Termination of Employment

Unfair Dismissal

The principle of Unfair Dismissal is based on the principles that substantial grounds must exist to justify the termination of a contract of employment and fair procedures must be followed in effecting the termination.

If you leave your job without being dismissed, you may still have a claim for unfair dismissal. This is known as constructive dismissal and arises where an employee considers that they have no alternative but to leave their employment because the conditions in work are being made too difficult for them to continue working. Such factors that may lead to such a conclusion include:

• Reduction in pay/ lack of pay rise
• Change in job function/ location 
• Change in working hours 
• Sexual harassment or abuse in the workplace

If I am dismissed due to my absence or sickness could this be an ‘Unfair dismissal’?

Unlike most forms of dismissal this area does not involve any fault on the part of the employee. In scrutinising such a dismissal as fair or otherwise a court or tribunal must balance the employee’s welfare against the demands of the business which is frequently a difficult task.

Other grounds for dismissal

• Behaviour inconsistent with Employer’s business
• Employee’s conduct
• Lack of competence and poor performance
• Conflict of Interest (working for a Competitor)
• Employee resigned and attempted to withdraw this resignation

Each case will be dealt with individually to determine if the dismissal was fair or unfair.

Who is covered by Unfair Dismissal Legislation?

A dismissed employee, to have an action here, must have one year’s continuous service with the employer.

One year’s continuous service is not required however where employees can show that they were dismissed by reason of trade union membership or activity, pregnancy, breastfeeding or related matters, or because they exercised their statutory rights to maternity, adoptive, parental or carer’s leave.

Remedies / Redress

• Reinstatement
• Re-engagement
• Compensation
• Restraining dismissals/ Injunction

Re-engagement

Re-engagement is where there is an order that the employee resumes work in the position he held immediately before his dismissal or in a different position which might be ‘reasonably suitable’.

Compensation: Calculation of Compensation ( Remuneration & Loss )

The calculation of remuneration is important in the assessment of the maximum value of claim, being actual loss attributable to a dismissal. Regard is had to the gross amount of such payment. The amount is capped at an equivalent of 104 weeks remuneration.

Loss is defined as “Any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss…of the rights of the employee under the Redundancy Payments Acts or in relation to superannuation.”

If an employee successfully mitigated his loss following a dismissal he was liable to receive a nil compensation award in the event of succeeding with an unfair dismissal claim until the enactment of the 1993 Act, section 6. The reason why an employee might not have a loss could also arise due to illness/ inability to earn at the time of and after the dismissal.

The 1993 Act however provided for the awarding of up to one months remuneration in cases where there is no loss.

Restraining Dismissals: Injunctions

It is well established that, generally, the courts will refuse to order the Specific Performance of a contract of employment. The courts are loath to compel an Employer and an employee to work together in circumstances where one or the other no longer wishes to maintain the relationship and where it would not be possible for the courts to supervise the relationship.

However, the rule is not absolute. Where there is a cause of action but damages are inadequate, trust & confidence still exists between the parties and it is otherwise just there may be a possibility of an Injunction being granted restraining an Employer from dimissing an employee.

As seen above, an employee claiming ‘Unfair dismissal’ has the potential to secure an award of up to two years gross renumeration.

Redundancy

Redundancy generally arises where an employee’s job ceases to exist. The reasons for a job ceasing to exist might be due to the financial position of the firm, lack of work, the firm closing down, or a reorganisation within the firm. Not all employees are legally entitled to a redundancy payment. In order to qualify for a statutory redundancy payment, an employee must have at least two years continuous service with the employer.

Redundancy or Unfair Dismissal?

Redundancy is an absolute defence to a claim of unfair dismissal provided the employee has been fairly selected for redundancy. However, strict adherence to the definition of redundancy is required from employers if an employee is to be held to be dismissed by reason of redundancy. Thus an employer who dismisses an employee on the grounds that his workforce requirements are ‘expected to cease or diminish’ must establish that the cesser or diminution was expected at or within a very short time after the time of the alleged redundancy.

‘Impersonality’ required for Redundancy

An essential feature of a redundancy dismissal is the requirement that the function be redundant not the person, i.e. that there be an element of ‘impersonality’ about the dismissal. Employer submissions that note alleged failings of the employee may indicate that it is not a genuine redundancy situation.

Other factors in determining the validity of a Redundancy

• The conduct of the Employer 
• Reasonableness 
• Consideration of other options 
• Selection criteria used 
• Objectivity of the selection process 
• Notice given
• Redundancy payment