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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Porter v Offsite Archive Storage & Inte... [2012] NIIT 01422_11IT (03 January 0 2012)
URL: http://www.bailii.org/nie/cases/NIIT/2012/1422_11IT.html
Cite as: [2012] NIIT 1422_11IT, [2012] NIIT 01422_11IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1422/11
CLAIMANT: Stewart Porter
RESPONDENT: Offsite Archive Storage & Integrated Services Limited
DECISION
The decision of the tribunal is that the claimant is entitled to an award of £77,900.00 in respect of unfair dismissal and loss of statutory rights. The claimant’s claim for unlawful deduction of wages is dismissed.
Constitution of Tribunal:
Chairman: Mr I Wimpress
Members: Mrs C Lewis
Mr H Stevenson
Appearances:
The claimant was represented by Mr Peter Coll, Barrister-at-Law, instructed by Shean Dickson Merrick Solicitors.
The respondent was represented by Thomas Sheridan and Lynn Sheridan of Peninsula Business Services Limited.
THE CLAIM AND THE RESPONSE
1. In a claim form dated 20 June 2011 the claimant brought claims in respect of breach of contract, unfair dismissal and unauthorised deduction of wages. The breach of contract claim was not pursued at the hearing as the sums involved in relation to the remuneration claimed were substantially in excess of the tribunal’s monetary jurisdiction for breach of contract. A detailed response was filed in which the respondent denied that the claimant was unfairly dismissed and asserted that the claimant was fairly dismissed for misconduct. The respondent further denied that it was in breach of contract in any way at all and in particular in relation to payment of money in lieu of notice. No mention was made in the response of the alleged unlawful deduction of wages. There was however a denial that the respondent had failed to pay the claimant accrued holiday pay notwithstanding that no claim of this nature was made by the claimant. It is clear that the failure to refer to the alleged unlawful deduction of wages and the reference to holiday pay was due to an error and the hearing proceeded on the basis that the tribunal was required to address the issues of unfair dismissal and unlawful deduction of wages.
SOURCES OF EVIDENCE
2. The tribunal received two bundles of documents at the outset of the hearing which were supplemented during the course of the hearing together with a further bundle of documents which we will refer to as the Clearpath material. In addition to the witnesses who gave oral evidence there were a number of others who were not called by either party but who contributed to a greater or lesser extent to the history of this matter and we consider it helpful to identify everyone now as far as possible. In so doing we are not criticising either party for not calling any of those whom we identify.
Witnesses who gave evidence to the tribunal
Mr Stewart Porter - the claimant and co-founder of OASIS.
Mr Dennis Barnedt III - the Chief Executive Officer of OASIS.
Mr John Dickey - the external consultant appointed to conduct the disciplinary hearing.
Mrs Lynn Sheridan - the Peninsula consultant responsible for negotiations with the claimant’s solicitor.
Mr Des Rogers - a co-founder of OASIS.
Mr Gary McElroy - a co-founder of OASIS.
Mr Glen Reid - former Chief Financial Officer of OASIS.
Mr Peter McCormick - a co-founder of OASIS and a participant in a chain of emails which led to disciplinary action against the claimant.
Mrs Maura McKay - the claimant’s solicitor.
Individuals referred to in the documents and/or in oral evidence who were not called to give evidence.
Ms Claire Gallagher - the head of Human Resources in OASIS.
Mrs A Munn - note-taker at disciplinary hearing.
Mr Alan Pevy - employee of Reisswolf and a participant in a chain of emails which led to disciplinary action against the claimant.
Mr Christoph Smaczny - employee of Reisswolf and a participant in a chain of emails which led to disciplinary action against the claimant.
Mr Gary Connolly - a participant in a chain of emails which led to disciplinary action against the claimant.
Mr Richard Kane - a business associate and longstanding friend of the claimant.
Mr Paul Nelis - the claimant’s successor as the respondent’s General Manager in Belfast.
Mr Ronnie Carroll - Current Chief Finance Officer.
Mr Brian Connolly - Financial Controller in respondent business and a participant in a chain of emails which led to disciplinary action against the claimant.
Mr O’Toole - Deloitte Touche financial consultant.
Mr Philip McConnell - Legacy Wealth financial adviser.
THE FACTS
3. The surviving claims of unfair dismissal and unlawful deduction of wages are to a large extent distinct in terms of the factual background to these proceedings and could be addressed separately. However, we consider it more convenient to deal with them together as part of the same timeline.
4. The claimant was one of the founders of McConnells, a well known document storage business. The respondent carries out business which involves the secure storage of documents and is part of a larger worldwide group known as OASIS Ltd. At the time of his dismissal the claimant was the respondent’s Managing Director.
5. In 2007 a Management Buy Out took place which involved the claimant, the other main owners of OASIS and a small number of private investors.
6. The claimant and his co-directors, Mr McCormick and Mr McElroy, all signed Service Agreements with OASIS at this time which made provision for their terms and conditions of service including salary.
7. The claimant’s Service Agreement was dated 21 December 2007 and described the claimant’s role as the Managing Director for the storage division of OASIS in Northern Ireland. The claimant’s remuneration was set at £85,000 per annum including an annual Director’s fee of £16,320. The Service Agreement also included private health insurance, 5% pension contribution by the respondent, club subscriptions of £1,020 per annum and an annual car allowance of £15,000.
8. Mr McCormick’s Service Agreement was also dated 21 December 2007 and his role was given as the Sales and Marketing Director. Mr McCormick’s remuneration was set at £121,000 per annum including an annual Director’s fee of £16,320. The Service Agreement also included private health insurance, entitlement to participation in such pension arrangements as were put in place by the Board, club subscriptions of £1020 per annum together with mileage and travel expenses as vouched.
9. Mr McElroy’s Service Agreement, again dated 21 December 2007, gave his role as Technical Director. Mr McElroy’s remuneration was set at 180,000 euros per annum including an annual Director’s fee of 24,000 euros. The Service Agreement also included private health insurance, participation in such pension arrangements as were put in place by the Board, club subscriptions of 1,500 euros per annum together with mileage and travel expenses as vouched.
10. Common to all three Service Agreements were clauses dealing with the directors’ duties and so forth. Clause 2.2 (b) required the director to act faithfully and diligently and devote the principal amount of his time to the business of the Company. Clause 2.2 (c) required the director to carry out his duties in a proper and efficient manner with a view to maintaining, protecting and extending the business interests, reputation and welfare of the Company and of Associated Companies. Clause 2.2 (d) required directors to keep the Board properly and fully informed of the conduct of the business. Clause 2.4 (a) dealt with Other Interests and forbade directors from becoming engaged, concerned or interested in any trade, business or occupation other than that of the Group. Clause 6 concerned Protective Covenants and at 6.1.1 prohibited directors from revealing trade secrets, secret or confidential operations, processes or dealings or any information concerning the organisation, business, finances, transactions or affairs of the Company and to keep with complete secrecy all Confidential Information. Clause 6.2 addressed the making of notes and forbade directors from making any notes or memoranda relating to the business of the Group otherwise than for the benefit of the Company.
11. According to the claimant, he and his fellow directors, Mr McCormick and Mr McElroy agreed between them that they would all receive the same remuneration but the claimant opted to have a portion of his paid into a pension as this was of benefit to him in terms of tax. The claimant’s Service Agreement made no reference to separate pension provision or a pension pot. Mr McCormick and Mr McElroy gave evidence in support of the claimant’s contention as did Mr Reid.
12. In May 2009, a further recapitalisation of the business took place with new investment from American and European funds. In advance of this development Clearpath Business Advisors were responsible for preparing a Due Diligence Report for Mr Barnedt and Mr John Chendo of Housatonic Partners. A number of drafts were provided and these included details of the directors’ salaries including the claimant’s. The early drafts recorded the claimant’s salary as being at the same level as his co-directors but the final or most up to date report shown to us dated 26 January 2009 recorded the claimant’s salary as being in accordance with his Service Agreement and thus significantly lower than the previous draft reports. Mr Reid was responsible for providing the information in relation to remuneration.
13. The recapitalisation went ahead and was embodied in a Share Subscription and Shareholders Agreement dated 15 May 2009. Paragraph 5.13 of this document dealt with Service Agreements as follows:
“Following completion, the Parties agree to use their reasonable endeavours to ensure that the Service Agreements are executed by the relevant Parties thereto within 3 months of Completion. The Company shall fully enforce the provisions of the Existing Service Agreements and the Service Agreements (following their execution) and shall also enforce (or procure that the relevant Group Company shall enforce) all subsisting service agreements for executives of the Group Companies and shall not make any change in any of the terms hereof without the prior written consent of a Preferred Majority.”
Paragraph 1.1 provides interpretation of some of the terms referred to above. “Existing Service Agreements” are defined as existing contracts of employment between OASIS and each of Stewart Porter, Peter McCormick, Glen Reid and Gary McElroy. “Service Agreements” are defined as new contracts of employment
to be entered into between the Company and each of Stewart Porter, Peter McCormick, Glen Reid and Gary McElroy within 3 months of completion. For the avoidance of doubt OASIS is “the Company” and it is identified as such in the agreement.
At paragraph 6.1 restrictive covenants were placed on the founders which included the claimant. Other points of note are that the claimant received 572,000 ordinary shares together with 684,000 preferential shares. The claimant’s shareholdings were approximately double those of Mr McCormick and Mr McElroy. The largest investor was Housatonic Equity Investors IV, LP.
There was a new Board of Directors and they appointed Mr Barnedt as the new Chief Executive Officer and day to day management was run from the respondent’s Dublin Offices. Mr Rogers and Mr McElroy were full members of the Board of Directors in contrast with Mr McCormick and the claimant who only had observer rights. Mr McCormick subsequently sold his shares and left the Company with a financial package. Mr McElroy also left with a financial package but retained his shares in the Company.
14. On 15 October 2009, an email exchange took place between the claimant and Mr Philip McConnell of Legacy Wealth following a meeting that they had on 14 October 2010 in relation to personal financial planning. In an emailed response to Mr McConnell the claimant referred to contact that he had with Mr Reid on 14 and 15 October 2009. The email stated that Mr Reid was to provide the claimant with a cheque “by this day next month” in respect of the outstanding or accrued elements of his unpaid remuneration package which he estimated at £55,000 - £60,000. The email also referred to the claimant’s actual salary of £85,000 being rectified from October 2009 and the claimant’s appreciation of Mr McConnell’s suggestion in respect of pension/salary plans and stated that he had himself thought of taking more pension and less salary as this would be more efficient in terms of tax and national insurance.
15. On 11 February 2010, Richard Kane met with Mr McCormick and the claimant. Mr Kane emailed them both afterwards to arrange a further meeting in Amsterdam as soon as possible on the subject of Titan Wind Ltd. As is apparent from the email Mr Kane had been working on a project for 4 years on a wind turbine industry project and agreeing that it made sense to start work immediately on preparing a support package. Mr Kane indicated that he would expect financial recognition in respect of his 4 years work. Mr Kane also indicated that he would speak to others including a Mr Harper who had already agreed to sit on “our board”. Mr McCormick replied to Mr Kane that both he and the claimant fully recognised that Titan was Mr Kane’s business and an opportunity that he had incubated. Mr McCormick went on to state that Mr Kane was entitled to a majority stake and that he and the claimant were happy to split a smaller stake. This email was copied to the claimant.
16. On 13 April 2010, the claimant emailed Mr Barnedt about his salary. This email was copied to Mr Carroll and Mr Connolly. The email commenced as follows:
“As the former directors and managers of the original Oasis business – we agreed to be paid the same salary but implemented slightly differently due to our own individual tax and personal circumstances etc”.
The claimant complained about discrepancies in his own remuneration package and drew attention to the fact that these discrepancies would have been obvious when Housatonic was undertaking due diligence. The claimant went on to set out the details of what his remuneration should have been. He stated that he should have been paid the equivalent of 180,000 euros per annum comprising of an £85,000 basic salary plus various allowances with the difference being accrued and transferred to his existing pension fund and he complained about the failure to transfer funds to his pension fund which was then managed by AXA. The claimant stated that Mr Reid was involved in arranging the transfer. The claimant stated that very little had been done in relation to the transfer. The claimant referred to the reasons for the delay which he attributed somewhat enigmatically to “as being convenient” and the “now known Glen circumstances and company actions.” The claimant also referred to a previous email in which he queried whether his accrued monies had been used elsewhere. The claimant concluded the letter by pointing out that the accrued monies could be paid to him at any time such as in the middle or at the end of the contract. The claimant signed off the email as the Managing Director of the Oasis Group.
17. On 27 April 2010, Mr McCormick sent an email to Mr Barnedt, copied to the claimant and Mr McElroy in which he referred to a telephone call that he had just received from Mr Pevy “suggesting/requesting” a meeting on Thursday, 29 April 2010 to discuss Reisswolf’s ability and interest in providing the respondent with “a disaster recovery solution” in the event that the respondent’s existing facilities in Northern Ireland were unavailable. Mr McCormick said that he believed that Reisswolf was unhappy with its local franchise and would like the respondent to consider becoming associated or partnering with Reisswolf in relation to secure destruction.
18. Mr Barnedt replied to Mr McCormick immediately (copying the email to the claimant and Mr McElroy) and indicated that although he would like to have this meeting the date didn’t suit but suggested that the meeting still move forward without him and that he would catch up with Mr McCormick and Mr Pevy later.
19. On 29 April 2010 the proposed meeting went ahead and Mr McCormick provided a report on it to Mr Barnedt by email which was again copied to the claimant and Mr McElroy. Mr McCormick reported that the true purpose of the visit by Mr Pevy and two colleagues was to make arrangements for the respondent to store secure destruction cabinets for Reisswolf. Mr McCormick stated that Mr Pevy and his principal client were unhappy with the Reisswolf franchise that ran a shredding operation in Newry and hence wanted to make arrangements with the respondent which for the moment would just be secure storage. Mr McCormick suggested that this was an opportunity for the respondent to enter into a relationship with Reisswolf as it was the market leader in Europe in the secure destruction of documentation and that there were strategic benefits in partnering with Reisswolf and provided the respondent with “a promotable and gilt edged solution for secure destruction as opposed to the miscellany of ad hoc partners”. Mr McCormick recommended that they set up a meeting.
20. Mr Kane issued a further email communication on 10 May 2010 on the subject of the Titan Energy Associates minutes and a proposed mail to a Chinese concern, XEMC. It is not necessary to set out the contents of this email. The claimant replied on the same day and approved the minutes and the letter to XEMC. Again this was copied to Mr McCormick.
21. On 17 May 2010, Mr Mahon sent an email to Brian Connolly (copied to Mr Carroll, Mr McCormick and the claimant) about a procurement involving scanning, microfilm and document and records scanning for NI Health. Mr Mahon had been asked to chair a working group for this procurement and expressed concern that if he was moved to shared services he would have to declare his conflict and would be removed from the panel and thus they would lose advantage. He compared this to another project where they were able to progress under the radar. Mr Mahon concluded his email by seeking advice from the recipients of the email as to how they would like this to be taken forward. The claimant replied on the same date and copied his reply to Mr McCormick. This is the first email that was used as a basis for the disciplinary charges against the claimant.
22. On 19 May 2010, the claimant sent a further email to Mr Barnedt which was copied to the same recipients as the previous email and to Mr Rogers. The claimant’s email enclosed a letter from Deloitte Touche dated 14 May 2010 which according to the claimant highlighted its initial findings in relation to his salary and the comparison with his fellow directors/partners. The letter from Brendan O’Toole of Deloitte Touche approached the matter firstly on the basis of the claimant’s Service Agreement and secondly on the basis of the claimant’s understanding that the Irish directors’ remuneration amounted to 180.000 euros per annum. In relation to the Service Agreement Mr O’Toole stated that OASIS had not made a 5% pension contribution into a company pension scheme but from May 2009 increased the claimant’s salary by 5% so that the claimant could make contributions to a personal pension scheme. According to Mr O’Toole this resulted in a shortfall of £38,734 from 1 January 2008 to 30 April 2010. This figure did not take account of health insurance and club contributions which the claimant said had not been paid or the loss in growth of the pension scheme if contributions had been made from 1 January 2008. In relation to the remuneration that the claimant understood was paid to the Irish directors Mr O’Toole produced a calculation of the alleged shortfall during the same period which amounted to £151,962.
23. Mr Carroll replied on the same day and stated that Deloitte Touche’s initial findings based on the Service Agreement correlated with the respondent’s and that there had been an underpayment of approximately £39,000. In relation to the health insurance premiums and club subscriptions Mr Carroll stated that an expense claim for £7,115.18 had been received on 3 November 2009 which was processed on 2 December 2009 and asked the claimant to confirm this. Mr Carroll was unable to comment on the workings which produced the £151,000 figure because they could only operate on the basis of the contracts in existence. Mr Carroll said that this was an unfortunate position and asked the claimant to revert to Mr Barnedt about it.
24. Mr Barnedt emailed the claimant on 22 May 2010 saying, “I know Ronnie [Carroll] is working on the back pay to pay you for what is missing from your contract”. Mr Barnedt went on to discuss how the funds should be paid to the claimant. Mr Barnedt also raised the issue of what the claimant’s next role should be and to suggest setting up a meeting about this. Mr Barnedt mentioned a previous discussion in which they had talked about Mr Nelis taking over as General Manager in Belfast so that the claimant could focus on Acquisitions or Senior Client Care.
25. The claimant ultimately agreed to take on the role of Head of Mergers & Acquisitions. In October 2010, Mr Paul Nelis was appointed as General Manager for the Belfast operation. On 22 October 2010 the claimant met with Mr Barnedt and indicated that he was unhappy with his new role. The claimant stated that he would like an ambassadorial role instead which would involve socialising with clients and working part time. The Board declined to offer the claimant this role. The claimant was in poor health at this time due to events in his personal life. It was agreed between the claimant, Mr McCormick and Mr Barnedt that the claimant should take time off work. The claimant went on long term sick leave on 27 October 2010. During this period of sick absence the claimant spent some time traveling in Europe with other businessmen.
26. On 5 October 2010, Mr McCormick emailed the claimant on the subject of shredding as follows:
“Don’t worry about being forced to work in the OASIS shredding operations. Heading it up. Starting it. Deciding what will need to be done. Preserve your job and employment as long as you can but most particularly avoid at all costs anything that will give Dennis a branch to beat you with.
He will shaft you. He would love to get you out as cheaply as possible and if he can build a case for saying you are conspiring to set up in competition.”
The claimant sent a reply about an hour later thanking Mr McCormick. We note at this point that the email of 5 October 2010 was not provided to Mr Dickey when he was conducting the disciplinary hearing which we will come to later.
27. On 7 October 2010, Mr Kane emailed Mr McCormick and the claimant. In this email Mr Kane advised both recipients to focus on their OASIS exits before devoting any further time or consideration to TEA matters. Mr Kane also implored them both to resolve their issues with the respondent at the forthcoming Board meeting for the sake of their mental and physical wellbeing.
28. Around the same time the claimant had again raised the underpayment of wages with the respondent. Mr Carroll responded on 7 October 2010 and referred the claimant to his response of 19 May 2010 in which it was stated that the respondent agreed with Deloitte Touche’s findings in relation to the signed contract and that he could not do any more on this except pay the £39,000 shortfall unless otherwise directed by Mr Barnedt. Mr Carroll concluded the email by saying that he was aware of the claimant’s frustration but asking him to bear in mind the position that Mr Barnedt, Mr Connolly and he were in.
29. On 7 December 2010, Mr Carroll emailed the claimant and advised that they were processing his full and final underpayment per the terms of his signed contract and asked him how he wanted this to be paid. The claimant emailed back and made the point that this payment was separate and not full and final payment. The claimant said that he would come back to Mr Carroll as to how the payment was to be made. Mr Barnedt added a few words of his own to this email exchange and said that he had specifically asked the Board if they were asking him to do anything other than pay the amount due under the claimant’s contract and they said no. It was further stated that this was not a Board issue but that Mr Rogers suggested, and Mr Barnedt agreed, that the respondent would contact its outsourced HR resource, Peninsula, which Mr Barnedt had done. Mr Barnedt invited the claimant to bring any new matters or information to the respondent to show that he should be paid differently than in his contract. Mr Barnedt would review it but as of now the respondent believed that this payment [of £39,000] was the only outstanding amount owed.
30. On 13 December 2010, the claimant sent a further email to Mr Carroll in which he raised six points that he wished to be addressed. These included a complaint about the monies owed under the Service Agreement being treated as salary paid into his bank account, a request to be provided with his last two pay slips, confirmation of the receipt of his health insurance renewal, a request for a copy of the minutes of the last Board meeting, written responses to previous questions and a more generalised complaint about continued hassle. Mr Carroll forwarded this email to Mr Barnedt.
31. Also on 13 December 2010, Mr Barnedt wrote to the claimant and invited him to attend an investigatory meeting on 21 December 2010 in relation to three matters of concern that had arisen. The first matter of concern was that the claimant was sending text messages to Mr Barnedt despite having previously been asked to communicate only by personal email, letter or phone call. Mr Barnedt received two such texts on 6 December 2010. Mr Barnedt also stated that the claimant should not use his company email as this meant that he was not removed from the work environment. The second matter of concern arose from the content of the second text in which the claimant stated that he did not agree with the content of Mr Barnedt’s previous letters and misinformation being given to clients. Mr Barnedt stated that the respondent needed to understand what exactly the claimant did not agree with. Mr Barnedt also said that he was not aware of any information being given out to clients about the claimant except that he was on medical leave and that the respondent was treating the matter with utmost confidentiality. The third matter of concern was that the respondent wanted to meet with the claimant in order to discuss how best to help him return to work and expressed concern about how the claimant was spending his time on medical leave. In the same letter Mr Barnedt addressed the six points raised in the claimant’s previous email to Mr Carroll. None of the responses appear anything other than straightforward.
32. On 20 December 2010, Mrs McKay sent two letters to Mr Barnedt in relation to four letters sent by him to the claimant since 4 November 2010. The first letter dealt solely with the proposed investigatory meeting on 21 December 2010 and sought clarification of the precise ambit, structure and intent of the meeting. Mrs McKay indicated that once this was provided the claimant would seek medical advice about his fitness to attend. In the second letter Mrs McKay took issue with Mr Barnedt’s instruction to the claimant not to make any contact with staff or clients. Mrs McKay regarded this as punitive and pointed out that the claimant was not under medical advisement to be completely isolated from work and that this instruction was a source of embarrassment to the claimant when longstanding clients got in contact with him. In addition travel and leisure activities were beneficial to the claimant. Mrs McKay also complained about a breach of confidentiality in that clients had been informed that the claimant was on garden leave, in dispute with the company or had left the company and she sought an explanation about this. Mrs McKay then raised formally the main issues that were the cause of the claimant’s work related stress which had caused his illness and absence from work. Mrs McKay identified two factors – the claimant’s marginalisation within the company and the failure to honour the agreement with regard to the pension element of the claimant’s salary package entitlement. Mrs McKay also sought clarification of the claimant’s precise role in the company of which he was the managing director, required the salary/pension shortfall to be paid without further delay, the withdrawal of the instruction that the claimant was to have no liaison with staff or customers or use the company email account and the utmost confidentiality in respect of the reason for the claimant’s absence from work. Mrs McKay concluded by suggesting a meeting to discuss the claimant’s health and return to work.
