High Court fires warning on dismissals during probation

Alan Hickey

July 17 2020

A recent High Court decision examined an employer’s attempt to dismiss a senior executive during his probationary period.

The Court granted an injunction preventing the employer from terminating the employee’s contract of employment on the basis that the technology company failed to follow fair procedures and the principles of natural justice before confirming the dismissal.

Background

The employee was appointed to the role of chief financial officer in July 2019. His contract of employment included a probationary period of six months. On January 7th, 2020 (still within his probationary period) the CEO informed the employee that his employment was being terminated with immediate effect and he would receive one month’s pay in lieu of notice. Notably, this type of procedure would not be uncommon in workplaces throughout Ireland.

The CEO issued a termination letter setting out examples of unacceptable poor performance including providing inaccurate projected sales figures, failing to adequately prepare for a board meeting and failing to answer a question from the board about the company’s basic cash position.

The employee exercised his right to appeal the decision to terminate his contract but was not in a position to attend the scheduled date for the appeal hearing. The employer wrongly in the Court’s view took his non-availability as confirmation that he did not wish to proceed with his appeal and confirmed the dismissal stood.

Poor performance

The employee submitted evidence that the employer never raised any issues with his performance prior to the January 7th meeting when he was summarily dismissed. The employee alleged that his dismissal was defective for the following reasons:

  • The dismissal was confirmed before affording him an opportunity to appeal.
  • The employer failed to adequately notify him of the arrangements for the appeal hearing.
  • The employer wrongly and unreasonably deemed his appeal to have been withdrawn when he merely notified the board that he was not available to attend on the proposed date for the hearing.

The Court accepted that these failings breached the express terms of the ‘disciplinary rules and procedures’ and ‘disciplinary appeal procedure’ referred to in his contract.

The Court also found that there was a breach of the implied terms in the contract requiring all such disciplinary processes and procedures to be conducted fairly and in accordance with the principles of natural justice.

Employers do not have carte blanche to terminate during probation periods

Although employees dismissed during a probationary period will typically not have the twelve months’ service required to bring a claim under the Unfair Dismissal Acts, the decision is an important reminder to employers that dismissing an employee during a probation period is not risk-free. If there are contractual provisions around performance assessment or the process for dismissal, it's vital that employers comply with the terms of their own contractual dismissal procedures before confirming the dismissal.

As this case demonstrates, a flawed process leading up to termination can potentially result in an injunction irrespective of the employee’s length of service.

Employee rights while they’re on probation

While employees generally have no rights to take a claim for unfair dismissal until they have acquired twelve months’ continuous service, they do acquire certain employment rights from day one of their employment.

Regardless of length of service, employees are entitled to make unfair dismissal claims at any time where they are dismissed:

  • For trade union membership or activity.
  • Pregnancy, giving birth, breastfeeding (or any matters connected with pregnancy or birth).
  • Availing of certain statutory rights (such as those under the Maternity Protection Acts 1994 and 2004, the Adoptive Leave Acts 1995 and 2005 or the Paternity Leave and Benefit Act 2016).
  • Making a protected disclosure under the Protected Disclosures Act 2014.

In addition, an employee with less than twelve months’ service has a right to refer a matter to the Workplace Relations Commission under section 13 of the Industrial Relations Act.

And as this recent case demonstrates, a flawed termination process involving a recently hired employee can even lead to a costly High Court injunction.

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