knowledge 31 March 2015 |

Injunctions – Recent Cases involving “No Fault Dismissals”

A no fault dismissal arises where an employer terminates a contract of employment on the giving of adequate notice to the employee, without following any procedures, where the dismissal is not based on the employee’s conduct or performance.

In the case of Bradshaw v Murphy and Others  [2014] IEHC 146, Miss Justice Finlay Geoghegan refused an interlocutory injunction application by the plaintiff, a Chef and restaurateur of the defendant company, seeking to restrain the termination of his employment and restrain the defendants from terminating an alleged partnership. Allegations of misconduct had been raised with the plaintiff and it was indicated that his employment would be terminated as a result.  

At the hearing of the interlocutory motion, the defendants gave an undertaking to the Court not to dismiss the plaintiff for misconduct pending the determination of the action. Counsel for the plaintiff submitted that due to an allegation of misconduct, any subsequent termination of the plaintiff’s employment invoked a requirement for fair procedures. Counsel for the defendants subsequently argued that the defendant company would only be entitled to terminate the plaintiff’s employment in the intervening period between the interlocutory motion hearing and the trial of the action in accordance with the plaintiff’s contractual terms of employment.

Miss Justice Finlay Geoghegan noted that whilst the plaintiff had raised a serious issue in relation to whether the defendant company could terminate his employment on foot of the alleged misconduct, she held that the plaintiff had not raised a serious issue to be tried as to the defendant company’s entitlement at common law to terminate the plaintiff's employment, without cause, in accordance with his contractual terms of employment. The plaintiff’s application for an injunction restraining the termination of his employment by the defendant company was, therefore, refused by the High Court in circumstances where the defendants had given the undertaking not to dismiss the plaintiff on the grounds of misconduct only. The Court observed that the fact that the defendants previously threatened to dismiss, for misconduct reasons, did not preclude the defendants from terminating in accordance with the contractual provisions.

In addition, in the case of Hughes v MongoDB Limited [2014] IEHC 335, Mr Justice Keane in the High Court dismissed an application for interlocutory relief brought by a regional technical director, who was dismissed because he was “not a good fit” for the defendant company. There was no evidence to show that the plaintiff’s dismissal was on the grounds of misconduct or poor performance. In rejecting the injunction application, Mr Justice Keane referred to the evidence adduced by the defendant showing that it was willing to provide the plaintiff with a written reference that confirmed the defendant’s confidence in the plaintiff’s abilities and that the defendant would reiterate to 'whom it may concern' that the plaintiff’s termination did not arise from any fault, misconduct, or poor performance on his part. Mr Justice Keane also went so far as to say that even if the defendant was being disingenuous in the reasons it gave for the termination, there was no authority for the proposition that a bad reason that informs the termination of an employment contract in accordance with its terms, renders that dismissal wrong in law.

Notwithstanding the above, employers are reminded that while an employer who dismisses an employee for "no fault" may avoid an injunction, it is likely to be faced with a claim for unfair dismissal under the Unfair Dismissal Acts 1977 to 2007 and an employer will be required to show that fair procedures were followed in effecting the dismissal or in the conduct of any investigation or disciplinary process which gave rise to the dismissal. It is noteworthy that, in each of the above cases, the employees in question did not have the requisite one year’s service in order to bring a claim under the Unfair Dismissals Acts. Employers should also ensure that terminations are effected in accordance with contractual terms, express or implied, and, where appropriate, the employer company’s memorandum and articles of association.