Employers: Don’t Make the Mistake of Looking for ‘Bullet Proof’ Contracts or Waivers

Mick came in to see me last week. He had had enough.

‘Enough is enough’, he barked.

Mick is a small employer. Old fashioned, grim, swarthy.

He had enough of this employment law nonsense. He was looking for a way to ensure that his workers would stop giving him grief, and ‘cop themselves on’.

Or, as he put it, ‘show up and shut up and do what they’re told’.

‘Now? Now, they’re always going on in such a bloody tiresome way about their rights..paternity this, maternity that, force majeure, bereavement leave, unfair dismissal, bullying, harassment, health and safety. In the good old days if a lad came and complained about bullying I’d tell him to grow a pair of balls and sort it out in five minutes at the back of the shed..’

‘Mick, my friend, take a seat.That ship has sailed’, I said.

When he calmed down Mick made it clear he wanted two things:

  1. A “bullet proof” contract of employment
  2. A form or agreement that an employee would sign when he was leaving promising he would not bring any claims against Mick after he was gone.

Bullet Proof Contract

What Mick wanted was a contract that set out exactly what the employee could and couldn’t do, and it was heavily loaded in favour of Mick and the needs of his business.

I had to explain to him that I could help him with that but it would not be bulletproof. I told him that regardless of how he and a future employee might negotiate an agreement, and even if the employee went ahead and signed it, the employee still had legal rights and entitlements, no matter how one sided it was drafted.

Therefore, no matter what was put in the contract, no matter how agreeable (or naive) the new employee was, no matter how keen he was to work for Mick (or anyone), the new employee had statutory rights.

These rights are set out in the statute books in pieces of legislation such as the Unfair Dismissal Acts or the Organisation of Working Time Act or the Redundancy legislation or the Payment of Wages acts.

He also had rights to fair play in raising grievances in the workplace or how any disciplinary procedure might be carried out, I told him. These were set out in statutory instruments. I could see Mick visibly wincing, and the blood draining from his face.

On top of that, I had to tell Mick that employees had rights arising from EU law, common law, and the constitution. I could see Mick visibly perking up when I mentioned “Bunreacht na hÉireann”.

Nevertheless, I had to advise Mick that no matter what way the contract was drafted the employee had protections and rights which were imposed on the employment relationship, whether he liked it or not and whether the employee was agreeable or not.

And he had to just get over it and perhaps improve his relationship with his staff, starting with how he viewed them.

A Leaving the Employment Indemnity/Waiver

He also wanted some sort of a one page, straightforward, easy to understand form which would do two things:

  • Prevent the employee from working for any competitors or starting his own business
  • Promise not to bring any claims against Mick.

I explained to Mick that if he wanted to try to prevent former employees from working for competitors or starting their own business nearby or stealing Mick’s customers or staff he needed to provide for this in the contract of employment. He would need a restrictive covenant which would only be enforceable if it was reasonable.

I had to break the news to him that looking for an employee to sign such a form when he was leaving Mick was too late, and akin to bolting a stable door when the horse was long gone.

As for promising not to bring any claims against Mick, I asked Mick to think about this: ‘why would an employee do that? Why would he give up those rights without some incentive? Would he not be asking, if presented with such a form, what was in it for him?’

In short, if he wanted the employee to waive his rights in respect of claims arising from the employment he’s better get out the cheque book and provide an incentive. Because, otherwise, it would be an act of folly for an employee to sign such a form.

And even if he did it could be overturned and set aside later on as he could claim that he did not know what he was signing and had no legal advice at the time.

Conclusion

Mick learned that the answer to his staff problems was in improving his attitude and approach to his employees. This would lead to a better atmosphere in the workplace, lads taking more care with his equipment and vehicles, a better working relationship, and less chance of claims against him.

And if there were claims against him?

Provided Mick did not ride roughshod over their rights, give them contracts of employment that were fair and lawful, maybe have a staff handbook in the workplace, too, to deal with discipline and grievances and bullying, he would have a far better chance of successfully defending any claims that arose.

Or even make it less likely that claims would be brought once the employee learned the chances of success were not great.

Irish and UK Employment Law-What Are the Main Differences?

uk employment law

There are huge similarities between Irish law and UK law, which is to be expected as the Irish legal system originates from the English legal System. The Irish legal system exists in a common law jurisdiction, as opposed to a civil law jurisdictions like France and other European countries.

Other common law jurisdictions include the legal systems in England, Australia, Canada, New Zealand, and India.

Common law systems place great reliance on previous decisions in Court, which decisions set precedents for principles to be applied in later cases with similar circumstances.

Consequently, Irish employment law and English employment law are strongly comparable.