33. On 22 December 2010, Mr Barnedt sent two letters in response to Mrs McKay. In the first letter Mr Barnedt pointed out that that the meeting that had been scheduled for 21 December 2010 was investigatory rather than disciplinary and that the purpose of the meeting was firstly to establish how the claimant is recovering and explore what if anything the respondent could do to assist and secondly to establish how the claimant was fit to travel Europe in the company of CEOs and friends. In this regard Mr Barnedt stated that the respondent would be keen to get clarification from the GP as to whether the suggestion that that the claimant should engage in social and leisure activities would extend to travelling abroad while representing other companies. Mr Barnedt also pointed out that according to the claimant’s GP he was not suffering from work related stress but neurasthenia. The tribunal did not receive any medical evidence about this but understands that this is a condition marked by chronic mental and physical fatigue and depression. Mr Barnedt urged the claimant to consider the request for an investigatory meeting favourably. In the second letter Mr Barnedt indicated that in late October 2010 he arranged a meeting with the claimant due to the claimant’s repeated comments to staff that he was unwell. According to Mr Barnedt the claimant told him that he felt stressed over several items and that he needed some time off and away from work as he needed time to rest. On this basis the claimant was told to take at least one week off work and to obtain a note from a GP permitting him to return to work. The claimant was also told to refrain from work related contact while he was off. This was based on the respondent’s duty of care and was not designed to be punitive and nor were the requests for meetings. Mr Barnedt also sought the names of individuals who were alleged to have breached the claimant’s confidentiality and requested a copy of the claimant’s further sick line. Finally Mr Barnedt enquired whether the claimant wanted any possible work related issues to be dealt with informally or formally through the respondent’s Grievance Policy and Procedure.
34. The claimant responded to Mr Barnedt’s correspondence of 22 December 2010 by email dated 6 January 2011. The claimant complained that despite Deloitte Touche’s findings that there was a net underpayment of £39,000 he had only been paid £22,000 to date and that no employer’s pension contribution had been paid. He requested that the outstanding pay slips be supplied to him as these were required by Deloitte Touche. He undertook to submit his outstanding health insurance invoice once received. He made a further request for a copy of the Board minutes. Finally the claimant stated that he wished it to be recorded that the making up of his pension contribution to equate to the packages of his co-directors remained unresolved.
35. On 7 January 2011, Mrs McKay wrote to Mr Barnedt in response to his second letter of 22 December 2010. Mrs McKay stated that the instruction not to have contact with staff and clients was not supported by the claimant’s GP and was exacerbating the stress which the claimant suffered. Mrs McKay said that it was unfortunate that this instruction had not been withdrawn. Mrs McKay criticised the respondent for not identifying the duties that the claimant was expected to perform on his return to work and indicated that this was of concern to the claimant’s GP in the context of certifying the claimant’s fitness to return to work. Mrs McKay also stated that this was a source of stress and needed urgent resolution. In relation to the confidentiality issue Mrs McKay indicated that senior representatives of several major clients including the Bank of Ireland and the Ulster Hospital had informed the claimant that they had been advised that he was on garden leave. Finally Mrs McKay pointed out that the issue of the contribution to the claimant’s pension to make up the shortfall to equate to the packages of his co-directors had not been addressed. Mrs McKay indicated that at this stage the claimant would prefer to have an informal meeting with Mr Barnedt to try and explore the way forward whilst reserving the right to raise the matter formally under the respondent’s grievance procedure.
36. On 11 January 2011, Mr Barnedt replied to the claimant’s email of 6 January 2011. Mr Barnedt enclosed a copy of same together with Deloitte Touche’s letter of 14 May 2010 and the claimant’s signed Service Agreement. Mr Barnedt pointed out that Deloitte Touche clearly stated that £38,734 was due under the claimant’s current contract and maintained that the figure of £151,962 that the claimant sought was calculated on the assumption that the claimant was paid the same remuneration as the other directors but that this was not the case and that he was being paid in accordance with his own contract. Mr Barnedt said that he did not understand the claimant’s comments in relation to underpayment of pension as calculated by Deloitte Touche. Mr Barnedt asked the claimant to provide an explanation and commented that the claimant had not responded to numerous emails sent by Mr Carroll asking how he wanted the monies paid. Mr Barnedt said that the claimant’s pay slips were being posted out, that there was no issue about health care insurance and that the Board minutes would be forwarded once approved by the Company Secretary. Mr Barnedt also maintained that there was no case to answer in relation to the claimant’s contention that the claimant’s pension contribution should be made up to equate with his fellow directors. Finally Mr Barnedt suggested rescheduling the investigatory meeting on 18 January 2011.
37. On 18 January 2011, Mrs McKay wrote to Mr Barnedt and advised that the claimant was not medically fit to attend the proposed investigation meeting or the proposed informal meeting but hoped to be fit by the end of January or early February. Mrs McKay also stated that henceforth all matters concerning the claimant’s employment should be directed to her.
38. On 21 January 2011, Mr Barnedt wrote to Mrs McKay in response to her letter of 7 January 2011. Mr Barnedt reiterated that the embargo on the use of the respondent’s email was not meant to be punitive but that having monitored the claimant’s account for 60 days it had been decided to turn the email account off and reinstate it on the claimant’s return to work. Mr Barnedt added that the respondent felt that in order to facilitate the claimant’s speedy recovery complete rest from work duties was important. Mr Barnedt also stated that it had been decided to promote Mr Nelis to General Manager of the Belfast Branch which was the intention when he was hired and noted that the claimant had expressed a desire to move to a different role on numerous occasions. According to Mr Barnedt the claimant had been offered the opportunity to work on two projects. The first involved the grading of acquisitions which the claimant started but did not complete due to his going on sick leave. The second was to start identifying potential future acquisitions but that the claimant felt that this was beneath him and could be completed by any low level clerk. Mr Barnedt said that he was completing the second project himself. The claimant’s request to become a part-time Client Care Ambassador with his current remuneration package was declined by Mr Barnedt prior to the claimant going on sick leave. A copy of a new Employee Manual was also provided. On the confidentiality issue Mr Barnedt maintained that the matter was only known to senior management. In relation to the medical position Mr Barnedt indicated that the respondent had no desire to take up the offer to speak to the claimant’s GP but reserved the right to have the claimant examined. Mr Barnedt also pointed out that none of the medical certificates provided made reference to work related stress but rather to neurasthenia and asked Mrs McKay to advise as to the identity of the claimant’s GP. Finally Mr Barnedt expressed disappointment at not being able to meet with the claimant and suggested a further date for such a meeting namely 11 February 2011.
39. On 1 February 2011, Mrs McKay responded to Mr Barnedt and reiterated that whilst the claimant was certified as unfit to perform his normal work duties it was highly unusual for a Managing Director to be asked to refrain from accessing his email account thus ostracizing and isolating him from the business. As to a role for the claimant Mrs McKay stated that it was for the respondent to provide the claimant with a new role and not the other way around. On the issue of confidentiality Mrs McKay expressed surprise that Mr Barnedt was maintaining his stance bearing in mind a recent brief discussion between him and the claimant on 21 January 2011. On the medical issue Mrs McKay explained that her reason for offering the respondent the opportunity to speak with the claimant’s GP was that the claimant was being threatened with disciplinary action and a discussion with his GP (Dr John Bell) would assist in understanding the nature and extent of his illness and the treatment recommended. Mrs McKay went on to indicate that the claimant’s health was improving and that he expected to be fit to attend the investigation interview on 22 February 2011. Finally Mrs McKay asked who would be conducting the meeting and indicated that the claimant would not be prepared to discuss any private or personal information with or in front of Ms Gallagher.
40. On 11 February 2011, Mrs McKay wrote to Mr Barnedt and sought to agree an amicable departure for the claimant from the respondent’s employment on the basis that it appeared unlikely that a suitable role would be found for the claimant. Mrs McKay indicated that a reasonable financial package would include £145,214 in respect of the shortfall in salary, 6 months salary in lieu of notice, compensation for loss of office and a reasonable contribution towards the claimant’s legal and accountancy fees.
41. On 22 February 2011, Mr Barnedt responded. He disputed the suggestion that there was no role for the claimant and advised that as a result of the claimant going on sick leave on 27 October 2010 his duties had been allocated to other employees to assist the company to function but that these would be returned to the claimant on his return to normal working. Mr Barnedt referred to the previous agreed role in Acquisitions and Mergers and stated that the alternative role suggested by the claimant was not within the respondent’s business needs. As regards the proposed package Mr Barnedt said that an agreement was being drawn up that would include payment in lieu of notice and a one off severance payment. Mr Barnedt rejected the proposal in respect of unpaid salary on the basis that the claimant had received all of his contractual remuneration.
42. Negotiations continued. Mrs Sheridan was engaged on behalf of Peninsula and it was proposed that she should meet with Ms McKay. No date was agreed but in the event Mrs Sheridan became free unexpectedly on 8 March 201 and phoned Mrs McKay to arrange a meeting that same day which took place at Mrs McKay’s office. The meeting did not succeed in bridging the gap between the parties. Mrs McKay argued on behalf of the claimant that the respondent had made certain promises to the claimant about pension provision which was reflected in emails in the possession of the claimant. Mrs McKay believed that the respondent would have counterparts of these emails. According to Mrs McKay, Mrs Sheridan undertook that she would look for these documents. Mrs Sheridan in her evidence to the tribunal said that she told Mrs McKay that she would conduct a forensic search. There was much discussion about whether the word “forensic” was used and what it was intended to convey. It is clear however that Mrs Sheridan relayed the need to find these emails to Clare Gallagher who in turn passed this message to Mr Barnedt. It was also agreed at this meeting that the claimant would stay off work for a further period of two weeks to allow space for further discussions to take place as to the claimant’s severance package.
43. Following on from the meeting on 8 March 2011 meeting Mrs McKay sent a letter to Mrs Sheridan on 15 March 2011 which set out a summary of the claimant’s position and indicated that in the event that the matter was not resolved the claimant would return to work on 23 March 2011. This letter was sent to Mrs Sheridan at a Belfast address which Mrs McKay believed to be the correct address for Peninsula. Unfortunately Mrs McKay was mistaken and address that she used was not a postal address but was merely the address of Peninsula’s Call Centre. Such correspondence should we were told have been directed to Peninsula’s Head Office in Manchester where Mrs Sheridan was based. As a result Mrs Sheridan did not receive this letter.
44. Having been informed of the request to locate emails in relation to the claimant’s pension provision, Mr Barnedt personally undertook the search. Mr Barnedt did not consider it appropriate to delegate the task of searching a senior member of staff’s computer to anyone else. He went about this by entering key words. He also spoke to the Chief Financial Officer in Dublin. As a result of this search Mr Barnedt found a number of emails that were transmitted during 2010 that had nothing to do with the claimant’s pension but were of concern to him as they suggested that in 2010 the claimant and others including Mr McCormick were engaged in discussions about setting up a shredding operation that according to Mr Barnedt he regarded as being in competition with the respondent and thereby incompatible with the claimant’s fiduciary duties to the respondent as a director.
45. Mr Barnedt decided to institute disciplinary proceedings against the claimant. Both these proceedings and the subsequent appeal took place under the auspices of the respondent’s Employee Handbook which contains relevant provisions in relation to disciplinary procedures as follows:
“A 4.d. you will only be disciplined after careful investigation of the facts and the opportunity to present your side of the case.”
The handbook contains non exhaustive lists of the rules covering minor, major and gross misconduct. It is stated at section E that in a case of gross misconduct an employee will be liable to summary dismissal. This is re-emphasised in section F where the punishment for gross misconduct is stated to be dismissal. In the same section it is indicated that the respondent retained the discretion to take account of length of service and vary the procedures accordingly and to bypass any step in the disciplinary process if the severity of the action warrants it. Section G stipulates who is authorised to take disciplinary action and in the case of management as opposed to other employees it is the Chief Executive Officer but that the list does not prevent a higher level of seniority or a nominated person progressing any disciplinary action. At point 3 in section K the handbook states, “Gross misconduct offences will result in dismissal without notice.” There is also a section in the handbook which deals with appeals and at point 4 of this section it is stated that the appeal procedure will normally be conducted by a member of staff not previously connected with the process so that an independent decision into the severity and appropriateness of the action taken can be made. The three step minimum statutory procedure is replicated in the following section of the handbook.
46. Mr Barnedt decided to proceed without any further investigation or an investigatory meeting. By letter dated 18 March 2011, Mr Barnedt invited the claimant to attend a disciplinary hearing on 23 March 2011. The letter set out three matters of concern which were to be discussed at the hearing as follows:
“It is alleged that, in a series of emails dated between May 2010 and October 2010 that have just come to our attention; that you undertook actions that are completely incompatible with your contract of employment and your duties as a Director. Namely you are in breach of your duty of fidelity and loyalty to your employer, in that you set out to keep a possible major tender contract from your employer, which was the Northern Ireland Health contract, as set out in the email dated 17th May 2010 to Sean Mahon and Peter McCormick.
It is alleged through reading the enclosed emails that you were embarking with others to set up a rival competing Company.
It is alleged that you also passed on confidential insider information to others rather than forwarded to your employer; of which you are fully aware of your actions and implications of your actions as set out in the email dated 5th October 2010 to Peter McCormick and others.”
47. The alleged incriminating emails were enclosed with the letter. The two emails specifically referred to in the letter read as follows –
17th May 2010 - claimant to Sean Mahon
“I mentioned this tender to Peter over the weekend – but was not going to inform the Dublin boys at first. Suggest we get together and discuss this initially. It is also an opportunity to set something up ourselves with other interested partners (Steria Fijitsu etc) I would assume something this size is going to attract the big players and we could find ourselves in with BT Siemens etc. It is obviously the very project we have discussed and Peter has may plans. Invest NI may also now play a further role and perhaps the entire operation could be set up in an employment black spot or political/enterprise area attracting even more grants etc. Lots to discuss.”
5th October 2010 – Peter McCormick to the claimant and the claimant’s response
“Stew, this is extremely dangerous ground. It definitely represents a very evidence [sic evident] conflict of interest…..and grounds for dismissal with no redundancy. I would caution you to be very careful what you communicate and who you communicate it to.”
“I know and am aware of the danger. My problem as previously mentioned to both yourself and Gary – we know Dennis does not want to do a deal with Alan.”
48. On 21 March 2011, Mr Barnedt emailed an update to all of the Oasis Directors including Mr Rogers regarding the claimant. In the email Mr Barnedt made reference to the claimant having undertaken actions in 2010 that were seemingly incompatible with his contract of employment and duties as a Director of McConnell’s and as an employee. Mr Barnedt then stated as follows:
“Through a review of e-mails we found him to be possibly in breach of duties of fidelity and loyalty to his employer, us.
Specifically, Stewart [Porter] set out to keep a possible major scanning tender from us and discussed possibly setting up competing scanning businesses with us. Stewart also wrote that he would specifically stall our progress into the destruction business (which he was asked to review and help set up by me) so he could possibly set up a competing business with Peter [McCormick] to compete with Oasis after Peter was gone. Stewart has also verbally stated to me and the Directors that he has no involvement with Titan Energy but based on 20+ e-mails, it is very apparent that he has been putting working hours towards the progress of this company whilst he should have been working as an employee of Oasis. “
49. In the absence of any further communication the claimant returned to work on 23 March 2011. Mr Barnedt had not expected this to occur having not received a copy of Mrs McKay’s letter of 15 March 2011 to Mrs Sheridan. According to Mr Barnedt he was very annoyed about the claimant returning to work unexpectedly as he had concerns about the claimant’s wellbeing in part due to a comment made previously by the claimant that he might as well throw himself in front of a bus. Mr Barnedt instructed the claimant to leave but he refused to do so until Mr Barnedt had spoken to Mrs McKay. Mr Barnedt phoned Mrs McKay and an irate conversation ensued. Mrs McKay followed up on this in writing on the same day. Mrs McKay rehearsed what had occurred namely that Mr Barnedt as CEO had instructed the claimant not attend work and to remain at home on pay and that Mr Barnedt had refused to provide any further explanation when asked to do so by Mrs McKay. Mrs McKay went on to say that Mr Barnedt had given a secondary reason for instructing the claimant to leave the premises namely that he had failed to attend with the company doctor. Mr Barnedt was challenged on this by Mrs McKay but refused to engage in any further conversation and indicated that he would confirm the position in writing. Mr Barnedt ended the conversation by stating that the claimant was on the premises illegally. Mrs McKay disputed this and went on say what had transpired at the meeting on 8 March with Mrs Sheridan including the fact that the claimant had been certified as being fit to return to work by his General Practitioner on 1 March 2011. Mrs McKay went on to dispute the respondent’s entitlement to require the claimant to attend with the company doctor. Mrs McKay contended that there was no lawful or contractual basis for instructing the claimant to stay away from work other than suspension. Mrs McKay concluded the letter by stating that as a result of Mr Barnedt’s actions there was no basis upon which he could conduct the disciplinary hearing in a fair and unbiased manner and that if it was to proceed on Friday, 25 March 2011 it should be conducted by another director.
50. On the same day Mr Barnedt wrote to the claimant and formally suspended him on the basis that he was alleged to have undertaken actions that were incompatible with his contract of employment as set out in the email of 18 March 2011, a copy of which was enclosed. Mr Barnedt went on to instruct the claimant to attend a disciplinary hearing at 9.00 am on Friday, 25 March 2011 at a venue to be decided. Mr Barnedt referred to Mrs McKay’s letter of the same date which he attached and pointed out that neither he nor his advisors had seen Mrs McKay’s letter of 15 March 2011. By email dated 23 March 2011 Ms Gallagher indicated that Mr Barnedt proposed conducting the disciplinary hearing himself.
51. Mr Rogers offered to accompany the claimant at the disciplinary hearing. Mr Barnedt emailed Mr Rogers on 23 March 2011 and indicated that his attendance would be permitted. Mr Barnedt also stated that he was not copying this email to the other directors due to a request to keep this at a high level and to allow them some distance to the issues in case there was an appeal.
52. On the evening of 23 March 2011 Mr Mahon sent an email to Mrs McKay which read as follows:
“I refer to Mr Porters note and attached email correspondence that I sent to the above people [the claimant, Mr McCormick, Mr Carroll and Mr B Connolly] on 17 May 2010 and would like for the record, clarify the context and purpose of this letter.
The purpose of my note was to brief all parties in the Oasis Group of the decision by NI Health to tender their entire document storage estate. This tender would replace the current contractual arrangements that were currently held by four companies; Oasis, Filestores, Morgan’s and Iron Mountain. It was discussed and a view taken that further services as outlined in the e-mail could be added to the potential contract. The reason I suggested and outlined these services was at that time Peter McCormick and I were working on the business case for Invest NI to establish an Oasis European Medical Records facility in Belfast and this contract could be that vehicle.
I outlined to all parties that I anticipated that the procurement process would begin within weeks of the note, however it must be stressed this procurement has now been delayed due to issues that all in the original email I sent to are well aware of.
In my note I finished by asking all concerned how best they wished for me to assist them in terms of advice and guidance as the tender process progressed.”
The email of 17 May 2010 referred to by Mr Mahon is described at paragraph 21 above.
53. Further email correspondence ensued between Mrs McKay and Ms Gallagher on 24 March 2012. Mrs McKay sought a postponement of the hearing to enable Mr Mahon to attend. Ms Gallagher responded that the hearing could not be rescheduled given Mr Mahon’s situation (the impending birth of his child) which meant that he most likely would not be available for two weeks. Ms Gallagher also provided Mrs McKay with a copy of a written statement which Mr Mahon sent the previous night and which he wished to have submitted. Ms Gallagher went on to state that Mr Barnedt would be chairing the hearing and that this was not negotiable. Mrs McKay made further representations by email and in particular in relation to the refusal to reschedule the hearing in order to facilitate the attendance of Mr Mahon. Mrs McKay drew attention to the nature of the charge and the claimant’s position in the company and stated that he was entitled to have a witness who could support his case that he was not guilty of misconduct. Mrs McKay pointed out that it was perfectly feasible to postpone for a second time and that there was no prejudice in agreeing a short postponement given that the claimant was suspended and not attending the workplace. Mrs McKay also challenged the decision that Mr Barnedt should chair the disciplinary hearing and suggested that the conduct of the process to date made it evident that the outcome was predetermined. Finally, Mrs McKay indicated that the claimant would attend the hearing under protest.
54. Ms Gallagher replied by email later that day. Ms Gallagher indicated that having taken advice the respondent would hire a third party independent consultant, Mr Dickey, to conduct the hearing. Ms Gallagher also pointed out that the respondent had not refused to accommodate Mr Mahon’s attendance but rather Mr Mahon had voluntarily provided a written statement in lieu of attending and she wished Mr Mahon well with the birth of his child.
55. In his evidence to the tribunal Mr Barnedt stated that he first enquired as to whether any of his fellow directors would undertake the disciplinary hearing but none were available either due to being based overseas or in the case of Mr Rogers having agreed to represent the claimant at the disciplinary hearing.
56. The services of Mr Dickey were secured through Peninsula. Mr Dickey had no training or qualifications in Human Resources or personnel matters but had worked at managerial level for some time and had undertaken grievance and disciplinary hearings both for the organisations that he worked for most recently Wrightbus and outside businesses. He was contacted about the matter on Wednesday 23 March 2011 and asked if he was free to conduct a disciplinary hearing on Friday 25 March 2011. Mr Dickey was available and arrangements were made for him to attend at the Ballymascanlon Hotel in Dundalk where the hearing was to take place.
57. On 24 March 2011, Mr Mahon sent an email with the above note to Mr Barnedt who responded as follows:
“As I asked Mr. Porters Solicitor to have you give your written testimony, I am guessing this is what this is. If they have asked you for information regarding that e-mail or others, you can respond as you see fit.”
In response Mr Mahon sent an email with the above note to Mr Barnedt and Ms Gallagher as follows:
“The solicitor contacted me again this evening. I have stressed I am not and wish not to be implicated in proceeding and thus the reason I have provided a statement confirming that I sent the email and confirming the contents with I have told them I have shared with you. They were ok with that. Good luck tomorrow.”
58. Mr Rogers also emailed the directors in response on 24 March 2011 to alert them to concerns that he had about the claimant’s health and wellbeing and set out in some detail distressing events that had occurred in the claimant’s personal life. In addition Mr Rogers stated that he had concerns that the actions being taken by the company could cause the claimant to act irrationally in regards to his health. Mr Rogers went on to mention a settlement proposal which as far as he was aware had not been responded to by the respondent and stated that the claimant had asked and was willing to leave the company as a “good leaver” and that in Mr Rogers’ opinion this was a much more humane way of dealing with this mentally fragile employee. Mr Barnedt acknowledged this and indicated that the clamant was being handled as advised by the respondent’s agents. Mr Barnedt also requested an update after the hearing if this was allowed.
59. Mr Rogers also responded to Mr Barnedt on 24 March 2011 and confirmed his attendance at the disciplinary hearing. Mr Rogers also stated that matters seem to have deteriorated with the claimant and expressed the view that this was not in the best interests of the company and that there ought to be a better way of handling the matter.
60. The disciplinary hearing took place on 25 March 2011 at the Ballymascanlon Hotel in Dundalk. Mr Dickey attended at the hotel at 8.30 where he spoke with Mr Barnedt and Ms Gallagher. Although this was described as a pre brief it appears to have been pretty perfunctory and consisted of Mr Dickey asking a few questions and reading over the papers.
61. The claimant was accompanied by Mr Rogers at the hearing. The tribunal was provided with a record of the disciplinary hearing both in its original manuscript form and as subsequently typed up. Mrs A Munn was the note-taker. The claimant contended that the record of the hearing was incomplete. The respondent did not suggest that it was verbatim and given that Mrs Munn simply took a long hand note of the proceedings without the benefit of a recording device we would be surprised if it was. However, for present purposes we will proceed on the basis that the record of the hearing is a broadly accurate reflection of what took place.
62. At the outset of the hearing the claimant complained that he did not receive a copy of the disciplinary rules and procedures with the invite letter. Mr Dickey offered to adjourn the hearing but the claimant and Mr Rogers indicated that they were happy to proceed. The claimant then questioned whether Mr Dickey was independent and the record states that the claimant was satisfied on the basis of what he was told by Mr Dickey that he was independent. There was also a rather bizarre incident in which Mr Dickey took umbrage at Mr Rogers approaching the note taker and offering her coffee.
63. After a short break Mr Dickey went through each of the matters of concern and gave the claimant an opportunity to comment on the allegations which he took up. In relation to the first matter of concern which related to setting out to keep a major tender contract from the respondent, the claimant put forward the explanation that is recorded as being that the email which formed the basis of this matter of concern was sent to other employees of the respondent including Mr McCormick and that the reason for not informing Dublin was that the claimant wanted to make sure as a company that all was in order first and that it was up to the claimant to act regarding tenders and pull it all together and that if they had told the “Dublin boys” first they may not have got in the tender. Mr Dickey is recorded as pressing the claimant hard as to whom he was acting for and the claimant maintained that he was acting on behalf of the respondent and that Mr Barnedt was aware of it. Mr Dickey suggested that the Dublin Office had a right to know what was going on and would both want to be and need to be involved. Mr Dickey then read out the second matter of concern which related to setting up a rival competing company. The claimant denied setting up a rival company. Mr Dickey drew the claimant’s attention to the apparent warning from Mr McCormick that he was on dangerous ground and the reference to delaying the respondent becoming involved in shredding. The claimant’s initial response was that he knew that it was at his own risk but subsequently changed tack and indicated that it was Mr McCormick who was on dangerous ground because he was seeking a redundancy package at that stage whereas the claimant was not leaving. Mr Rogers, perhaps unhelpfully from the claimant’s perspective, is also recorded as having intervened to say that his reading of the email was that the danger was to the claimant rather than Mr McCormick. Mr Dickey continued to press the claimant on this issue. The claimant claimed that he was wearing three hats,” his company hat, his customer hat and his friend hat”. The claimant suggested that if Mr Barnedt didn’t like the franchise Mr McCormick could do it but that he, the claimant, would not be involved. The claimant also pointed out that he owned shares in the respondent business with a value of around half a million pounds, drew attention to his service with the company, suggested that Mr McCormick was a loose cannon and that Mr Kane had been a personal friend for 24 years. Mr Dickey put to the claimant that his primary role and loyalty must be to the respondent. The claimant suggested that he had a duty to “source customers” but when pressed agreed that the company must come first and customers second. The claimant indicated that in the email he told Mr McCormick that if he wanted to get involved in shredding he should do it and set up before the respondent but that he couldn’t get into it. Mr Dickey pointed out that this was not what the claimant said in the email. The claimant responded that he was not setting up a shredding plant or encouraging someone to go into competition and emphasised that the shredding company collected the bags of documents and these were then destroyed and that Mr McCormick could set up plants anywhere in Ireland. Mr Dickey stated that the claimant appeared to be trying to get this all done before Mr Barnedt or the respondent had him working on shredding. The claimant responded Mr Barnedt had already asked him to price a shredder. The hearing continued along these lines and it is recorded that the claimant was offered a break when he became emotional but this offer was declined. The claimant then made a short statement the gist of which was that his aim was to help Mr McCormick when he decided to leave the respondent business. The claimant was aware that Mr Kane was going into the wind turbine business and Mr McCormick wanted to go in with him but Mr McCormick’s involvement appears to have caused problems for the project and the claimant kept an eye for Mr Kane because Mr McCormick was a loose cannon. Not surprisingly Mr Dickey queried why the claimant would seek to encourage Mr McCormick given his opinion of him. The claimant did not answer this question.
64. Mr Dickey then drew attention to the email of 5 October 2010 where the claimant stated, “If instructed I can only at risk to myself delay Oasis entry into the business for so long.” Mr Dickey pressed the claimant as to who would instruct him in this context. Mr Rogers suggested that this referred to Mr Barnedt to which Mr Dickey responded with a degree of scepticism. The claimant agreed that this referred to Mr Barnedt and Mr Dickey undertook to check it out. Mr Dickey then moved on to the third matter of concern which was the allegation of passing on confidential insider information. The claimant denied this allegation but no discussion is recorded concerning the email of 5 October 2010 which gave rise to the allegation. This may partly have been due to prompting from Mr Rogers who made reference to the claimant’s long association with the business and the lack of a current role as well as the promotion of Mr Nelis at the insistence of Mr Barnedt, whom the claimant described as a verbal bully and Mr McCormick being the real problem. The claimant then touched very briefly on the matter in hand by saying, “I have a right to look out there” and agreeing with Mr Dickey that there was a line that must not be crossed.
65. The claimant then went on to indicate that the reason he was at the hearing was that there was no role in the company for him and that this was contributing to his stress and that he had been the Managing Director of Belfast but now he had no role, was being disciplined and not allowed to go near the office. Mr Dickey then started to wind up the hearing and while doing so stated that the emails to and from the claimant could not be questioned. The only other exchange of significance was in reference to the relationship between the claimant and Mr McCormick which the claimant agreed was rocky prior the claimant taking sick leave. The claimant stated that he had not spoken to Mr McCormick for 6 months and that he challenged Mr McCormick about invoices. The meeting concluded a short time later with Mr Dickey saying that he would give a written decision in approximately one week and that a typed copy of the minutes of the meeting would be provided with it.
66. There were no complaints of substance about the conduct of the hearing in the claim form but in his evidence to the tribunal the claimant stated that Mr Dickey would not allow him to provide explanations in relation to the incriminating emails and insisted on yes or no answers. The claimant also complained that the alleged breaches of contract were not put to him by Mr Dickey and that he was first made aware of same when he received Mr Dickey’s decision. It was the respondent’s case was that the claimant had a full opportunity to explain the incriminating emails. In addition, the claimant criticised Mr Dickey for not allowing him to refer to his prepared notes.
67. On 25 March 2011, Mr Rogers sent a report on the hearing to Mr Barnedt by email in which he stated as follows:
“The chairman tried as best he could to stick to the three issues raised in the letter and after approx two hours of businesslike discussions got a comprehensive overview of the issues and the characters involved.
It was difficult for Stewart to stay composed throughout the process as he is inclined to wear his heart on his sleeve and is quite emotionally involved in the business after living it for the past 20 odd years. Except for one short period he kept it together.
I felt the chairman gave Stewart adequate opportunity to answer the charges and he conducted the hearing in an even handed manner. Whilst the process is difficult for Stewart to go through the emails deserved explanation and each topic got a good airing.
I am not qualified to comment on the protocol of such hearings not having attended such meetings previously. I cannot comment on the qualifications of the chairman as I don’t know anything about him.”
68. As indicated above, Mr Dickey did not give his decision immediately and it was duly issued by him on 4 April 2011. Mr Dickey’s decision was that the claimant was guilty of gross misconduct and was dismissed with immediate effect. Mr Dickey provided a detailed and comprehensive decision letter, the material portions of which are set out below:
“The matters of concern were:
1. It was alleged that, in a series of emails dated between May 2010 and October 2010 that have just come to our attention; that you undertook actions that are completely incompatible with your contract of employment and your duties as a Director. Namely you are in breach of your duty of fidelity and loyalty to your employer, in that you set out to keep a possible major tender contract from your employer, which was the Northern Ireland Health contract, as set out in the email dated 17th May 2010 to Sean Mahon and Peter McCormick.
During the meeting I put this matter of concern to you. Your responses were vague to say the least. You denied the allegation. You referred to a statement of Sean Mahon of which I had and have an unsigned copy of, and have read through it. However, I am not disputing the contents of Sean Mahon’s unsigned statement, nor Sean Mahon’s email dated 17th May 2010 at 11.42 am to Brian Connelly, cc’d to Ronnie Carroll, Peter McCormick and you. It is your response regarding this email to Peter McCormick that I am concerned about. At the hearing you said;
· “If we had told the Dublin boys first we may not have got the tender. In the group it’s up to me regarding tenders and to pull it all together and get it in”.
· “But this email was sent to more than me, it was sent to other company employees. I am MD, Peter McCormick is also an MD, I have respect for him. The reason Dublin wasn’t informed first were that you want to make sure as a company, that all is in order first.”
I find these answers unacceptable as you offered no logical or conclusive evidence to back your claim. I would refer to your email dated 17th May 2010, to Sean Mahon. In it you state:-
· “I mentioned this tender to Peter over the weekend – but was not going to inform the Dublin boys at first. Suggest we get together and discuss this initially. It is also an opportunity to set something up ourselves with other interested partners (Steria Fijitsu etc) I would assume something this size is going to attract the big players and we could find ourselves in with BT Siemens etc. It is obviously the very project we have discussed and Peter has may plans. Invest NI may also now play a further role and perhaps the entire operation could be set up in an employment black spot or political/enterprise area attracting even more grants etc. Lots to discuss.”
I find it inconceivable that something of this size and magnitude would be kept from your head office. Combining this with the email dated 4 October 2010 from Richard Kane to Peter McCormick and cc’d to yourself, and Peter McCormick’s email to you dated 5th October 2010, in which Peter McCormick warns you that;
· “Stew, this is extremely dangerous ground. It definitely represents a very evidence [sic evident] conflict of interest…..and grounds for dismissal with no redundancy. I would caution you to be very careful what you communicate and who you communicate it to.”
Your reply to him of the same date states;
· “I know and am aware of the danger. My problem as previously mentioned to both yourself and Gary – we know Dennis does not want to do a deal with Alan”.
Further on in the same email you stated that;
· “During a couple of very brief conversations Dennis suggested that I might be asked to set up a shredding operation for the group (as just one of a number of possible other projects he might give to me??) This is obviously a problem and we need – I feel establish shredding with Alan. But at the moment I cannot be seen to be involved – but obviously encourage it to be set up before Dennis/Oasis have me working on it. At the moment Oasis are not really in the business and therefore needs to be established ahead of Oasis. If instructed I can only at risk to myself delay Oasis’s entry into the business for so long. We all need other options and I have an old friend that can help and advise on taking
· Alan’s franchise
· developing other direct for ourselves
· and do not wish to share this valuable contact with Oasis”.
Given the fact that you offered no conclusive evidence or explaining these emails, I am satisfied that you did indeed breach your duty and fidelity and loyalty to your employer, which is contrary to your contract of employment namely ….”
Mr Dickey then set out the breaches of the claimant’s Service Agreement namely clause 2.2 (b), (c) and (d) and clause 2.4 (a). He then concluded as follows:
“I find there is sufficient evidence to substantiate this allegation against you.”
2. It was alleged through reading the enclosed emails that you were embarking with others to set up a rival competing company.
During the disciplinary hearing you denied the allegation but again your responses were vague and not at all concise. You gave no logical or conclusive evidence that would counteract this allegation. Indeed you seemed to do your best to evade the question.
Once again the emails within my possession, of which you have copies off, would substantiate the allegation against you.
I would draw your attention to the email dated 17th May 2010 in which you state;
· “I mentioned this tender to Peter over the weekend but was not going to inform the Dublin boys first. Suggest we get together and discuss this initially. It is also an opportunity to set something up ourselves with other interested partners.”
Also the email dated 28th July 2010 from Christoph (Reisswolf) to Peter McCormick in which Christoph states;
· “I hope you are well and your projects are still in positive process? Please let me know, if you wish any help from our side. Actually we have a used machinery in Spain, which is quite new, shredding capacity 1.5 tons per hour and a suitable press. Looking forward to our dinner in Belfast!”
Later in the same linked email chain dated 28th July 2010, Peter McCormick sent you and Richard Kane an email which stated;
· “Guys, read down to the note which I am responding to, it confirms that the opportunity offered to us is still available. We just need to proceed with caution and stealth.”
You responded to this email by reply email dated 28th July 2010 sent to Peter McCormick and Richard Kane, advising that;
· “Yes still positive overall. We like to see this happen in Ireland and the other areas offered Stewart”.
Furthermore, in the email dated 4th October 2010 from Richard Kane to Peter McCormick and cc’d to you, it was stated;
· “Is the shredding opportunity dead? I am conscious your friend will want a decision soon. My company would be willing to consider a partnership investment as an income stop gap until TEA revenue starts.”
Your reply was;
· “I earlier this morning left a message with Alan Pevy regarding the subject of possible storage options in Glasgow and expect him to come back to me later today. I also left a further message mentioning the destruction again and perhaps talking to him about the opportunity that still exists.”
Further on in the chain email dated 5th October 2010 from Peter McCormick to you and Richard Kane states;
· “Guys, yes this opportunity still exists and Alan knew/knows I needed time to make the decision and he and his German colleagues were happy to give this time, Stew, this is extremely dangerous ground. It definitely represents a very evidence [sic evident] conflict of interest…..and grounds for dismissal with no redundancy. I would caution you to be very careful what you communicate and who you communicate it to. I hope to be out by the end of this month…..this gives some freedom to act and this opportunity with Reisswolf is worth considering.”
In your reply email to Peter McCormick dated 5th October 2010 you state;
· “I know and am aware of the danger. My problem as previously mentioned to both yourself and Gary – we know Dennis does not want to do a deal with Alan.””
Mr Dickey then stated that he considered this to be in breach of clauses 2.4, 6.1 and 6.2 of the claimant’s contract of employment. He then concludes as follows:
“And therefore I find there is sufficient evidence to substantiate this allegation against you.”
“3. It was alleged that you also passed on confidential insider information to others rather than forward to your employer, of which you are fully aware of your actions and implications of your actions as set out in the email dated 5 October 2010 to Peter McCormick and others.”
“During the disciplinary hearing you denied the allegation. However, as with the previous allegations you seemed to evade the questions. However, it is clear from the email dated 5th October 2010 that you and others were considering opportunities which arose from the confidential information you were afforded initially by Sean Mahon in his email dated 17 May 2010. It seems that you and others were using this confidential information to set up in business in competition with Oasis Group, and considering the emails dated 4 and 5 October 2010, I would suggest that this may be substantiated. Furthermore, your email dated 5th October 2010 to Richard Kane, Peter McCormick and cc’d to Glen Bradley in which you state;
· “left a message with Alan Pevy regarding the subject of possible storage options in Glasgow and expect him to come back to me later today. I also left a further message mentioning the destruction again and perhaps talking to him about the opportunity that still exists.”
Richard Kane as I understand it is a personal friend of yours as confirmed by you at your disciplinary hearing. You said;
· “I have known Richard as a personal friend for 24 years.
And I understand Alan Pevy is an employee of Reisswolf, a competitor of Oasis.
Given the fact that you offered no conclusive evidence, counteracting or explaining these emails, I am satisfied that you breached the following Clauses in your contract of employment namely clauses 2.2(c), 6.1.1 and 6.2.”
Mr Dickey then set these out and continued:
“In conclusion, I am satisfied that you were indeed part of a number of individuals who were in the process of establishing a competitive business to your employer Oasis. During your disciplinary hearing a number of emails were shown to you. The email dated 5th October 2010 to you from Peter McCormick, Peter McCormick warned you that you were on extremely dangerous ground, and that definitely represented a conflict of interest and grounds for dismissal, to which in a reply email of the same dated you concurred with Peter McCormick’s analysis of the situation. In your reply email of the same you go on to state that you would obviously encourage a shredding company to be set up before Dennis/Oasis.
You further go on in the same email to state if instructed you could only at risk to yourself delay Oasis entering into the business for so long. I asked you who would instruct you to do this. You said, “Don’t know.”
I further asked you who would instruct you, was it Peter? Was it Richard? You replied, “No, not Richard.” Your representative Des Rogers suggested that it was Dennis. You then seemed to agree with your representative that it was Dennis. I informed you that I would check this out.
I find it inconceivable that the CEO of Oasis, your boss, would instruct you to delay Oasis entering into a lucrative market. I have posed this question to your CEO and he stated that under no circumstances could he or would he give such an instruction. It is quite evident from the emails that you were in discussions with a competitor of Oasis, which would have had a detrimental effect on your employer, Oasis.
I noted during the meeting that you were unable to give any specific or straightforward answers to vital questions. I was disappointed by your representative that he seemed not to take the advice I gave during my preliminaries with regard to his right of audience in that he had no right to answer questions on your behalf. I further find it strange that a man of his experience and position would consider it acceptable to approach a note taker during an official hearing/meeting, the consequence of which resulted in the meeting being disrupted.
Taking into account the substantial documented evidence in the form of emails, and the lack of any straightforward/concise answer along with your seemingly avoidance of the questions I posed to you, I am satisfied that you are indeed guilty of gross misconduct, and I have therefore decided that dismissal is the appropriate sanction. Your conduct has resulted in a fundamental breach in the relationship of trust and confidence upon which your contract of employment is based. It follows that your employment with Oasis has become untenable.
You are therefore dismissed with immediate effect. You are not entitled to notice or pay in lieu of notice. Any monies owing to you, together with your P45 will be sent out to you in due course.”
Mr Dickey concluded the letter by advising the claimant of his right of appeal if he believed that the disciplinary action taken against him was either too severe or inappropriate.
69. The claimant exercised his right of appeal through Mrs McKay who submitted a detailed letter of appeal dated 7 April 2011. On behalf of the claimant Mrs McKay firstly questioned the right of Mr Dickey to conduct the disciplinary hearing and contended that he had no legal power to dismiss the claimant. Mrs McKay then went on to set out the grounds of appeal which comprised a challenge as to the legality of the proceedings and she contended that even if Mr Dickey had the right to dismiss the claimant he improperly reached his decision because (i) he failed to follow the disciplinary procedures and rules of the company or any fair procedures, (ii) He made assumptions that were not based on evidence that was adduced at the hearing, (iii) he refused to allow the claimant to adduce evidence and call witnesses as to his innocence, (iv) the evidence did not support the finding of gross misconduct, (v) the hearing was not conducted in accordance with the rules of natural justice, (vi) the minutes of the hearing were inaccurate, prejudicial and contained substantial omissions from the claimant’s evidence and if Mr Dickey’s conclusions were reached on the basis of the transcript those conclusions were wrong, (viii) the speed at which the hearing was brought on and the manner in which it was conducted did not make sufficient allowance for the fact that the claimant had only returned to work after a period of illness due to work related stress and Mr Dickey’s drawing of adverse inferences from the claimant’s performance and manner of answering questions were unfair and unjustified. Mrs McKay also requested to be provided with a number of documents
70. Again there was a dispute as to who should hear the appeal. Mr Barnedt wrote to the claimant on 11 April 2011 and advised that he would be conducting the appeal hearing and informing the claimant of his right to be accompanied.
71. On 14 April 2011, Mr Barnedt replied to Mrs McKay’s letter of 7 April 2011. Mr Barnedt defended the decision to appoint Mr Dickey to undertake the disciplinary hearing and Mr Dickey’s conduct of it. Mr Barnedt noted that the claimant was unhappy with Mr Barnedt taking the disciplinary hearing and requested someone neutral and this led to Mr Dickey’s appointment. Mr Barnedt did not respond directly to the contention that Mr Dickey was not lawfully entitled to conduct the disciplinary hearing or impose the sanction of dismissal. Mr Barnedt went on to comment on some of the appeal points. In the same section Mr Barnedt confirmed that he would be conducting the appeal hearing as CEO of the OASIS Group. Mr Barnedt also provided some documentation in response to Mrs McKay’s request for same. Mr Barnedt denied discussing the evidence with Mr Dickey before the disciplinary hearing.
72. Mr Barnedt could not be dissuaded from hearing the appeal himself. Mrs McKay wrote to Mr Barnedt on 15 April 2011 noting that despite the issues that she had raised about the fairness of the procedure Mr Barnedt intended to conduct the appeal himself on the same day. Mrs McKay stated that it was clear that the claimant could not have a fair hearing of his appeal and on that basis he would not be attending the appeal hearing.
73. The appeal therefore proceeded in the claimant’s absence on 15 April 2011 as a paper appeal with Mr Barnedt reviewing the documentary evidence and the transcript of the hearing before Mr Dickey. Before addressing the grounds of appeal Mr Barnedt set out what he considered in his review of the disciplinary process which comprised the invite letter, the emails, the disciplinary hearing minutes, Mr Mahon’s email, the decision letter and the claimant’s Service Agreement. Mr Barnedt also spoke to Mr McElroy who advised him that he had no statement to make in relation to the disciplinary appeal and reiterated what he had said at the last Board meeting. In the course of his review of the material Mr Barnedt also inserted typescript comments in the transcript of the disciplinary hearing beside the key email exchanges.
74. Having conducted his review Mr Barnedt upheld the dismissal and the sanction imposed. Mr Barnedt’s letter dismissing the appeal used Mrs McKay’s letter of appeal as a template and addressed each point made by Mrs McKay seriatim.
“1. The decision has no proper basis in law/or under contract and/or under the disciplinary procedures and rules of the Company. The disciplinary procedure was followed as per your Service Agreement and in line with the Labour Relations guide to good practice. You received an invite to the disciplinary which contained the concerns you were required to address and the evidence namely the emails taken from your computer and you were informed that it would be viewed as gross misconduct. At the disciplinary hearing you were given the opportunity with the assistance of your companion to address the issues of concern. In relation to Mr Dickey’s authority to take the disciplinary and make a decision I would refer you to the Company handbook a copy of which you received prior to the disciplinary process at page 44g, Disciplinary Authority ‘.. Nominated person progressing any action..’ Mr Dickey pointed out in his decision letter at page 3 that he was satisfied that you breached your duty and fidelity and loyalty to the Company contra to Clause 2.2 Duties (b), (c) and (d). Clause 2.4 Other interests (a), Clause 6.1 Trade Secrets 6.1, 6.2 notes. After reading the minutes of the meeting and the decision letter I can confirm that the disciplinary process and decision was in line with the Company procedures and recognised good practice.
2. Mr Dickey failed to follow the disciplinary procedures and rules of the Company or indeed any fair procedures. After viewing all the papers namely emails, invite letter, disciplinary hearing minutes and the decision letter; I would say Mr Dickey was very open and fair. He explained the process and when he would make his decision, he asked a number of questions to ensure you were given every opportunity together with your companion to address the issues of concern.
3. Mr Dickey made assumptions which could not have been based on the evidence adduced at the hearing. Mr Dickey had the emails and asked you about them and gave you ample time to address them. I believe looking at the emails they are very self explanatory and were contra to your contract of employment. In fact in one of the emails dated 5 October 2011 Peter McCormick warns you ‘extremely dangerous ground … conflict of interest … grounds for dismissal with no redundancy.’ Your reply dated 5 October 2011 ‘I know and am aware of the danger.’ I do not believe Mr Dickey needed to make an assumption the evidence was clear to see in the emails but he give you the chance to tell your side of the story assisted by your companion.
4. Mr Dickey refused to permit you to adduce evidence by preventing you from bringing witnesses and other evidence as to his innocence of the allegations raised against him. Mr Dickey was happy to speak with witnesses but did not want to delay the disciplinary hearing further to assist a witness to appear on the day. A statement was given via email by Sean Mahon but it did not provide any evidence useful to the case in the negative or positive. I can confirm I have spoken to Gary McElroy as he was mentioned as a witness and he has informed me he had no statement to make other than what he had raised at the last Oasis board meeting. Whilst Gary was vocal at the meeting it was about issues unrelated to the disciplinary process.
