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2012 Archives

The need for a written partnership agreement in any partnership is crucial.

Because if you do not have one, then the Partnership act 1890 will govern your relations with your partner.

partnership-law-ireland

Partnerships are an important part of business life in Ireland for a number of reasons.

 

1) any time 2 or more people come together to carry on business and do not form a company the law assumes they are in partnership.They are then subject to partnership law which dates back to the Partnership Act of 1890.

 

2) Professionals such as doctors,lawyers,dentists,vets,accountants are not allowed to form companies.

 

3) There are advantages over forming a company from the point of view of tax, accounting and disclosure requirements.

Unlike a company a partnership is not a separate legal identity which means that partners have unlimited liability, unlike directors or shareholders in companies.

 

And partnerships do not have to go through any registration process to be formed.

 

The downside is that each partner is liable for the losses of his co-partner in carrying on the partnership business, even where the other partner has defrauded clients of the business.

partnership-law-ireland1

What is a Partnership?

Partnership Act 1890 defines a partnership and essentially states that where 2 or more people carry on business with a common view of profit, then a partnership exists.

 

A written partnership agreement is not necessary.

 

And where 2 or more companies come together to carry on business to make a profit then unless they have set up a special purpose joint venture company a partnership will be deemed to exist.

 

However it is important to note that Co-ownership of property alone does not mean that a partnership exists; there must be a sharing of any profits between partners.

Generally the maximum number of partners allowed is 20;however there are exceptions made for solicitors and accountants.

Why is it important to have a written partnership agreement?

 

Because if there is not either an implied or express agreement the partnership will be considered in the eyes of the law a partnership at will and will be governed by an act from 1890….which in most cases is wholly inappropriate for modern business.

 

For example without a written partnership agreement the 1890 Partnership act will mean that

1)there is no right to expel a partner

2)any partner may dissolve the partnership

3)if a partner dies, the firm will automatically dissolve

4)there is no power to retire under the Partnership act.

 

These are pretty crucial reasons for partners to set down their agreement and understanding in a written partnership agreement.

By Terry Gorry Google+

Franchising can be a great way to start your own business.And the failure rate for franchises is much less than for non franchise start-ups.

franchise-agreement

Franchise Opportunities

But you still need to do your homework and assess any franchise opportunities presented to you and ask and be satisfied about many questions which you might not think about in your enthusiasm to start your own business.

 

The franchise agreement from a major franchisor will generally be on a take it or leave it basis.

 

That is to say the franchise agreement will not be negotiable as the franchisor can’t afford to negotiate individual franchise agreements with each franchisee.

 

But that does not mean that you should not ask the right questions and satisfy yourself that the situation that arises when there is a dispute or the franchisee is incapacitated or dies is provided for.

 

Here are thirty questions you should ask and satisfy yourself about before signing a franchise agreement.

 

1. What law governs the franchise agreement?

 

Many successful franchises in Ireland are not Irish companies………..the law applicable for an international franchise may well be another jurisdiction.

 

2. What happens if the franchisee dies?

 

Is there provision in the franchise agreement for the franchisor to provide staff to run the business to keep the show on the road?

 

3. Is there a renewal option when the franchise agreement ends?

 

If there is are you happy to commit to sign a franchise agreement in say, 10 years time, having no opportunity to see the new agreement? What are the terms?

 

4. Can you sell the business? Can the franchisor veto your purchaser?

 

5. When the franchise agreement is terminated is there a non compete clause? For how long?

 

6. If the franchise agreement is terminated and the premises is yours, how much will it cost to debrand?

franchise-ireland

7. Is the training and system manual up to date? When was it last updated?

 

8. Is there an advertising fee payable? Can it be justified? Is there marketing spend on the brand?

 

9. Is there a management services fee? How is it calculated?

 

10. Does the franchisee have to inform the franchisor of any improvements he has made to the system?

 

11. Is the franchisor the owner of the trademark? And if not will he provide a licence to the franchisee for the use of any trademarks and intellectual property?

 

12. Who will own the premises? Will the franchisor provide any advice in relation to location and premises? Is this provided for in the franchise agreement?

 

13. How long has the franchisor been carrying on business? How many company owned outlets?

 

14. If the franchisor is supplying goods is there a credit limit? Will a minimum stock of products be imposed? Is a vehicle required? Will it have to be branded?

