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.

Implied Terms of Employment in the Employment Contract-What You Should Know

implied term employment contract
Employment contract

When a contract of employment is being drawn up it is impossible to provide for every eventuality in the work relationship between employer and employee.

For this reason certain terms of employment will be implied into the contract, and together with the express terms set out in the contract, form the contract of employment.

What are they? When will an implied term arise? How will you know?

Firstly, it is not always clear cut as to whether a particular term is implied into a contract; but there are some fundamental terms that certainly are implied into every contract.

Let’s take a look at those, shall we?

And let’s also look at when this is likely to arise.

Conditions for Implied Terms

There are a number of tests which must be passed if you are to imply a term into an employment contract:

  • Custom and practice

If you are to rely on custom and practice to incorporate an implied term into a contract the customer should be “reasonable, notorious (well known), and certain.” This might arise, for example, where the employer pays an annual bonus for many years.

  • Business efficacy

This arises where a term is implied to give a contract efficacy-that is, to make sense of it and make it workable. This would occur where it is “obvious and necessary”, for example the obligation for a lorry driver having a driving licence.

  • Officious bystander test

This occurs where something is so obvious that it goes without saying, and a third party observer would agree that it was blatantly obvious

  • Conduct of the parties after the contract is made

The conduct of the parties after a contract has been made and employment has commenced can give rise to an implied term being incorporated into the contract. It would be necessary to show an intention by the parties to include it as a term.

  • Terms implied by statute

An example here would be if there is no notice period expressly stated in the contract it is implied that the statutory notice period will apply.

  • Terms implied by law

These would include the obligation on the employer’s part to provide work and on the employee’s part to follow reasonable direction and show good faith and loyalty to the employer.

Let’s take a look at some well accepted implied terms.

Common Implied Terms

  1. The mutual obligation to maintain trust and confidence in each other

Both employer and employee are obliged to conduct themselves in a way that can allow each party to have trust and confidence in the other party.

The employee will often, in a constructive dismissal case, point to the unreasonable conduct of the employer and claim that he could not be expected to continue to have trust and confidence in the employer.

The obligation works both ways and an employer who discovers an employee cannot be trusted with handling cash for example, no matter how small the amount, can reasonably claim that he cannot enjoy trust and confidence in the employee any longer.

2. The duty of loyalty

It is an implied term that the employee will faithfully serve the employer and will not act against the best interests of the employer.

3. Giving references

There is no obligation on the employer to give a reference, but where one is given there is an implied term in the contract that the reference is accurate and fair.

4. Grievance procedure

It is almost certainly the case that there is an implied term in the contract that the employer will deal with complaints or problems from employees fairly and in a timely manner. This is the case even where the employer does not have a grievance procedure or policy in the workplace.

The Terms of Employment (Information) Act, 1994-What Employers and Employees Should Know

terms of employment information act 1994
Employment contract

Are you an employer?

Have you given your employees written statements in accordance with the Terms of Employment (Information) Act, 1994?

You should, you know.

Are you an employee? Did you receive a written contract?

If you didn’t, you are entitled to one.

Terms of Employment (Information) Act, 1994

The Terms of Employment (Information) act, 1994 sets out the basic terms of employment which the employer must provide to the employee in a written form within 2 months of starting the employment.

Failure to do so will leave the employer open to a claim from the employee, pursuant to the Terms of Employment (Information) act, 1994. The maximum amount that can be awarded to the employee is 4 weeks’ remuneration.

The claim must be brought to the Workplace Relations Commission (WRC) and is a straightforward win or loss situation-that is, it is clear whether there has been a breach of the legal obligation or not.

Other employment related cases may involve arguments about facts, and the interpretation of previous decisions of Courts or tribunals, or the law as set out in statute.

But in this type of case the written statement/contract of employment was either furnished to the employee within the prescribed timeframe or it was not.

For this reason, employers would be strongly advised to give their employees the necessary statements within the 2 month window.

What must be in the written statement?

