6 - 7 law and ethics employment law

Law and Ethics

Employment Law

By the end of this section you will be able to

- Tell the difference between an employee and an

independent contractor

- Define the tests used by the court to facilitate the

distinction

- Define unfair, constructive and wrongful dismissal

- Define redundancy and know employee’s redundancy rights

- Understand fair procedures

In groups,

discuss what

you already

know about

employment

law in Ireland.

What have you

learned in class

already about

employment law?

Will the courts

enforce an

employment

contract?

Can you be

discriminated against

because of your age?

Are any forms of

discrimination legal?

Introduction to Employment Law

Concerns law of the workplace

Governs relationship between

employees and employers.

Person who enters a contract of

employment will be an employee.

Who’s who?

Employers and employees have a

variety of rights, duties and

obligations.

Not everyone is an employee,

some are regarded as independent

contractors - the same laws do

not apply to them.

Because of this, you need to

know the differences between

them.

Distinction between employee and independent

contractor

1) Most employment law only applies to

employees eg. dismissals

2) Employer is vicariously liable for

actions of employee but not for

actions of independent contractor

3) In liquidation, employees are

treated as preferential creditors,

contractors treated as unsecured

debt.

4) Employees paid on a PAYE basis

Making distinctions

Employment legislation defines an

employee as “an individual who has

entered into work under a contract of

employment.”

Their contract is a contract OF

service.

The contract between an employer and

independant contractor is a contract

FOR services.

Common Law tests to distinguish between Emp

& IC.

1. Control Test

2. Integration Test

3. Enterprise Test

4. Economic Test

1. The ‘control’ test

The court will ask:

What level of control does employer

have over worker? The work carried

out? Methods? Can they suspend or

remove?

If yes - they are an employee.

This test got more difficult over

time.

CASES

Re: Sunday Tribune 1984

Court said test was of little value where employee exerted

special skill, increased size of business etc.

Tierney v An Post 2000

Plaintiff postmaster claimed disciplinary procedures after

sacking not followed so didn’t apply. Court looked at his

circumstances and said he was indp. contractor

2. Integration Test

Court will ask:

How integrated is worker in the business? Are they integral

to the business’s success? Eg. Sunday Tribune case

Kelly v Irish Press - columnist was considered an independent

contractor as newspaper retained full control over the final

content and held copyright

Criticisms: definitions of integration and organisation

3. Enterprise Test

Test says that worker who performs

duties as person in business in his

own right is an independent

contractor.

Q - do they bear financial risk? (See

Tierney case)

Criticisms: employees based on

commission basis for services

4. Economic Reality Test

Most modern and most likely to be

used by courts

Ready Mixed Concrete v Ministry of

Pensions 1968

- The individual works in return

for pay

- Subject to employer's control to

sufficient degree

- Contract provisions consistent

with contract of service

4. Sometimes called ‘multiple’ test

Courts recognise the need to consider

multiple factors

Henry Denny and Sons v Minister for Social

Welfare

Claimant food demonstrator considered

emploee. Paid per day irrespective of sales.

Employer gave all products and uniform.

Court said 1) had no independent input 2)

didn’t provide equipment 3) couldn’t alter

earnings.

Supreme Court said:

Irrespective of terms used by contract

drafters, it won’t prevent court from

defining status based on totality of

relationship.

Just because worker isn’t taxed on PAYE

doesn’t mean they aren’t an employee.

Minister for Agriculture and Food v Barry

Said no tests were conclusive and single

application of the test wasn’t

realistic.

Recent re-application of the “control test”

Brightwater Selection v Minister for Social and

Family Affairs

Court held Social Welfare Appeals Office erred in law

in not considering a control test.

Said it could be a contract for services, of services

or contract sui generis.

Agency Workers

Agency workers didn’t have same employment rights as workers

until EU Directive on Temp Agency Work.

2012 Act said workers must have equal treatment with regular

workers re: working time; pay; work done by pregnant women;

action taken to combat disabilities.

Temp workers must also have access to childcare facilities

etc.

Protection of Employees (Temporary Agency Work) Act 2012

2012 Act

Does not cover employees of

contracted companies or staff on work

placement schemes, Jobbridge etc.

Exam Q -

Outline any three tests used by the

courts to distinguish between a person

employed under a contract of service

and contract for services.

Termination of an Employment Contract

What are the

reasons your

contract can be

terminated?

