It’s an easy mistake to make.
If you’re an employer, unfairly dismissing an employee is, regrettably, commonplace.
Did you know that the top category of employment related claims in Ireland is for unfair dismissal?
What’s considered to be unfair is very broad-and if you consider illness related dismissals, and failing to ensure fair procedures, it’s easy to fall foul of the law in this area.
This extensive article takes a look at unfair dismissal law in Ireland.
So it covers
- constructive dismissal,
- employees’ remedies for unfair dismissal,
- dismissal procedures,
- fair dismissal,
- termination of the employment contract,
- some examples of constructive dismissal claims,
- fair procedure,
- illness related dismissals,
- and disciplinary procedures which may lead to dismissal.
This is probably the longest free article you will find on the internet about this topic.
And you might be thinking that you would prefer to stare at a radiator.
But if you are an employer taking the 10-15 minutes to read it might just save you a lot of money and help avoid a successful unfair dismissal claim.
And if you are an employee it will give you a very good indication of whether you have a case for unfair dismissal or not.
Let’s get started…
An employer can, at common law, terminate the employment contract for good, bad, or no reason.
However, if a term of the contract is broken the employee can bring a claim to the Civil Courts for damages due to the breach of contract.
The employee has, though, significant protection in statute-that is, acts passed by the Dáil into the statute books such as the Unfair Dismissals Acts 1977-2007.
The Unfair Dismissals Acts ensures that an employer cannot terminate the employment contract unless substantial grounds exist to justify it.
Unfair dismissal in Ireland is governed by the Unfair Dismissals Acts 1977-2001 and two points/fundamental principles need to be made clear about this legislation at the outset-
1. an employer must have substantial grounds for dismissing an employee and
2. in doing so the employer must apply fair procedures to the process.
The Unfair Dismissals Act covers people who have been in employment for at least 52 weeks continuous service and who have not reached the normal retirement age for the employment in question. (Holiday leave is not included in the calculation of service in establishing whether the employee has one year’s service or not).
The Unfair Dismissals Act 1977 provided that employees were excluded from claiming unfair dismissal once they had reached the social welfare pension age. However this exclusion was removed by the Employment Equality Act, 2004.
However if there is no retirement age provided for in the contract then the employee can continue working and any dismissal may give rise to a claim for unfair dismissal.
However employees in the following categories do not have to show 52 weeks continuous service:
- employees who have been dismissed for trade union membership, pregnancy, exercising their right to maternityleave, ante-natal, post natal related matters, employees dismissed for exercising rights to parental leave or carer’s leave.
Employees who are not covered by the legislation include FAS trainees, members of the Defence Forces, Gardai and civil servants, officers of VECs, and officers of health boards.
It may seem blindingly obvious but only employees may use the legislation in respect of a termination of employment-sub contractors for example would not be covered.
Section 13 of the Unfair Dismissals (Amendment) Act, 1993 deals with agency supplied staff and provided that the place where agency supplied staff worked was the employer for unfair dismissal legislation purposes-this is a “deemed employer” situation.(Learn more about the law surrounding agency work)
Fixed Term and Specified Purpose Contracts
Unfair dismissal legislation does not apply to fixed term and specified purpose contracts provided
- the contract is in writing
- the contract specifically excludes the legislation
- the contract is signed by both parties.
However, non renewal of a fixed term contract can lead to a claim for unfair dismissal unless the employer can show that the contract was a genuine fixed term/specified purpose contract and there was an objective justification for using such a contract in the first place.
An employer should always put in a fixed term or specified purpose contract the right to terminate early. Otherwise the employer is stuck with that employee for the fixed term and early termination would lead to a successful claim to be paid for the balance of the contract.
Read more about fixed term contracts here
Was there a dismissal?
To succeed with a claim for unfair dismissal, the employee must prove he was actually dismissed. So the employer must have shown an intention to terminate the employment.
Indefinite suspension can amount to a dismissal and dismissals subject to an appeal is still a dismissal. Issuing a P45 does not of itself terminate a contract and where notice is given the notice must specify the date of termination.
Constructive Dismissal-What is Constructive Dismissal?
An employee may succeed in a claim for constructive dismissal in circumstances where the employee resigns the employment as a result of the employer’s conduct towards the employee.
Circumstances giving rise to this situation include a reduction in pay, a deterioration in the working environment, change of job roles, unwarranted warnings, change of location of the job, lack of a pay rise, sexual harassment in the employment, and many others where the conduct of the employer is so unreasonable that the employee was left with no option but to resign.
Not all of these situations will always give rise to a successful claim for constructive dismissal but these are the kinds of things that employers must be very careful about if they don’t want to end up in the Employment Appeals Tribunal.
However employees who are in the employment for less than one year are excluded from the protection of the legislation.
Constructive dismissal in Ireland is covered by the Unfair Dismissals Act, 1977 in section 1(b) as it provides that a dismissal is, among other definitions,
“the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer.”
It is one of the most common employment claims taken by employees against former employers.
Essentially where an employee terminates his employment as a result of his employer’s conduct he may be able to successfully bring a case for constructive dismissal.
It is vitally important to note that in a constructive dismissal case the onus of proof is on the employee as he/she needs to prove that his/her resignation was justified. This can be contrasted with a case of unfair dismissal where the employer must prove that the dismissal was fair and justified.
Read about the burden of proof in constructive dismissal cases which is a heavy one.
Examples of potential constructive dismissal cases
Some examples of circumstances giving rise to a claim for constructive dismissal are set out below. However it is vitally important to understand that in all legal cases, the particular circumstances of the case will be a huge factor in success or failure and the examples below are not definitive or exhaustive.
- A unilateral reduction in pay
This may give rise to a case for a successful constructive dismissal case as it may be a material breach of a fundamental clause in the contract of employment.
- A change in job function
A unilateral change in the functions of your job may give rise to a successful constructive dismissal claim.
- Adverse working environment
There may be an implied term in the contract of employment that the employer will provide a working environment which is conducive to the employee fulfilling their contractual duties.
- Lack of a pay rise
This reason would be difficult to win a case with, unless the employee was led to believe that she would receive pay rises.
- Change of work location
Where the contract of employment does not make provision for a change of work location it can give rise to a claim.
- Undeserved warnings
If the employee can support the case that the warnings were unmerited and undeserved but were made to drive him/her out then a case for constructive dismissal may succeed.
- Sexual harassment in the workplace
- Abuse in the workplace
- Change in work hours
However the employer may (and indeed should) have provision in his contract to alter hours and shift systems; if this is the case then a case based on constructive dismissal will not succeed.
- Conduct of fellow employees.
All of the examples above have given rise to successful claims for constructive dismissal on one occasion or another; however this does not mean that these situations will automatically lead to a successful claim. And the conduct of the employee will be important in succeeding or not with a claim. The bottom line is that the employee should, if possible, exhaust the internal grievance procedures first.
At common law once notice of a resignation is given it cannot be unilaterally withdrawn. However it can be withdrawn by agreement. For this reason the giving of notice itself is not a dismissal as it may be withdrawn.
If one party seeks to withdraw a notice of resignation but the other party does not agree then a dismissal will have taken place.
Word of warning re resignations
Take legal advice before doing something as drastic as resigning your position of employment and be sure to exhaust all internal grievance/complaints procedures as this will ultimately strengthen any case you bring.
There is also a common law rule that once notice is given by either the employee or employer it cannot be unilaterally withdrawn so if you resign in haste you may repent at your leisure..
Date of dismissal
The date of dismissal is very important to ensure that a claim comes within the statutory time frames. The date of dismissal is the date on which the notice period expires which is the longer of the statutory minimum notice period or the contractual notice period. Section 1, Unfair Dismissals Act 1977:
|“date of dismissal” means—|
|(a) where prior notice of the termination of the contract of employment is given and it complies with the provisions of that contract and of the Minimum Notice and Terms of Employment Act, 1973 , the date on which that notice expires.|
|(b) where either prior notice of such termination is not given or the notice given does not comply with the provisions of the contract of employment or the Minimum Notice and Terms of Employment Act, 1973 , the date on which such a notice would have expired, if it had been given on the date of such termination and had been expressed to expire on the later of the following dates—|
|(i) the earliest date that would be in compliance with the provisions of the contract of employment,|
|(ii) the earliest date that would be in compliance with the provisions of the Minimum Notice and Terms of Employment Act, 1973 ,|
|(c) where a contract of employment for a fixed term expires without its being renewed under the same contract or, in the case of a contract for a specified purpose (being a purpose of such a kind that the duration of the contract was limited, but was, at the time of its making, incapable of precise ascertainment), there is a cesser of the purpose, the date of the expiry or cesser;|
Employees’ Remedies for Unfair Dismissal
An employee who has been dismissed has two avenues of remedy open:
- A claim to a Rights Commissioner or Employment Appeals Tribunal within 6 months (12 months in exceptional circumstances) or
- The Courts where he/she can bring an action for breach of contract or breach of constitutional rights. Because the cause of action is a breach of contract the time limit is six years.
To bring a claim for unfair dismissal under the Unfair Dismissal Acts 1977-2001 the employee must show
- He was dismissed
- He had a contract (oral or written)
- He had 1 year’s continuous service (service under the age of 16 years is not counted)
- He must be over 16 years of age.
