Unfair Dismissal

07 May 2020

Over time, most employees will reach a point where they decide to leave their company. But how you deal with this process is extremely important. Especially when it comes to dismissals.

Failure to act fairly could lead to an unfair dismissal claim being made against you. If found guilty, you could be made to pay heavy financial compensation–losing your best staff in the process.

In this guide, we'll discuss what unfair dismissal is, dismissal laws in Ireland, and how an employee may make a claim fairly.

What is unfair dismissal?

Unfair dismissal is when someone's employment is terminated without prior notice, or without substantial grounds.

When terminating employment, you must always act fairly. Failure to do so can lead to legal proceedings and a claim being raised against you. To ensure you don't go against employment law, you must know when a dismissal is unfair.

What are examples of unfair dismissal?

There are several situations where dismissal is classed as unfair. For example, some reasons include:

  • Their religious or political opinions.
  • Their sexual orientation, race, colour, age or being a member of the traveller community.
  • Being pregnant, giving birth, breastfeeding or attending antenatal classes.
  • Taking leave entitlements. (Such as maternity leave, carer's leave, parental leave, force majeure leave or adoptive leave).
  • Being involved in civil or criminal proceedings against the employer.
  • Holding a trade union membership or taking part in trade union activities.

The Employment Equality Act 1998-2015 are in place to protect employees against discrimination. If an employee feels discriminated against, a claim of discriminatory dismissal may be raised.

Redundancy isn't classed as unfair dismissal. However, you must always fairly select employees during this procedure. Unfairly selecting someone or having no genuine reasons could lead to an unfair dismissal claim being raised.

What is the law surrounding unfair dismissal in Ireland?

The Unfair Dismissals act 1977-2021 are in place to protect employees from unfair dismissal. It helps to ensure employers are acting fairly when they dismiss employees.

There are five fair reasons for dismissal:

  1. Capability, competence, or qualifications.
  2. Conduct.
  3. Redundancy.
  4. Breaking the law.
  5. Other substantial grounds justifying the dismissal.

Is dismissal for gross misconduct unfair?

There is no notice entitlement for dismissals due to gross misconduct or a serious breach of contract.

However, employees can make claims denying the act of gross misconduct or alleging that the employer didn't follow a fair disciplinary procedure.

Ensure you have clear and fair dismissal procedures in place, which is included in your employment contract.

A wooden gavel on a white background.

What are possible outcomes of an unfair dismissal claim?

If the WRC finds you unfairly dismissed an employee, there are a few outcomes that could be handed down to your business. For example:

Job reinstatement

You may be ordered to reinstate the employee to their former job. This means treating them as if they were never dismissed.

Following reinstatement, the employee is entitled to any loss of earnings between the date of the dismissal and the date of the hearing. They also have the right to any favourable changes within their employment.

As the employment relationship is often beyond repair if a claim reaches the WRC, this remedy is rarely used by Adjudication Officers.

Job re-engagement

Unlike job reinstatement, job re-engagement means the employee gets their job back from a certain date. However, they aren't entitled to such compensation, such as loss of earnings.

This outcome is usually given when the adjudicator feels the employee contributed in some way to the dismissal.

Financial compensation

Financial compensation is the monetary loss an employer can take after the outcome of the claim. How much compensation the employee is awarded depends on all the circumstances surrounding the dismissal.

However, the employee doesn't get their job back if they're awarded financial compensation. The maximum compensation an employee can be awarded is two years' pay.

When compensation is awarded to the employee, three factors are taken into consideration:

1.    Current loss of earnings

This is the amount of money lost between the date of the dismissal and the claim being heard. Any extra money earned during this period is deducted from their compensation amount.

Employment laws requires the employee to mitigate their losses. This can be done by seeking alternative employment or being available for work.

2.    Pension loss and future loss of earnings

This is any future impact the unfair dismissal will have on the employee's finances. Such as, how long it'll be until the employee finds a new job, or how the dismissal affects their pension entitlements.

3.    Contributory conduct

This element of compensation is a calculation that considers any employee conduct that contributed to the dismissal.

This is known as the degree of contribution. It's stated as a percentage, with the overall compensation reduced in proportion to the employee's contribution to their own dismissal.

If an employee isn't happy with the decision made by the adjudicator, an appeal can be made to the Labour Court.

Two people discussing work matters.

How to manage employees raising unfair dismissal claims

Employees can claim unfair dismissal by raising it under Irish Unfair Dismissal Legislation. However, there are certain legal requirements needed beforehand.

