Telecoms giant Verizon was entitled to dock the bonus of a senior Irish employee for his involvement in his department's use of an account with an outside company to buy gift vouchers for occasions like staff weddings or the birth of a child, a tribunal has ruled.
Peter Darcy, a senior director in construction procurement for the Verizon network in the United States, had brought a complaint under the Payment of Wages Act 1991 against Verizon Services Ireland Limited accusing it of making an unlawful deduction.
The tribunal heard that Mr Darcy was one of multiple employees disciplined after the payments came to light in 2023, leading to the supplier being cut off and the dismissal of a "senior figure" in the multinational.
The Workplace Relations Commission (WRC) noted in its decision that Mr Darcy came under scrutiny in 2023 as part of a wider company investigation into his department’s use of an account with an unidentified facilities management firm.
Stephen Helvin, a senior in-house lawyer with Verizon, said in evidence that he started an investigation after Irish tax authorities "raised issues" with the respondent’s use of the facilities management firm, referred to only as "Company A" in the decision.
He said the transactions he looked at "varied widely" from what would be expected from that type of vendor. Internal messages he examined in relation to one transaction showed one of these related to Mr Darcy and "a charitable donation which was above Verizon limits", he said.
Mr Helvin said he proceeded to interview Mr Darcy regarding "gift vouchers being placed under general ledger as real estate services". He told the WRC there were a number of specific transactions he found "concerning", as well as a "broader picture of non-compliance".
Mr Helvin said Mr Darcy "acknowledged some of this" and accepted that one message on the internal instant messaging system, Slack, referred to him "going around the policy".
The witness said his belief was that Mr Darcy knew company policy was being circumvented.
He concluded that the records of the transactions – noting them as "sundries" – were inaccurate, he said. "There was a concern about collusion with the vendor, as the records were being described improperly," he added in his evidence.
"The higher a person’s role is, the higher the expectation Verizon has of their conduct. There was an obvious failure on the complainant’s part to spot the ethics issue," Mr Helvin told the tribunal. "The rationale put forward that their department had been doing this for a long time is not acceptable," he added.
Mr Darcy’s position was that he was "shocked" to be told by the investigators that they had identified "payments of bar tabs and other issues he was unaware of", the tribunal noted.
He acted with the approval of his line manager whenever he bought a staff gift, which was done on occasions like weddings or the birth of a new child, he and his lawyers stated.
He added that he was unaware when he was interviewed by Mr Helvin that a disciplinary sanction might follow. The subsequent disciplinary process was delayed from October 2023 to January 2024 after Mr Darcy fell ill, the tribunal heard.
Mr Darcy’s position was that he "never made any gain from the Company A purchases". However, when Mr Darcy himself had a new child, his team gifted him a €200 voucher procured from Company A, he told the tribunal. He thought it was an "unfair conclusion" for the disciplinary officer to decide he "had gained personally".
The disciplinary officer, Courtney Mezenis, vice-president for corporate real estate at Verizon, said she decided to issue Mr Darcy with a final written warning on the basis that he had taken "some accountability for his actions" but this had been "limited". Her evidence was that it was not a sacking offence.
A human resources officer for the telecoms giant gave evidence that it was Verizon’s policy to cut the bonus payment to an employee under a first written warning by up to half, and between 50% and 100% for a final written warning. Mr Darcy received a 50% cut, which was "the lowest reduction possible for his sanction", she said.
Mr Darcy contended his bonus, worth 20% of base salary, was "cut in half without any explanation".
Adjudicator David James Murphy wrote in his decision that a cut to the bonus was "explicitly provided for" under Mr Darcy’s contract and that the employee was "reasonably on notice" of an investigation potentially touching on his own conduct when he was interviewed by Mr Helvin.
He found he could not consider the process to be seriously flawed and that Verizon was "entitled to hold the complainant accountable for his failure to adhere to policy" in spite of his manager’s approval.
"I think compared to most employers, the respondent enforced quite strict discipline when they discovered their policies were being circumvented. However, it was open to them to do so," Mr Murphy added.
He found the full bonus was not payable to Mr Darcy and rejected his complaint.
Tiernan Lowey BL was instructed by Áine Curran of O’Mara Geraghty McCourt for the complainant in the matter. The company was represented by Mary-Paula Guinness BL, instructed by Linda Hynes of Lewis Silken.
