Probation dismissals – I thought they were low risk?

Readers interested in HR matters (or indeed in hotels) may have noticed a well publicised decision of the Labour Court in recent weeks recommending payment of €90,000 to a manager at The Park Hotel in Kenmare who was dismissed during probation. No doubt many looked twice at the headlines as most HR practitioners generally believe that one of the main benefits of probation is that termination of employment is much easier and is low risk. It is well known that there ar...
Readers interested in HR matters (or indeed in hotels) may have noticed a well publicised decision of the Labour Court in recent weeks recommending payment of €90,000 to a manager at The Park Hotel in Kenmare who was dismissed during probation. No doubt many looked twice at the headlines as most HR practitioners generally believe that one of the main benefits of probation is that termination of employment is much easier and is low risk.

It is well known that there are various exceptions to the rule that an employee must have 12 months’ service to bring unfair dismissal claims. Those exceptions include equality claims, pregnancy related dismissals or a whistleblowing claim. Some employees might even bring wrongful dismissal claims to the High Court. However, employers would generally operate on the basis that a dismissal after 3 months where things were “not working out” (as occurred in the Park Hotel case) would normally be safe. So what is happening here and why was a €90,000 payment recommended in this case?

Employees in dispute with their employers (such as those dismissed during probation) can take an industrial relations route to the Labour Court under the Industrial Relations Acts[1]. This can involve seeking an “investigation” of a “trade dispute” by the Labour Court. The Court can hold a hearing and issue a “recommendation”. However the key point, and the comfort for employers, is that these “recommendations” are not legally binding. So why would an employee or their advisors take a route that is unenforceable?

Such cases do create certain pressures for an employer. Publicity can be generated (as is evident from the Park Hotel case) and that publicity might damage the employer’s brand or workplace morale. The employer might be reluctant to effectively ignore a Labour Court recommendation or to be perceived as disrespecting the IR institutions of the State. This is especially so for unionised or public sector employers. Furthermore, the employer, if it engages with the process, has to commit time and resources and possibly has to engage legal representation.

All of this might create a pressure to settle such claims or to accept and comply with the recommendation, even though not legally binding. It is an interesting choice for employers in these situations who have a decision to make on whether to engage, and to what extent, with the process. Some employers decide not to participate at all. Others cannot bear to think of a hearing occurring without them being present and decide to appear at the hearing but not necessarily be bound by it. Yet others fully participate and voluntarily comply with such decisions.

Getting back to the opening questions though, employers can if they wish make a cold, commercial decision not to engage in such cases, safe in the knowledge that such recommendations are unenforceable. The Park Hotel case nevertheless received significant publicity. The Court held that the manager was “denied natural justice” in how he was dismissed. Readers will differ in their perceptions of the hotel as a result and it is perhaps unlikely to have any significant long lasting negative impact on the business of the hotel. It is unknown whether the hotel will pay the recommended amount. Nevertheless employers should always be aware of this sometimes overlooked route when dismissing employees during probation.

Wriiten by Barry Walsh

[1] Section 20(1) of the Industrial Relations Act 1969