5. The evidence did not support a finding of gross misconduct. I believe viewing the emails that Mr Dickey’s conclusions in his decision were justified and indeed the issues of concern would be categorised as gross misconduct.
6. The hearing was not conducted in accordance with the rules of natural justice. You were given an invite to the meeting, you had the right to accompaniment, you were aware of the issues of concern and had copies of the emails that were to be used as evidence. You had a contract of employment which you were in breach of. You were given a disciplinary hearing which was explained throughout and minutes were taken and your companion was given an opportunity to address the hearing.
7. If the conclusions of Mr Dickey were reached on the basis of the minutes of the disciplinary hearing which purported to be verbatim the conclusions were wrong as the minutes were inaccurate, prejudicial and contained substantial omissions of evidence given by you. I have spoken to Mr Dickey and his minute taker and am assured that the minutes were an accurate account of what took place at the hearing. I have been told by Mr Dickey that he sent you a copy of the disciplinary minutes with his decision; thus I am surprised you did not return an amended version via your solicitor’s appeal letter if they were so out of touch of what took place.
8. The speed at which the hearing was called and the manner in which it was conducted did not make sufficient allowance for the fact that you had only returned from a long period of illness caused by work related stress and further that Mr Dickey drew adverse inferences from your performance and manner of answering which were unfair and unjustified in the circumstances. I would comment as follows and refer you to the Company handbook a copy of which you received prior to the disciplinary process; under Disciplinary and Disciplinary Procedures under A Introduction 4 c Disciplinary action where necessary is taken speedily and in a fair manner. I believe the hearing was conducted in a fair manner and in accordance with the Oasis Company Handbook and the Labour Relations Agency Good Practice guide. Firstly you received an invite to the disciplinary meeting and the evidence in relation to the allegations you came to address. I have read the minutes and can see that Mr Dickey explained the process as per the Company’s Disciplinary procedures. I believe he explained what he was there to do on more than one occasion. Mr Dickey went over the invite letter and disclosures, when it was suggested by you and your companion that the disciplinary rules and procedures were not in the letter sent; Mr Dickey asked you did you wish to adjourn the meeting to which both you and your companion stated no, we will continue, your companion did not want to abandon the meeting page 2 of the disciplinary minutes. I would comment at this stage that whilst as the owner of the company prior to Oasis taking over you did not have any procedures in place when Oasis took over you were given a contract of employment and Oasis put a Company handbook [which] was put in place in late November 2010. Your solicitor was sent a copy on 21 of January 2011 prior to the disciplinary process commencing. In relation to your claim that we did not take account of your illness I would remind you that when you returned from sick leave you supplied a doctor’s certificate that you were fit for work. When requested to attend an independent medical assessment to ensure your fitness to return and any requirement for reasonable adjustments you refused saying your doctor had declared you fit to return to work. I believe Mr Dickey took his time during the disciplinary hearing to ask you straight forward questions in an attempt to allow you to give him as much information as possible to allow him to make a well informed decision.
Now having given the matter full consideration; I am now writing to you to confirm the original decision taken by Mr Dickey is upheld. His decision was in line with Company policy and your contract of employment and I could find no new evidence to change this decision”
Mr Barnedt concluded by outlining expenses due to the claimant of several hundred pounds that would be paid into his account and undertaking to post out the claimant’s P45.
75. Mr Rogers gave evidence that he did not think that the claimant received a fair hearing from Mr Dickey but this was in marked contrast to his email report on the matter to Mr Barnedt which gave the hearing a clean bill of health. Mr Rogers’ explanation was that with the benefit of having heard the evidence about the matter he had changed his mind and now considered that Mr Dickey did not understand the explanations offered by the claimant. Mr McCormick’s unchallenged evidence is perhaps of more importance as he was a party to the email correspondence and maintained that Mr Barnedt was fully aware of the matters discussed in the emails through management meetings and at least one board meeting. He agreed with the claimant’s evidence that it would not have been practical to put the matters discussed into practice. What matters is the tribunal’s view of the fairness or otherwise of the disciplinary process.
76. Returning to the unlawful deduction of wages issue, we note that all of the founding partners in the business gave evidence that their intention was that each would receive the same remuneration after the sale of the business. In the event the claimant’s Service Agreement accorded him significantly less remuneration than the others. There was no obvious or logical explanation for this other than that proffered by the claimant namely that the intention was that the balance save for a generous car allowance would go into his pension pot. The claimant told the tribunal that he encountered difficulties due to his original pension being with McConnell’s which was no longer a viable pension provider being no longer in existence. In particular there was no evidence of the money being accrued. The explanation for this was that the amounts involved were not significant in the greater scheme of things and that accordingly there was no need for this to feature in the accounts when the business was bought out. The only written evidence in support of the claimant’s alleged salary entitlement was one reference in the Clearpath due diligence tables. Mr Barnedt gave evidence that he was unaware of any agreement between the claimant and his co-directors in relation to remuneration and contended that in any event the other benefits in the claimant’s Service Agreement, the club memberships and the car allowance, brought the claimant’s remuneration up significantly. In particular the claimant benefited from a car allowance of £15,000 per annum that his fellow directors did not enjoy.
THE LAW
Substantive unfairness
77. Article 130 of the Employment Rights (Northern Ireland) Order 1996 insofar as relevant provides as follows:-
“130. - (1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –
(a) the reason (or, if more than one, the principal reason) for the dismissal, and
(b) that it is either a reason falling within paragraph (2) or some other substantial
reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) A reason falls within this paragraph if it –
(b) relates to the conduct of the employee,
(3) Where the employer has fulfilled the requirements of paragraph (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –
(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
78. In Dobbin v Citybus Ltd [2008] NICA 42 the Court of Appeal provided guidance as to how an industrial tribunal should approach the task of determining the fairness of a dismissal. The judgment of Higgins LJ reads as follows:
“[48]… The equivalent provision in England and Wales to Article 130 is section 98 of the Employment Rights Act 1996 which followed equivalent provisions in section 57 of the Employment Protection (Consolidation) Act 1978.
[49] The correct approach to section 57 (and the later provisions) was settled in two principal cases - British Homes Stores v Burchell [1980] ICR 303 and Iceland Frozen Foods Ltd v Jones [1983] ICR 17 – and explained and refined principally in the judgments of Mummery LJ in two further cases – Foley v Post Office and HSBC Bank Plc (formerly Midland Bank Plc) v Madden reported at [2000] ICR 1283 (two appeals heard together) and J Sainsbury v Hitt [2003] ICR 111.
[50] In Iceland Frozen Foods Browne-Wilkinson J offered the following guidance –
‘Since the present state of the law can only be found by going through a number of different authorities, it may be convenient if we should seek to summarise the present law. We consider that the authorities establish that in law the correct approach for the industrial tribunal to adopt in answering the question posed by section 57(3) of the [Employment Protection (Consolidation) Act 1978] is as follows:
(1) the starting point should always be the words of section 57(3) themselves;
(2) in applying the section an industrial tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair;
(3) in judging the reasonableness of the employer's conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;
(4) in many, though not all, cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;
(5) the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair.’
[51] To that may be added the remarks of Arnold J in British Homes Stores where in the context of a misconduct case he stated -
‘What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further. It is not relevant, as we think, that the tribunal would themselves have shared that view in those circumstances. It is not relevant, as we think, for the tribunal to examine the quality of the material which the employer had before them, for instance to see whether it was the sort of material, objectively considered, which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being “sure,” as it is now said more normally in a criminal context, or, to use the more old-fashioned term, such as to put the matter “beyond reasonable doubt.” The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion’.”
This passage was cited with approval by the Court of Appeal in its recent decision in the case of Rogan v South Eastern Health and Social Care Trust [2009] NICA 47.
Procedural fairness
79. Article 130A of the 1996 Order makes provision in respect of procedural fairness as follows:
“130A. - (1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if—
(a) one of the procedures set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003 (dismissal and disciplinary procedures) applies in relation to the dismissal,
(b) the procedure has not been completed, and
(c) the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.
(2) Subject to paragraph (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of Article 130(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.
(3) For the purposes of this Article, any question as to the application of a procedure set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under Article 17 of that Order.”
80. Under the Employment (Northern Ireland) Order 2003, and the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004, an employer must follow a minimum procedure when disciplining or dismissing an employee. If the employer fails to follow the statutory procedure, the tribunal must make a finding of unfair dismissal and award a minimum of four weeks’ pay if the basic award transpires to be lower than that figure under Article 146 of the 1996 Order, unless the tribunal considers that such an award would result in injustice to the employer. The tribunal must also increase any award which it makes to the employee by 10%, and if it considers it just and equitable in the circumstances, by a larger percentage up to a maximum of 50%. The percentage increase must be made unless there are exceptional circumstances which would make the increase of 10% minimum unjust or inequitable (Article 17). The New Labour Relations Agency Code of Practice dated 3 April 2011 does not apply to the present case which is governed by the previous Code of Practice on Disciplinary and Grievance Procedures.
81. Accordingly, if an employer wishes to dismiss an employee it must follow the statutory dismissal procedure. This is the minimum procedure which must be followed in every case to which it applies. In the present case the standard procedure applies which is as follows:-
“Step 1: statement of grounds for action and invitation to meeting.
1. - (1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.
Step 2: meeting
2. - (1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.
(2) The meeting must not take place unless –
(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
(3) The employee must take all reasonable steps to attend the meeting.
(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.
Step 3: appeal
3. - (1) If the employee does wish to appeal, he must inform the employer.
(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.
(3) The employee must take all reasonable steps to attend the meeting.
(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.
(5) After the appeal meeting, the employer must inform the employee of his final decision.”
82. The case of Polkey v Dayton Services LTD 1987 3 All ER 974 HL makes it clear that, if a dismissal is procedurally defective, then that dismissal is unfair but the tribunal has a discretion to reduce any compensatory award by any percentage up to 100% if following the procedures correctly would have made no difference to the outcome.
83. In Alexander v Bridgen Enterprises Ltd [2006] IRLR 422 the Employment Appeal Tribunal provided guidance on the interplay between the statutory procedures and fair or unfair dismissal as follows:-
(1) if the statutory procedures were followed and there was a breach of other procedures but the individual would have been sacked anyway, that is, the chance of dismissal was more than 50%, the dismissal is fair;
(2) if the statutory procedures were followed but there was a breach of other procedures and if the chance of dismissal was below 50% the dismissal is unfair, but a Polkey deduction can be made;
(3) if no statutory procedures were followed there is automatic unfair dismissal and four weeks pay is the minimum which must be paid and can be increased by 10 to 50% unless the award of four weeks pay would result in injustice to the employer.
Compensation
84. Article 157 of the 1996 Order makes provision in relation to compensation as follows:-
157. - (1) Subject to the provisions of this Article and Articles 158, 160 and 161, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.
(4) In ascertaining the loss referred to in paragraph (1) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of Northern Ireland.
(6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.
Unlawful Deduction from Wages
85. Article 45 of the1996 Order provides as follows:-
“(1) An employer shall not make a deduction from wages of a worker employed by him unless—
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.
(2) In this Article “relevant provision”, in relation to a worker's contract, means a provision of the contract comprised—
(a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or
(b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.
(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.
(4) Paragraph (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.
(5) For the purposes of this Article a relevant provision of a worker's contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.
(6) For the purposes of this Article an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.
(7) This Article does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.”
86. Article 59(1) provides that for the purposes of a claim under Article 45,
“wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including - (a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise[…]”
87. The time limit for complaints to industrial tribunals is dealt with in Article 55 as follows:
“55. — (1) A worker may present a complaint to an industrial tribunal—
(a) that his employer has made a deduction from his wages in contravention of Article 45 (including a deduction made in contravention of that Article as it applies by virtue of Article 50( 2)),
(b) that his employer has received from him a payment in contravention of Article 47 (including a payment received in contravention of that Article as it applies by virtue of Article 52(1)),
(c) that his employer has recovered from his wages by means of one or more deductions falling within Article 50(1) an amount or aggregate amount exceeding the limit applying to the deduction or deductions under that provision, or
(d) that his employer has received from him in pursuance of one or more demands for payment made (in accordance with Article 52) on a particular pay day, a payment or payments of an amount or aggregate amount exceeding the limit applying to the demand or demands under Article 53(1).
(2) Subject to paragraph (4), an industrial tribunal shall not consider a complaint under this Article unless it is presented before the end of the period of three months beginning with—
(a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or
(b) in the case of a complaint relating to a payment received by the employer, the date when the payment was received.
(3) Where a complaint is brought under this Article in respect of —
(a) a series of deductions or payments, or
(b) a number of payments falling within paragraph (1)(d) and made in pursuance of demands for payment subject to the same limit under Article 53(1) but received by the employer on different dates,
the references in paragraph (2) to the deduction or payment are to the last deduction or payment in the series or to the last of the payments so received.
(4) Where the industrial tribunal is satisfied that it was not reasonably practicable for a complaint under this Article to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable.”
88. The tribunal considered the relevant case-law which is summarised in Harvey at paragraphs 324 to 370.
89. In New Century Cleaning Co. Ltd v Church [2000] IRLR 27, the Court of Appeal per Morritt LJ put the applicable test as follows:
“the question, in terms of [Article 45(3)], is: what was the wage properly payable to Mr Church on the first payday thereafter? The word 'payable' clearly connotes some legal entitlement. The adverb 'properly' is also consistent with a legal requirement, but is not necessarily limited to a contractual entitlement. This is confirmed by the provisions of s.27(1)(a), which show that the wages 'properly payable' may not be due under the contract of employment. But the words 'or otherwise' do not, in my view, extend the ambit of 'the sums payable to the worker in connection with his employment' beyond those to which he has some legal entitlement.”(paragraph 43)
Beldam LJ also observed:
“For wages to be 'properly payable' by an employer, he must be rendered liable to pay, either under the contract of employment or in some other way. [Article 59] contains some examples of sums which may be payable, either under contract or because for some other reason the employer is liable to make payment as an addition or supplement to 'wages'. An example of a sum properly payable otherwise than under contract would be a minimum wage payable by order of a wages council. Nor is it difficult to see how a fee, bonus, commission, holiday pay or other emolument referable to employment may be payable otherwise than under the contract of employment. Such payments may be customary or required by collective agreements without express provision being made in a contract of employment.” (paragraph 62)
90. The authors of Harvey refer specifically to the case of Coors Brewers Ltd v Adcock [2007] IRLR 440 in which Walls LJ stated that the mechanics of the English equivalent of Article 45 should operate as follows:
“The employee complains that there has been an unlawful deduction from his wages. He has not been paid an identified sum. He makes a claim under Part II. The employer may have a number of defences. Those defences may raise issues of fact. Those issues will be for the Tribunal to determine. But the underlying premise on which the case is brought is that the employee is owed a specific sum of money by way of wages which he asserts has not been paid to him. That, it seems to me, is the proper context both of Delaney v Staples and [Part IV of ERO 1996],
[Part IV of ERO 1996], as I read it, is essentially designed for straightforward claims where the employee can point to a quantified loss. It was designed to be a swift and summary procedure. Of course such claims would throw up issues of fact. The example canvassed in argument was of an employee being paid piece work, and asserting that his employer had deducted sums properly payable to him for work undertaken on the grounds that some of the items produced by the employee were defective. Delaney v Staples provides another example. Such a dispute would not take the case outside [Part IV of ERO 1996]. I also accept that [Part IV] is capable of expansion along Farrell Matthews & Weir v Hansen lines as envisaged by [ERO 1996, s.59(3)]. However, in my judgment to extend it to the present case is a step too far. “
SUBMISSIONS
91. The parties exchanged detailed written submissions in accordance with the tribunal’s directions. Copies of these are appended to this decision. The parties were also given the opportunity to elaborate on their written submissions and respond to each other’s’ submissions at a separate submissions hearing and which took place some weeks after the conclusion of the evidence. The tribunal also asked questions of the parties’ representatives. The tribunal is grateful to the representatives for their clear and helpful written and oral submissions.
Claimant’s Submissions
92. In his written submissions Mr Coll contended that the disciplinary process was manifestly unfair on the following grounds:
Procedural Unfairness
(1) The respondent did not investigate the matter at all. In particular the respondent did not speak either to the claimant in order to get his version of events or to Mr McCormick.
(2) The respondent had no contractual right or power to hand over the disciplinary decision to an independent contractor (Mr Dickey).
(3) Mr Dickey was in any event both unqualified for and unsuited for this role as he did not operate at a senior level, had no human resources training or qualifications and had limited experience in conducting disciplinary hearings and imposing disciplinary sanctions. In addition, he was brought into the process at too short notice and only saw the material on which the charges were based on the morning of hearing. Even then only selective emails were provided to him. In particular he was not given the email of 5 October 2010 which would have given a different perspective on the earlier emails. While he had the benefit of two pre briefings by the respondent this resulted in Mr Dickey adopting the position that the claimant was guilty unless he proved his innocence thus preordaining the outcome of the hearing.
(4) As for the hearing itself Mr Dickey took no steps to follow up the claimant’s suggestion that he should speak to Mr McCormick about the true position in relation to the emails. Instead Mr Dickey said that he “already had enough evidence”. Mr Dickey also wrongly formed the impression that Reisswolf was in competition with the respondent which it wasn’t and that the claimant had sold his shares in the respondent’s business which he hadn’t. Mr Dickey also ignored the contents of Mr Mahon’s email. As a result Mr Dickey was unable to contextualise the emails.
(5) When Mr Dickey came to make his decision he found the claimant guilty of charges that were never put to him in writing as required, and were never discussed with him.
(6) In relation to the appropriate sanction Mr Dickey equated gross misconduct with dismissal and gave no consideration to mitigating factors.
(7) The appeal process was a sham because it was conducted by Mr Barnedt who had properly stood aside at first instance. In addition to this fundamental unfairness Mr Barnedt failed to correct an obvious error in Mr Dickey’s decision where it was suggested that in the Sean Mahon email that the claimant had withheld information in relation to the forthcoming Health Service tender from the Dublin side of the respondent’s organisation.
Substantive Unfair Dismissal
(1) Mr Coll submitted that there were no substantive grounds to justify the dismissal of the claimant.
(2) If the matter had been properly investigated the finding of gross misconduct and the decision to dismiss the claimant would have been unsustainable.
(3) Mr Coll placed reliance on the claimant’s innocent explanation of the emails and Mr McCormick’s unchallenged evidence to this effect.
(4) Mr Coll rhetorically asked why would the claimant engage in a conspiracy against the respondent using the respondent’s work email system and why would he wish to do down a business that he was a shareholder in circumstances where he was also the subject of a strict no-compete restraint of trade clause as set out in the shareholder agreement.
(5) Mr Coll pointed out that the tribunal’s role was to identify the real reason for the claimant’s dismissal [see Rogan] and decide whether the employer’s decision to dismiss was reasonable having made such enquiries or investigations as appropriate and then to consider whether the decision to dismiss fell within the range of reasonable responses. The respondent had no genuine belief in the misconduct alleged and had no reasonable grounds to sustain such a belief given that there had not been an adequate investigation. There was no sufficient reason to dismiss the claimant.
Unlawful Deduction of Wages
93. Mr Coll made the following submissions in relation to this aspect of the case:
(1) At the time when the Service Agreement was entered into it was agreed between the claimant and the respondent that the remuneration specified in the Service Agreement only related to that which the claimant was to receive as his “normal pay” and that he was in fact entitled to receive the difference between this salary and the pay received by Mr McCormick and Mr McElroy which was to be accrued in a pension pot pending the transfer of the claimant’s pension from a previous manifestation of the respondent business.
(2) The claimant’s evidence in this regard was supported by Mr McElroy, Mr McCormick, Mr Rogers and Mr Reid. In addition the claimant’s evidence about this was corroborated by the fact that Mr McCormick and Mr McElroy each received the same salary as one another. Mr Coll pointed out that the claimant raised issues about his remuneration both before and after the take over of the business in 2009. Furthermore the Clearpath Due Diligence material supports the claimant’s evidence. This information was inserted by Mr Reid who discussed it with Mr Barnedt although he claimed only to have become aware of it in 2009.
94. In his oral submissions Mr Coll elaborated and expanded upon his written submissions as follows:
(1) There was no opportunity for the claimant to allay the respondent’s concerns about the emails in the context of an investigatory meeting.
(2) It is a strong point for the claimant that Mr Dickey did not allow him to refer to the notes that he had prepared for the disciplinary hearing.
Respondent’s Submissions
95. Procedural Unfairness
(1) Mrs Sheridan submitted that there was no need for any further investigation once they were discovered as they were quite clear and due to the quantity and unambiguous tone of the emails.
(2) The respondent complied fully with the minimum requirements of statutory procedure by properly inviting the claimant to a meeting but that although the claimant participated in that hearing he chose to belittle and frustrate Mr Dickey rather than offer sound explanations for the emails.
(3) Thereafter Mr Dickey gave a written decision and was offered the opportunity to appeal. Although the claimant appealed he did not participate in the appeal hearing.
Substantive Unfair Dismissal
(1) Mrs Sheridan emphasised that in accordance with the judgment of the Court of Appeal in Rogan the belief of the disciplinary decision maker was crucial and that the tribunal should not re-hear the allegations but rather determine whether the employer acted reasonably having regard to the information that was available and the investigation carried out.
(2) Mrs Sheridan submitted that if the tribunal found in the claimant’s favour in relation to his dismissal it should take into account the claimant’s breach of his fiduciary duties, the animosity shown by the claimant and his witnesses towards the respondent and reduce any award on the basis of the claimant’s contributory fault.
Unlawful Deduction of Wages
(1) Mrs Sheridan submitted that this aspect of the claim was misconceived and in any event time barred. The respondent’s fundamental point was that it should not be found liable for unlawful deduction of wages in the absence of written evidence of the claimant’s alleged entitlement to be paid the additional remuneration that he claimed to be entitled to receive. Mrs Sheridan noted that the monies that the claimant said were meant to accrue to his pension apparently took three years to sort out to allow money to be paid into the pension, were not recorded in any account, never accrued any monetary interest, were never recorded in a due diligence report or the Warranty Document or the Shareholders Agreement dated 15 May 2009. Nor was evidence found as a result of the so called forensic search of computers undertaken by the respondent following the meeting between Mrs Sheridan and Mrs McKay. Mrs Sheridan also drew attention to Mr Reid’s evidence in support of the claimant and Mr Barnedt’s evidence that Mr Reid had been found stealing money from the respondent via an over inflated salary which led to him paying the additional amount back to the respondent and resigning. Mrs Sheridan pointed out that Mr Reid gave evidence that he discussed the differences in remuneration in the respective Service Agreements with the claimant and Mr Barnedt but he made no record of the claimant’s expressed wish for part of his salary to be paid into a pension and was unable to point to accounts where the claimant’s additional remuneration was recorded even though it was his job to do so. Further, according to Mr Reid the difference only amounted to 2% of the respondent’s profit and was therefore not material. Mr McElroy gave evidence that the claimant and Mr McCormick would have had a similar salary and that the claimant wanted his salary structured differently but was unaware of any documents in which this was recorded. Mr McElroy also accepted that it was stated at clause 24.7 of the Shareholders Agreement that no monies over 20,000 euros were owed to the directors. Nor were Mr Rogers or Mr McCormick able to point to any document in which such a salary/pension arrangement was recorded. The Clearpath documents did not take into account monies being set aside to be paid into the claimant’s pension (clause 16.8 which made reference to maximum remuneration of 20,000 euros owing), nor did the Shareholders Agreement (page 315 and clause 5.13). The claimant was however paid £39,000 less than he was entitled to under his Service Agreement and this was rectified. Having regard to all of these circumstances Mrs Sheridan submitted that it was beyond belief that the claimant had nothing in writing to substantiate his claim.
