Termination During Probation - What Are The Risks?

• Published date: 29 July 2020
• Subject Matter: Employment and HR, Contract of Employment, Unfair/ Wrongful Dismissal, Employee Rights/ Labour Relations
• Law Firm: Ronan Daly Jermyn
• Author: Ms Deirdre Malone

Proceed with caution! Terminating during probation was always one of the more straightforward ways in which to terminate an employment relationship, given that employees did not have the requisite 12 months' service to bring an unfair dismissal claim. Two years ago, employers were given a wake-up call when the "At Your Service" Brennan brothers of the Park Hotel received a Labour Court recommendation that they pay their general manager '90,000, following his unfair dismissal during probation. Employers carried on, confident in the knowledge that it was recommendation (not binding decision) from the Labour Court under the Industrial Relations Act, and not an enforceable unfair dismissal decision.

Last month, things got more serious, when the High Court granted an interlocutory injunction following the purported dismissal of a chartered management accountant during his probation. The case is Donal O'Donovan -v- Over-C Technology Limited and Over-C Limited [2020] IEHC 291.

Background

Mr O'Donovan ("the employee") commenced his role as CFO of Over-C ("the employer") in July 2019. He was given a written contract of employment including a probation clause, a termination clause and clauses addressing disciplinary procedures. It is worthwhile to set out the probation clause in full:

An initial probationary period of 6 months applies to this position. During this period, your work performance will be assessed, and if it is satisfactory, your employment will continue. However, if your performance is not up to the required standard, we may either take remedial action, or terminate your employment.

The employee returned from annual leave after Christmas this year, and was called to a meeting with the CEO, during which he was told that his employment would terminate with immediate effect, and he would be paid in lieu of notice (one month's pay). The follow up letter sent to the employee to confirm his summary dismissal referred to sub-standard performance that was brought to his attention in earlier meetings. (This point is strenuously denied by the employee.)

The employee replied to the termination letter enquiring about his contractual entitlement to appeal the decision to dismiss him The CEO promptly replied and confirmed that he had a right of appeal, advising that a person from the Board of Directors would contact him to set up that hearing. An invitation to attend the appeal issued, but the employee replied indicating that he could not attend that the time...