Robert Orr (plaintiff) v Zomax Ltd (defendant): Employment - Unfair dismissal - Wrongful dismissal - Redundancy - Injunction - Damages - Whether the plaintiff could make a claim for unfair dismissal, seeking injunctive and financial relief under the common law rules and therefore outside the statutory framework.
High Court; judgment delivered March 25th, 2004.
An employee who alleges unfair dismissal and institutes proceedings at common law is not entitled to argue that the principles applicable under the statutory scheme for unfair dismissal should be imported into the common law. A common law claim for damages for wrongful dismissal and a statutory claim for unfair dismissal are mutually exclusive. Consequently the plaintiff in the present case was not entitled to seek to introduce a new obligation under common law on his employer to act reasonably and fairly in relation to his dismissal.
The High Court so held in refusing to make an order requiring the defendant to pay the plaintiff's salary and pension and life assurance benefits pending the trial of the action and also an injunction restraining the purported termination of the plaintiffs employment, on grounds that the plaintiff failed to demonstrate the existence of a fair issue to be tried.
Roddy Horan BL on behalf of the plaintiff and Michael J. Howard BL for the defendant.
Miss Justice Carroll set out the facts stating that the plaintiff who was an engineer joined KAO Information Systems (KAO) in 1995. Subsequently, there was a transfer of undertaking by KAO to the defendant company in 1999 and the plaintiff's employment continued pursuant to the EU Acquired Rights Directive. The plaintiff was employed by KAO in the position of Programme Manager assigned to the new Microsoft account. Subsequently, the plaintiff was appointed Client Services Manager of Microsoft Business by the defendant pursuant to a contract dated May 16th , 2000. That contract set out the relevant notice period required to be given in order to terminate the plaintiff's employment. In November 2003 the defendant decided to amalgamate the plaintiffs role and the position of Contract Centre Manager to create a new Business Relationship Manager role. The plaintiff unsuccessfully applied for the position. Subsequently at a meeting on November 19th , 2003 the plaintiff received a letter from Mr Dignam, the director of the defendants company stating that he was entitled to two months notice of the termination of his employment together with statutory redundancy.
The plaintiff was offered the choice of receiving pay in lieu of notice and in addition an ex gratia payment equivalent to one months salary. Mr Dignam again wrote to the plaintiff on November 25th , outlining the options available in the light of the recent restructuring and included a list of current open positions although at a lower level.
Subsequently, on December 8th , 2003 Mr Dignam wrote to the plaintiff referring to a meeting at which the plaintiff confirmed he would be returning to work on December 9th , to work out his notice. He stated that the plaintiff would take up a project management role and report to him for the duration of the notice. However, on December 12th , the plaintiff replied disagreeing with Mr Dignam in several matters and concluded by stating that "The purported redundancy is not accepted by me and I continue to reserve my position pending the outcome of further negotiations."
Following a meeting, Mr Dignam replied on December 19th , 2003 to clarify the situation and outline the plaintiff's options once again. He stated that the plaintiff was to be immediately placed on "garden leave" with pay for the duration of the notice period and that the plaintiff did not have a choice regarding acceptance of the redundancy.
The plaintiff did not return to work and a plenary summons was issued on February 3rd 2004 challenging the validity of the redundancy and claiming certain financial and injunctive relief. On February 4th , 2004 the plaintiff issued a notice of motion seeking an order that the defendant continue to pay his salary and fund and maintain his pension and life assurance benefits from the expiration of the notice period until the trial of the action, and an order preserving all the plaintiff's perquisites and entitlements including share options and allowances.
The plaintiff also sought an injunction restraining the purported termination of his employment and an injunction restraining the performance of the plaintiff's functions and duties by any person other than the plaintiff.
Miss Justice Carroll referred to the affidavits submitted by both parties and stated that the plaintiff submitted in his grounding affidavit that there was no valid reason why he should not remain in employment with the defendant and that his employment was not terminated by reason of redundancy. Conversely, Mr Shanahan, the Managing Director of the defendant company, claimed that there was no role for the plaintiff to occupy with the defendant and that any order directing his reemployment with the defendant would significantly disrupt the defendant's management and cause irreparable harm. Furthermore he submitted that the plaintiff could be adequately compensated in damages. The plaintiff submitted replying affidavits refuting the defendant's allegations.