(2) In relation to the time point Mrs Sheridan sought to rely upon Article 55 (2)(a) of the 1996 Order.
96. These issues were discussed at the Submissions Hearing where Mrs Sheridan made the following submissions:
1. The dispute is about what is not in the Service Agreement. The Respondent rested on the position that the claimant was properly paid in accordance with the terms of his Service Agreement and that the tribunal should not accept that there was an unauthorised deduction of wages in the absence of written evidence.
2. Mr Rogers rolled back from his evidence that the claimant was not allowed to refer to his notes when he gave evidence to the tribunal.
3. The claimant was told by his solicitor not to attend the appeal hearing. The claimant was not advised to send in a written submission setting out his points. The claimant did not take the process seriously.
4. It was accepted that Mr Dickey did not have all of the emails and decided the matter on the basis of what was in front of him.
5. In accordance with the Rogan judgment Mr Dickey made his finding that the claimant was in breach of the duty of trust and confidence on the balance of probabilities.
6. The claimant contributed to his own dismissal by his breach of fiduciary duties by sending emails to a competitor.
7. Mrs Sheridan was asked by the claimant and his solicitor to undertake a forensic search of documents to see if anything could be located to support the claimant’s contention that money was to be put into a pension pot for him. The solicitor was very insistent.
8. Mrs Sheridan again sought to raise a time bar issue but it is clear from Article 55 (2) (a) of the 1996 Order that this point was misconceived as time runs from the date on which the last such payment should be made. When pressed by the tribunal on this issue Mrs Sheridan acknowledged that any delay in raising this issue was only relevant to credibility.
DISCUSSION
Many of the factors that inform our decision in relation to the claimant’s dismissal sound on both substance and procedure. This is part due to the somewhat haphazard manner in which the law on unfair dismissal has evolved. For example, issues in relation to the investigation of alleged misconduct are a feature in both the question of whether a dismissal is substantively unfair and whether it is procedurally unfair. The latter category is also subdivided in to procedural flaws that fail to meet the minimum statutory requirements and those which may give rise to unfair dismissal even if the minimum statutory requirements are met.
98. When considering whether a dismissal is substantively fair or unfair one of the most important features of a fair disciplinary process is that the alleged misconduct should be the subject of a proper investigation unless the facts that form the basis of the alleged misconduct are so obvious that no further investigation of them is necessary. Having discovered the offending emails, Mr Barnedt, according to his evidence formed the view that the claimant was guilty of a number of disciplinary offences. The first question that one must ask is whether Mr Barnedt genuinely believed in the claimant’s guilt. An important part of the context is that the incriminating emails were exchanged between six to ten months before their discovery and there was no evidence that any actual damage had been occasioned to the respondent as a result. In addition while the emails certainly gave the appearance that those involved were engaged in some kind of subterfuge Mr Barnedt was well aware from the emails of 27 and 29 April 2010 of what business possibilities were being explored by the claimant and others but chose not to refer to these emails. Another important part of the context is that the claimant was engaged in negotiations with the respondent to agree terms on which he would leave his employment with the respondent. It is clear that a significant financial package would have been involved which might or might not have been greatly enhanced if the claimant were able to identify evidence in support of his contention that he had suffered a significant underpayment of salary. It was the search for this evidence that led Mr Barnedt to discover the incriminating emails. It seems to us that it is reasonable to infer that this chance discovery was a significant boon to the respondent and that Mr Barnedt gratefully accepted it as a means to dispense with the claimant’s services at no cost. We believe that the evidence that we have read and heard amply demonstrates that Mr Barnedt was unwilling to countenance an innocent explanation for the emails. We therefore do not consider that the Mr Barnedt entertained a genuine belief of the claimant’s guilt. This is reinforced by the absence of any meaningful investigation of the alleged misconduct. In our view serious allegations of this nature made against a senior employee should be thoroughly investigated before any disciplinary action is taken. There was no investigation whatsoever in the present case.
99. As appears from the evidence Mr Barnedt did not conduct the disciplinary proceedings himself having received representations from the claimant’s solicitor and advice from Peninsula. Instead he appointed Mr Dickey to undertake this task. This split in responsibilities gives rise to interesting issues as to as to the genuineness or otherwise of the respondent’s belief in the claimant’s guilt both before and after the disciplinary hearing and the opportunity that existed for Mr Barnedt to influence the outcome of that hearing. Mr Dickey faced significant difficulties in undertaking this task which involved standing in the shoes of the employer but without the benefit of any background knowledge of the respondent’s business. Mr Dickey had a short briefing session on the morning of the hearing and he was presented with a series of emails which on their face looked bad for the claimant. Mr Dickey did his best to understand what was going on. Mr Dickey was not helped by the claimant’s presentation which was unclear or by his companion who did very little to help the claimant. While the defects in the claimant’s presentation cannot be laid at the respondent’s door it cannot avoid responsibility for the unsatisfactory nature of the hearing as this was largely due to both the manner and the circumstances in which it had been set up. In our view it would have been quite possible for Mr Dickey to have found the claimant guilty of the charges as set out in the initial disciplinary letter. However, he went about the matter entirely the wrong way and strikingly approached the burden of proof issue on the basis that the claimant had to disprove the charges by means of conclusive evidence. We do not accept Mrs Sheridan’s submission that Mr Dickey determined the matter on the balance of probabilities.
100. It is also clear that the findings did not match the charges and that additional matters such as breaches of the claimant’s Service Agreement were only introduced when Mr Dickey set to work on writing up his decision. The decision also contained a significant factual error in that Mr Dickey believed that the claimant was no longer a shareholder in the respondent’s business. This is significant in view of the allegation that the claimant was acting against the respondent’s interests. This does not of course mean that the claimant was not in fact acting against the respondent’s interests but it makes it less likely and it is unfortunate that Mr Dickey got this wrong. The question of whether Reisswolf should be regarded as a competitor of the respondent is not something that the tribunal could or should attempt to resolve. There are arguments both ways. Mr Barnedt was adamant that it was a competitor because the respondent advertised that it provided a shredding service albeit that the actual shredding was undertaken by a third party. Mr Barnedt was equally adamant in his evidence to the tribunal that he was not interested in moving into the shredding business. It is clear however that both organisations were operating in the same broad sphere and Mr Barnedt gave unchallenged evidence that the respondent would bid for projects with a shredding component but would outsource the shredding element. In addition the respondent’s logo would appear on the shredding bins that would be collected from offices from where the paper would be collected. The claimant held a different view but was somewhat inconsistent when questioned by Mr Dickey on the matter. The correct way to look at it may be that Mr Barnedt regarded shredding as an integral part of the respondent’s business notwithstanding that the respondent did not partake directly in this shredding process and therefore viewed the offending emails as evidence that those involved were intending to go into competition with Oasis. Mr Dickey ultimately accepted that Reisswolf was a competitor and in our view he cannot be faulted for doing so on the evidence that was available to him. While we have a number of concerns about Mr Dickey's handling of the hearing which we will come to shortly we consider that it was open to him to find the claimant guilty of the substantive elements of the alleged offences although the particular of breaches of the Service Agreement were not within the remit of the charges as the claimant was not put on specific notice of same. However, this failing goes to procedure rather than substance.
101. While we can understand how the emails provided to Mr Dickey may have looked highly suspicious he did not have a proper understanding of them or the complete picture as he was not provided with important emails that may have thrown a different complexion on the incriminating emails. We are satisfied that Mr Dickey had an honest belief in the claimant’s guilt based on what was in the emails but when judged objectively he could not conceivably have held a reasonable belief in the claimant’s guilt because he did not have the full picture. Mr Dickey also misapplied the test by constantly referring to the need for the claimant to produce conclusive evidence to disprove the allegations against him rather than it being for the respondent to demonstrate the claimant’s guilt on the balance of probabilities. Mr Dickey also found the claimant guilty of specific and detailed charges that the claimant was not put on notice of. It is not in our view sufficient for the invitation letter merely to state the gist of the charges. Mr Dickey also on his own admission found the claimant guilty of one matter that he was not charged with at any time.
102. On a subjective basis we do not suggest that Mr Dickey did not honestly believe that the claimant was guilty of charges brought against him. Mr Dickey reached his decision on the basis of the evidence presented to him and the exploration of the matter at the hearing albeit that he misapplied the standard of proof. Judged objectively however and viewing the matter overall we are not persuaded with that the respondent genuinely believed in the claimant’s guilt at the end of the initial disciplinary phase. In so finding we have had regard to the fact that one of the first emails in the sequence openly advised Mr Barnedt about the project. Also, Mr Barnedt did not regard the fact that the emails had been sent the previous year and had not been followed up with concrete action as significant. He claimed to believe that the emails revealed evidence of very serious misconduct which vindicated the disciplinary action taken. He explained that he would also have disciplined Mr McCormick if he had still been employed by the respondent. It is also striking that the claimant and his alleged co-conspirators did not engage in any subterfuge to avoid detection but rather emailed each other openly using the respondent’s business email. It was said on the claimant’s behalf that this demonstrated that they were not involved in any underhand behaviour. We also bear in mind Mr Barnedt’s assertion, which we accept, that the emails were only discovered by chance and had gone undetected for some time.
103. When it came to the appeal Mr Barnedt did have the complete picture from the respondent’s perspective but was deprived of the claimant’s input because he improperly insisted on conducting the appeal himself. We consider that this flaw is so serious that it serves to undermine the suggestion that the respondent had either a genuine or reasonable belief in the claimant’s guilt. Moreover as we have indicated above the respondent did not carry out a reasonable investigation. There was no pre-disciplinary investigation whatsoever and this is not a case where the person suspected of misconduct was either caught red handed or where the facts speak for themselves. The most that could be said was that the emails required an explanation and the claimant should have been given the opportunity to do so before the instigation of disciplinary proceedings. Such investigation as took place within the scope of the disciplinary proceedings was inadequate due to the way in which the process was set up, the non provision of important emails, the failure to carry out further investigations properly and fairly and the convening of an appeal process that was to be conducted by a person, Mr Barnedt, who could not conceivably afford the claimant a fair appeal.
CONCLUSIONS
Substantive Unfairness
104. As will be apparent from the discussion above we consider that the claimant was substantively unfairly dismissed.
Procedural Unfairness
In relation to the discrete procedural fairness headings our findings are as follows:
(1) Investigation
It was common case that no investigation was undertaken by the respondent following the discovery of the emails that formed the basis of the disciplinary charges. In our view this case cried out for an investigatory meeting to be convened before the matter was taken any further. The respondent ought at the very least to have conducted an investigatory interview with the claimant in order to afford him the opportunity to provide his side of the story before any disciplinary charges were laid. If this had been done we would have been disposed to find that a reasonable investigation had been undertaken. Whilst ideally other significant protagonists such as Mr McCormick would also have been interviewed the respondent would not necessarily needed to have gone this far in order to surmount the reasonable investigation hurdle.
(2) The powers of the independent contractor
The respondent’s Employee Handbook made provision for an outside person to be nominated to conduct disciplinary proceedings and as a concept we have no difficulty with this. We have derived some assistance from the ACAS Guide in relation to Discipline and Grievances at Work. We are conscious of course that the ACAS Guide does not apply in Northern Ireland but in our experience ACAS publications often provide helpful assistance in this sphere. It is noted at page 27 of the Guide that in some instances employers may wish to bring in external consultants to carry out an investigation. No reference is made in the Guide to the using consultants to conduct disciplinary hearings or impose disciplinary sanctions but we do not see any significant difference in principle. It seems to us to be entirely consistent with bringing in an independent contractor to undertake an investigation which is a procedure which is approved by the ACAS Guide. We can see nothing wrong and a lot right with bringing in an independent person to conduct a disciplinary hearing particularly in circumstances where there would otherwise be liable to be a conflict of interest. We have more difficulty with such a person exercising the power to dismiss an employee on behalf of the employer but we are not persuaded that this was unlawful and we take cognisance of Mr Barnedt’s evidence that he conferred full powers in this regard on Mr Dickey.
(3) The choice of Mr Dickey to conduct the disciplinary hearing
There is force in Mr Coll’s submission that Mr Dickey was both unqualified for and unsuited for this role. Again we have to keep our feet firmly on the ground and look at this in terms of reasonableness. On one view it does not require high level experience to interpret a chain of emails. We do not accept Mr Coll’s submission that Mr Dickey was not a suitable person to adjudicate on the matter because of his lack of experience of operating at Board level. However, having given the matter careful consideration we consider that Mr Dickey did not have the requisite qualifications and experience to conduct a disciplinary hearing of this nature involving a very senior manager. This is not a criticism of Mr Dickey who in many respects did his best to conduct a fair disciplinary hearing but even Mr Barnedt when cross-examined was disposed to accept that having heard Mr Dickey’s evidence he would not have appointed Mr Dickey to undertake the disciplinary hearing. In addition, Mr Dickey was hamstrung by being brought in at the last moment and only saw the material on which the charges were based on the morning of hearing when he was provided with the file of papers. In addition, Mr Dickey did not see the surrounding emails. We also note that Mr Dickey agreed with Mr Coll’s suggestion that it would have been of assistance to him to have seen other emails as these would have provided a fuller context.
(4) Pre briefings by the Respondent
Whilst we appreciate the need for Mr Dickey to be provided with some background information in order to undertake his challenging mission we cannot regard the involvement of Mr Barnedt as fair given his central role in the matter and the views he had already expressed to others concerning the claimant’s actions. Although the time involved in the pre-brief was short and we only have sketchy details as to what transpired we consider this to be a serious procedural flaw.
(5) The Standard of Proof
It is both common case and plainly correct that the standard of proof in disciplinary proceedings in the employment sphere is the balance of probabilities. However, the manner in which Mr Dickey expressed himself in the decision letter where he referred several times to the need for the claimant to produce conclusive evidence to refute the allegations against him is more akin with requiring the claimant to prove his innocence which is clearly the wrong approach. It is also of note that no witnesses gave evidence to Mr Dickey in support of the disciplinary charges rather it was taken as read that the emails were inculpatory and for the claimant to explain.
(6) The Conduct of the Hearing
We have some sympathy with Mr Dickey’s attempt to conduct a fair hearing in circumstances where the claimant was clearly emotional and in the absence of an experienced representative. In difficult circumstances we believe that Mr Dickey did his best to be fair to the claimant during the course of the hearing. This belief is supported by Mr Rogers’ report on the hearing to Mr Barnedt in the immediate aftermath of the hearing notwithstanding whatever doubts he now entertains. However where Mr Dickey did fall down was in failing to take steps to follow up the claimant’s suggestion that he should speak to Mr McCormick about the true position in relation to the emails and instead adopting the position that he “already had enough evidence”. As to whether Mr Dickey fell into factual error in concluding that Reisswolf was in competition with the respondent it seems to us that this is a matter on which there could legitimately be a divergence of view and that Mr Dickey’s conclusion on this aspect could not be condemned as unreasonable or a conclusion that no properly directed tribunal of fact could arrive at. Mr Dickey was however clearly wrong in his belief that the claimant had sold his shares in the business. The follow up investigations conducted by Mr Dickey before he issued his decision were also flawed both in terms of procedural fairness and possibly substantively. In particular, having gone back to Mr Barnedt to check whether he had issued an instruction to the claimant in relation to shredding Mr Dickey failed to relate his answer back to the claimant so that he would have the opportunity to comment on it. This could have been important because on the evidence that we have heard it is far from clear what the word “instructed” referred to. It is unlikely in our view to have been intended to refer to Mr Barnedt instructing the claimant to delay entry into the shredding business and more likely was intended to mean that if Mr Barnedt instructed the claimant to move forward in relation to shredding the could only delay him for so long. Neither interpretation would have been particularly helpful to the claimant but he should as a matter of fairness been afforded the opportunity to respond to Mr Barnedt’s interpretation. We are disposed to accept the claimant’s contention that he was not permitted to use his notes at the hearing. While there is no reference to this in the record of the hearing it is not a verbatim record and it chimes with Mr Dickey’s overall handling of the hearing. We also take account of the change in Mr Rogers evidence on this aspect. We do not however regard this as a significant unfairness and it would not be sufficient in itself to undermine the fairness of the hearing but when added the other defects it adds to the impression of an unfair procedure. We do not accept the suggestion that the claimant chose to belittle and frustrate Mr Dickey or that he did not take the process seriously. Certainly the record of the disciplinary hearing provides no basis for this assertion. Finally, we have considered the contents of Mr Mahon’s email and do not believe that it is of any great assistance.
(7) The Disciplinary Charges
The letter inviting the claimant to the disciplinary meeting did not contain any direct reference to breaches of the claimant’s Service Agreement. It did however state that the claimant undertook actions that were completely incompatible with his contract of employment and his duties as a Director, namely that he was in breach of his duty of fidelity and loyalty to his employer, that he was embarking with others to set up a rival competing Company, passed on confidential insider information to others. While it would have been preferable for these matters to have been tied in to specific clauses in the claimant’s Service Agreement we consider that the letter inviting the claimant to the disciplinary hearing set out fairly and squarely the matters which were of concern to the respondent at that time. However, Mr Dickey fell into error when he came to deal with the matter. In the first place he did not have a copy of the Service Agreement available to him at the hearing and conducted the hearing on the basis of the matters of concern as framed by Mr Barnedt. Then when he came to write his decision he did have a copy of the Service Agreement and proceeded to tie his findings into specific clauses in the Service Agreement which were never opened or discussed at the disciplinary hearing. Mr Dickey compounded this error when he came to make his decision by finding the claimant guilty of charges that were never put to him in writing and were never discussed with him. In particular we are struck by the alleged breach of clause 6 which concerns the disclosure of trade secrets given that Mr Dickey did not specifically identify the trade secrets that were supposedly disclosed. More broadly we consider that the way that Mr Dickey went about this aspect of the process was conspicuously unfair and plainly wrong.
(8) Gross Misconduct and Sanctions
It is clear that both Mr Dickey and Mr Barnedt equated gross misconduct with dismissal and gave no consideration to mitigating factors. We find their evidence when pressed on this point to be entirely unconvincing. True though it is that the Employee Handbook stated clearly that if an employee acted in a way that constituted gross misconduct he would be liable to summary dismissal, this does not deprive the employer of any discretion in the matter. The word “liable” is synonymous with “likely” and does not mean that dismissal is inevitable. A disciplinary decision maker must always have regard to mitigating factors such as length of service and health. As we have indicated, we find the protestations of Mr Dickey and Mr Barnedt that they did so entirely unconvincing. In his evidence to the tribunal Mr Dickey also appeared unsure as to whether he was obliged to dismiss the claimant once he had found him guilty of gross misconduct or whether he could impose a lesser penalty if he found that there were mitigating circumstances. This aspect of Mr Dickey’s evidence was highly unsatisfactory and in our view Mr Dickey did not believe that he had any discretion to vary the penalty once he had concluded that the claimant was guilty of gross misconduct. Mr Barnedt was pressed by counsel as to whether he considered alternative disposals and took into account mitigating circumstances. Whilst it was unfortunate that the claimant for entirely understandable reasons did not attend the appeal hearing there were two clear mitigating factors that required little if any elaboration as they were well known to Mr Barnedt namely the claimant’s ill-health and his long service having been the founder of the respondent’s business.
(9) The Appeal Process
Mr Barnedt’s decision to conduct the appeal hearing himself flies in the face of his decision to have a neutral decision maker at first instance. We consider that it was plainly correct for Mr Barnedt to stand down from the initial disciplinary hearing due to his previous involvement in the matter. He had discovered the incriminating emails himself, reported his views on their contents to the Board and drafted the disciplinary charges. In these circumstances it is impossible to understand how he could even have contemplated conducting the disciplinary hearing himself in the context of a large organisation with substantial resources at its disposal. It was also striking and plainly wrong for Mr Barnedt to comment on the points made in the notice of appeal in his letter to Mrs McKay of 14 April 2011 and then going on to deal with the claimant’s appeal himself. This reinforces our view that it was both unwise and wrong for Mr Barnedt to conduct the appeal hearing and this letter smacks of predetermination. Having quite properly stepped down from the initial disciplinary hearing it made no sense for the matter to revert to Mr Barnedt on appeal as all of the objections to his conducting the initial hearing applied with at least equal force to the appeal. The reasons proffered for not handing the appeal over to another director were flimsy and insubstantial particularly in view of the fact that the respondent is a large business concern and was dealing with a very senior and longstanding employee and founder of the business who was facing dismissal. Instead of the claimant being provided with a fair appeal the respondent by its actions compelled the claimant to chose between participating in an unsatisfactory appeal and thereby conferring legitimacy on it even if the attendance was under protest or refusing to participate with the concomitant risk if not certainty of an adverse decision and potential criticism of his stance in the event of tribunal proceedings ensuing. We do not regard the suggested middle way of sending in written submissions as a viable or attractive option where there was a very good reason why the decision maker on appeal should have been someone other than Mr Barnedt. While we would not go as far to say that the appeal process was a sham we do not regard it as a fair process for the reasons that we have given. While it is true that Mr Barnedt at no stage accepted that he could not provide a fair hearing actions speak louder than words and having acceded to the request to stand down at first instance it made no sense for Mr Barnedt to hear the appeal particularly as there was no suggestion that he was holding himself back from the disciplinary hearing so that he would be available to hear the appeal. In addition, as Mr Coll has pointed out, we note that Mr Barnedt failed to correct an obvious error in Mr Dickey’s decision where it was suggested that the claimant had withheld information in relation to the Health Service tender from the Dublin side of the respondent’s organisation.
105. Breach of Statutory Procedures
Having established that the disciplinary process contained a number of procedural flaws it is now necessary to examine the matter through the prism of the three step statutory procedure. While at a superficial level it might appear that the respondent complied with the three step procedure once analysed it becomes plain that the respondent failed to adequately comply with the statutory requirements in several significant aspects. Firstly, the Step 1 letter did not refer to the alleged breach of the Service Agreement. While this would not necessarily be sufficient on its own to constitute a breach of Step 1 it must be viewed in conjunction with Mr Dickey’s findings and as we have noted above Mr Dickey made a number of specific references in his findings to breaches of the Service Agreement which were not foreshadowed as they should have been by the Step 1 letter. We do not regard the failure of the letter to deal with Mr Dickey’s power to dismiss as a breach of Step 1. The individual components of the three step procedure cannot be viewed in isolation from each other. Thus Step 2 is breached in the present case by holding a meeting without having first provided the employee with a proper Step 1 letter and afforded him a reasonable opportunity to consider his response. If the employer wishes to introduce further matters the appropriate course would be to abandon the proceedings and start again with a fresh Step 1 letter. The respondent did however comply with Step 2 insofar as it informed the claimant of his right to appeal against the decision. As for Step 3 whilst we have criticised the appeal in terms of its fairness to the claimant the statutory appeal process was followed in that each element for which the employer was responsible was undertaken. For these reasons the dismissal was therefore automatically unfair.
106. We are therefore satisfied that the claim of unfair dismissal has been made out on the grounds of substantive unfairness, procedural fairness and breach of statutory procedures.
