Key termination issues in IrelandOn 30 May 2001 in Personnel Today Related posts:No related photos. Employment lawyer Grahame Walsh, of Irish law firm McCann Fitzgerald, givesan overview of procedures employers have to go through to terminate a contractin Ireland, and the protection employees have against unfair dismissalWhen dealing with termination of employment in Ireland, employers need to beaware not only of the traditional common law protections and statutoryprovisions that prevent an employee from being wrongly or unfairly dismissed,but also of the likelihood that an aggrieved employee may turn immediately tothe courts and seek an order preventing the termination by way of injunction. Anti-dismissal injunction The Irish courts have, in a series of recent employment-related cases,granted injunctions preventing the implementation of a termination ofemployment and ordering restoration of benefits such as salary, pensioncontributions, and provision of a car pending the trial of a claim that anindividual has been wrongfully dismissed. In a few rare cases, it has directed reinstatement pending trial.Injunctions have been granted in a number of circumstances, including summarydismissal, lack of fair procedures, lack of notice and constructive dismissal. Traditionally, courts would not, at common law, order what was effectivelythe continuance of a contract of employment by re-instating an employee. The effect of the injunction remedy is to cause employers to act, pendingdetermination as to whether the employer is entitled to terminate theemployment relationship, in all respects as if the individual were still anemployee. In theory, the individual is available to his or her employer but,practically, the purportedly dismissed employee will not return to his or herplace of work. It is for that reason that almost all such cases have beencommercially resolved following the injunction application. The Irish courts place great emphasis on the principles of natural andconstitutional justice, and have granted injunctions in cases where employershave failed to observe proper and fair procedures in the manner in which theyseek to terminate a contract of employment. In one Supreme Court decision, the judge, in granting an order to prevent atermination, stated that, “Dismissal from one’s employment for allegedmisconduct with possible loss of pension rights and damage to one’s good namemay, in modern society, be disastrous for any citizen. “These are circumstances in which any citizen, however humble, may beentitled to the protection of natural and constitutional justice.” A court may award an employee who has been wrongfully dismissed damages forlosses suffered as a result of the unlawful breach of the employment contract. In addition to a claim for damages consequent upon a breach of the contract,related claims are also being made for discrimination and stress-inducedillness. Unfair Dismissal Under Unfair Dismissals legislation, an employee who has worked for at leasteight hours per week for more than a year is entitled to rely on thelegislation to challenge a dismissal. Under the legislation, a dismissal isdeemed to be unfair and the onus is on the employer to establish otherwise. Dismissals may be justified on one of a number of grounds, including theemployee’s competence, capability, conduct or redundancy. In addition todemonstrating that there were substantial grounds justifying the dismissal, theemployer must show that it acted reasonably in effecting the dismissal. An employer considering dismissal for poor performance should apply fairprocedures, such as notifying the employee of the dissatisfaction and affordingan opportunity to improve before effecting the dismissal. In a redundancy situation, the employer must show not only that a genuineredundancy situation existed, but also that the employee was fairly selectedfor redundancy. Employees must be informed about the disciplinary procedures at theirworkplace and should be notified of any changes. In the event that no such procedure exists, the employer must neverthelessfollow a fair and reasonable procedure. As a minimum, the employee must be informed of the reason for thetermination and given an adequate opportunity to make representations. The procedures followed by an employer may be important when decidingwhether a particular dismissal was fair or not. Irish courts and tribunals have consistently held that where, objectively,there were substantial grounds justifying the termination of the contract butthe process of termination was procedurally flawed, the dismissal will beunlawful. In cases other than gross misconduct – when the employer is entitled toterminate without notice – an indefinite contract must be terminated by notice.Legislation sets out the minimum statutory notice periods that apply to allemployees who work for at least eight hours per week and have completed 13weeks of continuous service with the employer, however, in practice, individualcontracts will provide for longer notice periods. Remedies for Unfair Dismissal Claims of unfair dismissal are normally heard by the Employment AppealTribunal (EAT) and must be made within six months of the date of dismissal. If both parties agree, the claim can be heard more informally by a RightsCommissioner, whose recommendation may be appealed to the EAT. The remedy, which may be sought or awarded in the case of unfair dismissal,is reinstatement, re-engagement or compensation of up to a maximum of twoyear’s remuneration (includes salary plus all benefits). Special Protection Dismissals that are connected with pregnancy, religion, politics, race,colour, sexual orientation, age, membership of the travelling community ortrade union membership are automatically unfair. Selective dismissals ofemployees on strike are also unfair. Compromise agreements In effecting a termination, it is common practice in Ireland for employersto make, together with any statutory entitlements, an ex gratia payment to thedeparting employee. The level of this payment will depend on factors such asseniority, length of service, particular industry norms and any perceivedexposure that the employer may have in relation to the termination. In consideration for the ex gratia payment, the employee will normally signa compromise agreement in full and final settlement of any claims that they mayhave against their former employer. The agreement will generally contain a clause stating that the employee has,prior to signing, had the benefit of legal advice, nevertheless, as in the UK,the extent of the enforceability of such agreements is the subject of muchcurrent debate. The impact of the legislation and court decisions in Ireland is clear. Anemployer, in effecting a termination, must not only demonstrate thatsubstantial and justifiable grounds exist for the termination, but must alsoadhere rigidly to procedures that are demonstrably fair and reasonable. Failureto do so may involve the employer in costly and time consuming litigation. Edited by Clare Murray, employment law partner at Fox Williams and editorof www.hrlaw.co.uk , Fox Williams’ onlineemployment law service Previous Article Next Article Comments are closed.