The Statutory Penalties for Breaches of Employment Law in Ireland

Are you aware of the range of penalties that are set down in legislation in Ireland for breaches of employment law?

There is a large number of statutes/acts dealing with all aspects of employment law in Ireland. These acts cover overnighting from unfair dismissal to working time to payment of wages to health and safety to annual leave and rest breaks, etc.

In addition to these penalties and employee can always go to the Civil Courts for common law claims such as breach of contract, personal injury, negligence, health and safety breaches, breach of constitutional rights, etc. That is another day’s work.

This piece is going to look at the penalties and redress for employees as set out in statute, that is, the various acts on the statute book.

Regardless of whether you are an employer or employee, you should find it useful.

Unfair Dismissal/Constructive Dismissal

The redress is set out in section 7, Unfair Dismissals Act, 1977, and in summary comprises

  1. Reinstatement or
  2. Reengagement or
  3. Compensation of up to 104 weeks’ remuneration in respect of the financial loss due to the dismissal.

If there is no financial loss an employee can be awarded 4 weeks’ remuneration.

Working Time/Rest Breaks

The penalties are set out in section 27, Organisation of Working Time Act, 1997:

  1. Require the employer to comply with the relevant provision of the act
  2. Compensation of up to 2 years’ remuneration.

Written Terms of Employment

Failure to provide a written statement of terms and conditions of employment within 2 months of starting can be punished as set out in section 7 of the Terms of Employment (Information) Act, 1994.

The WRC adjudicator can order the employer to give the statement to the employee and can award up to 4 weeks’ remuneration by way of compensation.

Protected Disclosures/Whistleblowing

The Protected Disclosures Act, 2014 provides severe penalties in section 11 for dismissal of an employee for making a protected disclosure:

  • 260 weeks (5 years) remuneration

The employee can also bring a tort action for having suffered detriment as a result of making a protected disclosure, as set out in section 13, Protected Disclosures Act, 2014, and can seek an order from the Circuit Court as set out in section 11 of the act preventing dismissal prior to the determination of a claim for unfair dismissal.

Payment of Wages

Section 6, Payment of Wages act, 1991 sets out the penalties for breaches of the act. These include

  • Compensation of the net amount of the wages which would have been paid the previous week prior to the deduction/non payment or
  • Twice the net amount of wages that would have been paid to the employee in the week immediately preceding the deduction or payment

Minimum Notice

Compensation can be awarded pursuant to Minimum Notice and Terms of Employment Act, 1973: “may award to the employee compensation for any loss sustained by him by reason of the default of the employer.”

Agency Workers

Penalties for breach of Protection of Employees (Temporary Agency Work) Act 2012 are set out in schedule 2 of the Act. It states that the WRC can order rectification of whatever breach of the act is proved, including reengagement or reinstatement, and/or order compensation of up to 2 years’ remuneration be paid to the employee.

Adoptive Leave, Carer’s Leave, Parental Leave

Breach of the adoptive leave provisions of the Adoptive Leave Act, 1995 can see compensation of up to 20 weeks’ remuneration awarded to the employee, or the WRC making whatever directive order it feels is expedient in the circumstances.

Carer’s leave: a WRC adjudicator can award a grant of carer ’ s leave to the employee of such length to be taken at such time or times and in such manner as the adjudication officer may specify, and/or up to 26 weeks’ compensation.(Carer’s Leave Act, 2001).

Parental Leave and Force Majeure Leave:  an adjudicator can award (a) the grant to the employee of parental leave of such length to be taken at such time or times and in such manner as may be so specified, and/or compensation of up to 20 weeks’ remuneration.(Parental Leave Act, 1998).

Maternity leave: breaches of the employees entitlement can lead to an award of compensation of up to 20 weeks’ remuneration and or grant of the leave to which the employee is entitled.(Maternity Protection act, 1994).

Transfer of Undertakings

Complaints about breaches of S.I. No. 131/2003 – European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 can lead to compensation being awarded depending on which regulation has been breached.

