Remedies for Unfair Dismissal

Details

Created: Thursday, May 03 2018 19:43

In the recent WRC decision of A Banker v A Bank ADJ-00001266, the Adjudication Officerordered the respondent bank to re-instate a dismissed employee where the bank had been found to have insufficient grounds to support allegations of gross misconduct and had conducted a flawed disciplinary process.

REMEDIES FOR UNFAIR DISMISSAL

Reinstatement awarded in recent case involving

Dismissed Banker

Shane MacSweeney

Facts

The complainant, who had 12 years’ service as a trader with the bank was dismissed in 2015 for alleged gross misconduct, in applying an above market interest rate to his parents' deposit account with the bank.  This had been brought to the bank’s attention by a colleague and following an investigation, the bank accused him of acting dishonestly and fraudulently.

A spreadsheet was submitted by the bank showing that over a five year period up to 2015, his parents had benefited from this above market rate arrangement to the tune of €10,487.60.

The complainant employee argued that he had at all times acted openly and transparently.  He said that his line manager knew that he had applied a better than market rate to his parents’ account and that there was no undisclosed conflict of interest. His name had appeared in daily management reports submitted to his manager, showing the transactions and there had been no attempt to conceal what he had done. 

He acknowledged that he had applied above-market interest on the account on occasions when it reached maturity or “rolled over”, but pointed out that several of his colleagues had also rolled over the account at higher than normal interest rates, on other occasions. None of those colleagues had not been interviewed, as part of the investigation. 

Moreover, he noted that he had no capacity to set interest rates after a promotion from his role as a trader in 2011 and he didn’t even have access to the relevant IT system after 2013, some two years before the allegations surfaced.

Flawed investigation

The Bank’s investigation was criticised by the Adjudication Officer.  It had casually discussed the allegations with various witnesses prior to meeting with the complainant and it had failed to record those meetings in minutes.  Furthermore, some witnesses relied upon by the disciplinary decision-maker were not referenced in the investigation report. The complainant was not afforded an opportunity to cross-examine witnesses and when he failed to attend a second disciplinary hearing, the decision-maker proceeded to dismiss him, in his absence.  

The Bank claimed that the complainant's actions amount to gross misconduct, on the basis that he had acted dishonestly and in breach of its conflicts of interest policy, in allowing himself to be involved in concealed transactions to the benefit of his parents and had dismissed him summarily.

Determination 

The Adjudication Officer was critical of several procedural flaws by the employer bank.  In particular, it noted:

• shortcomings in witnesses interviews;
• inadequate minute keeping;
• insufficient production of corroborating IT system reports, particularly in light of the complainant’s allegation that his line managers were aware of a practice of above-market interest rates being applied to deposit accounts. 

The Adjudication Officer found that the application of an above-market interest rate did not constitute gross misconduct and found that the bank had failed to demonstrate any deception on the part of the complainant or that he had breached bank policy.

Redress

Whilst reinstatement is one of the three redress options available in an Unfair Dismissals claim (re-engagement and compensation being the other options), it is rarely awarded, largely in recognition of the fact that the relationship of trust and confidence between the employer and the employee is inevitably damaged by such a process. 

Therefore, compensation (which frequently can be quite low) is ordered in the overwhelming majority of cases (95% plus).  Indeed, most employees do not themselves seek reinstatement as a remedy, perhaps understandably fearing difficulties in reintegrating into a workplace in which they were accused of wrongdoing.

However, in this case, the complainant specifically sought re-instatement to his role.  The bank submitted that re-instatement was not an appropriate remedy given that the relationship of mutual trust and confidence had broken down and the complainant had failed to engage fully in the disciplinary process. Unsurprisingly, the Bank also expressed the fear that re-instatement would lead to “future friction, disharmony and possibly an acrimonious relationship”.

The WRC held that there was no reasonable basis upon which to uphold the allegations against the complainant. The uncontested evidence was that the complainant was a popular and successful employee and had progressed well in his career at the bank. His last appraisal had been very positive and actually highlighted that he was an excellent team player. 

Because he performed a regulated (controlled) function for the purpose of the Central Bank of Ireland's 'Fit and Proper' regime, the employee had contended that dismissal would have a negative if not terminal impact on his career prospects, in the financially regulated sector.   

Comment

The decision is the latest in a line of recent decisions which demonstrate that, in appropriate circumstances, the WRC will consider the somewhat draconian remedy of re-instatement, even where gross misconduct has been (unsuccessfully) alleged. 

Historically, employers could largely avoid reinstatement, where they could demonstrate that the relationship of trust and confidence had broken down – in essence, that the relationship had been poisoned by the allegations and the process. 

However, where an award other than reinstatement might well have the net effect of damaging or ending an employee’s career (as in this case), the WRC has shown a willingness to interrogate the facts more robustly and to consider reinstatement to be a viable option.

The WRC determination further highlights the importance of strict adherence to investigation and disciplinary procedures.