Employer Resources Newsletter - September 2024

Workplace investigations play an important role in the dispute resolution process in Irish organisations. Typically, an investigation will be required as part of workplace procedures to resolve employee disputes, manage grievances, or examine alleged misconduct. To ensure that the running of a workplace investigation does not infringe employee rights, it is vital that employers are aware of their obligations around how to investigate work-related allegations in compliance with a range of statutory, contractual and constitutional rights. 

Natural Justice and Fair Procedures

Fundamentally, workplace investigations must be conducted in accordance with the principles of natural justice and fair procedures. employees who are denied fair procedures may allege that their constitutional and contractual rights have been breached. 

The WRC’s Code of Practice on Grievance and Disciplinary Procedures sets out a useful guide on what procedures to follow in managing a grievance or disciplinary matter in compliance with the principles of natural justice and fair procedures. Key principles include:

• that employee grievances are fairly examined and processed;
• that details of any allegations or complaints are put to the employee concerned;
• that the employee concerned is allowed to respond fully to any such allegations or complaints;
• that the employee concerned is given the opportunity to avail of the right to be represented during the procedure; and
• that the employee concerned has the right to a fair and impartial determination of the issues concerned, taking into account any representations made by, or on behalf of, the employee and any other relevant or appropriate evidence, factors or circumstances.

As a cornerstone of managing investigations, employers should have specific written policies demonstrating how workplace investigations will operate and how they adhere to the principles of natural justice and fair procedures as well as those set out in the Code of Practice on Grievance and Disciplinary Procedures.

What Triggers a Workplace Investigation?

A workplace investigation may become necessary for a number of reasons. Typically, investigations are carried out when an employee raises a grievance, a disciplinary issue arises, a bullying or harassment complaint is made, and in specific circumstances, an employee makes a protected disclosure. The employer may also initiate an investigation in response to an allegation made by a third party from outside the organisation.  

The Parameters of the Investigation: Finding Facts or Assessing Evidence

A crucial decision before starting the investigation process involves determining the nature of the investigation. 

If the investigation is an information gathering exercise, it is important that the investigator makes no assessment of the evidence. Investigators who are confined to gathering information do not have to comply with the strict principles of natural justice. 

If the investigator is asked to assess the evidence and make findings that cannot be contested however, employers must ensure to apply rigorous standards of fairness to the investigation.

To ensure that the investigation does not stray outside the boundaries that have been set, Terms of Reference are typically provided to employees who are in the scope of the investigation. While the employees do not have a right to decide the Terms of Reference, their feedback should be sought to ensure that all necessary evidence is captured. Clear Terms of Reference will guide the investigator and keep the investigation process on track.

Employers should also consider if there are compliance considerations under a statutory code of practice or specific legislation. Investigations dealing with bullying or harassment must adhere to the Codes of Practice on the prevention and resolution of bullying at work and on dealing with sexual harassment and harassment at work respectively. Failure to comply with the codes will be admissible in evidence before a court, the WRC and the Labour Court.

The Data Protection Commission has also published guidance for employers who need to manage a whistleblowing process. 

Risks of Mismanaging Investigations

From the organisation’s perspective, it is important to ensure that a difficult situation is not made worse by failing to apply basic standards of fairness. A mismanaged investigation may lead to legal claims ranging from unfair dismissal to discrimination. There are also wider reputational risks and employee relations issues to consider. A poorly conducted investigation may lead to employee unrest, reduced morale, higher employee turnover, and lower productivity.

Role of External Investigators and Legal Advisors

In most cases, an employee's manager or HR manager will be responsible for carrying out the investigation. The person who conducts the investigation must have no connection to the complaint and must have the skills and experience to complete an investigation. 

If the investigation leads to a disciplinary process, it is vital that the investigator is not involved in making decisions in the subsequent disciplinary procedure. In small organisation, there may not be enough neutral internal employees to manage each stage of the investigation and disciplinary process, and external support may be necessary. 

External investigators or legal advisors may also be required in sensitive cases involving senior employees or in highly regulated industries where the investigation requires sector specific experience and expertise.

Transparent Investigations Build a Workplace Culture of Trust

As well as ensuring compliance with a range of employee and statutory rights, a thorough and transparent approach to concluding workplace investigations helps to build a culture of fairness, trust, and accountability. A heavy-handed or biased approach not only exposes an organisation to the risk of legal claims, it will also jeopardise employee morale and organisational integrity. 

By adopting a best practice approach to investigations that adheres to the principles of natural justice and fair procedures, employers can avoid making a difficult situation worse and reach a conclusion that minimises the risks to the wider work environment.

Adare is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. If your organisation needs advice, support, or guidance about compliance requirements or any HR issues, please contact Adare to learn what services are available to support your organisation.