The compensation can range from a maximum of 4 weeks’ remuneration to 2 years’ remuneration.

Part Time Workers

The Protection of Employees (Part-Time Work) Act, 2001 is the relevant act for part time workers.

It provides that the WRC adjudicator can require the employer to comply with the relevant provision and/or award 2 years’ remuneration to the employee.

Fixed Term Workers

The Protection of Employees (Fixed-Term Work) Act 2003 is the relevant act for fixed term workers. Section 14 of the revised act provides the WRC adjudicator can:

(b) require the employer to comply with the relevant provision,

(c) require the employer to reinstate or reengage the employee (including on a contract of indefinite duration), or

(d) require the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 2 years ’ remuneration in respect of the employee ’ s employment.

Redundancy

The Redundancy Payments Act, 1967, section 7 sets out the employee’s right to a redundancy payment. Section 39 allows you to appeal the amount you have been awarded.

The Protection of Employment Act, 1977 also obliges the employer to inform and consult with employees in a collective redundancy situation. Section 11 of the Act sets out the penalties for the employer’s failure to consult and notify: a fine of up to €5,000 on summary conviction in respect of a breach of section 9 or section 10.

Discrimination and Equality Based Claims

Breaches of the Employment Equality Act, 1998 can see redress being ordered pursuant to section 82 of the Employment Equality Act, 1998:

Various orders including for re-engagement, re-instatement or compensation of up to 2 years’ remuneration or €40,000, whichever is the greater.

€13,000 can be awarded in contravention of the law in relation to a discriminatory claim in relation to access to employment.

Equal Status Acts Breaches

Equal status breaches can be penalised in accordance with the Equal Status Act, 2000. This protects you in relation to discrimination in respect of the supply of goods or services.

The maximum amount that can be awarded is the amount of the District Court limit in civil cases in contract (€15,000).

Minimum Wages

The National Minimum Wage Act, 2000 protects employees in relation to minimum wage rates. Complaints can be dealt with under section 26 of the act. The adjudication officer can order that the shortfall be rectified and paid to the employee, and the employee can also be awarded reasonable costs in respect of bringing the claim.

The employer can also be prosecuted in the District Court for breaches of this minimum wage act.

Health and Safety

Breaches of the Safety Health and Welfare Act 2005 can see an adjudication officer awarding compensation of such amount as he feels equitable in the circumstances for breach of section 27 of the act, which protects employees from penalisation or dismissal for making a complaint in respect of health and safety in the workplace.

Conclusion

The list above is not definitive, but certainly covers the most common types of employment law claim that will be brought to the WRC (Workplace Relations Commission), or Labour Court. A WRC adjudicator has a wide range of discretion for breaches of any particular act, so the various acts referred to above set out the maximum awards possible.

A Warning Employment Law Story for Employers

employers unfair dismissal story

Let me tell you a story.

Last year a small shop owner in Westmeath, Mick*, faced a claim from a dismissed employee on the grounds of unfair dismissal. The employee, Séamus*, worked for Mick for about 18 months, or so.

The background was typical enough.

Seámus started off well in the job, full of enthusiasm. Mick hoped Séamus would take the pressure off him once he learned the ropes and got a bit of experience.

As time went on, however, and particularly after Séamus had been in the job for 12 months, his performance dropped.

He showed less interest in the job, got himself a new girlfriend, a second hand car, and had much less interest in working at the weekend, especially on a Saturday evening.

His timekeeping got sloppy, too, and there were complaints from customers that his attitude and tone in the shop was poor.

One Saturday in May, Mick had Séamus rostered to work on Saturday because Mick was going to his brother’s child’s First Holy Communion. He was looking forward to the break, and the few pints and a bite to eat with “herself”.

An hour before Séamus was due to start Mick received a call from Séamus’s mother telling him that he wasn’t well and wouldn’t be able to come in.

Mick was furious, absolutely fuming, and suspected the only thing wrong with Séamus was a stonking hangover because he was seen out in the pubs on the Friday night.

Mick had to stay in the shop because he was short staffed,  and had to pass up going to the First Holy Communion. He felt really let down-gutted, in fact.