Miss Justice Carroll cited with approval the well known decision of Campus Oil v Minister for Industry (No. 2) IR 102, which provides that in deciding whether to grant interlocutory injunctive relief it must be established that there is a fair issue to be tried, damages are not an adequate remedy and the balance of convenience favours the granting of an injunction. The plaintiff claimed that the issue to be tried was that he was unfairly dismissed because there was no valid redundancy and that he was really dismissed because of criticisms made about him by Microsoft.
The plaintiff also claimed that there must be an implied term in the contract that the employer must act reasonably and fairly. The defendants countered this argument by submitting that that was not a fair issue to be tried as unfair dismissal is governed by the Unfair Dismissals Acts, which provide a statutory remedy which is mutually exclusive to the common law remedy for damages. In support of this argument the defendant relied upon the case of Parsons v Iarnrod Eireann E.L.R. 203, where a plaintiff who had unsuccessfully pursued a claim for wrongful dismissal under the Unfair Dismissals Act, 1977 was precluded from subsequently obtaining relief for the termination of his employment in the High Court.
Miss Justice Carroll quoted passages from the aforementioned case and also from the English authority of Johnson v Unisys Limited 2 AllER 801, in which the House of Lords held that an employee had no right of action at common law to recover financial loss arising from the unfair manner of his dismissal.
The House of Lords stated that the statutory regime introduced by the Industrial Relations Act, 1971 and subsequently by the Employment Rights Act, 1996 did not extend or build upon the common law. It created an entirely new system outside the ordinary courts at which tribunals applied new statutory concepts and offered statutory remedies. Miss Justice Carroll accordingly concluded that it had been held by the Supreme Court that the common law claim for damages for wrongful dismissal and the statutory claim for unfair dismissal are mutually exclusive and that the House of Lords decision in Johnson v Unisys Limited underlined this.
Miss Justice Carroll stated that in the present case the plaintiff was seeking to introduce a new obligation under the common law on the employer to act reasonably and fairly in the case of dismissal. However, the Learned Judge noted that at common law an employer could terminate employment for any reason or no reason provided adequate notice was given. The defendant in the present case gave notice in accordance with the plaintiff's contract plus an additional month.
Furthermore there was no allegation that inadequate notice was furnished. Miss Justice Carroll expressed the opinion that in light of the aforementioned decisions it was not open to the plaintiff to argue that the principles applicable under the statutory scheme should be imported into the common law. Accordingly the plaintiff failed to establish the presence of a fair issue to be tried.
However, for the purposes of clarity and completeness Miss Justice Carroll went on to consider whether damages were an adequate remedy. The learned judge concluded that in circumstances where the defendant was unwilling to reemploy the plaintiff and in fact had no role for him to perform, it was highly unlikely that the plaintiff would be re-instated and accordingly damages would be an adequate remedy.
In addition Miss Justice Carroll, on the assumption that she may have reached an incorrect conclusion in relation to either or both of the aforementioned principles considered whether a mandatory injunction requiring the defendant to pay the plaintiff his salary over and above the period of notice should be made. It was argued on behalf of the plaintiff that such an order was common place and a number of authorities were provided to that effect.
However, Miss Justice Carroll noted that none of the cases cited were relevant to the present case because in each case it was emphasised that there were either "special" or "exceptional" circumstances or that there was no loss of trust in the employee or there was a breach of a fixed term contract.
Furthermore, the learned judge stated that the plaintiff did not allege that he would suffer irreparable loss and damage if deprived of his salary and accordingly he had failed to establish a case on the balance of convenience that he should be paid his salary after the period of notice had expired.
Miss Justice Carroll felt that it would constitute a serious injustice for the defendant if it was obliged to pay the plaintiff's salary until the trial of the action and the same considerations applied to the application to maintain the plaintiff's pension and life assurance benefits or preserving his perquisites and entitlements.
It followed that there was no justification for making an order permitting the performance of the plaintiff's duties and functions by the plaintiff or an order restraining the performance of those functions and duties by any person other than the plaintiff. Accordingly the plaintiff's application was refused.
Solicitors: Fawsitts (Dublin) for the plaintiff; A & L Goodbody (Dublin) for the defendant.
Lynn O'Sullivan, barrister.