Note: employees working outside the State are excluded as are people who are on probation and have less than 12 months service. Statutory apprentices are covered but only where they have completed 6 months service.
Continuity of service
As stated above, you need 1 year’s continuous service to bring a claim for unfair dismissal. Continuity is not broken by illness, holidays, maternity leave, strikes or lockouts. Neither does lay off break continuity of service.
Working outside Ireland
The legislation does not apply to a worker who normally works outside the State unless he was ordinarily resident or domiciled in the State during the term of his contract.
Section 6 of the Unfair Dismissals Act 1977 divides dismissals into 2 categories:
1. dismissal deemed to be automatically unfair or
2. dismissals deemed to be not unfair.
Once a dismissal has taken place the burden is on the employer to show that it was not an unfair dismissal.
There are a number of categories of dismissals which the Unfair Dismissals Act 1977 and 1993 deem to be automatically unfair. They are on the grounds of
1. trade union membership
2. the colour, race or sexual orientation of the employee
3. the employee’s religious or political opinions
4. where the employee is involved in legal action against the employer
5. the employee’s age
6. the fact that the employee is a member of the traveling community
7. the employee becoming pregnant
8. the employee taking part in industrial action.
These are the main grounds which the legislation deems to give rise to an unfair dismissal claim and are deemed by the law to be automatically unfair.
In addition if you can show that you qualify to bring a claim under the Unfair Dismissals legislation and your employer accepts that there was a dismissal, it will be for your employer to show that there were fair grounds for the dismissal as the burden of proof shifts from you to the employer.
Not unfair dismissals
1) Capability, competence, or conduct
Capability grounds are usually premised on issues like lateness, absenteeism, and persistent absence through illness.
If lateness or absenteeism is at issue then the employer will be expected to have documentary evidence to substantiate this claim such as clocking in records, or absenteeism files that are not medically certified. In addition the employer should have evident of the severity of the absences being brought to the attention of the employee.
If illness or injury is at issue, it is often assumed that you cannot be dismissed while on certified sick leave from you work. However, this is not true.
It is difficult to lay down hard and fast rules to apply to these cases as each are different and each will be treated on its own merits. Accordingly these instances are usually divided into short term and long term categories.
Short term illnesses are taken to include medical illnesses which require the individual to be absent for short periods from the work place. Assuming that the employer is not actually questioning the validity of the terms cited they will be expected to have:
1. Established that a pattern of absences exists and it that it is causing problems
2. Satisfied themselves that the problem is unlikely to get better in the long run.
3. Warned the employee the dismissal may occur if things do not improve.
Many of the same considerations exist in a long term absence cases. However, employers will in this instance be expected to secure detailed medical evidence which suggests that an early return is unlikely.
The precise time frame in which an absence will be considered unreasonable will vary from case to case depending on it effect on the work place.
In circumstances where there is a deviation in the medical evidence to both parties as to the likely date of return, the employer should seek a third opinion in advance of taking a decision to dismiss.
Performance Related Problems and Lack of Competence
To dismiss under this heading there is a two fold test:
- has the employer an honest belief as to the employee’s incompetence?
- has the employer reasonable grounds for holding such a belief?
However, the employer is required to set out the employee’s shortcomings, point out the required improvements, and give sufficient time to make the improvements, and warn her of the possibility of dismissal.
This, quite frankly, can be a slow process and will require monitoring of the employee’s performance.
But it must be followed to ensure procedural fairness and natural justice and avoid a successful claim for unfair dismissal.
However if an employee is not heeding warnings and don’t accept that there is justification for them, the employer may be entitled to dismiss sooner.
Competence is taken to refer to the standards which are expected of an individual employee as regards their job. The employer should take the earliest opportunity to outline these expectations to the employee so that each party is fully aware.
In the circumstances where the employee falls short of the standards expected, it is understood that this should be communicated to the employee through formal procedures in addition to a specification as to the improvements necessary. The improvements should be achievable and be within a reasonable time time frame.
Ultimately, a final warning should be given to the employee setting out the likelihood of dismissal should there not be a marked improvement.
Conduct is taken to cover a very large area of behaviour and might be accurately termed misconduct. In this regard there is a very clear need to differentiate between gross misconduct and ordinary instances of misconduct.
Gross misconduct may give rise to summary dismissal without notice or pay in lieu of notice.
Alternatively a series of instances on misconduct may collectively lead to dismissal. In the case of instances of minor misconduct warnings as to future behaviour must be issued.
Again, unless summary dismissal can be justified for gross misconduct, proper procedures and processes must be gone through.
