Unfair Dismissals and Probation

Workplace Unfair Dismissal

In consideration of probation periods; n order to bring a claim under the Unfair Dismissals Acts 1977 to 2015 (the Acts), an employee must have one year’s continuous service with his employer.

As employees on probation generally have less than 12 months continuous service, the need to comply with the dismissal procedure is less urgent than it is with regard to employees with a right to claim under the Acts. However, where there is a contractual obligation to follow the disciplinary and dismissal processes in respect of employees on probation, it is important that this is adhered to.

The entitlement to fair procedures and natural justice for all employees should also be borne in mind by employers to avoid unfair dismissal allegations.

Fair procedures and natural justice include;

  • Warning the employee that his/her performance/conduct is not satisfactory
  • Allowing a reasonable chance to improve performance/conduct
  • Assisting the employee to improve by providing training or mentoring.

Probationary periods should not last for more than 12 months, as employees then acquire entitlements under the Acts. Further, there must be provision in the contract to extend the probationary period in order to allow an employer to do so.

Ex Gratia Payment

Although there is no obligation to do so, an employer may offer an employee who is being dismissed after a probation period of less than 12 months an ex gratia payment in consideration for the employee signing a compromise agreement. Under this agreement, the employee waives his entitlement to bring a claim under the Acts.

In this scenario, it is important that payment in excess of what the employee is entitled to is offered; the compromise agreement will not be enforceable unless valuable consideration is provided. The employer should also include a waiver which covers all other statutory, common law and equity claims against the company and its past and present officers and employees.

In order for the agreement to be enforceable, the employee must be advised of his entitlements under the employment protection legislation, and the agreement should list the acts which are applicable.

Underperformance due to Personal Issues

Employees with longer service are usually entitled to performance management; therefore an employer has lesser obligations in this respect for an employee who is still on probation. This means that a long-term employee is in a stronger position with regard to receiving an opportunity to improve their performance.

The terms of the employee’s probationary period will determine the extent of the employer’s obligations.

At a minimum, the employer should:

  • Request the employee to meet with their manager, who should notify them of the performance issues, explaining the specific performance issues clearly;
  • Offer the employee an opportunity to respond fully to the concerns;
  • Explain what is required of the employee; the employee should be requested to participate in a “performance improvement plan”, which should set out clear targets for the employee to achieve by a certain date. The employee should be afforded a reasonable period of time to improve;
  • The employee should be offered additional support which the employer can reasonably provide, such as increased supervision and training;
  • The employer should offer appropriate support for any personal or health issues;
  • The employee’s work and progress should be monitored over a period of time;
  • Follow-up meetings with the employee to discuss progress made or lack thereof;
  • A further opportunity to improve.

If the employee does not improve within a reasonable period, the employer may institute disciplinary procedures.

Importantly, in order to dismiss an employee on grounds of competence, the employer must have reasonable grounds for sustaining an honest opinion of the employee’s incompetence.

Probationary Clauses upon Promotion

Where an employer wishes to promote an employee, they may wish to include a probationary clause in a contract stating that the employee will revert to his or her previous position if performance is unsatisfactory.

However, it is preferable from the perspective of the employer to state that the employee will revert to previous role or a suitable equivalent where such a role is available. This will give the employer more flexibility and discretion, should the promotion not work out.

Pension Schemes

In Ireland, neither employers nor employees are required to contribute to a pension or pay into a Personal Retirement Savings Account.

However, employers must provide employees with access to a PRSA or an occupational pension scheme within 6 months of commencing employment. If an employer ensures this, they will not be in breach of their obligations.

It is therefore important in the context of employees on probation that, where the probationary period is extended beyond the usual 6 months, employees are provided with access to a PRSA or an occupational pension scheme.

Recent Unfair Dismissals Legal Case

The recent case of Glenpatrick Watercoolers Limited v A Worker [2015] concerned an alleged unfair dismissal.

In finding that the employer failed to adhere to the Code of Practice on Grievance and Disciplinary Procedures, the Court held that no prior notice of a disciplinary meeting was provided to the Claimant and unspecified incidents were taken into account in the decision to terminate the Claimant’s employment.

Significantly, it was stated that an employer is not relieved of his obligation to act fairly during the probationary period.

As the Code is also applicable when managing underperformance, it is likely that the Labour Court would have reached the same conclusion if the employee had been dismissed for underperformance without observing the disciplinary process.

NOTE: This article is for information purposes only; specific legal advice should be taken before relying on the information in this article.

If you are an employer seeking advice regarding unfair dismissals and probationary periods, or if you are an employee and need assistance in relation to your rights in relation to probation we would be delighted to assist you; contact us at 021- 425184 or via our contact form.

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