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Employment Law

Redundancy in Ireland | The Employers’ Obligations in Non-Collective Redundancies

redundancy-law-ireland

An employer’s obligations in redundancy situations will depend on whether a collective redundancy is proposed or it is a “normal” redundancy in a small business in Ireland.

This piece will look at non-collective redundancies; in collective redundancies there will be additional requirements on the employer imposed by the Protection of Employment Acts 1977 to 2007 and various regulations and other legislation.

As indicated already in relation to unfair dismissals, redundancy is a defence to a claim for unfair dismissal.

Genuine Redundancies

However it must be a genuine redundancy within the terms of the Redundancy Payments Acts 1967 to 2003 which sets out 5 redundancy definitions/situations.

These are:

1. The employer has ceased or intends to cease the business for which he employed the employee;

2. The requirements of the business have changed to the point where the employee is no longer required for the particular work for which he was employed;

3. The employer intends carrying on business with fewer or no employees;

4. The employer has decided the work which is being done by the employee will be done in a different way in the future and the redundant employee is not qualified or trained;

5. The employer has decided that the work will be done by another employee who is capable of doing other work for which the redundant employee is not trained or qualified.

Non Collective Redundancies

In non-collective redundancies in Ireland there are no specific procedural requirements set out to carry out a redundancy dismissal.

What the employer must be very aware of though is the Unfair Dismissals (Amendment) Act, 1993 as this act holds that if the conduct of the employer is unreasonable in carrying out a redundancy then it may amount to unfair dismissal.

There are 3 principal areas employers need to be careful about:

  1. their conduct (and its reasonableness) in carrying out the redundancies
  2. considering alternative options to redundancy and
  3. selection for redundancy.

Unfair Selection for Redundancy

Recent cases involving unfair dismissal claims which centred around redundancy involved unfair selection for redundancy. For example, in this case the employee was awarded €50,000 because he was unfairly selected for redundancy.

(Here are 4 cases where employees brought claims on the basis that they were unfairly selected for redundancy)

So it is vital that the employer act reasonably in carrying out a redundancy and a principal factor in how reasonable the behaviour was will be how the employer selected the employee(s) for redundancy and whether there were other alternatives to redundancy such as alternative employment or some other type of work in the employer’s business.

From an employer’s perspective it is important to be able to point to the reasonableness of his conduct when faced with the necessity for redundancy.

Even though it is not a procedural requirement from a legal perspective it is good practice for the employer to hold meetings and discussions to explore any alternatives and it would be prudent for the employer to make a record of these discussions and proposals.

The ability of the employer to be able to point to a paper trail of how the decision to carry out redundancies was arrived at can prove invaluable at a later date, for example at an EAT or Rights Commissioner hearing.

 Fair Selection for Redundancy

The key point for an employer is to be able to demonstrate that people were selected fairly for necessary redundancies and that the employer acted reasonably at all stages of the process.

The selection of employees for redundancy has led to many employers paying quite a high price at a later date before the Employment Appeals Tribunal and unfortunately there are no criteria laid down in legislation for the selection of employees.

Some factors to be considered by the employer should include

    • Attendance record
    • Ability
    • Disciplinary record
    • Skill level

While many employers employ a policy of “last in, first out”. If there is a procedure in place in the workplace to deal with redundancy, as there is with most unionised workplaces, the employer will have to be able to show that the procedure was used to select each employee made redundant.

Nevertheless, no matter what criteria are used, the employer may well have to stand over his/her selection procedures at a later date and being able to objectively justify his choice will be his best defence.

You may also be interested in calculating your redundancy entitlements
Employers-How to Avoid Costly Employment Claims

Categories
Employment Law

Do You Make Costly Mistakes in These 13 Areas as an Irish Employer?

Being an employer in Ireland is a difficult challenge at the best of times.

There is a huge body of employment law which places fairly onerous obligations on the employer.

There are key areas of possible friction for you as an employer and which can lead to costly and expensive mistakes in your dealings with your employees.

Lets take a look at some of the most common ones.

Key areas of concern for an Irish employer

1)      The Contract of employment

This is a critical area to get right from the outset and to prevent problems arising in the future. Watch out for implied terms as well as the express terms you agree with your employee. (See contract of employment for more information)

2)      Payment of wages

The Payment of Wages act 1991 governs the payment of wages by an employer to the employee.

And it’s easy to fall foul of its provisions if you are not careful.