1. Performance of the contract

2. Agreement between parties

3. Frustrating event

4. Breach of contract e.g. gross

misconduct

5. Notice

6. Dismissal

7. Redundancy

Should it be easier or harder to

terminate contract of employment?

Dismissal

Common law -

wrongful dismissal

in the courts

Statute - claim for

unfair dismissal

forums other than

courts

Unfair Dismissal

Unfair Dismissals Act 1977-2015

One of the most important aspects of employment law

Dismissal is:

a) Termination of contract of employment

b) Termination of contract because of conduct of employer

(constructive dismissal)

c) Expiration of contract for fixed term without renewal

with no objective reason for non-renewal

Eligibility to claim

Employee must be:

1) Employed by the employer under contract of service and

2) For a period of one year prior to the date of termination

(this requirement may be waived in cases of pregancy,

trade union membership, where the employee has exerted

the right to be paid minimum rate of pay or where the

employee is a whistleblower) and

3) A person is not excluded from making a claim under the

Act

People excluded from making claim under

Section 2

● Employees with less than one year’s service

● An employee under 16 or who reached retirement age

● A member of the Defence Forces or the Gardaí*

● Persons working on family farm or in home

● Persons employed at sea

● Persons on a probationary period

● Persons working illegally within the state

● Certain public servants

Where to claim

Workplace Relations Commission

(absorbed Rights Commissioners and Employment Appeals

Tribunal)

You have six months from the date of dismissal to bring case.

Extension to 12 months only available in exceptional

circumstances.

Cases demonstrating extended timeframe

Teresa Bilas v Campbell Catering

(ARAMARK) 2014

Court held that the illness of the

claimant from Dec 2011 until April

2012 was considered to be

reasonable cause

McDonagh v Dell Computer 2004

Court held plaintiff’s depression

constituted exceptional

circumstances and allowed the claim

WRC appeals go to the Labour Court

Four steps in the WRC unfair dismissal process

1. Employee must have been

dismissed

2. Proving the “reason” for

dismissal is either fair or

unfair

3. Commission assesses the

“fairness of the reason”

4. Remedies awarded

STEP 1 - Employees must have been dismissed

Commission requires employee to prove that has

been dismissed.

Words must constitute a dismissal.

Futty v Brekkes (1974)

“If you don’t like the job, f**k off.” Tribunal

held language was common on docks and did not

constitute a dismissal.

“If you are complaining about the fish

you are working on or the quality of it or

if you do not like what in fact you are

doing then you can leave your work,

clock off, and you will be paid up to the

time when you do so. Then you can

come back when you are disposed to

start work again…”

STEP 2. Proving the ‘reason’ for dismissal is fair

or unfair

Act (Section 6) provides two

categories

1)automatically unfair reasons

2)reasons that may be considered fair

Sections 6(1-2) Automatically unfair reasons

● Membership or proposed membership of a trade union

● Religious or political opinion

● Race, colour or sexual orientation of the employee

● Evidence against employer in civil or criminal

proceedings

● Age

● Membership of the Traveller community

● Pregnancy or related matters

● Exercise of right to adoptive leave, parental, force

majeure, or carers leave

● Whistleblower (Protected Disclosures Act 2014)

Fair reasons for dismissal

Capability

Capability, competence or

qualifications includes health,

physical and mental capacity.

If employee becomes incapable of

performing duties it may be fair to

dismiss.

Employer required to consider

alternatives but not obliged to

give alternative

Bolger v Showerings (1990)

Employer must show the

- Substantial reason for dismissal

was ill-health

- Employee received notice that

this was being considered

- Employee was given the

opportunity to be heard and put

forward his response

Qualifications

If employee doesn’t have qualification validly

connected to their job

Blackman v Post Office - failed to pass exam

Lister v Thom & Sons - employee needed to pass

driving test but failed - UNFAIR as didn’t affect

work

P v Mid Western Health Board - doctor whose

qualifications weren’t recognised couldn’t be

retained.

Competency

If employee lacks the competence (intellectual ability to

carry out employment.

Employee must be given notice and given support to improve.

O’Donoghue v Emerson - “off the cuff” remark insufficient

to qualify as a warning

Bell v DEVTEC - EAT found that the claimant was below the

standard required and expected, but dismissal wasn’t fair

because supervision wasn’t exercised.

Conduct of Employee

Covers wide range; fraud, bribes,

drinking on job, being late,

swearing.

