Remedies for Unfair Dismissal
At common law, the remedies available for wrongful dismissal are very limited. The majority of employees may have their employment contract terminated by the minimum notice period. This has the effect that even where there has been a breach of contract, the level of compensation available will be minimal.
The Unfair Dismissals Acts creates its own enforcement mechanisms. This was formerly administered by the Rights Commissioners and the Employment Appeals Tribunal. It comprised a legal chairman, and two other members appointed respectively from persons nominated by employers’ and employees’ representatives. Cases are now heard by adjudication officers in the Workplace Relations Commission with a right of appeal to the Labour Court.
If the WRC adjudication officer finds that there has been an unfair dismissal, it may order one or more of the following:
- compensation up to two years’ salary.
The same remedies are available from the Labour Court on appeal.
Special relief may be granted where the person concerned has been victimised by dismissal by being a member of the trade union involved or having provided evidence, information or assistance for the purpose of an examination or investigation by the Labour Court.
2015 legislation provides relief for an employee or other worker who claims that he/she has been dismissed from their employment wholly or mainly as a result of:
- being a member of a trade union which requests an investigation of a trade dispute by the Labour Court;
- being in the employment of the employer concerned in the grade, group or category to which the trade dispute relates; and
- having provided evidence or other information or assistance in relation to the request made to the Labour Court.
In the event of a claim for unfair dismissal on any of the above grounds, the individual may apply to the Circuit Court for interim relief pending the hearing of his/her unfair dismissal claim.
Reinstatement / Reengagement
Frequently reinstatement or re-engagement will not be possible. The most common award is compensation. The WRC must give a statement of the reasons why reinstatement or reengagement is not awarded. It need not necessarily be detailed.
Reinstatement or reengagement may be required in respect of a successor employer. Where there is a change of employer on the transfer of a business, the employee’s rights are preserved under the Acquired Rights Directive.
Reinstatement requires the that the employee is taken back and re-employed as if he had never been dismissed. The employee would be entitled to salary and continuity of service.
Re-engagement requires that the employee be taken back and re-employed, but not necessarily on the same terms. The employer may be offered an alternative, similar or comparable position. The WRC or Labour Court may order the terms of re-engagement. Re-engagement allows for tailored redress. It may involve re-engagement at a later date as if there was a suspension.
Re-engagement or reinstatement will only be ordered where practicable. Frequently, this will not be possible because the relationship has broken down and the parties may have to work together. The size of the workplace is relevant. Re-engagement or reinstatement may be feasible in a larger workplace.
Reinstatement of an employee is in order that he be taken back on the same terms in the position in which he was employed, immediately before his dismissal. The reinstatement is deemed to take place from the date of dismissal, so that there is continuity.
Reinstatement requires that the employer be treated as if he had not been dismissed. A person who has been dismissed and reinstated is entitled to arrears of salary and other benefits. He is entitled to the same position as he previously held.
Reinstatement may be ordered, even though there is no position to return to. This may preserve accruing rights, such a pension. It is most appropriate where the employee has not been blameworthy.
Reengagement requires that the employee is taken back either in the position he held immediately before the dismissal or in a different position, which would be reasonably suitable for him on terms and conditions that are reasonable in the circumstances. Unlike reinstatement, it is not necessarily retrospective, other than to the extent that might be ordered.
Reengagement is more flexible and falls short of reinstatement. Reengagement may be ordered with continuity of employment for some or all employment rights purpose. It may be deemed to be a period of suspension. It may be awarded where the employee was blameworthy to some extent but should have been given a further opportunity, instead of being dismissed. It does not, however, import blame.
Factors in Reinstatement/ Reengagement I
There is no right to reinstatement or reengagement. Although the Unfair Dismissals Act created a new scheme of employment rights, it is a matter of discretion on the part of the WRC adjudication officer / Labour Court. In practice, it is not usually granted, for practical reasons. The relationship of employer and employee has commonly broken down.
If both parties are opposed to reinstatement or reengagement, the WRC adjudication officer is unlikely to award it. The adjudication officer more commonly awards compensation only rather than reinstatement or reengagement. The relationship of trust and confidence between the employer and employee has often broken down irretrievably.
Where the employee’s behaviour has been a factor in the dismissal, reinstatement and reengagement are less likely. Equally the employer’s behaviour may have contributed to the irretrievable breakdown of the relationship
Factors in Reinstatment/ Reengagement II
Reinstatement or reengagement will not be appropriate if the job has disappeared. This will be so in the case of redundancy.