Unlawful Deduction of Wages
107. As appears from the evidence the claimant raised the issue of the failure to transfer funds to his pension pot on a regular basis. There was no suggestion that he was trying to lay a paper trail to bolster his claim and the respondent put forward no credible or logical reason that would explain why the claimant’s remuneration package was substantially less than his fellow Directors. As Mr Coll submitted it did not make any sense. Nevertheless we were troubled by the notion of such large sums of money being regarded as unlawful deductions of wages. As Mr Coll pointed out a contractual entitlement to pay is not dependent on a written document.
108. The respondent’s case as presented to the tribunal was in a nutshell that the claimant was not entitled to a penny more than was provided for in the Service Agreement. This is in marked contrast to its approach prior to the discovery of the incriminating emails which was to seek to locate material that the claimant suggested would support his contention although in fairness the respondent was prepared to make a further payment when underpayment was uncovered by Deloitte Touche. Furthermore in his evidence to the tribunal Mr Barnedt did not seek to deny the claimant’s entitlement directly but rather maintained the line that the Service Agreement was the only vehicle that determined the claimant’s pay entitlement.
109. One possible approach to the unlawful deduction of wages/breach of contract issue is to ask ourselves what the position would be if there had been an earlier written contract between the claimant and the respondent that paid the claimant a higher salary. The answer must be that this would have been superseded by the salary provisions of the new Service Agreement. Why then one might ask should the claimant be in a better position when one compares his current situation where he is seeking to set aside the Service Agreement in favour of an unwritten agreement between himself and his fellow co-directors. The claimant’s answer as we understand it is that it is not the case that there was a previous contractual agreement but that the he and his co-directors verbally agreed that they should be paid the same remuneration at the same time as they entered into the Service Agreements.
110. We are satisfied on the basis of the largely unchallenged evidence of the claimant and Mr McElroy together with Mr McCormick’s completely unchallenged evidence that the three directors agreed that their remuneration should be broadly equivalent. The question arises however as to whom this agreement was with and whether the respondent is bound by it. In view of the very significant sum of money involved we consider that this question should be resolved in the context of a breach of contract claim rather than in the context of a claim for the unlawful deduction of wages. While we entirely understand and appreciate the claimant’s reasons for not pursuing the breach of contract claim before the tribunal, in our view it is wrong in principle to seek to put the unlawful deduction of wages “cart” before the breach of contract “horse”. The correct approach is rather to have the breach of contract claim addressed head on in the High Court as it enjoys full jurisdiction to award if appropriate the sizable loss that the claimant considers that he has suffered due to the respondent’s breach of his alleged contractual entitlement to equivalent remuneration to Mr McCormick and Mr McElroy.
111. The evidence as to the mechanics as to what precisely occurred at this juncture is somewhat sparse and this adds to our unease at attempting to resolve this issue at one step removed from a direct claim for breach of contract. While we are inclined to accept the evidence of the claimant and his co-directors that they agreed that they should receive the same remuneration this was never reduced to writing and on one possible view was superseded by the Service Agreements signed by each of them. Furthermore the evidence given by the claimant and his co-directors as to when this was agreed was vague to say the least. While this is perhaps unsurprising given the nature of an unwritten agreement it seems to us that the correct approach in law to this issue is to determine in the first instance the status and validity of the unwritten agreement. In our view this is best achieved by addressing the issue directly in the context of a breach of contract claim rather than indirectly via a claim for unlawful deduction of wages. We consider that this is consistent with the approach advocated by the Court of Appeal in Coors Brewers Ltd v Adcock. As we have said we can quite understand why the claimant did not pursue this aspect of his claim before us given the tribunal’s limited financial jurisdiction for breach of contract. We therefore dismiss the claim in relation to the unlawful deduction of wages.
COMPENSATION
112. We do not propose to make a Polkey deduction in this case because we consider that in view of the plethora of procedural flaws committed by the respondent in the course of the disciplinary hearing we cannot say that following the procedures correctly would have made no difference to the outcome.
113. The next stage is to consider what uplift in the range of 10% to 50% should be awarded. Having regard to the serious flaws that we have identified in the application of the statutory disciplinary procedure we consider that an uplift of 30% is warranted which we consider to be just and equitable in the circumstances of this case. We decided against making an even higher uplift because the respondent at least attempted to operate the statutory procedure and in particular made the necessary arrangements for an appeal albeit that the appeal itself was unsatisfactory for the reasons that we have given.
114. While we are satisfied that the claimant was unfairly dismissed we consider that to say the least he was unwise to become involved in the email communications that gave rise to the disciplinary proceedings and the explanations provided by him in the course of the disciplinary hearing were unimpressive. To this extent the claimant contributed to his own dismissal. We measure the claimant’s contributory behaviour at 30% which has the effect of cancelling out the 30% for failure to comply with statutory procedures.
Award
115. The claimant’s solicitor helpfully provided the tribunal with a Schedule of Loss which was subsequently revised at the request of the tribunal. A copy of the revised schedule of loss was provided to the respondent’s representatives who have not raised any objection to its contents other than as indicated at the hearing in relation to the issue of uplift and contributory conduct. It has been necessary for the tribunal to revise this further in light of our decision on the claim for unlawful deduction of wages.
116. Mr Coll submitted that, if the tribunal were minded to make a final compensatory award, post any deductions, that amounted to the statutory maximum level, without having to include the six months notice period loss in that calculation, then the tribunal could consider specifically stating that it was making no award in respect of loss suffered in the claimant’s notice period of 6 months post dismissal, thereby leaving the way clear for the claimant to seek to recover his losses in that period by way of a wrongful dismissal action in the High Court.
117. The provisions in relation to notice pay are of course contractual in nature and as indicated at the outset of this decision the claimant decided not to pursue the breach of contract claim. While this decision may have been directed towards the claimant’s claim that he was not being paid his correct salary it seems to us that the breach of contract claim is either in or out and if it is out, which it is, it is not open to us to make an award in respect of the notice pay element. We consider that it is appropriate to accede to Mr Coll’s suggestion that the award should the claimant’s loss during the six months notice period. We also consider that our decision should indicate our view as to future loss and bearing in mind the non compete element we consider that it would be reasonable to allow 12 months in respect of future loss. However, in view of Mr Coll’s submission and the need to avoid compensating the claimant twice in respect of the same period we propose to confine the award in respect of future loss to 6 months.
Basic Award
The Claimant had been employed by the Respondent and its predecessor companies since 1989, which is in excess of the 20 year maximum for purposes of calculation of the basic award.
Accordingly the basic award, with the claimant’s date of birth of 11 May 1963 is as follows:
14 x 1 x £400.00 = £5,600.00
6 x 1.5 x £400.00 = £3,600.00
Total: £9,200.00
Compensatory Award
4 May 2011 to 4 June 2012
Salary entitlement @ £85,000 per annum = £7,083.33 per month
Loss 4 May 2011 to 4 June 2012 £7,083.33 x 13 = £92,083.29 gross
Less earnings to date: £60,000.00 gross
Balance £32,083.29 + 5% per annum pension contribution (£1,604.16) =
Sub-Total: £33,687.45 gross
and
Ongoing future monthly loss of £7,083.33 + 5% pension contribution (£345.16)
= Total monthly ongoing loss of £7,437.49 gross
£7,437.49 x 6 = £44,624.94
Sub-Total £78,312.39
Loss of Statutory Rights £300.00
Summary
Basic Award - £9,200.00
Compensatory Award - £78,312.39
Statutory cap of compensatory award is £68,400 (Net)
Loss of Statutory Rights £300.00
Total Award: £77,900.00
118. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Chairman:
Date and place of hearing: 27 February 2012 - 2 March 2012, 3-5 April 2012 and
31 May 2012, Belfast.
Date decision recorded in register and issued to parties:
THE INDUSTRIAL TRIBUNALS
Case reference 1422/11
BETWEEN
STEWART PORTER
Claimant
-and-
OFFSITE ARCHIVE STORAGE AND INTEGRATED
SERVICES LIMITED (OASIS)
Respondent
WRITTEN SUMMARY SUBMISSIONS ON BEHALF OF THE CLAIMANT
Introduction:
1. The Claimant claims unfair dismissal and unauthorised deduction from wages.
2. The Respondent accepts that the Claimant was dismissed but denies this was unfair. It further denies any liability for unpaid wages.
3. The Claimant, at the time of his dismissal, was in titular terms, Managing Director of the Respondent’s Northern Ireland operations.
Personae Dramatis:
4. At the Tribunal’s specific request the Claimant respectfully contends that the following persons are those of key relevance to the issues in dispute:
i. Stewart Porter- Claimant, and co-founder of OASIS
ii. Denis Barnedt III- Chief Executive Officer of the Respondent, and in effect the person to whom the Claimant was responsible.
iii. Claire Gallagher- The Respondent’s head of HR function.
iv. John Dickey- external consultant appointed by the Respondent on the recommendation of Peninsula to conduct the disciplinary hearing and responsible for decision to dismiss the Claimant.
v. Lynn Sheridan- Peninsula Consultant conducted negotiations on behalf of the Respondent with the Claimant’s Solicitor.
vi. Maura McKay- Solicitor for the Claimant.
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vii. Peter McCormick- Co-Founder of OASIS. Involved in the email chain relied upon by Respondent in discipline/dismissal of Claimant.
viii. Gary McElroy- Co-founder of OASIS.
ix. Des Rogers- Co-Founder of OASIS, member of Board of Directors.
x. Glen Reid- previously Chief Financial Officer of OASIS, lead contact with outside investors in take-over negotiations 2008-2009.
xi. Alan Pevy & Christoph Smaczny- Reisswolf employees involved in the email chain relied upon by Respondent in discipline/dismissal of Claimant.
Unfair Dismissal:
5. The Claimant contends that he was unfairly dismissed from his employment as Managing Director of the Respondent on 4/4/11. The Respondent followed a manifestly unfair process resulting in his dismissal and moreover, properly analysed, there are no substantive grounds to justify his dismissal in any event.
6. Article 126 of the Employment Rights (NI) Order 1996 establishes the right to protection from unfair dismissal. Articles 130 (as relevant) sets out the requirements of same:
(1)In determining for the purposes of this Part
whether the dismissal of an employee is fair or unfair, it is for
the employer to show-
(a) the reason (or, if more than one, the principal reason) for the dismissal,
and
(b) that it is either a reason falling within paragraph (2) or some other
substantial reason of a kind such as to justify the dismissal of an employee
holding the position which the employee held.
(2) A reason falls within this paragraph if it -
(c) it relates to the conduct of the employee
(2A) Paragraphs (1) and (2) are subject to Articles 130ZA to 130ZF.
(4) In any other case where the employer has fulfilled the requirements of
paragraph (1), the determination of the question whether the dismissal is fair
or unfair (having regard to the reason shown by the employer)-
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(a) depends on whether in the circumstances (including
the size and administrative resources of the employer’s undertaking the
employer acted reasonably or unreasonably in treating it as a sufficient reason
for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of
the case.
(6) Paragraph (4) is subject to Articles 130A to 139,144 and 144A.
Art 130A provides,
(1) An employee who is dismissed shall be regarded for the purposes of this
Part as unfairly dismissed if-
(a) one of the procedures set out in Part I of Schedule 1 to the Employment (Northern
Ireland) Order 2003 (NI 13) (dismissal and disciplinary procedures) applies in
relation to the dismissal, (b) the procedure has not been completed, and
(c) the non-completion of the procedure is wholly or mainly attributable to
failure by the employer to comply with its requirements.
(2) Subject to paragraph (1), failure by an employer to follow a procedure in
relation to the dismissal of an employee shall not be regarded for the purposes
of Article 130(4)(a) as by itself making the employer’s action unreasonable if
he shows that he would have decided to dismiss the employee if he had followed
the procedure.
(3) For the purposes of this Article, any question as to the application of a
procedure set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003, completion of such a procedure or failure to comply with the
requirements of such a procedure shall be determined by reference to
regulations under Article 17 of that Order.
Procedural Fairness:
7. There are two separate elements to this concept for current purposes. If an employer fails to comply with the requirements in Art 130A for the statutory minimum of a fair disciplinary procedure any resulting dismissal will be automatically unfair, save for the statutory embodiment of the Polkely deface in Art 130A(2).
8. Separately however it is necessary for the Respondent to establish not only a ground for dismissal wider ER(NI)O 1996, Article 130, but also that it acted fairly and reasonably in dismissing the Claimant. [See McLarnon v’ NI Housing Executive IT 2422/ 03 [2005] 9 BNIL 37.]
9. As will be seen below in the evidential review, it is the Claimant’s case that the process employed in the case of his dismissal failed to comply with the statutory minimum requirements thereby falling foul of the automatically unfair provisions in Art 130A, but that notwithstanding that, his dismissal was in any event manifestly unfair when judged against
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the general requirements of Art 130 (4). It is accepted that it is not the function of the Industrial Tribunal when considering the Art 130(4) test to decide whether it would have thought it fairer to act in some other way: the question is whether the dismissal lay within the range of conduct which a reasonable employer could have adopted (the band of reasonable responses test) having conducted a reasonable investigation. [See Rogan v South Eastern Health & Social Care Trust [2009] NICA 47].
Unfair Dismissal - Evidential Review:
10. In the run-up to his dismissal the Claimant had been subjected to increasing isolation and undermining within the Respondent organisation following from and connected to the takeover of the company by the foreign investors, as embodied by Mr. Barnedt (DB). He was left with no actual role going-forward, a subordinate had been promoted effectively into his duties, there had been no review of his remuneration and service agreement, and he had been frozen out of addressing the difficult issue of alleged over-charging of his health service clients.
11. In this context he tried to negotiate his exit from the organisation. In that subtext DB then conducted an unauthorised and illicit review of the Claimant’s email account.
12. As a consequence he “found” a series of email exchanges involving the Claimant which, it was alleged, demonstrated a conspiracy on the Claimant’s part to set up in competition against the Respondent company. These emails formed the basis of the “evidence” relied upon by the Respondent, both in the disciplinary process and before the Tribunal, and were first shared with the Claimant on that basis in the disciplinary charge letter of 18/3/11.
13. The Tribunal heard a great deal of evidence regarding the disciplinary process that then ensued. The Claimant’s criticism of same can be summarised in contending that the said process was fatally flawed rendering it both automatically and generally unfair. In that regard the Claimant primarily relies upon the following elements of the evidence:
(a) Post the “discovery” of the allegedly offending emails the Respondent conducted absolutely no investigation. No effort was made to speak with, for example, Peter McCormick (PM) about the content of the
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emails and whether they were suggestive of activities on the part of the Claimant that were seditious of the company or in some manner in breach of his fiduciary-type responsibilities to the company.
(b), (c), (d) Despite the fact the Claimant was a very senior employee, a founder of the company, and a shareholder in it still, the Respondent took no steps whatsoever to speak to him about the emails and to ascertain his version of events.
(c) The Respondent (belatedly and reluctantly) switched the responsibility for the disciplinary hearing from DB to John Dickey (JD). There was no contractual right or power to hand the disciplinary decision to someone outside of the company.
(d) The disciplinary hearing and subsequent process operated by JD was an exemplar of how not to conduct a disciplinary process.
(e) JD had no understanding of the internal workings of the company nor did he correctly understand the structure of the company and the nature of its working operations. He was not in his own right operating at the senior level of the Claimant. He, despite offering himself as an external consultant, specialist in this field, had no Human Resources type training or qualifications. He had limited experience in the conducting of disciplinary hearings and in the imposition of disciplinary sanctions.
(f) The manner in which JD approached his task rendered him open to the Respondent’s undue influence. He permitted at least two pre-hearing briefings from the Respondent’s side, with no input at the time or subsequently into same from the Claimant’s side. The Claimant had no way of knowing what JD had been told never mind the opportunity of countering/challenging same. As a result JD fell into gross error in adopting a default position that in effect meant the Claimant was guilty until he proved his innocence.
(g) The notes of the disciplinary hearing amply demonstrate the inappropriate way in which JD went about the task.
(h) The net cumulative effect was that the Claimant was faced with a preordained situation, in which there was no chance of an outcome other than dismissal.
(i) It is respectfully contended by the Claimant that on foot of the evidence available to the Tribunal from the Respondent’s side it remains unclear as to what contact took place between JD and the
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Respondent post the hearing, what the purpose of such contact was and what further information was given to JD. DB in his evidence fried to palm this point off with a reference to Claire Gallagher (CG) having been involved in contact with JD - inexplicably the Respondent choose not to call CG to give evidence.
(j) What is however clear is that JD took no steps whatsoever to follow up on the Claimant’s request that he speak to PM re the true situation vis a vis the emails and whether there was a plot against the Respondent. JD was unable to offer any reasoned explanation to the Tribunal for this stark and grossly unfair refusal/ omission, save for the interesting insight which the Claimant contends speaks volumes, that he felt that he already “had enough evidence”.
(k) The JD process was further replete with fundamental flaws and resulting unfairness in respect of which the blame lies with the Respondent rather than JD directly. For example, when DB withdrew from the disciplinary process, JD was brought in at the last minute (less than 18 hours notice). JD only saw the papers on the morning of the hearing. The Respondent displays a determined zeal in its haste to be shot of the Claimant. In another example, it is clear that DB selectively picked the emails to provide JD with. JD gave evidence that it would have been helpful to see the end email from PM (page 404, 5/10/10). This would have put a different perspective on the earlier email chain. Further, somehow JD was informed by the Respondent that OASIS was in competition with Reisswolf (which it was not) and that the Claimant had sold his shares in the Respondent company (which he had not- indeed he still retains them to this day)
(l) JD then proceeded to find the Claimant guilty of disciplinary charges which had never been levelled against him, never put to him, never discussed with him and most importantly of all had never been put in writing to him as required under the statutory regime of minimum requirements of fairness. In this regard by itself the Respondent is guilty of automatically unfairly dismissing the Claimant contrary to Art 130A. Furthermore, it is contended that irrespective of Art 130A, to adopt such an approach is so unfair that as judged against the ordinary requirements of Art 130(4) it renders the Claimant’s dismissal on those charges unfair.
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(m) When considered in cross-examination JD accepted that at least one of the charges was not in fact even made out on the evidence, even though he had entered a conviction (2b).
(n) Further JD seems to have totally ignored the statement evidence of Sean Mahon in finding that the Claimant was attempting to hide a major tender from his employers.
(o) JD seems to have been either unwilling or unable to envisage any contextualisation of the allegedly offending emails that would have afforded the Claimant a fair crack of the whip in demonstrating the correct, non-toxic narrative for those emails. There was a total and artificial absence of nuance in the manner in which JD looked at the emails.
(p) When he moved to dismiss, JD made the fundamental error made by so many in this field of adopting the tunnel-vision approach of deeming gross misconduct and dismissal as the two sides of the one coin. This is wrong in law, (albeit in compliance with the Respondent’s disciplinary code) and meant that no assessment was made of the impact of the Claimant’s state of health at the time of the emails, nor of his long-service with the Company.
(q) The Appeal process was a sham. It was conducted by DE; despite his previous acceptance that it would be wrong for him to conduct the disciplinary hearing. That there was only ever going to be one outcome to this appeal process is abundantly clear from the version of the earlier disciplinary hearing notes with DB’s inserted commentary. DB did not even take the simple course of correcting the obvious error in the disciplinary decision that the Claimant had withheld information in the Sean Mahon email re the forthcoming health service tender from the Dublin part of the Respondent’s operation. DB was not capable of dealing with this appeal in a fair, open and impartial fashion.
Argument:
14. The disciplinary process employed by the Respondent was fundamentally flawed and unfair. There was no (or alternatively no adequate, reasonable) investigation.
15. When one considers the substantive merits (as opposed to the procedural failings) it is the Claimant’s case that the evidence before the Tribunal
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amply demonstrates that even on the information available to the Respondent, and certainly on the basis of the information that could very easily have been available if a proper investigatory/disciplinary process had been followed, a finding of gross misconduct and the imposition of dismissal is unsustainable.
16. Most fundamentally on the question of the substantive merits the Tribunal heard not only the evidence of the Claimant as to the innocent nature of the emails, but the evidence of PM puts the matter beyond doubt. In fact, it is submitted that PM’s evidence in this regard was so persuasive and credible that none of it was subject to challenge under cross-examination. The uncontradicted position therefore is that the Claimant was not engaging in conspiracy against the interests of the Respondent.
17. It is respectfully contended that this in any event stands to reason. Why would the Claimant have entered into a conspiracy with others openly using the medium of his work email account? Why would the Claimant have wanted to do down a company he had founded and in which he remained a relatively substantial shareholder? How could the Claimant, a man with very considerable business experience and acumen, really have anticipated bringing to fruition a conspiracy to undermine his employer when he was bound by a strict non-compete, restraint of trade clause in his shareholder agreement?
18. The Burchell test (British Home Stores v Burchell [1978] IRLR 379) establishes that it is for the Tribunal to identify the real reason for dismissal and decide whether the employer’s decision to dismiss was founded upon a reasonable conclusion after having made such enquiries and investigation as appropriate and then to consider whether dismissal fell within the band of reasonable responses.
19. Morgan LCJ confirmed the applicability of this test in this jurisdiction in Rogan v South Eastern Health & Social &ire Trust [2009] NICA 47, para 16,
[16] The manner in which the tribunal should approach that task has been considered by this court in Dobbin v Citybus Ltd [2008] NICA 42. Since there was no dispute between the parties in relation to the relevant law I consider that it is only necessary to set out the relevant passage front the judgment of Higgins LJ.
“[48].. .The equivalent provision in England and Wales to Article 130 is
Section 98 of the Employment Rights Act 1996 which followed equivalent
provisions contained in Section 57 of the Employment Protection (Consolidation)
Act 1978.
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[49] The correct approach to section 57 ( and the later provisions) was settled in two principal cases — British Homes Stores v Burchell [1980] ICR 303 and Iceland Frozen Foods Ltd v Jones [1983] ICR 17 — and explained and refined principally in the judgments of Mummery LJ in two further cases- Foley v Post Office arid HSBC Bank Plc (formerly Midland Bank Plc v Madden reported at [2000] ICR 1283 (two appeals heard together) and J Sainsbury v Hitt [2003] ICR 111.
[50] In Iceland Frozen Foods
Browne-Wilkinson J offered the following guidance — ‘Since the present state of
the law can only be found by going through a number of different authorities,
it may be convenient if we should seek to summarise the present law. We
consider that the authorities establish that in law the correct approach for
the industrial tribunal to adopt in answering the question posed by section
57(3) of the [Employment Protection Consolidation) Act 1978] is as follows:
(1) the starting point should always be the words of section 57(3) themselves;
(2) in applying the section an industrial tribunal must consider the
reasonableness of the employer’s conduct, not simply whether they (the members
of the industrial tribunal) consider the dismissal to be fair;
(3) in judging the reasonableness of the employer’s conduct an industrial
tribunal must not substitute its decision as to what was the right course to
adopt for that of the employer;
(4) in many, though not all, cases there is a band of reasonable responses to
the employee’s conduct within which one employer might reasonably take one
view, another quite reasonably take another;
(5) the function of the industrial tribunal, as an industrial jury, is to
determine whether in the particular circumstances of each case the decision to
dismiss the employee fell within the band of reasonable responses which a
reasonable employer might have adopted. If the dismissal falls within the band
the dismissal is fair: if the dismissal falls outside the band it is unfair.’