Firstly, we can look at section 3 of the Terms of Employment (Information) Act, 1994 which sets out the following matters:

An employer shall, not later than 2 months after the commencement of an employee’s employment with the employer, give or cause to be given to the employee a statement in writing containing the following particulars of the terms of the employee’s employment, that is to say

(a) the full names of the employer and the employee,

(b) the address of the employer in the State or, where appropriate, the address of the principal place of the relevant business of the employer in the State or the registered office (within the meaning of the Companies Act, 1963 ),

(c) the place of work or, where there is no fixed or main place of work, a statement specifying that the employee is required or permitted to work at various places,

(d) the title of the job or nature of the work for which the employee is employed,

(e) the date of commencement of the employee’s contract of employment,

(f) in the case of a temporary contract of employment, the expected duration thereof or, if the contract of employment is for a fixed term, the date on which the contract expires,

F5 [ ( fa ) a reference to any registered employment agreement or employment regulation order which applies to the employee and confirmation of where the employee may obtain a copy of such agreement or order, ]

F6 [ (g) the rate or method of calculation of the employee ’ s remuneration and the pay reference period for the purposes of the National Minimum Wage Act, 2000,

( ga ) that the employee may, under section 23 of the National Minimum Wage Act, 2000, request from the employer a written statement of the employee ’ s average hourly rate of pay for any pay reference period as provided in that section, ]

(g) the rate or method of calculation of the employee’s remuneration,

(h) the length of the intervals between the times at which remuneration is paid, whether a week, a month or any other interval,

(i) any terms or conditions relating to hours of work (including overtime),

(j) any terms or conditions relating to paid leave (other than paid sick leave),

(k) any terms or conditions relating to—

(i) incapacity for work due to sickness or injury and paid sick leave, and

(ii) pensions and pension schemes,

(l) the period of notice which the employee is required to give and entitled to receive (whether by or under statute or under the terms of the employee’s contract of employment) to determine the employee’s contract of employment or, where this cannot be indicated when the information is given, the method for determining such periods of notice,

(m) a reference to any collective agreements which directly affect the terms and conditions of the employee’s employment including, where the employer is not a party to such agreements, particulars of the bodies or institutions by whom they were made.

You must also consider regulations introduced in S.I. No. 49/1998 – Terms of Employment (Additional Information) Order, 1998 which set out the information which must be provided about rest breaks.

  1. (1) In relation to an employee who enters into a contract of employment after the commencement of this Order, the employee’s employer shall, within two months after the employee’s commencement of employment with the employer, give or cause to be given to the employee a statement in writing containing particulars of the times and duration of the rest periods and breaks referred to in sections 11, 12 and 13 of the Act that are being allowed to the employee and of any other terms and conditions relating to those periods and breaks.

(2) In relation to an employee who has entered into a contract of employment before the commencement of this Order, the employee’s employer shall, if requested by the employee to do so, give or cause to be given to the employee, within 2 months of the request being made, a statement in writing containing particulars of the times and duration of the rest periods and breaks referred to in sections 11, 12 and 13 of the Act that are being allowed to the employee and of any other terms and conditions relating to those periods and breaks.

Exclusions, Changes, and Complaints

Section 2 of the Act provides some exclusions:

2.—(1) This Act shall not apply to—

(a) employment in which the employee is normally expected to work for the employer for less than 8 hours in a week, or

(b) employment in which the employee has been in the continuous service of the employer for less than 1 month.

Section 5 of the Terms of Employment (Information) act, 1994 obliges the employer to notify the employee of changes to a term or condition within 1 month.

Section 6 of the Act provides for employees who were in the employment before the commencement of the Act. They can request a statement in accordance with section 3 and must be given it within 2 months of the request.

Section 7 of the Terms of Employment (Information) act, 1994 sets out how complaints will be dealt with, and provides for compensation of up to 4 weeks’ remuneration.

Conclusion

Employers should give their employees a written statement or written contract of employment within 2 months of the commencement of the employment.

