Avoid Unfair Dismissal Claims

Unfair dismissal is the most common type of employment claim against employers in Ireland. Dealing with these claims can be extremely costly and time consuming. Employers are well advised to follow their own written procedures, to the letter, in employment contracts and handbooks, and to treat employees fairly and reasonably throughout any termination process, writes Claire McDermott from Flynn O’Driscoll.

In order for a dismissal to be deemed to be fair, the test is twofold: (1) there must be a substantial reason for the dismissal, and (2) the procedures used must be fair.

The Unfair Dismissals Acts set out a number of instances where dismissals will automatically be deemed to be unfair. These include trade union activities, strike action, dismissals relating to any protective leave (e.g. maternity), religious or political opinions, race, gender and sexual orientation.

Here are five things employers should NEVER do when considering terminating an employee’s employment.

 1.       Never act in the heat of the moment

At a very minimum, on dismissing an employee, employers must give the employee reasonable notice, which is dependent on their length of service with the company. This must be done in accordance with the Minimum Notice and Terms and Conditions of Employment Act or the notice provisions as set out in the employee’s contract. In circumstances where an employee offers their resignation in a heat of the moment scenario, it could be risky for an employer to rely on it. The best advice is that if a resignation is made during a heated exchange, it would be prudent for the employer to allow the dust to settle before issuing a P45. No matter how bad the employee has behaved, the employer should hold his breath and take immediate external advice on how to proceed.


2.       Never make an example of an individual employee

In circumstances where there are breaches of company policy within the workplace, such as practical jokes or bad time-keeping, and these practices are being carried out by a number of employees, be very careful not to make an example of any one individual employee.

In the recent case of RSA Insurance and Philip Smith, the former Chief Executive of RSA in Irelandwas awarded €1.25 million in a case where it was determined by the Employment Appeals Tribunal (EAT) that Mr. Smith had been constructively dismissed from his role. The case related to a report, which RSA Insurance had produced as a result of an investigation into the financial reserves of the insurance company. Mr Smith noted during the hearing that the later part of the report was a character assassination of him, which left him with no choice but to resign. There were also claims that the report had been drafted in such a way as to pre-determine that the decision would be taken by the Company to dismiss Mr Smith. These claims were upheld by the EAT who noted that the practices within RSA were known by more than a dozen employees.


3.       Never terminate by reason of redundancy without consultation

Redundancy is a highly regulated area. Where a genuine redundancy situation exists, employers will still need to exercise caution and ensure that they act in accordance with the legislation as well as following their own procedures. Fair procedures need to be followed at every step, and employers are advised to engage in at least a two-stage consultation process. The process should include an explanation as to why the company needs to restructure or make changes, any selection criteria to be used, and consultation on any suitable alternative positions that might be available within the company. Those selected for redundancy should be asked for their feedback and any alternatives to redundancy before any final decision is made. Where proposals are put forward by employees, the company should take time to consider same and revert to the employees as to whether they are viable alternatives.