Hotel group claims Fergal Ryan approved cash payments to people working for the company, including two payments to his own partner
A hotel manager accused of breaching his employer’s cash handling rules to make payments to workers off-payroll has been awarded €50,000 by the Workplace Relations Commission (WRC) for unfair dismissal.
An adjudicating officer found that a “threatening and patronising” letter he sent in a bid to “extract” a bigger termination settlement wasn’t up for consideration during disciplinary proceedings – and that the alleged petty cash matters were not a sacking offence.
Fergal Ryan, the former general manager of the Clayton Hotel in Sligo, complained against Dalata Hotel Group PLC under the Unfair Dismissals Act – a complaint which was upheld in a decision published today.
Mr Ryan, the hotel group maintained, approved cash payments to people working for the company, with two such payments going to his own partner, Kasia Smolinska, a former restaurant manager at the hotel.
The alleged issues with cash handling came to light in the company in the wake of a May 2019 row between Mr Ryan and his line manager, Des McCann, the WRC heard.
The WRC was told that after a meeting between the two men regarding the running of the Clayton Hotel in Sligo, Mr Ryan wrote to Mr McCann stating that he had had accused him of financial impropriety and undermined him.
In the letter, Mr Ryan claimed his line manager was trying to “manage him out of the business” unless he accepted a termination agreement.
Mr McCann wrote back to say Mr Ryan’s letter “wholly mischaracterised” their discussions and that he would be lodging a formal grievance over the matter.
“If you are suggesting that I claimed you stole money, I most certainly did not,” he wrote, telling Mr Ryan that if he did not “take ownership” and “accept and agree to follow company procedures” on payment mechanisms that disciplinary action would be inevitable.
“Any discretion I may have is now gone,” Mr McCann wrote. “It is very ironic that if you did write the letter in question to stave off an investigation… you may very well have brought about the result that you were seeking to avoid,” he added.
In his grievance, Mr McCann alleged Mr Ryan had made “false and outrageous allegations of intimidation and harassment”.
In a conversation with another employee, Mr Ryan had also “threatened to take the company for €150,000 if he was not allowed to do what he wanted in the Sligo hotel”, Mr McCann stated in his complaint.
Aaron Shearer BL, who appeared for Dalata, said Mr Ryan was dismissed for “repeated, egregious and admitted breaches of the company’s cash-handling policy”.
The complainant’s partner, Ms Smolinska, had returned to work at the Clayton Hotel on two days in December 2018 – having left the employment of the hotel months previously after taking a severance package, the WRC was told.
Shane Casserly, the company’s head of corporate development, gave evidence that Ms Smolinska received €200 from petty cash for working Christmas Day.
He said when Mr Ryan sought to have her paid a further €60 in cash for providing training in the hotel’s till system on December 29, this was “blocked by the accountant”, who later agreed to issue a gift voucher.
The following February, when Mr Ryan paid two porters €70 each out of the petty cash fund for doing some security work, Mr Casserly said there was “no doubt” the hotel manager was aware of the petty cash policy.
There was “no reason not to pay through the proper channels” when Mr Ryan paid €100 from the petty cash fund to bring in a temporary chef for the May bank holiday, Mr Casserly added.
He said the investigation had found Mr Ryan had broken the policy four times – with three of the breaches taking place after being told by the hotel’s accountant that what he was doing was wrong – supported the finding of gross misconduct and the decision to dismiss him.
Dalata’s then-deputy chief executive Dermot Crowley, who has since been appointed CEO, heard an appeal of the dismissal on February 11, 2020, and upheld the sanction.
He said Mr Ryan had other options for bringing in relief staff, including Dalata’s hotel in Galway, two hours away, and staffing agencies.
Mr Casserly added that it was “not appropriate for partners to work at the same property and it was understood they [Mr Ryan and Ms Smolinska] would not work together”.
