High Court of Ireland Decisions

 


THE HIGH COURT

DUBLIN

HC 91/2004

2001 14751P

MR. SEAN SHARKEY

Plaintiff

DUNNES STORES (IRELAND) Limited

Defendant

APPROVED JUDGMENT OF MR. JUSTICE T.C. SMYTH

DELIVERED ON WEDNESDAY, 28TH JANUARY 2004

I hereby certify the following to be a true and accurate transcript of the judgment in the above-named hearing.

B. Whelan__________

Stenographer

MR. JUSTICE T.C. SMYTH DELIVERED HIS JUDGMENT, AS FOLLOWS, ON WEDNESDAY, 28TH JANUARY 2004

The Plaintiff seeks injunctive relief, declaratory relief and damages arising out of what he terms his purported termination of employment by the Defendant on either 2nd or 3rd October 2001.

The Plaintiff was born on 18th May 1953, and having completed his secondary school education he obtained his Leaving Certificate. He obtained temporary work with a Health Board for a short period and at age nineteen, in 1972, he went to work for the Defendants. In reality, he was employed by the Defendants, and no one else, for the entirety of his working life. He worked in several different locations in various capacities -- he clearly gave satisfaction to his employers and ultimately, in October 2001, he was in a managerial capacity in the Defendant's store at Ard Easmuinn, Dundalk, County Louth. At that time his gross annual salary was £46,500, holiday allowance £2,000, VHI subscription £1,400, bonus £8,000, discount vouchers £1,400, and Sunday unsocial hours allowance £1,500; total £60,800 (euro equivalent 72,200): in addition thereto, he had a company car.

The Plaintiff married in 1976 and has five children, three of whom, as of January 2003, were dependent on him, and one of the three is disabled and likely to remain so. Over the years the Plaintiff sought to improve the lifestyle of his wife and family as his financial circumstances improved over the years.

On 3rd October 2001, at 3.15pm, the Plaintiff received a telephone call from a Mr. Beggan, an Area Manager of the Defendant's, directing the Plaintiff to meet at 5.00pm at the Hotel Kilmore, Cavan. The Plaintiff was to meet Mr. Beggan and Mr. Tim O'Mahony (whom the Plaintiff knew to be the head of Personnel of Dunnes Stores). Mr. Beggan did not elaborate on the purpose of the meeting despite enquiry from the Plaintiff. The Plaintiff became apprehensive as he "had heard that on previous occasions store managers had been rung up in their store and asked to attend hotels and the outcome of the meetings were that they were let go". It seems that there was considered amongst the staff to be a "list" which existed and that the Plaintiff feared that he was now on it. He was aware that Messrs Gallagher, Walsh and Cudsaya, and several more departed the Defendant's employment in circumstances into which he was being directed to place himself. He did acknowledge that there was no "list" to which he could formally point to and accepted that there was no known policy to let people go at age fifty. The Plaintiff was sufficiently concerned about the terms of the direction that he contacted his wife to accompany him to the meeting.

On arrival at the hotel at around the appointed time (Dundalk being some 55 miles away from the specified venue), the Plaintiff and his wife were met in the hotel foyer and when the Plaintiff asked Mr. O'Mahony what was on the agenda for the meeting, he was told "you are the agenda". As this hotel was in the Plaintiff's own home town, this was -- from the Plaintiff's perspective -- a very inauspicious and embarrassing prelude to the meeting which took place immediately thereafter in a room in the hotel.

In the hotel room were the Plaintiff and his wife and Messrs Beggan and O'Mahony. The defendants have given no evidence in this case. It would appear that the only real participants in the meeting were the Plaintiff and Mr. O'Mahony. The undisputed evidence of what took place at the meeting is that of the Plaintiff himself.

