Background:
The Complainant claimed unfair dismissal, asserting that fair procedures were not followed. His employment contract was revised in January and May 2019, with a salary increase to €45,000 and set targets with commissions. On May 29, 2020, the Respondent dismissed him, citing neglect, carelessness, sharing company information with a competitor, and making unsubstantiated commitments to customers. Seventeen client complaints were also listed, but these allegations were never presented, investigated, or part of any disciplinary process. The Complainant was not warned about any performance issues, nor given a chance to defend himself. He argued that the dismissal was fundamentally unfair, with no right of appeal, citing legal precedents on fair dismissal procedures. Additionally, he claimed unlawful deductions from his salary and commissions totalling €32,340.02 between January and June 2020, and unpaid notice of €1,458.00. The Complainant secured alternative employment in June 2020 but suffered a monthly loss of €2,505.00.

The Respondent stated the Complainant was employed initially as a Sales Manager & Technical Advisor from November 1, 2017. He later became a Senior Sales Representative in January 2019. The Complainant was dismissed on May 29, 2020, allegedly due to conduct issues, a breakdown of trust, and failure to meet performance expectations, as outlined in his employment contract's "Review" clause. The Respondent argued that the dismissal was justified, citing persistent issues with sales reports, administrative errors, and discrepancies in commission payments. Despite being placed on a performance improvement plan and receiving a formal warning, the Complainant did not show improvement. The Respondent maintained that while there might have been procedural defects in the dismissal process, these did not undermine the fairness of the decision. The Complainant disputed the dismissal, alleging unfair treatment and wrongful deduction of wages and commissions. He also claimed unpaid notice pay and other financial entitlements, arguing that the Respondent acted unreasonably and failed to follow fair procedures.

Finding:
The case, heard over four days, focused on the dismissal of Mr. O’Shea due to alleged performance issues. Under Section 6 of the Unfair Dismissals Acts 1977, a dismissal is considered unfair unless substantial grounds justify it. An employer must show that the dismissal was due to the employee's capability, conduct, redundancy, or legal constraints. Here, the employment contract, which included a Review clause, was revised in 2019. Despite being warned and placed on a performance improvement plan, the Complainant allegedly failed to meet expectations, leading to his dismissal. However, the Adjudicator found the dismissal procedurally unfair as he was not given a fair opportunity to respond to the allegations. While alternative employment was found in June 2020, an award of €30,000 in compensation for financial loss was made. Also, unpaid wages and commission totalling €33,519.87 was ordered; totalling €63,519.87.

Practical Guidance for Employers:
Employers should:

• Follow Fair Procedures: Ensure that all disciplinary actions and dismissals are conducted in accordance with fair procedures. This includes providing the employee with a clear outline of the allegations against them, allowing them to respond, and conducting a thorough investigation before making any dismissal decision. Procedural fairness is crucial, and failing to adhere to it can lead to a dismissal being deemed unfair, regardless of the underlying reasons.
• Document Performance Issues: Maintain detailed records of any performance-related concerns, including warnings, performance improvement plans, and any communications with the employee regarding these issues. This documentation is essential in defending the decision to dismiss if challenged.
• Right to Appeal: Always provide the employee with the right to appeal a dismissal decision. This is a fundamental aspect of fair procedures and allows for any potential errors in the initial decision to be corrected.
• Compliance with Employment Contracts: Ensure that any changes to employment contracts, such as salary revisions or target adjustments, are agreed upon in writing by both parties. Unilateral changes without employee consent can lead to disputes.
• Handle Wage Deductions Lawfully: Any deductions from wages, including commissions, must be lawful and in line with the terms of the employment contract and relevant legislation. Disputes over wage deductions can result in significant financial liabilities for the employer.

The full case can be found here:
https://www.workplacerelations.ie/en/cases/2024/july/adj-00030303.html