Paul v East Surrey District Health

Authority 1995; nurse drank whiskey,

dismissal was fair

TMC Dairy Products v Connolly 1988 -

poor attendance = fair dismissal

Note:

Employee entitled

to fair procedures

Conduct of Employee

Gross misconduct or serious criminal

offence even after working hours can

still give rise to fair dismissal

Creffield v BBC 1975 - cameraman

conviction

Gross misconduct depends on facts

Aisha Olukoya v Veolia - luas case

Noone v Dunnes - garda assault

Conduct of Employee

Penalty must be proportionate and

reasonable

Lorraine Fitzpatrick v Dunnes Stores

(2014) -

Decision found to “lack

proportionality given the

circumstances of the case and

personal background of claimant with

12 years service.”

Conduct of Employee

If employer doesn’t have proof of

offence he must investigate and

belief must be on reasonable grounds

Pacelli v Irish Distillers Ltd 2003

Stock losses and missing products -

lack of explanation = fair dismissal

Seale v Foreman Cameras dismissal

fair after repeated warnings

Redundancy

Provided it’s a genuine

redundancy

Dundon v GPT (1995)

Employee selected because of

trade union activity was

successful claiming unfair

dismissal

Statutory Illegality

Where it becomes illegal for an

employee to continue in a position

Brennan v Blue Gas 1993

Employer dismissed employee after

truck driver could not get insurance

because of poor accident record

Four steps in the WRC unfair dismissal process

1. Employee must have been

dismissed

2. Proving the “reason” for

dismissal is either fair or

unfair

3. Commission assesses the

“fairness of the reason”

4. Remedies awarded

Duty to follow fair

procedures

Fair procedures

Constitutional duty

Employer must:

- Ensure employee aware of reasons for dismissal

- Allow representative accompany them

- Tell the employee about allegations and

provide evidence

- Give employee right to respond and make

representations

- Give employee the right to address deciding

body

Fair Procedures

Redmond v Ryanair 2006 Cabin crew

accused of falling asleep, reinstated

because denied fair procedures

Linda Magill v Tomkins Ltd/The Grand

Hotel 2014 - claimant awarded €20k,

head housekeeper dismissed without

warning/ no opportunity to defend

STEP 3 - Commission assess the ‘fairness of

reason’

If reason is not automatically unfair, the

WRC will look at evidence and decide

whether it was fair or not

Reasonableness

Would a reasonable employer have

terminated the contract of the employee?

STEP 4 - Remedies for unfair dismissal

a) Reinstatement / continuity of employment

a) Re-engagement /new contract (where

practicable)

a) Compensation - most common, max payment is

104 weeks for loss, or 4 weeks

Constructive

Dismissal

Constructive Dismissal

- Where employee terminates contract because of

conduct of the employer.

- Employer “constructs” a dismissal

- Same procedures and remedies

- Must prove conduct of the employer was serious to

entitle employee to resign

- Burden on employee to prove

Constructive Dismissal

Byrne v RHM Foods (Ireland) Ltd 1979

Employee forced to resign after new

boss didn’t give her work to do and

isolated her by cutting off phone and

removed work.

Stress = employer behaviour was

sufficiently serious and therefore

constructive dismissal

Test used by the courts

1) Contract test - would this be a fundamental

breach of contract

2) Reasonableness test

Factor Example

Changes to pay Unilateral reduction in apy

Non-payment of employee’s tax & PRSI

Changes in hours of work Change to hours and shift pattern not breach

Change from day to night shift is a breach

Changes in location If no mobility clause in contract, change to

location may amount to claim

Unjustified series of warnings Where warnings force to leave rather than

improve

Failure to investigate sexual harassment,

bullying or abuse claims

Failure to investigate sexual harassment,

bullying or abuse claims

Failure to make the workplace employee

friendly

Failing to implement smoking ban or make

reasonable adjustments for employee with

disability

Reasonableness test allows employee to

argue that employer may have acted within

terms of the contract but conduct is still

unreasonable.

e.g. “Resign or you’re fired!”

Constructive Dismissal

McKenna v Pizza Express 2007

Court awarded €63k after being

“embarrassed and humiliated” by her

employer and felt she had no option

but to resign when employer refused

to reschedule disciplinary hearings.

Court agreed this was constructive

dismissal.

Wrongful

Dismissal

Wrongful Dismissal

Common law action where contracts breached without required

notice

Remedies can include specific performance, injunctions,

damages but courts generally avoid SP.

Generally damages will be given according to what would have

been earned had notice been given.

