Constructive Dismissal

Constructive Dismissal in Ireland-What is Constructive Dismissal?

Constructive dismissal in Ireland is covered by the Unfair Dismissals Act, 1977 in section 1(b) as it provides that a dismissal is, among other definitions,

“the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer.”

Essentially where an employee terminates his employment as a result of his employer’s conduct he may be able to successfully bring a case for constructive dismissal.

It is vitally important to note that in a constructive dismissal case the onus of proof is on the employee as he/she needs to prove that his/her resignation was justified. This can be contrasted with a case of unfair dismissal where the employer must prove that the dismissal was fair and justified.

Examples of potential constructive dismissal cases

Some examples of circumstances giving rise to a claim for constructive dismissal are set out below. However it is vitally important to understand that in all legal cases, the particular circumstances of the case will be a huge factor in success or failure and the examples below are not definitive or exhaustive.

A unilateral reduction in pay

This may give rise to a case for a successful constructive dismissal case as it may be a material breach of a fundamental clause in the contract of employment.

A change in job function

A unilateral change in the functions of your job may give rise to a successful constructive dismissal claim.

Adverse working environment

Change of work location

Where the contract of employment does not make provision for a change of work location it can give rise to a claim.

Undeserved warnings
Sexual harassment in the workplace
Abuse in the workplace
Change in work hours
Conduct of fellow employees.

All of the examples above have given rise to successful claims for constructive dismissal on one occasion or another; however this does not mean that these situations will automatically lead to a successful claim.

Remedies for constructive dismissal

Possible remedies for unfair or constructive dismissal which the EAT (Employment Appeals Tribunal) can order include

Reinstatement in the job
Re-engagement
Compensation.

To bring a case under the Unfair Dismissals Act, 1977 you will need to have at least one year’s continuous service with the employer and have exhausted all internal grievance procedures of the company.

You must also bring your claim within 6 months of the date of termination of your employment (12 months in exceptional circumstances) and can bring it to a Rights Commissioner who will make a recommendation or you can bring your complaint directly to the Employment Appeals Tribunal who will issue a determination.

This determination of the EAT can be appealed to the Circuit Court by either you or the employer.

Word of warning

Take legal advice before doing something as drastic as resigning your position of employment and exhaust all internal grievance/complaints procedures as this will ultimately strengthen any case you bring.

Unfair Dismissal | Unfair Dismissals In Ireland

Unfair dismissal in Ireland is governed by the Unfair Dismissals Act 1993 and two points need to be made about this legislation at the outset-
1. an employer must have substantial grounds for dismissing an employee
2. in doing so the employer must apply fair procedures to the process.

The Unfair Dismissals Act covers people who have been in employment for at least 52 weeks continuous service. Employees who are not covered include FAS trainees, members of the Defence Forces and Gardai and civil servants.

It may seem blindingly obvious but only employees may use the legislation in respect of a termination of employment-sub contractors for example would not be covered.

An employee may succeed in a claim for constructive dismissal in circumstances where the employee resigns the employment as a result of the employer’s conduct towards the employee. Circumstances giving rise to this situation include a reduction in pay, a deterioration in the working environment, change of job roles, unwarranted warnings, change of location of the job and many others. Not all of these situations will always give rise to a successful claim for constructive dismissal but these are the kinds of things that employers must be very careful about if they don’t want to end up in the Employment Appeals Tribunal.

However employees on probation up to a period of one year are excluded from the protection of the legislation.

Unfair Dismissals

There are a number of categories of dismissals which the Unfair Dismissals Act 1977 and 1993 deem to be automatically unfair. They are
1. trade union membership
2. the colour, race or sexual orientation of the employee
3. the employee’s religious or political opinions
4. where the employee is involved in legal action against the employer
5. the employee’s age
6. the fact that the employee is a member of the traveling community
7. the employee becoming pregnant
8. the employee taking part in industrial action.

These are the main grounds which the legislation deems to give rise to an unfair dismissal claim and are deemed by the law to be automatically unfair.

Redundancy Defence

The employer has a defence in the form of redundancy but he must be able to show that the employee has been fairly selected for redundancy. However if the employer seeks to employ the redundancy defence he can expect that if an unfair claim is made against him he will find that his redundancy defence is put under a fair degree of scrutiny.