[51] To that may be added the
remarks of Arnold J in British Homes Stores where in the context of a
misconduct case he stated -
‘What the tribunal have to decide every time is, broadly expressed, whether the
employer who discharged the employee on the ground of the misconduct in
question (usually, though not necessarily, dishonest conduct) entertained a
reasonable suspicion amounting to a belief in the guilt of the employee of that
misconduct at that time. That is really stating shortly and compendiously what
is in fact more than one element. First of all, there must be established by
the employer the fact of that belief; that the employer did believe it.
Secondly, that the employer had in his mind reasonable grounds upon which to
sustain that belief. And thirdly, we think, that the employer, at the stage at
which he formed that belief on those grounds, at any rate at the final stage at
which he formed that belief on those grounds, had carried out as much
investigation into the matter as was reasonable in all the circumstances of the
case. It is the employer who manages to discharge the onus of demonstrating
those three matters, we think, who must not be examined further. It is not
relevant, as we think, that the tribunal would themselves have shared that view
in those circumstances. It is not relevant, as we think, for the tribunal to examine
the quality of the material which the employer had before them, for instance to
see whether it was the sort of material, objectively considered, which would
lead to a
9
certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being “sure,’ as it is now said more normally in a criminal context or, to use the more old-fashioned term, such as to put the matter “beyond reasonable doubt.” The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion’.”
20. This was effectively summarised at para 21
of Rogan as,
It is for the employer to
establish the belief in the particular misconduct. The tribunal must then
consider whether the employer had reasonable grounds upon which to sustain the
belief and thirdly whether the employer had carried out as much investigation
into the matter as was reasonable in all circumstances. The tribunal must also,
of course, consider whether the misconduct in question was a sufficient reason
for dismissing the employee.
21. The Claimant submits that the evidence clearly demonstrates that on all limbs of that test the Respondent’s case comes up short.
22.
It should also be noted
that the requirement of reasonableness applies not
only to the disciplinary outcome of the process but also the manner of the
process resulting in that outcome. (Whitbread plc v Hall [2001] ICR 699
EWCA)
Unauthorised Deduction from Wages:
23. The second limb of the Claimant’s case is that he has suffered a series of unlawful deductions from wages that pertained from the commencement of his service agreement on 21/12/07 through to the time of his dismissal in April 2011.
24. The basis for this contention is that it was agreed between him and his employer (OASIS) at the time of the entering into of the aforesaid service agreement that the remuneration referred to therein only related to that which lie was to receive as his normal pay. Beyond and above that the Claimant was to be entitled to the difference between his service agreement package and that which his co-directors Gary McElroy and Peter McCormick were to receive, that being a salary figure of €180,000 or sterling equivalent.
25. This was to be an entitlement to the Claimant on an accrual basis pending the transfer of his pension vehicle from the previous manifestation of the
10
company with the intention that this element of his salary would then be paid into that pension pot (that transfer to be effected by the Respondent).
26. The Tribunal has heard evidence from the Claimant, Gary McElroy, Peter McCormick, Des Rogers and Glen Reid that this was the arrangement in place at the time. It is accepted that this arrangement is not categorically documented contemporaneously. However it is submitted that the oral evidence of this state of affairs is strong, cogent and uncontradicted.
27. It is strongly corroborated by the fact that McElroy and McCormick were treated equally in terms of remuneration and far from there being any basis upon which the Claimant should have been subjected to a negative differential it is clear that all concerned were of a view that he should be and was entitled to parity in bottom line pay terms.
28.
The Claimant’s remuneration was simply being
structured in a different way and accordingly the service agreement did not
actually reflect the entirety of that entitlement.
29. The extraneous evidence strongly corroborates the Claimant’s contention. The documented queries he made re the state of progress of the payment of this entitlement are before the Tribunal. It is notable that these queries both pre and post date the “take over” of OASIS in May 2009.
30. Further the Respondent’s Clear path due diligence documentation is manifestly supportive of the Claimant. The Tribunal will recall the Respondent’s obstructive attitude to the provision of this documentation which they maintained was irrelevant.
31. The Claimant contends that Glen Reid’s essentially uncontradicted and unchallenged evidence is strongly indicative of the credibility of the Claimant’s contention. GR told the Tribunal that not only was he aware of the Claimant’s entitlement, but he put that information into the due diligence process and had several conversations with the take-over investors group, and specifically with DB re same in advance of the deal being finalised in May 2009. Yet DB says he only became aware of this element of the Claimant’s claim in November 2009.
32. The Tribunal’s assessment of the credibility and truthfulness of each side’s opposing account/state of knowledge is key. Is the Tribunal prepared to accept that the Claimant, and all his witnesses have attempted to mislead the Tribunal re his entitlement? Conceptually, why would it have been that the Claimant would have accepted lesser remuneration than his equal
11
colleagues? Why did the Respondent attempt to suppress the Clearpath documentation?
33. The Claimant contends that he is entitled to seek to recoup the monies due to him by means of this unauthorised deductions from wages claim (as opposed to simply being limited to a breach of contract claim. NB: The Claimant specifically withdrew his breach of contract claim as before the Tribunal without adjudication upon same as it is subject to the statutory cap of £25,000).
34.
The unauthorised deductions from wages regime is
established under Art
45 of the ER(NI) O 1996, (as relevant)
45. - (1) An employer shall not make a deduction from wages of a worker
employed by him unless-
(a) the deduction is required or authorised to be made by virtue of a statutory
provision or a relevant provision of the worker’s contract, or
(b) the worker has previously signified in writing his agreement or consent to
the making of the deduction.
(3) Where the total amount of wages paid on any occasion by an employer to a
worker employed by him is less than the total amount of the wages properly
payable by him to the worker on that occasion (after deductions), the amount of
the deficiency shall be treated for the purposes of this Part as a deduction
made by the employer from the worker’s wages on that occasion.
35.
It is submitted that the Claimant’s circumstances
fall within the protection
of Art 45(3). The exceptions envisaged in Art 46 are not applicable.
36. The term “deduction” is to be afforded a wide definition and can even include a failure to pay wages on time (See Francis v Elizabeth Claire Care Management Limited [2005] IRLR 858).
Generally:
37. If the Tribunal is minded to find for the Claimant on his unfair dismissal claim, it would be open to the Tribunal to consider an uplift of any award of compensation on the basis of the Respondent’s failure to comply with the statutory disciplinary procedures.
38. Further, in considering any compensatory award, given the total loss being in excess of the statutory cap, the Tribunal should consider identifying the period of award as relating to that period after the Claimant’s contractual notice period of 6 months. This would allow the Claimant the opportunity to recover his loss for the period of his lawful
12
notice by way of a breach of contract action for wrongful dismissal in a different forum.
Conclusions:
39. The Claimant was unfairly dismissed, both automatically and on consideration of all the circumstances, procedural and substantive.
40. The Claimant has sustained significant unauthorised deduction from wages throughout the latter part of his employment with the Respondent contrary to Part IV of the ER(NI)O 1996.
Peter Coll
The Bar Library
21st May2012
13
SCHEDULE OF LOSS
APPENDIX 1- COMPENSATORY
LOSS
May 2011 to 4th June 2012
Salary entitlement @ €180,000 per annum
=£156,155.00 per annum
=
£13,012.91 per month
Loss 4th May 2011 to 4th June 2012
£13,012.91 x 13 =£169,167.83 gross
Less earnings to date;
£6000.00 gross (Invoice dated 1/9/11)
Balance £163,167.83
APPENDIX
2- UNLAWFUL
DEDUCTIONS FROM WAGES CLAIM
Salary underpaid 1 January
2008 to 4th May 2011
Remuneration Package due to Irish Directors including Claimant = €180,000 P.A.
Average Exchange Rates
Y/E 31.12.2008 1.2588= £142,993
P.A.
Y/E 31.12.2009 1.1233 = £160,242
P.A.
P/E 31.03.2010 1.1269 = £159,730
P.A.
Y/E 31.12.2010 1.1660 = £154,374 P.A.
Y/E 31.12.2011 1.1527 = £156,155
P.A.
Period Gross Paid Gross
Due Differenc
e
1.1.2008 —31.12.2008 £76,080 £142,993
£66,913
1.1.2009 — 31.12.2009 £93,686 £160,242
£66,556
1.1.2010— 31.12.2010 £142,629 £154,374
£11,745
1.1.2011 — 4.05.2011 £47,500 £53,050
£5,550
TOTALS £366,895 £510,659 £150,764
AMOUNT DUE FOR UNLAWFUL DEDUCTIONS FROM WAGES
= £150,764.00 GROSS
Case Number: 1422/2011
In the Office of the Industrial Tribunals and Fair Employment Tribunals
Northern Ireland
BETWEEN:
Stewart Porter
Claimant
-and-
Offsite Archive Storage & Integrated Services Holdings Limited
Respondent
________________________________________________________________________________
Respondent’s Written Submission
________________________________________________________________________________
Page Page
No
1. Introduction 2-4
2. Background 5-7
3. Evidence 8
4. Service Agreement 9
5. Unfair Dismissal 10-20
6. Unlawful Deductions of Wages 21-24
1. Introduction
1
1.
The Claimant has two claims before the Tribunal by way of an IT1
1422/2011, Bundle pages 1-19: -The Unfair Dismissal was summarised by: -
1.2 The Claimant was employed by OASIS as its Managing Director under a Service Agreement signed 21st December 2007.
1.3 Claimant invited to a disciplinary meeting by letter 18th March 2011; under the Company Handbook that was never issued to the Claimant.
1.4 Claimant not given investigation prior to disciplinary invite without explanation.
1.5 Claimant had been on sick leave due to neurasthenia, as result of his treatment of in the workplace and was preparing to return to work.
1.6 Early March the Claimant’s & Respondent’s representatives entered into discussion regarding an amicably termination of employment and a substantial sum on unpaid pension contributions.
1.7 Respondent without consent trawled through Claimant’s emails to construct a misconduct case to avoid a financial package. The Respondent claimed he found emails to support allegations of gross misconduct.
1.8 The Claimant attended the disciplinary meeting 25th March 2011, he was not given opportunity to call material witnesses, the Chair had been spoken to by Mr. Barnedt and he held the meeting in a superficial manner and refused to engage with Claimant. The Claimant offered innocent and compelling explanations, the record of the disciplinary Was deficient due to errors and omissions, he was dismissed and the Claimant appealed; Mr. Barnedt III was taking the appeal and the Claimant declined to attend due to Mr. Barnedt’s bias.
1.9 Claimant unfairly dismissed, charges not formulated in good faith, concocted to terminate employment, no reasonable investigation, no witnesses spoken to, charges were. unsupported by evidence of any significant or weight.
1.10 Claimant unfairly dismissed, charges not formulated in good faith, concocted to terminate employment, no reasonable investigation, no witnesses spoken to, charges were unsupported by evidence of any significant or weight.
1.11 Appeal process a sham, should not have been conducted by Mr. Barnedt and was in defiance of the claimant’s innocent explanations.
1.12 The Respondent failed to comply with the Labour relations Code of Conduct.
1.13 Unauthorised Deductions of Wages summarised by: -
2
1. Non-payment of pension contributions from the Claimants salary alleged as per his Service Agreement. (Bundle pages 249-264)
1.2.l The Respondent defended the claims via an lT3 response
summarised by Bundle pages 20-29:
1.2.2 February 2011 a meeting was held between the Claimant’s and the Respondent’s representatives resulting in the Respondents representative requesting a forensic search (Bundle page 37, 7) of the computers for documents relating to pension monies owed to the Claimant.
1.2.3 A series of emails May-October 2010 were found that were completely incompatible with his service agreement and his duties as a Director; namely in breach of his duty of fidelity and loyalty to his employer. That it would appear the Claimant was embarking with others to set up a rival competing Company and that he had passed on confidential information to others rather than his employer. An invite for disciplinary meeting was arranged for 23 March 2011 with a right to accompaniment. (Bundle pages 3-14)
1.2.4 The disciplinary hearing took place 25th March 2011 convened by John Dickey an independent as the Claimant at the request of the Claimant. An outcome was provided 4th April 2011 as the Claimants explanation was deemed unsatisfactory.
1.2.5 The Claimant’s solicitor appealed by letter dated 7th April 2011 and appeal invite for the l5th April 2011 was sent but the Claimant failed to attend the appeal. Mr. Barnedt carried out the appeal and forwarded an outcome letter dated 5th May 2011.
1.2.6 The Claimant’s actions caused the Respondent to lose faith in his integrity and represented a gross breach of trust and in breach of his service agreement. They reasonably believed his was guilty of the misconduct and that the decision to dismiss was within the band of reasonable responses; which a reasonable employer would have adopted.
1.2.7 They believed the dismissal procedures were reasonable and that they gave the Claimant the opportunity to put his case forward.
1.2.8 Whilst the Claimant through his counsel attempted to raise further issues and reasons for the dismissal in the submission we propose to take each issue separately and provide a submission of evidence to each claim as clearly both issues are disputed between the Parties and conclude with the remedy.
3
1.2.9 We believe it is important to raise the issue of Rogan at this early stage of the submission and its overriding objective and specifically Regulation 3(1) (b) of the Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005. Namely dealing with the case in a proportionate fashion, considering the issues involved and the needs of the Respondent’s business together with the most recent Northern Ireland Court of Appeal decision Patrick Joseph Rogan v SHE & SC Trust (2009) NICA 47 and specifically paragraph 18, 19 and 20 of Lord Chief Justice Morgan’s judgement, it is contended that his judgement has had the affect of correctly and effectively providing guidance on the correct focus of Tribunal claims.
1.2.10 Rogan paragraph 19, the issue as to what if any conduct constitutes the reason for dismissal was clearly a matter on which the belief of the disciplinary panel was the crucial issue, the agreed and correct legal position of the parties was that having established the belief of the disciplinary panel the Tribunal should not rehear the allegations but should consider whether the employer acted reasonably having regard to the material available to it and the investigation carried out by it.
1.2.11 I would draw the Tribunal to this comment it is not the purpose of nor should it be the purpose of the Tribunal to rehear the decisions taken after the disciplinary hearing or appeal process; which are neither judicial nor quasi judicial in nature but were in fact, business meetings in nature.
1.2.12 The issue at hand is whether the Respondent acted reasonably in the processes they applied. Rogan should go along way to reducing the unnecessary cross-examination
4
2. By way of Background / Setting the Scene
2.1 The Respondent carries out business as a Secure Document Storage Company which is part of a larger world wide group known as OASIS Limited; it has four functions to Secure the Storage of Documents, Document Imagery and Storage, Media Storage and Shredding.
2.2 Originally the Claimant, Peter McCormick and Gary McElroy who were joined by Des Rodgers worked in the secure storage of documents; there was a Management Buy Out (MBO) in December 2007 the Claimant and the others main owners of OASIS together with a small number of private investors, The Claimant, Peter McCormick and Gary McElroy signed Service Agreements at this time dated 2l December 2007. (Bundle pages 249-297)
2.3 By May 2009 there was a further MBO and a new investment package of American and European funds, with a new Board of Directors who appointed Dennis Barnedt III (Mr. Barnedt) as the new Chief Executive officer in May 2009 to whom all staff Shareholders/ Directors had to report to; this also resulted in a centralisation of certain day to day management activities to Dublin.
2.4 On the 9th September 2010 the Claimant advised the Respondent, Mr. Barnedt he wished to look for a more meaningful role in the Group but he was not quite sure of what he wanted to do Mr. Barnedt suggested the Claimant should take the role of head of Mergers and Acquisitions, which he agreed to, do, the role consisted of two tasks: - grade all past acquisitions and identify future possible acquisitions. By early October 2010 Paul Nelis who had been appointed by the Claimant was recommended by the Claimant to be appointed General Manager of the Belfast operation. By 22 October 2010 the Claimant was unhappy with his new role and met with Dennis Barnedt stating he was unhappy with his new role. He wanted to be appointed as a Client Ambassador socialising with the clients working part time hours for his full time salary, a role that was declined by the Board.
2.5 Whilst unfortunately the Claimant had experienced a personal tragedy previously he had a further tragedy in the summer of 2010; by late October 2010 the Claimant raised concerns about his health and staff were expressing concerns about the Claimant’s health and during a meeting between Peter McCormick, Dennis Barnedt and the Claimant he told them he would take time away from work to recover and Dennis Barnedt agreed that would be best.
5
2.6 The Claimant went on long term sick leave 27th October 2011 (Bundle page 365); the Respondent wrote to the Claimant on the 10th November 2010 to encourage him to take time to rest and 1st & l3th December 2010 to set up a welfare meeting in relation to his health. The Claimant had raised an issue about monies from his salary had not been paid into his pension and the Respondent had the issue investigated this resulted in Ronnie Carroll the Respondent’s Finance Director writing to the Claimant in relation to the Deloitte & Touché advice regarding unpaid salary owed to the Claimant which was subsequently paid.
2.7 On the 18th January 2011 (Bundle page 181) the Respondent was instructed by the Claimant’s solicitor that all correspondence relating to the Claimant’s employment should be directed to them and a series of letters was exchanged between the Respondent and the Claimant’s solicitor in relation to his welfare and his alleged underpayments.
2.8 The latest correspondences related to a termination package the Claimant was looking to leave the Company as his other two colleagues Peter McCormick and Gary McElroy had terminated their employment by this time. (Bundle pages 182-191)
2.9 The pension contributions were still an issue, thus it resulted in a meeting between the two representatives and the Respondent’s representative requesting the Respondent to carry out a forensic computer search for documents which did not find any documents in relation to monies owing from his salary to be paid into a pension fund. It found a number of emails which were in contra to the Claimant’s Service Agreement and Company Handbook. (Bundle pages 3-14, 194-248)
2.10 After the MBO a new Board were elected and Des Rodgers and Gary McElroy became part of the Board of Directors whilst Peter McCormick and the Claimant had observer rights only. Peter McCormick then sold his shares and left the Company with a financial package but Gary McElroy took a financial package and kept his shares in the Company.
2.11 The Claimant raised an issue regarding his pension 2009 that money should have been paid into his pension fund from unpaid salary as arranged by Glen Reid. The Respondent after an investigation by Dellotte Touché requested by the Claimant found that the Claimant had been underpaid as per his Service Agreement and after consideration he was paid £39000.00. It took some time for the monies to be paid to the Claimant as he had wanted paid in the manner that would save him paying tax; whilst the Respondent tried to meet the Claimant’s request after numerous requests in the end it was paid into his monthly salary.
6
2.12 Prior to Peter McCormick leaving the Company the Claimant became unwell and needed to be encouraged to take time off to receive help and this resulted in him being on long term sick from October 2010. Whilst on sick leave he had to be reminded to take time away from work to rest; via his solicitor he requested a new part time post and also through his solicitor he was looking to leave the Company. The Respondent was dealing with the Claimant up until this time and then he was instructed to deal with the Claimants solicitor and the solicitor has been involved with the process right up to and during the Tribunal process.
7
3. The Evidence
3.1 The evidence was provided to the Tribunal by way of a Bundle of documents (430 pages) which were considerably added to during the course of the Tribunal. Clear Path document 4,000 pages, Emails between Des Rodgers and Dennis Barnedt.
3.2 Evidence on behalf of the Claimant in relation to the Unfair Dismissal was given by the Claimant and his supporting witnesses Des Rodgers and Peter McCormick. The Claimant and Des Rodgers gave evidence in relation to the disciplinary process and Peter McCormick gave evidence in relation to the emails used at the disciplinary. In a well crafted presentation that sought to re-write history, striving to get the Tribunal to re-hear the disciplinary process during the cross examination of John Dickey the disciplinary chair and the decision he took. Then through the appeal process and the decision taken by Dennis Barnedt.
3.3 Evidence on behalf of the Claimant in relation to the Unauthorised Deductions of Wages, whilst no written document or record of monies was produced the Claimant, Des Rodgers, Peter McCormick, Gary McElroy and Glen Reid gave evidence stating they had an understanding that they should all be paid the same salary figure yet there was nothing in the Claimant’s Service Agreement.
3.4 Evidence on behalf of the Respondent in relation to the Unfair Dismissal was given by John Dickey who took the disciplinary hearing and made the decision to dismiss (Bundle pages 1-14, 24-47, 54-81)
3.5 Dennis Barnett who took the appeal process and the decision to uphold the dismissal. Dennis Barnedt gave evidence in relation to the claim for Unauthorised Deductions of Wages. There was no paperwork to prove the monies had been set aside in a due diligence or written document/s to prove the monies were owed. (Bundle pages 82-97, 99-103)
3.6 The Respondent’s evidence refers to the events that lead to the disciplinary and appeal process that had continual in put from the Claimant’s solicitor.
3.7 Dennis Barnedt on behalf of the Respondent gave evidence about the alleged unpaid salary/pension contribution.
8
4. The Service Agreement
4.1 The starting point of any employment claim must be the contract of employment and in this case it is a Service Agreement; an agreement that was executed by a solicitor dated 21st December 2007 signed by the claimant and witnessed by Gary McElroy (Bundle pages 249-264) It contained certain points.; -
i. Clause 2. Employment. The Company employs the Director and the Director agrees to serve the Company as Managing Director. 2.2 (b), (c), (d) & (e). 2.3, 2.4 (a), (Bundle 251-252)
ii. Clause 4. Remuneration & Other Terms. 4.1 Salary £85,000.00., 4.4 Directors Fee £16,320.00 which is included in salary. 4.5 (a) Health Insurance, (b) Pension 5% contribution ‘No mention of other monies to be paid into pension i.e. from unpaid salary’, (c) Club subscriptions £1,020.00 annually, (d) Car £15000.00 annually paid monthly.
iii. Clause 5 Summary determination Provision. 5.1 (b) be guilty of any grave misconduct gross default or wilful neglect in the discharge of his duties hereunder or in connection with or affecting the business of the Group or any member of the Group. (Bundle page 256)
iv. Clause 6 Protective Covenants.
6.1 Trade Secrets 6.1.1,
6.2 Notes and 6.4 Restrictive Covenants. 6.4.1, 6.4.2 and
6.5 Further Agreements. 6.9 Company Policies guidance
the Company handbook was forwarded to his solicitor via
email January 2011 (Bundle page 258)
v. Clause 7 Grievance and Disciplinary procedure the Company handbook was
forwarded to his solicitor via email January 2011 (Bundle page 261)
4.2 However Mr. McElroy’s Service
Agreement sets out at paragraph at 4.5 (b) ‘The Director
shall be entitled to participate in such pension arrangements of the Company as
are put in place by the Board’
(Bundle
page 270) and the same applies to Mr. McCormick’s (Bundle pages 287).
9
5. Alleged Unfair Dismissal
5.1 The Claimant contends the dismissal was unfair due to disciplinary
procedure being: -
i.
A comedy of errors.
ii. Procedure wrong.
iii. Large chunks of what he said was left out.
iv.. Mr. Dickey did not understand the business; he misunderstood and
misrepresented
what Claimant said.
v.
He was not given a number of names to choose from to Chair the meeting.
vi. Mr. Dickey had already made his decision.
5.2 The Claimant told the Tribunal he went to the meeting with notes he had put together 2/3 days prior to the hearing that he had emails that would have counteracted the emails used to discipline him yet he did not bring the emails to the hearing nor did he give a copy of his notes to John Dickey. He went on to say the procedure was wrong, that he had no say in the independent person, that he believed he should have been given 2/3 disciplinary Companies to choose from and found it strange he was not given a choice of independent or 1/2 names to choose from, that they needed to establish John Dickey was bonafide.
