Harrington v Irish Life and Permanent Plc

• Jurisdiction: Ireland
• Judge: MR. JUSTICE T.C. SMYTH
• Judgment Date: 18 June 2003
• Neutral Citation: 2003 WJSC-HC 5905
• Court: High Court
• Docket Number: 3576p/2002
• Date: 18 June 2003

2003 WJSC-HC 5905

THE HIGH COURT

3576p/2002

HARRINGTON v. IRISH LIFE & PERMANENT PLC

DUBLIN

JOSEPH HARRINGTON

Plaintiff

IRISH LIFE & PERMANENT PLC

Defendants

Citations:

BLISS V SOUTH EASTERN THAMES REGIONAL HEALTH AUTHORITY 1985 IRLR 308

CLARKE V NOMERA 2000 IRLR 766

ADDIS V GRAMOPHONE CO LTD 1909 AC 488

CHITTY ON CONTRACTS 24ED V2 PARA 37–50

PEPPER V WEBB 1969 2 AER 216

BREWSTER V BURKE & ANOR 1985 4 JISLL 98

AHERN V MIN FOR INDUSTRY & COMMERCE (NO 2) 1991 1 IR 462

MOONEY V AN POST 1998 4 IR 288

MAHER V IRISH PERMANENT UNREP COSTELLO 7.10.1997 1998/25/10100

Synopsis:

EMPLOYMENT LAW

Contract

Terms - Implied - Disciplinary procedures - Fair procedures- Whether right of appeal afforded to plaintiff - Whether fair procedures followed - Damages - Type of damages available for breach of contract - Whether plaintiff entitled to damages (2002/3576p - Smyth J - 18/6/2003)

Harrington v Irish Life and Permanent plc

the plaintiff had been suspended from his employment with the defendant pending a disciplinary inquiry following allegations of harassment from other employees. He sought various declarations from the High Court to the effect that he was still employed as a manager with the defendant and damages for distress in relation to the manner in which the disciplinary enquiry was conducted by the defendant. The plaintiff contended that he had not been afforded an unlimited appeal against the findings of the defendant which was in breach of an implied term in his employment contract to fair procedures. He further contended that the defendant had a general implied obligation to exercise its contractual entitlements reasonably. He also contended that the defendant had no right to impose the production of a psychiatric report as a condition of his return to work and was oppressive. He argued that the defendant could not be selective in the application of its disciplinary code. He also sought to challenge the failure of the defendant to award him a discretionary bonus on the basis that there had been a lack of fair procedures. The defendant contended, inter alia, that any right of appeal the plaintiff had from its disciplinary proceedings was not unlimited.

Held by Smyth J in refusing to grant the relief sought that the grant of declaratory relief was discretionary, which discretion ought to be exercised against the plaintiff in light of the fact that he had not been dismissed, that the court was being invited to assume a role in the midst of disciplinary and investigative functions proper to the defendant as employer and that the plaintiff should not be granted relief in respect of a decision made a year before taking action on it, no explanation having been given for such delay. It had not been reasonable for the plaintiff to engage in a consistent pattern of ignoring directions given to him by his employer. The plaintiff knew and had been advised of the appeal process, a reasonable time had been given in which to appeal and there had been no want of natural or constitutional justice nor had there been a failure to observe due process. The condition as to the production of a psychiatric report was warranted due to the plea of foreseeability that could be raised against the defendants if complaints against the plaintiff by other staff members were made in the future. The fact that a bonus was almost invariably granted did not make it less than discretionary and there had been no loss of opportunity to the plaintiff in that regard. An employer who shows forbearance was not to be precluded from enforcing all or any of its contractual entitlements. Where damages fell to be assessed for breach of contract rather than tort, it was not permissible to award general damages for frustration, mental distress, injured feelings or annoyance caused by the breach.

1 JUDGMENT DELIVERED BY MR. JUSTICE T.C. SMYTH ON WEDNESDAY, 18TH JUNE 2003 - DAY 10

2 I hereby certify the following to be a true and accurate transcript of my shorthand notes of the evidence in the above-named action.

APPEARANCES

For the Plaintiff

MR. M. CONNAUGHTON SC

MR. P. MURRAY BL

Instructed by:

GALLAGHER SHATTER SOLICITORS

4 UPPER ELY PLACE

DUBLIN 2

For the Defendants

MR. P. GALLAGHER SC

MR. B. MURRAY SC

MR. R. HORAN BL

Instructed by:

IRISH LIFE & PERMANENT PLC.

LEGAL AND SECURITIES DEPT.

