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A Must Read High Court Case on Fair Procedure in Disciplinary and Appeal Hearings

The recent case of Kelleher v An Post, High court, Peart J on 16th May of this year [2013] IEHC 238, 2012 No. 9604P concerned the termination of a postmaster’s contract of employment by An Post following an alleged failure to follow security procedures in the course of a kidnap incident and alleged misuse of company funds.The plaintiff had originally sought certain declarations including that the decision to terminate the contract was null and void, and that the decision that the plaintiff should repay to An Post one half of its losses (i.e. €52,500) was also null and void.The case looked at whether the defendant had followed fair procedures in the investigation which led to the termination of the postmaster’s contract. It was ultimately held by the High Court that fair procedures were afforded to the plaintiff and the proceedings were dismissed.BackgroundThe plaintiff’s contract of employment was terminated on 27th October 2011 having been postmaster in Newcastle West, Co. Limerick for approximately 19 years. On 28th June 2011, whilst the plaintiff was on annual leave, his son was kidnapped at gunpoint at his home. The kidnappers contacted the staff at the post office and demanded that money be paid over in order to secure his release. The staff at the post office did as they were told, did not inform the Gardai and dropped off a bag containing €105,000 which was available at the post office at the time.On 29th June 2011, An Post commenced an investigation into the incident. That evening the plaintiff was handed a Notice of Suspension of Contract by the Assistant Manager Fraud Investigation with An Post. This notice stated the reason for the suspension was “Misuse of company cash”. The following day, the plaintiff’s salary was stopped.On 19th July 2011 the plaintiff was handed a six page letter setting out a number of serious issues which had come to light during the course of the investigation and audit and which were described as “a serious failure in respect of compliance with Company procedures and overall management of the office”. The letter set out the following issues:a. Failure to follow Company security procedures in the course of the kidnap incident on 28th June 2011 resulting in the loss of €105,000The defendant stated that the investigation was not in relation to the circumstances surrounding the kidnap of the plaintiff’s son but that concerns related to the failure by the plaintiff to follow An Post’s security policy. The staff did not contact the Hostage Help Line in accordance with An Post’s security policy, and further that the sum of €105,000 was handed over without any contact being made with An Garda Siochana, An Post’s Regional Office, or the applicant himself. The staff at the post office stated that they had been unaware that there was a Hostage Helpline and they stated also that they had never attended any security seminars. The defendant took the view that even though the applicant was on holidays, it was incumbent upon him to have ensured that staff left in charge were made fully aware of security procedures, and aware that they must ensure compliance. The letter concluded by stating that it was company policy that where losses from robbery/burglary are contributed to by the negligence of the Postmaster then he/she will be required to make good the appropriate loss in accordance with the conditions in the contract. The letter went on to state that the Company wished to give the applicant an opportunity to put forward any reasons why his contract should not be reviewed and why he should not be asked to make good some or all of the loss suffered.b. Misuse of Company fundsOn the 29th June 2011 when this investigation started, the plaintiff informed the Operations Manager, that he had taken a sum of €12,000 in cash from Company funds on the 27th June 2011 before his departure that day for his holiday to Spain. The defendant’s letter went on to state how seriously all these matters were regarded by An Post and referred to Section 2.33 (c) of the Postmaster’s Manual which contained an express provision forbidding the postmaster from making use of their personal balance for any purpose other than the public service.c. Failure to process Business Deposits on day of receiptThe defendant informed the plaintiff that during the investigation it had discovered that three business deposits from LIDL had not been processed since they had been presented on the 24th June 2011, and it was pointed out that all deposits should be brought to account on the day they are presented.d. Unauthorised access to Post Office and Counter Automation SystemThe defendant stated that the plaintiff had instructed his son to put through his monthly payment on the Counter Automation system on the 30th April 2011, and then to “run off and file away the corresponding POSB office report which would have shown the transaction details”. The letter pointed out that in order to comply with this instruction, the plaintiff’s son would have to have accessed the post office area and the Computer Automation System. As the plaintiff was not a registered assistant, this was unauthorised and it was strictly prohibited to let anybody else use or even know one’s password.CorrespondenceThe plaintiff replied by letter dated 29th July 2011 and rejected the accusation that there had been serious failures by him and further indicated that he was contesting the suspension and the procedures being adopted. The plaintiff requested that the suspension be lifted, his name cleared and a full response to his letter given. The defendant responded by letter dated 31st August 2011 and maintained its position that the plaintiff’s suspension was warranted in the circumstances, and denied that it was misconceived or ill-founded. The plaintiff was offered another opportunity to furnish explanations and/or to put forward representations/assurances in relation to the issues raised, and also offered a meeting if he wished to elaborate on any matters at such a meeting before the Company would make any decision.The plaintiff replied by letter dated 7th September 2011 contesting all issues and providing further justification and explanations in