 

15. What books and records will the franchisee have to supply to franchisor?

 

16. Will a confidentiality agreement be required?

 

17. Who will pay for initial and ongoing training?

 

18. Is there a territory? Is it exclusive? Is it stipulated in the franchise agreement?

 

19. How long will the franchise agreement last? Is it compliant with competition law requirements?

 

20. Is training provided for staff? Is it ongoing?

 

21. Is more than 10% of the initial fee for use of the name and trademark? Can this be justified?

 

22. What initial stock will be needed? Will the franchisee have to purchase equipment, stationery from the franchisor?

franchise-opportunities

23. What ongoing obligations has the franchisor as per the franchise agreemtent in relation to problem solving, management, finance and marketing, provision of staff in an emergency, research and development and maintaining and improving the manual?

 

24. Will franchisee be required to advertise locally?

 

25. Does the franchisor have the right to communicate with the franchisee’s customers?

 

26. Has the franchisor the legal right to purchase the franchise from the franchisee? On what terms? Is that in the franchise agreement?

 

27. Is the franchisor entitled to appoint a manager if the franchisee dies or is incapacitated?

 

28. Who is entitled to terminate the franchise agreement? On what terms? What events will bring this about?

 

29. What will happen when a dispute arises? Is arbitration provided for in the franchise agreement? Litigation?

 

30. Does the franchisee have to enter into any restrictive covenants in the franchise agreement?

 

When looking at a franchise agreement with a view to buying either a new franchise or an existing franchise, a close perusal of the franchise agreement with these questions foremost in your mind is a good starting point.

 

But only a starting point. You will need to engage a solicitor before signing any franchise agreement but these questions may assist you in deciding whether to go that far or not.

By Terry Gorry Google+

This piece will give you some essential information about copyright law in Ireland, copyright infringement, what is copyright and so forth.

Infringement of copyright is common nowadays, particularly with the growth of publishing on the internet leading to image copyright breach amongst other common breaches.

copyright-infringement

What is copyright?

 

Copyright is the legal term, which describes the rights given to authors/creators of certain categories of work.

 

 

Copyright protection extends to the following works:

 

1.original literary, dramatic, musical or artistic works sound recordings, films,broadcasts, cable programmes

2.the typographical arrangement of published editions,computer programmes,

3.original databases.

 

The owner of copyright is the author and within the Copyright and Related Rights Act, 2000 the author has a very specific definition

 

21.—In this Act, “author” means the person who creates a work and includes:

(a) in the case of a sound recording, the producer;

(b) in the case of a film, the producer and the principal director;

(c) in the case of a broadcast, the person making the broadcast or in the case of a broadcast which relays another broadcast by reception and immediate retransmission, without alteration, the person making that other broadcast;

(d) in the case of a cable programme, the person providing the cable programme service in which the programme is included;

(e) in the case of a typographical arrangement of a published edition, the publisher;

(f) in the case of a work which is computer-generated, the person by whom the arrangements necessary for the creation of the work are undertaken;

(g) in the case of an original database, the individual or group of individuals who made the database; and

(h) in the case of a photograph, the photographer

 

copyright-law

 

For example a photographer is the owner in the case of a photograph.

 

However, as copyright is a form of property, the right may be transferred to someone else, for example, to a publisher. Where an employee in the course of employment creates the work, the employer is the owner of the copyright in the work, unless an agreement to the contrary exists.

 

Copyright is a property right and the owner of the work can control the use of the work, subject to certain exceptions. The owner has the exclusive right to prohibit or authorise others to undertake the following:

 

1. copy the work

2. perform the work

3. make the work available to the public through broadcasting or recordings

4. make an adaptation of the work.

 

Copyright takes effect as soon as the work is put on paper, film, or other fixed medium such as CD-ROM, DVD, Internet, etc.

 

No protection is provided for ideas while the ideas are in a persons mind; copyright law protects the form of expression of ideas, not the ideas themselves.

Rights related to Copyright

Rights are not restricted just to the creators of the works themselves but certain other rights may apply.

 

For example, the record company has certain rights in a sound recording of the performance of a song, in addition the author(s) of the lyrics and the music will also have certain copyrights. Similarly performing artists have certain rights in their performances. The legislation also provides for moral rights, such as the right to be acknowledged as the author of a particular work and also the right to object to derogatory treatment of that work.