This kind of situation envisages two potential forms: either the employee misled the employer about qualifications during the process of applications or the job was offered contingent on certain qualifications being secured which have subsequently not been secured.
In this case the employer should establish that the current levels of staff are unsustainable and that accordingly the dismissal of the employee was justified.
This may be countered by the employee in circumstances where evidence suggests that:
- There was no economic imperative or justification for the redundancies eg. Company continues to operate profitably
- That the space vacated had been refilled
- That the process of selection for redundancy was unfair
- That the basis for selection was premised on discrimination
The employer has a defence in the form of redundancy but he must be able to show that the employee has been fairly selected for redundancy. However if the employer seeks to employ the redundancy defence he can expect that if an unfair claim is made against him he will find that his redundancy defence is put under a fair degree of scrutiny.
For example, it is not enough that the employer can show that his workforce numbers requirement is expected to decline some time in the future-he must be able to show that is requirements will lower in the very near future to the redundancy that he has just carried out.
This situation is taken to occur in a situation where the employee’s continued employment in their current situation would be a breach of the law. The most obvious example of this may be said to occur where a valid driving license is required to continue work in a haulage business as a truck driver.
In certain circumstances, the court may be prepared to accept an argument that reasonable accommodation of the employee should have been considered prior to dismissal, that is to say, an employee no longer able to carry out a specific task may be used in a different role.
5) Other Substantial Grounds
In circumstances whereby the employer cannot rely on any of the grounds as aforementioned, then an onus will be imposed upon them to justify the dismissal on the basis of other “substantial grounds”.
The Employment Appeals Tribunal is very strong on fair procedure in relation to the termination of an employee’s job; they have held many times in the past that if they find that fair procedure was not followed then they will deem the dismissal to be unfair, regardless of the circumstances.
This reflects a person’s constitutional right to natural justice and fair procedures. Even though the Unfair Dismissals Act, 1977 made no reference to fair procedure the 1993 Act did in section 5(b):
The requirements of natural justice will depend on the particular circumstance of each case, which will vary.
And section 14(1) of the 1977 Act obliges the employer as follows:
14.—(1) An employer shall, not later than 28 days after he enters into a contract of employment with an employee, give to the employee a notice in writing setting out the procedure which the employer will observe before and for the purpose of dismissing the employee.
Grievance and disciplinary procedures
Adopting and implementing this Code of Practice on Grievances and Disciplinary procedures (SI 146/2000), while not mandatory, is an important factor in the employer successfully defending a claim of unfair dismissal.
The main points about this procedure are as follows:
- all employers should have agreed procedures to deal with grievances and disciplinary matters
- all managers and supervisors should be aware of, and apply, these procedures
- employee representatives should be able to assist employees in difficulty
- any issues arising should be deal with fairly with an opportunity for the employee to make representations on his behalf
- a range of sanctions should be provided for and considered
- warnings should be removed from the employee’s record after a certain period of time.
The basic principles therefore are
- The procedure is fair and rational
- The basis for the disciplinary procedure is clear ie the employee knows what he has done wrong
- The penalties are clear
- An internal appeals mechanism is in place.
To be able to show that fair procedures were followed (in cases other than those of gross misconduct and/or dishonesty), warnings should be issued to the employee setting out the cause of the complaint against him. (In cases of dishonesty, no warning is necessary)
The range of disciplinary sanctions provided for include an oral warning, a written warning, suspension with/without pay, transfer etc.
However, a common question at Employment Appeal Tribunal hearings is whether the employer considered other sanctions short of dismissal-were all other options looked at?
You may be interested in my online training course: How to carry out a disciplinary procedure in the workplace.
Unless there has been a fundamental breach of the employment contract by gross misconduct or dishonesty on the part of the employee, warnings are essential to show fair procedures were followed.
However, it has been held in some cases that the inadequacy of performance was so bad that warnings would be ineffective.
There is no set format for a warning but the following principles must be adhered to:
- It should be clear and unequivocal; a broad statement or large hint will not suffice
- The cause of the problem should me made clear to the employee, eg competence, conduct etc.
- The consequences for the employee should be spelt out if the warning is not heeded eg that her job is in jeopardy.
The employee must also be given time and opportunity to improve.
Warnings should lapse or be expunged from the record after a certain period of time and the Employment Appeals Tribunal has held that warnings cannot remain indefinitely on an employee’s record.
Performance Related Problems
An employer seeking to justify the dismissal of an employee because of poor performance should be able to do the following:
- Explain how the problem came to light, especially if the employee is in the job for a good period of time
- Show that he investigated why performance is not up to scratch-it is not sufficient to merely show that performance was inadequate
- Clearly warn the employee that his performance is falling short
- Counsel the employee as to the need to improve and the assistance offered to help with this
- Monitor the response to the warning
- If there is no improvement, show that they investigated why there was no improvement
- Give a final warning that is clear and unequivocal setting out what the problem was, the consequences of failing to meet the required standard and when the consequences would be likely to result
- Show evidence of the failure to meet the standard of the final warning and provide evidence to the employee giving him an opportunity to respond and make a case for his retention in employment.