However, there is differences, too. Let’s take a look:

  • Minimum wage rates are different
  • Rest break entitlements also differ
  • Mandatory pension-mandatory enrolment of an employee in a pension is not the position in Ireland, whereas it is in the UK
  • Statutory sick pay exists in the UK, but there is no statutory sick pay in Ireland (there may be a contractual entitlement, however)
  • Annual leave entitlements are different
  • There is no award upper limit for discrimination in the UK, there is a limit of 2 years’ remuneration in Ireland
  • Minimum notice-there is slight differences, depending on the length of service
  • Redundancy payment entitlements are different-in the UK regard is had for the age of the employee, in Ireland it is calculated on service alone
  • Unfair dismissal-in Ireland you need only 1 year’s service, whereas in the UK you need 2 years’ service to bring a claim
  • Termination payments are taxed differently
  • Whistle blowing-there is no upper limit on the award in the UK, in Ireland the limit is 5 years’ remuneration
  • settlement/compromise agreements-there is no statutory recognition in Ireland, there is in the UK
  • Working time-maximum working week (48 hours) can be opted out of in the UK, but not in Ireland
  • Agency workers in Ireland have protection from no less favourable treatment from day one, whereas in the UK the worker needs to have worked 12 weeks on assignment
  • Collective bargaining-there is no obligation on an Irish employer to recognise the trade union in the workplace for bargaining purposes; in the UK the union can follow a statutory route to seek recognition
  • Status of employment-in Ireland you can be an employee or self employed contractor; in the UK you can be an employee, or self employed, or a worker
  • Employment claims-there is no preliminary case management procedure in Ireland; there is in the UK
  • Injunctions-employees seeking injunctions in Ireland are much more likely to succeed than in a UK court
  • TUPE-in Ireland the employer gets a better deal in relation to the application of TUPE regulations as the triggering of TUPE is more limiting as the transfer must involve the transfer of significant tangible or intangible assets or employees

Conclusion

On balance, I think it is fair to say that UK employers would find the employment law landscape in Ireland a more favourable one to employees than exists in the UK. UK employers may also find a higher level of expectation and empowerment with the Irish employee when it comes to employment rights and the relationship between employer and employee.

How Employers Can Deal With the Problem Employee (and Avoid Costly Employment Law Claims)

 

problem employee

There’s a lad from outside Mullingar who has a peculiar way of making a living.

I’ll tell you about that another time, though.

Because last week he paid me a visit on different business: the common problem of the “problem employee”?

How do you handle this familiar problem?

Many employers come to me with a massive sense of frustration, sometimes anger.

Their emotions range from a sense that employment law in Ireland is loaded in favour of the employee, to fear of taking any action for fear of a costly claim to the WRC or Court from the employee.

What can you do if an employee is misbehaving or demonstrating a bad attitude or failing to perform or is guilty of misconduct or is forever missing days or guilty of persistent poor timekeeping?

Or is a liability or just not right for your organisation?

Or is he on the fiddle?

Small employers, without the benefit of trained HR professionals in their business, are often frozen with fear and indecision.

Quite frankly, they don’t have a clue what to do or what they are allowed to do to handle a problem employee.

Some employers take a metaphorical lump hammer to the problem; others take the approach of “being nice and hoping for the best”.

Neither of these approaches are recommended, quite frankly.

The Options

Firstly, you need to be mindful of a certain critical time period: 12 months’ employment or “one year’s continuous service”, according to the Unfair Dismissals Act, 1977.

Generally, an employee can only bring a claim for unfair dismissal when he/she has one year’s continuous service in the job. There are exceptions, for example, a dismissal on a discriminatory ground, or a dismissal because the employee has made a protected disclosure (Protected Disclosures Act, 2014).

By and large, though, the employee needs a year’s service.

So, if an employee is not working out, or is simply not right for your organisation, the contract of employment can be terminated.

Over one year’s service?

If the employee has more than one year’s service it is more problematic for you as an employer. The employee has more protection by virtue of the Unfair Dismissals act, 1977.

It provides that an employee can only be dismissed on specified grounds, provided there are substantial grounds justifying the dismissal :

  • Capability, competence, qualifications
  • Conduct
  • Redundancy
  • Illegality
  • Other substantial grounds

To dismiss on one of these grounds you need to ensure all your ducks are in a row; this article which I have written in the past about how to legally dismiss an employee should help.

You do need, however, to afford fair procedures and natural justice to the employee in terminating the employment as these are constitutional rights.

There is one further situation that arises: frustration of the contract. This could arise where an employee becomes ill or suffers an injury that makes it impossible for him/her to do the work. In other words, the employee is unable to fulfill his/her obligations due to incapacity.

It is said, then, that the contract is at an end as it has been frustrated.

Practical examples

Let’s look at some practical examples.

“Susan” is a secretary/receptionist in a medical practice. Her attitude is poor, her absenteeism rate is high, her work is poor, and worst of all, she has plenty of “sass” going on in her interaction with her boss because her boss is a non national.