56/59 ST. STEPHENS GREEN

DUBLIN 2

3 COPYRIGHT:Transcripts are the work of Gwen Malone Stenography Services and they must not be photocopied or reproduced in any manner or supplied or loaned by an appellant to a respondent or to any other party without written permission of Gwen Malone Stenography Services

4 MR. JUSTICE T.C. SMYTH DELIVERED HIS JUDGMENT ON WEDNESDAY, 18TH JUNE 2003 AS FOLLOWS

MR. JUSTICE SMYTH: The Plaintiff after a period in commercial life

5 between 1971 to 1985 (with AIB Plc in the Munster area) rose to the position of senior assistant manager of a branch of the bank. He then came to work for the Irish Permanent Building Society, he received a letter of appointment but he asserts no terms or conditions of employment. He was a person who apparently gave satisfaction in his work in a managerial capacity and reported to a Mr. Murphy. His upward progress in work brought him to the position of General Manager (Collections) in the head office of the Defendant and his line manager was Mr. Kane. Mr. Kane was appointed chief executive of the Irish Permanent at the time of its integration with Irish Life in 1999 and continued in that position until he announced in December 2002 his intended resignation which took place in May 2001.

6 Mr. Kane and the Plaintiff were well known to each other for a number of years and Mr. Kane clearly regarded the plaintiff's ability (T. 8 p.1561.18; p.161 1.27-29) and was well disposed to the Plaintiff. Before any merger took place between Irish Life and Permanent and the Trustee Savings Bank 2 9 (TSB) referred to in the pleadings and documents Mr. Kane had appointed the Plaintiff to a particular project called Vision 21 it was the intention that those engaged in that project would be rewarded in a particular way. However the project was in effect abandoned as a specific when work began on the integration or merger with the TSB. In or about 9th November 2000 Mr. Kane and the Plaintiff had a discussion concerning the fate of Vision 21 and in particular the Plaintiff, who was then the person most affected by the rearrangement. I am satisfied and find as a fact that Mr. Kane pointed out to the Plaintiff that the management structure of the new 12 merged entity would give rise to the necessity of a selection process for the new management positions. Mr. Kane considered that the Plaintiff was well placed if he applied for the job in the new entity because of his range of skills and urged the Plaintiff to strongly consider getting out of the project work and applying for the post of the integration general manager of the merged entity. The Plaintiff who at that time was aged 48 years of age appreciated that if the integration process got underway he would have two years of important work by which stage he would be 50. The Plaintiff made clear his preference to Mr. Kane, that if he got another two years out of the company he would take the benefit of a preferential pension scheme, that would be a very good result for him. (The task of merging the entities was scheduled to be substantially completed by March/April 2003). This arrangement of an offer for 2 years certain and entitlement to a package was something Mr. Kane could not commit the Defendant to without the sanction of thee Group Chief Executive - this was obtained, however the. Plaintiff never accepted the offer within the time of its availability - a fact that Mr. Saul (whom I shall refer to later in this judgment) could not understand. It was also clear from the evidence that if the Plaintiff did not accept the 2 years work and the package - he would be entitled to apply for a position in the new entity (if available), but in this regard he would be “on the hazard”. There was no guarantee of any specific position and Mr. Kane believed that even if the Plaintiff had applied for a specific managerial position and failed that "he was an obvious candidate for the merger entity anyhow". Mr. Kane considered the Plaintiff "was a natural shoo-in to work on the merger project".

7 The Plaintiff's contention was that when seconded or allocated to the Vision 21 project it was envisaged that he could at his sole election return to his position as General Manager, Operations of Irish Permanent. Where the evidence of the Plaintiff and that of Mr. Kane differ on this whole issue I prefer the evidence of Mr. Kane whom I found to be a reliable witness. When the Plaintiff's alleged agreement concerning his status became a matter of controversy in March 2001 Mr, Kane by memorandum dated 26th March 2001 set out his position. This was later followed up by a letter dated 1st May 2001 from Mr. Kane to the Plaintiff, which states:

"Dear Joe,

Thank you for your letter of 4th April 2001. I think it is important to set the record straight.

I was advised by Niall Saul, that you had informed him by telephone, that you had some understanding or agreement with me in regard to your position, and how this would be dealt with when your current role ended. He stated that you had informed him, that you had confirmed this with me in the week ending 23rd March 2001. He advised me, that on the basis of this view, you had decided not to participate in the interview process for the Permanent TSB “Top Executive Team” and had decided not to proceed with discussion which you had commenced with him which were aimed at defining and agreeing the arrangements that would apply in the event of you leaving employment when your current role ends.

The sole purpose of my letter to you was simply to advise...