If targets are used to measure the employee’s performance and work, the employee must be given sufficient time to improve and warned as to the consequences of failing to reach the target.
In addition, where an employee meets the target but falls back to an old unacceptable level, the EAT has held on occasion that the procedure should revert to the 1st stage of the warning procedure.
The EAT has also held that unreasonable targets leading to dismissal can amount to unfair dismissal.
There are two types of suspension permissible:
- to remove the employee while an investigation is being carried out and
- as a disciplinary sanction.
Suspension should be for a limited time only, not indefinite. Generally the employee must be paid while suspended, unless there is a contractual right to suspend without pay.
The Supreme Court decision in Connolly v McConnell  set out the general requirements in relation to disciplinary hearings.
The decision in this case stated, inter alia, ‘they may not remove him without first according to him natural justice. He must be given the reasons for his proposed dismissal and an adequate opportunity of making his defence to the allegations made against him..’
Therefore there is a duty on the employer to
- fully investigate the circumstances of the alleged offence
- carry out this investigation prior to taking any disciplinary action
- give the employee the opportunity to defend himself against the charge
- ensure parity/equality between employer and employee at any hearing.
Delay in carrying out an investigation may unfairly prejudice the employee’s chances of defending himself and render the dismissal unfair. It is essential that an employee is also told that she has the right to representation at any disciplinary hearing.
Take a look at my online training course about carrying out a disciplinary procedure.
An employer’s internal investigation should be suspended where the Gardai are carrying out a criminal investigation and they require the employee to comment on the allegations the subject of the criminal charge.
Even if an employee is convicted of a criminal offence arising from facts which concern the employer the employer should still carry out an investigation and hold a disciplinary hearing before dismissing.
Dishonesty during the course of a disciplinary hearing may itself be a breach of trust. And a delay in carrying out an investigation may prejudice the employee’s right to fair procedure and render a decision to dismiss unfair.
The right to representation at a disciplinary hearing is not a right to legal representation.
Standard of Proof for Dismissal
Generally the standard of proof required to justify dismissal following an investigation is looked at under two headings:
- Why was the dismissal effected? Had the employer reasonable grounds for believing that he was right to dismiss? This is a subjective test; the WRC will put itself in the shoes of the employer and consider whether, in all the circumstances, the employer had reasonable grounds for believing what he believed prior to the decision to dismiss
- How was the dismissal effected? Was the investigation carried out in a fair manner, and fair procedures afforded to the employee?
Proof beyond reasonable doubt is not required therefore; proof on the ‘balance of probabilities’ is generally sufficient.
Sickness and Absence Related Dismissals
Dismissals related to absence and/or non attendance at work due to sickness and illness are one of the most common types of dismissal from employment in Ireland. The Unfair Dismissals Act 1977 states that a dismissal shall not be unfair if it is because of the employee’s capability to do the work for which he/she was employed.
However employers need to now consider the impact of Employment Equality legislation as any employee suffering from a disability enjoys considerable protection and “disability” is so widely defined and might well cover many illnesses which will keep an employee out of work.
Even if an employee is out of work on certified sick leave it does not follow that any termination of the employee’s employment is unfair. Section 6(4) of Unfair Dismissals Act 1977 allows the dismissal if the employee is not capable of performing the work for which he/she was employed.
Employers need to ensure that fair procedures are afforded to the employee including letting the employee know that there is a danger of the employment being terminated if the attendance record does not improve. The employer must give the employee reasonable opportunities to improve his/her attendance record.
Sickness/Illness Records Prior to Dismissal
There are two types of record dealing with absences from work due to illness:
1. An Underlying Condition
These types of absences can fall into two categories: a) frequent short absences or b) a lengthy absence related to one underlying condition.
In this circumstance the employer should obtain medical advice as to whether the problem will continue and what is the probability of the employee being able to attend work more regularly in the future. Once he does this the employer can decide whether to leave the position open for him or not depending on the needs of the employer.
2. Frequent Intermittent Absences
These absences tend to be for a short period of time, frequent, and for a range of different reasons, not one consistent problem.
The employer must carry out a fair review of the employee’s attendance record, give an opportunity to the employee to improve and give warnings that the employment is at risk if improvement is not forthcoming, and have an up to date medical opinion prior to dismissing. If the employer does this then generally he will have sufficient reason for dismissal.