On Monday, Mick resolved to tackle Séamus about his absence on Saturday and get to the bottom of it.

When Monday came around it transpired Séamus had made a remarkable recovery, so much so that he starred for the local junior team on the Sunday.

When Mick went to discuss the situation with Séamus he was not in the best frame of mind, especially after hearing about the footballing exploits of Séamus the previous day.

The conversation between the two men started off on a bad footing, and soon went downhill rapidly.

It ended up with Mick telling Séamus that he “was taking the piss” and he wouldn’t stand for it any longer He said he was very disappointed with him, and heard he had played football the previous day.

“I can’t trust you now, I’m afraid”.

He told him he could go back home to his mother, and play his football but he wouldn’t be working for Mick anymore.

He would have his P.45 in a few days when the bookkeeper came in.

About a fortnight later a solicitor’s letter arrived at the shop. The letter stated that Séamus had “clearly been unfairly dismissed” and that he wanted, and was entitled, “to be compensated for his loss of income”.

Soon after Mick received a letter from the WRC (Workplace Relations Commission) telling him that an unfair dismissal claim has been made by Séamus.

But that was only the start of it as there was also claims for failure to give the required notice, failure to give a written contract, failure to give proper rest breaks, failure to pay the correct pay for annual leave and public holidays.

Mick went to his own solicitor about the case and made it clear he would not consider taking Séamus back, or compensating him.

His exact words were “I’ll have a beard sweeping the floor before I’d give that smart-arse waster his job back or let him back into my shop”.

Approximately 20 weeks later Mick’s solicitor received notice of the hearing date with the WRC in Lansdowne house, Dublin 4.

Mick’s solicitor strongly advised him to try to settle the case because on the unfair dismissal claim alone he was in a very weak position, having failed to follow any procedure at all.

To make matters worse, he was offside in relation to the minimum notice claim and the written contract claim, so these could not be won either.

As for the claim about getting the right rest breaks? Mick was adamant Séamus had got enough breaks, but unfortunately for Mick he had no records that he should have kept in accordance with the Organisation of Working Time Act Regulations.

So, Mick had no choice-he had to settle. It killed him but it could have been worse if the case went ahead to a full adjudication hearing.

All in all, the whole mess cost Mick approximately €23,500.

The maximum Séamus could have been awarded for the unfair dismissal would have been 2 years’ salary, so the €23,500 it cost Mick was being viewed by Mick in that context.

Nevertheless, it was €23,500 of after tax income he could ill afford to be handing out in compensation and could have used it to replace a fridge or help upgrade his deli.

Lesson for Employers

Mick made a fatal mistake in this tale. He dismissed without any procedure, and let his hurt and pride overrule his good judgment.

If an employee is dismissed without a fair or proper procedure, almost always it will constitute an unfair dismissal.

Employers also need to be careful to ensure that all employees have a written contract of employment, and to maintain work records and records of rest breaks and annual leave.

 

*Note: Mick and Séamus are not the real names of employer and employee.

The Range of Reasonable Responses in Unfair Dismissal Cases

unfair dismissal claims

If I am representing an employee in an unfair dismissal case I will nearly always argue that the sanction of dismissal was excessive and disproportionate.

That a reasonable employer would not have gone that far, and a lesser sanction would have been more appropriate.

The employer, or his representative will claim that the action was reasonable.

What is reasonable? What is excessive? Disproportionate?

Who decides? The employer? Or the decision making body such as WRC or Court?

Courts and decision making bodies in unfair dismissal cases, when assessing whether an employer’s response to penalising the employee in an employment law dispute, have long recognised that they will not substitute their judgment for that of the employer.

This means that once the employer’s sanction of the employee falls within a range of reasonable responses, the WRC or Court will not take on the role of employer in deciding what is appropriate in the circumstances. Instead, it will decide whether the employer’s response falls within a range of reasonableness in the circumstances.

What’s appropriate and reasonable in the circumstances will also vary widely, and what may be an appropriate penalty in one workplace may be disproportionate and excessive in another.