The meeting began (after social introductions) by Mr. O'Mahony stating that "the company has reviewed its future plans and you are no longer part of their future plans". Despite repeated requests by the Plaintiff, who was shocked by this information, he was never told what the plans were or why he did not figure in them. He felt, as he had an unchallenged and blameless record with the company and given thirty years' loyal service, that he was at least entitled to an understandable reason to him for the termination of his employment. The only response to the explanation he was seeking was a reiteration of the statement given at the outset of the meeting. It is clear from the Plaintiff's evidence that Mr. O'Mahony spoke from a written, prepared statement. The Plaintiff was, however, assured that he was not being made redundant. It was, however, made perfectly clear to him that he was not to go back to the store in Dundalk, in which only two and a half/three hours earlier he was in a managerial position. The Plaintiff considered himself dismissed and treated unjustly -- the Defendant viewed the matter as a termination of employment, not a case of dismissal.

At the end of the meeting the Plaintiff was handed the document from which evidently Mr. O'Mahony was reading, which is dated 2nd October 2001 (which on balance I am inclined to believe was a mistake). It contains the terms and conditions upon which the Defendant was terminating the Plaintiff's employment; on it were contained the names of two persons (for whose fees the Defendant would be responsible), one of whom might assist the Plaintiff in seeking employment and the other to tender advice on taxation matters. I am satisfied that the Plaintiff was annoyed and, in his own words, "boiling with rage". Such may not have been a helpful response, but it is in all the circumstances understandable. It is accepted that at the end of the meeting Mr. O'Mahony said "same place, same time, same people" a week hence, to which the Plaintiff made no spoken reply but shook his head. The Plaintiff understood he had been given a take-it or leave-it 'deal' and felt he was merely being asked to return to sign up and conclude matters. He was not told this was an opening gambit nor did he feel that there would be any other negotiations -- he really wanted his job back and I consider he had reason to believe that that fundamental would not be addressed.

I am satisfied that the Plaintiff was really shocked at what had happened, and very angry that he -- as he saw things --- was given no understandable reason for the termination of his employment. I believe he probably considered himself out of his depth in trying to deal with a situation that made no sense to him. He immediately consulted a solicitor, whom, without writing any preliminary letter, issued proceedings and obtained an ex parte order, injunctive in character, from Lavan J on 5th October 2001, within a week after negotiations between the parties --- replaced by certain undertakings which are not in dispute, and an open letter of 11th October 2001 indicating to the Plaintiff much improved terms to those put to him at the meeting in Cavan in respect of a termination of contract as of date 1st November 2001. To the date of the hearing of the action, the Plaintiff was not replaced by the Defendant in its branch at Ard Easmuinn, Dundalk. To the date of this judgment, the offer has not been withdrawn, rejected or accepted in writing. Notwithstanding protestations of the Plaintiff to the contrary, I am satisfied that the mutuality of trust and respect to sustain a viable employer/employee relationship had irreversibly and irretrievably broken down as a result of the events of early October 2001.

Between October 2001 and January 2003, the Plaintiff apparently only made one effort to secure alternative employment, through an agency called Excel. Nothing came of that enquiry. While I accept that it is generally more difficult for a person to obtain employment at age fifty than in his twenties or thirties, I am satisfied as a fact that he did not exert himself to obtain alternative employment. A condition of the consent order in October 2001, as referred to in the letter, is that so long as the Plaintiff would have the benefit of the funds therein referred to -- until hearing of the action ---- of his salary, so long should he be available to work for the Defendant if called upon to do so. That arrangement neither precluded him from actively seeking alternative employment nor mitigating his alleged losses; in my judgment, with the exception of one attempt (which I consider to have been feeble), he did neither. When, in September 2002, there was a possibility of a job at 25,000 euro per annum, he did not accept or pursue the possibility. The Plaintiff did not seek the assistance of the person named to him by the Defendant for the purpose of securing a placement in the employment or job market. The Plaintiff did not apparently give any thought to setting up his own business if he availed of the sum on offer from the Defendants.

