Dismissal

01 October 2014

Updated October 2014

Gives introductory guidance on dismissal law. Defines unfair dismissal and wrongful dismissal and explains how claims can arise and the remedies that courts can award to employees in dismissal cases. Also covers the growing use of interlocutory injunctions especially by senior executives to prevent their dismissal before a trial. Finally stresses the importance of employers having fair procedures in place in the event of dismissal claims.

There are two types of dismissal recognised in Irish law:

  • unfair dismissal - governed by the Unfair Dismissals Acts 1977-2007. To bring a claim, the employee will generally have to have one year’s continuous service with their employer. Such claims are brought before a Rights Commissioner or the Employment Appeals Tribunal.
  • wrongful dismissal - arises at common law and is based on a breach of ordinary contract law. Claims are brought before the Circuit Court or High Court and there is no qualifying time period.

In order for an employee to bring an unfair dismissals claim, generally the employee must have one year’s continuous service which includes the individual’s notice entitlement (eleven months service plus one month’s notice equals one year’s continuous service).

Employees whose employment has been terminated on the grounds of the employee’s trade union activity or maternity related reasons including pregnancy or in relation to their rights under the Parental, Adoptive, Carers Leave and Minimum Wage Acts can claim for unfair dismissal, even if they have served less than a year.

The dismissed employee must lodge their claim within six months of the dismissal or ‘in exceptional circumstances’ within twelve months.

Where an unfair dismissals claim is brought, it is presumed that the dismissal has been unfair, leaving the employer with the burden of proving that the dismissal was fair.

What is fair and unfair?

Dismissals arising from the following grounds are automatically unfair:

  • the employee’s membership of or trade union activities
  • the employee’s religious or political opinions
  • legal proceedings by the employee against the employer
  • the employee’s race, colour or sexual orientation
  • the employee’s age
  • the employee’s membership of the travelling community
  • maternity related dismissals
  • dismissals related to Parental, Adoptive, Carers Leave and Minimum Wage Acts
  • unfair selection for redundancy

The Protected Disclosures Act 2014 amends the unfair dismissals legislation so that it is unlawful to dismiss an employee wholly or mainly because they have made a protected disclosure. There is no service threshold required for such claims.

Dismissals arising from the following grounds are regarded as fair:

  • the employee’s capability, competence or qualifications (This definition allows employers to dismiss by reason both of incompetence or poor performance.)
  • the conduct of the employee (Examples of misconduct include late arrival to work, absenteeism, failure to obey reasonable orders, and incidents of gross misconduct such as sexual harassment, violence and theft.)
  • redundancy
  • the fact that continuation of the employment would contravene another statutory requirement
  • there were other substantial grounds justifying the dismissal

Remedies

The successful employee may be awarded reinstatement, re-engagement and/or compensation.

Where reinstatement occurs the employee is put back into their old job and receives remuneration for the period from dismissal up to the hearing of the case and there is no break in continuity of service.

Where re-engagement occurs the employee is put back into their old job, or a suitable alternative position, but does not receive remuneration during the interim and continuity of service is broken.

Where compensation is ordered the employee can receive compensation of up to a maximum of two years' remuneration. The employee is, however, under a duty to mitigate their loss by looking for alternative work. Compensation is confined to economic loss only and a person cannot be compensated for the stress/emotional trauma of being dismissed. Compensation of up to five years' remuneration may be awarded to an employee who is dismissed for having made a protected disclosure.

Decisions of the EAT may be appealed by the employer or employee to the Circuit Court and from there to the High Court.

An employee can bring a claim for wrongful dismissal where the dismissal breaches the employee’s contract of employment. This may occur where, for instance, the employee is not given their full contractual notice, or is not given valid or proper notice (the most common); the employee is summarily dismissed in circumstances which do not justify summary dismissal; or fair procedures are not observed.

Claims are brought by employees in the Circuit Court (where the maximum monetary award they can receive is €75,000) or the High Court (which has unlimited monetary jurisdiction). The jurisdiction of the Circuit Court is limited to €60,000 for personal injury actions.

In many instances employees bringing a wrongful dismissal claim will also include additional claims flowing from the breach of contract. For example, consequential loss due to an inability to obtain future employment, damage to reputation within the employee’s industry, loss of pension, etc.

There is no length of service requirement for employees bringing wrongful dismissal claims and such employees have six years within which to bring their claims before the courts.

An employee who is successful with a wrongful dismissal claim will be entitled to an award which puts them back into a position (by way of financial compensation) as if the wrong/breach had never occurred.

For a breach of (insufficient) notice claim, an employee’s claim for damages would be the balance of their contractual notice or ‘reasonable’ notice, if different. However, other losses may flow from that breach, for example, diminution of pension, loss of bonus etc.

An employee may seek an injunction under which they ask the court to keep them employed until the trial of the action. Here, the onus is on the employee to show that damages at the trial of the action would not be adequate compensation, that there is a serious legal issue to be tried and that the balance of convenience lies in favour of the courts maintaining the status quo.

Of paramount importance to employers is the issue of fair procedures. In order for an employer to dismiss an employee (even in instances of gross misconduct by the employee) the employer will be expected to have a clear and documented procedure in place and to have followed it precisely.

The requirements of fair procedures may vary from case to case but essential elements include:

  • an entitlement to representation
  • access to witness statements
  • compliance with the principle of proportionality
  • communication to the employee of the employer’s dissatisfaction and allowing the employee to respond

The employee is entitled to a period or periods in which to meet the improvement required by the employer and will also be entitled to assistance required to meet those standards.

The 2013 High Court decision of Kelleher v An Post [2013] IEHC 328 is a useful case for employers as it shows the Court's ability to uphold an employer's decision to terminate an employee's contract where fair procedures and due process have been followed meticulously.

This factsheet was written by A&L Goodbody, Solicitors, IFSC, North Wall Quay, Dublin 1.

© A&L Goodbody Solicitors. The material is not intended to provide, and does not constitute, legal or any other advice on any particular matter, and is provided for general information purposes only.