Thursday, July 16, 2015
Part Two – Firing
In last week’s article we looked at some of the pitfalls associated with hiring an employee. In general, though, recruitment and putting effective employment contracts in place should not cause significant problems.
Far more problematic is the end of the employment relationship. Without due care, an employer can easily expose themselves to an unfair dismissals claim.
Ireland (like most of the EU) has a protectionist approach to employment. The thrust of the law in the last 40 years has been towards permanent employment contracts.
Most fundamentally, once an employee has more than 52 weeks of continuous service, their dismissal is automatically deemed by the law to be unfair and the employer must prove otherwise. The employer must be able to justify the dismissal by reference to misconduct, incapacity, incompetence or redundancy of the employee’s role among others. The 52-week threshold is immutable.
On top of this, legislation enacted in 1993 compels an employer to act “reasonably” when dismissing. It is also settled law that employers must adopt fair procedures when terminating employment. It’s convenient to consider dismissal in respect of two periods – dismissal during probation and dismissal at any point in time after that.
In part one of this article, it was noted that it’s important to ensure that the contract of employment contains a probation clause. A good probationary clause should provide (a) that the employment can be terminated for no reason during probation and (b) that the disciplinary procedure won’t apply in those circumstances.
These are critical points. An employer needs to reserve the right to dismiss cursorily (because otherwise, if the dismissal is related to performance, it could be argued that no time was given to improve).
Termination after 52 weeks
As an initial point, it’s important to bear in mind that the notice period counts towards the 52-week threshold. If you dismiss at ten months, with a three-month notice period, you’re going to overtake the threshold and the employee is entitled to a permanent contract. You should always add the actual service and the notice period service together and ensure the total is less than 52 weeks.
After 52 weeks, fair procedures will have to be followed if you’re dismissing for misconduct or incompetence. Equally, a dismissal flowing from incapacity (typically due to illness) will have to be bolstered by sufficient medical evidence to the effect that the employee can’t return to the job.
There is really no excuse for an employer not to have a written Disciplinary Policy in place. That policy should contain a number of stages, each of which will only be reached if the employee fails to improve performance etc.
Failure to follow the procedure has the potential to doom the employer’s defence to an unfair dismissal claim. It should be remembered that these claims are not trifling – up to two years remuneration can be awarded. For an employee on a certain salary level, you are immediately talking about potentially large amounts of money.
Any disciplinary hearing (especially one that could result in a termination) must also be conducted on rigorously fair principles. The employee must know the case against them (they can’t be presented with allegations at the last minute). They must have the opportunity to vindicate their position/articulate their defence. They must have the ability to cross-examine witnesses etc. They also have a right to representation and they must be given an appeal of decision to dismiss.
Again, the tribunal/courts have repeatedly demonstrated that failure to abide by these principals can torpedo the procedure and, ultimately, the decision to dismiss.
Finally, dismissals following redundancy obviously don’t involve any element of misconduct, competence or capacity. However, those dismissals are equally susceptible to an unfair dismissal claim and need to be treated with the same care. A clear rationale justifying the redundancy is essential, as is a rationale justifying the selection of the particular employee.
There are cases where summary termination is appropriate but these are few and far between. There have been a number of cases in the last two years in which the EAT has struck out so-called “gross misconduct” cases because the behaviour complained-of was simply not serious enough in the Tribunal’s view.
There is no “one size fits all” definition of gross misconduct. However, it’s reasonable to say that it has to be misconduct beyond the norm – it has to be genuinely serious (either by its nature or by the effect is has on the business, or a combination of both).
Applying a disproportionate sanction when firing an employee or dismissing without recourse to the employee’s rights to fair procedure can be a costly mistake to make. Employers should always tread carefully and have caution as their watchword when it comes to employee dismissals.