 

The primary legislation governing copyright in Ireland is the Copyright and Related Rights Act, 2000 (No. 28 of 2000)

 

Copyright Protection

 

In Ireland, there is no registration procedure for owners of a copyright work.

 

Basically the act of creating a work also creates the copyright, which then subsists in the physical expression of the work.

 

Copyrights are protected by law and illegal use of these rights can be contested in the Courts, the technical term for this misuse is infringement.

 

The legislation provides for criminal offences and consequently infringers could face both civil liability and criminal convictions.

 

Professional advice should be sought by copyright owners with regard to the options and the remedies available where infringement of their work occurs.

 

It is most important that the originator of a work can show subsequently when the work and the consequential copyright were created as it may be necessary to commence or defend infringement proceedings, at some later stage.

 

One way of doing this is to deposit a copy of the work with an acknowledged representative who may be a bank or solicitor in such a way as to allow the date and time of the deposit to be recorded or notarised.

copyright-protection

Alternatively, one may send a copy of the work to oneself by registered post (ensuring a clear date stamp on the envelope), retaining the original receipt of posting and leaving the envelope containing the copyright work unopened thus establishing that the work existed at that date and time.

The Copyright Notice and Symbol ©

It is important to show that copyright is claimed in a work. Works should be clearly marked to show who the copyright owner is and the date from which copyright is claimed.

 

The internationally recognised symbol © is normally used to indicate that a work is protected by copyright.

 

Example:

 

© Copyright Business and Legal 2009.

 

Examples of more detailed copyright notices may be found in published versions of literary works. The inclusion of a copyright notice does not legally constitute proof of ownership, but does indicate a claim to copyright, which may prove useful if it is necessary to defend that claim or to deter possible infringement.

 

It is usually necessary to obtain permission to use copyright material. Persons with a copy of a work can look for an indication on the work regarding copyright. This can assist making contact with the author/ original creator of the work in order to obtain their permission to use the work for any act, which is prohibited by copyright legislation.

 

Length of Copyright Protection

 

The duration of copyright protection varies according to the format of the work. In respect of the following works the term of protection is:

Literary, dramatic, musical and artistic works

Copyright protection expires 70 years after the death of the author/creator

 

Films

Copyright protection expires 70 years after the last of the following dies, the director, the author of the screenplay, the author of the dialogue of the film, or the author of the music composed for use in the film.

 

Sound recordings

Copyright protection expires 50 years after the sound recording is made or if it is made available to the public then 50 years from the date it was made available to the public.

 

Broadcasts

Copyright protection expires 50 years after the broadcast is first transmitted

 

The typographical arrangement of a published edition

Copyright protection expires 50 years after the date it is first made available to the public

 

Computer-generated works

Copyright protection expires 70 years after the date it is first made available to the public

 

Chapter 3 of the Copyright and Related Rights Act, 2000 (No. 28 of 2000) deals in greater detail with the duration of copyright in Ireland.

 

Benefits of Copyright Protection

 

Copyright protection provides a vital incentive for the creation of many intellectual works. Without copyright protection, it would be easy for others to exploit these works without paying any royalties or remuneration to the owner of the work. Copyright therefore encourages enterprise and creates a favourable climate to stimulate economic activity.

 

Copyright protection provides benefits in the form of economic rights which entitle the creators to control use of their literary and artistic material in a number of ways such as making copies, performing in public, broadcasting, use on-line, etc. and to obtain an appropriate economic reward. Creators can therefore be rewarded for their creativity and investment.

 

Copyright also gives moral rights to be identified as the creator or author of certain kinds of material (known as the paternity right), and object to the distortion and mutilation of it. An author’s right to object to the modification or derogatory action in relation to his or her work is known as an integrity right. Chapter 7 of the Copyright and Related Rights Act, 2000 (No. 28 of 2000) deals in greater detail with moral rights applicable in Ireland.

By Terry Gorry Google+

The contract of employment in Ireland is made up of both express terms and implied terms with the Terms of Employment (Information) Act, 1994 stipulating that certain basic information must be given to the employee in writing.

