In an ideal world, you and your staff will enjoy a harmonious employment relationship.
Unfortunately, this isn’t always possible. Sometimes you may need to dismiss an underperforming or badly behaved employee.
But to protect them from immediate dismissal at the whim of employers, employment laws have developed the concept of unfair dismissal.
In this guide, we explain what this is and how you can avoid it.
What is an unfair dismissal?
Under current labour laws, it’s a dismissal you make that terminates the employment contract of an employee—but without a good reason.
So, in short, if you dismiss an employee in a way that isn’t fair.
When can dismissal automatically be deemed fair and unfair?
Under the Unfair Dismissal Act 1977, a dismissal will be automatically unfair if it was for any of the following reasons:
- Membership or proposed membership of a trade union or engaging in trade union activities.
- Religious or political opinions.
- Civil or criminal legal proceedings against an employer where you are a party or a witness.
- Race, colour, sexual orientation, age or membership of the traveller community.
- Pregnancy, giving birth or breastfeeding or any matters connected with pregnancy or birth.
- The employee exercises rights under legislation to maternity leave, adoptive leave, paternity leave, carer’s leave, parental leave or force majeure leave.
- Unfair selection for redundancy.
- Whistleblowing where the employee raises concerns about possible wrongdoings at work under the Protected Disclosures Act 2014.
Not all dismissals are automatically unfair. The Unfair Dismissals Act 1977 also specifies that dismissals based on the following grounds aren’t deemed to be unfair:
- Unacceptable conduct.
- Poor performance.
- The employee is no longer legally capable of carrying out the role (for instance, a driving conviction for an employee who drives as part of their job).
Even if you do dismiss an employee on one of the above grounds, it’s vital that you follow fair procedures and the principles of natural justice before confirming the dismissal.
In gross misconduct scenarios, you may be entitled to make a summary dismissal.
Even in gross misconduct cases, you may need to consider suspending the employee and conducting an investigation before confirming the dismissal to ensure you treat the employee fairly.
Compensation for unfair dismissal
An unfair dismissal claim can be costly both in terms of negative publicity and awards of compensation.
An employee who successfully makes out an unfair dismissal in Ireland is entitled to three remedies:
As the employment relationship is generally placed under great strain by an unfair dismissal claim, the most common remedy is an order for compensation.
What is the maximum compensation for an unfair dismissal?
The level of compensation is linked to the employee’s salary. So, an employee with a high salary represents the greatest financial risk from an unfair dismissal perspective.
But what is the maximum payout for unfair dismissal? It’s 104 weeks’ (or two years’) salary.
While there are no recent statistics confirming the average compensation for unfair dismissal in Ireland, the last time the findings were published employers had to pay out on average over €18,000 per claim.
Ultimately, unfair dismissal payouts in Ireland are a big risk for your business, so you should endeavour to ensure a dismissal is fair.
Take the appropriate steps where necessary and review all the information you have available before going ahead.
Avoiding an unfair dismissal
As there are various employee rights on unfair dismissal, the best way to avoid infringing these rights is to be aware of them and to acknowledge them in your employment documentation.
Your employment policies should confirm the grounds for unfair dismissal. This can include:
- The reason for providing a dismissal being untrue.
- The reason is, simply put, unfair.
- As an employer, you acted unreasonable (such as failing to provide a warning about the dismissal).
- If it’s based the reason is due to discrimination.
You should also detail how to avoid various types of unfair dismissal, particularly the ones listed above that are automatically unfair.
As an employer, you should provide all employees with a written statement of the procedures that will be applied prior to a dismissal within 28 days of their employment commencing.
This will help prevent misunderstandings and reduce the risk of suffering an expensive unfair dismissal claim.
Need our help?
If you have a pressing unfair dismissal question you need help with, get in touch for immediate assistance: 1890 252 923.