Employers Beware - fair procedures are required at all stages of an employee relationship

While the requirements to follow fair procedures in the context of employee grievances and disciplinary matters can be onerous (both in terms of time and costs) on small businesses a failure to do so can have significant adverse implications including reputational damage.  Fair investigative procedure should be set in place and followed by all employers no matter how large or small and investigations carried out by personnel who are trained specifically to handle employee complaints.

Employers need to be aware that many of their obligations in this regard are statutory and flow from a host of varying pieces of legislation where the particulars of requirements for policies and procedures and the manner of how investigations should be conducted are set out including the Unfair Dismissals Acts 1977-2007, the Code of Practice on Disciplinary Procedures 1996, the Code of Practice on Sexual Harassment and Harassment at Work 2012 under the Equality Acts 1998-2011, the Health and Safety Authority 2007 Code of Practice for Employers and Employees on the Prevention and Resolution of Bullying at Work. 

This principle of implementation of fair procedures applies to all employees and at all stages of the employment relationship as demonstrated in the recent Labour Court recommendation in Embankment Plastics Limited and A Worker (CD/15/267 Recommendation No LCR21066) where the failure of fair procedure resulted in a costly €33,419.38 in compensation for the employee.

The worker in question was dismissed (with payment in lieu of one week’s notice) on 27 April 2015 after circa 10 week’s employment having been hired under an employment contract with a provision for a 6 month probationary period extendable up to 11 months.

Although the employee would not have come within the application of the Unfair Dismissals Act 1977 (not having the prescribed period of continuous service of 12 months) the right to refer the dispute for investigation and recommendation to the Labour Court under Section 20 of the Industrial Relations Act 1969 was exercised and the dispute came to be heard by the Labour Court.  

Many employers believe that employees without one year’s service would have no recourse against the employer in relation to their employment and are also of the view that there is no requirement to follow appropriate and fair disciplinary procedures in respect of employees who are ‘on probation’.

This recommendation clearly shows the Labour Court views matters otherwise.

At the hearing of the matter the Court was informed that the employer had neglected to apply certain fundamental requirements of fair procedures in its dealings with the employee while in response the employer stated it had validly terminated the contract of employment in accordance with its terms and sought to rely on the fact that the employee was on probation with his contract including the express provision that:

During or at the end of your probationary period, the Company may terminate your employment by giving you one week’s notice or payment in lieu of such notice. The Company’s disciplinary procedure shall not apply to any dismissal during the probation period, or any extension thereof.

Furthermore, the respondent argued that by virtue of a series of meetings between the employee and the employer’s Managing Director prior to the date of termination of employment the employee was fully aware of the employer’s position as regards its expectations and his performance.

Notwithstanding the express provision in the contract (and indeed without any attempt to reconcile conflicting evidence as regards the meetings between the parties) the Labour Court referred to what it viewed as ‘egregious breaches of fair procedures’ concluding that the Company’s decision not to comply with its own disciplinary procedures or be bound by the provisions of the Code of Practice on Grievance and Disciplinary Procedures (S.I. No. 146 of 2000) because the employee was on probation was “misconceived”. This €33,419.38 awarded in compensation was calculated having regard to the loss of earnings suffered by the worker as a result of the dismissal and took into account the reduced wage in subsequent employment.

This Labour Court recommendation demonstrates that the obligation on an employer to follow fair procedures (whether its own or the Statutory Code of Practice) when dealing with employees applies from the very commencement of employment and notwithstanding any agreed probationary period. 

For further information on this topic please contact Bríd McCoy (Partner), or your usual AMOSS contact.