30 08 2017 Insights Employment Law

Summary Dismissals - Pitfalls and Hazards for Employers

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By Harry Wall
31st August, 2017

The recent Labour Court case of DHL Express (Ireland) Ltd. and Michael Coughlan (UDD1783) serves as a useful touchstone for employers in terms of the high bar that must be satisfied where employees are summarily dismissed for gross misconduct.

Mr Coughlan had been employed as a driver by DHL Express for 11 years. He was involved in a minor accident, causing some damage to his van. Following an investigation and disciplinary hearing his actions were adjudged by the company to amount to gross misconduct and he was summarily dismissed. Mr Coughlan successfully brought an unfair dismissal claim to the Workplace Relations Commission (“WRC”), at which point the company appealed the Adjudication Officer’s decision to the Labour Court.

The matters touched on by the Labour Court in its decision serve as a useful guide to many of the key procedural matters to be addressed where gross misconduct is an issue.

Setting out complaints/allegations beforehand|
Adjudication Officers and the Labour Court expect adherence by employers to the principles set out in the statutory Code of Practice on Grievance and Disciplinary Procedures (S.I. 146/2000) (the “Code”) when determining the adequacy or otherwise of a company’s disciplinary processes. The Code sets out that employers must comply with the principles of natural justice and fair procedures when implementing disciplinary policy. This requirement includes that details of any allegations or complaints that the employee is to face are to be put to the employee concerned.

Following the completion of an investigation into the accident at issue here, Mr Coughlan received a letter inviting him to attend a disciplinary meeting which set out the allegation he was to face, namely a “failure to protect and safeguard company property.” In the course of the disciplinary meeting he was confronted with his previous expired disciplinary warnings and it was clear that these were also being taken into consideration. The appeal officer’s decision made reference to a further ground of a duty of care owed to the public, staff and to the employee himself. None of these additional issues had been made known to Mr Coughlan beforehand.

It is vitally important that an invitation to a disciplinary meeting sets out the entirety of the complaints or allegations that and employee is to answer, and that no additional complaints are introduced at a later stage.

What constitutes Gross Misconduct?
The Labour Court noted that a high bar applies to behaviour that can be said to constitute gross misconduct. The Labour Court cited an earlier Employment Appeals Tribunal (“EAT”) case in which it was stated that gross misconduct “… applies only to cases of very bad behaviour of such a kind that no reasonable employer could be expected to tolerate the continuance of the relationship for a minute longer …” and which cited examples of such behaviour as including violent assault or theft. The Labour Court felt that the grounds here, “failure to protect and safeguard company property”, did not come within that definition.

Equally the Labour Court noted that the company had waited for two weeks before suspending Mr Coughlan, meaning he was free to drive for the company, and which would indicate that his conduct was not viewed as very bad behaviour that could not be tolerated a minute longer. This is consistent with the approach of the old EAT in cases such as Duffy -v- Hugh McAvoy T/A ‘Talk To Me’ (UD1048/2009) where it was stated that a failure to suspend an employee in gross misconduct situations may undermine the gross nature of the employee’s behaviour as it brings into question whether it was something that warranted dismissal in the first place.

Proportionality of sanction
In short, does the punishment fit the crime? Proportionality was an issue in both the Adjudication Officer and the Labour Court’s decisions.

The Labour Court noted that Mr Coughlan had in essence misjudged the width of the gap he was attempting to drive through. He had freely admitted to this misjudgement in the course of both the investigation and the disciplinary meeting. In light of the high bar attaching to gross misconduct, the Labour Court decided that such an inadvertent misjudgement could not be said to amount to gross misconduct justifying a summary dismissal.

Consideration of lesser or alternative sanctions
Could an alternative, lesser sanction have been imposed by the company in this instance? It was apparent that the company had not considered any alternative sanctions. Given the relatively minor level of damage caused, necessitating €2,500 of repairs, it was surprising that no consideration had been given to the employee contributing toward the cost of repairs.

Reliance on previous disciplinary warnings
Where a disciplinary policy provides that warnings should be removed from an employee’s record after a specified period, and are not to be considered in subsequent disciplinary processes, this must be adhered to.

Mr Coughlan had received warnings relating to previous accidents, including a final warning in 2013. He had also been accident free for a two year period after receiving the final warning. The company adopted an approach whereby they viewed his most recent accident as part of a continuum of behaviour which incorporated his prior warnings. This was despite the fact that the company’s disciplinary policy provided for disciplinary warnings to be expunged once they had expired, and his final warning had expired after 12 months.

Mr Coughlan was awarded a sum of €75,000, the equivalent of 2 years’ wages, which is the maximum financial award the Labour Court could have made under the Unfair Dismissals Acts. This illustrates the seriousness with which breaches by employers of employees’ rights to natural justice and fair procedures are viewed by the WRC, particularly where an employee’s livelihood is at stake.

As a final point it is worth noting that in the original unfair dismissal case the Adjudication Officer had ordered that Mr Coughlan be re-engaged by the company.

Individuals can select reinstatement or re-engagement as their preferred remedy under the Unfair Dismissals Acts 1977 to 2015 when submitting an unfair dismissal complaint. In reality reinstatement and re-engagement tended to be ordered rarely under the old EAT system. Given that it could take upwards of 18 months for an unfair dismissal claim to be heard, it was not practical in many instances to order an employer to reinstate or re-engage an employee.

Under the new WRC system however, hearings can be listed in a matter of months, resulting in a much shorter period of time between an individual being dismissed and their case ultimately being heard by an Adjudication Officer. In practice this has meant that re-engagement and reinstatement are increasingly being looked at as viable remedies.

Reinstatement means an individual is restored to their former position on the same terms and conditions as prior to their dismissal. Re-engagement entails the individual being re-employed in a different role with similar terms and conditions.

A common objection to reinstatement is that the relationship between the employer and employee will have broken down irretrievably and cannot be re-established. In this instance, the Adjudication Officer noted that reinstatement would not be appropriate as there would be “… a requirement for a sizeable rebuilding of trust from both parties before an employment relationship of worth or viability could spring back into being.” However, the Adjudication Officer instead opted for re-engagement, effectively to give the employee the opportunity of a fresh start elsewhere in the company.

As such, when preparing to defend an unfair dismissal claim, employers need to be prepared for the possibility that they may be ordered to welcome their ex-employee back into the organisation, if that is the remedy the individual has opted for.

For more information on the content of this Insight, please contact a member of our Employment team.

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