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.
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:
- repudiation and
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.