Largest Award for Unfair Dismissal in Ireland

In a recent Workplace Relations Commission (WRC) decision (A Sales Executive -v- A Software Company) the WRC awarded the sum of €329,199 to an employee in what is understood to be the largest award for Unfair Dismissal ever made in Ireland.

In this article, Conor White, Employment Law Solicitor at CKT examines the case and provides an overview of recent WRC Unfair Dismissals decisions to assess a) whether this record award indicates a trend towards increased pay-outs in the future and b) what common errors are made by employers when it comes to dismissing employees.

Background

The Sales Executive v Software Company case concerned an employee who was dismissed on the grounds of serious misconduct, following allegations of bullying being made against him. The employee had approximately 34 months service with the employer and asserted that his annual remuneration was €306,294 (this was contested by the employer).

The employee complained that his dismissal was unfair for multiple reasons including the following:-

• That the investigation leading to his dismissal did not follow the procedures set out in the employee handbook;
• That the employee should have been afforded the right to legal representation due to the complexity of the process; and
• That the employer had made its mind up to dismiss the employee well in advance of completing the internal disciplinary procedure.

The employer asserted that there had been a full and fair investigation and disciplinary process, with provision for an appeal. It submitted that the employee was warned that his behaviour was an issue and that it endeavoured to deal with this issue at a local level without the need for escalation to a formal disciplinary procedure. It added that the employee’s behaviour worsened and thereafter the employer elected to suspend the employee (with pay) pending further investigation.

An investigation followed and ultimately the employee was dismissed following an appeal.

Adjudication Officer Decision

In the WRC, the Adjudication Officer noted that he was required to consider whether the employer’s decision to dismiss the Complainant was reasonable in the circumstances and whether it was substantively and procedurally fair.

In his decision the Adjudication Officer was critical of the employer’s failure to adequately warn the employee that his role was in jeopardy. Furthermore, the employer did not adequately engage with its own disciplinary policy and there was a lack of training provided to the employee regarding their bullying and harassment policy.

The Adjudication Officer went on to find that the investigation failed to provide procedural fairness due to the lack of independence of the person who decided to terminate the employee’s role.

In determining the extent of the award, the Adjudication Officer decided that the annual remuneration of the employee, as calculated by the employee, was reasonable. The employee was unemployed for over two years and the new role which the employee obtained is paid substantially less than that which he had with the employer.

In Unfair Dismissal claims the maximum award which an Adjudication Officer can make (pursuant to section 7 (1) (c) (i) of the Unfair Dismissals Acts) is 104 weeks remuneration, which in this case would amount to €438,932.

Ultimately the award made was equal to 75% of the loss calculated by the employee. This was reduced as there is an onus on complainants to mitigate their losses by seeking alternative employment.

A Trend?

The question arising from such a substantial award is whether employers should be concerned about being subjected to similar decisions. Two recent WRC decisions concerning similar complaints highlight that while the determinations against all three employers may be similar the resulting award depends on the employee’s remuneration.

In Sylvia  Hallahan v Sanmina Ireland Unlimited Company the complainant claimed that she was unfairly dismissed following a workplace investigation into graffiti in a workplace bathroom, which was attributed to her. The Adjudication Officer heard evidence from five witnesses and ultimately determined that the employer had failed in its duty to provide reasonable grounds justifying the complainant’s dismissal. In particular, the appeal process facilitated as part of the employer’s disciplinary procedure did not provide reasons for its determination. This indicated a lack of fair procedures.

The result of this determination was that the Adjudication Officer awarded the sum of €23,102 to the employee which was calculated on the basis of the employee’s gross and prospective losses after being dismissed.

Similarly, the decision in Conor  Hynes v Heneghan Premier Services Limited related to a claim for Unfair Dismissal but in this case the dismissal arose by way of a purported redundancy. The employee was made redundant following the outbreak of the Covid-19 pandemic and the employer failed to provide a defence to justify that dismissal. Making an employee redundant requires employers to follow a strict procedure involving consultation with the employee prior to making the final decision. In this case the employee was awarded the sum of €24,840, in respect of lost earnings, less any amount he had already received as a redundancy payment.

Successfully Defended Claims

Claims for Unfair Dismissal can be defended by employers where they can point to fair procedures having been followed.

In Sean O’Connell v The Carphone Warehouse Limited Dixons Carphone Ireland the Complainant alleged that he was subjected to a Constructive Unfair Dismissal, which means that the behaviour of his employer was such that he was left with no option but to resign his employment. The employee in this case was the subject of a disciplinary investigation following an allegation that he had failed to manage a company process called ‘Workforce Management’. The employee appealed the finding of the investigation but ultimately resigned before the appeal completed.

The WRC Adjudication Officer determined that while the employer delayed in its disciplinary procedure it ultimately followed fair procedures and the employee failed to exhaust the employer’s internal procedures before resigning. Accordingly, this claim for Constructive Unfair Dismissal was rejected.

Similarly the employee in Emma  Phillips v Flutter Entertainment PLC was also subjected to a disciplinary procedure but in this case was ultimately dismissed. The Adjudication Officer determined that the employer was within the bounds of fair procedure when it decided to dismiss the employee for gross misconduct following a comprehensive investigation.

Common themes

In each of the above-mentioned decisions the complainants asserted that they had been unfairly dismissed by their employer. The common theme in each case was the allegation that fair procedures had not been followed. Depending on the specific circumstances of the case, fair procedures can include the following:-

• The right to appeal the outcome of a disciplinary investigation;
• The right to legal or trade union representation;
• Delay in finalising a grievance or disciplinary procedure; and/or
• A requirement for independent investigation of the alleged issues.

Conclusion

Ultimately where an employee is deemed to be unfairly dismissed the amount of the award will depend on the loss suffered by that employee. The Sales Executive mentioned at the start of this article was determined to have earned substantial remuneration and, by being dismissed from that role, his losses were correspondingly substantial.

However, it does not have to be the case that higher paid employees bring higher risk to employers. By regularly updating workplace policies for grievances, bullying and disciplinary matters etc; employers can substantially reduce the risk of an adverse decision before the WRC.

If you have an employment law query, please contact a member of our Employment Law Team.