In a recent decision of the WRC, a bank has been ordered to re-instate a dismissed employee where it was found that the bank had insufficient grounds to uphold the allegations for which the complainant was summarily dismissed (A Banker v A Bank ADJ-00001266).
The complainant commenced employment as a trader with the respondent (the "Bank") in January 2003. He was dismissed in December 2015 for gross misconduct, namely applying a higher than market interest rate to his parents' deposit account which the Bank alleged was fraudulent and dishonest. The allegations against the complainant arose in May 2015, when a disgruntled colleague mentioned the activity on the account to the Operations Manager.
A spreadsheet was submitted in evidence by the Bank showing a sample of 55 transactions on the account between 2008 and 2015. The difference between the interest rates applied by the complainant on his parents' account and the market rate corresponded to a value of €10,487.60. The Bank did not however investigate the application of above-market interest rates by other employees, including on accounts other than the employee's parents' account.
The complainant submitted that his line manager knew of the familial relationship, and as such there was no breach of the Bank's conflicts of interest policy. The complainant applied above-market interest on the account several times when it reached maturity or "rolled over", but a number of other traders also rolled over the account at interest rates higher than the market rate. Those other traders were not interviewed as part of the investigation.
It was also established that following the complainant's promotion in 2011, he was no longer able to set interest rates because he had ceased to act as a trader. The complainant did not have access to the IT system for the account after 2013. He submitted that for the period he was actively managing the account, there had been no cover-up in that he had flagged his name on entries on the account and that every rollover of an account was recorded in a daily report sent to managers, so there was transparency at all times as to his dealings.
In carrying out its investigation, the Bank informally discussed the allegations with witnesses prior to meeting with the complainant, it failed to record the minutes of all meetings with witnesses and some witnesses were not referenced in the investigation report which was relied on by the disciplinary decision-maker. The complainant had no opportunity to cross-examine relevant witnesses at the disciplinary hearing. When he failed to attend a second disciplinary hearing, the decision-maker proceeded in his absence and imposed a sanction of dismissal.
The Bank's evidence was that it considered the complainant's actions to amount to gross misconduct on the basis of what it perceived as the employee dishonestly performing a concealed role in breach of the Bank's policy on conflicts of interest.
The Adjudication Officer highlighted a number of procedural flaws in the Bank's process, including: deficiencies in how discussions with witnesses were approached; a failure to keeps minutes of informal meetings held with witnesses; and a failure to produce reports from the IT system which would have corroborated the complainant's assertions that line managers were aware of a practice of above-market interest rates being applied to deposit accounts.
The Adjudication Officer did not consider on the evidence that the application of an above-market interest rate constituted misconduct. The Bank had not demonstrated that anyone was deceived or that the complainant had breached any policy or mandate.
The complainant sought re-instatement to his role. The Bank submitted that re-instatement was not an appropriate remedy given the relationship of mutual trust and confidence had broken down and the complainant had failed to engage in the disciplinary process. The Bank further expressed fear that re-instatement would lead to “future friction, disharmony and possibly an acrimonious relationship” however no direct evidence was presented of any basis for such fear.
The Adjudication Officer stated that as there was no reasonable basis upon which to uphold the allegations against the complainant, re-instatement and re-engagement were each viable forms of redress. The evidence was that the complainant was a popular and successful employee and had progressed well in his career at the bank. The complainant’s last appraisal was very positive and highlighted that he was an excellent team player. Because he performed a regulated (controlled) function for the purpose of the Central Bank of Ireland's 'Fit and Proper' regime, he contended that dismissal would have a negative if not terminal impact on his career prospects in the financially regulated sector.
Comment / Impact for employers:
This decision serves as a reminder that re-instatement can be ordered in any case where the WRC finds that a dismissal is unfair, including dismissals for what the employer perceives as gross misconduct. An employer will not be able to avoid an order for re-instatement simply by arguing that trust and confidence has broken down from its perspective. The decision also highlights yet again the importance of well-defined and legally robust investigation and disciplinary procedures.