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“No-Fault Dismissal” Deemed to be Substantively Unfair

In Caroline Mcaree v Newbrook Nursing Home Ulc Drumbear Lodge Nursing Home ADJ-00030614 the Complainant submitted a complaint under the Unfair Dismissals Acts 1977-2015 (the “Acts”) that she was unfairly dismissed without reason or explanation. The Respondent employer asserted that the termination of the Complainant’s employment complied with the provisions of her contract of employment and was a “no fault” dismissal.

Facts: The Complainant, Ms Mcaree, was employed with the Respondent from 3rd March 2009 until 17th September 2020. The Complainant was originally employed as a Nurse Manager and was promoted to Director of Nursing in 2016, based in Drumbear Lodge Nursing Home.

Mr Phil Darcy, CEO for the Respondent, outlined in evidence under oath how Covid-19 put pressure on their services to maintain a high level of care. Mr Darcy gave evidence that on 2nd April 2020 he received a call from HIQA querying Drumbear Lodge Nursing Home’s lack of preparedness and contingency planning for Covid-19.  Mr Darcy was surprised as there had been extensive planning conducted and he wrote an email to the Complainant to ensure she complied with the relevant directions. He claims he did not get a response and it weighed on his mind. Conversely, the Complainant’s representative submitted that the Complainant did in fact reply to this email, but that she did so over a telephone call. It was also submitted on behalf of the Respondent that the Complainant failed to send a HIQA notification in line with an email request to do so by Mr Darcy on 21st April 2020. This was admitted by the Complainant, and she put it down to tiredness, oversight and human error. She gave evidence that the following day she discussed the omission with her HIQA Inspector and was advised not to worry about it. It was also submitted that the Respondent had been notified of significant health and safety concerns regarding the care of its residents in Drumbear Lodge and there was a serious outbreak of Covid-19 in that facility.

The Respondent submitted that the Complainant was dismissed in accordance with clause 10 of her contract of employment as a “no fault” dismissal as it would have been impossible to manage a performance improvement plan at the time given the pressure on nursing homes during the global pandemic. The Complainant was offered a severance package.

The Respondent’s representative informed the Workplace Relations Commission (“WRC”) that the Respondent did not dispute that the dismissal was unfair, but it was necessary to put it into the context of the pandemic. The Respondent denied humiliating the Complainant; they argued that they tried to reach a negotiated settlement and made an offer to her of €21,250. They did not give a reason for the dismissal to staff, and it was submitted that nothing was done to damage the Complainant’s reputation.

Decision: The Adjudicator found the dismissal to be substantively and procedurally unfair. She noted that the Respondent continuously relied on clause 10 of the Complainant’s contract and insisted it provided for a “no fault” termination. The Adjudicator observed that no such term was used in the contract. It was also noted that the Respondent failed to comply with the provisions of section 14(4) of the Acts which requires an employer to furnish a written statement of particulars of the grounds of dismissal.

The Adjudicator noted that while accepting that the Complainant’s dismissal was unfair, Mr Darcy implied that there were shortcomings in the Complainant’s performance. As the Respondent failed to produce evidence to support these inferences, the Adjudicator found the dismissal to be substantively unfair. In finding that the dismissal was also procedurally unfair, the Adjudicator found that the arguments advanced by the Complainant’s representative that the entire process was devoid of natural justice and in contravention of the Respondent’s own procedures were “compelling and persuasive”.

In considering the compensation to be awarded in this matter, the Adjudicator noted that she was taking into account the conduct on the part of the Respondent as provided for under section 7(2)(a). She found that the evidence provided by the Complainant in respect of her efforts to mitigate her loss were “credible and convincing”. She assessed the Complainant’s loss as four weeks’ pay post dismissal and ongoing due to a difference in remuneration between her salary with the Respondent and her remuneration with the HSE. She awarded the Complainant compensation in the amount of €63,740.38.

Takeaway for Employers: “No fault” dismissals arise in circumstances where an employer dismisses an employee by providing reasonable notice (or payment in lieu of notice if permitted by the employee’s contract of employment), but no procedures are followed in effecting the dismissal. Employers seeking to dismiss an employee on this basis should ensure that they make it clear to the employee that he or she is not being dismissed because of any misconduct or performance issues and that all communications, including the dismissal letter, are consistent with this message.

A “no fault” dismissal may reduce the risk of injunctive action, but such dismissals are likely to be found to be in breach of the Unfair Dismissals Acts which require dismissals to be substantively and procedurally fair. Under the Unfair Dismissals Acts, an employee could be awarded up to two years’ remuneration as compensation, depending on the employee’s financial loss. Reinstatement or re-engagement are also possible forms of redress. Employers must exercise caution particularly in circumstances where an employee has a year’s service and legal advice should be obtained if an employer is contemplating dismissal on this basis.

Link – https://www.workplacerelations.ie/en/cases/2022/september/adj-00030614.html

Authors – Tara Kelly, Jenny Wakely and Anne O’Connell

28th October 2022

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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