Categories
Employment Law Procedures and Policies

Dignity at Work Policies in Ireland-Harassment, Sexual Harassment and Bullying

bullying-at-work

Are you being bullied at work?

Or harassed?

Bullying and harassment are the acts of cowards.

But can be appallingly damaging if you are a victim. And if you are an employer in whose workplace this is allowed to happen.

Bullying, harassment, and sexual harassment claims by employees against employers can be incredibly costly affairs.

And if you are an employee and are suffering from being bullied or harassed it can be equally costly for you in terms of your health.

If you are being bullied at work there is a wide range of legal remedies open to you and you don’t have to suffer in silence.

Let’s take a look at the background to bullying, harassment and sexual harassment in the workplace in Ireland..

While there is no express statutory legal obligation on employers to have policies covering bullying, harassment, and sexual harassment it is strongly advisable.

Because the Safety, Health and Welfare at Work Act 2005 and the Employment Equality Acts, together with the common law, create indirect obligations which amount to pretty much the same thing.

In fact, there are three statutory codes of practice covering this area. These include

  1. the Health and Safety Authority’s code on bullying, “Code of Practice for Employers and Employees on the Prevention and Resolution of Bullying at Work
  2. the Equality Authority’s “Code of Practice on Sexual Harassment and Harassment at Work” and
  3. the “Code of Practice Detailing Procedures for Addressing Bullying in the Workplace” (“the Industrial Relation Act Code-statutory instrument 17/2012).

The obligations and responsibilities imposed by these codes of practice along with the employers’ common law duties of care and so forth really make it imperative for employers to have policies in place.

Employers who do not have a workplace policy in place dealing with these issues will have a hard time defending claims made against him as it will be difficult to show that he has discharged his statutory obligations.

Remember that an employer can potentially face civil and criminal proceedings for failure to provide a place of work that is free from bullying.

The presence (or absence) of workplace policies is admissible in evidence in any civil or criminal proceedings when such a dispute comes before a Court or tribunal such as the Labour Court, Employment Appeals Tribunal or Rights Commissioner.

Note: from 1st October, 2015 all these claims must be brought to the WRC (Workplace Relations Commission) or to civil court.

Personal injuries cases taken against employers will also be significantly influenced by the presence of policies as will legal proceedings seeking to attribute liability to the employer for the illness of an employee.

Learn more about bullying as a health and safety issue in the workplace here.

Dignity at Work Policy

One of the most efficient ways for employers to attend to the obligations imposed by the three statutory codes of practice above is to have (and implement) a dignity at work policy which would address bullying, harassment, and sexual harassment.

It is important to note that this dignity at work policy needs to be adapted to the particular circumstances of the workplace. For example if there is a safety representative or committee in place he/they will have to be consulted.

It must also be effectively communicated to employees and implemented in the workplace with regular reviews to take cognisance of any changes in legislation or codes of practice. And it must be brought to the attention of those in the workplace who have responsibility for implementing it and appropriate training should be provided.

(You may also be interested in reading Codes of Practice from the Labour Relations Commission.)

Having appropriate procedures and policies in place in your work place can minimize disputes and time wasting for both employees and employers.

They can also protect your business from costly disputes and claims and ensure that you are in compliance with the law as an employer.

We provide workplace policies and procedures for employers in the following areas:

  • sick leave/sick pay
  • leave
  • timekeeping and attendance
  • internet and email use in the workplace
  • grievances
  • disciplinary issues
  • mobile phone
  • bullying and harassment
  • breaks
  • confidentiality
  • data protection
  • use of company vehicles
  • and more.

Stress, Harassment, and Bullying at Work-The Legal Remedies

If you are being bullied at work, or are a victim of workplace stress or harassment, there are a number of legal remedies open to you.

The broad categories of causes of action you can pursue would be

  • breach of contract
  • a personal injuries claim for negligence of the employer;  your employer owes you a duty of care which is not discharged properly if you suffer one of these non physical injuries at work
  • health and safety law and the employer’s duty to provide you with a safe workplace
  • unfair dismissals (constructive dismissal)
  • equality law in respect of harassment.

Breach of contract

Your contract of employment will contain either an express or implied term that the employer will maintain your trust and confidence, that he will take reasonable care for the health and safety of his employees, that he will provide a safe system of work, that he will ensure reasonable codes of conduct in the workplace, that employees will be free in the workplace to work free from bullying and harassment.

However a claim for a personal injury arising from stress, bullying or harassment fit more naturally into the domain of tort law (civil wrong). For that reason it is more likely to be pursued as a personal injury claim.

Personal injury claim

There appears to be a trend in taking non physical injury claims as personal injury claims. However, the Injuries Board will not deal with it if it is a psychiatric/psychological injury and will simple issue an authorisation to pursue the claim through the Courts. It will invariably end up on the High Court.

The employer has a general duty of care towards his employees  under the law of torts (civil wrongs). (Learn more about negligence and torts here).

There may be a case for distinguishing between stress caused in the workplace and perhaps arising from personal circumstances. So, if there are multiple causes of stress damages may be apportioned.

Constructive dismissal

The employee can also bring a case for constructive dismissal/loss of earnings if he/she leaves the employment because of the bullying, stress or harassment; however this should be one of the last options to exercise as the burden of proof in constructive dismissal cases fall on the employee.

In Riehn v Dublin Society for the Prevention of Cruelty to Animals [2004] 15 ELR the employee resigned due to stress caused by an excessive workload and was awarded €30,000 in loss of earnings.

The venues that you would pursue the various remedies range from the Rights Commissioner service to the Employment Appeals Tribunal to the Labour Court to the Health and Safety Authority to the Civil Courts.

Criminal prosecution

The Health Safety and Welfare at Work Act, 2005 provides for the criminal prosecution of offences.

Section 78 of the Health Safety and Welfare at Work Act, 2005 provides the penalties:

(i) on summary conviction to a fine not exceeding €3,000 or imprisonment for a term not exceeding 6 months or both, or
(ii) on conviction on indictment to a fine not exceeding €3,000,000 or imprisonment for a term not exceeding 2 years or both.

Section 80 of the act provides for personal liability for directors and officers of the company.

Disability claim

One of these non physical injuries could be classified as a disability under the Employment Equality Acts. If that is the case a claim to the Equality Tribunal may also be possible.