Burden of Proof
The burden of proof is on the employer in these types of case. He must show
i) The reason for the dismissal was the incapacity of the employee to carry out the type of work for which he was employed
ii) The employee was given an opportunity to put his side of the case
iii) The employee was given notice that his employment was at risk
iv) The reason for the dismissal was substantial.
It is noteworthy also that an employer must have a need to dismiss the employee due to the requirements of the business-there must be sound commercial reasons. It is not enough to dismiss based on poor attendance record alone where the employer is in a position to make alternative arrangements.
What is reasonable will depend on the particular circumstances of the job and business.
An employer is under no obligation to provide alternative work such as light work if the employee is unable to do the type of work for which he was employed.
If an employee is out sick and his behaviour is not consistent with being on sick leave a dismissal on the grounds of dishonesty or misconduct could be justified. But this will depend on the circumstances of each case.
For example someone with a few acres of land has successfully claimed that the bit of light work that he was doing around the farm could not be equated with a full time industrial job from which he was on sick leave. He successfully brought a case for unfair dismissal.
Conflict of interest and competition
An employee owes a duty of loyalty to her employer.
Therefore, an employer can dismiss fairly where that duty is breached by a conflict of interest or the employee is competing against the employer.
In a similar vein, an employer will be entitled to dismiss where the employee behaves in a way that is inconsistent with the employer’s business or brings it into disrepute. This would also include a criminal conviction for an offence in connection with the employment, for example where the reputation of the business is affected.
Where there is the possibility of conflict of interest and where it cannot be resolved the employer may be justified in terminating the contract.
An employee engaging in behaviour which is inconsistent with the business of the employer may also justify dismissal, as will a criminal conviction if the offence is connected with the employment.
Even where fair procedures are followed and the employee deserves a severe penalty the tribunals have asked on many occasions whether the employer has assessed a range of penalties for the offence, not just dismissal.
It is well established that a tribunal cannot take into account facts which the employer was unaware of when dismissing the employee. However the EAT will take matters which later came to light to justify the decision of dismissal in deciding on the the award or remedy for the employee.
So an employee could win his case but be awarded nothing.
The House of Lords in the UK has found that there is no inconsistency between a finding of unfair dismissal with no award of compensation.
Settlement of cases and contracting out
Settlement of cases is possible after negotiations between employer and employee; however, contracting out of the unfair dismissals legislation in the contract of employment or imposing a settlement without negotiation are both void under the legislation.
An employee cannot be expected to contract out of her entitlements under the legislation; this is set out in section 13 of the Unfair Dismissals Act, 1977.
The EAT distinguishes between settlements which follow negotiations (normally with professional advice) and settlements imposed by the employer without legal advice or negotiations. The former are valid while the latter fall foul of section 13 and will be void.
Duplication of claims
Section 15 of the 1977 act prohibited bringing a case for unfair dismissal under the 1977 act and for wrongful dismissal in the Courts. However section 10 of the Unfair Dismissals (amendment) act 1993 changed this.
Where an employee has made a claim under the Employment Equality Acts 1998-2004 and a settlement has been reached or the Equality Tribunal has begun an investigation the employee is not entitled to bring a claim under unfair dismissals legislation.
Redress/Remedies for unfair dismissal
Possible remedies for unfair or constructive dismissal which the EAT (Employment Appeals Tribunal) can order include
- Reinstatement in the job-this is to the position which the employee held prior to dismissal on the same terms and conditions
- Re-engagement-this does not guarantee continuity and payment of lost salary and benefits and may be to the same position or a different one to that held before dismissal
Compensation of up to 104 weeks remuneration can be awarded for unfair dismissal.
(c) payment by the employer to the employee of such compensation (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) in respect of any financial loss incurred by him and attributable to the dismissal as is just and equitable having regard to all the circumstances.
Assessment of Loss
While the EAT can award up to 104 weeks compensation, the employee has a duty to mitigate his/her loss by seeking alternative employment.
The amount of compensation will depend on
- where the responsibility for the dismissal lay
- the steps taken by the employee to mitigate his loss
- any efforts to negotiate the dismissal.
The actual loss of the employee will be closely looked at by the EAT before it makes any compensatory award.
For example in Coyle v Tipper House Trust Ltd UD 904/93 the employee won his case for unfair dismissal but was not awarded anything because the Tribunal held he had suffered no financial loss because he was unfit for work at the time of dismissal and thereafter.
The employee’s loss is financial loss (not injury to feelings etc.) up to a maximum of 104 weeks’ remuneration but this was amended by section 6 of the Unfair Dismissals (Amendment) Act 1993 which has the following effect:
1. if an employee has a nil financial loss (eg he immediately gets employment or is unfit to work due to sickness) the maximum he can be awarded is 4 weeks’ remuneration.
