Employment Law – law notes for legal and accounting students from Holland Condon solicitors

Nov 25, 2014

  • Civil side (as opposed to criminal)
  • part of contract law

~ Governs relationship between employers and employees.  The parties have a contract of employment.  Law in this area comes from common law, and, mainly, from statute/ EU law.  Focus is on protecting and giving rights to employees.

~ Contract can be oral or written (statute asks for it in writing but oral still is valid contract).

~ Terms can be expressed or implied by custom; common law; statute and the Constitution.

 

~ 1st question to be asked – Have we an Employee?

 

Employee                   v                      Self-employed

 

    Independent contractor
     
  “Contract of Service” “Contract for Services”
     
  Employment Law applies Employment Law does NOT APPLY
     
  Definition = “an individual who has entered work under a contract of employment” Definition =  no statutory one. e.g. call out gardener v one @ Kilkenny Castle

 

 

~ Employers duties = *pay wages; * provide work; *safety; *holidays.

~ Employee duties = *available for work; *obey lawful orders; *use reasonable care.

 

~ Why is distinction between employee v independent contractor important?

  • Statutory protection is given only to employees;
  • Employer is legally responsible for actions of employee in the law of tort (=“vicarious liable”) and not for actions of self-employed;
  • Employer legally responsible for actions of employee in contract law (law of agency);
  • In liquidations, employees are preferential creditors and contractors are not;
  • Employees paid under PAYE basis and not obliged to account to tax man.

 

~      4 Tests to determine is she/he employee ====== 

1. Control Test = has the employer control over Employee ?

re/ Sunday Tribune

            Tierney v An Post

2. Integration Test= how integrated is employee into workplace ?

Re/ Sunday Tribune  compared to Kelly v Irish Press

 3. Enterprise Test = who bears the financial risk ?

Tierney v An Post

4. “Economic Reality” Test = hybrid of all tests & more

The courts have recognised that no one test can be decisive in determining employee status.  They apply an economic reality test, a hybrid test, which contains elements of all other tests.  In Market Investigations v Minister for Social Security (1969) (UK case) Justice Cooke outlined the factors that may be of some importance in determining the status of a worker: (1) the provision of own equipment or whether they supply their own transport; (2) the hiring of helpers; (3) the degree of financial risk; (4) the degree of responsibility for investment and management; (5) whether there is an opportunity of profiting from the sound management in the performance of his tasks; (6) whether they were paid by commission or salary; and (7) whether they identified themselves as self-employed for tax purposes.

Above UK case followed here in Henry Denny case.

There is no definitive test, however, and the determination in each case depends on the nature of the work itself and the relationship between the parties.  McAuliffe v Minister for Social Welfare (1994) Mr. McAuliffe, a wholesale distributor of newspapers, contracted with two persons to deliver newspapers on his behalf to retail shops and other outlets.  An issue arose as to whether these persons were employed pursuant to a contract of service or under contract for services.

The High Court in deciding that the contracts were for services was influenced by the following facts: –

  • The persons provided and maintained their own transport;
  • They were remunerated on the basis of a sum per run and were paid monthly against invoices submitted by them to Mr. McAuliffe;
  • They were free to carry goods for other persons except they could not carry newspapers for another supplier when engaged on delivery runs for Mr. McAuliffe;
  • They were responsible for any damage, destruction or loss of goods carried and for any loss occasioned by delay.

The Court went on to say that had the contracts been one of service then one would expect the employee to be paid a weekly wage and overtime and the vehicle to be provided by the employer and the employer to discharge all overheads relating to the vehicle, the employee to be prohibited from using the vehicle for carrying on a delivery business of his own.

There is no real single test that can be used as was reiterated in the very recent Irish case of Min. For Agric. V Barry.