relation to the issues raised and stated that he required a meeting “with an agenda list of prospective individuals proposed to be called at such meeting, confirmation of my right to call witnesses, to question such and all witnesses, at the proposed meeting”. The plaintiff wrote again by letter dated 12th September 2011, this time expressing his concerns as to the procedures and policies followed by the defendant in relation to the conduct of the investigation and requesting an assurance that in the future the investigation would be conducted without bias, and in a competent manner relying only on evidence and material properly gathered and having due regard for the plaintiff’s rights. The respondent replied stating inter alia:“The Company remains of the view that you were seriously negligent in not having trained your staff in correct procedures. This is compounded by the fact that you absented yourself for a week leaving an Assistant in charge, who through your negligence, was not familiar with or properly instructed in the procedures to be followed in dealing with events which transpired”.The defendant also dealt with the plaintiff’s request for a meeting with an agenda list of prospective attendees and outlined the procedure for the oral hearing including:1. the applicant would be asked to respond to the company’s letter dated 19th July 2011 and the issues raised and that that letter would constitute the agenda for the hearing;2. there was no question of any person being “called to give evidence” as it was an opportunity for the applicant to respond to the issues raised.3. while the company would not have witnesses present, the applicant, if he so indicated, could request the presence of particular persons, provided they were relevant.4. the Company stated it had no wish to follow “Court like procedures”, and that its procedures were inquisitorial.5. following the hearing, the applicant would be provided with a written summary record of the oral hearing, and that he would be given seven days to review it and raise any matter that he may feel was not accurately represented in that summary.On the 12th October 2011, the plaintiff wrote a letter to the defendant expressing the hope that “when you consider the points that I will make in this letter you will come to the view that I should be reinstated as Postmaster and that between us any outstanding issues can be dealt with in due course”. The plaintiff made a number of concessions or admissions in the letter including accepting his understanding of the function and operation of the Hostage Helpline was incorrect, and he gave an assurance that immediately upon reinstatement as Postmaster he would ensure that all staff working in the post office would be fully conversant with all security procedures, including ‘Tiger’ kidnap and raid situations. He also accepted that he should not have drawn down €12,000 wages in advance of the due date. In relation to the failure to lodge the Lidl deposits on the same day as they were received, the plaintiff accepted that these, where possible, should be processed on the same day and gave an assurance that he would make every effort in the future to ensure that those deposits were processed without delay and on time. With regard to the Counter Automation System, the plaintiff accepted that from the information contained in the company’s letter to him dated 19th July 2011, the proper procedure regarding use of own login, username and password had not always been followed in recent times. He concluded:“In conclusion I would hope that you will accept my bona fides insofar as the matter of early progressing of wages is concerned and that my assurance with regard to never doing anything like that again will provide the company with the confidence that it requires. I also hope that upon reinstatement the company will clearly see that all security procedures will be effected and complied with at all times in the future. As I have stated previously the experience that myself and my family have endured since June has been traumatic and devastating and one which will haunt all of us for a very long time to come. At this stage I simply want to get back to work and try, as best I can, to restore some normality for myself and my family. In this context, I would regard this as my final reply (unless you have any further queries) and I am now not seeking an oral hearing.” (emphasis added)The defendant replied by letter dated 27th October 2011, stating that the company, following a consideration of his case had decided to terminate the applicant’s contract as postmaster with immediate effect as they had lost confidence in the plaintiff continuing to hold the contract as postmaster. The plaintiff was informed of his right of appeal within 7 days and that if no appeal was received, the position would be advertised.AppealPrior to the appeal the plaintiff’s solicitor requested “copies of all material reviewed and considered by the Company in deriving [sic] its decision to terminate our client’s contract and on which the Company’s decision was based”. The defendant, prior to receiving the request to appeal, received a letter from the plaintiff’s doctor requesting that due to the applicant’s medical condition, all proceedings regarding the applicant should be “deferred at once”,. The defendant stated that they were willing to allow the plaintiff have his appeal dealt with by way of a written submission. The appeal was fixed for hearing on the 4th April 2012 at which the plaintiff was represented by his solicitor.On the 20th August 2012 the plaintiff received a letter from an officer of the defendant informing him that following a consideration of the report by the Retail Operations Director, no reason had been found to alter the initial decision and that his appeal was therefore denied and his contract terminated with immediate effect. The plaintiff subsequently complained that he has not had sight of the report to the Retail Operations Director, and that he had been denied any opportunity to make any comments upon any conclusion that may have reached as to the merits of the appeal, either in relation to facts or matters of law.JudgementJustice Peart stated that he was not satisfied that “as a matter of fair procedures or constitutional justice the plaintiff is