Let’s take a look at the principle of the range of reasonable responses, and how the decision making bodies come to an assessment of the employer’s decision.

The Employment Appeals Tribunal (EAT) have held,

“………the task of the Tribunal is not to consider what sanctions the Tribunal might impose but rather whether the reaction of the Respondent and the sanction imposed lay within the range of reasonable responses”. (McGee v Peamount Hospital)

The decision making body will look at the circumstances of each case and decide whether the response of the employer falls within the band of reasonable responses. In doing so, the WRC or Court will look at things like

  • The gravity of the conduct leading to the dismissal
  • The size of the employer’s workforce and resources
  • The employee’s background and length of service
  • Any other relevant facts.

It is important to note that what may be reasonable for one employer may not be held to be reasonable in respect of another employer. This is because a large employer will have far more resources than a small outfit and will be able, perhaps, to consider a sanction short of dismissal, such as redeployment or other alternatives, which will not be open to the small guy.

In the UK Lord Denning, MR, stated in British Leyland UK limited v Swift (1981),

“the correct test is..was it reasonable for the employer to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, the dismissal was fair. It must be remembered that in all cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view”.

Conclusion

Unfair dismissal cases can be expensive for employers, and there is many factors which will be considered in deciding whether the dismissal was unfair or not. Two significant factors are the presence or absence of a fair procedure in deciding to terminate, and whether the decision to dismiss falls within the range of reasonable responses.

15 Things You Should Know About Unfair Dismissal in Ireland

unfair dismissal-1

Are you confused about the law surrounding unfair dismissal in Ireland?

Do you know the difference between unfair dismissal and constructive dismissal?

You should, you know, before embarking on an unfair dismissal claim.

Or, if you are an employer, defending such a claim.

In this piece, I am going to give you 15 things in plain language to help your understanding, and prevent you taking out your metaphorical gun and shooting yourself in not just one foot, but both feet.

Let’s get started, shall we?

  1. The important acts are the Unfair Dismissals Act, 1977, which you can access here, and the Unfair Dismissals (Amendment) Act, 1993.
  2. Unfair dismissal arises when the employer terminates the employee’s employment; constructive dismissal arises when the employee resigns due to the conduct of the employer. In an unfair dismissal case the burden of proof is on the employer. In a constructive dismissal case this burden shifts from the employer to employee; this means the employee must prove he/she left the employment due to the conduct of the employer which he/she could no longer be expected to tolerate.
  3. You must bring your claim to the WRC (Workplace Relations Commission) within 6 months of the dismissal, unless you can show reasonable cause in which case you may be allowed 12 months by the WRC.
  4. Redress possible for the employee, if he/she wins, can be reinstatement, re-engagement, financial compensation.
  5. Financial compensation is financial loss incurred by him and attributable to the dismissal as is just and equitable having regard to all the circumstances, subject to a maximum of 104 weeks remuneration. Receipt of social welfare payments by the employee is disregarded in calculating financial loss.
  6. An employee who is on probation, or who has less than 12 months’ employment is excluded from the rights afforded by the unfair dismissal legislation, although there are some limited exceptions, for example a dismissal arising from a discriminatory ground.
  7. A dismissal shall be deemed to be an unfair dismissal, unless there are substantial grounds for it.
  8. A dismissal will not be an unfair dismissal if it arises from one of the following: conduct, performance, redundancy, the employee being in breach of the law in order to continue in his position (eg loss of driving licence if it was essential to hold one to do the job).
  9. An employer must give an employee a written statement of the procedure to be used in dismissing him within 28 days of commencement of employment.
  10. You can also go to the Civil Courts with a common law claim of wrongful dismissal, but you cannot do both-you must choose between the WRC or the Civil Courts. A wrongful dismissal claim is basically a breach of contract claim, for example your contract of employment provided for 1 month’s notice and you only received 1 week’s notice. This is a clear breach of contract and allows you to go to the Civil Courts and sue for breach of contract/wrongful dismissal.
  11. If an employer is going to dismiss on the grounds of competence he should give the employee clear notice of the shortcomings, and sufficient time to improve. A performance improvement plan (PIP) is recommended, and I would recommend that this lasts for 6 months, or thereabouts.
  12. Even if an employee is to be dismissed he/she should be afforded fair procedures and natural justice prior to termination, unless situation if one of gross misconduct which may justify a summary dismissal. Here are 6 steps which should be taken in any fair disciplinary procedure.
  13. An employee on long term sick leave can be dismissed on the grounds of incapacity, that is, he/she is unable to fulfil the contract of employment. There are recommended procedures, however, before an employer should terminate an employee on long term sick leave.
  14. A decision making body such as the WRC or Labour Court will apply 2 well known tests to decide wither the employee was justified in leaving the employment in a constructive dismissal case.
  15. Being dismissed from your job can seem like the end of the world at the time. But some of the most famous, successful people were fired from their job at one time or another. Here is 10 ultra-successful people who were dismissed from their employment.

