How do I handle it? I’ve dismissed an employee who has less than one year’s service, am I fully protected against a claim for Unfair Dismissal?

Jennifer O’Sullivan writes:

Legislation

Section 2(a) of the Unfair Dismissals Acts (the “UDA”) sets out the general rule that an employee must have one year’s continuous service at the date of his dismissal to bring a claim under the UDA. Employers must bear in mind, however, this will not apply in a number of limited circumstances such as where the employee can show that they were dismissed for trade union membership or activity, for pregnancy or connected matters; for exercising their rights under the National Minimum Wage Act or for exercising their rights to either adoptive leave, parental leave, force majeure leave or carer’s leave.

A common misconception is that, for the purpose of calculating continuity of service, the year ends on the anniversary of an employee’s first day. This has been rejected by the Tribunal who have held that a year beginning on, for example, 14 February 2012, will end on 13 February of the following year.

Recent Case Law

* The recent case of An Employee –v- An Employer (UD1120/2011) also sounds a cautionary note for employers seeking to dismiss an employee close to reaching one year’s service.

The Claimant in this case commenced employment on 23 November 2009. As a result of unsatisfactory attendance the decision was made to terminate his employment. The employee was verbally informed, by phone, after he had finished work on 15 November 2010 that his employment was to be terminated with effect from 22 November, giving him one week’s notice. The employer had also written a letter that day confirming the decision to terminate his employment but this was not handed to the employee until his shift the following morning, on 16 November 2010. Part of the employer’s defence to the claim was that the Tribunal did not have jurisdiction to hear the matter where the employee had less than one year’s continuous service as his notice expired before 22 November 2010.

Tribunal Held

The Tribunal held that the Claimant’s notice only took effect from the day it was handed to him on 16 November 2010, notwithstanding the fact that the employee was verbally given notice of the termination of his employment on 15 November and the written notice was also dated that date. The Tribunal therefore determined that the employee’s date of dismissal was 22 November 2010 which meant that he had service of exactly one year with his employer and the Tribunal had jurisdiction to hear the claim.

While not expressly noted in the decision referred to above, it may be the case that the Tribunal were influenced by the fact that the employee was not notified of his dismissal until after he had finished work on 15 November 2010. Nonetheless, this decision may be concerning to companies whose practice it is to communicate a dismissal to an employee in person and subsequently prepare and issue a letter confirming the decision to dismiss and the date of termination. If a letter is posted to inform an employee of the termination of employment, this may not be received by an employee until a day or more after the date they were verbally informed of their dismissal.

In addition, it is also important to note that the date of dismissal is impacted by an employee’s notice entitlements. If an employee is paid in lieu of part or all of their notice entitlement, their date of dismissal will be the date on which their notice expires and not the day that they finish work. Equally, an employer cannot attempt to bring forward a dismissal date by avoiding the employee’s notice entitlements. The UDA specifically provide that if an employer does not give prior notice of termination, or if the notice given is not in compliance with the employee’s statutory or contractual notice entitlement, whichever is the greater, the date of dismissal will nonetheless be the date on which the notice would have expired, if properly given.

This provision can have consequences in a case of termination for gross misconduct. An employer will often contractually reserve the right to summarily dismiss an employee without notice in cases of gross misconduct. Additionally, section 8 of the Minimum Notice Acts provides that “[n]othing in this Act shall affect the right of any employer or employee to terminate a contract of employment without notice because of misconduct by the other party.” The Tribunal has held that this “exemption” to the requirement of giving notice, will only apply to instances of very serious behaviour by an employee.

An employer should therefore be wary of assuming that an employee’s notice period will not be taken into account for the purposes of calculating continuous service, merely because the dismissal is termed as gross misconduct. Should a Tribunal ultimately find that the dismissal was disproportionate and a lesser sanction should have been imposed, it may result in the employee getting the benefit of their notice period for the purpose of calculating service.

Key Tips

Taking into account the lessons from case law and the statutory provisions dealing with continuity of service, employers looking to understand the potential liability in dismissing an employee with less than one year’s service should bear in mind the following key tips:

1. Check the employee’s commencement date. Is there any potential for a discrepancy between the contract of employment and the date the employee actually started work?

2. Confirm the employee’s notice entitlement both under the Minimum Notice Acts and their contract of employment. The employee will be entitled to whichever period is longer. Continuity of service for the purpose of coming within the scope of the Unfair Dismissals Acts will take into account the notice period.

3. Ensure there is clarity and consistency in the termination date communicated to the employee. Although decisions of a particular division of the Tribunal are not binding precedent on other divisions, in light of the case law referred to above, it would be prudent practice to ensure that an employee receives notice of dismissal in writing on the same day as they are verbally informed of the termination of their employment.

4. An employer must also take into account the impact of an appeal process. If an employer does not intend that an individual will remain in employment pending the outcome of an appeal process, this should be clear from the letter of dismissal to avoid an employee continuing to accrue service during an appeal process.

5. Finally, it is also important for employers to be aware that employees with less than one year’s service may have other avenues of redress which do not have a one year minimum service requirement such as claims for discrimination or victimisation under the Employment Equality Acts, claims through the civil Courts for wrongful dismissal, breach of contract and/or applications for injunctive relief and claims under the Industrial Relations Acts in respect of a “trade dispute.”