Constructive Dismissal in Ireland-What is Constructive Dismissal?

constructive-dismissa

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.”

It is one of the most common employment claims taken by employees against former employers.

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

  1. Reinstatement in the job
  2. Re-engagement
  3. 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.

Constructive Dismissal-Will You Win Your Case?

Constructive dismissal cases are difficult to win because the burden of proof is on the employee to prove that she had no other option but to resign due to the unreasonableness of the employer.

The January, 2013 decision of the Employment Appeals Tribunal in the case of Daniel O’Gorman v Glen Tyre Company Limited illustrates this.

In this case Mr. O’Gorman was a mechanic who had gone on sick leave in May, 2010 and did not return to work. He resigned from his position in September, 2010.

Mr. O’Gorman brought a case for constructive dismissal.

Decision of EAT

The Employment Appeals Tribunal in its decision referred to the burden of proof on the employee as being a ‘very high one’. It held that the employee must prove that his resignation was not voluntary.

The EAT must look at the contract and decide whether there has been a significant breach of the employment contract going to the root of the contract.

If there has not been a breach by the employer the EAT will then look at the conduct of the employer and employee and decide on the ‘reasonableness’ of the decision of the employee to resign.

The claim by the claimant for constructive dismissal fell under three headings:

  1. The excessive workload placed on him
  2. Exclusion in the workplace, for example at lunch breaks
  3. Being bullied and harassed in the workplace.

Mr. O’Gorman suffered from Asperger Syndrome.

Mr. O’Gorman left work in May, 2010 and did not return due to stress, according to his parents and GP who stated it was work related. However, the employer stated that he did not know this until he received the 2nd medical certificate.

The EAT held that it is crucial in a constructive dismissal case that the employee fully informs the employer of the complaints being made against him and gives the employer the opportunity to resolve the problems.

Interestingly, the EAT in this held that the parents of the claimant had a duty to let the employer know of the issues.

The EAT found no significant breach of contract going to the root of the contract which would have prevented the employee from carrying out his duties as per the contract.

The EAT then examined the conduct of both parties and found that the decision of the employee to resign was not a reasonable one.

The claimant’s claim failed.

Read the full determination of the Employment Appeals Tribunal here.

Word of warning re resignations

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

There is also a common law rule that once notice is given by either the employee or employer it cannot be unilaterally withdrawn so if you resign in haste you may repent at your leisure..

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Unfair Dismissals In Ireland-a Financial Landmine for Employers?

Unfair dismissal in Ireland is governed by the Unfair Dismissals Acts 1977-2007 and two points/fundamental principles need to be made clear 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.

unfair-dismissal-ireland

The Unfair Dismissals Act covers people who have been in employment for at least 52 weeks continuous service and who have not reached the normal retirement age for the employment in question.

However if there is no retirement age provided for in the contract then the employee can continue working and any dismissal will give rise to a claim for unfair dismissal.

However employees in the following categories do not have to show 52 weeks continuous service:

  •  employees who have been dismissed for trade union membership, pregnancy, maternity, ante-natal, post natal related matters, employees dismissed for exercising rights to parental leave or carer’s leave.

Employees who are not covered by the legislation include FAS trainees, members of the Defence Forces, 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.

Fixed Term and Specified Purpose Contracts

Unfair dismissal legislation does not apply to fixed term and specified purpose contracts provided

  1. The contract was in writing
  2. The contract specifically excluded the legislation
  3. The contract was signed by both parties.

Many employers use fixed term and specific purpose contracts in the belief that they are under no obligation to renew once the term has expired.

However, non-renewal can amount to  a dismissal.

The employer must be able to show that it was a genuine fixed term contract in the first place and that there was a commercial justification for it.

Read more about fixed term contracts here.

Employees’ Remedies for Unfair Dismissal

An employee who has been dismissed has two avenues of remedy open:

  1. A claim to a Rights Commissioner or Employment Appeals Tribunal within 6 months (12 months in exceptional circumstances) or
  2. The Courts where he/she can bring an action for breach of contract or breach of constitutional rights. Because the cause of action  is a breach of contract the time limit is six years.

To bring a claim for unfair dismissal under the Unfair Dismissal Acts 1977-2007 the employee must show

  1. He was dismissed
  2. He had a contract (oral or written)
  3. He had 1 year’s continuous service
  4. He must be over 16 years of age.

Constructive Dismissal

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

Once a dismissal has taken place the burden is on the employer to show that it was not an unfair dismissal.

There are a number of categories of dismissals which the Unfair Dismissals Act 1977 and 1993 deem to be automatically unfair. They are on the grounds of
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.

In addition if you can show that you qualify to bring a claim under the Unfair Dismissals legislation and your employer accepts that there was a dismissal, it will be for your employer to show that there were fair grounds for the dismissal as the burden of proof shifts from you to the employer.

Fair Dismissals

There are a number of limited grounds on which a dismissal can be justified by the employer as fair dismissals. They are on the grounds of

  • competence, capability or qualification
  • redundancy
  • misconduct
  • fixed term contracts or specific purpose contracts coming to a natural end
  • other substantial grounds.

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.

Adopting and implementing this Code of Practice on Grievances and Disciplinary procedures, while not mandatory, is an important factor in the employer successfully defending a claim of unfair dismissal.

Read about the essential elements of a good Grievance And Disciplinary procedure. The basic principles are

  1. The procedure is fair and rational
  2. The basis for the disciplinary procedure is clear ie the employee knows what he has done wrong
  3. The penalties are clear
  4. An internal appeals mechanism is in place.

The range of disciplinary sanctions provided for include an oral warning, a written warning, suspension with/without pay, transfer etc.

Generally the employer is required to set out the employee’s shortcomings, point out the required improvements, and give sufficient time to make the improvements.

The acid test tends to be what would a reasonable employer do and this will depend on the particular circumstances as the conduct may be of such serious nature as to warrant immediate dismissal. These circumstances are limited though an d the employer should take legal advice before dismissing without notice.

Remedies for unfair dismissal

The employee can bring a case for unfair dismissal under the Unfair Dismissals Acts 1977-2007 to a Rights Commissioner or the Employment Appeals Tribunal within 6 months.

The awards against the employer can include

  • reinstatement
  • re-engagement
  • compensation from a minimum of four weeks remuneration up to a maximum of 2 years remuneration.
Remuneration in this context includes salary, bonuses, benefits.
The Rights Commissioner and Employment Appeals Tribunal will consider what the employee has done to mitigate his loss and whether he has been able to find work since the dismissal.

Assessment of Loss

While the EAT can award up to 104 weeks compensation, the employee has a duty to mitigate his/her loss be seeking alternative employment.

The employee’s loss is financial loss (not injury to feelings etc.) up to a maximum of 104 weeks but this was amended by section 6 of the Unfair Dismissals (Amendment) Act 1993 which has the following effect:

1. if an employee has a nil financial loss (eg he immediately gets employment or is unfit to work due to sickness) the maximum he can be awarded is 4 weeks’ remuneration.

2. social welfare benefits should not be regarded in calculating financial loss.

The EAT can also reduce the award for any contributory conduct by the employee.


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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

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