Injunction Preventing Dismissal

Proceedings to Prevent Dismissal

The High Court recently granted an interlocutory order requiring an employer to pay an employee dismissed during his probationary period, six months' salary on the condition that the employee would be available to undertake his originally intended duties, if required.

The High Court noted that there was a strong case to be made that the employee concerned, Mr O’Donovan, was dismissed by Over-C for sub-standard performance during his probationary period without being afforded his implied contractual right to be heard as part of that assessment or to appeal against an adverse assessment, or both (O’Donovan v Over-C Technology Ltd & Another [2020] IEHC 291).

Although this decision was overturned by the Court of Appeal, it does provide some useful guidance as to what criteria will be examined when an application to injunct an employer is under consideration.

Obtaining Injunctive Relief

In order to obtain an injunction in relation to an employment dispute matter, one must prove that: (1) there is a serious question to be tried on the employee’s entitlement to a permanent injunction; (2) the balance of convenience favours the grant of interlocutory relief, which requires, but is not limited to, a consideration of whether damages would be an adequate and effective remedy for an employee who fails to obtain interlocutory relief but later succeeds in the action at trial and, if not, whether the employee’s undertaking to pay damages would be an adequate and effective remedy for a respondent against whom interlocutory injunctive relief is granted but whose defence to the action succeeds at trial.

While Lord Diplock’s speech in American Cyanamid was ambiguous on whether the adequacy of damages was a consideration antecedent to, or part of, that of the balance of convenience, the judgment of O’Donnell J in Merck has now clarified that it is preferable to consider adequacy of damages as part of the balance of convenience, thus emphasising the flexibility of the remedy.

Injunction Restraining Dismissal

Where a mandatory injunction is sought, such as where an employee seeks an injunction restraining dismissal (which is, in substance, an injunction mandating the continuation of an employment relationship), the Campus Oil principles are subject to the significant refinement that an employee must establish at least a strong case, likely to succeed at the hearing of the action, and not merely surmount the lower threshold of establishing a serious question to be tried (Maha Lingam).

In Merck, O’Donnell J pointed out that it would be an error to treat the Campus Oil principles as akin to statutory rules, before later outlining the steps that might usefully be followed in considering an interlocutory injunction application:

First, the court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted;

The court should then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanamid and Campus Oil approach will yield the correct outcome. However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;

If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice;

The most important element in that balance is, in most cases, the question of adequacy of damages;

In commercial cases where breach of contract is claimed, courts should be robustly skeptical of a claim that damages are not an adequate remedy;

Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial;

While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;

While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined.’

Finally, in approaching the test the High Court will be conscious of Lord Diplock’s admonition in American Cyanamid (at 407):

‘It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at trial.'

Case references:

American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL) (at 407-9) and approved by the Supreme Court in Campus Oil v Minister for Industry (No. 2) [1983] 1 IR 88

Merck Sharp & Dohme Corp v Clonmel Healthcare Ltd [2019] IESC 65

Maha Lingam v Health Service Executive [2005] IESC 89, [2006] 17 ELR 137