Terry Gorry & Co. Solicitors provides all the necessary policies for responsible employers.

We also represent employees who suffer personal injuries as a result of workplace stress,  harassment and/or bullying. Learn more about sexual harassment here.

Categories
Employment Law Procedures and Policies

Employment Rights Infringed in Ireland? Where Should You Go?

employment-law-rights

Yes, it’s confusing.

Where to go if your employment rights have been infringed?

Well, there is good news due to the new Workplace Relations Bill, 2014.

UPDATE 2015

And there were big changes introduced on 1st October 2015.

Read about the Workplace Relations Commission and the procedure for pursuing employment and equality claims now.

Prior to this there was a wide number of forums available for employees to seek to have their employment rights upheld and vindicated, as set out below.

But now you must go to the new body, the WRC.

******************************************************************************************************************************************

It is important to note that the Employment Appeals Tribunal and the Rights Commissioner service are not courts of law and cannot award your costs of representation.

Both parties will pay their own costs.

These include

• The Rights Commissioner service

• The Employment Appeals Tribunal

• The Labour Court

• The Labour Relations Commission

• The Equality Tribunal

• The Courts

• The Health and Safety Authority

• The National Employment Rights Authority (NERA)

Here is a brief look at these bodies and their remit. There is also a table below which gives a summary of where to go, the time limit, remedies available, and where appeals can be taken.

Elsewhere on this site you will see the occasions when you have to go to one of these bodies or the other as breaches of various pieces of employment law legislation occurs.

Rights Commissioner

The Rights Commissioner service can deal with transfer of undertakings, unfair dismissals (if there is no objection by either party), health and safety, protection of employment, protection of young persons in employment, protection of fixed term workers, adoptive leave issues, carer’s leave, industrial relations, minimum wages, organisation of working time, terms of employment, payment of wages, parental leave, maternity protection, persons reporting child abuse.

Take a look at the Labour Relations Commission website at www.lrc.ie for more information and to download the relevant forms.

rights-commissioner-service

Employment Appeals Tribunal

The Employment Appeals Tribunal (EAT) is the traditional venue for unfair dismissal cases, even though a Rights Commissioner can hear such a case provided there is no objection by either party. The EAT can determine cases itself  in certain circumstances as well as deal with appeals from decisions of the Rights Commissioner.

It can hear cases concerning minimum notice, terms of employment, payment of wages, organization of working time, transfer of undertakings, parental leave, redundancy payments, carers leave, maternity protection, adoptive leave, and more.

Labour Court

The Labour Court is essentially an industrial relations tribunal, notwithstanding it’s name. It’s principal task is to attempt to resolve industrial relations disputes.

Whilst it can hear cases at first instance in certain matters such as organisation of working time, protection of employment, industrial relations, protection of part time employment, protection of fixed term employment, employment equality and minimum wages it sees itself as a forum of last resort and cases should only be referred to it when all other attempts at dispute resolution have failed.

Labour Relations Commission

The Labour Relations Commission is concerned with industrial disputes and providing the Rights Commissioner Service.

The Equality Tribunal

The Office of the Director of Equality Investigation (the Equality Tribunal) is the venue for redress under the Employment Equality Acts. Decisions of the Equality Tribunal can be appealed to the Labour Court.

The Courts

The Civil Courts deal with applications for injunctions, wrongful dismissal, and breach of contract. The can also hear appeals from the other forums above.

The Health and Safety Authority is concerned with occupational health and safety and can prosecute breaches of health and safety law. It also plays a large role in the enforcement of anti bullying and harassment policies and procedures in the workplace.

NERA (National Employment Rights Authority)

NERA’s primary function  is to provide information to employers and employees and to monitor and inspect employment conditions. It can also prosecute breaches and enforce compliance re holidays, organisation of working time, dismissal, notice, working time, and payment of wages.

It’s enforcement services unit can attempt to have determinations of the Labour Court or EAT enforced through the Courts. (However you might be better off engaging the services of a solicitor and pursuing this yourself as it is likely to be quicker.)

Legislation Forum Time Limit Redress/Remedy Appeal
Adoptive Leave Acts, 1995-2005 Rights Commissioner 6 months DecisionDirection20 weeks compensation Employment Appeals Tribunal
Carer’s Leave Act, 2001 Rights Commissioner 6 months DecisionGrant of Leave26 weeks compensation Employment Appeals Tribunal
Civil proceedings Civil Courts 6 years DamagesInjunction
Data Protection Acts, 1988 & 2003 Data protection commissioner Na Enforcement noticeProhibition noticePenalties Circuit CourtHigh Court
Employment equality acts, 1998-2007 Equality tribunal 6 months Equal payArrears of remunerationUp to 2 years compensation Labour Court
Equal Status Acts, 2000-2004 Equality tribunal 6 months DecisionCompensation up to €6,349An order Circuit Court
European Communities (protection of employment) regulations, SI 488/2000 Rights commissioner 6 months DecisionCompensation up to 4 weeks remuneration EAT
European Communities (protection of employees of transfer of undertakings) SI 131/2003 Rights commissioner 6 months DecisionCompensation up to 4 weeks remuneration (breach of regulation 8) EATCompensation if breach of any regulation other than 8
Industrial Relations Acts, 1946-2004 Rights commissionerLabour Court RemunerationRecommendationDetermination Labour Court
Maternity Protection Acts, 1994-2004 Rights commissioner 6 months DecisionDirectionsGrant leaveCompensation up to 20 weeks’ pay EAT
Minimum Notice and terms of employment acts, 1973-2001 Employment appeals tribunal 6 months Up to 8 weeks’ pay compensation High Court on a point of law only
National Minimum Wages Act, 2000 Rights commissioner 6 months DecisionArrearsReasonable expensesEmployer to remedy breach Labour court
Organisation of Working Time Act, 1997 Rights commissioner 6 months DecisionCompensation up to 2 years remuneration Labour court
Parental Leave Acts, 1998-2006 Rights commissioner 6 months DecisionGrant of leaveCompensation up to 20 weeks’ remuneration EAT
Payment of Wages act, 1991 Rights commissioner 6 months DecisionCompensation up to 2 years remuneration EAT
Protection of Employment Acts 1977-2007 Rights commissioner 6 months DecisionCompensation up to 2 years remuneration Labour Court
Protection of Employees (fixed term work) act, 2003 Rights commissioner 6 months DecisionReinstatement/re-engagementCompensation up to 2 years compensation Labour Court
Protection of Employees (employers’ insolvency) act 1984-2004 Employment appeals tribunal 6 weeks Declaration that Minister is to make payment and specify amount High court
Protection of young persons (employment) act, 1996 Rights commissioner 6 months RecommendationCompensation as is equitable Eat
Redundancy Payments Acts, 1967-2007 Employment appeals tribunal 6 months Determination as to entitlement to lump sumEntitlement to rebates High court on a point of law
Safety, Health and welfare at work act, 2005 Health and safety authority Na Improvement noticeProhibition noticeDirection re improvement plan District court
Terms of employment (information) act, 1994 and 2001 Rights commissioner 6 months Recommendation to correct statementCompensation up to 4 weeks remuneration Eat
Unfair dismissal acts, 1977-2007 Rights commissionerEatCircuit courtHigh court Six months Recommendation from rights commissionerEat may award reinstatement, re-engagement or compensation of up to 2 years remunerationCircuit court may award damages for wrongful dismissal EatCircuit court