entitled to be furnished with the material of which he now complains……..the plaintiff seems to think that fair procedures require that after the appeal hearing has concluded, the person hearing that appeal should, prior to making his report and recommendation, again revert to the plaintiff for his further comments, submissions and observations. That could not be the case in my view”Justice Peart further stated that that the plaintiff had his appeal hearing and that “was where his fair procedure rights are to be afforded to him. That is where he makes his points and arguments. Thereafter the appeal is closed and a decision falls to be made. There is no obligation to be inferred that the appeal officer must once again revert to the appellant………...But that aside, in my view fair procedures in a matter of this nature do not require that in advance of the decision the plaintiff ought to have been provided with the text of Mr Ryan’s recommendation to Mr Dunleavy, so that he consider same and make further submissions”In relation to bias/pre-judgment on the part of the defendant, the court noted that there was “simply no evidence of pre-judgment or bias, and none from which to infer any…….When raising the issues of concern to him following his investigation, Mr Ryan was perfectly entitled to inform the plaintiff of the issues he considered to exist following his investigation. It must be recalled also that each time he did so he specifically offered the plaintiff an opportunity for his comments on the issues raised. It is quite clear that in so far as Mr Ryan had reached a view or opinion in relation to the issues, such a view or opinion was of a prima facie nature, capable of revision or amendment in the light of any response or submission that the plaintiff might choose to offer. That cannot be classified as an impermissible form of pre-judgment, predetermination or bias as alleged”.The plaintiff also argued that there had been communication between the appeals party and the defendant which meant that he could not have had a fair hearing. Justice Peart noted:“This is essentially a natural/constitutional justice argument based on the principle of nemo judex in sua causa. In that regard I refer to what was stated by Barrington J. in Mooney v. An Post [1998] 4 IR. 288“The terms natural and constitutional justice are broad terms and what the justice of a particular case will require will vary with the circumstances of the case. Indeed two of the best known precepts of natural and constitutional justice may not be applicable at all in certain circumstances. As the trial judge has pointed out the principle of nemo judex in sua cause seldom applies in relation to a contract of employment where the employer judges the issue and is an interested party. Likewise it is difficult to apply, to a contract of employment, the principle of audi alteram partem which implies the existence of an independent judge who listens first to one side then the other.”Justice Peart commented that “…It is inevitable that often during an internal or in-house investigation leading to a dismissal the decision-maker and some or all of the investigators will have some form of contact, and that there may be communication of some kind about the issues involved….The fact in the present case that Mr Ryan was the person charged with investigating the issues, and interacting directly with the plaintiff in relation to the issues, and that Mr Dunleavy in his capacity as Head of Contractors had to make the final decision based on a recommendation by Mr Ryan, does not mean, and cannot in my view mean, that from the moment that investigation commences both Mr Ryan and Mr Dunleavy must be hermetically sealed from each other so that Mr Dunleavy may not have any knowledge or communication in relation to the matters under investigation. That in my view is to expect too much, and certainly in the circumstances of the present case was not a necessary requirement in order to ensure that fair procedures were afforded to the plaintiff in relation to this investigation and the decision to be made in accordance with the Appendix 4 procedure which was the agreed procedure in the case”.The Court concluded that the defendant was entitled under the contract to recover a proportion of losses incurred and that “….the plaintiff cannot now complain if he did not make adequate submissions in that regard or chose to concentrate on the other substantive issues which were raised. Clearly the contract says what it says. If the company made a finding of negligence against the plaintiff which resulted in a loss, the company was entitled to consider what part of that loss should be made good by the plaintiff. He was invited to comment upon this at an early stage. He decided to forego a first instance oral hearing, where he might have dealt with this issue along with the other issues. He could have addressed it in his appeal as well. In my view he has not been denied fair procedures in relation to it. Indeed, An Post has made it clear that it will listen to any proposals which he has in relation to it”.Justice Peart stated that one must have sympathy for the plaintiff, his family and staff but “…this Court in these proceedings is addressing only the question of whether or not the plaintiff was afforded fair procedures in relation to the investigation which the kidnap triggered, and in relation to the procedures which were adopted leading to the termination of the plaintiff’s contract with An Post”.He concluded “….I search in vain in this case for any unfairness in the process leading to the final decision made……..the evidence clearly points to the plaintiff having been afforded procedures that were fair in every respect. He was informed of the issues of concern in a very comprehensive manner. He was invited at every stage to give any responses or observations he wished, and he did so at length before his volte face on the 12th October 2011. He was afforded the opportunity of an oral first instance hearing which he at first indicated a wish for, but later declined. He was afforded an oral appeal hearing and a full opportunity to make both oral and written submissions. Taken in the round, this process was scrupulously fair”.The proceedings were dismissed.

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