3)      Time and leave entitlements

This area covers rest periods, sickness of the employee as well as holiday entitlements and maternity periods and is an area of friction between employer and employee. The Organisation of  Working Time Act, 1997 and various EU directives have a lot to say in this area.

4)      Discrimination and equality in the place of work

This is another huge area of law with rights and entitlements arising from the Constitution, EU directives and our own Irish legislation such as Employment Equality Acts.

Many employers get caught out, not by direct discrimination but, by indirect discrimination.

5)      Health and safety

Health and safety law places some very serious obligations on the employer and there are common law obligations as well as statutory obligations. Breaches of health and safety law can lead to criminal convictions for you as an employer.

6)      Transfer of undertakings

This covers situations where one business buys another in which there are employees. The Transfer of Undertakings Directive govern this area.

7)      Unfair dismissals

Need I say more? This area also covers constructive dismissals and has proven to be an area of considerable cost and expense to employers. A necessary line of defence in relation to claims for unfair dismissal is good grievance and disciplinary procedures which follow best practice.

8)      Redundancy

If you wish to make an employee redundant it had better be a proper redundancy and the procedure for choosing an employee for redundancy must be fair and non-discriminatory. Read more about redundancy law here.

9)      Trade union recognition/disputes

The above are broad areas of employment law which commonly lead to costly mistakes and expense for you as an employer if not handled correctly. You might be interested in further employment law articles which spell out some common misconceptions and mistakes that cost employers in Ireland.

10) NERA Ireland

Getting ready for a NERA inspection can be time consuming and expensive if you do not follow some essential steps to ensure you are compliant as an employer. Learn more about the work of NERA and take a  look at the handy employers’ check list.

11) Part time Employees’ Working Conditions

Not understanding the protections that part time employees enjoy is also something that many employers overlook or take for granted. Learn about part time employees’ rights here.

12) Fixed Term Contracts

Fixed term contracts and the danger of a contract of indefinite duration (CID) arising against the employer’s wishes is quite common also. Learn more about fixed term contracts here.

13) Changing the Contract of Employment

The employer needs to be aware of what he/she can and cannot do when it comes to altering the terms and conditions of the contract of employment.

Always seek the advice of a legal professional if you wish to ensure you do not leave your business exposed to the spectre of costly employment related claims.

If you have a question or concern, please use the contact form below. We respond within 24 hours, guaranteed.
Employers-How to Avoid Costly Employment Claims

Categories
Employment Law

Termination of Employment | Fair Dismissal | Unfair Dismissals | Dismissal Procedures-Some Essential Facts You Should Know

constructive-dismissa

Termination of employment issues have the potential to cause the employer a lot of money, and a lot of grief and heartache for the employee.

It is important for any small business to have a basic understanding of the procedures and the rights of employees and employers when it comes to terminating employment.

The most commonly litigated aspect of employment law is instances involving the termination of the employment contract itself.

Although disputes are not uncommon in the workplace, most will be resolved without the parties involved being compelled to terminate the employment contract.

However in some instances this may be the only reasonable avenue available to either or both parties.

Contracts of employment may be terminated in a number ways including: agreement, dismissal, repudiation and frustration. (Check out our other employment law in Ireland articles)

Termination of employment by Agreement

As is the case with all contracts, contracts of employment may be terminated with the consent of both parties.

In certain circumstances a term of the contract may be inserted to deal with the termination of the contract, by means of notice by either party. In this instance it is generally understood that a certain minimum time must have elapsed prior to the term being activated.

An alternative means by which the contract of employment may be brought to an end involves the payment of an agreed sum, made with the intention that the contract shall be terminated forthwith.

In certain circumstances where the interests of both parties are served by the immediate termination of the contract of employment, then no such monies may be necessary i.e. the employer is actively seeking to cut back on staff numbers and the employee has been offered more lucrative terms with another employer.

Termination of employment by Repudiation

A repudiation of the employment contract occurs where either party unilaterally fails to abide by the terms agreed, eg forced resignations, failure to pay remuneration, unilaterally changing the nature of the work..

In circumstances where an employee is the one alleged to have committed a repudiatory breach of the employment contract, for example by means of unambiguously leaving the job at issue, the contract is not deemed to be terminated and it is still at the discretion of the employer to retain the services of the employee.

The reasoning behind this principle is to avoid rewarding employees who seek to prematurely end their contracts deliberately.

