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Thursday, 18th April 2024
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Compensation is not guaranteed when dismissed unfairly Back  
Any employee, regardless of the industry they work in, who feels they have been unfairly sacked has the right to bring a case for unfair dismissal before the Employment Appeals Tribunal, writes John Doyle, but large compensation awards are not guaranteed.
<An employee whose contract of employment is terminated has the option of suing in the courts for wrongful dismissal which is a separate cause of action and which is outside the scope of this article or alternatively may bring a claim for unfair dismissal before the Employment Appeals Tribunal (EAT). Of course, the question of employment law arises for any company with employees and the financial services sector is no different. There is a school of thought that the Acts mean that employees can never be dismissed without large compensation payments. This is not so. What the Acts prohibit are dismissals which are ‘unfair’. Certain dismissals are deemed to be unfair unless the employer can prove otherwise and conversely certain other dismissals are deemed not to be unfair. It is true that the EAT sets very high standards of proof. The EAT must be satisfied ‘on the balance of probabilities’ and its decisions may be unanimous or on a majority of the three person division.

Service requirement: Essentially, in order for an employee to have the protection of the Acts he must have at least twelve months’ continuous service with the employer. There are certain exceptions, for example, where an employee can show that while they do not have the requisite service, the dismissal was due to matters related to such issues as pregnancy or to trade union membership.

Time limit: An employee must bring a claim for unfair dismissal either before a Rights Commissioner or the EAT within six months of the date of dismissal. This period may be extended to twelve months in exceptional circumstances but after twelve months the EAT cannot hear the case. Where an employee is dismissed, then the dismissal is deemed to be unfair and the onus is on the employer to establish that there were substantial grounds justifying the dismissal or that it results wholly or mainly from one or more of the capability, competence or qualifications of the employee, the employee’s conduct or the redundancy of the employee or the inability of the employee to lawfully continue in the position.

Procedures: One of the most fundamental points for a company to be aware of is that it must provide its employees with written details of the procedures which it will use for the purpose of dismissing them and when the appropriate circumstances arise the company must follow its own procedures which should include an appeal process. In addition, the company must give the employee full details of any allegation which is made against him and give him a reasonable opportunity to present his side of the case.

Warnings: Where a company wishes to establish that it has issued warnings on prior occasions to an employee, the company must be able to adduce cogent evidence that the warnings were clear and unambiguous and not a mere ‘ticking off’ which will not satisfy the EAT that it constituted a warning. A warning must make it expressly clear to the employee that failure to remedy the situation will lead to the possibility of his employment being terminated. Having issued a warning, the company must provide the employee with a reasonable opportunity to meet the required standard. If a dismissed employee requests reasons for his dismissal, the company must provide these in writing.

Redundancy: Where an employee is made redundant this is a full defence to an unfair dismissals claim. However, the employer must be able to establish that a genuine redundancy situation existed and that the particular employee was selected for redundancy on the basis of fair selection criteria. There is no legal requirement on an employer to hold a meeting with an employee who is being considered for redundancy.

Conduct: In assessing an unfair dismissals claim, the EAT will take into account the reasonableness or otherwise of the employer’s conduct concerning the dismissal and the extent to which the company complied with its own internal disciplinary procedures in relation to the dispute.

The EAT will expect employers to be fully aware of their obligations and to deal with the employees appropriately and not in a hostile or aggressive manner.

The test applied by the EAT in assessing whether a company has acted fairly is not whether the EAT itself would have come to a different conclusion in the circumstances but rather what a ‘reasonable employer’ should do.

Constructive dismissal: A termination may also occur where there is no actual dismissal by the employer but where the employee resigns and claims he was effectively forced to resign. An employee may bring a case before the EAT for what is commonly referred to as ‘constructive dismissal’. In this event the onus of proof will be on the employee to establish that he resigned his position because the conduct of the employer was such that he was reasonably entitled to terminate the contract without giving prior notice of the termination to the employer.

In these circumstances there is a high level of proof on the claimant who must exhaust all internal disciplinary and grievance procedures in order to successfully bring a constructive dismissal claim.

Sanctions: Where a company comes to a conclusion that a disciplinary offence has been committed, the sanction imposed must be proportionate to the wrongdoing so that dismissal for a minor transgression is bound to be held by the EAT to be unfair.

EAT procedure: As a matter of procedure, when a case comes before the EAT, if it is one of unfair dismissal where the act of dismissal is not in dispute then the employer will put its case first followed by the claimant’s case. Otherwise, in a constructive dismissal case, the EAT will hear first from the employee.

Evidence: In any EAT case, it is essential for both parties to ensure that they have all relevant witnesses present at the hearing to give direct evidence. In an actual dismissal case, this is particularly so in respect of the person who made the decision to dismiss the employee. In the absence of direct evidence on behalf of one party, the other party’s evidence will effectively be unchallenged and the EAT will be bound to accept it.
In the event that a case is proceeding before the EAT and a material witness cannot be present, at the very least the employer should be in a position to give a very good reason why the witness is not present.

Remedies: When an employee lodges a claim he may seek re-instatement, re-engagement or compensation. Where the EAT determines that a dismissal is unfair it will decide which remedy is appropriate in the particular circumstances. The employee will be either reinstated to the position which he held immediately before his dismissal, on the same terms and conditions or re-engaged either in the same position he held prior to his dismissal or in a different position which would be reasonably suitable for him and on such terms and conditions as are reasonable in the circumstances or be compensated. While a generally accepted principle is that a court or tribunal will not force people to work together when a relationship has deteriorated, the EAT will award reinstatement or re-engagement in appropriate circumstances.

Compensation: Where an employee has suffered financial loss arising from an unfair dismissal, he may be awarded compensation up to a maximum of two years’ remuneration such as the EAT determines is ‘just and equitable having regard to all the circumstances’. Where the employee has not incurred financial loss (for example if he has found alternative work at the same or at a higher rate of pay) then the employee may be compensated by a sum of up to four weeks remuneration (including any regular bonus or allowance or any payment in kind). In determining the amount of compensation to award, the EAT will take into account the extent to which the loss was caused by the employer and also the extent to which the loss was caused or contributed to due to fault on the part of the employee. The employee is obliged to take such reasonable steps as are open to him to mitigate his loss and should be able to give evidence of a concerted effort to find a new job.

Costs: Regardless of the outcome of the EAT hearing, the general rule is that the EAT will not award costs to either party unless it finds that one of the parties acted frivolously or vexatiously. This power is rarely used but it will be used in the appropriate circumstances.

Summary: The Acts aim to protect employees from being unfairly dismissed, whether by way of actual dismissal or constructive dismissal by setting out criteria pursuant to which a dismissal may be deemed to be unfair and by providing employees with remedies in circumstances where an employee’s dismissal has been found by the EAT to be unfair. The Acts endeavour to ensure that both the employer and the employee act with a degree of reasonableness and fairness when employment issues arise by insisting upon appropriate procedures that should be followed by both parties and in the event that issues remain unresolved, by permitting both parties to present and argue their respective sides of the case before the EAT.

This article sets out some of the general principles of the law and does not deal with the every exception and qualification and therefore this article should not be relied on in specific situations and legal advice should always be sought.

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