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	Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Spaolonzi v Swanston & Anor [2007] NIIT 1307_05 (11 October 2007) URL: http://www.bailii.org/nie/cases/NIIT/2007/1307_05.html Cite as: [2007] NIIT 1307_5, [2007] NIIT 1307_05

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THE INDUSTRIAL TRIBUNALS

CASE REF: 1307/05

1488/05

CLAIMANT: Roberto Spaolonzi

RESPONDENTS: Richard Swanston & Peter Brady

T/A The Dental Studio

DECISION

The unanimous decision of the tribunal is that the claimant was unfairly dismissed by the respondents. However the compensation payable to him as a result is reduced by reason of the claimant's contributory fault. Details of the compensation are set out in the attached Schedule.

Constitution of Tribunal:

Chairman: Mr P Cross

Panel Members: Ms R Armstrong

Ms M Gregg

Appearances:

The claimant was represented by Mr Robinson, Barrister-at-Law, instructed by Rosemary Connolly, Solicitor

The respondents were represented by Mr Potter, Barrister-at-Law, instructed by O'Reilly Stewart, Solicitors

The Issues

1. The claimant, who was born on 12 December 1964, was employed as a dental technician by the respondents from 2 October 2001. He claimed that he had been dismissed by the respondents. The respondents claimed, that although other members of their staff had been made redundant, the claimant had in fact resigned from his employment and was not dismissed. The case was concerned with discovering the true course of events leading to the departure of the claimant.

The Evidence

2. The tribunal heard evidence from the claimant and the two respondents. Also from Mr Killen and Mr O'Donnell who were computer experts. Mrs Spaolonzi and Ms Coyle also gave evidence for the claimant. Mr Cunningham, Ms Christine Angus and Ms Stephanie Ramsey gave evidence for the respondents.

Findings of Fact

3. On the 7 June 2005 the respondents had a meeting with the firm's Chartered Accountant, Mr D Cunningham. At this meeting, Mr Cunningham pointed out to the respondents that they had serious financial problems, in that they had cash flow difficulties and were in an over trading situation. The respondent partners had tried to trade out of the difficulties by taking on more staff and increasing the output. However although this had increased gross profit, overheads had also increased substantially, with the result that the net profit had increased very little. Mr Cunningham suggested that the position was serious but not yet fatal and that it could be rectified if the partners could introduce more capital, or reduce their drawings, or reduce staff overheads. He left it to the partners to decide how to correct the problem.
4. The respondent partners spent a long time that evening, after the departure of the accountant, considering the position. They were not in a position to introduce more capital and could not reduce their drawings, which were already greater than the net profit for the year to that date. Their only option, they felt, was to reduce the wage bill by making some redundancies. This being the case, they made a list of all the staff, including themselves, and then each made a list of three people who could be made redundant. Mr Brady listed Ms Coyle, Mr Glenn and Mr McGookin as the people to be made redundant. Mr Swanston listed Ms Coyle Mr Glenn and the claimant.
5. Mr Swanston and Mr Brady then discussed what should happen. After much debate as to who could do which jobs, if there was a redundancy situation, the respondents decided on two redundancies only and made Sinead Coyle and Brian Glenn redundant. They spoke to the two later on the 8 June. Sinead Coyle, on learning that she was to loose her job became very upset. She went home with the receptionist Stephanie Ramsey, who was given leave to accompany her in her emotional state. Later that afternoon the claimant heard that Ms Coyle was to be made redundant and reacted in a very aggressive manner. Subsequently Mr Swanston and Mr Brady went up to the claimant's work station and tried to explain what was happening. They were met with a torrent of abuse from the claimant, who amongst other things, said that he had no confidence in the respondents as being capable of running a business and that they had made Ms Coyle redundant, who was one of the best workers and most highly skilled members of the staff. His language was very violent and contained a lot of swearing. Mr Brady left in a distressed state after a few minutes. The claimant continued to berate Mr Swanston as they continued to work to get the orders out for that evening.
6. The next morning, 9 June, the respondents held another meeting with the claimant, again at his work station. They again discussed the redundancies. The claimant said that he was now even more disgusted about the situation. He said that he had no faith in the respondents to run the business. He said that he intended to leave but that he would not give as much notice as was given to Ms Coyle. The respondents tried to explain that they had to take some action to keep the business afloat and that they and not the claimant knew the overall financial position and the advice of the firm's accountant. All this explanation was of no avail and the meeting broke up.
7. The respondents at this point became very annoyed at what they perceived as the unreasonable attitude of the claimant. His job had been retained, yet he was giving the respondents more trouble than any other members of staff, at what was a very difficult time for the respondents. This situation prompted the respondents to draw up a list of the grievances, which they felt that they had concerning the conduct of the claimant. These commenced with the fact that the claimant had told the respondents that he had no trust in their management and contained a total of fifteen points. These grievances then formed the agenda of a meeting on the following day 10 June, between the respondents and the claimant. The respondents hoped that by the next day the claimant would be in a calmer frame of mind. They suggested that if he wanted to bring a solicitor or other advisor to the meeting that that would be acceptable. However the claimant did not want to do that.
8. At this meeting the claimant was given a list of grievances and a letter which had been prepared by Mr Swanston. This letter stated as follows:-

