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On 21 April 2022, the Industrial Tribunal decided that, based on the elements of the case at hand, the employee CS (the “plaintiff”) was not forced to resign from his employment with the company RS&S Ltd (the “Company”). .
The facts of the case are as follows:
The plaintiff’s mother AS, was one of the founders and shareholders of the family Company. In 1998, there was a change in the leadership of the company which led to a change in managing director. The plaintiff started working with the company in 1989 and worked for the company for 28 years until, according to the plaintiff, he was forced to resign from his employment.
The plaintiff had been employed as a sales executive in the Company’s showroom and he claimed that he always carried out his duties diligently and increased the Company’s client base. Due to this, the plaintiff was given more responsibilities within the Company’s sales department and five employees used to report directly to him. In addition to this, he was tasked to travel for business purposes.
The plaintiff claimed that after the change in management, several conflicts had emerged between the directors of the company. In 2014, following a number of internal family disputes, the managing director wrote to the directors of the company and informed that the company had to engage an external advisor to ensure a separate management of the company from its owners. The plaintiff alleged that the managing director of the time had been very confrontational and critical of the plaintiff’s work.
According to the plaintiff there were various incidents where he felt he was humiliated and where his position was being undermined. The plaintiff also alleged that the management’s attitude had an impact on his mental health. In fact, according to the plaintiff, in February 2017 the family doctor had certified that the plaintiff was unfit for work.
After consulting with his family and with his family doctor, on the 24 March 2017, the plaintiff resigned from his employment. The company always maintained that the plaintiff resigned from his employment voluntarily and that the elements of constructive dismissal did not subsist.
The Industrial Tribunal examined the elements of constructive dismissal and stated at the outset that the concept of constructive dismissal is not enshrined in Maltese law, but the tribunal follows the parameters established by English Law.
According to the Industrial Tribunal, to determine whether an individual was forced to resign from his employment, a dual test needs to be satisfied. The first test is a contractual test, where the Industrial Tribunal needs to determine whether the employer had seriously breached the conditions of employment.
The second test consists of a reasonable test, where the Industrial Tribunal needs to determine whether there was a breach of trust in the employer and employee relationship. The tribunal also determined that it needed to consider the following three elements: (i) whether the employer had breached the contract of employment; (ii) whether the breach was serious enough to justify an employee’s resignation; and (iii) whether the employee accepted this breach, in the sense that the employee should resign within a short period of time after the alleged breach.
The Industrial Tribunal applied these parameters to the case at hand and noted that the plaintiff did not have a contract of employment in place with the Company. It noted that until 2014, there were no issues between the plaintiff and the managing director of the company, to the extent that the plaintiff had been promoted and given important responsibilities. According to the tribunal, the issues started after 2014, when the managing director had informed the directors of the company that the company needed restructuring and needed to pursue a new business vision.
To this end, an external audit company was also engaged as consultants. The Industrial Tribunal noted that several measures which had been implemented as part of the restructuring process were not well received by the plaintiff and his family. However, these measures had yielded positive business results.
The Industrial Tribunal also found that the plaintiff had not raised a complaint via the grievance procedure, nor had he raised any of the issues during any of the management meetings which he used to attend. It held that in the context of a working environment, employees, especially those at managerial level, are expected to receive some form of criticism from their superiors.
It was also noted by the tribunal that just before the plaintiff’s resignation, he had agreed to travel with the managing director and that he had actively participated in a management meeting. Moreover, the Company was willing to re-engage the plaintiff after his resignation. The Industrial Tribunal concluded that there was no fundamental breach of contract and that there was no evidence to show that the plaintiff had been forced to resign. The tribunal also determined that the employee’s resignation was not an immediate one. Based on these elements, the Industrial Tribunal held that the elements of constructive dismissal did not subsist.
This article was first published in the Malta Independent.
Originally published May 21, 2022
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