Employment: Dismissal and Redundancy in Ireland

Discontinuing Employment

i Dismissal

An employer can, at common law, terminate an employment contract without cause, provided this is done in accordance with its terms. If a term of the contract is breached, however, this can give rise to a claim for damages at common law, or even to a claim for injunctive relief in certain circumstances. Notwithstanding any express contractual right to terminate, employees are afforded statutory protection against unfair or discriminatory dismissal. Under the UDA, an employer cannot lawfully dismiss an employee unless substantial grounds exist to justify termination. Also, it is essential for an employer to be able to establish that fair procedures have been followed before making a decision to dismiss. Subject to certain exceptions, employees must have accrued at least 12 months’ continuous service to qualify for protection under the UDA.

To justify a dismissal, an employer must generally be able to show that it resulted wholly or mainly from one or more of the following grounds:

  • the capability, competence or qualifications of the employee for the work concerned;
  • the conduct of the employee;
  • the redundancy of the employee’s role; or
  • the employee being prohibited by law from working or continuing to work (e.g., not holding a valid work permit where one is required).

If the dismissal is not because of any of the grounds listed above, there must be some other substantial grounds to justify it. If an employee believes that he or she has been unfairly dismissed, he or she may bring a claim to the WRC. An adjudicator can award redress in the form of compensation (subject to a maximum of two years’ gross remuneration), reinstatement or re-engagement.

A dismissal is automatically deemed unfair under the UDA if an employee can show that his or her dismissal was wholly or mainly attributable to one of the following:

  • membership or proposed membership of a trade union or engaging in trade union activities;
  • religious or political opinions;
  • legal proceedings against an employer in which an employee is a party or a witness;
  • race, colour, sexual orientation, age or membership of the Traveller community;
  • pregnancy, giving birth, breastfeeding or any other matters connected with pregnancy or birth;
  • making a protected disclosure under the PDA; or
  • the exercise or proposed exercise by the employee of the right to parental leave, force majeure leave, carer’s leave, maternity leave, adoptive leave, paternity leave or parent’s leave.

If an employee alleges that he or she has been dismissed in a discriminatory manner (i.e., on one of the nine grounds upon which discrimination is prohibited by the Employment Equality Acts (see Section VIII)), he or she may bring a claim before the WRC and subsequently before the Labour Court on appeal. Either of these bodies may award compensation (subject to a maximum of two years’ gross remuneration, depending on the claim), reinstatement or re-engagement. In gender discrimination cases, a claim may be made directly to the Circuit Court, which can, in theory, award unlimited compensation. There is no minimum service threshold for an employee to be covered by this legislation.

Once in continuous employment for at least 13 weeks, an employee is entitled to a minimum period of statutory notice of termination. The minimum length of the notice period will depend on the employee’s length of service (although greater periods of notice can be provided for by contract):

  • between 13 weeks and two years’ service: one week’s notice;
  • between two years’ and five years’ service: two weeks’ notice;
  • between five years’ and 10 years’ service: four weeks’ notice;
  • between 10 years’ and 15 years’ service: six weeks’ notice; and
  • 15 years’ or more service: eight weeks’ notice.

An employee may waive the right to notice and accept payment in lieu. Alternatively, the contract can stipulate a right to pay in lieu of notice. An employer may dismiss an employee without notice or payment in lieu of notice if the employee has fundamentally breached the employment contract amounting to a repudiation of the employment contract, or if the employee is guilty of gross misconduct.

To settle a dispute, including a redundancy situation, compromise or claim, the parties can enter into a settlement agreement. For the settlement agreement to be enforced, as a matter of contract law, the employee must receive something over and above what they might otherwise be entitled to (i.e., an ex gratia payment). The employee should also be advised in writing and given the opportunity to obtain independent legal advice in relation to the terms of the agreement.

ii Redundancies

The Protection of Employment Act 1977 must be complied with when an employer intends to implement collective redundancies. Collective redundancy occurs when, within a period of 30 days, the number of such dismissals is:

  • at least five in an establishment employing more than 20 but fewer than 50 employees;
  • at least 10 in an establishment employing at least 50 but fewer than 100 employees;
  • at least 10 per cent of the number of employees at an establishment employing at least 100 but fewer than 300 employees; and
  • at least 30 in an establishment employing 300 or more employees.

When collective redundancies are proposed, the employer must first enter into consultation with employee representatives, a trade union or a works council, with a view to reaching an agreement in relation to matters such as the possibility of avoiding or reducing the numbers to be made redundant and the criteria to be used in selecting employees for redundancy. The consultation must commence at least 30 days before notice of the first redundancy is issued. The Minister for Employment Affairs and Social Protection must also be notified at least 30 days in advance of the first notice of termination by reason of redundancy being confirmed.

The Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 established a redundancy panel to which employees or employers may refer certain proposed collective redundancies for an opinion and possible Labour Court hearing in circumstances where it is alleged that the dismissed employees will be replaced by new employees on lesser terms and conditions of employment. Should such a finding be made and the employer proceeds with the redundancies nonetheless, it will be exposed to significantly increased liabilities, inter alia, if claims are brought by the dismissed employees under the UDA.

Although there is no express statutory form of consultation required for individual redundancies, it is best practice to do so. In this regard, it is also recommended that employers make at least some effort to identify an alternative position for the employee, if possible. As with any other form of dismissal (other than in cases of gross misconduct), notice of termination by reason of redundancy or payment in lieu thereof must be given.

It is also possible, when concluding the redundancy process, to enter into a compromise agreement with the employee, whereby he or she would receive an ex gratia payment in return for him or her waiving his or her rights and entitlement to bringing any claim against the employer.

Any employee who is on protected leave (e.g., maternity or paternity leave) cannot be made redundant, and the employer will have to wait until he or she returns before engaging with him or her on the issue.

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