The size of the business is a significant factor. In a relatively small business, where the employee works closely with the employer, compensation is more likely than reinstatement or reengagement. However, in a larger, more impersonal enterprise, reinstatement or reengagement is a greater possibility.
The seniority of the employee is also relevant. All things being equal, a senior employee in a position of management and authority, is less likely to be reinstated.
The WRC must give a statement of the reasons why reinstatement or reengagement is not awarded. It need not necessarily be detailed.
Factors in Compensation
The majority of claimants receive compensation and not reinstatement. The maximum compensation which the WRC can award is 104 weeks’ remuneration. Remuneration includes salaries, wages and benefits in kind. The compensation payable is that which is attributable to the dismissal and is just and equitable in the circumstances. Only the financial loss which arises directly from the unfair dismissal may be the subject of compensation.
The WRC has the discretion to make an award of compensation which is just and reasonable, having regard to all circumstances. This includes the full circumstances of the dismissal rather than just what occurred afterwards. The WRC may award more or less, than it might otherwise have done, because of the employer’s or employee’s conduct.
The WRC has regard to
- the extent to which the loss is attributable to the conduct of the employer and employee;
- the measures adopted by the employee to mitigate his loss;
- the extent of compliance or failure of compliance by the employer with codes of practice relating to grievance, discipline and dismissal;
- the extent or failure by the employer to comply with its procedure for dismissal;
- the extent to which the conduct of the employee contributed to the dismissal.
The employee is obliged to mitigate his loss. He should take steps to minimise his loss after dismissal. He should seek alternative employment. Failure to mitigate loss may be a basis for the reduction of the award. An employee should seek alternative employment.
Compensation may be granted for financial loss attributable to the unfair dismissal. There is a cap of 104-week salary. The EAT has held that the value of stock options may be capable of being included for this purpose.
Where an employee has not suffered actual loss (e.g. he has been re-employed on equivalent’s compensation) up to a maximum four weeks’ enumeration may be awarded, as is considered just and reasonable.
Compensation for financial loss covers actual, estimated and prospective loss. Actual loss is lost to date e.g. loss of salary. Payments under the Social Welfare or Tax Acts by reason of dismissal are disregarded. Compensation as to future loss may be awarded. An assessment must be made to as to the likely future loss. Expert evidence may be required.
The applicant must prove his loss. He must prove each element of the loss. The WRC adjudication officer may have regard to
- the extent to which the financial loss is attributable to the act or omission of the employee;
- the measures, if any, taken by the employee (or the failure to adopt measures) to mitigate his loss;
- the extent of compliance or the failure of compliance by the employer, with the workplace disciplinary and grievance procedures; and
- the extent to which the employee’s conduct has contributed to the dismissal.
The WRC adjudication officer must have regard to all of the circumstances in determining the appropriate compensation. Regard may be had to the conduct of the parties prior to dismissal. The award must be just and appropriate in the circumstances of the case.
Elements of Award
Benefits and expenses received and incurred by the employee may be taken into account in the award. Legal costs are not generally awarded. Each party usually carries his own costs irrespective of the result. Legal costs may be allowed if one party has acted frivolously, vexatious or an aggravated manner.
The loss is limited to quantifiable financial loss. The circumstances of dismissal may be taken into account in the award. There may be a financial effect by reason of damage done to future employment prospects.
There is usually no compensation allowed for mental distress, hurt feelings and insult. It may be available in exceptional cases. It appears that there is less resistance to such awards than in the past, although they are limited to exceptional circumstances.
The general rule is that sums received in consequence of the termination of employment are subject to income tax. However, there are generous allowance and exemptions for payment made on termination of employment.
In assessing the award, compensation is generally granted on the basis of the net amount of the employee’s wages or income. This is inappropriate where and to the extent that tax relief is not available, as the sum received would be itself taxable.
Compensation may be granted for the prospective loss of income. Unless the employee has been reemployed before the hearing, an assessment must be made of the chance of obtaining alternative employment and of the likely level of salary. The employee may need to prove the position in the labour market through witnesses.
The award may compensate for reduced rights under minimum notice, redundancy payments and other equivalent legislation. The employer will not have equivalent rights in any new employment.
The new employment may not have equivalent benefits under pension and other schemes.The value of lost pension rights may be the subject of compensation. The employee may have lost future prospective employer’s contributions to the scheme for his benefit, from the date of dismissal. Expert witnesses and advisors may be necessary in order to prove accrued and prospective pension loss.
New or prospective new employment, may have a lower rate of employer pension contributions than under the old employer’s scheme. There may be no contributions or no scheme. Statutory and scheme preserved benefits must be taken into account.
An award may be reduced, due to the conduct or misconduct of the employee. The burden of proof is the employer. In a case where the employee has been unfairly dismissed based on the failure to follow proper procedures but might have been nonetheless fairly dismissed, had they been followed, the reduction may be high.
Employees have a duty to mitigate their loss. They must take reasonable steps to seek new employment. What is reasonable, depends on the circumstances. If an employee fails to mitigate, there will be a reduction in the level of compensation in respect of loss which he would have avoided, but for failure to mitigate.
The employee may be entitled to an award under the minimum notice, working time (for holiday leave) or other legislation. He may be entitled to a redundancy payment instead of an unfair dismissal award. Such a claim could be made and claimed or in a single proceeding.
A summary dismissal which is unfair may also breach the minimum notice legislation. See the section on this legislation. In cases of unfair dismissal, it is commonly the case that the employee has not worked out his notice. Pay in lieu of notice should be given if the employee does not work out his notice.
Commonly, the employee will have accrued rights to holiday leave. Public holiday leave may also be due if the public holiday occurs during the relevant period or if it should have been credited, by reason of leave not being afforded on the public holiday
References and Sources
Employment Law Meenan 2014 Ch. 20
Employment Law Supplement Meenan 2016
Employment Law Regan & Murphy 2009 Ch.14 ( 2nd Ed 2017)
Employment Law in Ireland Cox & Ryan 2009 Ch.21
Dismissal Law in Ireland Redmond 2007
Other Irish Books
Employment Law Forde & Byrne 2009
Principles of Irish Employment Law Daly & Doherty 2010
Employment Law Contracts (Book & CD-ROM) Beauchamps, Solicitors 2011
Unfair Dismissals Act 1977 (10/1977)
Worker Protection (Regular Part-Time Employees) Act 1991 (5/1991),
Unfair Dismissals (Amendment) Act 1993 (22/1993)
Protection of Employees (Part-Time Work) Act 2001 (45/2001
Civil Service Regulation (Amendment) Act 2005 (18/2005) (Part 6)
Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 (27/2007)
Industrial Relations (Amendment) Act 2015 (27/2015), s. 39
Periodicals and Reports
Employment Law Yearbook (annual) Arthur Cox
Employment Law Reports
Irish Employment Law Journal
Employment Law Review
Dismissal & Redundancy Consolidated Legislation Barrett, G 2007
Irish Employment legislation (Looseleaf) Kerr 1999-
Employment Rights Legislation (IEL offprint) Kerr 2006
Dismissal & Redundancy Consolidated Legislation Barrett, G 2007
Principles of Irish Employment Law Daly & Doherty 2010
Termination & Redundancy, What is the law? Hayes, Barry & O’Mara 2005
Termination of Employment Statutes (IEL) Kerr 2016
Termination of Employment: Practical Guide for Employers Purdy 2011
Employment Law Nutshell Donovan, D 2016
Employees: Know Your Rights Eardly 2008
Essentials of Irish Labour Law Faulkner 2013
Workplace Relations Commission http://www.lrc.ie/en/
Irish Human Rights and Equality Commission https://www.ihrec.ie/
Health and Safety Authority http://www.hsa.ie/eng/
Textbook on Employment Law, Honeyball, et al. 13th Ed. 2014
Labour Law, Deakin and Morris 5th Ed. 2012
Employment Law, Smith and Wood 13th Ed 2017
Selwyn’s law of Employment Emir A 19 Ed. 2016
Employment law : the essentials. Lewis D Sargeant M and Schwab M 11 Ed.2011
Labour Law Collins H, Ewing K D and McColgan 2012
Industrial relations law reports. (IRLR): Law Section,
Employment law Benny R Jefferson M and Sargent 5th Ed. 2012
Pitt’s Employment Law 10th Ed. Gwyneth Pitt 2016
CLP Legal Practice Guides: Employment Law 2016 Gillian Phillips, Karen Scott
Cases and Materials on Employment Law 10th Ed. Richard Painter, Ann E. M. Holmes 2015
Blackstone’s Statutes on Employment Law 2015 – 2016 Richard Kidner
UK Practitioner Services
Tolley’s Employment Handbook 2017 Mrs Justice Slade 2017
Butterworths Employment Law Handbook 2017 Peter Wallington 2017
Blackstone’s Employment Law Practice 2017 Edited by Gavin Mansfield, John Bowers, John Macmillan 2017
UK Periodicals and Reports
The Employment Law Review 8th Ed. Erika C. Collins 2017
Industrial Relations Law Reports
Employment Law in Context: Text and Materials 2nd Ed. David Cabrelli 2016