If they don’t they are leaving themselves wide open for a simple, “open goal” type claim by their employee(s).

 

Need a contract for your business?

Contact me.

I can supply you with

  1. a template contract which you will complete yourself for each employee. This would involve things like commencement date, job description/role, rate of pay, and any other specific details for the individual employee and/or
  2. individual contracts for each employee-we get all the necessary details from you for each employee and draft the contracts for you.

Staff Handbooks

You will also need a staff handbook because you will need to provide certain basic procedures which will apply in the workplace.

For example, discipline, grievance, dignity at work policies/procedures. Also, your contract of employment will refer to these policies/procedures.

I can also supply you with a staff handbook (€100 plus vat).

Learn more about it here.

How Safe is Your Workplace Investigation From a Costly Outcome?

fair procedures

It happens the best of us, you know.

The botched workplace investigation

Do you worry about the disciplinary procedures in your workplace?

Have you been told about the eye watering, stomach churning awards when the inevitable unfair dismissal claim comes on for adjudication?

Let’s be honest.

A badly executed workplace investigation can prove to be a costly affair. It’s vital that it is carried out properly to prevent claims for unfair dismissal, and other causes of action.

Statutory Instrument 146/2000 gives us a statutory Code of Practice for Grievances and Disciplinary Procedures.

However, it sets out the broad principles which should be applied in a disciplinarily procedure.

But the mechanics of carrying out the investigation fairly have led to frequent challenges from the employee, claiming that they have not been afforded fair procedures or natural justice.

Basic fair play.

Such challenges have been the subject of consideration by the employment related fora, such as the Employment Appeals Tribunal, Labour Court and Workplace Relations Commission, and the Courts.

The High Court has adjudicated in many disputes surrounding employment related matters such as breach of contract, applications for injunctions, and the procedure which was used to dismiss an employee.

Let’s take a look at some of those High Court decisions and see what we can learn from them, shall we?
Let’s face it: if you are carrying out your investigation and/or disciplinary procedure in accordance with the findings of learned Judges of the High Court you are going to be on pretty solid ground.

Patrick J. Kelly v Minister for Agriculture, Fisheries and Food, Minister for Finance, The Government of Ireland, Ireland and Attorney General

This is a December, 2012 decision involving a harbour master in Killybegs who was dismissed from his position by his employer. Read the full decision here: [2012] IEHC 558 .

One of the interesting findings in this case by J Hedigan was that the the full range of fair procedures do not apply at the investigative stage.

There is no fixed model for fair procedures that is applicable to all circumstances. What is required in one instance may differ from another. In National Irish Bank and the Companies Act 1993, l.R. p. 145, Shanley J., subsequently upheld by the Supreme Court, dealt with an investigation by inspectors which was a two stage one. The first was an investigative stage, the second a hearing stage. In distinguishing in Re Haughey [1971] I.R. 217, Shanley J. at p. 168 held that at first stage, the inspectors could not be compelled to produce documents to the respondent nor was he entitled to any documents or to the facility of cross-examining any person at the initial stage.

“I am satisfied that there is no entitlement to invoke the panoply of rights identified by the Supreme Court at the information gathering stage of the inspector’s work. The procedures identified by the inspectors following the outcome of the first stage accord in my view with the requirements of fairness and justice and guarantee, where appropriate, the exercise of the rights identified in Re Haughey.”

I gratefully adopt this dictum of the late Shanley J. It is fairness and justice which is to be sought in any investigative process and it is to the process as a whole that the Court must look to determine if those basic requirements were met. The requirement of fairness and justice will vary from case to case.He further found that there cannot be bias, either subjective or objective, where there is no adjudication.

He also found that the requirement of fairness will vary from case to case.

In summary, the rules of natural justice do not apply where it is a pure investigation and there are no findings arising from it. Nevertheless, it is still advisable to afford natural justice and fair procedures.

And if the investigator is allowed to make findings then the rules of natural justice should be applied.

