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Recent EAT cases in Ireland and the UK

PRACTICE AREA GROUP: Employment, Pensions and Benefits
DATE: 03.03.2011

Foster v BT Communications (UD1828/2009)

Subject: Poor Performance/Waiver Agreement

The Claimant, Ms Foster, worked as a telecommunications sales agent for the Respondent, BT Communications. During the course of her employment she was subjected to a development performance review plan with her line manager. The review found that her sales performance was at a significantly unacceptable level and the Claimant was placed on a performance improvement plan. During this performance improvement process the Claimant met with her line manager to discuss alternatives or ways to circumvent this process and was given the option of terminating her employment in consideration for receiving three months’ pay. The Claimant accepted this offer and signed a waiver agreement to that effect. Some months later the Claimant discovered the Respondent had introduced a redundancy scheme under which she would have received considerably more than her settlement.

The Claimant then brought an unfair dismissal claim alleging that there had been an agenda against her by the Company to “manage her out of the business”. She claimed that the sales targets set for her were excessive and it was impossible for her to meet these. The Claimant said she felt she had to sign the waiver agreement as she was vulnerable to the possibility of dismissal and the fear that she would not receive a reference if she was dismissed. She therefore signed the agreement to protect her reputation in the telecommunications sales industry.

The Irish Employment Appeals Tribunal unanimously held that it could not find any evidence that the Claimant had been dismissed, either constructively or otherwise. The Claimant came across as “an intelligent and experienced business person” who had opted not to seek legal advice at the time of entering into the waiver agreement even though aware of her right to do so. Entering into the waiver agreement was, in the view of the Tribunal, a rational decision on the part of the Claimant to resign. The Tribunal acknowledged that she was under considerable stress when she entered into the agreement but felt that this was nothing more than ordinary workplace stress and was not sufficient to alter her ability to make a rational decision about her employment and therefore entering into the Agreement was done freely and willingly.

Dunne v Irish Prison Service (UD704/2009)

Subject: Onus on employee during probation

The Claimant, Ms Dunne, commenced working for the Respondent, Irish Prison Service, as a recruit prison officer. Under her contract she was required to serve a 12 month probationary period, which was subsequently extended to 18 months, 22 months and, finally, to 26 months.

During this probationary period, a number of assessments were carried out in line with normal procedures to assess her work performance, attendance and punctuality. In addition, she was told repeatedly that she would need to improve on her sick leave. The Respondent gave the Claimant numerous warnings, and extended her probationary period on this basis. However, the Claimant alleged that she viewed the warnings as simply an acknowledgment of her sick leave which warranted an extension of her probation or could lead to a failure to give her an increment, but at no point was she aware that her job was in jeopardy.

In January 2009 she received a letter from the HR Directorate informing her that a file in relation to her dismissal had been sent for consideration to the Respondent’s Secretary General. The letter gave her the opportunity to make written submissions to the Secretary General in support of her case, which she did. The Irish Prison Welfare Service and the Prison Officers Association also wrote submissions on her behalf. However, in March 2009, the Secretary General informed the Claimant of its decision to dismiss her and terminated her employment on 21 March 2009.

The Irish Employment Appeals Tribunal refused to accept the Claimant’s submission that she was not aware her job was at risk until January 2009, as she had had numerous warnings which made it clear that the decision to retain her was contingent on her ability to provide regular service. The Tribunal found that during a probationary period, the onus is on the employee to prove they are capable and committed to the role and stated that the claimant had failed to do this.

However, the Tribunal also found that whether or not on probation, fair procedures must be adhered to in the dismissal process. The manner in which the Claimant’s dismissal was handled was flawed as she did not receive an opportunity to meet with the HR Directorate nor was she afforded the chance to seek representation. Though her actions and poor attendance record contributed to her dismissal, the Tribunal found she was unfairly dismissed due to the lack of fair procedures, and awarded her €15,000.

Russell v Transocean International Resources Ltd ([2011] IRLR 24)

Subject: Applying annual leave to offshore employees

This Scottish case concerned offshore employees, working a pattern of two weeks on, two weeks off. The annual 26 weeks of “field break” onshore, during which they were not required to work, more than sufficiently covered both the employees’ compensatory rest breaks and entitlement to annual holiday. However, the claimants contended that their entitlement to four weeks’ annual leave had to be taken out of the time that they were rostered to work offshore, so that they should have only 22 weeks a year.

Initially the Employment Tribunal upheld the claim on grounds that “leave” means a release from what would otherwise have been an obligation to work. On appeal by Transocean to the Employment Appeals Tribunal it was held that it is not contrary to the Working Time Regulations for an employer to designate time when an employee is not working as statutory annual leave time, so that they could be required to take their holiday when they were not offshore.

The employees then appealed this decision to the Scottish Court of Session. The Court upheld the Employment Appeal Tribunal’s decision, concluding that it was correct to hold that their entitlement to four weeks’ paid annual leave under the Working Time Regulations 1998 was satisfied by the provision of 26 weeks’ of “field break”. It rejected the claimant’s argument that if it were legitimate for an employer to designate all or part of a rest period as annual holiday, this would mean that in the case of a person working a normal Monday to Friday work pattern, every Sunday (being additional to the Saturday minimum weekly rest period) could be designated by the employer as annual leave for the purposes of the Regulations.

The Court of Session set out the general principle that a worker must have “at least four remunerated weeks of the weekly cycle in which he is free from work commitments” and, on that basis, an employer cannot “controvert the fundamental entitlement to four weeks of annual leave by stipulating that non-working days within the weekly working cycle (typically Saturdays and Sundays) must be treated as annual leave.” In this case, however, since the employees were only required to work for 26 weeks per year, that did not contravene the 48-week cap on the number of working weeks permitted in a year.

Bullimore v Pothecary Witham Weld Solicitors (No.2) 9[2011] IRLR 18)

Subject: The Risk of Poor references – employers may be liable

Following the termination of her employment, Ms Bullimore brought a claim of unfair dismissal and sex discrimination before the Employment Tribunal in England. Her former employer agreed to settle those proceedings. Some years later, Ms Bullimore was offered a new job, subject to satisfactory references. Her former employer provided a “damaging” reference, which was significantly influenced by the fact she had brought tribunal proceedings.

The negative reference resulted in Ms Bullimore's job offer with the prospective new employer falling through. The EAT ruled that the giving of the reference by the former employer was an act of unlawful discrimination by way of victimisation. The actions of the prospective new employer in this regard were also found by the EAT to be unlawful discrimination by way of victimisation.

The practical lesson of this decision is that an employer who victimises a former employee by giving them an poor reference for a reason connected with the employee having brought discrimination proceedings can be found to be liable for loss of earnings if a prospective employer then withdraws a job offer as a result. In addition, where the prospective employer withdraws on offer based on this reference, this itself can be an act of unlawful victimisation.

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