Termination of employment by Dismissal

A dismissal for the purposes of employment law is legally defined as the unilateral termination of the contract of employment by the employer.

Where the employer fails to give adequate notice of the dismissal he/ she will be held to have repudiated on the fundamental conditions of any employment contract, payment for work completed.

In circumstances where an employee refuses to accept this repudiation, then he/she may elect to sue for damages for wrongful dismissal.

Note: there is a significant difference between wrongful dismissal and unfair dismissal.

Termination of employment by Frustration

One of the more recent innovations in the law of contract is the legal principal of frustration, whereby circumstances outside of the control of either party mean that the contract comes to an end and any further contractual obligations are set aside.

In the context of the contract of employment, the factors accepted are inclusive of but not limited to: the destruction of the workplace, illness on the part of the employee, employee’s imprisonment or liquidation of the business.

Notice of Termination

One of the terms of any contract of employment will generally be the length of notice required to lawfully terminate the contract. In the event that no such clause is deemed to exist then reasonable notice must be given (this will be determined by the individual circumstances of any contract).

(Read more about notice periods for termination of the contract of employment.)

However where an employee is being dismissed for a very serious breach of contract, there is no entitlement to any notice.

The process whereby an employer decides to immediately terminate an employment contract is legally regarded as a summary dismissal. This power may be exercised in circumstances where the contract of employment expressly stipulates or alternatively where the employee is guilty of serious misconduct.

The exact factors which constitute a serious misconduct may be cited in the contract or alternatively where this is not the case, the individual circumstances of the employment may be considered. However, some actions are so nefarious as to be instantly regarded as such including: deliberately destroying the employer’s valuable property, stealing from the employer, and gross insubordination.

In addition to the grounds previously specified an employee’s action representing to the employer that he possessed a certain skill or qualification, which was not in fact the case, would have seriously misrepresented the situation and this action would warrant summary dismissal.

However, inability to do a job may be regarded due to the employer’s inadequate training methods or to inefficient techniques for selecting employees.

Dismissal Procedures

In most cases the employment contract should specify or directly incorporate the manner in which dismissal procedures should be conducted.

Indeed statute compels all employers to issue new employees with a directive on appropriate dismissal procedures within one month on initiating employment under section 14 of the Unfair Dismissals Act 1977.In the event that this directive is altered, a minimum of 28 days notice must be given to the employee.

However this obligation does not apply where no agreed procedural framework was in place between the parties or the employee’s trade union or where no such procedure is based on custom and practice.

It is estimated that as much as 80% of employers’ lost unfair dismissal cases are lost because of procedural unfairness.

Codes of Practice on Disciplinary Procedures

In the advent of any dismissal procedures being initiated, the employee has a Constitutional right to expect fair procedures.

In essence this means that an employee must be made aware of any evidence against them and should be afforded the opportunity to respond to the allegations.

In the event that a breach of fair procedures is found then the courts can order that the employee be continued to be paid pending a full hearing of the action.

Procedures are necessary to ensure that discipline is maintained in the workplace and that disciplinary measures can be applied in a friar and consistent manner.

The procedures must comply with the principles of natural justice and fair procedures including

1. Details of the allegations or complaints are put to the employee concerned.
2. The employee concerned is given the opportunity to avail of representation.
3. The employee concerned has the right to affair and impartial determination of the issues being investigated, taking into account the allegations or complaints themselves, the response of the employee to them, any representations made by or on behalf of the employee concerned and any other relevant or appropriate evidence factors or circumstances.

It is advisable that allegations be set out in writing, that the source of the allegation or complaint be given or that the employee concerned be allowed to confront or question the witnesses

Disciplinary action may include:

1. An oral warning
2. A written warning
3. A final written warning
4. Suspension without pay ( not advisable)
5. Transfer to another task
6. Some other disciplinary short of dismissal

See Labour Relations Commission codes of practice also.

Dismissal

Fair Dismissal

In circumstances where an employee can demonstrate that they were dismissed from a contract of employment, then the onus is on the employer to demonstrate that this dismissal was justified and  fair.

In order to achieve this an employer must show that the dismissal was premised upon one or more of the grounds set out in the Unfair Dismissals Act 1977. In doing so the employer must also rebut any allegation of dismissal on any improper grounds alleged by the employee.