"It is the intention of this informal meeting to allow you to see and discuss the points of grievance that we have listed overleaf.

It is our opinion that your position in The Dental Studio is untenable and we would like to discuss an amicable "parting of the ways".

You have been in a unique and valued position (friend also) in the laboratory. This has led us to dealing with your difficulties and grievances in a way friends would, rather than processing any formal disciplinary processes at any stage of our relationship, due to that unique position. Your input to the laboratory has been highly appreciated and that we have come to this place highly regretted.

It is with every hope that you will come to an amicable end to our relationship and go forward to a happier working environment in another laboratory."

The parties then proceeded to discuss the grievances and almost all were addressed in a positive way by both parties. The claimant was very calm at this meeting and in a different mood than at the earlier meetings. At the end of that discussion, despite the hope, expressed to the claimant that the remaining staff would continue to work for the respondents, the claimant stated that it would be better if he left the firm. He also said that "these things have a habit of working out". Mr Brady was upset at this turn of events as he and the claimant had been such good friends both at work and on a social level. However it was quite clear to the respondents that the claimant was not prepared to continue with them and that he was determined to leave. The conversation then turned to the question of what notice would be worked by the claimant. The tribunal accept the evidence of Mr Brady and Mr Swanston, that the claimant, whose expertise was required until it could be replaced, agreed to work a period of one month. The respondents then asked their employee, Christine Angus, to contact LEDU, or some similar organisation, to find out what an employee of the standing of the claimant would get as a redundancy payment, if he was made redundant. When this sum was ascertained, it was agreed that if the claimant worked out his notice then the sum would be paid to him along with whatever other monies he was entitled to. The claimant was given a letter with the calculations on it, including redundancy pay of £1,120.00. Ms Angus was told by the respondents that the claimant had agreed to leave and she recorded a note that "he agreed to voluntary redundancy".

9. The next Monday the respondents expected to see the claimant at his work, however he did not appear and when Stephanie Ramsey finally spoke to him, after the partners had tried without success, he stated that he was not going to return. On 13 June the claimant wrote to the respondents claiming that he had been dismissed and asking for an appeal. He also used some expressions that showed that he had taken advice from some one conversant with employment law. Another similar letter again requesting an appeal was posted to the respondents on 16 June. The respondents replied, stating that the claimant had resigned from their employment, but that if the claimant wanted to argue that this was not correct the respondents would hold a disciplinary meeting to examine the claimant's argument. This correspondence was then taken up by solicitors for each party and this ended in the tribunal proceedings being commenced. No disciplinary or appeal hearing ever took place. The claimant was never paid the sum of £1,120.00 being the equivalent of what he would have received on redundancy.
10. The legal position

