Today's EAT review concerns Patricia Heffernan v Dunnes Stores (UD 1355/2009), a case that received quite a bit of coverage on both sides of the border due the facts that it involved a well-known retail employer and their customer loyalty scheme. Most important for our employer readers are the legal lessons that should be learned from this case. Eversheds detail these at the end of this review.

Case Name: Elaine Martin v Tesco Ireland Holdings Limited (UD 1455/2009)

Legislation: Minimum Notice and Terms of Employment Acts 1973 to 2005; Unfair Dismissals Acts, 1997 TO 2007 (the “Acts”)

Jurisdictions/Subject Matter: Dismissal for Gross Misconduct


Facts

The Claimant commenced employment as a sales assistant on 6 February 1999. She received induction training on her first day of employment and was given a copy of the staff handbook.

The Respondent operates a value club scheme whereby the card is swiped at the till and value club points are earned on the value of purchases made. Points are converted to value club vouchers and the vouchers can be redeemed in store.

Following an audit of the scheme, anomalies were identified in the excessive use of a club card in the store where the Claimant worked, and the matter was investigated. It was identified that from November 2008 to April 2009 vouchers totalling €110.00 were applied to the Claimant.

On the 25 May 2009 the store manager and the HR manager met with the Claimant and her representative. The Claimant accepted that she had applied points to her own Clubcard on foot of customers’ purchases. The Claimant explained that customers sometimes told her to take the points for herself. The Claimant stated that other members of staff did the same. The Claimant was suspended with pay and asked to attend a further meeting on 28 May 2009.

In the meeting on the 28 May 2009, the Claimant apologised for her behaviour but the store manager referred to the bond of trust existing between employer and employee and in light of the number and value of transactions, and terminated the Claimant’s employment with immediate effect.

The Claimant appealed the decision to dismiss her on the 2 June 2009. She was not invited to an appeal hearing and the Regional Manager (who formally determined her appeal) wrote to her on the 15 June 2009 affirming the decision to terminate her employment.


Determination

The Tribunal acknowledged that the Respondent was of the view that inappropriate use of the club card amounted to fraud and theft and therefore must result in termination of employment for gross misconduct. However, the Tribunal considered the reasonableness of the conduct, actions and decisions of both parties.

The Tribunal was of the view that the onus was on the Respondent to update and remind employees of their obligations and the proposition that all staff knew the content of the staff handbook inside out was unreasonable.

The Tribunal remarked on the manner in which the Respondent carried out their investigation, conducting a covert operation involving CCTV footage and analysis of till receipts and questioned the fact that during this time the Respondent allowed the Claimant to continue using her club card without generally notifying staff that such use was unacceptable.

The Tribunal considered the proportionality of the sanction in circumstances where they deemed a reasonable explanation had been given. In holding that dismissal for gross misconduct was disproportionate and inappropriate the Tribunal awarded the Claimant €24,000 under the Unfair Dismissals Acts 1997 to 2007 and a further €2190 (being the equivalent of 6 weeks' notice) under the Minimum Notice and Terms of Employment Acts 1973 to 2005.


Legal Review

This case highlights the need for employers to have significant evidence to substantiate a summary (i.e. without payment of notice monies) dismissal for gross misconduct. If the Respondent had chosen to dismiss on notice it may have been slightly easier to justify the dismissal, but the key reasons for the decision seem to have been the sanction imposed, and the lack of an appeal hearing.

Key features of this case are that:

1. The employee was dismissed summarily.

2. The Tribunal considered that the employer was required to remind the employees about the specific obligations in the Handbook.

3. The Tribunal was of the view that rather than videotaping an employee who was suspected of ongoing breaches of company rules, the employer ought to have reminded employees of its rules, before commencing its covert investigation.

4. The Tribunal did not believe that dismissal was an appropriate sanction. It preferred that the practice be identified and warned against. One imagines that in the Tribunal’s view, this would have solved the problem without a need for a dismissal.

5. The Tribunal did not pay any heed to a written-only appeal. It is not clear from the determination whether there was any type of appeal hearing, but it seems likely that the appeal was in writing and was determined in writing without any formal hearing. Whilst SI 146/2000, the Code of Practice on Disciplinary and Grievance matters requires that there must be an initial disciplinary hearing, it is silent as to whether there needs to be an actual hearing for the appeal. Following this decision, the practice of conducting appeals in writing only must be considered to be less safe than the practice of having a formal appeal hearing where the parties are present.

As always, it is possible to fairly dismiss an employee. However, great care however must be taken with the process.