Laid off? Dismissed?
An employee has won €10,000 in the Labour Court for unfair dismissal against a jeweller business where the employer claimed the employee was not dismissed but laid off. The employee’s case at the Workplace Relations Commission at first instance had failed. He appealed that decision to the Labour Court.
The employee in this case claimed he was dismissed on 4th September 2020. The employer claimed he was laid off on that date and was informed by email on the same day.
The Labour Court reviewed the email in question and noted that it contained no notice of lay off as anticipated by the Redundancy Payments Act, 1967.
Section 11 of the Redundancy Payments Act, 1967 states:
Lay-Off and Short Time
11. (1) Where an employee’s employment ceases by reason of his employer’s being unable to provide the work for which the employee was employed to do, and—
(a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and
(b) the employer gives notice to that effect to the employee prior to the cessation, that cessation of employment shall be regarded for the purposes of this Act as lay-off.
Also, the email said there was a decision taken to suspend the employment of the employee.
The Labour Court noted, however, that the employer had ceased paying the wages of the employee one week prior to the 4th September 2020 and was unable to explain this to the Labour Court.
The Labour Court was obliged to decide whether the employee could reasonably and objectively understand himself to have been dismissed.
The Labour Court referred to the case of McKenzie Limited v Smith  where the indefinite suspension of an employee was considered to amount to a dismissal. A similar finding was made in Deegan v Dunnes Stores Ltd  ELR 184.
In this case the Court held that it was reasonable for the employee to conclude he had been dismissed in circumstances where he had not been advised of the withholding of his wages in advance of 4th September 2020 and the employer had decided to suspend his employment.
The Court found that the employer had undermined the contract of employment by
- Ceasing, without notice or notification, to provide work to the employee and
- A week earlier had ceased to pay his wages without notification or telling him
The Labour Court found that he was dismissed and awarded him €10,000 which it felt was just and equitable in the circumstances. This was after noting that the employee had failed to show he made significant efforts to mitigate his loss by obtaining new employment.
A useful takeaway for employers from this case is the need to communicate clearly with employees. If you are laying off an employee this should be communicated clearly and openly as required by the Redundancy Payments Act, 1967.
Read the full decision of the Labour Court in Claddagh Ring Limited t/a Claddagh Jewellers and Nima Amjadi here.