For example, it is not enough that the employer can show that his workforce numbers requirement is expected to decline some time in the future-he must be able to show that is requirements will lower in the very near future to the redundancy that he has just carried out.

Fair Procedure

The Employment Appeals Tribunal is very strong on fair procedure in relation to the termination of an employee’s job; they have held many times in the past that if they find that fair procedure was not followed then they will deem the dismissal to be unfair, regardless of the circumstances.

Filed Under: Employment Law Tagged With: constructive dismissal, unfair dismissal, unfair dismissals, unfair dismissals act

Terms of Employment | Amending the Terms of Employment in Ireland

Terms and conditions of employment in a recession – are employers entitled to unilaterally vary such terms and conditions?

Terms And Conditions of employment

An employee’s terms and conditions of employment may be a mix of those terms that are clearly set out in his/her contract, those implied by custom and practice and the employer’s duty to act reasonably, those which are incorporated through collective agreements and those which derive from statute (such as the right to minimum wage or annual leave) which apply automatically.

(This is part of the employment law in Ireland series of articles)

Amending terms and conditions of employment-historically

Where an employment contract does not expressly enable the employer to vary the terms of employment, employers may either:

1. Obtain the employee’s express agreement to the change;
2. Terminate the employee’s employment on due notice and offer re-engagement on new terms; or
3. Attempt to impose the change unilaterally.

Unilateral variation of an employee’s terms and conditions of employment to the employee’s detriment may give rise to:

1. A claim of constructive dismissal under the Unfair Dismissal Acts 1977-2007 or at common law;
2. A claim for damages for breach of contract;
3. A claim in respect of an unlawful deduction under the Payment of Wages Act 1991;
4. A “trade dispute” under the Industrial Relations Acts 1946-2004,
5. Industrial relations issues, and
6. Injunctive proceedings to prevent the unilateral variation.

What is contractual, and not merely a work practice, may not be varied unilaterally.

Such variation must be agreed between the parties regardless of whether the term is express or implied.

In practice, whether or not an employee benefit constitutes a term or condition of employment may be somewhat academic if changing it is likely to give rise to industrial relations issues and human resources problems. In Neville v Waters Munster Glass Ltd RP558/2003, the claimant, having refused to accept a reduction in salary and to work a reduced three day week, was consequently made redundant. Although the claimant argued that he had been unfairly dismissed, the tribunal held that a genuine redundancy situation existed.

It is clear from a UK case, GAP Personnel Franchises Ltd v Robinson UKEAT/0342/07, that where employees do not accept a unilateral variation by the employer, especially one that has an immediate impact (e.g. the reduction in pay or benefits), they should make it clear, preferably in writing, that they do not accept the change and are working under protest. Otherwise the employee may eventually be held to have implicitly accepted the change.

Variation of terms and conditions of employment in a recession

With unemployment rising to a rate of 8.3% and FÁS forecasting that this rate will exceed 12% during 2009, resistance to changing terms and conditions is low. There has been no change in the legal requirement to obtain employee consent for such variation, however many employees are accepting paycuts where they are being implemented in a genuine effort to avoid job losses and to try to ensure the employer’s survival.

However, it is significant to note that workers opting to accept a paycut, in order to avoid the threat of job losses, may find themselves being made redundant if the employer is ultimately forced to close down. The statutory redundancy payment is based on the employee’s current wage which will mean a lower statutory severance package than the employee would have received on the previous higher wage.

Amending terms of employment in Practice

In the course of varying terms and conditions employers should:
1. Maintain clear communication with employees;
2. Provide employees with reasonable notice of any variation to terms and conditions;
3. Be able to explain why the change is necessary and inform the employees of the alternative (i.e. a more formal re-structuring and ultimately possible job losses);
4. Consider whether the new terms can be imposed in stages as opposed to implementing all variations at once. This may help to ease the transition and allow employees to plan for the change; and
5. Consider whether an incentive can be suggested to assist employees in accepting the change. This does not necessarily have to be a financial benefit.

Filed Under: Employment Law Tagged With: constructive dismissal, terms and conditions of employment, terms of employment