2. social welfare benefits should not be regarded in calculating financial loss.
“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;
The EAT can also reduce the award for any contributory conduct by the employee.
Remuneration in this context includes salary, bonuses, benefits.
The Rights Commissioner and Employment Appeals Tribunal will consider what the employee has done to mitigate his loss and whether he has been able to find work since the dismissal.
To bring a case under the Unfair Dismissals Act, 1977 you will need to have at least one year’s continuous service with the employer and have exhausted all internal grievance procedures of the company.
You must also bring your claim within 6 months of the date of termination of your employment (12 months in exceptional circumstances) and can bring it to a Rights Commissioner who will make a recommendation or you can bring your complaint directly to the Employment Appeals Tribunal who will issue a determination.
This determination of the EAT can be appealed to the Circuit Court by either you or the employer.
However, an employee is expected to mitigate her loss once they are dismissed; a common question for employees at EAT hearings is ‘what did you do once you were dismissed to get another job?’
The taxation of termination payments is as follows:
1. a basic exemption available to all employees on each and ever occasion of termination of employment and
2. a rebate for each full year of service.
An employee must bring a claim for unfair dismissal within 6 months of dismissal; this can be extended to 12 months in exceptional circumstances.
Notice of Termination
One of the terms of any contract of employment will generally be the length of notice required to lawfully terminate the contract. In the event that no such clause is deemed to exist then reasonable notice must be given (this will be determined by the individual circumstances of any contract).
However where an employee is being dismissed for a very serious breach of contract, there is no entitlement to any notice.
The process whereby an employer decides to immediately terminate an employment contract is legally regarded as a summary dismissal. This power may be exercised in circumstances where the contract of employment expressly stipulates or alternatively where the employee is guilty of serious misconduct.
The exact factors which constitute a serious misconduct may be cited in the contract or alternatively where this is not the case, the individual circumstances of the employment may be considered. However, some actions are so nefarious as to be instantly regarded as such including: deliberately destroying the employer’s valuable property, stealing from the employer, and gross insubordination.
In addition to the grounds previously specified an employee’s action representing to the employer that he possessed a certain skill or qualification, which was not in fact the case, would have seriously misrepresented the situation and this action would warrant summary dismissal.
However, inability to do a job may be regarded due to the employer’s inadequate training methods or to inefficient techniques for selecting employees.
Basic Principles of Fair Dismissals in Employment Law in Ireland
Many employers wonder what is considered to be a fair dismissal and what is the correct procedure to adopt when seeking to dismiss an employee.
The Unfair Dismissals Act, 1977 is not of much assistance as it states that a dismissal shall be deemed to be unfair unless there were substantial grounds justifying the dismissal and makes no reference to the procedure to be followed.
6.—(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.
However Courts and tribunals have implied the concept of “fairness” and fair procedures into the Act and the Unfair Dismissals (Amendment) Act 1993 goes a step further by enshrining fair procedures into the legislation:
|“(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so—|
|(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and|
|(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14 (1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section 7 (2) of this Act.”.|
Section 14 of the Unfair Dismissals Act, 1977 states:
14.—(1) An employer shall, not later than 28 days after he enters into a contract of employment with an employee, give to the employee a notice in writing setting out the procedure which the employer will observe before and for the purpose of dismissing the employee.
So, the employer is obliged to let the employee know, within 28 days of commencement of employment, the procedure to be followed when dismissing an employee.
It is estimated that as many as 80% of unfair dismissal cases are lost by employers due to a lack of procedural fairness and not affording due process to the employee.
Courts and tribunals will also consider an employer’s failure to comply with any code of practice drawn up under the Unfair Dismissals (Amendment) Act, 1993.
Case law from the Employment Appeals Tribunal has shown that a dismissal will be held to be unfair if he acts in a manner that is procedurally unfair. However where a dismissal is clearly justified the Tribunal tend to reflect this in its award to the employee on the grounds of the employee’s conduct contributing to his dismissal.
What Courts and tribunals consider to be procedural fairness will be judged on the particular circumstances of each case.
Codes of Practice on Disciplinary Procedures
In the advent of any dismissal procedures being initiated, the employee has a Constitutional right to expect fair procedures.
In essence this means that an employee must be made aware of any evidence against them and should be afforded the opportunity to respond to the allegations.
In the event that a breach of fair procedures is found then the courts can order that the employee be continued to be paid pending a full hearing of the action.
Procedures are necessary to ensure that discipline is maintained in the workplace and that disciplinary measures can be applied in a friar and consistent manner.
