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.
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.
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”.
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.
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.
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.
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.
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
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”.
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
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
Employers-How to Avoid Costly Employment Claims