If she has over 12 months’ service, the option for you as employer in this situation is to manage the situation professionally. You would use a performance improvement plan and/or the disciplinary procedure to let Susan know that her performance and conduct is unacceptable and will have to improve.

You would ensure to afford her the full benefit of your disciplinary procedure and ensure she is aware that improvements are required and if they are not forthcoming the sanctions set out in the disciplinary procedure will be imposed.

If she does not have 12 months’ service and is on probation either because she is in her first 6 months’ of employment or she has had her probation extended, her employment could be terminated.

“Gianluca” is a part time employee but appears to be angling to bring some sort of claim against you. He has already suffered a minor injury-back problem- as a result of lifting some stuff in the store room.

He’s due back to work shortly after his injury and his solicitor is writing to you about accepting liability for Gianluca’s injury. You have observed him carefully for a couple of years now and you know he is just gagging to quit the job and bring some sort of claim to the WRC (Workplace Relations Commission).

You are, quite frankly, walking on eggshells.

What to do? Firstly, report the personal injury suffered in the workplace to your insurer, if you have not done so already, and let the insurer deal with it.

Secondly, when he does come back, deal with him professionally, just like Susan above. Provided you respect the laws and don’t act unlawfully, you have nothing to get overly anxious about.

You do need to ensure you are giving him his correct rest breaks, holiday and public holiday entitlements, and all other employment obligations.

But once you are satisfied you are doing so you need not worry excessively.

The laws are not completely imbalanced or stacked against you, and you have rights too. It’s a myth to say otherwise.

For example, at its most basic Gianluca needs to perform in accordance with the contract of employment, and follow reasonable directions of you as employer and any of his line managers.

Even the Supreme Court held earlier in 2017 held that every wrong that an employee suffers in the job does not give rise to a claim or a legal cause of action.

So stay calm. The dice is not loaded. There is no need to act on any fleeting impulses you might have to take him into a darkened room and teach him a lesson!

Fianlly, Paul is a blocklaying contractor and Jimbo, one of his lads, is threatening to drive him around the bend. He is frequently missing from work, just texts that morning or the eveing before and says he won’t be in.

At this stage paul is getting suspicious that Jimbo is working for someone else a couple of days a week, as it seems to be the same days he is missing all the time.

In any event, the response from Jim should be the same as for Gianuca and Susan: invoke the disciplinary procedure after having the chat/some informal counselling with Jimbo to let him know the rate of “no shows” is unacceptable.

You will see that all these problems can be resolved in a professional way with no undue concern for claims against you, provided you stay calm and deal with the issues coolly and calmly.

Conclusion

Employment law is fundamentally based on the contract of employment.

If you go back through the centuries there was a “master/servant” relationship. If you fast forward a few hundred years there still exists a huge disparity in power between the employer and employee in negotiating a contract of employment.

Generally, it’s a case of, “take it or leave it”.

So statute law such as the Unfair Dismissals Act 1977 and the Organisation of Working Time Act, 1997 were introduced by legislators to protect employees and redress the inherent imbalance in equality of arms between employer and employee.

That’s all that’s happened.

So, if you are an employer, stay cool, abide by the laws and you won’t need to worry excessively about the whole shooting match being loaded against you.

Disciplinary Procedures in the Workplace-3 Interesting High Court Decisions About Fair Procedures

fair procedures high court

Are you an employer or employee involved in a disciplinary procedure in the workplace?

If you are you need to be clear about the rules that should apply to such procedures, including at the investigatory stage and the ultimate disciplinary procedure where a sanction may be imposed.

The High Court has recently handed down three decisions in relation to internal investigations and disciplinary procedures in the workplace.

And, unfortunately, the principles that you would like to be crystal clear about in relation to carrying out a disciplinary procedure in the workplace are not entirely settled.

Let’s take a look at the three cases, all of which are dealt with in the High Court over a short period of time in the first part of 2017, and you will see what I mean.

The first case is Lyons v Longford Westmeath Education and Training Board . Mr. Lyons is a teacher with the Longford Westmeath Education and Training Board and certain allegations were levelled against him. The employer engaged the services of an external HR company who carried out an investigation into the allegations.

However, the HR company went further than merely carrying out an investigation-it also issued a report, presumably because they were requested to do so by the employer, and found against Mr. Lyons with respect to the bullying allegation made against him.

Mr. Lyons then brought an action in the High Court arguing that

  1. He should have been allowed legal representation during the investigation, and
  2. His legal representative should have been allowed to cross examine any witnesses.

The High Court held in his favour, which surprised many observers as it was generally understood that the full panoply of fair procedures and natural justice need not be afforded in the preliminary investigation stage of a disciplinary procedure, and it was sufficient if the employee had representation and could cross examine at the disciplinary hearing stage where dismissal was a possibility.