5.3 The Claimant went on to say he was aware of the LRA Code of Conduct, that he had been advised by M. McKay to attend and what position and stance he would take. He stated it was a comedy of errors and that large chunks of what he had said at the disciplinary were left out, that Mr. Dickey did not understand the business, that he misunderstood and misrepresented what the Claimant had said as he Mr. Dickey had already made his decision.
5.4 When the Claimant discussed the emails used at the disciplinary he asserted they meant something different, that the emails need to be read in context. It is important to note that one must remember what was said and happened at the point in time of the disciplinary hearing and not what was said in hindsight at a Tribunal hearing after the event.
5.5 Des Rodgers accompanied the Claimant to the disciplinary meeting he stated he expected a professional, a business card, an informed man, papers and a procedure of fairness; that there were no procedures in front of him and that there was a lack of evidential evidence. He stated he pulled John Dickey up when he did not have documents. He went on to say he had a different opinion after the meeting but when he was challenged about the email he sent to D. Barnedt I just after the meeting about how the meeting went he answered ‘yes it is as I have written’. He agreed with the content of the email he sent to Dennis Barnedt.
10
5.6 Des Rodgers went on to say that the Claimant was not well enough for the disciplinary yet the Claimant had a fit to return to work from his GP dated 1st March 2011 and both he and his solicitor had stated he did not need to attend an occupational health assessment as his GP stated he was fit to return to work. (Bundle page 369)
5.7 Peter McCormick in his evidence discussed the emails and stated the Claimant’s assertion that the emails related to him was completely wrong and push come to shove he disputed the Claimant’s version of events in relation to the emails.
5.8 The Claimant stated he never received the Company’s Handbook yet his solicitor was sent it via email January 11 because at this stage they had been told that all correspondence for the Claimant must go through M. Mckay. (Bundle pages 181, 194-246)
5.9 The Claimant had an opportunity to put his case forward we believe via the solicitor’s advice and his belief that it was not going anywhere he did not take the allegations and the process seriously as he was going to leave it to a Tribunal to adjudicate the situation.
5.10 The Respondent contends the dismissal was fair therefore if we deal with the actual dismissal on the 4th April 2011 which was for gross misconduct being a fair reason for dismissal under Article 130 (4) ERO (NI) 1996 as amended is to be met; which is, would the dismissal be justified in the circumstances.
5.11 There is a fall back process which should be followed if the argument of fairness as required under Article 130(4) ERO (NI) 1996 as amended is to be met; which is, would the dismissal be justified in the circumstances.
5.12 The Respondent had been requested to do a forensic search (Bundle page 37 (7)) of the computers to try to locate documents relating to the owed monies to the Claimant that should have been paid into his pension fund. In evidence Dennis Barnedt stated on his trawl for documents going back to 2007 whilst he could not find any paperwork in relation to the monies owed to his pension he came across a number of emails which lead to the disciplinary process.
11
5.13 The Respondent followed the statutory disciplinary procedure by sending the Claimant and his solicitor an invite letter dated l8 March 2011 (Bundle pages 1-14 & 249-264) which contained: -
i.
Date, time and venue for meeting.
ii. The three allegations being raised.
iii. Evidence being used i.e. emails dated 10th-
17th
May, 8th June, 25th July 8th August and
5th October 2010.
iv.
The possible outcome of Gross Misconduct.
v. Service Agreement.
vi. Copy of Disciplinary rules and procedures.
5.14 The Claimant via his solicitor expressed concern about Dennis Barnedt taking the disciplinary hearing that he would not hold it in a fair and unbiased manner. (Bundle page 15-18) As no other Directors were available the Respondent brought in an independent Chair John Dickey who was given the authority to take the disciplinary and make his own decision.
5.15 The disciplinary hearing was rescheduled via
letter dated 23 March
2011, now suspending the Claimant. The disciplinary took place on the
25th March 2011, Mr Dickey received all the information in relation to the
disciplinary and he followed the statutory process; he provided a set of
minutes to the Claimant and a written decision giving him the right to appeal
his decision. (Bundle pages 17, 24-38, 39-46)
5.16 Sean Mahon forwarded a statement as per his email, ‘I have stressed I am not and wish not to be implicated in proceedings’. (Bundle page 20a)
5.17 The Claimant told the Tribunal he went to the meeting with notes he had put together 2/3 days prior to the hearing that he had emails that would have counteracted the emails used to discipline him yet he did not bring or give a copy to John Dickey. He went on to say the procedure was wrong, that he had no say on the independent person, that he believed he should have been given 2/3 disciplinary Companies to choose from and found it strange he was not given a choice of independent or 1/2 names to choose from, that they needed to establish John Dickey was bonafide.
5.18 The Claimant went on to say he was aware of the LRA Code of Conduct, that he had been advised by M. Mckay to attend and what position and stance he would take. He stated it was a comedy of errors and that large chunks of what he had said at the disciplinary were left out, that Mr. Dickey did not understand the business, that he misunderstood and misrepresented what was said as John Dickey had already made his decision.
12
5.19 The Tribunal should take note that this is a case that has involved legal representation long before the disciplinary hearing being that M. McKay was acting on the Claimant’s behalf; there are various authorities that define this representation / misrepresentation; which we shall discuss.
5.20 Firstly the Respondent claims that the legal representation became involved long before the disciplinary hearing being that M. McKay was acting on the Claimant’s behalf; (Bundle page 181) wrote to the Respondent on the 18th January 2011 instructing the Respondent to correspond with her in matters relating to the Claimant’s employment.
5.21
There have been various letters in relation to the alleged unlawful
deductions of wages; however that situation then developed itself into a quasi
legal representation for the Claimant into every matter that the employer was
subsequently to deal with. The Respondent claims that it was nothing short of
misrepresentation at its worst and frustration at its least in the events that
were placed before the Tribunal namely
i. Unfair Dismissal
ii. Unauthorised Deduction of Wages
5.22 The Respondent relies upon the following cases whilst not directly related the principles are related in relation to the involvement of the, legal advisor: -
i. In the case of Churchill v A Yeates & Son Limited (1983) ICR 380 it sets out an example of whether the employee was advised at any material time, and if so, by whom; the extent of the advisors knowledge of the facts of the case and the advise given to the employee. The starting point must be the famous passage in, Dedman v British Building & Engineering Appliances (1974) ICR 53(1973) IRLR 379 EAT. If a man engages skilled advisers to act for him and they mistake the limit and present it too late he is out his remedy is against them.
5.29 What we say is that M. McKay along with the Claimant has set out to frustrate the disciplinary and the appeal process; she has also set out along with the Claimant the position of an unlawful deduction of wages. Therefore any claim in respect of these clearly lies at the door step of the advisor and not within the realms of the Tribunal.
5.30 During the cross examination of John Dickey the Claimant’s counsel brought the Tribunal piece by piece through the disciplinary process and the decision and whilst he took the decision maker thorough the minutes and decision letter it was clear throughout the cross examination that Mr. Dickey made the decision with the evidence in front of him. (Bundle pages 1-14, 24-47, 54-81)
13
5.31 The Claimant via his representative appealed the decision, an appeal invite was forwarded but the Claimant did not attend as advised by his solicitor. As per the claimant’s evidence I was advised by Maura Mckay it was going to Tribunal (Bundle pages 47-49)
5.32 An appeal meeting took place taken by Dennis Barnedt he went over the minutes adding his comments, he went over the emails observing that some of the recipients were dropped off some of the emails and as no new evidence was provided from the Claimant he decided to uphold the decision taken by John Dickey. He made his decision and forwarded it to the Claimant. (Bundle pages 50, 61-63, 82-97, 99-103)
5.33 Yet again the Claimant consulted with his solicitor and he told the Tribunal in evidence he was not advised to do a written appeal, not to attend. He stated clearly, ‘I took and acted on her advice’.
5.34 The Claimant and his companion Des Rodgers have in the proceedings challenges the contents of the minutes of the disciplinary meeting, but the Tribunal is invited to accept the evidence of the Respondent as being what actually happened and what actually was said
5.35 If the Claimant seeks to challenge the reason for the dismissal it is necessary that some evidence to be adduced to show a different reason for the dismissal. The Claimant asserts in his claim form Bundle pages 1- 18, in his evidence and Des Rodgers evidence they have both tried to suggest the real reason for the dismissal was to save the Company money and so Mr. Barnedt would achieve a bonus.
5.36 In conclusion the Respondent states that the Claimant and his skilled advisers from the outset have at all times tried to unsuccessfully, to muddy the waters.
5.37 The Tribunal must rely upon the facts before them:
1. The emails are quite clear.
2. No further investigation was required because of the quantity and the
unambiguous tone of the emails
3. The Claimant was properly invited to a
disciplinary hearing.
4. The Claimant participated along with his representative at the
disciplinary hearing but choose to belittle and frustrate rather than offer sound explanations for the emails.
5. The Claimant was given a decision with a right to appeal.
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6. The Claimant decided not to avail of the appeals procedure..
5.38 The Respondent asserts that they carried out a disciplinary process for gross misconduct in compliance with its own policies and the Labour Relations Agency Code of Practice and the claimant’s attempt to re run the disciplinary hearing in the Tribunal process and sneer at the Respondent and his agents do not change the facts as set out before the Tribunal by the Respondent
Relevant law
The proper approach for a Fair Employment Tribunal to take when considering the
fairness of a misconduct dismissal is well settled and was recently considered
by the Court of Appeal in Rogan v South Eastern Health & Social Care
Trust [2009J NICA 47.
Article 130 of the Employment Rights (Northern Ireland) Order 1996 provides:-
“130(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is far the employer to show —
(a) the reason (or if more than one the principal reason) for the dismissal and
(b) that is either a reason failing within paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) a reason falls within this paragraph if it —
(b) relates to the conduct of the employee,
(4) where the employer has fulfilled the requirements of paragraph (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) —
(a) depends on whether in the
circumstances
(including the size and administrative
15
resources of the employees undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
The Court of Appeal in Rogan approved the earlier decision of Court in Dobbin v Citybus Ltd (20081 N1CA 42 where the Court held:
The correct approach to [equivalent GB legislation] was settled in two principal cases — British Home Stores v Burchell [1980]ICR 303 and Iceland Frozen Foods Ltd v Jones [1983] ICR 17 and explained and refined principally in the judgements of Mummery LJ in two further cases Foley v Post Office and HSBC Bank Plc (formerly Midland Bank) v Madden reported at [2000] ICR 1283 (two appeals heard together) and J Sainsbury v Hitt (2003) ICR111.
In Iceland
Frozen Foods,
Browne-Wilkinson
J offered the following guidance:-
“Since
the present state of the law can only be found by going through a number of
different authorities, if may be convenient if we should seek to summarise the
present law. We consider that the authorities establish that in law the correct
approach for the industrial tribunal to adopt in answering the question posed
by [equivalent GB legislation] is as follows:
(1) the starting point should always be the words of (equivalent GB legislation] themselves;
(2) in applying the section an industrial tribunal must consider the reasonableness of the employer’s conduct not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair;
(3) in judging the reasonableness of the employer’s conduct an industrial tribunal must not substitute its decision as to what was the right
16
course to adopt for that of the employer;
(4) in many, though not all, cases where there is a band of reasonable responses to the employee’s conduct within which one employer might reasonably take one view, another quite reasonably take another;
(5) the function of an industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair; if the dismissal falls outside the band it is unfair.”
To that may be added the remarks of Arnold J in British Home Stores where in the context of a misconduct case he stated-
“What the Tribunal have yet to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, it must be established by the employer the fact of that belief, that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further. It is not relevant, as we think, that the tribunal would themselves have shared that view in those circumstances. It is not relevant,
17
as we think, for the tribunal to examine the quality of the material which the employer had before them, for instance to see whether it was the sort of material, objectively considered, which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being ‘sure’, as it is now said more normally in a criminal context, or, to use the more old fashioned term such as to put the matter beyond reasonable doubt The test, and the test all the way through is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion.”
In Paragraph 1466 of Harvey (Unfair dismissal Division) states:
“The
standard
of proof which an employer must meet has been
discussed in a number of cases. As the extract from Arnold J’s judgment in the British
Home Stores case indicates, the Tribunal should not require the employer to
be satisfied beyond all reasonable doubt, which would be a far too stringent
standard, or even on the balance of probabilities. Indeed in Lees v The
Orchard [1978] IRLR 20, EAT, it was suggested
that the latter test might possibly be too rigid. It is submitted that,
exceptional circumstances apart, it will be difficult for a Tribunal to
conclude that an employer has acted reasonably unless it is at least more
likely than not that the employee committed the misconduct relied upon.
Exceptional cases might
include those where the need for an employee with complete and unimpeachable
integrity is so important that any real doubt about his reliability will
justify the dismissal. On the other hand as Arnold J pointed out in the British
Home Stores case, if the balance of probabilities test satisfied, then it
would be extremely difficult — and may be virtually impossible — to allege successfully
that the employer has acted unreasonably in deciding that the employee
committed the act of misconduct.”
The Court of Appeal in Rogan v South Eastern Health & Social Care Trust [2009] NICA 47 (see above) considered the issue of the appropriate standard of proof to be applied by an employer when considering an allegation of misconduct. In the circumstances of that case it stated at Paragraph 17:-
It was
accepted that the civil standard was the appropriate standard of proof for the
disciplinary panel but the respondent placed emphasis on the passage in the
opinion of Lord Nicholls in Re: H (Minors) [1996] AC 563, referring
to the need for more
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cogent
evidence to overcome the likelihood of what is alleged if
a serious allegation is made. That passage has been
considered again by the House of Lords in Re: D[2008] UKHL.
33 and a proper approach is helpfully set out in Paragraphs 27
and 28 of the opinion of Lord Carswell
Richards LJ expressed the proposition neatly in R (N) v Mental Health Review
Tribunal
(Northern Region) 120051 EWCA Civ 1605, f2006J QB 468, 497—8, Paragraph 62, where he
said:-
‘
Although there is a single civil standard of proof on the
balance of probabilities, it is flexible in its application. In particular, the
more serious the allegation or the more serious the consequences if the
allegation is proved, the stronger must be the evidence before a court will
find the allegation proved on the balance of probablilties. Thus the
flexibility of the standard lies not in any adjustment to the degree of
probabIlity required for an allegation to be proved (such that a more serious
allegation has to be proved to a higher degree of probability), but in the
strength or quality of the evidence that will in practice be required for an
allegation to be proved on the balance of probabilities.
In my opinion this paragraph effectively states the concise terms of the proper state of the law on this topic.”
Alternative
In the alternative should the Tribunal find in favour of the Claimant the
Respondent will rely upon the following two positions:
1. A fundamental flaw in the disciplinary proceedings the Respondent will say that the Claimant by the tone and the inference that can be drawn from the emails, that he breached his fiduciary duties which resulted in a loss of trust and confidence.
Philip Towers v Premier Waste Management Limited (2011) EWCA Civ 923 Case No 9NE30012
A
Director of a Company is appointed to direct its affairs. In doing so it is his
duty to use his position in the Company to promote its success and protect its
interests. In accordance with equitable principle the special relationship with
the Company generates fiduciary duties on the part of a Director. His fiduciary
commitments to the Company took the form of a duty of loyalty and a duty to
avoid a conflict between his personal interests and his duty to the Company.
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These duties, which are simple, strict and salutary, were the basis of the Claimant’s Service Agreement.
The Tribunal should take note in relation to this position is the serious
animosity that the Claimant and his witnesses displayed towards the Respondent,
throughout these proceedings and the relationship prior to the proceedings in
particular the ‘Americans’ and ‘Dublin Boys’.
Contributory Fault
2. It is the Respondent’s case in relation to the emails that they were all self explanatory and carried a tone and inference that has never been answered at the disciplinary or during these proceedings.
3.. It is abundantly clear that these emails belonged to the Claimant or his friends thus the Claimant’s actions amounted to contributory fault Therefore any award for unfair dismissal the Respondent relies upon Article 157 (6) of the ERO (NI) 1996 as amended it would be appropriate to make a reduction of 80 percent.
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6. Unauthorised Deductions of Wages
6.1 The law Article 45 ERO 1996 as amended Article 45 (1) sets
out that an employer shall not make a reduction from wages of a worker employed
by him.
6.2 (a) The deduction is required or authorised to be made by virtue of any statutory provision or a relevant provision of the worker’s contract, or
6.3 (b) The worker has previously signified in writing his agreement or consent to making the reduction.
6.4 45 (2) In this Article ‘relevant provision’ in relation to the workers contract means: -
6.5 (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or
6.5 (b) in one or more terms of contract (whether express or implied and, if express, whether oral or in writing) the existence of the effect, or combined effect, of which in relation to the worker the employer was notified to the worker in writing on such an occasion.
6.6 The Respondent believes that this part of the case is misconceived in that there is no unauthorised deduction and it should be struck out from these proceedings.
6.7 The Respondent also believes that this part of the claim is time barred as per Article 55 (2) (a)
6.8 (2) Subject to paragraph (4), an industrial tribunal shall not consider a complaint under this Article unless it is presented before the end of the period of three months beginning with
6.9 (a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which was made,
6.10 In his evidence the Claimant asserts this relates to monies taken from his salary which he states should have been the same amount as Gary McElroy’s and Peter McCormick’s. The Claimant further asserts he had taken a smaller salary of £85,000.00 and the rest was to be put into his pension fund and that Glen Reid was looking after this issue and that it was part of the due diligence during the MBO negotiations.
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6.11 The Respondent states the Claimant first raised this issue of his alleged under payment of salary in 2009 and after investigation it was realised he had been underpaid prior to the new investors coming onboard. A review was carried out by Dellotte Touché and it was found that the Claimant had been underpaid to the sum of39,000.00. It took some time to have the monies paid to the Claimant as he did not want it paid in his salary; in the end it was paid into his account.
6.12 The Claimant asserts through evidence that he was not paid his full entitlement of wages which had been suggested was set aside to be paid into a pension: -
i. A
pension that took 3 years to sort out to allow
monies to paid into it.
ii. Monies that were never recorded in an account.
iii. Monies that never accrued any monitory interest
iv.
Monies that were never recorded in a due diligence
report.
vi.
Monies that were never recorded in the Warranty
Document.
vii. Monies that were never recorded in the Shareholders Agreement l5th May 2009.
6.13
In this case the Claimant had a service agreement (Bundle page 249- 264)
which stated his salary of £85000.00 and when he raised the underpayment with
the Board members the Respondent Dennis Barnedt had this investigated and found
he had been underpaid by
£39,000.00 and this was paid to the Claimant.
6.14 The Claimant was unhappy with the payment as he stated he was entitled to monies dating back to 2007.
6.15 He was asked to provide evidence of this arrangement but nothing was ever provided.
6.16 The Claimant then via his solicitor requested the payment of the back monies owed to be paid, which resulted in a meeting between the representatives to discuss the pension issue.
6.17 . As the Claimant’s representative claimed there were documents relating to monies to be paid into a Claimant’s pension; the Respondent’s representative agreed to request a forensic search (Bundle page 37 (7)) of the computers and if the documents were found she would advise the respondents to pay what monies were owed.
6.18 This search took place but no documents in relation to the Claimant’s unpaid salary or a sum of money that should have been set aside to go into a pension fund were found.
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6.19 What did surface were a number of emails that raised a number of disciplinary issues amounting to gross misconduct; which lead to a disciplinary process and dismissal.
6.20 The Claimant in his evidence suggested there was an arrangement that he should have a small salary with monies put into a pension to save him and the Company money.
6.21 The Claimant stated he had left it to Glen Reid the Chief Finance Officer, to sort out it for him yet there was no documentation to suggest that monies had been set aside or accruing interest or within the due diligence prior to the MBO.
6.22 On behalf of the Claimant we heard evidence from Gary McElroy who exited the Company on the 28th February 2011 but was a share holder and observer at the Board meetings. He stated he was self-employed until 2007 and then employee on salary 180,000.00 Euros. He stated the Claimant and Peter McCormick would have had a similar salary and that he was aware the Claimant wanted his salary structured differently.
6.23 He went on to say there were no documents and he knew in the background it was being resolved. On cross examination he stated he read the Claimant’s Service Agreement before he signed it and agreed there was nothing in the document to say that part of his salary was set aside to go into his pension. When taken to the April Share agreement and the 24.7 clause that no monies owing to Directors over 20,000.00 Euros he answered yes and when asked about his working relationship with the Company it was good. When asked by the Chair did he feel isolated he replied did not and that he left the Company due to the pending litigation in relation to warranty claims.
6.24 Glen Reid was Chief Finance Officer in the Company 2007 prior to the Management Buy Out, his role was to draft all the service agreements and liaise with the lawyers. You heard Dennis Barnedt say in his evidence in chief that Mr. Reid had been found stealing monies from the Company via over inflated salary which when found out paid monies back and resigned.
6.25 During his evidence Mr. Reid stated he had noticed the Claimant salary in the Service Agreement was different from the others and he spoke to him, he said the Claimant told him he wished for part of salary to be paid into his pension. He went on to refer to the Claimant’s pension fund being hard to access, he even forgot about it at some stage, yet when asked where he had recorded it he stated he had not done so.
6.26 He could not direct the Tribunal to accounts that had taken account of the monies owed to the Claimant’s pension even though it was his role to do so. He stated as it only represented 2% of the companies profit in his opinion it was not material.
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6.27 When he was cross examined about possible documents he replied ‘no, you know there isn’t, your playing games with me’. His evidence was that it was ‘built on trust’ and everybody knew it.
6.28 Des Rodgers a Director on the Board gave evidence that he relied on Glen Reid and that he knew there was parity between the employees namely the Claimant, Gary McElroy and Peter McCormick. Under cross examination he admitted no document tied all three employees together and that he was not aware of any document in relation to monies to be paid into the Claimant’s pension.
6.29 Peter McCormick gave evidence that they had all agreed to be paid the same salary.
6.30 During the hearing more evidence was requested to prove this issue via the Clear Path due diligence document (Bundle pages 4,000)
6.31
It could not be found in the Warranty Agreement aod with reference to
16.8 of this agreement the maximum remuneration was 20,000.00 euros this was
signed by the Claimant, Mr. Elroy and Mr. McCormick. (Bundle pages 247-248) The
Share Subscription and Share Holders Agreement dated 15th May 2009 (Bundle
pages 299-329) at page 315 5.13 Service Agreement there is no mention of the
monies set aside from the Claimant salary to be paid into his pension fund. The
Clear Path documents still did not take into account the monies that should
have been set aside to pay into the Claimant’s pension fund.
6.32 Dennis Barnedt on behalf of the Respondent contended they paid the Claimant his salary as per his Service Agreement and that when the Claimant raised the issue in relation to monies kept from his salary to be paid into his pension fund the Respondent had it investigated. When they realised he had been underpaid to the value of £39,000.00 they quickly rectified the situation and repaid £39,000.00 monies owed. No evidence of the claimed monies owing was ever produced or found.
6.33 The Claimant seeks to rely upon evidence of a document purporting to relate to his salary amount to be paid into his pension; yet no document has ever been found. It is beyond belief that the Claimant did not have his unpaid salary directed to his pension in writing either in his Service Agreement or at least in writing from Glen Reid.
6.34 He states the arrangement was done to save the Company and himself tax and national insurance.
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I now put the submission forward on behalf of the Respondent.
I would thank the Tribunal and Mr. Peter Coil for their patience at this time.
Lynn Sheridan
Peninsula Business Services Limited
30th May 2012.
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