 

NOTE: most decisions can be appealed to the High Court on a point of law only.

 

Categories
Fixed Term Contracts The Employment Contract Videocast

The Employment Contract in Irish Employment Law-The Facts You Should Know

Employment contract
Employment contract

It’s true, you know.

The foundation stone of the employer/employee relationship is the employment contract.

So, it’s critical from day one, and becomes even more important if there is a dispute.

It is vital that it is drafted correctly, especially from the employer’s viewpoint.

Before we go any further, though, you need to know one thing: it is a legal requirement to give an employee a written statement of certain terms and conditions of employment within 2 months of the employee starting the job.

If you are an employer, therefore, you have a legal obligation to give a written contract to your employees. (Learn what must be included in a contract of employment)

This extensive article looks at the contract of employment in Irish law and some of the critical issues which arise in the employment relationship.

It will also look at

  • terms of employment,
  • the express terms you should include
  • who is a “deemed employee” and why it matters
  • changing a contract of employment,
  • termination of the contract,
  • minimum notice periods,
  • the difference between a contract of service and contract for services,
  • issues prior to employing someone
  • and more.

The employment contract is the source of much misunderstanding and strife between employers and employees.

Even though legislation has come to play a huge role in the employment relationship the legal relationship between employer and employee is rooted in the law of contact. There is no requirement in law that the employment contract be in writing.

However, there is an obligation on the employer under the Terms of Employment (Information) act, 1994 to give employees a written statement of certain terms of employment (see below).

This legislation does not apply to employees with less than one months’s service or to employees who are expected to work less than 8 hours per week.

Who is an Employee in Irish Law?  Is an Employment Contract Necessary?

It is vitally important for both employers and employees to understand who is considered to be an employee in Irish law versus the worker being an independent contractor.

Clearly an independent contractor will not enjoy the benefits of Irish employment legislation.

Contract of service or contract for services?

The vital difference is that an employee works under a contract of service while an independent contractor supplies his/her labour and/or services under a contract for services.

The status of the worker, in a dispute situation, will be determined by legal interpretation and some basic rules. Important decided cases in this area include

  • Ready Mixed Concrete v Minister of Pensions and National Insurance[1968] and
  • Henry Denny & Sons (Ireland) limited (t/a Kerry Foods) v Minster for Social Welfare[1998]
  • Minister for Labour v PMPA Insurance Co. Ltd.

It is worth noting that regardless of the label put on the relationship by the parties the Courts will look at the facts of the situation and decide what type of contract exists. In making it’s decision the Court will be influenced by:

  1. Whether there is written evidence of terms
  2. Whether there is control over the worker as to how, what, when, why, and how the worker works
  3. Whether the employee provides his own labour/skill to the “employer” and cannot assign his duties to another.

The key areas therefore which a Court or tribunal will consider will be the aspect of personal service, the degree of control over the worker, and any written terms of the contract.

A Deemed Employee

A deemed employee situation will arise where a person is working for an employer through another agency or body.

That person will be a deemed employee of the person for whom they are doing the work. This situation will commonly arise where employment agencies place people in a work environment.

The employment agency must be one as defined by the Employment Agency Act, 1971 but this act defines an employment agency very widely. It is important to note though that the notion of a deemed employee only applies in relation to the application of specific statutes which provide for protection for a deemed employee.

However it can be a dangerous situation where a business does not know of their potential liability to a deemed employee until a problem occurs and the deemed employer can be held responsible for a dismissal over which he had no control or knowledge.

You might also be interested in the law surrounding temporary agency workers.

 Partnerships

Partners are not employed by or with each other but may, as a partnership, have employees.

Shareholders/Directors

Ownership of a shareholding in a company does not prevent the owner from being an employee of the company. But a controlling shareholder may have difficulty establishing that he was an employee.

Prior to Contract

Before entering into a contract of employment there are three areas that an employer needs to consider carefully.
These areas can be broadly categorized as follows:

  1. Advertising the position
  2. Interviewing for the job
  3. Conditions precedent.

Job Advertising

Advertising the job can be fraught with danger for the employer as it is easy to fall foul of employment equality legislation.

In addition the wording of the advertisement can be held to form part of the subsequent contract of employment.

Interviewing for the job

Employers need to be careful not to ask questions which fall foul of the Employment Equality Acts, 1998-2004 and avoid asking questions that could be considered discriminatory on the grounds of age, marital status, sex, and the other grounds referred to in employment equality legislation.

Keeping note of the interview is a smart practice as what is said at interview (by both parties) can be held to form part of the subsequent contract.

Conditions precedent

The employer should make a job offer conditional on certain conditions being fulfilled, depending on the position.

These conditions may cover Garda vetting, clean driving licence, health to do the job, suitable references, registration with professional bodies, and others-this will depend very much on the nature of the work and position.

The areas of references and medical examinations can cause problems and the key principle always for the employers is that you have the employee’s consent to take up references and medical reports/evidence.

The Data Protection Commissioner has held that you need written consent to take up references. However there is no general requirement in law that an employer furnish a reference.

Medical evidence?

There is no reason why a prospective employee should not be asked to undergo a medical prior to a job offer being made even though it is common for employers to only require a medical examination after the offer has been made and accepted.

Union membership? 

A pre-contractual closed shop is lawful under the Common law and European law.

