An 'Informed Decision' - Waiver of Employment Rights

Introduction

In a recent High Court case (Health Service Executive -v- Laya Healthcare LTD [2021] IEHC 737), Laya insurance argued that, prior to any decision by a patient to opt to be treated as a private patient, the patient must be fully informed as to the consequences of abandoning the entitlement to be treated as a public patient.

Waiver of Employment Law Rights

Attention was drawn attention to the observations of Simons J. in Board of Management of Malahide Community School v. Conaty [2019] IEHC 486 where he stressed (in the context of a purported waiver of rights under the Unfair Dismissals Act, 1977) that such a waiver would have to be done on an informed basis if it was to be valid. At para. 73 of his judgment, Simons J. stated:-

“…The principle of “informed consent” as set out in the judgements in Hurley v. Royal Yacht Club and Sunday Newspapers Ltd. v. Kinsella (discussed above) apply by analogy. A person can only be said to have waived a statutory right if they do so on an informed basis. If one assumes for the moment that… it is competent for an employee to waive their right of permanent employment by entering into a fixed term contract under section 2(2)(b), it is nevertheless necessary that that waiver be given on the basis of informed consent. There is an implicit obligation on an employer to put an employee on notice that the entering into of a particular contract will entail the loss of statutory rights previously acquired by the employee. A bald statement in the contract to the effect that the Unfair Dismissals Act does not apply to dismissal consisting only of the expiry of the fixed term would not be sufficient…”

Informed Consent and Waiver of Rights

While Mr. Justice Denis McDonald accept that, as counsel for the HSE has stressed, the case law which had been cited by Laya and Irish Life in relation to this issue did not address a decision not to exercise or to waive a statutory right. In this context, Mr. Justice McDonald did not believe that reliance could be placed on the decision of Simons J. in the Conaty unfair dismissal case. In his view, the cases addressing waiver of rights under the Unfair Dismissals Act were sui generis (of their own facts) and could not be applied, by analogy, to the present case. 

However, Mr. Justice McDonald did reaffirm that all of the case law shows that courts have been concerned, in a wide variety of situations, to make sure that decisions affecting rights are taken on an informed basis.

Review of Settlement Agreement - Payment of Fees

In an employment law context, the signing of a settlement agreement (often called a 'compromise agreement', 'exit agreement' or 'termination agreement') involves the waiver, by an employee, of their rights to bring certain claims against their employer. Such an agreement is most often proposed by an employer. Therefore, to ensure its enforceability, an employer should ensure that the employee obtains independent legal advice. Towards that end, we recommend that the employee is adequately appraised of the legal consequences of signing such an agreement.

An invoice from the advising solicitor, to the employer directly, for the advice given, will be a record that such advice has been given.