Dublin Office: (01) 561 3594 | Cork Office: (021) 486 1420 | Shannon Office: (061) 363 805

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Respondent ordered to pay €63,000 in unpaid wages and commission after unfair dismissal claim

Background

The complainant alleged unfair dismissal, arguing that proper procedures were not followed. His employment contract was updated in January and May 2019, with a salary increase to €45,000 and targets linked to commissions. He was dismissed on May 29, 2020, for alleged neglect, carelessness, sharing company information with a competitor, and unfulfilled customer commitments. Seventeen client complaints were cited but never formally investigated or included in a disciplinary process. The complainant claimed he was never warned of performance issues or given a chance to defend himself, calling the dismissal unfair and without appeal. He also claimed €32,340.02 in unpaid salary and commissions from January to June 2020, plus €1,458.00 for unpaid notice. After securing new employment in June 2020, he suffered a monthly loss of €2,505.00.

The respondent stated the complainant, initially hired in November 2017 and changed role in January 2019. They cited conduct issues, a breakdown in trust, and failure to meet performance expectations as reasons for the dismissal, referencing the "Review" clause in his contract. Persistent issues with sales reports, administrative errors, and commission discrepancies were also noted. Despite being placed on a performance improvement plan and receiving a formal warning, the complainant failed to improve. The respondent acknowledged procedural flaws in the dismissal process but maintained that these did not affect the fairness of the decision. The complainant disputed the dismissal, claiming unfair treatment, wage deductions, and unpaid entitlements.

Summary of the complainant’s Case:

The complainant’s employment contract was revised on January 1st and May 1st, 2019, with his salary increased to €45,000 and new targets and performance rewards added. On May 29th, 2020, the respondent dismissed him, allegedly without following fair procedures. The dismissal letter accused the complainant of negligence, carelessness, recklessness, causing financial and reputational harm, sharing organisation information with a similar organisation within the industry, and making unverified commitments to clients. It also cited complaints from 17 clients. However, these allegations were neither presented to the complainant nor investigated, and there was no formal disciplinary process or warning.

In March 2020, when concerns about meeting targets arose, the complainant provided a detailed response, citing his 2019 sales figures to show no issues with his performance.

The complainant referred to Redmond on Dismissal Law (3rd edition, para 13.58), which states that natural justice requires employees be informed of alleged misconduct and given the chance to defend themselves. Though written responses may suffice, an oral hearing is preferable. Additionally, based on Dodder Management UD 311/1978, the complainant argues that warnings must be given before dismissal. No such opportunity to address issues was provided.

The complainant also highlighted the absence of an appeal process, citing An employee v. An employer (ADJ-0000381), and asserted that this lack of procedure rendered the dismissal unfair.

After being dismissed, the complainant found alternative employment in June 2020 but incurred a monthly loss of €2,505.

The complainant claimed unlawful deductions from January 1st to June 13th, 2020, totalling €32,340.02. This included unpaid salary of €15,994.36, performance reward due in January (€1,258.78), February (€8,479.30), and March (€8,664.10), as well as wages of €11,250.00.

The complainant was seeking unpaid notice of €1,458.00.

Summary of the respondent’s Case:

The complainant was hired on November 1, 2017 and changed roles on January 1, 2019.

The respondent denied the complainant was unfairly dismissed and claims no additional money was owed. The complainant was dismissed for misconduct under Section 6(4)(b) of the Unfair Dismissals Act 1977, due to a breakdown of trust and confidence. He received two weeks' notice.

The respondent testified that the complainant’s behaviour harmed the business and its reputation. Although they did not seek HR advice, they followed the employment contract, which included a review clause.

Review Clause

The contract allows for employment review if the organisation is dissatisfied with the employee’s actions. This can be triggered by failure to perform duties, communication issues, negative feedback, or misuse of organisation property. If placed under review, the employee may face reduced pay, suspension of benefits, or dismissal with one week’s notice if deemed detrimental to the organisation.

The complainant received his employment contract on November 1, 2017, and it was revised on January 1, 2019. In April 2019, his contract was renegotiated to a €45,000 salary, with a €500 monthly reward for meeting targets and a 4.5% bonus on performance above target. On July 1, 2019, the bonus terms were changed to depend on signed contracts and profitability.

From August 2019, the complainant’s monthly target was raised to €80,000. The respondent faced issues with his failure to submit paperwork, impacting year-end accounts. In October 2019, after multiple warnings, the complainant was placed on a performance improvement plan (PIP), but he disputed the listed issues. The respondent continued to raise concerns about missing paperwork, contract issues, and unprofitable sales.

In January 2020, the Chief Executive Officer met the complainant to discuss these problems. The complainant attempted to resign on January 25, 2020, but was instead placed under review and asked to submit his 2019 sales report. Due to discrepancies, the deadline was extended several times.

On March 9, 2020, the complainant was warned that failure to provide the report could lead to dismissal. He finally submitted the report on March 15, 2020, but it revealed overpaid performance bonus. The organisation raised his performance target to €100,000 and hired an assistant for his area.

On May 29, 2020, the complainant was dismissed due to lack of improvement and damage to the organisation’s reputation. He was given two weeks' notice, one of which was garden leave.

The respondent acknowledged some procedural issues with the dismissal but argues this did not invalidate the fairness of the outcome. It relies on the review clause in the complainant’s contract, citing case law that defects in procedure do not necessarily render a dismissal unlawful if there is no reasonable chance of injustice.

The respondent argued it acted reasonably under the circumstances, referencing the standard of a "reasonable employer" as set out in Looney & Co. Ltd. v Looney UD843/1984.

The complainant was paid €1,516.67 on June 26, 2020, under the Temporary Wage Subsidy Scheme. He submitted a claim on October 22, 2020, but the respondent argues that claims for performance bonus owed before April 2, 2020, are out of time, per Section 6(4) of the Payment of Wages Act 1991.

The complainant was also seeking notice pay, but the Respondent asserts this was a duplication of his previous claim.

Findings and Conclusion

Unfair Dismissal Overview

Under Section 6(1) of the Unfair Dismissals Act 1977 (as amended), a dismissal is considered unfair unless substantial grounds justify it. Section 6(4) lists valid reasons for dismissal, such as an employee’s competence, conduct, redundancy, or legal constraints. The employer must prove that the dismissal was based on one of these reasons or other significant grounds.

The complainant started his employment on 1st November 2017, under a contract with a review clause, allowing the company to terminate employment if performance did not improve. His contract was amended twice in 2019. In July 2019, his performance target was increased to €80,000, but the complainant did not agree. Performance issues arose, and by January 2020, the complainant was warned and placed under review. On 29th May 2020, his employment was terminated after repeated warnings about performance, communication, and other concerns.

Procedural Fairness

The organisation’s disciplinary process did not comply with the legal requirements for natural justice, such as allowing the complainant to respond to allegations. While the complainant was aware of the performance issues, he was not given a fair opportunity to address them. The Adjudicator found his dismissal procedurally unfair.

Compensation

The complainant found new employment in June 2020 but continues to suffer a monthly financial loss of €2,505. The appropriate compensation is €30,000.

Claim for Unpaid Wages

The complainant claims €33,519.87 in unpaid wages and €1,458 in notice pay. He argued that his contract entitled him to a monthly bonus and 6% performance bonus, which the company disputed, citing revisions in 2019. However, there is no clear evidence of the complainant agreeing to these changes. The Adjudicator found his complaint valid and directed the orgnisation to pay €33,519.87 in unpaid salary and bonuses.

Notice Payment Claim

The complainants notice pay was reduced to 70% under the Temporary Wage Subsidy Scheme during the pandemic. As wages were reduced across the board, the Adjudicator found this claim not well-founded.

Decision

Section 41 of the Workplace Relations Act 2015 required the Adjudicator to make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 required the Adjudicator to make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

The complainant was unfairly dismissed and the Adjudicator directed payment of 30,000 euro financial loss to be paid by the respondent.

The Adjudicator also found the sum of 33,519.87 euro gross for performance and target bonus due to the complainant and direct payment by the respondent.

Our Commentary:

1. Comply with Employment Contracts: Ensure that any modifications to employment terms, such as salary revisions or changes to performance targets, are mutually agreed upon in writing. Unilateral adjustments without employee consent can lead to disputes and claims of contract breach.
2. Handle Wage Deductions Lawfully: All wage deductions, including commissions, must be legally justified and in accordance with the employment contract and applicable legislation. Improper deductions can result in significant financial liabilities and legal challenges.
3. Adhere to Fair Procedures: Employers must follow fair procedures for all disciplinary actions and dismissals. This involves clearly outlining the allegations to the employee, allowing them to respond, and conducting a thorough investigation before any dismissal decision is made. Adhering to procedural fairness is essential, as failure to do so may render a dismissal unfair, regardless of the reasons behind it.
4. Ensure Right to Appeal: Always provide employees with the opportunity to appeal dismissal decisions. The appeal process is a fundamental aspect of procedural fairness and helps to address any errors in the initial decision.
5. Maintain Thorough Documentation of Performance Issues: Keep comprehensive records of all performance-related concerns, including warnings, performance improvement plans, and related communications. This documentation is vital for defending against challenges to dismissal decisions.