The grounds upon which dismissal may be premised include: capability, competence, qualifications, conduct, redundancy, illegality or another case premised on unnamed “substantial grounds”.

1) Capability

Capability grounds are usually premised on issues like lateness, absenteeism, and persistent absence through illness.

If lateness or absenteeism is at issue then the employer will be expected to have documentary evidence to substantiate this claim such as clocking in records, or absenteeism files that are not medically certified. In addition the employer should have evident of the severity of the absences being brought to the attention of the employee.

If illness or injury is at issue, it is often assumed that you cannot be dismissed while on certified sick leave from you work. However, this is not true.

It is difficult to lay down hard and fast rules to apply to these cases as each are different and each will be treated on its own merits. Accordingly these instances are usually divided into short term and long term categories.

Short term illnesses are taken to include medical illnesses which require the individual to be absent for short periods from the work place. Assuming that the employer is not actually questioning the validity of the terms cited they will be expected to have:

1. Established that a pattern of absences exists and it that it is causing problems

2. Satisfied themselves that the problem is unlikely to get better in the long run.

3. Warned the employee the dismissal may occur if things do not improve.

Many of the same considerations exist in a long term absence cases. However, employers will in this instance be expected to secure detailed medical evidence which suggests that an early return is unlikely.

The precise time frame in which an absence will be considered unreasonable will vary from case to case depending on it effect on the work place.

In circumstances where there is a deviation in the medical evidence to both parties as to the likely date of return, the employer should seek a third opinion in advance of taking a decision to dismiss.

2) Competence

Competence is taken to refer to the standards which are expected of an individual employee as regards their job. The employer should take the earliest opportunity to outline these expectations to the employee so that each party is fully aware.

In the circumstances where you fall short of the standards expected, it is understood that this should be communicated to the employee through formal procedures in addition to a specification as to the improvements necessary. The improvements should be achievable and be within a reasonable time timeframe.

Ultimately, a final warning should be given to the employee setting out the likely hood of dismissal should there not be a marked improvement.

3) Qualifications

This kind of situation envisages two potential forms: either the employee misled the employer about qualifications during the process of applications or the job was offered contingent on certain qualifications being secured which have subsequently not been secured.

4) Conduct

Conduct is taken to cover a very large area of behaviour and might be accurately termed misconduct. In this regard there is a very clear need to differentiate between gross misconduct and ordinary instances of misconduct.

Gross misconduct may give rise to summary dismissal without notice or pay in lieu of notice.

Alternatively a series of instances may collectively lead to dismissal. In the case of instances of minor misconduct warnings as to future behaviour must be issued.

5) Redundancy

In this case the employer should establish that the current levels of staff are unsustainable and that accordingly the dismissal of the employee was justified.

This may be countered by the employee in circumstances where evidence suggests that:

  • There was no economic imperative or justification for the redundancies eg. Company continues to operate profitably
  • That the space vacated had been refilled
  • That the process of selection for redundancy was unfair
  • That the basis for selection was premised on discrimination

6) Illegality

This situation is taken to occur in a situation where the employee’s continued employment in their current situation would be a breach of the law. The most obvious example of this may be said to occur where a valid driving license is required to continue work in a haulage business as a truck driver.

In certain circumstances, the court may be prepared to accept an argument that reasonable accommodation of the employee should have been considered prior to dismissal, that is to say, an employee no longer able to carry out a specific task may be used in a different role.

7) Other Substantial Grounds

In circumstances whereby the employer cannot rely on any of the grounds as aforementioned, then an onus will be imposed upon them to justify the dismissal on the basis of other “substantial grounds”.

Unfair Reasons

The Unfair Dismissals Act lists numerous grounds upon which dismissal premised upon, if proven to be so, will be unfair including:

1. Taking part in a strike action
2. Membership of a trade union or participation in union activities
3. Religious or political opinions
4. Actual or threatened civil or criminal proceedings to be taken against the employer. This is taken to extend to situations whereby the individual is merely to act as a witness
5. Race, colour or sexual orientation
6. Membership of the traveller community
7. Pregnancy
8. Exercising right under the Adoptive Leave Act 1995
9. Exercising right under the Parental Leave Act 1998
10. Exercising right under the National Minimum Wage Act 2000
11. Unfair selection for redundancy
12. Exercising right under the Maternity Protection Act 1994
13. Exercising right under the Carer’s Leave Act 2001

Learn more about employment law in Ireland.