It is vital that as an employer or employee that you take legal advice as to the various aspects of your employment contract.

contract-of-employment

This includes the names and addresses of both employer and employee, the place of work, the title of the job, pay, any terms relating to sick pay, periods of notice and many other basic details.

 

Implied Terms

 

In every contract of employment, written or otherwise, there are 4 categories of implied terms which fall under the headings of

a) terms implied by custom/practice(depending on the industry)

b) terms implied by statute (right to redundancy, right not to be unfairly dismissed)

c) terms implied by law (employers duty of care and employees duty of trust and confidence)

d) collective agreements in unionized employment.

 

Express Terms of Employment

 

The express terms of employment set out below is a pretty extensive list but it should provide a decent check list of what should be included in a contract of employment and be contained in writing in the contract.

1. Who-the employer and employee

2. When-when does employment start

3. What-what is the job role

4. Hours-hours of work?

5. Where-the workplace

6. Is there a period of probation? For how long?

7. Pay-the salary package

8. Holidays-what is the position re holidays and is there extra days over and above those set down by statute in the Organization of Working Time Act,1997

9. Sick pay-what is the situation re sick pay

10. Retirement age

11. Pension

12. Disciplinary and grievance procedure

13. Any restrictions re competition and setting up against the employer in the future using trade secrets/contacts

14. Notice re termination of employment

15. Email and internet use

employment-contract

This list is not exhaustive but should give a good basis for both employer and employee when it comes to negotiating an employment contract.

If you need any assistance with drafting a contract of employment or advice before signing one solicitors Dublin would be happy t assist.

By Terry Gorry Google+

Unfair dismissal cases are common and potentially costly for employers. unfair-dismissals-ireland

The outcomes from these cases, which can be brought to a Rights Commissioner or directly to the Employment Appeals Tribunal (EAT), include

  • Compensation (up to 104 weeks’ salary)
  • Reinstatement
  • Reengagement.

There are a number of key areas about which the EAT and Rights Commissioners are concerned and which can be critical factors in the ultimate decision. Here are four such factors:

  • Procedural fairness

Both the Employment Appeals Tribunal and the Rights Commissioner service are very anxious to see that the dismissed employee received procedural fairness leading up to the decision to dismiss.

What may appear to be fair to an employer may not be seen to be so by the EAT and the principles of natural justice should permeate every step of the procedure with the employee knowing what the charge/complaint against him/her is and the opportunity (with representation) to meet the charge.

  • Alternative sanctions

The EAT and Rights Commissioners will also be influenced by whether the employer seriously considered alternative sanctions and penalties to outright dismissal. An employee may well argue that alternative penalties should have been imposed and that the dismissal was disproportionate to the alleged “offence”.

unfair-dismissals-ireland1

  • Opportunity to improve

Regular monitoring of an employee’s performance is important as is the opportunity for the employee to improve performance, particularly where the employer is claiming that poor performance or incompetence are the reasons for dismissal.

The tests to be used in dismissal cases as a result of alleged incompetence or poor performance are twofold:

i)       Has the employer a genuine and honest belief in the incompetence of the employee and

ii)     Is this belief reasonable and has the employer grounds for it?

The employee should be given plenty of opportunity to improve performance.

  • Representation at disciplinary hearing

The employee should be advised that he/she is entitled to representation at any disciplinary hearing and entitled to defend the charges against him/her.

 

In summary employers must be aware that

  • Substantial grounds must exist for the termination of employment and
  • Fair procedures must be followed pretty strictly.
By Terry Gorry Google+

Historically solicitors would advise clients in custody that there was not much to be gained by making a statement, either under caution or otherwise, when being questioned by the Gardai.

They would explain that the client could invoke the privilege against self-incrimination.

right-to-silence

However this position has changed somewhat in the last few decades.

There has been a growing body of legislation which makes this advice more problematic as under various pieces of legislation now on the statute books it may be an offence to fail to explain certain matters or adverse inferences may be drawn against the arrested person which may later be put to a judge or jury.

Criminal Justice Act, 1984

The Criminal Justice Act, 1984 contains a number of provisions which are designed to force the arrested person to provide information to the Gardai. This can have serious consequences when someone is arrested and detained for questioning and ensures that the arrested person has a decision to make in relation to what he/she might say when being questioned.

Section 15 of the Criminal Justice Act, 1984 makes it an offence for a person not to account for a firearm in his/her possession.

