Unfair Dismissal - Compensation Considerations

Unfair Dismissal - Compensation

In most circumstances, when an individual brings a claim of unfair dismissal, if successful, they may be awarded loss of earnings from the termination date until they obtain new employment. In theory, a claim under the Unfair Dismissals Act can result in an award of up to 2 years’ salary, however these awards are quite rare.

However, the case of An Optical Assistant -v- Retail Optical Shop (ADJ00018205), highlights the considerations an Adjudication Officer will factor when deciding whether or not to award a higher compensation amount than the loss of earnings.

Background

The complainant employee commenced employment with the respondent company on 01 April 2014. On 15 November 2018, she received a solicitor’s letter, purportedly on behalf of the complainant, enclosing her P45. On the P45 document her end of employment date was given as 03 November 2018. The letter contained a detailed series of questions concerning her employment status, who her employer was, details of her contact of employment and other information that would have ordinarily been provided for previously under the Terms of Employment (Information) Act, 1994. The complainant employee was most perplexed as there had been no formal notice of termination of employment, no redundancy process or investigation or disciplinary process.

In response, the respondent company countered that, having recently acquired the shop from which the complainant employee purportedly worked, they discovered that a number of individuals on the payroll were not working at the store and therefore their employment was terminated. 

One of the directors of the complainant company noted that this termination was part of a “tidying up” process and that the individual concerned was never an actual employee of the store in question.

Other Factors - Award of Compensation

The Adjudication Officer in this matter noted that this case was governed by the Unfair Dismissals Act, 1997 supported by SI 146 of 2000 – Statutory Code of Practice on Grievance and Disciplinary Procedures and the very considerable body of precedent law in these cases. The case law from the Employment Appeals Tribunal, the Labour Court and the higher courts emphasised the paramount role of the rules of natural justice in all cases. The Adjudication Officer noted that, from the evidence given, it was clear that the complainant had been an employee. However, she was a low ranking employee and had, in effect, to his view, become “collateral damage” in the main commercial dispute between certain directors. Proper procedures of formal investigation, meetings to consider her status and the opportunity of an appeal did not take place prior to any decision to dismiss the complainant employee. The issuing of the P45 constituted a dismissal.

Award of Compensation under Unfair Dismissals Act

The Adjudication Officer found that no rules of natural justice were observed. That being the case, the Adjudication Officer deemed that one year’s gross salary, being approximately €30,000, is an appropriate award given that proper procedure was not followed in any fashion whatsoever.

Further Information

For further information, please contact the author of this article, Barry Crushell.