In order to sustain a claim for unfair dismissal it is necessary for the tribunal to find that the claimant was dismissed by the respondent his employer. Alternatively a claimant may prove that his employer gave him an ultimatum that either he resigns from his employment or he is dismissed. In cases such as this, where there is a dispute as to whether the claimant was dismissed or resigned, certain tests have been laid down by the courts to help a tribunal to decide whether an employee has been dismissed or has resigned. These were set out by Lord Justice Donaldson MR in the English Court of Appeal decision in Martin v MBS Fastenings (Glenwed) Distribution Limited [1983] IRLR198. These tests are as follows:-

1. Did the employer intend that the employment should in any event be ended either by resignation or if that failed by dismissal?

2. Did the employer impose some degree of pressure on the employee?

3. Did the pressure in fact cause the resignation by leading the employee reasonably to believe that he had no alternative option but to resign?

If these questions are answered in the affirmative then the employee is considered to have been dismissed. If in the negative then he has resigned.

11. At the conclusion of the oral hearing of this case the case of Sandhu v Jan De Rijk [2007] IRLR 519 was reported. As this case had not been referred in the closing submissions of the parties and as it was a relevant English Court of Appeal decision, the chairman asked if the parties would like to deal with it in further submissions. The parties did make further written submissions to the tribunal which the tribunal have now considered. The case gives guidance to tribunals in situations where an employee is in effect given a choice to resign or be dismissed, comparing such situations to genuine resignations, where no dismissal occurs.
12. In Sandhu, Lord Justice Wall says as follows:-

37 "What is striking in the authorities and is amply demonstrated in the cases I have discussed so far, is that in none of the cases in which the employee has been held to resign has the resignation occurred during the same interview/discussion in which the question of dismissal has been raised, and in no case in which the termination of the employee's employment has occurred in a single interview has a resignation been found to have taken place. The reason for this, I venture to think, is not far to seek. Resignation, as the authorities indicate, implies some form of negotiation and discussion; it predicates a result which is a genuine choice on the part of the employee. Plainly, if the employee has had the opportunity to take independent advice and then offers to resign, that fact would be powerful evidence pointing towards resignation rather than dismissal."

13. A tribunal, if it finds that the claimant was dismissed and that the dismissal was unfair, may, under Article 156(2) of The Employment Rights (Northern Ireland) 1996 ("the Order"), reduce the basic award, if it considers that the claimant's conduct makes it just and equitable that such a reduction be made. Likewise, there is a similar power given to the tribunal by Article 157(6) of the Order, concerning the compensatory award. In Mercia Rubber Mouldings Limited v Lingwood [1974] IRLR 82, Sir John Donaldson, in the National Labour Relations Court, stated that if a tribunal reduces compensation due to the claimant's conduct, the claimant must have an opportunity to give evidence on his conduct.
14. The decision of the tribunal

The tribunal in endeavouring to answer the questions posed in Martin v MBS as to whether the claimant was dismissed or resigned, find as follows. So far as question number one was concerned, did the employer intend that the employment should end in any event, the tribunal are of the view that the respondents, despite all the aggravation caused to them by the claimant, from the time that he first discovered the potential redundancies, were at first anxious to avoid losing the services of the claimant. They had made their redundancy selection on the basis that he would be part of the ongoing team and sorely needed his skill and expertise, to keep the dentist customers content, in the knowledge that the business could continue with the requisite quality of work. The last thing that the respondents wanted was to lose the claimant. They hoped that by putting the problems on the table (in the form of the list of grievances) that they could put the difficult few days behind them and start on a fresh course. The difficulty in this argument from the respondent's point of view is the letter quoted above which speaks of "a parting of the ways". The tribunal considers that this showed that the respondents' attitude had changed under the extreme provocation of the claimant and that they had formed a revised view, prior to the final meeting, that the claimant would have to leave.