This decision, and J. Hedigan’s findings, is encouraging from the perspective of a small employer with limited resources. It recognises that the circumstances of each case should be looked at when assessing the granting of fair procedures and natural justice.

EAMON O’BRIEN v AON   INSURANCE  MANAGERS  (DUBLIN) LIMITED

Read the full decision here: [2005] IEHC 3

J. Clarke found:

Even if there are infirmities in the methodology of the investigators (and I express no view on that issue) and even if those infirmities may have affected the contents of their report the fact remains that the recommendations of the report do not, in the words of Kearns J. in Morgan “amount to a sanction” and therefore Haughey rights do not arise.

Clarke’s reference in the extract above to the Morgan case is the case of Morgan v. Trinity College [2003] 3 IR 157, which is well worth a read in any consideration of the law as it applies to investigations and disciplinary procedures in the workplace.

Giblin v Irish Life & Permanent PLC [2010] IEHC 36

Read the full decision here: Giblin v Irish Life & Permanent PLC [2010] IEHC 36

J. Laffoy stated:

First, in conducting a process to determine whether the plaintiff should have a serious sanction, including the most serious sanction available, namely, dismissal, imposed on him, the defendant must act in accordance within the terms of the plaintiff’s contract of employment, including the implied term that the plaintiff, as employee, is entitled to the benefit of fair procedures (Glover v. B.L.N. [1973] I.R. 388). However, it is well recognised that what fair procedures demand depends on the terms of the plaintiff’s employment and the circumstances surrounding his proposed dismissal (Mooney v. An Post [1998] 4 I.R. 288).

It is not to be inferred from this decision that I consider that it is not appropriate for executives of the defendant who are involved in the human resources aspects of the defendant’s management to conduct the type of investigation which was conducted in relation to the plaintiff. Nor is it to be inferred that I am of the view that the person or persons who conduct the “thorough investigation” to be conducted under para. (iv) of the Disciplinary Procedures in all cases should not be the decision maker as to whether the conduct of the employee being investigated warrants a serious sanction such as dismissal. A one stage inquisitorial process may be appropriate in many cases.

It is worth noting that J. Laffoy considered that A one stage inquisitorial process may be appropriate in many cases.

Mooney v An Post [1998] 4 IR 288

In this case, J. Barrington held that the principle of “nemo iudex in causa sua” (nobody is a judge in his own cause) did not apply in all situations, especially employment situation where the employer judges the issue and is clearly an interested party.

“The terms natural and constitutional justice are broad terms and what the justice of a particular case will require will vary with the circumstances of the case. Indeed two of the best known precepts of natural and constitutional justice may not be applicable at all in certain circumstances. As the trial judge has pointed out the principle of nemo judex in sua cause seldom applies in relation to a contract of employment where the employer judges the issue and is an interested party. Likewise it is difficult to apply, to a contract of employment, the principle of audi alteram partem which implies the existence of an independent judge who listens first to one side then the other.”

Nevertheless, if you are an employer you should try to ensure that the investigator and decision maker are different people and have quite distinct roles.

Tom Kelleher V An Post [2013] IEHC 328

This case is well worth a read in an consideration of disciplinary procedures/employment law in teh workplace. Read it here.

J. Peart stated:

But in any event, as has been made clear by Barrington J. in Mooney, the nemo judex rule cannot apply in all its glory to all situations in the area of employment law. It is inevitable that often during an internal or in-house investigation leading to a dismissal the decision-maker and some or all of the investigators will have some form of contact, and that there may be communication of some kind about the issues involved.

Conclusion

It seems to me from the cases above that the courts recognise that what are fair procedures will vary from case to case, depending on the circumstances of each case, the contract of employment, the disciplinary procedure in the workplace, and the resources of the employer.

It also appears to be the case that there is a distinct divide between the investigative stage of any procedure and the disciplinary procedure.