Here are ways to manage employees raising unfair dismissal claims:

Meet legal service requirements

To claim unfair dismissal in Ireland, the employee must have had at least twelve months of continuous service before making a claim.

However, there are exceptions to the twelve-month rules:

  • If they were dismissed for being a member of a trade union or having proposed membership.
  • Being pregnant, giving birth, breastfeeding or any other matter connected with birth.
  • Not allowing leave. (Such as maternity leave. adoptive leave, paternity leave, parental leave, and carer's leave).
  • Making a protected disclosure (protection for whistleblowers).
  • Not allowing the employee to exercise their rights under national minimum wage legislation.

Raise claim to the Workplace Relations Commission

The claim must then be made to the Workplace Relations Commission (WRC).

From October 2015, employees must present their claims to the WRC within 6 months of the alleged incident. This time limit may be extended to 12 months where the employee can show reasonable cause for the delay in lodging the claim.

An adjudication officer will examine the evidence put forward by the employee and the employer. Examples of evidence presented as part of an unfair dismissal claim are:

  • Letters, emails, or a written statement.
  • Minutes of any past meeting.
  • Contract of employment or employee handbooks.
  • CCTV footage.

The adjudicator will call any witnesses to attend the hearing and provide any evidence.

Meet appropriate time limits

An employee must make an unfair dismissal claim to courts within six months of the dismissal taking place.

The six-month timeframe can be extended for a further six months. But only if there is a ‘reasonable cause’ for the delay.

The Unfair Dismissal Acts state the date of dismissal is the day an employee's notice expires.

Provide appropriate notice period

Employers must provide appropriate notice periods during these times.

How much notice period employees receive depends on their service length. For example, if they have been:

  • Employed for 13 weeks to two years: One week's notice.
  • Employed for two years to five years: Two weeks' notice.
  • Employed for five years to ten years: Four weeks' notice.
  • Employed for ten years to 15 years: Six weeks' notice.
  • Employed for 15 years or more: Eight weeks' notice.

An image of an office-place.

Who isn’t allowed to claim unfair dismissal?

Under Irish employment legislation, not all employees can claim unfair dismissal against their employer.

The following cannot make a claim:

  • An employee under the age of 16, or an employee who has reached the normal retirement age of 65. (As well as any employees who are not covered by the Redundancy Payments Act because of their age).
  • An employee working for a relative in a private house, where they live together.
  • An employee who is taking part in full-time training or an apprenticeship.
  • An employee on a probation period.

If the employee has been employed for less than a year, they will not be entitled to make an unfair dismissal claim. Unless they fall into one of the exceptions outlined in the previous section.

Is dismissal at the end of a fixed-term contract unfair?

You may have employees working for you on fixed-term contracts. So, as an employer you must know how to terminate their job, fairly and appropriately.

This should be done by ensuring their contract of employment:

  • Is in writing and sets out the length of their fixed-term contract.
  • Is signed by both parties before employment starts.
  • Includes a clause that states when the contract expires.

There's no liability to claim under the Unfair Dismissals Acts. An employee may bring a claim for unfair dismissal only if:

  1. They’re on a fixed term contract.
  2. Their contract has been terminated on the specified date,
  3. They were re-employed on another contract within 3 months.
  4. They will be doing the same or similar work

The Workplace Relations Commission may find that the successive contracts were simply a guise to avoid unfair dismissal rights. Where this occurs, the employee will have continuous service right back to the start of the first contract.

Is constructive dismissal the same as unfair dismissal?

Under the Unfair Dismissals Act, an employee can claim for constructive dismissal.

If an employee's conditions of work are made so difficult, they feel obliged to leave, they may claim constructive dismissal.

A constructive dismissal may also be deemed as unfair if the employee can prove their case.

What is the difference between unfair dismissal and wrongful dismissal?

Wrongful dismissal is a breach of contract claim which is pursued through the civil courts. Unfair dismissal claims are regulated under the Unfair Dismissals Acts and managed by the Workplace Relations Commission.

The employee must choose which claim they want to make. They will not be entitled to make a claim in both the civil courts and the WRC.

Get expert advice on unfair dismissal with Peninsula

As an employer, you must always treat your staff fairly–and that includes when you're dismissing them. Not treating your employees fairly could lead to an unfair dismissal claim.

If an unfair dismissal claim is made against you, you could end up paying large financial compensation.

Peninsula offers expert advice on dismissal and terminations. Our HR services can help you understand the rights of your workers helping you keep a happy workforce.

We also offer unlimited 24/7 HR advice that’s available 365 days a year. Want to find out more? Book a free consultation with one of our HR consultants. Contact 0844 891 0353.

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