An employee who was dismissed for breach of Fitness and Probity Standards has succeeded in his unfair dismissal claim against his employer bank but was only awarded four months’ salary (Bank Official v Bank (ADJ-00014020)).

A case has come before the Workplace Relations Commission which will be of interest to financial services clients with employees operating under the Central Bank of Ireland’s fitness and probity standards.

Factual Background

The Complainant was employed as a Senior Customer Adviser in the Respondent bank until he was dismissed for advising a customer to sign her former husband’s name on the back of a bank draft in order for her to lodge the money into her sole bank account. The bank’s Cheque Handling and Cashing Policy requires that a bank draft payable to two persons be either:

  • lodged to the joint account of those two persons; or
  • lodged to the sole account of one of those persons where the other person has endorsed their name on the back of the bank draft in order to facilitate the lodgement.

The customer called the bank and confirmed that the Complainant had advised her to sign her husband’s name and the Complainant then advised his manager of this. The Complainant admitted the wrongdoing and confirmed that he was fully aware of the bank’s policies. The matter was referred to a disciplinary hearing in which the Complainant was found to have advised a customer to commit a fraudulent act which amounted to gross misconduct. It was also found that he had breached a number of the bank’s policies. The Complainant was dismissed with immediate effect, which was upheld on appeal.

Respondent bank’s argument

The bank emphasised that the Complainant’s role was a “Controlled Function” role under the Central Bank Reform Act 2010 and was therefore subject to the fitness and probity standards set out by the Central Bank of Ireland. The bank argued that these standards require employees to be competent and capable, honest, ethical, to act with integrity and be financially sound. The bank’s position was that in the context of the regulatory environment such conduct could not be tolerated, and it was effectively required by law to take such action to dismiss him, which was reasonable and not unfair.

Complainant’s argument

The Complainant relied on the fact that he had an unblemished record for over 10 years and that he was allowed to remain in his role for two months following the incident, without transfer or suspension. He also admitted his wrongdoing and apologised for the mistake.

Findings

The Adjudication Officer found that the Complainant did not initiate the admission (and only advised his manager following a call from another branch after the customer had called in) and was aware that he had breached the relevant policies and procedures. He also found that the Complainant’s actions compromised the bank’s reputation. However, despite these findings, the Adjudication Officer found that although the Complainant’s actions constituted serious misconduct warranting serious disciplinary action, they did not constitute gross misconduct. The Adjudication Officer found that the dismissal was substantively and procedurally unfair but that the Complainant had contributed substantially to the dismissal and awarded €10,000, which was equivalent to approximately four months’ salary. In coming to this decision the Adjudication Officer emphasised the fact that the Complainant was allowed to continue working in the same section, in a position of trust and confidence for a period of two months after the incident and wasn’t suspended with pay pending the investigation and disciplinary hearing. This seemed to undermine, in the Adjudication Officer’s eyes, the bank’s argument that it operated a zero-tolerance approach to such conduct.

Takeaways for clients

The key point in this decision is that even though the employee won, it was not a significant win since an award of four months’ salary, which will be taxable, is a relatively low award. Insofar as the employer avoided a much larger award, the decision is a favourable judgment for employers and supports the view that regulated employers must take such actions where conduct breaches the fitness and probity standards. The Complainant’s breach of the fitness and probity standards appears to have been a significant factor in the Adjudication Officer’s decision to grant a low award to the Complainant.

It is not clear from the judgment what the Complainant’s contract or the bank’s disciplinary policy defined gross misconduct as or if there was any definition at all. We would recommend in all contracts for employees who occupy Pre-Approval Controlled Function or Controlled Function roles, gross misconduct is defined as including a serious breach of the rules and regulations of the Central Bank, in particular the fitness and probity standards. Gross misconduct should also include fraud or any form of dishonesty.

The contract should also specify that the individual’s ongoing employment is strictly subject to compliance with any policies and procedures applicable in relation to any Central Bank authorisation or any Pre-Approval Controlled Function or Controlled Function role that they hold, including the fitness and probity standards. Had these clauses been included in the Complainant’s contract, it would have been easier for the bank to argue that the conduct was gross misconduct warranting summary dismissal.

Further, where an incident involving a breach of fitness and probity standards arises, consideration should be given to suspending the employee. The bank’s failure to suspend the employee in this case undermined its argument that the breach constituted gross misconduct. However, we would advise seeking legal advice prior to suspending an employee, as following a decision against Bank of Ireland in 2015 suspension needs to be carefully implemented.