Law & Regulation
Wrongful Dismissal
By Patrice O'Keefe, Comyn Kelleher Tobin
Jun 2, 2009 - 9:33:18 AM

The Supreme Court recently ruled in favour of Dunnes Stores and overturned a High Court decision, awarding an employee a mere €9,079 for bonuses, instead of approximately €72,000 which was awarded to the employee by the High Court for wrongful dismissal (Berber V Dunnes Stores Limited).  

This case is of particular significance because it is now clear that there is implied, into every contract of employment, an obligation on both an employer and employee not to act in a manner likely to destroy or seriously damage the relationship of confidence and trust between the parties.  In addition, the judgement confirms that employers are entitled to assume that an employee is able to withstand a certain level of stress caused by normal management issues such as restructuring.  Notwithstanding this assumption, once the employer is put on notice that stress is becoming detrimental to the employee’s health, the employer owes the employee a duty of care and must take appropriate action to prevent the employee from suffering further harm.

Background:

The facts of the case centred around an employee, Mr. Berber, who had been employed by Dunnes Stores for over twenty years.  Throughout the 1990’s Mr. Berber was a Buyer and remained in this post until early 2000.  He underwent a management performance review where his performance was generally rated as “effective contribution”.  The assessment provided for four levels in ascending order – below standard, effective contribution, highly effective and excellent.  At the review, reference was made to the fact that Mr. Berber was colour blind.

Following the review, Mr. Berber was transferred from Buying to Store Management.  Unhappy with the proposed move, he immediately sought a meeting with Mrs. Heffernan.  He contended that at the meeting, it was agreed that he would transfer to store management at the firm’s flagship store in Blanchardstown, Dublin, where he would undergo re-training.  Mr. Berber claimed that this agreement was subsequently varied by Dunnes Stores and as a result Mr. Berber refused to attend the store until he had spoken to Mrs. Heffernan again.  He was suspended without pay. As a result of the suspension, Mr. Berber requested that all further correspondence would be directed through his solicitor.  He alleged that the “extraordinary” conduct of Dunnes Stores had caused him a great deal of stress and that he became ill as a result.  Dunnes Stores alleged that the suspension was due to his attitude to senior staff and asserted that his persistence in seeking to speak with Mrs. Heffernan was unreasonable.

High Court

In the High Court, the judge considered Mr. Berber’s transfer to store management was motivated by sound management considerations.  He noted that while some of Mr. Berber’s behaviour may have been characterised as unreasonable, it was due to the breakdown of trust with senior management.  It was found that there was an implied term in Mr. Berber’s contract that both the employer and employee would maintain mutual trust and confidence.  The judge expressed the view that the way in which Dunnes Stores dealt with their employee in the knowledge of the precarious nature of his physical and psychological health amounted to oppressive conduct likely to seriously damage the employer/employee relationship.

Supreme Court

The Supreme Court took a different approach in the examination of the two issues which were raised on appeal:

Breach of Contract

It was confirmed that there is a mutual obligation on an employer and employee to conduct themselves in a manner not likely to destroy or seriously damage the relationship of confidence and trust between them.  It was noted that the term imposes reciprocal duties on the employer and the employee and that the conduct of the parties as a whole and the cumulative effect must be examined.   In the case before it, the Supreme Court found that the conduct of Dunnes Store was not such as to amount to a repudiation of the contract of employment.  However, the Court found that the conduct of Mr. Berber was unreasonable.  

Personal Injury

In relation to the personal injuries action, Mr Berber had claimed that as a result of the employer’s conduct, he incurred a recognised psychiatric illness and not mere hurt, upset and injury to his feelings.  In addition, he claimed physical injury, being the exacerbation of his Crohn’s disease.  The Supreme Court held that a reasonable employer should be aware of Mr. Berber’s vulnerability by reason of his changes in his occupation, but not necessarily a vulnerability to mental injury.  In the case before it, the Supreme Court found that Dunnes Stores had acted reasonably in relation to incident as it arose. 

Patrice graduated from University College Cork with a BCL degree in 2000 from Queens University Belfast with a Masters in Law and Computers (LLM) in 2001. She qualified as a Solicitor in 2007.

Patrice joined Comyn Kelleher Tobin, Solicitors, 29 South Mall, Cork in October 2004.  She practices primarily in the firm’s Employment and Litigation Departments. Patrice is a CEDR accredited Mediator, a qualification which is a recognised worldwide.