The Avoidable Fears and Panic of Small Employers-3 Illustrative Cases

Are you an employer? Have you been stressed and anxious about an employment issue recently?

I have met a number of employers in the last year or so and I had a great deal of sympathy for them.

Let me explain.

It’s very easy for you as an employer to make mistakes in relation to your employment law obligations. One of the obvious reasons for this is the massive body of employment law legislation on the statute books.

If you throw in EU directives and regulations and statutory instruments and recommended workplace policies/procedures and common law and decided cases and the constitution you would be forgiven for not knowing whether you were coming or going when an employee makes allegations or claims against you.

I have recently encountered a number of cases where employers eventually contacted me for advice and had they contacted a solicitor earlier in the day they could have saved themselves a lot of money, anxiety, and stress.

Referring a complaint to the Workplace Relations Commission

The first case involved a small family owned business who were, like most small business owners, flat out doing what they did: making stuff and selling it. Out of the blue they received communication from a trade union on behalf of a long standing employee. The letter set out a number of grievances going back many years and demanded a meeting with the trade union official and their member employee.

The employer, acting in good faith and trying to ‘do the right thing’, agreed and a number of meetings were arranged. These meetings were only moderately successful and involved the employee complaining about many issues, mostly trivial matters frankly, going back many years.

A number of meetings took place involving management of the company and the trade union official and employee. These meetings were time consuming and necessitated the preparation and issuing of minutes and the focusing of valuable management time.

Ultimately the meetings failed to resolve the issues and the employee, with the assistance of the trade union, submitted a claim to the Workplace Relations Commission. Once the employer received the formal letter from the WRC advising of the complaint he immediately panicked and embarked on another round of meetings to try to resolve the issues.

Schedules had to be arranged to facilitate all concerned and ultimately proved to be a waste of time as the employee was still not satisfied.

This whole episode caused great anxiety and stress to the owners of this small business who were anxious from the outset to deal with the problem fairly and in accordance with the law.

What the employer could have done

Firstly, the employer should have obtained professional advice.

If he did he would almost certainly have been told that the issues raised by the employee were grievances or complaints but not breaches of the employee’s rights. Therefore nothing unlawful had been done and there was no cause for panic.

Secondly, the employer could have given the employee a copy of the staff handbook and directed his attention to the grievance procedure in the handbook and told him he was obliged to use the internal grievance procedure to try to ventilate his complaints and have them dealt with.

He would also have been told that the outcome of the grievance procedure could be appealed if the employee was still not happy but ultimately the decision of that appeal was final.

Thirdly, if the employer sought professional advice early he should have been told that the complaint that was submitted to the WRC was a ‘trade dispute’ under the Industrial Relations Act, 1969 and the employer could simply refuse to have it investigated by the WRC by ticking a box on the letter he had received from the WRC.

A lot of stress and anxiety, and expenditure of management resources, would have been avoided, not to mention money saved.

Alleged breach of contract

The second case involved an employee going to a solicitor and making a wide number of allegations about non payment of wages for extra hours allegedly worked, holiday entitlements, public holidays, failure to pay minimum wage, a stress related injury as a consequence of the workplace, and so on.

The threatened legal action contained in the solicitor’s letter on behalf of the employee covered all of the above issues going back many years and demanded a significant payment to ‘settle the matter and all claims arising from the employment’.

It was a real ‘mixum gatherum’ of a demand letter and caused the recipient small business owner a great deal of anxiety and stress. She was an elderly lady who had employed this employee for over thirty years and in addition to the stress and worry at receiving such a letter was also personally disappointed on a human level for she felt she had been very fair with this employee for three decades and was taken aback to see the relationship go downhill.

The small business owner, an elderly lady who has retired from the business which was now run by her son, was incredibly upset by the whole affair.

The employee who was making this claim was at an age when many people would consider retiring and it appeared that this claim may have been one motivated by a desire to get recognition for the years of service, one way or the other.

On the face of it the demand by the employee for an eye watering amount of money was intensely worrying. However, when the issues and claims were stripped down to their essence the situation was not nearly as bad as first appeared.

Firstly, I explained that even though the employee was claiming a stress/psychological injury as a result of the situation in the workplace it is very difficult to successfully succeed with such a claim. I told her son that the employee would need to prove a number of things:

1. That he had suffered an identifiable psychiatric/psychological injury
2. That the injury suffered was as a result of the negligence of the employer
3. That the injury was foreseeable and the employer had failed to act as a reasonable employer would.

In other words if the employee had only suffered ‘ordinary stress’ and not a recognised psychiatric injury he would be unlikely to succeed with a personal injury claim. Courts recognised that work is generally a cause of stress. It is not play or entertainment or recreation.

Moreover, bringing a personal injury claim would require expensive medical reports and take quite a while to get to court for hearing and incur significant legal costs with an uncertain outcome thus leaving the employee with a touch decision to make.

In short when the rubber hit the road this ‘stress’ claim may not even get off the ground.

With regard to the other claims concerning holiday pay, public holiday entitlements, or non payment of wages, for example, these would need to be submitted to the WRC (Workplace Relations Commission) within 6 months of the alleged breach of the relevant act.

Thus, the WRC would not be able to deal with the entire value of his claim, assuming there was merit in it, as he would be ‘out of time’ for the bulk of what he was claiming.

This six months rule would not apply if he sued for breach of contract in the Civil courts and he could go back 6 years. However, this would involve legal proceedings for breach of contract in the civil Courts and with the amounts of money involved it may not actually be worth the risk in the end.

Yes, if he won he would almost certainly get his legal costs awarded by the Court, however if the claim was a relatively small one would it be worth it? Would he have the evidence to support all aspects of his claim? Would the employer have a good defence and/or better records? And he would be statute barred in respect of the parts of his claim which were over 6 years old.

Therefore when this particular claim, which commenced with a demand for an eye watering sum of money from the employer, was stripped down to its bare essentials it was not nearly as worrying or stressful for the employer.

Nor an attractive money pot for the employee.

Unfair dismissal

Another employer contacted me in a lather of sweat about an unfair dismissal claim that is coming up. She checked online and discovered that the potential award in an unfair dismissal claim is up to 2 years’ salary.

However, the legislation allows the award of financial loss to a maximum of 2 years’ salary and this level of award is extremely rare.

In her particular case, however, the employee had got a new job within 1 month of the dismissal. Therefore the maximum financial exposure for this claim was 1 month’s salary.

If she calculated how much this would amount to, and the fact that she could put up some sort of defence to the claim when the hearing was held, she would have seen that it was not something that should cause a great deal of anxiety.

And she could always try to settle it in advance of the hearing and avoid the time and cost involved in attending a WRC hearing, especially if she wanted to have legal representation. I would have had to advise her, however, that the cost of defending the case using a solicitor might actually exceed the potential award to the employee.

So, if she wanted to defend it she could consider doing it herself and taking her chances.

Normally I would not recommend this approach but if an employer has a potential exposure for a small award that is not likely to exceed the cost of legal representation then I would advise her to this effect and let her decide.

Conclusion

You will see from these three examples that massive fear and worry can be caused to decent employers if they do not obtain sound professional advice from the outset.

Yes, employers must afford employment rights to their employees and treat them decently, with respect, and lawfully. And if they don’t they will be brought to account. Quite right, too.

But unnecessary fear or stress to employers caused by bad or no advice can be avoided if they seek professional advice early in the day from someone who is familiar with the ins and outs of employment law in Ireland.

Otherwise they will experience worry and anxiety that may be wildly out of proportion to their potential exposure in the claim(s) they are threatened with.

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