Any “infirmities” in the investigative procedure can be remedied at the disciplinary stage, assuming the employee is given fair procedures in the disciplinary hearing/procedure.

 

How to carry out a disciplinary procedure in the Irish workplace-online course-learn more.

Restrictive Covenants (non-compete clauses) in Contracts of Employment-What You Need to Know

 

restrictive-covenant

Do you wonder how effective a “non compete” clause is in a contract of employment?

When will it not be enforceable?

Let’s take a look at this important topic.

It is widely accepted that an employer is entitled to protect his trade secrets and confidential information in his contract of employment. The Courts have also recognised, down through the years, a common law right to have trade secrets and confidential information protected.

Fidelity and loyalty

Courts will also recognise a duty of fidelity and obligations of loyalty in all employment contracts. This duty has also been held to include an obligation for an employee not to compete with his employer while employed by him.

In Ireland, the EAT has upheld dismissals on this ground of breach of good faith and loyalty. It has also, on occasion, upheld dismissals where the employer had a significant, bona fide concern that this would occur.

Confidential information and trade secrets

An employer does not have to have a specific term in the contract of employment to protect trade secrets and confidential information. However, if there is a dispute, the employer would have to prove that the information he sought to protect was a trade secret or confidentiality must apply to it.

This will depend on the particular circumstances and there is a difference between “objective knowledge”, property of the employer, and “subjective knowledge”, property of the employee.

These rights of the employer must be weighed against the employee’s right to blow the whistle, as whistleblowing is protected in certain circumstances in Ireland, thanks to the Protected Disclosures Act, 2014.

Non-compete after termination of employment

There is no common law restriction on an employee competing with a former employer, or soliciting former colleagues or customers/clients. That is why provision for this should be made in the contract of employment.

There is also a distinction to be made between copying the employer’s customer/client lists-not allowed-and soliciting former customers based on what is in the employee’s head-allowed.

To be clear: there is no common law restriction on an employee soliciting business being done by their former employer.

When are restrictive covenants allowed in a contract?

The law attempts to strike a balance between preventing restraint of trade on the one hand, and, on the other hand, allowing legitimate restrictive contractual terms in a contract of employment.

What’s permitted will depend on

  1. Where the employer has a legitimate interest to protect; a general restriction against competition is not enough.
  2. The restriction must be reasonable and cover activity of the employee while he worked at the employer.
  3. The time period must be reasonable; this will depend on the time needed for the employer to protect the goodwill of the business or limit the damage done by the employee.
  4. The geographical area to be protected must be reasonable; it cannot be too wide if it is more than adequate to protect the employer’s business.

If an employer is in fundamental breach of a contract, or repudiates the contract, he will be unable to rely on a restrictive covenant.

The Competition Act, 1991

The Competition Act, 1991 prevents agreements between undertakings which have as their object or effect the restriction of competition (section 4(1) Competition Act, 1991).

However, employees are not undertakings while working as employees for either their “old” employer, or “new” one.

If they set up a new business, though, in competition with their old employer they will be considered to be an undertaking and any agreement between the employee and former employer will fall within the restriction against restriction of competition in section 4(1).

The leading case in this area is Apex Fire Protection v Murtagh [1993].

One of the useful inferences that can be drawn from the case is that a one-year restriction is acceptable, but anything more than this may be seen as excessive.

The case also shows that a business owned and operated by an ex-employee can be considered an undertaking and, therefore, any agreement will fall within the The Competition Act, 1991.

It also shows that the legality of restraints in any agreement between employer and employee will depend on the particular circumstances of the case.

Any aspect of the agreement that is excessive or unnecessary to protect a legitimate interest of an employer is likely to be unenforceable.

Are you an employer?

Need a quote for a contract of employment? Contact me.

We can supply you with

  1. a template contract which you will complete yourself for each employee. This would involve things like commencement date, job description/role, rate of pay, and any other specific details for the individual employee and/or
  2. individual contracts for each employee-we get all the necessary details from you for each employee and draft the contracts for you.