15. The second point in the Martin v MBS case was whether the employer imposed some form of pressure on the employee. The only pressure that the employer, the respondent in this case imposed upon the claimant, was in connection with the letter and list of grievances. One could argue that this list and letter were produced to drive the claimant out of his job. This tribunal sees this list differently and holds that the list was produced to try and clear the air of all the problems and arguments that arose out of the redundancies. In the mind of the tribunal the claimant behaved very badly over the financial and subsequent redundancy problems. He was an employee without the responsibility of senior management, yet when the firm ran into very serious problems, he did his best to undermine the respondents and make things even harder for them. Despite this, the respondents knew that the redundancies that they had made required the continued presence of the claimant and for this reason, as well as the friendship that they had for each other, the respondents, up to the evening before the meeting on the 10 June continued to hope that the air could be cleared and that the claimant would continue with his employment. However prior to the meeting the respondents came to the conclusion, that the claimant's activities in undermining the respondents' efforts to keep the business solvent and viable meant that he had to leave their employment and as a result they composed the letter referred in 8 above.
16. The final point was, did the letter and list of grievances cause the claimant to resign because he felt that he had no other option. The tribunal finds that this is the case. The evidence of both sides is that the parties went through the list and managed to agree on almost all the points. That being the case, it would have been possible for the claimant to have said to the respondents that the matters had been cleared and a new start could be made. The more serious difficulty with this final point of the test, "was the employee asked to resign or be dismissed," is the letter. This does clearly refer to the ending of the contract of employment. The tribunal had great difficulty in reconciling this letter to the verbal evidence of the parties who attended the meeting. The tribunal are of the opinion, that despite the fact that the claimant was the employee, he was in reality the strongest character in this affair. He had a very strong personality and was probably the most skilled craftsman in the firm. The firm, after the redundancies would be in serious difficulties without him. The claimant knew this and also the fact that the respondents, particularly Mr Brady, were in a very emotional state. All the pressure and unpleasantness surrounding the redundancies, in this small close knit firm had fallen on the respondents' shoulders and they were in a very vulnerable state. It should be mentioned that the claimant was also in a very emotional state. To add to this the claimant was saying things like, he was not prepared to commit his future to them or work under their leadership and was in effect threatening to leave at the earlier meetings that took place. It was in this atmosphere of uncertainty as to what the claimant might do that the letter and list of grievances were written. When the letter was shown to the claimant he became aware that he had no future in the business and would have to resign or be dismissed. This is the very type of case contemplated by Lord Justice Wall, where a resignation occurs during a single meeting and no real negotiation of terms of resignation occur.
17. The tribunal hold this to be the correct view of these events, this is made clearer to the tribunal as the financial package, (based on the amount that the claimant would have received on redundancy), was not put into place until after the claimant's intention to resign was stated by him. The parties had been anxious to justify their respective conduct, by going through the list of grievances. The claimant trying to show that he was not the only one at fault and that it was the lack of leadership in running the firm that prompted his termination, the respondents were trying to justify their conduct to a colleague who was also a close friend.
18. Having held that the claimant was dismissed; the tribunal hold that the dismissal was unfair, in that the claimant was not afforded the long established rights of an employee facing the prospect of dismissal. He received no warning that the meeting might result in his dismissal, and he had received no previous warnings as to his conduct, as required in his contract of employment.
19. The compensation awarded to the claimant is set out in the Schedule hereto. The calculation of the claimant's losses are as agreed between the parties. The tribunal find that the basic award and the compensatory award should be reduced by sixty per cent having regard to the conduct and contributory fault of the claimant. This was his disruptive and undermining conduct throughout the difficult period following the visit of the accountant. The tribunal is satisfied that the claimant had ample opportunity before this tribunal, of which he availed himself, to deal with the matter of his conduct.
20. The claimant was in receipt of Job Seekers Allowance and the parties attention is drawn to the provisions of the attached recoupment notice

This is a relevant decision for the purposes of The Industrial Tribunals (Interest) Order (NI) 1990

Chairman:

Date and place of hearing: 1 November 2006, 5 & 6 March 2007

and 12 June 2007, Belfast

Date decision recorded in register and issued to parties:

Case Ref No: 1307/05

1488/05

CLAIMANT: Roberto Spaolonzi

RESPONDENTS: Richard Swanston & Peter Brady

T/A The Dental Studio

ANNEX TO THE DECISION OF THE TRIBUNAL
STATEMENT RELATING TO THE RECOUPMENT OF JOBSEEKER'S ALLOWANCE/INCOME SUPPORT
21. The following particulars are given pursuant to the Employment Protection (Recoupment of Jobseeker's Allowance and Income Support) Regulations (Northern Ireland) 1996.

	£
(a) Monetary award	4851.00
(b) Prescribed element	67.20*
(c) Period to which (b) relates:	23 July 2005 – 16 August 2005
(d) Excess of (a) over (b)	4,783.80

*Note that in this statement the Prescribed element is reduced by 60% from

£168.60, as the Monetary award is reduced by that percentage as a result of the contributory fault of the claimant

The claimant may not be entitled to the whole monetary award. Only (d) is payable forthwith; (b) is the amount awarded for loss of earnings during the period under (c) without any allowance for Jobseeker's Allowance or Income Support received by the claimant in respect of that period; (b) is not payable until the Department of Social Development has served a notice (called a recoupment notice) on the respondent to pay the whole or a part of (b) to the Department (which it may do in order to obtain repayment of Jobseeker's Allowance or Income Support paid to the claimant in respect of that period) or informs the respondent in writing that no such notice, which will not exceed (b), will be payable to the Department. The balance of (b), or the whole of it if notice is given that no recoupment notice will be served, is then payable to the claimant.

22. The Recoupment Notice must be served within the period of 21 days after the conclusion of the hearing or 9 days after the decision is sent to the parties (whichever is the later), or as soon as practicable thereafter, when the decision is given orally at the hearing. When the decision is reserved the notice must be sent within a period of 21 days after the date on which the decision is sent to the parties, or as soon as practicable thereafter.
23. The claimant will receive a copy of the recoupment notice and should inform the Department of Social Development in writing within 21 days if the amount claimed is disputed. The tribunal cannot decide that question and the respondent, after paying the amount under (d) and the balance (if any) under (b), will have no further liability to the claimant, but the sum claimed in a recoupment notice is due from the respondent as a debt to the Department whatever may have been paid to the claimant and regardless of any dispute between the claimant and the Department.
Roberto Spaolonzi

Claimant

V The Dental Studios

Respondent

____________________ Schedule of Loss ____________________

Name Date of Birth	Roberto Spaolonzi 12/12/1964
Date started employment Date of dismissal Age at date of dismissal Completed years of continuous employment	02/10/01 10/06/05 40 3
Gross basic pay per week Take home week's pay at date of dismissal Total per week	£520.00 £387.50 £387.50

BASIC AWARD £280.00 X 3 = 840.00

£840.00

COMPENSATORY AWARD Immediate loss of earnings Loss of earnings from date of dismissal (10 June 2005) to date of new job (16 August 2005): £387.50 x 9 weeks Loss of Earnings from date of new job (16 August 2005) to 30 September 2005 £520 - £350.00 = £170.00 £170.00 x 6 weeks Loss of Earnings from 30 September 2005 to 1 November 2006 £520.00 - £420 = £100 £100.00 x 56 weeks = Loss of Guaranteed Bonus from January 2005 to date TOTAL	£3,487.50 £1,020.00 £5,600.00 £900.00 £11007.50
OTHER LOSSES Loss of Statutory Rights	£280.00
TOTAL LOSS Basic Award £840.00 Loss of earnings £11007.5O Other losses £280.00 TOTAL LOSSES Claimant to receive 40% thereof =	£12127.50 £4851.00