Employer ordered to pay nearly $280,000 for the unjustified dismissal of four employees…

The Employment Relations Authority has ordered an employer to pay nearly $280,000 for dismissing four employees during the Covid 19 lockdown. The employees were dismissed as the company could no longer afford to maintain their employment due to economic factors caused by the lockdown.

The employer initially sent a letter to its employees, reducing their salaries by 30% in response to the lockdown. There was no opportunity to negotiate how much their salaries would be reduced by, when their salaries would be reduced, or when the reduction would end.

A month after this letter was sent, the employees were dismissed over the phone. There was no consultation with the employees in regard to their employment, and no alternative employment opportunities were provided.

The employer argued that this was an exceptional situation where consultation with the employees was not required, because redundancies were inevitable and there was no time to spare. As well as this, they relied on a provision in their employment agreements which stated that no consultation was necessary for dismissal under exceptional circumstances.

The ERA agreed with the proposition that the redundancies were inevitable, but that this didn’t circumvent the need for consultation with the employees. As well as this, the salary reduction was done without informed consent of the employees. The salary reduction was a variation to the contract between employer and employee. This variation required consent of the employees, which was not given.

The employer was subsequently ordered to pay nearly $280,000 for loss of wages for the unemployment period of each employee, loss of wages arising as a result of the wage decrease, and compensation for hurt and humiliation to each of the employees.

If the employer had understood the correct dismissal process, and how variations to an employment agreement can be permitted, a significant amount of time and money could have been saved.

If there is confusion regarding the rights and entitlements of an employee, it is wise to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley