Termination of employment

Grounds for termination

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

An employer must have cause to dismiss an employee. Under the Unfair Dismissals Acts 1977 to 2015, the dismissal of an employee is deemed not to be unfair if it is for reasons of capability, conduct, capacity, redundancy, contravening the law (ie, the employee’s continued employment would be illegal) or some other substantial reason.

Notice

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

At a minimum, employers must give employees the following statutory periods of notice.

Duration of employmentMinimum notice
13 weeks to 2 years1 week
2 to 5 years2 weeks
5 to 10 years4 weeks
10 to 15 years6 weeks
15 years or more8 weeks

 

If the employee’s contract of employment provides for notice in excess of the statutory period, the contractual notice must be given. Payment in lieu of notice may be given if it is provided for in the contract of employment.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

An employer may dismiss an employee without notice for gross misconduct (ie, summary dismissal). This is conduct that is so serious that immediate dismissal of the employee is warranted; for example, assault, stealing or serious breach of employment policies. Employment contracts may contain further examples of gross misconduct.

Severance pay

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

The Redundancy Payments Acts 1967 to 2014 provide for statutory redundancy payments for employees with at least two years’ continuous service.

Employees are entitled to two weeks’ pay for each year of continuous service (capped at €600 per week) plus one additional week’s pay (capped at €600 per week).

Procedure

Are there any procedural requirements for dismissing an employee?

Yes. The Unfair Dismissals Act states that the adjudication officer or the Labour Court may have regard for the reasonableness of the conduct of the employer concerning a dismissal.

The Workplace Relations Commission has introduced a Code of Practice on Grievance and Disciplinary Procedures, which, although not technically legally binding, employers should follow in dismissing an employee. The Code sets out the importance of procedures and their application fairly and consistently in light of an employee’s constitutional right to natural justice and fair procedures. It outlines that disciplinary action may include:

  • an oral warning;
  • a written warning;
  • a final written warning;
  • suspension without pay;
  • transfer to another task, or section of the enterprise;
  • demotion;
  • some other appropriate disciplinary action short of dismissal; or
  • dismissal.
Employee protections

In what circumstances are employees protected from dismissal?

Employees with 12 months’ service have statutory protection from unfair dismissal.

Dismissals are automatically deemed to be unfair if they result wholly or mainly from the following:

  • membership or proposed membership of a trade union or engaging in trade union activities, whether within permitted times during work or outside of working hours;
  • religious or political opinions;
  • legal proceedings against an employer where an employee is a party or a witness;
  • race, colour, sexual orientation, age or membership of the Traveller community;
  • pregnancy, giving birth or breastfeeding, or any matters connected with pregnancy or birth;
  • availing of rights under legislation to maternity leave, adoptive leave, paternity leave, carer’s leave, parental or force majeure leave;
  • unfair selection for redundancy;
  • making a protected disclosure under the Protected Disclosures Act 2014; and
  • dismissal in the context of transfer under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.

 

No minimum period of service applies to the automatically unfair dismissals above.

Mass terminations and collective dismissals

Are there special rules for mass terminations or collective dismissals?

Yes. The Protection of Employment Act 1977 (as amended) sets down procedural requirements concerning collective redundancies.

Collective redundancies arise where during any period of 30 consecutive days, the number of employees being made redundant are:

  • five employees where 21 to 49 are employed;
  • 10 employees where 50 to 99 are employed;
  • 10 per cent of employees where 100 to 299 are employed; and
  • 30 employees where 300 or more are employed.

 

In such a situation, the employer must enter into consultations with employee representatives with a view to reaching an agreement. These consultations must take place at the earliest opportunity and at least 30 days before the notice of redundancy is given. The consultation aims to consider whether there are any alternatives to the redundancies.

The employer is obliged to provide the following information in writing to employee representatives:

  • the reasons for the redundancy;
  • the number and descriptions of the employees affected;
  • the number and descriptions of employees normally employed;
  • the period in which the redundancies will happen;
  • the criteria for selection of employees for redundancy; and
  • the method of calculating any redundancy payment.

 

The employer must also inform the Minister for Employment Affairs and Social Protection in writing of the proposed redundancies at least 30 days before the occurrence of the first redundancy.

Class and collective actions

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Irish law does not provide for class actions or collective actions; however, representative actions and test cases operate similarly to class or collective actions.

Joinder and consolidation procedures are also a form of collective action.

Mandatory retirement age

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

Employers may impose a mandatory retirement age; however, it must be objectively and reasonably justified by a legitimate aim and the means of achieving that aim must be appropriate and necessary. Employers commonly cite intergenerational fairness and succession planning as the grounds for imposing mandatory retirement ages.

The Code of Practice on Longer Working of the Workplace Relations Commission sets out the best industrial relations practice in managing the relationship between employers and employees when an employee is approaching retirement. This Code of Practice is now binding under SI 600/2017.

The current qualifying age for state pensions is 66. The government had announced plans to increase the state pension age to 67 in 2021 and 68 in 2028. However, the government has deferred the change that was due in 2021 and a Pensions Commission has been established to consider the change to the state pension age, among other issues such as sustainability and intergenerational fairness.

There has been recent high-profile litigation by employees against employers enforcing mandatory retirement ages in which employees have successfully claimed that the mandatory retirement age is not objectively justified. Employers should ensure that the mandatory retirement age is objectively and reasonably justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.