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Dismissal for Advising Customer to Forge Ex-Husband’s Signature Upheld on Appeal

AUTHORs: Bryan Dunne Services: Employment, Pensions and Benefits DATE: 20/12/2019

Introduction.  We provided an update in January 2019 in relation to a Workplace Relations Commission (“WRC”) decision in which an employee of a bank was held to have been unfairly dismissed in circumstances where he told a customer to sign her ex-husband’s name on a cheque made out to the two of them.

This decision was appealed to the Labour Court in Permanent TSB plc v Christopher Callan (UDD1968) and the Labour Court has overturned the WRC decision and found that the employee was not unfairly dismissed. This is a welcome outcome for financial services clients with employees operating under the Central Bank of Ireland’s fitness and probity standards.


The employee was employed as a Senior Customer Adviser in the bank, which was a “Controlled Function” role. He advised a customer to sign her ex-husband’s name on the back of a bank draft in order for her to lodge the money into her sole bank account.
The matter was referred to a disciplinary hearing in which the employee was found to have advised a customer to commit a fraudulent act. It was also found that he had breached a number of the bank’s policies. The employee was dismissed for gross misconduct with immediate effect, which was upheld on appeal.

Decision of the WRC Adjudication Officer

The Adjudication Officer held that the decision to dismiss the employee was substantively and procedurally unfair, emphasising the fact that the employee was allowed to remain in his role, a position of trust and confidence, for a period of two months after the incident occurred and was not suspended with pay pending the investigation and disciplinary hearing. This seemed to undermine, in the Adjudication Officer’s eyes, the bank’s argument that it operated a zero-tolerance approach to such conduct. However, the Adjudication Officer did find that the employee had contributed substantially to his dismissal and only awarded the employee the equivalent of approximately four months’ pay.

Arguments before the Labour Court on appeal

The employee made the same arguments before the Labour Court as he had previously made before the WRC. He relied on the fact that he had an unblemished record for over 10 years and that he was allowed to remain in his role for two months following the incident, without transfer or suspension. He also emphasised that he admitted his wrongdoing and apologised for the mistake. He argued that the sanction imposed was disproportionate in the circumstances of this case.

The bank emphasised that the employee’s role was a “Controlled Function” role under the Central Bank Reform Act 2010 (the “2010 Act”) and that the 2010 Act required the bank to regularly complete due diligence to assess employees’ fitness and probity. The bank’s position was that in order to meet the requirements of the 2010 Act it had in place a suite of policies and procedures including a Fraud Prevention Policy, a Cheque Handling and Cashing Policy (which specifically covered the lodgement of bank drafts in the circumstances) and a Code of Ethics and that all staff received training and updating on these procedures on a regular basis and were aware that breaches of the Code of Ethics, or a failure to report breaches, could give rise to disciplinary action, up to and including dismissal.

The bank explained that redeployment was not viable in the circumstances, given that the employee had deliberately made a decision in breach of the bank’s policies, having first advised the customer of the correct procedure, and that, therefore, he could not be trusted again.

The bank said that the decision was made not to suspend the employee because: there was no dispute over what had happened; the bank felt that the process would be carried out in a timely manner and wouldn’t take long; and it was unlikely that the employee would repeat the incident in the short term.

The bank submitted that the failure to suspend the employee should not now be used as a “stick to beat them with” and acknowledged that although the procedures followed might not have been flawless, any flaws were of a minor nature and not fatal to the process.

Labour Court decision

The Labour Court said that the question it had to consider was “whether the decision to dismiss is within the range of reasonable responses of a reasonable employer to the conduct concerned”.  The Labour Court, in a very short decision, said that the decision did fall within the range of reasonable responses of a reasonable employer and that, therefore, the dismissal was fair. The Labour Court took into account the fact that the witnesses had given evidence of considering options other than dismissal but determined that these were not viable options.

Takeaways for Clients

The decision is a very welcome judgment for employers and supports the view that regulated employers must take action where an employee’s conduct breaches the fitness and probity standards and that it is reasonable for employers to dismiss employees in circumstances where they can longer trust them.

As we mentioned in our previous article, it is not clear from either the judgment of the WRC or the Labour Court what the Complainant’s contract or the bank’s disciplinary policy defined gross misconduct as, or if there was any definition at all. We would recommend that in all contracts for employees who occupy Pre-Approval Controlled Function or Controlled Function roles, gross misconduct is defined as including a serious breach of the rules and regulations of the Central Bank, in particular the fitness and probity standards. Gross misconduct should also include fraud or any form of dishonesty.

The employment contract should also specify that the individual’s ongoing employment is strictly subject to compliance with any policies and procedures applicable in relation to any Central Bank authorisation or any Pre-Approval Controlled Function or Controlled Function role that they hold, including the fitness and probity standards, as may be amended from time to time.

While we still don’t have a definitive timetable or draft legislation on the Central Bank’s proposals for a Senior Executive Accountability Regime, we do know it is definitely coming (also covered in the employment law round up in the most recent Matheson Employment Law Podcast, episode 42).  This decision will support employers that are forced to take decisive action against employees breaching conduct standards, in order to meet their own fitness and probity and broader regulatory obligations.    

This article was co-authored by Employment, Pensions and Benefits partner, Bryan Dunne and solicitor, Laura Ensor. Please contact Bryan or Laura of this office if you have any questions arising out of the above.