Terms of Employment

The contract of employment in Ireland is made up of both express terms and implied terms with the Terms of Employment (Information) Act, 1994 stipulating that certain basic information must be given to the employee in writing.

This includes the names and addresses of both employer and employee, the place of work, the title of the job, pay, any terms relating to sick pay, periods of notice and many other basic details.

Implied Terms

In every contract of employment, written or otherwise, there are 4 categories of implied terms which fall under the headings of
a) terms implied by custom/practice (depending on the industry)

b) terms implied by statute (right to redundancy, right not to be unfairly dismissed, right to notice, right not to be discriminated against as per Employment Equality Acts, right to breaks, annual leave, holidays as per Organisation of Working Time Act, 1997, protective leave including maternity leave, payment of wages as per Payment of Wages Act 1991, atypical workers such as part timers and fixed term workers protected by the Protection of Employment Acts, health and safety provisions as per Health and Safety at Work Act 2005)

c) terms implied by law (employers duty of care and employees duty of trust and confidence)

d) collective agreements in unionized employment.

Express Terms of Employment

The express terms of employment are those terms clearly agreed between the employer and employee and can be oral or in writing.

The principal express terms that should be included in any document setting out the terms and conditions of a contract are set out in this article.

employment-contract

Terms of Employment (Information) Acts

The Terms of Employment (Information) Acts 1994-2001 provide that employees must be given a statement, signed by the employer, of certain of their terms and conditions of employment within 2 months of their employment.

What must be included in this statement?

  • The names of the employer and employee
  • The address of the employer
  • The place of work (This can be a thorny issue if you need the employee to move to another location or provide geographical mobility in the course of employment and it has not been provided for in the contract of employment)
  • Hours of work (this needs to be clear about shifts, overtime, work breaks, lay offs, short time, and so forth)
  • The job title or nature of the work for which they are employed (Drafting this too widely can give problems when it comes to redundancy; drafting too narrowly can lead to practical, on the ground difficulties)
  • The date of commencement of employment (when does employment start is an important question as most statutory entitlements will be dependent on the length of service)
  • The duration of the contract and expiry date if the contract is a fixed term/temporary contract
  • The rate of pay or method of calculation (the salary package and the breakdown between basic salary, commission, bonuses, allowances, and so forth should be set out)
  • How often/the intervals at which pay will be paid
  • Terms and conditions re paid leave (what is the position re holidays and is there extra days over and above those set down by statute in the Organization of Working Time Act,1997)
  • Terms and conditions re illness/sickness or injury and pensions (what is the situation re sick pay; there is no general right to be paid while out sick but the contract can provide for it expressly or custom and practice of the industry/job can imply it but this may need to be proven if questioned)
  • The period of notice obliged to be given by both parties
  • If any collective agreement affects the contract
  • Times of breaks/rest periods both daily and weekly
  • The company’s pay reference period.

If the employer fails to provide this statement to the employee a claim can be made to the Rights Commissioner service who may order compensation of up to 4 weeks remuneration and require the employer to give the statement of terms to the employee.

In addition to the above statutory minimum terms and conditions it is prudent and advisable for the employer to include other terms in the contract dealing with

  • Short time/lay offs
  • Illness pay
  • Retirement age
  • Time off work
  • A probationary period (cannot exceed one year)
  • Bullying and harassment procedures
  • Grievance and disciplinary procedures (a specified disciplinary procedure should be in place and a copy of this together with the grievance procedure should be given to the employee along with the contract/letter of offer)
  • Company car
  • Share options
  • Retirement age (should be specified by the employer)
  • Any restrictions re competition and setting up against the employer in the future using trade secrets/contacts. Note that common law implies a duty of loyalty in the employment contract; common law also protects confidential information and trade secrets in the absence of an express or written term in the contract covering this area. However there is no common law barrier to soliciting for business done by the employer once the employee leaves the employment.
  • Email and internet use

In addition to the above, the employer must give new employees, within 28 days of starting employment, a written summary of the procedures to be used should it be necessary to dismiss them.

As an employer you need to be clear what terms and conditions are obligatory in the employment contract as a result of the Terms of Employment (Information) Acts and the additional terms and conditions which might be advisable and prudent for the employer.

Legal advice is recommended as the consequences of a badly drafted contract with an employee will be far more costly than the cost of having a properly drafted contract of employment by a legal professional.

Termination of the Employment Contract and Minimum Notice Periods

Providing for termination of the employment contract is an important term of the contract of employment, one which the employer needs to take care over, particularly the notice period.

There are a number of important considerations to think about such as

  1. The notice period
  2. The reason(s) for termination.

Notice period

An agreed notice period is strongly recommended in all contracts of employment.

If none is specified then the employer is obliged to give “reasonable” notice. Reasonable notice will vary from contract to contract.

Minimum Notice Periods for termination

The statutory minimum notice periods on termination of employment are as set out in the Minimum Notice and Terms of Employment Acts 1973 to 2001 which are based on years of service of the employee.

Service                                        Notice
13 weeks – 2 years                    1 week
2 – 5 years                                   2 weeks
5 – 10 years                                 4 weeks
10 -15 years                                6 weeks
over 15 years                              8 weeks.

Employees are entitled to the above notice periods or pay in lieu except in cases of dismissal for misconduct where the employer is entitled to terminate the employment immediately without notice.

The employer on the other hand is entitled to at least 1 week’s notice from the employee, but this will depend on the contract.

Note: Both the employer and employee have the right to terminate the contract of employment without notice due to the misconduct of the other party.

Any claims in respect of breaches of the Minimum Notice and Terms of Employment Acts go to the Employments Appeal Tribunal which can award compensation to the employee for not receiving proper notice. (Note that if the employee was sick or on strike during the notice period no compensation is payable)

Reason for termination of the employment contract

Both employer and employee have a broadly similar right under common law to terminate the contract of employment. If notice is not provided for in the contract then “reasonable” notice should be given.

“Reasonable notice”, in the absence of a stipulated period of notice, will be decided by

  • Custom and practice
  • Length of service
  • Age and experience of the employee
  • Job role
  • The particular facts of the case.

It is recommended to the employer that a notice period always be stipulated in the contract.

