On 17 April 2015, the High Court ordered Bank of Ireland (“BOI”) to reinstate a former employee, Mr. James Reilly, who was dismissed in 2009 for circulating inappropriate emails, in breach of the BOI email policy[1] on the basis that the decision of BOI to dismiss was disproportionate and unreasonable.  

This decision is important for employers as it highlights the risks of “making an example” out of an employee.  It also gives clear guidance on the factors that employers should consider when putting an employee on paid suspension and it is a worthwhile reminder of the costly consequences of an order of reinstatement under the Unfair Dismissal Acts 1997-2007 (“UD Acts”), where Mr. Reilly stands to receive back pay of 6 years.

Background

Mr. Reilly was a sales manager with BOI with 8 years’ service and an exemplary work record.  In 2009, it came to BOI’s attention that inappropriate emails, described as pornographic, obscene or offensive, were being circulated internally and externally by its employees, including Mr. Reilly.  Mr. Reilly was placed on paid suspension pending an investigation and subsequently dismissed for gross misconduct for breach of BOI’s email policy. 

The High Court decision dealt with an appeal from the decision of the Circuit Court to award Mr. Reilly compensation of 1 year’s remuneration for his unfair dismissal (the maximum award being 2 year’s remuneration under the UD Acts).

Making an example out of an employee

The High Court strongly criticised what it characterised as an attempt by BOI to “make an example” out of Mr. Reilly.  Mr. Reilly gave evidence that the practice of circulating such emails was “widespread”, that it was simply “banter” between colleagues and that senior employees (one of which was subsequently promoted within BOI) were also involved in circulating them.  BOI had been aware that there was an existing problem with employees circulating inappropriate emails but, prior to Mr. Reilly’s dismissal, no employees had been disciplined for such conduct.  The High Court noted that if a zero tolerance policy was going to be adopted by BOI, it should have notified its employees by way of circular notices, team briefings etc. of the policy shift, which serves as a useful reminder to employers to communicate a change in its position.

Suspending an employee – When is it justified?

A significant part of the High Court’s decision focused on what he held to be the unjustified suspension of Mr. Reilly.   BOI investigated 5 employees in relation to the inappropriate emails, but only suspended 3 of these employees, including Mr. Reilly.  Mr. Reilly was informed verbally he was being put on paid suspension as “an issue had arisen in relation to emails”, but he received no further information at the time of his suspension.

Mr. Justice Noonan noted that suspension is an extremely serious measure which can cause irreparable damage to an employee’s reputation, and stated that a holding suspension should only be imposed after “full consideration of the necessity for it pending a full investigation” of matters. Helpfully, he identified the following four instances where suspension will normally be justified, if it is necessary:

  1. To prevent repetition of the conduct complained of;
  2. To prevent interference with evidence;
  3. To protect individuals at risk from such conduct; or   
  4. To protect the employer’s business and reputation.

On the evidence before him, Mr. Justice Noonan, did not believe that Mr. Reilly’s suspension was necessary as BOI had preserved the evidence in relation to the emails, and it was extremely unlikely that Mr. Reilly would continue to circulate such emails during the investigation.

Takeaways for Employers

Employers frequently suspend employees with pay pending the outcome of an investigation and a disciplinary procedure.  If you are considering suspending an employee (with pay) you should:

  1. Ensure that your disciplinary procedure provides for paid suspension of employees pending the outcome of an investigation and disciplinary procedure;
  2. Consider whether the employee’s suspension is necessary for the carrying out of an investigation and in doing so, take into account Mr. Justice Noonan’s four examples outlined above.
  3. Confirm to the employee in writing the reason for his/her suspension, copying him/her with the company’s disciplinary policy and procedure. While the employer should give the employee an indication of why it is necessary to place the employee on paid suspension, such that it is necessary it is advisable that the detail of the allegations against the employee are not set out in the suspension letter but rather, are set out in full in the invitation to the investigation meeting when the allegations have been fully identified.
  4. Conduct the investigation and, if necessary, the disciplinary process, without delay.  The longer an employee remains on suspension, the stronger his/her argument that the suspension damaged his/her reputation, and has contributed to his/her isolation and depletion of their skills and experience.

Interestingly, Mr. Justice Noonan commented that when told of his suspension, Mr. Reilly was not afforded the opportunity to “offer an explanation or defend himself”.  While an employee may wish to offer an explanation to an employer at the point when they are suspended, we would advise that it is more appropriate that an employee is given the opportunity to do so at the investigation meeting, when he/she has had time to consider the allegations against him/her.

Reinstatement

Under the UD Acts, an order may be made in favour of an employee for compensation, re-engagement or reinstatement.  In the vast majority of cases where an employee’s claim is successful, an award of compensation is made. Significantly however in this case, the High Court ordered that Mr. Reilly be reinstated to his position in BOI that he held at the time of his dismissal in 2009. 

As a consequence, BOI will be obliged to put Mr. Reilly back in the position he held prior to his dismissal, on the same terms and conditions, without a break in his continuity of service.  Mr. Reilly will be entitled to back pay from the date of his dismissal in 2009 and all other benefits must be brought up to date. This is a powerful remedy for any employee and one that employers should be aware of when faced with a claim under the UD Acts.