€90k Awarded For Probationary Period Dismissal

This recommendation by the Labour Court (LCR21798) is a very useful reminder about the significant potential cost of not adhering to fair procedures when terminating employment during the probationary period.

The Claimant said he had moved to Kenmare from Dublin on 29th January 2018 after being headhunted to take up the position of General Manager in the Park Hotel and was dismissed without warning on 27th April 2018. The Managing Director denied that the claimant had been headhunted by them and asserted that he had been entitled to dismiss the claimant, as per the probationary period clause in the contract of employment.

The Labour Court disagreed and said that whilst an employer was entitled to dismiss an employee during the probationary period, if they were not suitable for employment, they were still required to adhere to fair procedures in accordance with the Code of Practice on Grievance and Disciplinary Procedures, SI no 146 of 2000, and as rooted in the common law concept of natural justice. In this case the employee’s contract of employment did not differentiate between a dismissal within or outside the probationary period and stated that all dismissals would be carried out in line with the Company’s Disciplinary Procedure. The Court was satisfied that no performance issues had been brought to the attention of the Claimant in advance and that he was never made aware that his employment was in jeopardy. The Court also noted that the claimant was not offered the right to representation nor given any reason for his dismissal and the right to respond to it, and in effect had been afforded no fair procedures.

Lessons For Employers

Employers often wrongly assume that they will not be open to a claim if they dismiss an employee during their probationary period and before they have 12 months service. This is not so, as clearly demonstrated by the Labour Court’s recommendation in this case. Whilst it is not necessary to afford employees a full disciplinary procedure during their probationary period, at the very least they must be made aware of any shortcomings and the consequences of not achieving required standards. A clear probationary clause in the contract of employment and probationary policy will be helpful and ensure that employees are aware that their employment may be terminated and the steps that will take place before this happens. It is critically important that feedback is given to employees at the earliest possible stage and that they are given a reasonable opportunity to rectify shortcomings.

If you need any assistance on managing probationary period issues or drafting clear contracts of employment for your business, please email Carmel Murphy, HR Solutions or Telephone (071) 9642748.