Ireland: Workplace Relations Commission Awards Maximum Compensation to Employee Dismissed Without Cause
A recent decision of the Workplace Relations Commission (“WRC”) considered the issue of an employee who was dismissed by her employer without cause. In determining the compensation that should be awarded, significant consideration was given to the lack of fair procedures and reasoning afforded to the employee, as well as the difficultly that the lack of reasons for dismissal would pose in her securing alternative employment. The WRC awarded the employee the maximum compensation available to her – a total of two years’ remuneration.
The recent decision of the Workplace Relations Commission (“WRC”) in the case of Maria Inmaculada De La Torre Ruiz v Hamilton UK Services Limited ADJ-00049851 highlights the serious consequences for employers when dismissing employees without cause or on a “no-fault” basis.
Dismissal on a no-fault basis occurs where an employer dismisses an employee as prescribed under the employee’s contract of employment. This means that the employee is served their contractual notice and their employment is terminated without giving the employee any reason for the termination. While this is strictly permissible under contract law, the employer exposes themselves to a potential claim in the WRC under the Unfair Dismissals Acts 1977 – 2015 (the “Acts”), which requires employers to follow fair procedures and natural justice.
The complainant in this case was employed as a Financial Accountant with the respondent employer from 6 July 2021 until 27 July 2023 when she received three months’ pay in lieu of notice and was dismissed. The employer conceded to the WRC that the complainant was dismissed without cause, and as a result, the question for the Adjudicator in this case was to determine the level of compensation that would be an appropriate remedy in light of the breach of the Act.
The Adjudicator considered the difficulty for the complainant in securing new employment given that she could not explain the reasons for her dismissal from her employment. The Adjudicator estimated that the complainant would not find alternative employment for another 18 months, and considering this and the loss already incurred in the previous 17 months between the dismissal and hearing date, the Complainant’s financial loss was assessed at €165,992.00. This amount was slightly reduced by the Adjudicator given the complainant had secured employment for 9 months on a fixed term contract.
The employer argued that the complainant had failed to mitigate her losses, but the Adjudicator held that she had applied for several jobs and also emphasised the fact that her dismissal lacked any procedural fairness, which impacted her ability to mitigate her loss and secure new employment.
Despite her financial loss exceeding €165,000, the maximum compensation that can be awarded under the Act was €145,122.00 – equivalent to two years’ remuneration. Therefore, the WRC awarded the complainant the maximum remedy possible of €145,122.00, illustrating the weight given by the WRC when determining compensation to the actual and prospective losses of a complainant in circumstances where there is a clear absence of any reason for the dismissal and no fair procedures.
This case serves as a reminder to employers that, while they are free to dismiss an employee on a no-fault basis, in doing so they run a significant risk that an employee will successfully bring a claim for unfair dismissal to the WRC and an employer could be ordered to pay significant compensation to the employee.
