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Employment Claims

The 2 Essential Parts of an Effective Discharge Form-Is Your Waiver Really Effective?

employment-waiver-discharge

This case is an important one for all employers to note.

Unless you are happy to see your employee getting a 2nd bite of the cherry.

It involved the termination of the employment by way of redundancy and the worker signing a common type of form in such situations: a waiver or discharge form.

The employee, Eoin Kerrigan, was made redundant by Smurfit Kappa Ireland Limited and had signed a form which stated:

“I ,(the claimant), hereby accept the sum of €25,280.76 gross in full and final settlement of all claims arising out of my employment with (the respondent) or the termination thereof, both under statute and under common law in all respects for all purposes.

I confirm that this sum is inclusive of but not limited to any entitlements, rights, or claims that 1 have or may have had under the Minimum Notice and Terms of Employment Information Act, 1973-2001, the Industrial Relations Acts 1949-2004, the Unfair Dismissals Acts 1977-2001, the Redundancy Payments Act 1967-2003, the Protection of Employees (Part Time Work) Act 2001, the Protection of Employees (Fixed Term Work) Act 2003, the Payment of Wages Act 1991, the Organisation of Working Time Act 1997 and the Employment Equality Act 1998-2004 etc.

I confirm that this document has been read over and explained to me prior to my signing it and that accordingly I both understand and accept the contents of this document in full.”

Kerrigan now brought an appeal to the Employment Appeals Tribunal from a Rights Commissioner decision under the Unfair Dismissals Acts, 1977 To 2007.

EAT did not have jurisdiction?

The former employer claimed as a preliminary point that the EAT did not have jurisdiction to hear his appeal because of the discharge he had signed “in full and final settlement of all claims arising from the employment”.

However it was accepted by both employer and employee that claimant was not advised to seek advice before signing the discharge form.

The EAT then had to look at this issue and decide, firstly, whether it could hear his appeal.

2 step test

The EAT firstly reviewed the Circuit Court case Hurley v the Royal Yacht Club [1997] ELR 225 which had considered the question of a waiver clause in an agreement settling all claims arising from the employment.

In that case, a 2 step test was put forward:

“I am satisfied that the applicant was entitled to be advised of his entitlements under the employment protection legislation and that any agreement or compromise should have listed the various Acts which were applicable, or at least made it clear that they had been taken into account by the employee. I am also satisfied that the applicant should have been advised in writing that he should take appropriate advice as to his rights, which presumably in this case, would have been legal advice. In the absence of such advice I find the agreement to be void”.

This test was then applied in the High Court in Sunday Newspapers Ltd v Kinsella and Brady [2008] ELR 53.

The 2 elements of the test are:

  1. The legislation that is purported to be excluded by the waiver should be listed and
  2. The employee should be advised in writing to take appropriate advice as to his rights.

In this case, as the employee was not advised to seek appropriate advice-generally legal advice-the EAT held that it was not excluded by the waiver and had jurisdiction to hear the case.

When the EAT then went on to consider the substantive issue it found that

  1. He was not unfairly dismissed and the redundancy was lawful but
  2. The procedures used by the company were not fair, for example, he was only given the first page of a two page document to sign.

The EAT held that he was unfairly dismissed and awarded him €10,000 for this, in addition to “a sum equivalent in amount to his redundancy lump sum and ex gratia payment.”

You can read the full decision here (Eoin Kerrigan-v-Smurfit Kappa Ireland Limited, C/O Smurfit Kappa Group).