Secition 16 of the Criminal Justice Act, 1984 makes it an offence for an arrested person to fail to account for any stolen property in his possession.

Section 18 of the Criminal Justice Act, 1984 obliges a person to account for any object, substance or mark on him which the Garda suspects is because of the person’s participation in an offence and Section 19 obliges a person to explain his presence in a particular location.

right-to-silence-ireland

Both sections 18 and 19 can lead to adverse inferences being drawn against the arrested person by a judge or jury at the hearing or on preliminary examination. However a person cannot be convicted on the basis of inferences alone.

Section 18 and 19 of the Criminal Justice Act, 1984 have been amended by the Criminal Justice Act 2007 with similar consequences but the arrested person must be told by the Gardai about the effect of failing to answer questions and must be given the chance to consult with a solicitor.

The Criminal Justice Act 2007 provides additional safeguards for the arrested person; for example inferences can only be drawn there the interview has been recorded electronically.

Other acts such as the Criminal Justice (Drug Trafficking) Act 1997, the Offences against the State (Amendment) Act 1998, the Misuse of Drugs Act 1977 and 1984 and the Criminal Justice (Forensic Evidence) Act, 1990 all compel the arrested person to provide information or material.

In conclusion the old advice of “whatever you say, say nothing” may not be the best advice in all circumstances and if you find yourself in this situation you should avail of your right to consult with a solicitor.

By Terry Gorry Google+

The Code of Conduct on Mortgage Arrears 2010 is a critically important document for anyone in arrears with the mortgage on their primary residence.

The primary residence, incidentally, does not have to be occupied if it is the only residential property owned by the borrower in the State.

code-of-conduct-mortgage-arrears-2010

A March, 2012 High Court decision in Stepstone Mortgage Funding Limited v Fitzell has held that in order to successfully obtain an order for possession that the lender has complied with the  Code of Conduct on Mortgage Arrears 2010.

In summary the Code of Conduct on Mortgage Arrears 2010 obliges the lender to hold off on possession proceedings unless

  • Every reasonable effort has been made to agree an alternative arrangement with the borrower and
  • To hold off proceedings for possession for 12 months from when the mortgage enters the Mortgage Arrears Resolution Process.

Mortgage Arrears Resolution Process

This process should be used prior to legal proceedings being commenced and the lender must tell the borrower that the Mortgage Arrears Resolution Process is being applied to his/her loan which can only occur after 31 days from the mortgage arrears occurring.

Standard Financial Statement

The bank’s Arrears Support Unit must assess a Standard Financial Statement that the bank requires the lender to fill out.

Revised Payment Arrangements

When repossession proceedings have commenced but have been adjourned on the basis that a revised payment arrangement has been entered into with the lender then if this arrangement breaks down the bank is required to review the failure and seek a new Standard Financial Statement.

Conclusion

If you find yourself in mortgage arrears with your primary residence, and increasing numbers of people in Ireland are, you should contact your lender and contact the Money Advice Budgeting Service (MABS).

You would also be well advised in consulting a solicitor and possibly the New Beginning group.

Here is a link to the Code of Conduct on Mortgage Arears:Code of Conduct on Mortgage Arrears 1 January 2011

By Terry Gorry Google+

From May, 2012 a new body, the Property Services Regulatory Authority (PSRA) has been set up to regulate the provision of property services in Ireland.

This new body covers auctioneers/estate agents, property management service providers, and letting agents.

licensed-property-service-provider

Anyone providing property services in Ireland requires a licence and is leaving themselves open to up to 5 years in prison and an unlimited fine if they provide property services without one.

 

A separate licence is required for each property service.

 

There are a number of different application forms depending on whether you are a sole trader, independent contractor, company or partnership.

 

The Property Services (Regulation) Act 2011 is the relevant piece of legislation which you can find at www.IrishStatuteBook.ie and the PSRA (www.NPSRA.ie ) have produced a booklet explaining the whole procedure together with the application forms and notes to help you with filling out the application.

 

Sole Trader/Independent Contractor Example

The following comprises the main requirements for a sole trader/independent contractor but is not comprehensive or exhaustive.