Giving notice of termination of employment contract

Some important points concerning notice:

  1. Notice can be given at any time including during leave or illness leave but not during maternity leave;
  2. It must be clear and unambiguous
  3. It can be in writing or orally (unless it is specified in the contract that it be in writing)
  4. The Minimum Notice and Terms of Employment Act, 1973 sets out minimum notice periods depending on the length of service
  5. The minimum period of notice in all cases is one week
  6. If an employee is dismissed for misconduct he loses his entitlement to notice under the Minimum Notice and Terms of Employment Act, 1973.

Damages following dismissal

In general punitive damages allowed following a dismissal will be restricted to remuneration to which the employee was entitled and not for any distress caused by the manner in which the dismissal has occurred.

Changing a Contract of Employment

Changing or varying the terms and conditions of a contract of employment can only be done with the agreement of the parties. It cannot be unilateral.

An employer is leaving him/herself open to a successful claim if he imposes changes to a contractual entitlement unilaterally. It is worth noting that agreement can be express, implied, or by acquiescence.

However an important distinction should be made between a work practice and a contractual provision or term of the contract.

Variation by the parties

Sometimes variation by one of the parties becomes necessary to give the contract commercial efficacy. If a term is so obvious that common sense would dictate that it must be included in the contract the Courts will imply it into the contract.

hanging-contract-of-employment

Variation by Trade Unions or a 3rd Party

What about variation of the terms of employment through the trade union negotiating on behalf of the employee? Generally employees will accept changes negotiated on their behalf by their trade union.

However a trade union cannot bind those members who have made it clear that they will not be bound by the changes-see Goulding Chemicals Ltd v Bolger [1977], Irish Supreme Court.

Take a more detailed look at the legality of trade union negotiated variations of contracts.

Custom and Practice

Some contracts of employment will have terms of employment implied into them by custom and practice of the employment or industry.

For this to happen the custom must be

“so notorious, well known and acquiesced in that the absence of agreement in writing it is to be taken as one of the terms of the contract between the parties” O’Reilly v Irish Press [1937]

Contractual Right to Vary

Many employment contracts will contain a term reserving the right to the employer to vary or alter the terms and/or conditions of the contract.

However this does not give the employer the right to make unreasonable changes and courts and tribunals will always look to see if the change was necessary and reasonable.

It is important to note that if an employee does not object to a change and works away under the changed terms he/she may be held to have implicitly agreed to the changed terms and conditions.

On the other hand an employee could argue that he/she was simply being co-operative and this did not imply approval of the change. The best way for an employer to counter this is to bring any proposed change to the attention of the employee; if he/she does not he cannot slip changes in “under the radar” and claim acquiescence by the employee.

It is worth noting also that where an employer is entitled in law to make changes to contracts of employment employees are still entitled to engage in trade disputes to attempt to bring about change. This is the case even in companies where unions are not recognised as the Labour Court can be asked by the union to investigate the dispute.

 Co-Operation and not variation

A distinction must be drawn between an employee co-operating in a change and acquiescing to a contractual variation. Courts will not allow employers to slip in changes unknown to an employee.

Trade Disputes

Even where the employer is legally entitled to take certain action employees may engage in a trade dispute and seek to persuade to bring about the changes they require.

Even in a “non union” employment the Labour Court can investigate a trade dispute where it is not the practice of the employer to negotiate with a trade union.

Collection agreements and contracts of employment? Read about the legality of collective agreements and the tests applied.

Amending the Terms of Employment in Ireland-historically

Terms and conditions of employment-are employers entitled to unilaterally vary such terms and conditions?

In short, the answer is no.

Where an employment contract does not expressly enable the employer to vary the terms of employment, employers may either:

1. Obtain the employee’s express agreement to the change (recommended);
2. Terminate the employee’s employment on due notice and offer re-engagement on new terms (not recommended); or
3. Attempt to impose the change unilaterally (not recommended).

Options 2 and 3 above are not recommended and leave the employer at significant risk to a successful claim for unfair/constructive dismissal/non payment of wages claims.

Unilateral variation of an employee’s terms and conditions of employment to the employee’s detriment may give rise to:

1. A claim of constructive dismissal under the Unfair Dismissal Acts 1977-2007 or at common law;
2. A claim for damages for breach of contract;
3. A claim in respect of an unlawful deduction under the Payment of Wages Act 1991;
4. A “trade dispute” under the Industrial Relations Acts 1946-2004,
5. Industrial relations issues, and
6. Injunctive proceedings to prevent the unilateral variation.

What is contractual, and not merely a work practice, may not be varied unilaterally.

Such variation must be agreed between the parties regardless of whether the term is express or implied.

In practice, whether or not an employee benefit constitutes a term or condition of employment may be somewhat academic if changing it is likely to give rise to industrial relations issues and human resources problems.

In Neville v Waters Munster Glass Ltd RP558/2003, the claimant, having refused to accept a reduction in salary and to work a reduced three day week, was consequently made redundant. Although the claimant argued that he had been unfairly dismissed, the tribunal held that a genuine redundancy situation existed.

It is clear from a UK case, GAP Personnel Franchises Ltd v Robinson UK EAT/0342/07, that where employees do not accept a unilateral variation by the employer, especially one that has an immediate impact (e.g. the reduction in pay or benefits), they should make it clear, preferably in writing, that they do not accept the change and are working under protest. Otherwise the employee may eventually be held to have implicitly accepted the change.

Amending terms of employment in Practice

In the course of varying terms and conditions employers should:
1. Maintain clear communication with employees;
2. Provide employees with reasonable notice of any variation to terms and conditions;
3. Be able to explain why the change is necessary and inform the employees of the alternative (i.e. a more formal re-structuring and ultimately possible job losses);
4. Consider whether the new terms can be imposed in stages as opposed to implementing all variations at once. This may help to ease the transition and allow employees to plan for the change; and
5. Consider whether an incentive can be suggested to assist employees in accepting the change. This does not necessarily have to be a financial benefit.

Collective agreements and contracts of employment-what is the legal position?

Employers’ Obligations and Contracts

Employers need to ensure that they have robust, legally sound contracts of employment in place for all of their staff.

There are 4 main reasons for doing so:
1. it is a legal obligation
2. you will need them for a NERA inspection
3. a well drafted contract will minimize the opportunities open to employees to bring costly and damaging claims against you as an employer
4. it makes good business sense to have clarity between both employer and employee as to their obligations and responsibilities.

