English

Employers: Get your free copy of "The 16 Common Employment Law Mistakes that Most Irish Employers Make" and my regular money saving employment law tips via email. Sign up below.

Instant access. We respect your privacy.

Employment Law

What is constructive dismissal?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

  • Reinstatement in the job
  • Re-engagement
  • 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.

 

Word of warning to employees

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

By Terry Gorry Google+

The Tupe regulations should be a critically important consideration if you are selling your business or if you are working in a business which is being taken over.

tupe-regulations

The Transfer of Undertakings Directive of 1977, which became part of Irish law by the European Communities (Safeguarding of Employees’ Rights on Transfer of Undertakings) Regulations, 1980, protects the rights of employees where the business in which they are employed is transferred to a new owner.

What is an undertaking?

It is important to note that the TUPE directive covers undertakings and businesses or parts of undertakings and businesses-this leads to the critical question of what an undertaking is and as there is no definition in the legislation it has led to much case law with each case being decided on it’s own particular facts.

 

 

Key elements of the TUPE regulations

The key thrust of the TUPE directive is that the rights and obligations in respect of employment contracts of the transferring business are transferred to the new business.

  • There must be a change of employer-this is a fundamental criteria
  • A change of employer can occur where full ownership does not change (management responsibility may change and transfer to a subsidiary for example)
  • Pension entitlements are excluded insofar as they do not have to be continued by the new company
  • The parties to a transfer have an obligation to notify, inform and consult with employees or their representatives
  • If TUPE legislation is breached the problem rests with the new business (the transferee)
  • The TUPE directive does not apply where the reason for the transfer is the insolvency of the transferring business.
  • TUPE also does not apply where the business is transferred by a transfer of shares
  • TUPE may apply even where there is no agreement between the two businesses, for example where a lease or franchise is surrendered by operation of law.

 

Who does TUPE apply to?

Firstly employees but also persons having an employment relationship with the transferor. This may mean agency workers, depending on who pays them, for example and the Labour Court has held that agency workers can be covered by the directive, depending on the particular circumstances of the case.

Conclusion

If you are thinking about purchasing a business in Ireland or the EU there is quite a lot of complex issues which you would be well advised to obtain legal advice for.

There is considerable body of decided case law which teases out many issues that have arisen in this area-matters like

  • the cessation and resumption of a business prior to transfer,
  • what is an undertaking,
  • who is covered by the legislation,
  • whether public bodies are undertakings,
  • questions surrounding dealerships and franchises,
  • transfer of part of an undertaking,
  • the difference between an “activity” and an undertaking and so forth.

For this reason do consult a solicitor if you feel that your rights have not been upheld in this potentially complex area.

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+

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 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+

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+

Are you worried about redundancy and redundancy entitlements in Ireland?

Do you need to access a redundancy calculator to check what you can expect?

redundancy-calculator

Hopefully this comprehensive article will help give you a good, sound understanding of redundancy in Ireland, redundancy payments, notice periods and your employment rights in Ireland.

Non-collective redundancies in 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. The focus of this piece is 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.

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.

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.

redundancy-entitlements

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

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.

It is worth noting also that the idea of “impersonality” should run through any redundancy decision-this means that the person is not redundant but it is actually the job that is deemed to be redundant-this may be due to change in the workplace or a downturn in business.

redundancy-ireland

Redundancy Calculator Ireland

Calculating your redundancy entitlements is pretty straightforward with the redundancy calculator provided online by the Department of Social Protection.(See link at the end of this article)

What is redundancy?

The legal definition of redundancy in Ireland is set out in the Redundancy Payments Act 1967 and amended by the Redundancy Payments Act 1971 and 2003-

an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

 

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

 

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

 

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

Key factors in redundancy

There are two critical factors to be gleaned from this definition-

The redundancy should arise from the doing away with the job, not the person. This feature of impersonality is necessary in a genuine redundancy situation.

redundancy-payments

Change-the change must arise as a result of change in the workplace which might range from a closing down of the business to a simple reduction in number of employees.

Redundancy entitlements

To be entitled to a redundancy payment you must have the requisite period of service served which is:

104 weeks of continuous employment attained after the age of 16 years.

To be entitled to redundancy you will need to have been dismissed from your job; if you are given a new contract of employment or your old contract is renewed you will not be entitled to redundancy.

Short time/lay offs

You can be placed on short time or laid off where the employer is unable to provide work but only where the employer reasonably believes that the lay off will not be permanent.

The employer is generally obliged to pay the employed during this time although there are exceptions to this general rule depending on custom and practice in specific situations.

Redundancy payments

Redundancy payment entitlements are calculated by reference to weeks per year of service and is basically calculated as follows:

  • 2 weeks’ pay for each year of continuous employment over the age of 16 years
  • An additional one week’s normal earnings.

All earnings over €600 per week are disregarded though in calculating statutory redundancy payments and redundancy payments are tax free.

(Continuous employment is not broken by layoffs, holidays or sickness.)

Redundancy calculator

You can access a redundancy calculator on the website of the Department of Social Protection to calculate your redundancy entitlements. Click here to go to calculator.

See also solicitors Dublin if you have any queries arising from this article.

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.
member-of-the-law-society