A Mason Hayes & Curran (MHC) LLP briefing on a record Workplace Relations Commission (WRC) compensation for unfair dismissal notes that the issues were complicated by the existence of a 12-month non-compete clause in the employee’s contract.

The adjudication officer expressed some reservations about the non-compete clause, suggesting that it was not reasonable that the complainant be required to compromise his goal of re-establishing himself in business.

The lawyers point out that the WRC decided that a former music business chief executive, chair and founder, who had been unfairly dismissed, was entitled to compensation of €440,000, plus a further €24,000 for failure to give him adequate notice of the dismissal.

Unfairness

The unfairness of the dismissal and failure to give notice were not in dispute – the WRC simply had to decide the monetary value of the award.

Where an employer enforces a restrictive covenant affecting a dismissed employee’s ability to mitigate losses, the impact on compensation will be significant, the lawyers state.

This factor should be considered by an employer if an employee asks to be released from their non-compete clause, especially if there is a question of fairness of the termination.

The non-compete clause prohibited the complainant from engaging in a similar business for a year after the termination of his employment.

Refused permission

He was refused permission to form a new company and also not allowed to provide services on a self-employed contractor basis to his former employer.

The complainant then operated a holiday business from his home and worked as an artist.

The complainant gave evidence that his financial losses ran for 76 weeks, which the adjudication officer concluded amounted to €460,000.

The respondent conceded that the manner of the complainant’s summary dismissal impacted his ability to mitigate his loss.

The MHC lawyers point out that the case raises practical issues on the relationship between post-termination restrictions and the duty to mitigate in unfair dismissal claims.