We specialize in drafting employment contracts for employers in Ireland.

No matter how small or big your business or school is, we can draft contracts for your particular circumstances.

And we can review and advise on your existing contracts and ensure that you will have nothing to worry about should you be chosen for a NERA inspection.

Our contracts typically include the following terms:

  • date of employment
  • appointment and duties
  • job specification
  • location
  • probationary period
  • hours of work
  • breaks
  • wages
  • annual leave
  • pension
  • retirement
  • absence
  • illness/sick leave
  • maternity, paternity, force majeure leave
  • confidentiality
  • grievance, bullying, harassment, dignity at work, disciplinary
  • internet and email
  • data protection
  • termination-notice and pay on termination
  • health and safety
  • short time and layoffs
  • changes to the terms of employment.

However each employer’s situation is different and each employee is different.

So every contract we draft is an individual contract as opposed to a one size fits all affair.

Learn more about how we help employers here.

Categories
Unfair Dismissal

Unfair Dismissals and Constructive Dismissal In Ireland-The Facts You Should Know

unfair-dismissal-ireland

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

Unfair dismissal in Ireland is covered 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.

(Note: the Unfair Dismissals (Amendment) Act, 1993 is also vitally important as it made significant changes to the Unfair Dismissals Act, 1977)

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. (There is authority for the proposition that holiday leave is not included in the calculation of service in establishing whether the employee has one year’s service or not (see Twomey v O’Leary Office Supplies Ltd [1997] ELR 42) I believe, however, that it would be safer from an employer’s perspective to count annual leave as part of continous service ).

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 maternity leave, 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

  1.  the contract is in writing
  2. the contract specifically excludes the legislation
  3. 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.

Resignations

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:

  1. A claim to a Rights Commissioner or Employment Appeals Tribunal within 6 months (12 months in exceptional circumstances) or
  2. 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

  1. He was dismissed
  2. He had a contract (oral or written)
  3. He had 1 year’s continuous service (service under the age of 16 years is not counted)
  4. 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.

Unfair Dismissals

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

(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:
(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
(b) the conduct of the employee,
(c) the redundancy of the employee, and
(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.

Section 6(4) Unfair dismissals act, 1977

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:

  1. has the employer an honest belief as to the employee’s incompetence?
  2. 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

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

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.

2) Qualifications

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.

3) Redundancy

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

Redundancy Defence

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.

4) Illegality

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”.

If you are an employer and you are relying on “other substantial grounds” you would be well advised to reconsider the situation and get professional advice before dismissing on this ground.

Fair Procedure

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):

(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.”.

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

  1. The procedure is fair and rational
  2. The basis for the disciplinary procedure is clear ie the employee  knows what he has done wrong
  3. The penalties are clear
  4. 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.

Warnings

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.

Targets

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.

Suspension

There are two types of suspension permissible:

  1. to remove the employee while an investigation is being carried out and
  2. 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.

Disciplinary Hearings

The Supreme Court decision in Connolly v McConnell [1983] 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.

Criminal investigations

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.

Penalty

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.

10.—Section 15 of the Principal Act is hereby amended by the substitution of the following subsections for subsections (2) and (3):
“(2) Where a recommendation has been made by a rights commissioner in respect of a claim by an employee for redress under this Act or the hearing of a claim by the Tribunal has commenced, the employee shall not be entitled to recover damages at common law for wrongful dismissal in respect of the dismissal concerned.
(3) Where the hearing by a court of proceedings for damages at common law for wrongful dismissal of an employee has commenced, the employee shall not be entitled to redress under this Act in respect of the dismissal to which the proceedings relate.”.

Discriminatory dismissals

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

  1. Reinstatement in the job-this is to the position which the employee held prior to dismissal on the same terms and conditions
  2. 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
  3. Compensation.

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?’

Taxation

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.

Time limits

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.

Section 6 Unfair Dismissals Act, 1977

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 5 Unfair Dismissals (Amendment) Act, 1993

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.

Procedural Fairness

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

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.

Section 15 of the Unfair Dismissals Act, 1977 states:

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.

Have you a case for unfair dismissal?

If you have lost your job and feel you may have been unfairly dismissed?

Here are our services for employees.

Workplace Relations Commission Adjudiction, June 2018

You will find a comprehensive summary of unfair dismissal in a June, 2018 case, ADJ-00003961.

Categories
Podcast Redundancy Videocast

Redundancy in Ireland-What Employers and Employees Ought to Know About Non Collective Redundancies

redundancy in ireland

Let’s admit it.

Redundancy is not a pleasant topic to discuss.

But not discussing it, and not understanding your obligations if you are an employer, or entitlements as an employee can prove very costly.

Therefore,  this piece about redundancy in Ireland will look at:

  • what is a redundancy,
  • redundancy payments,
  • where to access a redundancy payment calculator,
  • fair selection for redundancy
  • short time and lay offs
  • disentitlement to redundancy.

Hopefully it will give both employers and employees a good overview of non collective redundancies.

An employer’s obligations in redundancy situations will depend on whether a collective redundancy is proposed or it is a “normal” redundancy (non-collective redundancy) in a small business in Ireland.

The focus of this piece is non collective redundancies; elsewhere on this site you can read about collective redundancies.

Firstly let’s take a look at what a redundancy is..

What is redundancy?

The definition of redundancy in Ireland is set out in the Redundancy Payments Act 1967 and amended by the Redundancy Payments Act 1971 and 2003-

an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or              

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or            

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or      

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or         

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

Key factors in redundancy: impersonality and change

There are two critical factors to be gleaned from this definition-

  1. The redundancy should arise from the doing away with the job, not the person. This feature of impersonality is necessary in a genuine redundancy situation.
  2. Change-the change must arise as a result of change in the workplace which might range from a closing down of the business to a simple reduction in number of employees.

Required period of employment

The required period of employment is 104 weeks of continuous employment.(Section 7(5) Redundancy Payments act 1967).

Dismissal by the employer

To qualify for a redundancy payment, the employee must be dismissed.

This does not occur if the employee’s employment is renewed or re-engaged by the same employer and the terms and conditions do not differ from the previous one.

So if an employee resigns, redundancy payments are not available to him/her.

Short time/lay offs

You can be placed on short time or laid off where the employer is unable to provide work but only where the employer reasonably believes that the lay off will not be permanent.