As of 3rd October 2001, the Plaintiff could reasonably be of the view that his employment had in the mind of the Defendant ceased on 2nd October 2001 (the date stated in the document handed over on 3rd October 2001, though, as I have already stated, I believe the date of 2nd October to be a mistake) and that the total gross package on offer to him was limited to £70,000 gross; in short, a contract that was already terminated by the Defendant without notice and on a take-it or leave-it basis. Whatever belief either the Defendant and/or Mr. O'Mahony may have had about the fact or prospects of another meeting, or what was negotiable or not, none took place, and in my judgment the Plaintiff did not in all the circumstances act unreasonably in consulting his solicitors or acting on his advice.

In my judgment, the Plaintiff's position was and is quite distinguishable from cases such as Garvey –v Ireland [1981] IR 76, Gunn -v- Bord an Cholaiste

Naisiuntea Ealaine is Deartha [1990] 2IR 168, and O'Donnell -v- Dun Laoghaire Corporation [1991] ILRM 301, where the relationship between the parties was governed by specific statutes, and in respect of Garvey and Gunn the Plaintiffs were office holders. Equally, I am satisfied that the test to be applied in the instant case is that as determined by the Supreme Court where the issue of legal liability depends on the terms of the contract between the parties; whether the Plaintiff was the holder of an office or an employee. I am satisfied and find as a fact in the instant case that the Plaintiff was at all material times an employee, and not an office holder. Mindful that the difference between employee and office holder is not the determining issue as to whether the principles of natural and constitutional justice applies (per Barrington J in Mooney -v- An Post [1998] 4 IR 288 at 297). In Mooney's case, Barrington J, at p.298, noted that:

"Dismissal from one's employment for alleged misconduct with possible loss of pension rights and damage to one's good name may, in modern society, be disastrous for any citizen. These are circumstances in which any citizen, however humble, may be entitled to protection of natural and constitutional justice."

and further:

"If the contract or the statue governing a person's employment contains a procedure whereby the employment may be terminated,

it usually will be sufficient for the employer to show that he has complied with this procedure."

In the instant case, there was no governing statute and no written contract to which reference can be made. The Plaintiff accepted in evidence that an employee could terminate his employment with the Defendant at any time by giving due notice to the employer. However, he would not accept that the employer had a reciprocal right unless there was a specific reason given for the termination at the time of notice. I am satisfied and find as a fact on the evidence that what most perturbed the Plaintiff, who wished to remain in his employment, was the manner of the termination of his unwritten contract (vide T.1, p.64, Q.216: "You could leave a little bit of dignity, that you would have space in order to go and not be dumped out the door.) I am satisfied and find as a fact that the Plaintiff was not dismissed from his employment and the somewhat Delphic pronouncement as a reason, though it clearly perplexed the Plaintiff, is nonetheless reason enough in the eyes of the law. An employer is not necessarily obliged to disclose its future plans in terminating an employee's contract of employment. It is accepted by the Defendant that in lieu of notice salary for the period equivalent to the notice period must be offered and paid. In the instant case, given the lengthy loyal service without blemish and his position with the Defendant, and his age and time reasonably required to seek re-employment, I hold that the Plaintiff to have been entitled to not less than three and not more than six months' notice. Notwithstanding that the pension rights of the Plaintiff were related to a mandatory retirement age of sixty-five, such did not confer any right on the Plaintiff to be retained in employment to that age, notwithstanding expectations the Plaintiff might have had in that regard, especially given his years of satisfactory service. The Plaintiff was, and is, entitled also to accrued pension rights as to the date of termination of employment.