The procedures must comply with the principles of natural justice and fair procedures including
1. Details of the allegations or complaints are put to the employee concerned.
2. The employee concerned is given the opportunity to avail of representation.
3. The employee concerned has the right to affair and impartial determination of the issues being investigated, taking into account the allegations or complaints themselves, the response of the employee to them, any representations made by or on behalf of the employee concerned and any other relevant or appropriate evidence factors or circumstances.
It is advisable that allegations be set out in writing, that the source of the allegation or complaint be given or that the employee concerned be allowed to confront or question the witnesses
Disciplinary action may include:
1. An oral warning
2. A written warning
3. A final written warning
4. Suspension without pay ( not advisable)
5. Transfer to another task
6. Some other disciplinary short of dismissal
The Termination of Employment Generally
Leaving aside the question of unfair dismissal, how can the contract of employment be terminated legally?
It is important for any small business to have a basic understanding of the procedures and the rights of employees and employers when it comes to terminating employment.
Contracts of employment may be terminated in a number ways including: agreement, dismissal, repudiation and frustration.
Termination of employment by Agreement
As is the case with all contracts, contracts of employment may be terminated with the consent of both parties.
In certain circumstances a term of the contract may be inserted to deal with the termination of the contract, by means of notice by either party. In this instance it is generally understood that a certain minimum time must have elapsed prior to the term being activated.
An alternative means by which the contract of employment may be brought to an end involves the payment of an agreed sum, made with the intention that the contract shall be terminated forthwith.
In certain circumstances where the interests of both parties are served by the immediate termination of the contract of employment, then no such monies may be necessary i.e. the employer is actively seeking to cut back on staff numbers and the employee has been offered more lucrative terms with another employer.
Termination of employment by Repudiation
A repudiation of the employment contract occurs where either party unilaterally fails to abide by the terms agreed, eg forced resignations, failure to pay remuneration, unilaterally changing the nature of the work..
In circumstances where an employee is the one alleged to have committed a repudiatory breach of the employment contract, for example by means of unambiguously leaving the job at issue, the contract is not deemed to be terminated and it is still at the discretion of the employer to retain the services of the employee.
The reasoning behind this principle is to avoid rewarding employees who seek to prematurely end their contracts deliberately.
Termination of employment by Dismissal
A dismissal for the purposes of employment law is legally defined as the unilateral termination of the contract of employment by the employer.
Where the employer fails to give adequate notice of the dismissal he/ she will be held to have repudiated on the fundamental conditions of any employment contract, payment for work completed.
In circumstances where an employee refuses to accept this repudiation, then he/she may elect to sue for damages for wrongful dismissal.
Note: there is a significant difference between wrongful dismissal and unfair dismissal.
Termination of employment by Frustration
One of the more recent innovations in the law of contract is the legal principal of frustration, whereby circumstances outside of the control of either party mean that the contract comes to an end and any further contractual obligations are set aside.
In the context of the contract of employment, the factors accepted are inclusive of but not limited to: the destruction of the workplace, illness on the part of the employee, employee’s imprisonment or liquidation of the business.
Wrongful dismissal, unlike unfair dismissal, is a common law relief for a dismissed employee and does not require any particular period of service in the job. (To bring a claim for unfair dismissal you need 12 months service.)
A wrongful dismissal case will generally be based in breach of contract by the employer or a breach of an employee’s constitutional rights.
Generally a wrongful dismissal claim will be based on a breach of the employment contract and the relief sought will be damages for breach of contract.
Given that the employment contract can be terminated for any reason provided the proper notice is given winning a wrongful dismissal case will require a fundamental breach of contract.
The employee must prove financial loss as a result of the breach and cannot bring a case both to Court for wrongful dismissal and for unfair dismissal to the Employment Appeals Tribunal; he/she must choose one or the other.
|15.—(1) Nothing in this Act, apart from this section, shall prejudice the right of a person to recover damages at common law for wrongful dismissal.|
|(2) Where an employee gives a notice in writing under section 8 (2) of this Act in respect of a dismissal to a rights commissioner or the Tribunal, he shall not be entitled to recover damages at common law for wrongful dismissal in respect of that dismissal.|
|(3) Where proceedings for damages at common law for wrongful dismissal are initiated by or on behalf of an employee, the employee shall not be entitled to redress under this Act in respect of the dismissal to which the proceedings relate.|
|(4) A person who accepts redress awarded under section 9 or 10 of the Anti-Discrimination (Pay) Act, 1974 , in respect of any dismissal shall not be entitled to accept redress awarded under section 7 of this Act in respect of that dismissal and a person who accepts redress awarded under the said section 7 in respect of any dismissal shall not be entitled to accept redress awarded under the said section 9 or 10 in respect of that dismissal.|
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