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EAT Decisions sent 23.08.12 – Constructive Dismissal – Employer guilty of conduct amounting to significant breach of contract

In the case of Michael Murray v Rockabill Shellfish Limited UD 1832/2010, the Employment Appeals Tribunal restated the test for constructive dismissal and found in the Claimant’s favour.In this case the Claimant commenced employment on 16th August 1993 and was initially a skipper on board the Respondent’s boat and later became a driver. In 2001 he became assistant manager and in 2002 he became  a manager and learned on the job with no formal training. The Claimant gave evidence of certain practices which he was forced to participate in during his employment including illegally dumping contaminated products and his son being allegedly forced to forge certain documents. The Claimant stated that he was belittled in front of staff and in June 2009 he was told that his salary was being reduced by €10,000 to €40,000 per annum. The Claimant was informed that the €10,000 salary reduction was to be given to the Managing Director’s son who was to become General Manager. An announcement was made in front of staff in the canteen and the Claimant was demoted to assistant manager. The Claimant stated in evidence that he did not agree to the pay cut or demotion and though that in fact it wasnt being implemented. The Claimant approached the Respondent and was told that if he didn’t like it, he knew where the door was. The Claimant stated that from June to December 2009 he felt like a general dogs body. He received no contract and no warnings and was on sick leave from January 2010 due to work related stress. There was no written policy in place in relation to sick pay but precedent existed in the company in relation to sick pay. The Claimant was not paid sick pay.Whilst the Claimant was on sick leave he heard that the Respondent was advertising to replace him and he engaged the services of a solicitor and resigned on 25th June 2010. In evidence the Managing Director disputed the dubious work practices and agreed that he had used bad language but stated that the Claimant was not up to the job of Production Manager.DeterminationFrom June 2009 the Tribunal noted that the Claimant was subjected to bullying and harassment, foul and abusive language, belittled and criticised, forced to engage in dubious and appalling work practices, demoted and had his salary cut by €10,000. The Managing Director agreed that the demotion and pay cut happened and he used bad language but disputed the rest of the evidence. The Claimant tried to enter into a grievance process but the Respondent refused to engage. The Tribunal questioned the fact that the Managing Director stated his solicitor wrote without his authority to do so and in any event the Tribunal was satisfied that the Respondent’s correspondence demonstrated an unwillingness on the part of the Respondent to resolve the Claimant’s grievances.The Tribunal again looked the test for when a Constructive Dismissal arises and noted that “a constructive dismissal will occur when an employee terminates his Contract of Employment where, because of the employer’s conduct, the employee was entitled to terminate his Contract without notice or where it was reasonable for him to do so. It has been well established that a question of constructive dismissal must be considered under two headings – entitlement and reasonableness. An employee must act reasonably in terminating his Contract of Employment. Resignation must not be the first option taken by an employee and all other reasonable options, including following the grievance procedure, must be explored. An employee must pursue his grievance through the procedures laid down before taking the drastic step of resigning”.

The Tribunal noted that the Respondent had no Grievance Procedure that the Claimant could invoke nor did the Claimant have a contract of employment despite having requested one. Where there is no Grievance Procedure, as in the claimant’s case, the claimant must act reasonably.

The Tribunal stated that they must consider whether because of the employer’s conduct, the Claimant was entitled to terminate the contract or if it was reasonable for him to do so and referred to the case of Brady v Newman UD 330/1979. In that case the Tribunal stated “….. An employer is entitled to expect his employee to behave in a manner which will preserve his employer’s reasonable trust and confidence in him so also must the employer behave”.The Tribunal held that the Claimant was constructively dismissed and the employer was guilty of conduct which amounted to a significant breach of the contract and failed to engaged with the Claimant to resolve his grievances.The Claimant was awarded €30,000 under the Unfair Dismissal Acts.

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