“I don’t know whether I have a case or not”

“I don’t know whether I should resign and forget about it”

Get professional advice before you take an action that you might regret later.

My Single Best Tip for Employers

small employer ireland

The first time I met Séamus he was a worried man. Séamus is a small employer, with just a handful of employees.

But he had to let one of them go recently because he just wasn’t working out. His attitude was disastrous and Séamus could not see how their relationship could be a happy one.

In fact, he could only see it ending badly.

And that’s exactly what happened on a wet Monday morning a few weeks before Séamus came to see me.

 

Are you an employer?

Are you concerned about the possibility of facing an costly claim for unfair dismissal?

Recently, I wrote an article, “My Single Best Tip for Employees”.

In this piece, I want to give you, as an employer, my best tip to protect yourself in relation to unfair dismissal claims, and how to ensure you are not stuck with an employee who is just not right for your organisation.

Let’s take a look, shall we?

My tip for employers is almost the exact opposite of my tip for employees.

Let me explain.

My tip for employees was to try to ensure that he got 12 months’ continuous employment under his belt, if at all possible. This was to ensure the employee could avail of the remedies provided by unfair dismissal legislation in Ireland, particularly the Unfair Dismissals act, 1977.

My tip for you as employer is to ensure this does not happen, unless you are absolutely satisfied that you are happy with the employee and they are right for your business.

The best way to do this is by a robust, comprehensive probation period clause in the contract of employment.

This clause should make a number of provisions, and I would recommend the following:

  1. The probation period would be for an initial 6 months, but you would have the right to extend it to 11 months, if needed. This gives you a full 11 months to ascertain whether the employee is right for you or not.
  2. The full rigours of the disciplinary procedure will not apply during the probation period; I would still recommend fair procedures and natural justice if you are going to terminate, but you would provide that the full disciplinary procedure need not be afforded during probation.
  3. The notice period during the probation period would be one week; if you do not spell this out you run the risk that whatever notice period stipulated in the contract will apply-this could be one month or three months and it would be strongly arguable, in the absence of the one week provision, that the employee is entitled to one or three months’ notice. Even if you did not require the employee to work the notice period, you would still be on the hook for payment of wages in lieu of notice.

It is widely accepted that an employee can be dismissed during the probation period. In fact, the purpose of the probation period is to allow the employer see if the employee is “the right fit” for the organisation.

It is critical, therefore, that you have as much time as possible to make that decision, but thtat you make it before the employee has 12 months’ continuous service and the protection of the Unfair Dismissals Act, 1977.

Bonus Tip #1 for Employers

If you are going to terminate an unsuitable employee don’t leave it too late-remember that the termination date is the date when notice expires, not when it is given.

If, for example, you have an employee working for 50 weeks and you give her a months’ notice of termination she will have the necessary period of continuous employment to bring an unfair dismissal claim.

Bonus Tip #2 for Employers

I would recommend that you always go through some form of fair procedure before terminating, even if the employee is on probation.

If the employee has over 12 months’ service you need to afford the full rigours of your disciplinary procedure before terminating the employment.