Unfair dismissal

The Court of Appeal (Inferior Jurisdiction) (the “Court”) presided over by Honourable Judge Lawrence Mintoff on 16 September 2020, in the case “MC vs. JK,” dealt with an appeal from an unfair dismissal case decided by the Industrial Tribunal on 5 February 2020 where the Tribunal concluded that the plaintiff’s termination of employment was unjust and in violation of the law. The Tribunal awarded compensation to the employee which had to be paid by the employer.

Facts of the Case

An employee, MC instituted a case of unfair dismissal with the Industrial Tribunal (the “Tribunal”). MC was initially employed as a handyman but was later expected to work as a fulltime labourer with an employer, JK. MC worked with JK for more than six years. During 2014 and 2015, MC received three written warnings from his employer notifying him of his underperformance and soon after he was dismissed from work. The plaintiff felt aggrieved by this dismissal as he claimed that the termination of his employment was unjust because: (a) it was not made for a valid reason; and (b) principles of natural justice were not respected.

The defendant, JK, explained to the Tribunal that MC persistently failed to fulfil his duties despite being warned several times both verbally and in writing. The employer also mentioned that MC was insubordinate towards him and was a bad influence on other employees. Furthermore, the employer received complaints from customers on MC’s quality of work. There were times when the employee even refused to complete certain tasks, saying that he was not able to do them or that he did not have the physical capabilities to finish them. The employer claimed that he felt constrained to terminate the relevant employment engagement.

Tribunal

The Tribunal considered evidentiary documents, including four warning letters which mentioned the employee’s underperformance and also the testimony of various witnesses who confirmed that the quality of work produced by the employee was not up to standard and that he was not capable of holding a skilled tradesman job. In fact, co-workers said that he was more of a ‘helper’ rather than a labourer. It also resulted, from the evidence presented that, the employee was very often asked to do work which he was not qualified to handle such as ‘finishing and construction works, painting, gypsum, tiling etc.’ During his testimony, MC explained how he used to notice certain injustices and bad and/or illegal practices at the workplace, such as overtime being paid at normal hourly rates and no salary adjustments were made to account for the cost of living increase. MC also complained that there were times when the employer even failed to provide him with the right tools for the job. Plaintiff alleged that he was dismissed from work as he was the only Maltese employee, so the employer had to provide him with certain legal rights which he did not usually give to the other non-Maltese employees. The Director of Employment and Industrial Relations said that during an investigation, they had discovered a number of irregularities especially around the ways how payslips were issued, and overtime paid.

The Tribunal decided the case in favour of the employee because it concluded that the dismissal was unfair and unjust. It also proceeded to award compensation to the employer in the amount of €4070 which had to be paid by the employer. This conclusion was reached mainly because it was clear from the information which was made available to the Tribunal that the employer’s expectations were much higher than the employee’s skills. The Tribunal also noticed that the employee’s performance was not questioned during the first four years of employment. It was only after 2014 when the employee started receiving warnings. No evidence was presented to the Tribunal indicating the acceptable practices and efficiency levels at the workplace. No specific training was ever provided to the employee to improve his skills and hence be able to ameliorate his efficiency and quality of work levels. The Tribunal questioned how the employee could be considered at fault for producing mediocre results, if he did not possess the required skills and the employer never offered him any training.

The Tribunal stated that an employment termination during the probation period because the selected individual would not have satisfied the employer’s expectations is not only understandable but also legally permissible. It would be unjust to apply this argument to a case where the employee was retained for several years and was not provided with the necessary training. It was clear to the Tribunal that during the selection process, the employer did not make the right selection – what the Tribunal referred to as ‘ culpa in eligendo.’

Appeal

The employer appealed the case and requested the Court to revoke and annul the Tribunal’s decision. JK claimed inter alia that: (a) ‘culpa in eligendo’ emanating from article 1037 of the Civil Code (Chapter 16 of the Laws of Malta) was wrongly applied to the case at hand as this case did not deal with a delict or quasi-delict but with an employer-employee relationship governed by a contract of employment; and (b) compensation was awarded without considering the elements which are described in article 81(2) of the Employment and Industrial Relations Act (“EIRA”, Chapter 452 of the Laws of Malta).

The Court was not convinced that the employer was receiving complaints from third parties especially since few months after the dismissal, one of the mentioned complainants employed MC. The Court was convinced that the dismissal occurred because the employer did not have enough work and not as an employer disciplinary action. ‘Underperformance’ was not a justifiable reason for termination especially because the employer was continually being given work which he was not able to handle either because he did not have the necessary skills or due to health reasons.

The Court said that the Tribunal’s decision was not based on the principle of ‘culpa in eligendo’ but rather on the consideration that the employee was engaged as a labourer, he did not possess any specific skill, art or trade yet he was regularly being given work which he was not capable of doing at the expected standards and without being given any training. The Tribunal felt that responsibility for bad quality of work had to be borne by the employer as he failed to choose the right person for the job.

As for the appellant’s second claim, the Court said that according to article 81(2) of EIRA, when awarding compensation for damages, the Tribunal had to “take into consideration the real damages and losses incurred by the worker who was unjustly dismissed, as well as other circumstances, including the worker’s age and skills as may affect the employment potential of the said worker.” The Court quoted PD vs. De La Rue Currency and Security Print Limited (Court of Appeal (Inferior Jurisdiction), 23 April 2018) where the Court said that when exercising its discretion to award compensation, the Tribunal has to give clear reasons supporting the award and details on the quantification methodology. The Court rejected the appellant’s first claim but proceeded to agree with the employer on this second point as it noticed that the Tribunal failed to give adequate reasons for its decision to award compensation and ordered that the case be returned to the Tribunal for the latter to give a detailed explanation on how it arrived at the compensation amount figure.