Whatever uncertainty the Plaintiff may have had concerning the effect of the events of 3rd October 2001, or either of the parties had as to whether in fact there would be a meeting a week later, or its purpose or the reason for the institution of these proceedings and the initial court order, matters were put on quite a clear and different footing by the open letter of 11th October 2001 from the Defendant's solicitors. Even on the most unscientific and crude method of calculation at a six-month salary of £23,500, and allowing in the evidence of the actuary de bene esse (for in my judgment there was no strict legal basis for its admission) on the capitalised value of the stated loss of 280 euro from age sixty five on the pension, a figure of 79,872 euro was arrived at. I am satisfied that the offer set out in the letter of 11th October 2001, by way of termination, which offers the sum of £109,000, plus many other matters, exceeds such a figure. However, given the date of termination or leaving as set out in the letter of 11th October 2001, Oliver Freeny & Co. and Dunnes Stores Pension Assurance Scheme - -Statement of Benefit Entitlements as of 1st November 2001, to have made the cessation package only for a period of seven days from 11th October 2001, after which "it will expire automatically" was in all the circumstances unreasonable. In my judgment, the Plaintiff should have been given up to the date of termination (1st November 2001) to accept or reject "the cessation package". The letter of 22nd October 2001 from the Defendant's solicitors which sought to delimit, what in all circumstances I find to be the right of the Plaintiff, is ineffective. The offer was never withdrawn, rejected or accepted. In my judgment, the letter of 11th October 2001 was, and is, a proper notice of termination of the Plaintiff's employment --- salary in lieu of notice was provided, as was the protection of the rights of the Plaintiff as of that date. In my judgment, the Plaintiff has no claim for damages for the alleged reckless or negligent infliction of emotional suffering, defamation, deceit, intimidation or any other interference with his constitutional right to earn a livelihood --- the evidence does not, in any event, in my judgment, sustain any such claims.

I do not accept the proposition that the Plaintiff is unemployable. I am satisfied (as earlier stated in this judgment) that he has really failed to mitigate such damages as he has asserted or alleged he has or will suffer.

This is, declarations and injunctions aside, a common law action for damages for breach of contract; it is not a case of unfair dismissal -- even if it were, I am content to note the decision of the House of Lords in Johnson -v- Unisys Ltd. [2001] 2 All ER 801, where in it was held that "an employee had not right at common law to recover financial losses arising the unfair manner of his dismissal, because a contrary conclusion would be inconsistent with the statutory scheme for dealing with unfair dismissals". Furthermore, even if the Plaintiff suffered emotional suffering and same is attributed to the negligence of the Defendant, there is no evidence of foreseeability of harm. However, even foreseeability of harm does not automatically lead to a duty of care, and accordingly there is

foreseeable economic loss caused by the Defendant (whose actions might lead to a lack of confidence in the Plaintiff to go out and seek or obtain employment) would automatically establish a successful claim in negligence (Simaan General Contracting Co.- -v- Pilkington Glass Ltd (No.2)

[1988] 1 All ER 791.)

In my judgment, the instant case is clearly distinguishable from that of Vine -v- National Dock Labour Board [1956) 1 All ER 1 and [1956] 3 All ER 939 (H.L.)), wherein it was held that damages would not be an adequate remedy in a situation when a Plaintiff was purportedly dismissed (for a failure to comply with a valid order to report for work) by a disciplinary committee of the local board. The dock labour scheme contained no provision for the delegation of a disciplinary matter by a local board. While the dissenting judgment of Jenkins LJ in the Court of Appeal was upheld in the House of Lords, it was nonetheless recorded that the granting of a declaration was discretionary. In all the circumstances of this case, I decline to exercise the discretion in respect of the Plaintiff, because in my judgment it is unwarranted. Even if a declaration were made in favour of the Plaintiff in respect of the events of 3rd October 2001, such would avail the Plaintiff nothing because matters were placed on a completely different footing on 11th October 2001. Furthermore, such damages in lieu of a declaration by way of the payment of contractual wage or salary was paid to the Plaintiff.

In the instant case, the Plaintiff has since October 2001 to date been paid a sum well in excess of 100,000 euro and in respect of which the terms of the letter of offer of 11th October 2001, referred to in paragraph 19 of the Defence, is not as at the date of this judgment withdrawn in writing. In light of these facts and what I hold to be the Plaintiff's entitlement to still accept the terms of the letter of 11th October 2001, I make no award of damages in favour of the Plaintiff, who was offered wages in lieu of notice, and whose other contractual rights have been respected. This is not a case for exemplary, punitive or aggravated damages -- a want of tact at the meeting of 3rd October 2001 is not equivalent to the outrageous conduct considered by Griffin J in Conway -v- INTO [1991] 2 IR 305 at 323.

END OF JUDGMENT

Approved TC Smyth

19/3/2004