by Michael Doyle, Associate, Employment, Pensions & Incentives at A&L Goodbody
A recent Labour Court recommendation serves as a useful reminder to employers that they do not enjoy a carte blanche when it comes to dismissing employees on probation. This case has attracted widespread media coverage as it concerns the Park Hotel Kenmare, which is owned and operated by the Brennan brothers of RTE’s ‘At Your Service’ fame.
Probationary employees enjoy rights too!
In Beechside Company Limited T/A Park Hotel Kenmare v A Worker the Labour Court found that the former general manager of the Park Hotel Kenmare had been unfairly dismissed while on probation and recommended he be paid a compensatory award of €90,000. The former employee claimed that he was dismissed without warning after being called to a meeting with John Brennan, the Managing Director of the hotel, who informed him that it was “not working out”. The hotel argued that it was entitled to dismiss the employee during his probationary period by the giving of notice, as this was provided for in his contract of employment.
The Labour Court accepted that an employer has a right to decide not to retain an employee in employment during their probationary period. However, it stated that “this can only be carried out where the employer adheres strictly to fair procedures”.
The Court concluded fair procedures were not applied in this case as the employee:
(i) was not provided with details of any performance issues
(ii) no warning was given that his employment was in jeopardy
(iii) he was not afforded the right to representation
(iv) he was not provided with the reasons for his dismissal; and
(v) he was not afforded an opportunity to reply.
As the former employee had less than 12 months’ service, he could not challenge his dismissal by way of an unfair dismissal claim. For that reason, he brought a claim under the Industrial Relations Acts, for which there is no length of service requirement. The downside of such a claim is that the Labour Court’s recommendation in his favour is not legally binding.
It is relatively common for employers to provide in contracts of employment that a company’s disciplinary procedure does not apply to employees during their probationary period. This combined with the fact that employees typically require 12 months’ service in order to bring a claim under the Unfair Dismissals Acts often lulls employers into a false sense of security when it comes to dismissing probationary employees.
The Labour Court has consistently affirmed an employee’s right to natural justice and fair procedures – as outlined in the Code of Practice on Grievance and Disciplinary Procedures (S.I. No. 146 of 2000) – prior to being dismissed from their employment, regardless of their length of service and whether or not they are on probation. As this recent Labour Court case demonstrates, a failure to do so can result in a significant adverse award being made. While such awards are not legally binding, they can result in adverse publicity and have the potential to create broader employee relations issues.
Other Avenues of Redress
Employers should be aware that there are other avenues of redress available to employees dismissed during or at the end of their probationary period. For example, an employee may argue that the dismissal was linked to a discriminatory ground (e.g. gender, age, race) and challenge the dismissal under the Employment Equality Acts on that basis. While undoubtedly rarer in practice, it is also open to a probationary employee to apply to the High Court to restrain their dismissal where they can establish they are to be dismissed in breach of their right to natural justice and fair procedures.
What should employers do?
While case law confirms that due process must be followed in effecting a probationary dismissal, that does not mean that the full rigours of a company’s disciplinary procedure must be followed prior to dismissing an employee on probation. It is however important that an employer can demonstrate a procedurally fair process has been followed.
If an employer has a probationary policy, it should be adhered to. If an employer does not, it should put in place a probationary review process, in the course of which an employee’s suitability for continued employment is assessed. An essential part of such a process is a mid-probation review, whereby a probationary employee is informed of their progress on probation, notified of any performance concerns and afforded a reasonable opportunity to address those concerns prior to a decision being made on their continued employment. An end of probation review should also be held, at which an employee should be advised whether they are to be confirmed in their position, dismissed on notice or have their probationary period extended. In all cases, it is important a paper trail is kept.
Finally, employers should ensure they have communicated their probationary decisions prior to an employee accruing 12 months’ service, as the ramifications of effecting a procedurally unfair dismissal after this threshold has been reached are much greater.
About the author
Michael acts for a wide range of employers in the private and public sectors on all aspects of contentious and non-contentious employment law and industrial relations matters. He regularly advises employers on disciplinary, grievance and bullying/harassment processes, termination of employment and related litigation, individual and collective redundancies and compliance with employment equality, fixed-term and agency worker legislation. Michael has considerable experience of advising on the employment aspects of commercial transactions and outsourcings. He is a proponent of alternative dispute resolution and has participated in a number of mediations, including mediations of contentious shareholder disputes involving employee shareholders.