 

****SEE  ———-  SUMMARY OF FACTORS TAKEN INTO ACCOUNT TO DETERMINE WHO IS EMPLOYEE

 

 PROTECTIVE LEGISLATION

Legislation has been enacted to protect the interests of both the employer and the employee, covering various aspects of employment.  Such legislation is contained in the following Acts: –

  •  The minimum Notice & Terms of Employment Acts, 1973 to 1994;
  • The Unfair Dismissals Acts, 1977-2007;
  • The Employment Equality Act, 1977;
  • The Anti-Discrimination (Pay) Act, 1974;
  • The Redundancy Payments Acts, 1967 to 2007;
  • The Protection of Young Persons (Employment) Act, 1977;
  • The Worker Protection (Regular Part-Time Employees) Act, 1991;
  • Payment of Wages Act, 1991;
  • The Safety Health & Welfare at Work Act, 1989;
  • Maternity Protection Act, 1994;
  • Protection of Employees (Temporary Agency Work) Act, 2012.

 

It is important to note that the above Acts only give protection to employees who work under a “contract of service”.  An independent contractor works under a “contract for services” and is not an employee.

 

AGENCY WORKERS = Consider the position of people who work as “agency workers” i.e. people employed by an employment agency who work for third parties. Do not confuse this with the separate area of AGENCY ( see anon). Discuss agency workers.

 

Termination of Employment Contract

(1) Effluxion of time;

(2) Performance of contract;

(3) By Agreement;

(4) Death or incapacity of parties;

(5) Breach of Terms of contract;

(6) Frustrating event e.g. permanent illness of employee (incapacity); Insolvency or bankruptcy of employer;

(8) By notice given to other party. Common law says notice must be reasonable. Statute has set out minimum notice periods for employers. Contract can have express terms dealing with notice but must be at least statutory minimum. Employer must give notice but notice alone can’t bring an employment contract to an end because of employee protection legislation. Thus, notice given to employer by employee is ok.

(9) By redundancy;

(10) By dismissal if employer has substantive grounds for the dismissal; uses fair procedures and gives notice of dismissal.In some cases, summary dismissal is justified.

 

*Dismissal without just cause = employee has claim either in common law – “wrongful dismissal” OR in statute law – “unfair dismissal”.

Breach by employer = that’s what we are dealing with.

 

UNFAIR DISMISSALS

  • NB aspect of employment law; Unfair Dismissals Act, 1977 – 2007   ( UDA )

 

  •  Criteria for making a claim =

Pre-conditions =

(1) Employee = contract of service;

(2) Greater than or equal to 1 years service to employer;

(3) Not excluded by Act e.g. Garda;Army;Public Servants.

(4) Dismissal generally must occur within 6 months of making a claim.Can be extended to 12 in rare cases eg claimant had depression.

 

Step One = Employee must have been dismissed

  • Dismissal defined as (a) termination of contract by employer or (b) termination by employee because of employer’s actions to the employee (constructive dismissal); or (c) end of a fixed term contract without renewal.

** Not always easy to say dismissal e.g. f*** off”.

Once employee shows dismissal then it is presumed to be unfair and the onus is on employer to show it was fair.

 

Step Two = What is the reason for the Dismissal ? UDA sets out 2 categories of reasons for dismissal –  one where reasons are automatically unfair and cannot be made fair; and the second, is where the reasons might be deemed fair.

  • Automatically unfair reasons = membership of trade union, race, colour, sexual orientation, political opinion, age, pregnancy of employee, suing employer for other reason.
  • Possibly fair reasons = potentially fair reasons for the dismissal i.e.

**Capability (employee becomes mentally or physically incapable of doing work e.g. Showerings case); OR Competence (employee intellectually not up to the mark; need for help/training and supervision with review of performance & warnings if the dismissal is to be fair) OR Qualifications of employee (employee does not have the necessary qualifications e.g. Doctor P v Mid West Health Board);

**Conduct of employee inside workplace and outside; can lead to reason for dismissal where it amounts to “gross misconduct” e.g. serious conviction, fraud, assault at work, fraud at work. In conduct cases, the process of investigation of the conduct and the method/process of dismissal must both be fair. Fair procedures and natural justice must be applied no matter how bad the conduct of the employee is eg. robbing employer but dismiss procedure unfair = unfair dismissal. also see Noone v Dunnes and Preston v Standard Piping Ltd; repeated bad conduct can result in dismissal being fair – Seale -v- Foreman Cameras

**Redundancy provided employer follows fair redundancy procedure. A dismissal dressed up as a Redundancy will be an unfair dismissal case.