Want to join Adare Human Resources' HR workshop on 25 September?

What are your key HR priorities for 2025? See how your organisation compares with industry benchmarks in attracting, retaining and engaging employees.

The HR Barometer Survey 8.2 provides expert insight, highlights, trends and identifies the key HR challenges and priorities currently facing employers to support your strategic HR planning into 2025.

To launch the newest version of our HR Barometer Survey 8.2, Join Adare on 25 September, where they will be holding in person workshop in The Clayton Hotel, Sir John Rogerson Quay and discussing the latest findings in the HR Barometer Survey 8.2.

The workshop will be conducted by Adare's HR experts with each topic being carefully selected based upon the results of the HR Barometer survey 8.2.

To attend the webinar, please register in the link here.

Approval for Legislation Amending the Maternity Protection Act

Minister for Children, Equality, Disability, Integration and Youth, Roderic O’ Gorman announced the General Scheme of the Maternity Protection (Amendment), and Miscellaneous Provisions Bill 2024 has been approved by Government.

The Scheme provides for the intention to introduce legislation to:

• Amend the Maternity Protection Act 1994 to allow for a pause in maternity leave in the case of a very serious physical or mental illness for a period of up to 52 weeks. The need for the pause must be certified by a doctor or consultant.
• Provide that members of the Oireachtas have an entitlement to 26 weeks maternity leave, which they were not entitled to before.
• Amend the Employment Equality Acts 1998-2015 to provide that an employer shall not enter into a non-disclosure agreement [NDA] with an employee where the employee has made allegations of discrimination, harassment, sexual harassment or victimisation unless it has been requested by the employee.

Maternity Protection Act 1994

The proposed provisions will include a new insertion which will permit an employee who is on maternity leave and who requires a necessary intervention to be carried out for a serious physical health condition that carries with it a high risk to the life of the employee to:

• postpone all or part of the maternity leave,
• the maternity leave may not be postponed for a period longer than 52 weeks.

The new provision also states that where an employee intends to postpone the leave, the employee must notify her employer in writing of her intention to postpone the leave and the date on which the intended postponement will commence. The notification must be provided not later than 2 weeks before the intended date of commencement of the postponement and the notification must include a medical certificate stating the nature and extent of the employee’s health condition, and the intervention(s) required.

Maternity Leave for Members of the Oireachtas:

The scheme highlights that members of the Oireachtas have an entitlement to 26 weeks maternity leave, which they were not entitled to before and propose a new insertion in the Act which specifically provides for a pregnant member of the Oireachtas to be entitled to leave, to be known (and referred to in this Act) as “maternity leave for members of the Oireachtas”, for a period of 26 consecutive weeks.

Amendments to the Employment Equality Act of 1998 – Proposed Update on Non-disclosure Agreements

New proposals have been tabled to update the Employment Equality Acts by the insertion of a new section after Section 14 to the 1998 Act in relation to Non-Disclosure Agreements (NDAs). Section 14 of the 1998 Act states that a person shall be guilty of an offence if they procure or attempt to procure another person to do anything that constitutes discrimination or victimisation as noted in the Act. The Act does not currently include the use of NDAs where allegations of sexual harassment or discrimination have been made.

The new provisions would prohibit the use of NDAs in instances where allegations of discrimination, harassment or victimisation occur and the purpose of the NDA is to conceal information in relation to that allegation, unless the employee requests for an NDA to be signed.

Furthermore, in order for an NDA to be enforceable, the employee must be provided with independent legal advice, at the expense of the employer. The terms of the NDA must be set out in writing, be for a limited duration and have a 14-day waiting period after the NDA is signed to allow the employee to withdraw from the agreement (if they wish) before it comes into force.

The impact of these proposed changes may result in the regulation of non-disclosure agreements where allegations discrimination, harassment or victimisation so employers will have to be cognisant of the impact of this.

Amendment to the Workplace Relations Act 2015 (2015 Act)

A further update is proposing to amend Section 41(7)(c) of the 2015 Act which states that an Adjudication Officer shall not entertain a dispute referred to them in instances where there is a dispute in relation to the entitlements of an employee under the 1994 Act after a six-month period from the date that an employer is informed that an employee is pregnant, has recently given birth, or is breastfeeding.

This current position limits the time for bringing a claim under the 1994 Act which in most cases has often expired by the time the employee returns to work. The proposed changes will amend this section and allow Adjudication Officers to reject claims after the expiration of a period of six months “beginning on the day immediately following the date of the occurrence of the dispute”.

This amendment will further enhance the rights of those returning to work after maternity leave.

It would be advisable for all HR Professional’s to take note of these updates for when the legislation is enacted as employee contracts and handbooks may need to be updated.