Up until relatively recently, an employer could generally suspend an employee with pay pending an investigation as long as the right to suspend was included in the disciplinary policy or contract of employment. However, the power to suspend employees pending an investigation has come under close scrutiny over the last number of years in a number of high profile cases. The current generally accepted position is that, even where a right to suspend exists in the contract or staff handbook, a suspension will normally only be justified where necessary to:

  1. Prevent the repetition of the conduct complained; or
  2. Prevent interference with evidence; or
  3. To protect the employer’s own business or reputation

The issue of suspension was examined by the High Court in the case of Bank of Ireland v Reilly [2015] IEHC 241. In this case, the High Court ordered Bank of Ireland to reinstate a former employee who was dismissed in 2009 for breach of the company’s email policy on the basis that the decision to dismiss was disproportionate and unreasonable. In its decision, the High Court was particularly critical of the manner in which the employee was suspended. In particular, the High Court noted that:

  • Only 3 out of 5 staff under investigation were suspended;
  • it was unclear who made the decision to suspend;
  • the decision to suspend seemed to be based on second or third hand information;
  • the branch manager who suspended the employee did not know the details of the allegation; and
  • there was no evidence that suspension was necessary.

The High Court held that the employee was entitled to an explanation of the reason for the suspension. It further held that the suspension was not imposed to facilitate an investigation. Rather, it was an expression by the Bank of the seriousness of the matter and its resolve to punish those involved. The Court held that this indicated pre-determination. Ultimately, the High Court ordered the Bank to reinstate the employee over 5 years after the dismissal which meant that the Bank was not only required to reinstate the employee but also to pay back pay for 5 years. This case clearly demonstrates that suspension should not be undertaken lightly and only after a full consideration of the necessity for it.

The issue of suspension was also considered in the case of Philip Smyth v RSA Insurance Ireland Limited [2015] 4 JIC 1706. In this case, the Employment Appeals Tribunal (the “EAT”) awarded the former chief executive of RSA Insurance compensation of €1.25 million, one of the largest awards in its history.

Mr Smith had brought a case for constructive dismissal after he was suspended for what RSA described as issues in the Irish claims and finance functions which resulted in the company being forced to inject €262million of emergency capital into its Irish subsidiary. Following his suspension, Mr Smith resigned claiming that he had been made the “fall guy” by RSA for the issues.

In this case, the EAT criticised, amongst other things, the manner in which Mr Smyth was suspended on account that the suspension was reported on RTÉ with very little notice to the employee. The EAT held that:

suspending the claimant on national television was the equivalent of taking a sledge hammer to his reputation, to his prospects of ever securing employment in this industry again in Ireland, in Europe and very possibly beyond and it sealed his fate with the respondent forever” and that the public suspension was in fact “a dismissal, disguised as a suspension” and was “never acceptable

Again, this case demonstrates that employers should consider the necessity of the suspension and that it is no longer safe to rely only on a clause in a contract of employment or staff handbook.