**Statutory illegality e.g. Brennan v Blue Gas.

 

Procedure Step = over-riding principle in dismissal cases even if the reason for dismissal is deemed fair and reasonable, is that the procedure leading to dismissal must also be fair i.e.

  • Properly investigate conduct/problem
  • tell employee allegations and give copy evidence to them;
  • allow them to respond and be represented;
  • allow them time to prepare and put forward representation to an adjudicating body (by themselves or by a rep.);
  • natural justice applied in the hearing of the representations;
  • upon conclusion give written reasons for dismissal.

 

Third Step = Tribunal assesses whether the reason is fair by asking whether a reasonable employer would have terminated the contract for the reason provided by the employer. Remember this does not apply in “automatically unfair dismissals”.

 

Constructive Dismissal

~ Actions of employer drive employee to terminate or resign;

~ The conduct of employer must be serious enough e.g. Byrne v RHM Foods;

~ Onus on employee to show constructive dismissal

~ Examples of employer actions that could lead to constructive dismissal. List them please.

~ Relief and remedies for employee = same as unfair dismissal as contructive dismissal is unfair dismissal

 

Remedies for Unfair Dismissal

  • 6 (maybe 12 if grave reason) months to make a claim
  • Go to Rights Commissioner first or go to
  • Employment Appeals Tribunal;
  • Appeal within 42 days to Circuit Court
  1.  Re-instatement; same employer same contract OR
  2. Re-engagement; same employer different contract (eg.job)
  3. Compensation = 104 weeks max.

SO remedy could be either  1, or 2, or 3, or 1+3, or 2+3.

 

Unfair and Wrongful Dismissal

  • Employee unfairly dismissed has 2 legal remedy routes
  • Must choose only one i.e. Unfair Dismissal Act, claim to rights commr./E.A.T

OR

  • Common Law action in the Courts for “wrongful dismissal” and employee must prove dismissal (a) without notice and (b) loss suffered. Damages awarded are limited to what the employee would have earned had they worked the notice. Generally used where the employee has a mixed bag of employment contract eg director and chief executive role and where Statutory notice doesnt apply.

Why bring claim in the Courts?

  • Pre-conditions don’t apply e.g. 1 years service;
  • No limit on amount of damages;
  • Claim can be made for up to 6 years after dismissal;
  • Generally used where large salary or large financial losses involved.

 

You should track down a comparison Table between

Unfair  /  Constructive  /  Wrongful dismissals

 

 

REDUNDANCY

*Definition = job ceases to exist because of financial position of the firm; not enough work; firm closing down; re-organisation of work practices or work structure.

*Who has a Right to Redundancy ? if you are working greater than or equal to 2 years and over 16 years and not family and not live with employer;

*Right to Notice before your job terminates (before redundancy)= minimum of 2 weeks notice of redundancy or more if employee has long service (e.g. 15 years = 8 weeks notice under Minimum Notice Acts) or pay in lieu.

*Right to time off to seek new work

*Statutory Redundancy Payment =>  employee has a right to be paid this minimum sum (can pay more than minimum) =  [(2 weeks gross wage to max of €1,200) x no. of years in work] + 1 week gross wage;

*Selection Procedure = in selecting various or one employee for redundancy, the employer must be fair and objective in its selection; see Williams v Compair and list what needs to be done. Selection criteria that will be used are = you should list some.

*Duty to Consult = employees body/trade union where greater than 10% workforce involved in redundancy and to notify the Minister in advance of the redundancies.

 

If redundancy not genuine or unfair selection or one of automatic unfair reasons can be shown to be used in the redundancy selection process, then it’s an Unfair Dismissal case. Employers can’t use “redundancy” as a mask for unfair dismissal.

– from a firm of Solicitors based in Kilkenny

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