He said Mr Ryan had acknowledged Ms Smolinska had left at the company’s request “due to the nature of [their] relationship”, received a severance payment, and that it was “understood they would not work together”.
Dawn Wynne, group head of HR, gave evidence that Mr Ryan was offered an ex-gratia payment of €25,260 to leave the company on May 10, 2019 and that she understood a further €15,000 was offered when Mr Ryan sought “further enhancements”.
Solicitor Barry Creed, who appeared for Mr Ryan, said the complaints and allegations were made against his client after he turned down the voluntary severance package in May 2019.
Mr Ryan’s evidence was that this severance package was produced at Mr McCann’s request and not his.
Ms Smolinska said she took a termination settlement in 2018 and left on good terms to open her own café in Sligo – adding she was “never told that she could not go back to work in the hotel”.
She said the Sligo Clayton’s then-operations manager Noel McLeish phoned her on Christmas Eve to say he was “stuck” because the head chef’s father had died and the chef could not attend work.
He asked her to come in and work Christmas Day, to which she eventually agreed, coming in the following day to work from 10am to 8pm in the hotel restaurant, receiving €200, she said.
She said she had insisted on being paid cash for the work.
Mr McLeish told the hearing that he spoke to Mr Ryan before phoning his partner on Christmas Eve and that the complainant “wasn’t too happy”.
Mr McLeish “knew no other way of paying” Ms Smolinska for the cover shift and that it was his own decision, he said.
Ms Smolinska returned on December 29 at Mr McLeish’s request to train staff on the restaurant till software and got a €60 gift voucher four months later for the four hours’ work, he said.
Mr Ryan said he left the hotel himself at 5.30pm on the Christmas Day, before the payment was processed.
He said Mr McLeish came to him the following day in the restaurant, when he counter-signed the petty cash docket for €200.
Mr Ryan said a conversation with the HR manager in January 2019 was the first time he learned that his partner was “not to work in the hotel”.
With 450 guests in the hotel on Christmas Day, he said there would have been “chaos” if someone wasn't brought in.
Under cross-examination by Mr Shearer, Mr Ryan said: “I wasn’t aware that the payment of cash and regularising it afterwards was not allowed. I was never made aware that this was an issue.”
Mr Shearer, for Dalata, said both the chair of the disciplinary hearing and Dermot Crowley, the appeals officer in the case who is now the chief executive of the hotel group, had concluded Mr Ryan “knew what he was doing was wrong”.
“I am not satisfied that [Mr Ryan] was entirely forthright in his evidence at the hearing,” wrote adjudicating officer Catherine Byrne in her decision, which was published this morning.
She found that he "gave no credible explanation why it was necessary to ask his partner, a former employee, to work on Christmas Day".
Ms Byrne also thought it was unnecessary to bring Ms Smolinska in to provide till system training as a proficient user from another hotel, or the software provider, could have been brought in instead.
“It seems to me that having paid [Ms Smolinska] in cash, the complainant sought to normalise this by paying cash to the porters in February and to a local chef working on Easter Sunday,” Ms Byrne wrote.
Mr Ryan’s “threatening and patronising” letter to Mr McCann had been “an attempt to intimidate” and a bid to “extract a more generous settlement”, Ms Murphy wrote.
But she noted that the letter was “off the table” for the disciplinary process, which was confined to the four alleged breaches of the cash handling procedures.
These had been “bizarre conduct by a senior manager”, she wrote, but added that a reasonable employer would have “dealt with the matter in a different way and would not have resorted to dismissal”.
The reasonable options open to the company at that stage were to issue a warning or re-open talks on a settlement, she wrote.
She found Mr Ryan’s instructions to pay workers in cash were not gross misconduct and dismissal was therefore disproportionate and unfair.
Ms Byrne ordered the hotel group to pay €50,000 in compensation for financial loss, taking into account both Mr Ryan’s contribution to his dismissal and his difficulty finding alternative work because of the impact of the pandemic.