Short time is the situation where the employee’s pay is less than one half of his normal weekly pay or his hours of work are reduced to less than half his normal weekly hours.

The employer is generally obliged to pay the employed during this time although there are exceptions to this general rule depending on custom and practice in specific situations.

There is no general right to lay off employees and not pay them; in fact, without an implied or express term in the employment allowing lay off the employer may well be in breach of contract.

The right to lay off without pay may be permissible in pretty limited circumstances established through custom and practice.

However  EAT decisions in the past have held that the custom and practice in Ireland since the introduction of the legislation is that there is no obligation to pay during lay off.

You can learn more about the EAT’s decisions in relation to payment during lay off  in this article.

An employee who has been laid off for 4 or more consecutive weeks can give a written notice to his employer indicating his intention to claim redundancy.(Section 12 Redundancy Payments act, 1967).

The employer can then give the employee a counter notice which must inform the employee that their employment will recommence not later than four weeks after the notice and this period of employment will be at least 13 weeks without lay off or short time.

Disentitlement to Redundancy

An employee is not entitled to a redundancy payment in the following circumstances:

  • Termination of the employment contract due to misconduct
  • If the employer offers a new contract of employment or to renew his existing contract of  employment (see note)

Note: the new contract or the offer of a renewed contract must contain the same terms and conditions as the previous contract of employment and must involve the same place and capacity as the previous contract.

If these are different, then the offer of employment must be ‘suitable’ in relation to that employee. If the employee unreasonably refuses an offer of employment then she will be disentitled to a redundancy payment.

These types of cases often involve offers of employment at a different location and each case will be judged on its merits as to whether the offer is reasonably or unreasonable refused by the employee.

See section 15 of Redundancy Payments Act, 1967.

Notice of Redundancy

An employee who is entitled to a redundancy payment (service of at least 104 weeks) are entitled to at least 2 weeks notice.(Section 17 Redundancy Payments Act, 1967). However, longer serving employees have greater entitlements under the Minimum Notice and Terms of Employment Act, 1973. 

In addition contractual notice provisions must be complied with to avoid a claim for wrongful dismissal.

A copy of the  RP 50 form is given to the employee; this form combines RP 1 (notice of redundancy), RP 2 (certificate of redundancy), RP 3 (rebate claim), and RP 14 (employee’s application for a lump sum from the Social Insurance Fund).

The employer then sends the RP 50 form to the Minister for Enterprise, Trade and Employment to obtain a rebate of the payment made.

UPDATE

There is now no need to issue RP 50 forms as no redundancy rebate applies where the date of dismissal by reason of redundancy occurs on or after 1st January 2013. Please refer to this page on the Department of Social Protection website for the procedure.

Collective Redundancies

In a collective redundancy situation there will be additional requirements on the employer imposed by the Protection of Employment Acts 1977 to 2007 and various regulations and other legislation.

As indicated already in relation to unfair dismissals, redundancy is a defence to a claim for unfair dismissal.

Genuine Redundancies

However it must be a genuine redundancy within the terms of the Redundancy Payments Acts 1967 to 2003 which sets out 5 redundancy definitions/situations.

These are:

1. The employer has ceased or intends to cease the business for which he employed the employee;

2. The requirements of the business have changed to the point where the employee is no longer required for the particular work for which he was employed;

3. The employer intends carrying on business with fewer or no employees;

4. The employer has decided the work which is being done by the employee will be done in a different way in the future and the redundant employee is not qualified or trained;

5. The employer has decided that the work will be done by another employee who is capable of doing other work for which the redundant employee is not trained or qualified.

Conduct of the employer in carrying out redundancies

In non-collective redundancies in Ireland there are no specific procedural requirements set out to carry out a redundancy dismissal.

redundancy-payments

What the employer must be very aware of though is the Unfair Dismissals (Amendment) Act, 1993 as this act holds that if the conduct of the employer is unreasonable in carrying out a redundancy then it may amount to unfair dismissal.

So it is vital that the employer act reasonably in carrying out a redundancy and a principal factor in how reasonable the behaviour was will be how the employer selected the employee(s) for redundancy and whether there were other alternatives to redundancy such as alternative employment or some other type of work in the employer’s business.

From an employer’s perspective it is important to be able to point to the reasonableness of his conduct when faced with the necessity for redundancy.

As well as the reasonableness of the employer’s conduct in making a position redundant, she would be well advised to carry out the following steps:

  1. The employers should consider all options before deciding on redundancy. Are there alternatives? The employer should record this decision making process.
  2. Is alternative employment an option for the employee?
  3. Has the selection for redundancy been fair? (see below)

Even though it is not a procedural requirement from a legal perspective it is good practice for the employer to hold meetings and discussions to explore any alternatives and it would be prudent for the employer to make a record of these discussions and proposals.

The ability of the employer to be able to point to a paper trail of how the decision to carry out redundancies was arrived at can prove invaluable at a later date, for example at an EAT or Rights Commissioner hearing (now,  the Workplace Relations Commission service deals with these claims).

Because the onus is on the employer to justify the selection for redundancy.

 Fair Selection for Redundancy

The key point for an employer is to be able to demonstrate that people were selected fairly for necessary redundancies and that the employer acted reasonably at all stages of the process. This obviously only arises in circumstances where the employee is made redundant and there are other employees in similar employment who were not dismissed.

The selection of employees for redundancy has led to many employers paying quite a high price at a later date before the Employment Appeals Tribunal and unfortunately there are no criteria laid down in legislation for the selection of employees.

It is up to the employer to set her own criteria for selection for redundancy.

Some factors to be considered by the employer should include

  • Attendance record
  • Ability
  • Disciplinary record
  • Skill level

While many employers employ a policy of “last in, first out”.

If there is a procedure in place in the workplace to deal with redundancy, as there is with most unionised workplaces, the employer will have to be able to show that the procedure was used to select each employee made redundant.

Nevertheless, no matter what criteria are used, the employer may well have to stand over his/her selection procedures at a later date and being able to objectively justify his choice will be his best defence.

Fair Procedure and Reasonableness

Fair procedure is essential when selecting employees for redundancy. Clear communication to ensure staff are aware of developments is also vital.

Employees should be encouraged to come forward with their own ideas as to how the business might be run more efficiently and consideration should be given to temporary layoff or short week options. Any ideas brought forward by the employees to reduce costs should be given fair consideration.

