Employee Replaced by Subordinate in Company Hierarchy Awarded €25,350 for Constructive Dismissal
An employee who was demoted from her role and subsequently resigned was held to have been constructively dismissed.

Background 

This case concerned a claim by an employee that she had been constructively dismissed after an alleged demotion from her role as a retail supervisor.

Pauline O'Connell commenced employment in 2010 with Homecare Medical Supplies, initially as a retail assistant and subsequently as a retail supervisor. 

In 2015 an email was circulated to all staff of Homecare Medical Supplies with an open competition for a new role as "Team Leader", which had substantially similar duties to Ms O'Connell's job as retail supervisor. Ms O'Connell was worried that this was a sham designed to ensure she would lose her position and seniority as retail supervisor and replaced in the company hierarchy by her subordinate. 

She contacted her Managing Director and a meeting took place between Ms O'Connell and the Managing Director where she outlined her concerns. She was told that she was the most senior employee for this role and was encouraged to apply. She subsequently applied for the Team Leader position but was unsuccessful.

She alleged that this was a source of great anxiety and stress for her, particularly having lost out to a more junior employee. Ms O'Connell claimed that the successful applicant's demeanour towards her changed. She claimed she had been told to "shut up" by the successful applicant, and was subject to other similar derogatory remarks.

She informed the Managing Director of this and was told to use the formal grievance procedure. She submitted a grievance letter and two meetings took place to deal with the grievance. She visited her GP and was absent from work on extended certified sick leave, citing work-related stress. During this period she received no contact from her employer. She subsequently signed a document prepared by her employer which set out the outcome of the grievance procedure; her grievance was not upheld. However, she later claimed in evidence that she was crying hysterically in the meeting and was simply told to go back to work and "forget about it". She went on sick leave again and resigned six weeks later.

In January 2017, an Adjudication Officer (AO) in the Workplace Relations Commission held that her complaint was not well founded. The AO was swayed by the fact that she had accepted an increase in her salary, worked for a period of time without complaint subsequent to the alleged demotion and did not appeal the grievance decision. 

Labour Court Appeal Decision

Ms O'Connell appealed the AO's decision to the Labour Court. 

The Labour Court looked at whether it was reasonable to terminate the contract of employment based upon the conduct of the employer.  

The Labour Court held that the tensions which arose between Ms O'Connell and the successful applicant were foreseeable and no supportive or preventative measures were put in place by the employer. Neither were there any discussions about how her duties and responsibilities would change in the future. The lack of contact during Ms O'Connell's sick leave, failure to engage an occupational medical practitioner and lack of engagement with her grievance created a distancing in the relationship between employer and employee.  

The Labour Court held that, as such, she had been entitled to terminate her contract and had been constructively dismissed.  She was awarded compensation in the amount of €25,350. 

Comment

This case is a reminder to employers to ensure that due process is applied and procedures followed where a company grievance has been initiated. This case also highlights that employers can be at risk of a claim even when an employee resigns. It also reminds employers to consider maintaining contact with employees whilst they are on sick leave due to work-related stress and arrange for the employee to be examined by an occupational medical practitioner if necessary. 

Contributed by Catherine O'Flynn

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