What distinguished this case from others, perhaps, is the fact that the investigation resulted in a report being issued and an adverse finding against Mr. Lyons. If the investigation simply investigated the allegations and decided whether there was a case to answer or not, and stopped there, then Mr. Lyons it may have been held by the High Court that he was not entitled to legal representation and to cross examine witnesses.

Justice Eager held, inter alia,

It is quite clear to this Court that the proceedings adopted by Graphite Recruitment HRM Ltd. is in breach of Article 40(3)(1) and (2) of the Constitution of Ireland by the refusal to allow legal representatives to appear on behalf of the applicant. The processes adopted by Graphite Recruitment HRM Ltd. failed to vindicate the good name of the applicant, in their refusal to hold an appropriate hearing, whereby the applicant through solicitor or counsel may have cross-examined the complainant..Equally, the complainant ought be entitled to then cross-examine the applicant.

 

And

The Court is clear that in circumstances where a complaint is made which could result in an individual’s dismissal, or where it impinges on the individual’s right to a good name, the individual is entitled to fair procedures, as outlined by the Supreme Court in the case law quoted above.

The second case worth looking at is E.G. v The Society of Actuaries in Ireland.

E.G. was an actuary and there was allegations against him of wrongdoing. The Society of Actuaries in Ireland, in responding to the complaints against E.G., set up an investigative committee who were to investigate the allegations and decide whether he had a case to answer, that is, whether there was prima facie evidence of wrongdoing.

The committee found there was prima facie evidence of wrongdoing and E.G. then sought an order from the High Court that he was entitled to natural justice and the finding of the committee should be set aside.

In this case the High Court decided that as the committee was only in the preliminary stages of a procedure involving an investigation, and did not have the power to make adverse findings against E.G., and the full panoply of fair procedures and natural justice was not necessary. It would only be in the formal disciplinary enquiry, where E.G. may have serious adverse findings made against him and sanctions imposed, that he would be entitled to legal representation and to cross examine witnesses.

The Court made a clear distinction between the preliminary investigation and the later formal disciplinary procedure.

The High Court relied on a High Court case, later upheld in the Supreme Court, involving the Law Society of Ireland, O’Sullivan v Law Society of Ireland [2009] IEHC 632.

 

Justice McDermott held:

In the courts view it was not necessary for the first named respondent to afford to the applicant the full panoply of natural justice rights in the course of any investigation into his conduct (outside of and/or in parallel with, any s. 8 or s. 9 process that may also have been underway) prior to their invocation of s. 17. They were of course, obliged to treat him fairly but they were entitled to adopt less formal and more abridged procedures than in circumstances where s. 17 had actually been invoked.”
85. The Supreme Court in dismissing an appeal against the judgment of Edwards J. [2012] IESC 21 was satisfied that the full panoply of natural justice rights does not inexorably apply at every phase of an investigative process. An appropriate standard of fair procedures must be applied at all stages of a tiered process. There may be situations in which a stronger degree of procedural protection may be required having regard to the decision to be taken at an investigative stage or its potential consequences.

 

And

A full oral hearing will be required before the Disciplinary Tribunal following the referral in the course of which the full panoply of rights will be available as set out in the Scheme as already described.

 

The third case was also, like Lyons above, in the education sector, N.M. v Limerick and Clare Education and Training Board.

The teacher in this case sought an injunction preventing the employer from carrying the disciplinary procedure to a conclusion. The Court considered whether the employee would have been entitled to cross examine witnesses at the investigation stage, even though this stage had already completed by the time the case came to the High Court.

Even though the investigation was tasked with making findings of fact the High Court found that because it could not make findings of fact which were final or binding, that is, the findings were only made as part of the investigation stage of the procedure.The Court held therefore, that the employee was not entitled to the full range of fair procedures/natural justice.

It also held that, therefore, that he was not entitled to cross examine witnesses and reiterated the principle arising from O’Sullivan v Law Society of Ireland [2009] IEHC 632 that the full range of fair procedures and natural justice is required at the disciplinary stage of the procedure, and not earlier in the investigation.

Conclusion

It remains to be seen whether the decision in the Lyons v Longford Westmeath Education and Training Board case is followed or not. From an employers perspective it seems to be a prudent course of action to ensure that the investigation that is carried out does not make final binding findings of fact and is strictly a fact finding exercise, and leaves final binding findings of fact to the disciplinary stage of the procedure.

My Single Best Tip for Employers

small employer ireland

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

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

In fact, he could only see it ending badly.

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

 

Are you an employer?

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

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

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

Let’s take a look, shall we?

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

Let me explain.

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

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

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

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

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

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

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

Bonus Tip #1 for Employers

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

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

Bonus Tip #2 for Employers

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

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