Please refer to the guide here. ..Guide to Becoming a Licensed PSP

(Solicitors Dublin)

Your application would be as a sole trader or independent contractor (depending on whether you have employees or not) and the main requirements are as follows:

  • A completed and signed Application Form (PSRA/LA 3)
  • Evidence of your qualification(s) or necessary experience (see below)
  • Evidence that the required level of Professional Indemnity Insurance, which covers both the employer and employees, is or will be available to you,
  • Accountants Report,
  • Tax Clearance Details,
  • Certificate of Business Name Registration (only required if you intend using a business name-it is not necessary to trade under a business name but if you choose to do so the business name will have to be registered),
  • Prescribed Licence Fee (€1,000),
  • Passport size photograph,
  • Compensation fund contribution of €200.

licensed-property-service-authority

 

The necessary experience required is that you have held an auctioneer’s licence for three out of the last five years.(This is not now the case-see the amendment below which points up the difference between the booklet published by PSRA and the published regulations covering the qualifications requirement)

The level of professional indemnity insurance cover which must be provided for is as follows:

“the amount insured for each and every claim (exclusive of defence costs)

must be at least twice the business’s annual fee turnover (exclusive of VAT)

in the previous fiscal year subject to a minimum cover of €500,000 (five

hundred thousand euro), with no limit on the number of claims in any one

year.”

Hopefully this article together with the guide above will give you a good understanding of what is now required to become a licensed property services provider in Ireland.

Update 18th June, 2012

The PROPERTY SERVICES (REGULATION) ACT 2011 (QUALIFICATIONS) REGULATIONS 2012 sets out the qualifications requirements for applicatnts for the various licences and were published on 5th June 2012.

These regulations appear to different significantly from the booklet published by the PSRA as the regulations now give some discretion to the PSRA in relation to the applicant proving he/she has attained the minimum qualification requirements.

Here is an extract:

“minimum qualification requirements”, in relation to an application for a
licence, means—
(a) the applicant has, in respect of the subject areas specified in the Schedule, successfully completed a course of studies which has led to the
awarding to him or her, by a nationally recognised awarding body or
awarding bodies, of 120 ECTS compatible higher education and training credits at levels 6 to 10 of the framework of qualifications (in this
definition referred to as the “Irish framework”),

(b) the applicant has, in another jurisdiction, in respect of the subject
areas specified in the Schedule, successfully completed a course of
studies which has led to the awarding to him or her, by a body or
bodies in that jurisdiction that is or are equivalent to a nationally
recognised awarding body or awarding bodies, credits, under a framework in that jurisdiction that is equivalent to the Irish framework,
equivalent to levels 6 to 10 of the Irish framework,
(c) the applicant has lawfully engaged in, and for periods amounting
together to not less than 3 years of the 5 year period immediately
preceding the making of the application, the provision of the property
service for which he or she is seeking the licence, or
(d) the applicant has such other qualifications or experience, or both,
which, although not falling (or fully falling) within paragraph (a), (b)
or (c), satisfies the Authority that the applicant is suitable to provide
the property service for which he or she is seeking the licence

The PSRA application form for a sole trader/independent contractor now refers to “evidence of my engagement full time in the provision of Property Services for 3 of the last 5 years” which is a significant difference from page 13 of the PSRA booklet which states:

In the case of a Sole Trader or Independent Contractor evidence that the applicant was the holder of a licence or permit issued under the Auctioneers and House Agents Acts 1947 to 1973 for three of the five years immediately preceding the making of the application.

By Terry Gorry Google+

One of the most common sources of dispute between employer and employee is when termination of employment occurs.

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.

employment-rights-ireland

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.

 

Termination of employment in Ireland

Contracts of employment may be terminated in a number ways including:

  • agreement,
  • dismissal,
  • repudiation and
  • frustration.

 

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 in circumstances whereby 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 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.

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).

However where an employee is being dismissed for a very serious breach of contract, there is no entitlement to any notice. Invariably the employee will argue that the reason for his dismissal, if there was a breach of contract, is disproportionate and excessive punishment.

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.

By Terry Gorry Google+

Unfair dismissal and constructive dismissal cases can prove very expensive for employers, not to mention traumatic occasions for employees.

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.

unfair dismissal

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.

 

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.

constructive-dismissal

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

Unfair Dismissal Categories

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 sometime 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.

By Terry Gorry Google+

In contentious business a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
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