Circumstances of fair dismissal
Prior to determining whether an employer has fair reasons for the dismissal of an employee under the Employment Rights Act 2012, it must first be established that the employee was dismissed.
The circumstances in which an employee is dismissed are set out in Section 26 of the act. Three situations are described.
First, an employee is dismissed if the contract under which he is employed is terminated by the employer, whether with or without notice.
Of course, this first situation describes the typical dismissal at common law where the employer terminates the relationship. At common law the issue was whether the termination is in accordance with the contract or not; whether it is wrongful or not. Under the act the issue is whether the dismissal was fair. However, a termination at common law will usually be a termination under the act.
Secondly, Section 26 of the act provides that an employee is dismissed by his employer where he is employed under a contract for a fixed term and the term expires without being renewed under the same contract.
Thirdly, Section 26 prescribes that it is a dismissal if the employee terminates the contract under which he is employed with or without notice, in circumstances in which he is entitled so to terminate it by reason of the conduct of the employer.
The above section is what is commonly referred to as a constructive dismissal. Here, the employer commits a fundamental breach of a term of the contract and the employee resigns as a consequence of the breach.
An example of a constructive dismissal occurs when an employer has been demoted without good reason. Once an employer has been dismissed, it must then be determined whether the dismissal is fair or unfair.
The statutory fair reasons for dismissal are set out in Section 29 of the act. These are:
The dismissal is fair if it relates to the capability of the employee to perform work of the kind which he was employed by the employer to do. “Capability” is defined in Section 29 (3) of the act as referring to the employee’s capability assessed by reference to skill, aptitude, health or any other physical or mental quality.
An employer can dismiss an employee for misconduct, for example, theft or disloyalty. In examining conduct, it is important that the employer follows the procedure set out in Part A of the Fourth Schedule of the act.
For example, where a dismissal occurs as a result of the closure of a business because of the downturn in the economy, this will be a fair reason for dismissal.
However, the employee must comply with Section 29(4), (5) and (6) of the act which require that, in those circumstances, consultations must take place with the employee or his trade union.
The employer has the right to dismiss an employee if, where continued, employment would amount to a breach of a duty or restriction imposed by law.
5. Some other substantial reason
If the reason for the dismissal does not fall within the four areas above, the employer must show “some other substantial reason of a kind such as tojustify the dismissal of the employee”.
This provision allows the employer to put forward any ground for dismissal that he deems to be a substantial reason.
Each of the above areas needs to be discussed further and I will, in future articles, examine how the courts have dealt with them.
• Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected]