The recent High Court decision in the case of Anna Buttimer and Oak Fuel Supermarket Limited Trading as Costcutter Rathcormac deals with the question of termination of employment during the probation period.
In this case Anna Buttimer sought a High Court injunction preventing her employer from terminating her employment, stopping the employer from replacing her in the workplace, preventing the employer from termination of her employment contract, and other reliefs.
Background
The employer has a shop and filling station in Rathcormac, Cork. Ms Buttimer started her employment in March 2022 as a supervisor with a promise of promotion to store manager within a month.
She was acting as manager from the commencement of her employment, however. Towards the end of March an employee made a number of allegations against her. These included that she had accused another employee of being two faced and used inappropriate language, among other things.
Ms Buttimer saw these allegations as an attempt to have her removed from her job.
The employer engaged the services of an external HR firm who were to investigate the allegations in accordance with the Bullying and Harassment policy in the workplace. The terms of reference referred to “the principles of Natural Justice will be applied at all times”.
While the investigation was ongoing Ms Buttimer was promoted to the position of store manager in April 2022. Her contract provided for a probation of 6 months, extendable by a further 5 months.
The staff handbook referred to the disciplinary procedure in the workplace and defined misconduct. However, the standard disciplinary procedure was not to apply during the probation period.
Her boss, Mr Mullane, received further complaints about Ms Buttimer by text message when the original investigation was being carried on. He called Ms Buttimer to a meeting in May 2022 and told her she had failed her probation and was terminated, either at the meeting or later that day.
However, at that meeting Mr Mullane offered her a job in a different store he owned, in Grenagh. This job would involve her staring a new 6-month probation period and a position as a trainee manager as Mr Mullane could see potential in Ms Buttimer to “become a good manager”.
Ms Buttimer did not reply to Mr Mullane’s email offer and the next interaction was Mr Mullane received a solicitor’s letter on behalf of Ms Buttimer demanding her reinstatement and claiming that she had been terminated as a result of allegations made against her without the opportunity to defend herself against those allegations and in breach of fair procedures and the company’s own policies.
It was claimed that the trainee manager position that was offered was a demotion.
Ms Buttimer then issued her legal proceedings seeking the reliefs set out above.
The defendant argued that she was not entitled to the reliefs sought as she did not come to court with clean hands. The judge did not agree as the type of conduct that Ms Buttimer was accused of was not conduct of such gravity as to constitute “unclean hands”.
The court went on to look at the tests to be applied when an interlocutory injunction is being sought, as set out in Campus Oil v Minister for Industry and Energy (No. 2) [1983] IR 88) and Okunade v Minister for Justice & Ors [2012] 3 IR 152) and in the Supreme Court in Merck Sharp & Dohme v Clonmel Healthcare [2019] IESC 65.
(1) First, the court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief pending the trial could be granted;
(2) The court should then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanamid and Campus Oil approach will yield the correct outcome. However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;
(3) If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice;
(4) The most important element in that balance is, in most cases, the question of adequacy of damages;
(5) In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;
(6) Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial.
(7) While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;
(8) While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined.”
The plaintiff argued that she was entitled to an injunction as her employment was terminated on the basis of certain allegations against her without being given the opportunity to challenge the allegations or defend her position.
The defendant argued that she was not terminated on the basis of the allegations against her but was terminated because she had failed her probation period and her performance was poor and she was not the right fit for the store.
The Judge noted that
50. The authorities are clear that an employee may be let go during her probationary period for any reason (including poor performance) or no reason without any obligation to afford fair procedures. However, it is equally clear as a matter of general principle that while at common law an employer is free to dismiss an employee for any reason or no reason, where the dismissal or termination is for misconduct, the employer is obliged to comply with fair procedures.
And in O’Donovan v Over-C Technology Limited & anor (para 61):
“There is no suggestion that the principles of natural justice must be applied where an employer terminates the employment contract of an employee on the grounds of poor performance.”
In paragraph 56 of her judgment, Costello J said:
“If an employer has a contractual right – in this case a clear express right – to dismiss an employee on notice without giving any reason, the court cannot imply a term that the dismissal may only take place if fair procedures have been afforded to the employee, save where the employee is dismissed for misconduct.”
In this case, therefore, the judge had to determine if the employee was terminated for misconduct. If she was then she was entitled to fair procedures, natural justice and would be granted the injunction.
The judge could not determine whether the employee was terminated for misconduct or poor performance. But he decided that she had established a strong case that she was fired on account of the allegations against her.
He then had to decide if the allegations against her constituted misconduct and thus attracted fair procedures and natural justice. He decided that the allegations against her did constitute misconduct as understood by reasonable persons.
The judge also noted that the employer appointed an external investigatory to carry out an investigation which might lead to a disciplinary procedure. This indicated that the employer viewed the allegations as misconduct issues.
The judge also found that even if the contract of employment states that the disciplinary procedure will not apply during the probation period all that means is the company’s standard procedure will not apply. The employee’s common law and constitutional principles still apply, and the employee is entitled to fair procedures.
Fair procedures were not applied, the judge found, and granted the injunction having weighted up the balance of convenience/justice and the adequacy of damages as a remedy for the employee if she was successful at trial.
The judge agreed that the employee’s good name and reputation needed to be seriously considered when weighing up if damages would be adequate if she succeeded at trial.
109. The final thing that is relevant to the balance of convenience is the fact that the plaintiff was still in her probationary period and that the defendant could have simply let her go for no reason (or for performance-related issues) subject only to one week’s notice (see O’ Donovan and Curr). This has to be taken into account in the assessment of the overall balance of convenience as well as in considering whether damages would be an adequate remedy.
113. However, I am of the view that the balance of justice does require some relief in order to avoid irredeemable harm to the plaintiff in the event that she is ultimately successful at trial. As is made clear in the authorities, the court has a broad discretion to arrange things appropriately to minimise the risk of injustice pending the full trial. The damage to the plaintiff’s reputation and the defendant’s acceptance of the importance of reputation is of particular relevance here. I will therefore grant interlocutory orders in terms of paragraphs 3 and 6 of the Notice of Motion. This does, of course, adversely impact on the defendant because they can not fill the vacancy but this prejudice must be weighed against the prejudice to the plaintiff if the defendant can replace her permanently or can make it public that her employment was terminated. It holds open the plaintiff’s position and seeks to reduce the reputational damage that might be done if it is made known that the plaintiff was let go even if her position is vindicated at trial. It also minimises the plaintiff’s exposure on her undertaking as to damages.
Takeaways for employer and employee
An employee on probation can be terminated for no reason or on performance grounds without an obligation to afford fair procedures and natural justice.
An employer must ensure fair procedures if the employee is to be terminated on the grounds of conduct, even if the employee is on probation.