Objective and fair selection criteria should be used to select what positions are to be made redundant and regard may be had as to whether the dismissal was an unfair one or not by looking   to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, (Section 6 Unfair Dismissals Act 1977 (as revised)).

When applying criteria to assist with selection for redundancy it is up to the employer to  choose, and he may apply different criteria for different parts of the business. The onus is on the employer to be able to justify the criteria chosen on objective grounds.

A good way for an employer to approach a scenario where employees might be seen to be equally at risk is to use a ‘skills matrix’ which involves setting out the skills needed to keep the business going. Then, the employees at risk of redundancy are measured against this matrix and those who score lowest are made redundant.

This is a legally defensible way to ensure a redundancy decision is not later held to be an unfair dismissal on the grounds of unfair selection.

Decided Redundancy Cases

Here are two cases concerning redundancy which should be instructive.

Coincidentally they both involve solicitor’s firms losing out.

The first case involved fair procedure and the reasonableness of the employer in terminating the employment.

 The Tribunal is mindful of the fact that the burden of proof rests with the respondent to show that it has acted fairly and reasonably in all the circumstances surrounding the termination of this employee.

On balance the Tribunal accepts that the telephone call from France during which the claimant was told that a decision had been made to make him redundant was an unfair way to treat a loyal and exemplary employee. No forewarning was given and no alternative was considered.

In considering compensation to be awarded the Tribunal acknowledges that the respondent’s Principal’s intention was to become a sole practitioner which the claimant did confirm in evidence. The Tribunal accepts therefore that with more consideration a lawful and fair termination of employment would have been implemented ultimately.

The Tribunal therefore awards €17,984.00 payable by the respondent under the Unfair Dismissals Acts, 1977 to 2007.

Brendan Campbell and Anthony Conleth Pendred Practicing As A.C. Pendred And Company Solicitors

The second case involves unfair selection for redundancy:

The Tribunal found that no meaningful consultation took place between the respondent and the claimant. The respondent failed to give advance warning of the nature of the meeting of 1 May 2013 when the claimant was informed that the decision had been made to make her redundant. The claimant was not afforded an appeal procedure. Furthermore, she was not offered the opportunity of having representation at the aforementioned meeting and at the follow-up meeting on 24 May 2013. There were no written notes or memos of the said meetings. There was no attempt to secure a voluntary redundancy. No consideration was given to an alternative to redundancy, such as a pay cut or reduced hours. The respondent did not consider a last in, first out policy. At the meeting on 24 May 2013 the claimant was offered a full time position in the Sligo office. This was not a viable option due to her domestic situation, and Sligo being 48km from the claimant’s home.

The respondent acted unreasonably in failing to apply objective criteria to the selection of the claimant for redundancy.

The Tribunal finds that the claimant was unfairly selected for redundancy and accordingly unfairly dismissed. The Tribunal awards the claimant the sum of €12,765.06 under the Unfair Dismissals Acts 1977 to 2007.

Mary Morris and Callan Tansey Solicitors UD143/2014

Redundancy Entitlements

Calculating your redundancy entitlements is pretty straightforward with the redundancy calculator provided online by the Department of Social Protection.

Redundancy payment entitlement

To be entitled to a redundancy payment you must have the requisite period of service served which is:

  1. 104 weeks of continuous employment attained after the age of 16 years.
  2. Dismissal

To be entitled to redundancy you will need to have been dismissed from your job; if you are given a new contract of employment or your old contract is renewed you will not be entitled to redundancy.

 Therefore if you resign from your job you will not be entitled to a redundancy payment.

Redundancy payments

Redundancy payment entitlements are calculated by reference to weeks per year of service and is basically calculated as follows:

  • 2 weeks’ pay for each year of continuous employment over the age of 16 years
  • An additional one week’s normal earnings.

Normal weekly earnings is her normal weekly wage at the date she was declared redundant together with her normal average overtime earnings.

All earnings over €600 per week are disregarded though in calculating statutory redundancy payments and redundancy payments are tax free.

(Continuous employment is not broken by layoffs, holidays or sickness.)

NOTE: the definitions of ‘continuous employment’ and ‘reckonable service’ are important ones and can be seen in Schedule 3 of the Redundancy Payments Act,1967.

Payments are then calculated by reckonable service, not the period of continuous employment.

Reckonable service does not include time absent from work due to

  • absence in excess of 52 weeks due to an occupational accident or disease
  • absence in excess of 26 weeks due to illness
  • absence due to lay-off by the employer.

An employee who is being made redundant is entitled to two weeks’ notice and must be given a redundancy certificate by the employer. The employer was entitled to a rebate from the Irish government of 60% of the statutory element of each lump sum payment, provided he has given the requisite two weeks’ notice.

However from January 1st 2013, the employer statutory redundancy rebate was abolished. Where the date of dismissal occurred in 2012 the employer rebate is 15%. If the date of dismissal was in 2011 or earlier the employer rebate is 60%.

Collective redundancies place specific statutory obligations on the employer, for example the requirement to consult with employees. Failure to do so or advise the government of a collective redundancy situation can lead to a criminal conviction and hefty fines of up to €5,000.

The upper age limit of 66 years for entitlement to redundancy was removed by the Protection of Employment Act 2007.

Ex Gratia Payments

An ex gratia payment is an extra redundancy payment over and above the statutory entitlement. The employee is not entitled to one but it may be negotiated between the parties.

Statutory redundancy is not taxable; ex gratia payments are.

Redundancy calculator

You can access a redundancy calculator on the website of the Department of Social Protection to calculate your redundancy entitlements.

Here’s an excellent guide to the redundancy payments scheme from the Department of Enterprise, Trade and Innovation. It dates from 2010 but, nevertheless, explains redundancy very well. Do check with a professional-solicitor or accountant-for any changes since then, though.

UPDATE

The December, 2012 budget made some significant changes re

  • redundancy rebates
  • prsi
  • maternity leave and
  • termination/ex gratia payments.

Since January, 2013 there is no employer rebate in respect of redundancy. See Department of Social Protection.

Disputes about Redundancy Payments Acts, 1967-2007

Disputes about redundancy payments and entitlements are dealt with by the Workplace Relations Commission.

Relevant Legislation

The Redundancy Payments Act, 1967

The Redundancy Payments Act, 2003

The Redundancy Payments act, 1979.