff reached the age of 65, particularly in the light of the commencement of the relevant clause with the words “it is intended that”. In my view this was a contract which could be terminated on reasonable notice by either party at any time. The contract then provides that it may be determined on six months notice “for good and sufficient reason”. I think this phrase is of considerable importance, as it does not in my view either expressly or impliedly limit the right to give notice to cases where there has been some form of misconduct. I think, had that been intended, it would have been very clearly stated. Accordingly, in my view this contract may be determined by six months notice for any good and sufficient reason, whether it be related to the Plaintiff’s misconduct or to the general relationship between the parties. I also am quite satisfied that, like most contracts of employment, there is an implied condition that the contract may be determined without notice for serious misconduct.

28. The question then arises as to whether there was serious misconduct in the present case. I am satisfied on the evidence that the Plaintiff was either given a specific order or at least there was an agreement between himself and his superior officer, namely Mary McKeon, that he would personally approach Ms. Hickey, would seek to find out from her the reasons for her letter of resignation and would seek to persuade her to remain in the Defendant’s employment. I am further satisfied he did not do this, and that he told Mary McKeon he had done so. I think it matters little whether this was an express instruction or a course of action which he undertook to his superior to carry out. He certainly lied to her about it and this is a very serious matter. It should be noted that the Defendant does not rely solely on this episode as grounds for dismissal, in that it also points to the Plaintiff’s attitude in the days following the incident, in which he showed little or no co-operation with the Defendant, and were it not for the fact that this was clearly done on his solicitors advice, I would treat it as a most serious matter. I do not think any of the other matters which were ultimately taken into account by the Defendant could conceivably justify immediate dismissal, and I therefore would propose only to consider the Plaintiff’s behaviour in the relevant incident in this regard. I have considered the statements set forth in Pepper -v- Webb but on balance I do not think that they apply to the present case. The Plaintiff here was a senior employee, and, as is shown by the fact that the disciplinary procedures agreed by the company with the trade unions did not apply to him, I think he deserved to be treated slightly differently from the average employee. While what took place between the 12th and 15th January undoubtedly was misconduct on his part, I do not think in the circumstances of the present case that it was sufficient misconduct to justify instant dismissal. I think I should also say in fairness to the Plaintiff that I think the Defendant’s handling of the subsequent disciplinary proceedings was unnecessarily heavy handed, and both parties were to blame for the subsequent deterioration of relations.

29. Having said all of that, however, I am quite satisfied that the totality of matters complained of against the Plaintiff did constitute good and sufficient reason to terminate his employment. The results of the hotel had been bad for several years, I am satisfied that the Plaintiff had been made aware of the disquiet of the Defendant as to his management of the hotel, and I am also satisfied that he was well aware of the importance of the employment of Ms. Hickey in turning around the results. I do not know why he pursued the course he did on 12th January, but it was clearly a serious breach of his obligations to the Defendant, which was compounded by his telling lies afterwards. In addition, all normal relations between the Plaintiff and his superiors in the Defendant had disappeared to the extent that it would have been virtually impossible for them to have worked together. I am satisfied that the Defendant was perfectly entitled to serve notice on the Plaintiff pursuant to the relevant clause in his contract of employment on the basis there was good and sufficient reason to terminate it.

30. The only other matter to be considered is whether fair procedures were observed in the Defendant’s dealing with the Plaintiff. Apart from earlier discussions about his management and about Ms. Hickey, the Plaintiff was given a four page document setting out a number of complaints against him. He had that document for ten days and obtained legal advice on it. He was invited to, and did, attend a meeting with his legal advisor present. He was asked to explain the matters complained of in the memorandum and was given ample opportunity to do so, which he declined. He was offered a further meeting should he wish it, and was informed that he could appeal any decision made.

31. He complains that at the meeting he had asked for certain financial records to be produced, but in my view this could not be a valid complaint as he must have been well aware of the financial records of the hotel himself. He complains that he asked that Ms. Hickey and Mr. McDonald be present to give their account of what had happened in relation to the two incidents complained of. However, he had had the letter of complaint for ten days before the meeting and did not make this request until he was actually present at the meeting. He complains that Eamon McKeon was effectively the decision maker, and was also one of the complainants. There might be some merit in this complaint were it not for the fact that he was offered an appeal, and did not even respond, and indeed gave evidence that immediately after the meeting on 5th February he had decided to issue these proceedings.

32. For these reasons I am quite satisfied that there was good and sufficient reason to terminate his employment, but he was not given the requisite six months notice. This was undoubtedly a breach of his contract, but one which in my view only entitles him to damages amounting to six months gross salary. As he was entitled to notice under the express contractual provision, in my view the six months gross salary must include all benefits, which I understand amounts to the sum of £29,752.00. The Plaintiff has also claimed general damages and has produced evidence of medical treatment for an episode of depression after the termination of his agreement. Somewhat reluctantly, I would accept that the Defendant did not follow the proper procedures in terminating the contract, as they did not purport to use the contractual provision that they were terminating for good and sufficient reason, but rather purported to terminate his employment on the basis there had been serious or gross misconduct. I would accept that this did cause some distress to the Plaintiff and that it probably was the cause of some short term depression, but in view of the fact that the Defendant was entitled to determine on six months notice I think this can have caused very little specific damage to the Plaintiff. I would be prepared to award him a further £2,000.00 in general damages. Accordingly, there will be a decree for £31,752.00, but of course credit must then be given for all monies which have been paid to the Plaintiff since the termination of his contract.