Damages can be reduced accordingly (Carney v Balkan Tours)

Wrongful Dismissal and Minimum Notice

Minimum Notice Act 1973

Courts may oblige employer to provide an employee with

reasonable notice

Court will look at level of responsibility

Nicoll v Falcon Airways = 3 months notice for pilot

Bauman v Hulton Press = 6 months notice

Wrongful Dismissal and Minimum Notice

No notice = summary dismissal / common

law right

Generally unlawful unless employer can

provide conduct was sufficiently

serious

Wilson v Racher 1974

Gardener swearing not serious enough

Court will assess

each breach on

facts and look at

what’s

reasonable

Eligibility Criteria for Wrongful Dismissal

Common law action / happens in COURTS

Employee must prove:

- Dismissed without notice

- Consequence of breach was suffering a

loss

This is different from Unfair Dismissal because

Unfair dismissal actions go to WRC

Employee doesn’t have employed for a year like

in UD actions.

Employee can bring a claim for wrongful

dismissal 6 years after date of dismissal (UD

actions are 6 months)

Comparison table

on page 73

Factors UNFAIR CONSTRUCTIVE WRONGFUL

Definition Based on

discriminatory

grounds

Where employee

resigns because of

employer’s

behaviour

Employee

dismissed in breach

of right to notice

without just cause

Source Statute Statute Common Law

Burden of Proof Employer Employee Employee

Remedies Reinstatement, Re-

engagement,

compensation

Reinstatement, Re-

engagement,

compensation

Compensation and

injunctions only

Limits on comp 2 yrs salary with ex 2 yrs salary with ex No limit

Statute of Limit 6 mths / 12 months 6 mths / 12 mths 6 years

Factors UNFAIR CONSTRUCTIVE WRONGFUL

Minimum service

requirement

1 year with ex 1 yr with ex None

Eligibility Contracts of service Contracts of service All contracts of and

for services

Adjudication

machinery

WRC WRC Courts

Redundancy

Unfair Dismissals Acts 1977-2015 sets out

right of employer to dismiss people ‘fairly’

Redundancy Payments Acts 1967-2014

sets out the criteria for what counts as

redundancy

● Employer ceases business or location

● Requirements of business have ceased or

diminished

● Employer decides to have fewer

employees

● Employer decides that work should be

done in different manner

● Employer decides work should be done

by person capable of doing the work other

than person employed

Employee’s Rights on Redundancy

Payment: Employed for two years

Except under 16s, family employment, farms

where both employer and employee reside

Minimum notice: two weeks

Time Off: to look for new employment,

attend interviews or training

Selection for Redundancy

Employer must

- Consider alternatives

- Consult union or worker reps on avoiding redundancy

- Consult union or worker reps on selection

- Ensure selection is fair

- Ensure selection process is followed

- Offer alternative employment where possible

- Inform the employees

Mahon v McPhilips (1979)

- EAT said that employee on sick leave

at time of redundancy was not a

special reason to justify not using

last-in, first-out rule.

- Claimant had brought case on basis

that he had been dismissed while

junior employees had been retained.

Duty to consult

Collective redundancies = 10% of the workforce (20 plus)

Consultation with union 30 days prior

Employer must provide

- Reasons

- Number of employees proposed

- Period it will take effect

- Criteria for selection

- Method for calculating redundancy payment

Written notice to

the Minister

Or fine of up to

€250,000

Tobin v OCS Operations Ltd

WRC awarded €120,000 to 61

employees of Cleary’s who

were made redundant without

consultation.

Selection Criteria

Criteria must be objective and seek to ensure fairness and

consider:

- Skills and qualifications of employees

- Whether or not “last in, first out” should be used

- Attendance or disciplinary records

- Absence and time keeping records

- Experience and length of service

Must not be based on discriminatory factors

Kerrigan v Peter Owens Advertising

Claimant made redundant on the grounds of

1) Costs

2) Reorganisation

3) Age

4) Costs associated with his contract

Tribunal ruled this was not genuine redundancy

Claiming unfair dismissal in redundancy

Largely when dismissed employees

feel the consultation process of

selection process was not carried

out in accordance with the

statutory requirements

Tribunal process for redundancy

Employee will bring claim to the Commission in

same way they would an unfair dismissal claim.

It will be considered fair unless

- Redundancy isn’t genuine

- Employee was unfairly selected

- Employee was selected in contravention of

agreement

- Redundancy for any of the automatically unfair

reasons

msstephanielord@yahoo.com