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Employees on probation have a right to fair dismissal procedures

21 Jul 2020 / employment Print

Employees on probation have a right to fair dismissal procedures

A William Fry briefing note says that dismissals during probation have been considered relatively low risk by employers since the Workplace Relations Commission (WRC) requires employees to have at least one year's service before taking a claim of unfair dismissal.

However, recent courts’ focus on an employee's right to fair procedures in cases challenging dismissal during probation should serve as a cautionary tale to employers, lawyers Catherine O’Flynn (small picture) and Ailbhe Dennehy say.

Fair

Employers should follow fair procedures in any dismissal, including during a probationary period, they say, despite lack of employee recourse to the WRC.

The fact that employers cannot side-step fair procedures, despite short service, is shown by a recent High Court decision in O’Donovan v Over-C Technology Ltd & Another [2020] IEHC 291.

The ruling finds that the employee's implied contractual right to fair procedures had been breached when assessing his performance and subsequently dismissing him. 

The employee was appointed CFO of Over-C Technology Limited (Over-C) under a contract with a six-month probation providing for termination if performance proved inadequate.

The employee had the right to lodge an appeal in any disciplinary action.

Notice

In January 2020, Mr O'Donovan was dismissed with immediate effect and paid in lieu of his one month's notice. Reasons cited included a sub-standard performance and inflated and misleading sales projections.

The letter of termination said the employee had been made aware of the performance issues prior to dismissal. 

Mr O'Donovan asserted his right to an appeal but a timescale was not agreed and the dismissal was confirmed.  He then sought injunctive relief on the basis that the dismissal was a breach of contract as well as a breach of his constitutional right to fair procedures. 

The High Court decided that mutual trust and confidence no longer existed and refused to grant an order placing Mr O'Donovan back into the business.

Process

The High Court also decided that the claim was "one of a fair termination process rather than one for reinstatement".

An interlocutory order required Over-C to pay Mr O'Donovan six months' salary (in addition to benefits and any bonus), on condition the employee was available to continue his duties.

However, Over-C could appoint a new CFO as it saw fit. 

The William Fry team say that employers are therefore advised to strictly adhere to contractually mandated performance assessment procedures and ensure the employee in question is afforded full and fair procedures in advance of a decision to dismiss on grounds of poor performance.

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