Donal O'Donovan v Over-C Technology Limited and Over-C Limited  IECA 37
The Court of Appeal has issued an interesting judgment in relation to an employment injunction where the employee had been dismissed while on probation.
A central issue in the case was whether fair procedures had to be applied before a dismissal while an employee was on probation. A question arose as to whether an allegation of misconduct had been made (this was denied by the employer) and what difference, if any, that made to the fair procedures issue. The employer's defence, essentially, was that the reason for dismissal was performance-related, not misconduct and therefore the right to fair procedures did not arise. The employee claimed that his dismissal was null and void and he sought an injunction preventing his employer from terminating his employment, together with damages.
As with any case of this nature, great attention is paid to the employee's contract of employment and any correspondence generated relating to the dismissal. It may sound like a statement of the obvious, but words matter, and great care should be taken to ensure that what is said or written is what is actually meant and will withstand forensic scrutiny. In this case, the employee's contract specifically provided for termination during the probationary period if performance was not up to the required standard and that pay could be made in lieu of notice, which had been done.
The employee was granted an injunction in the High Court where there were arguments advanced as to the precise terms of the order to be made and how the costs of the proceedings up to that point should be dealt with. The Judge in the High Court was satisfied that there was an implied right to fair procedures whether the reason for the dismissal was poor performance or misconduct. Since fair procedures had not been afforded to the employee, the employee had established that he had a strong case. The High Court Judge accepted that the relationship between the parties had irretrievably broken down to the extent that it was not feasible that the employee could ever resume his duties. The Judge granted an injunction prohibiting the employer from dismissing the employee and ordered that he receive his full remuneration for a period of six months. Interestingly, the Judge released the employer from an undertaking it had given not to replace the employee.
Court of Appeal
The employer appealed on a number of grounds but essentially on the basis that the High Court Judge had been wrong to imply a term requiring the application of fair procedures to a dismissal for poor performance in circumstances where the Judge accepted that there had been no allegation of misconduct.
The Court of Appeal considered the principles applicable to injunction applications, including whether a permanent injunction might be granted at the end of a full hearing and if not, then it is extremely unlikely that an interlocutory injunction would be granted. The Court of Appeal proceeded on the basis that there had been no allegation of misconduct because the High Court had decided that and the employee had not appealed that finding.
The Court of Appeal considered it to be a “critical fact” that the dismissal occurred while the employee was on probation and stated that “during a period of probation, both parties are – and must be – free to terminate the contract of employment for no reason, or simply because one party forms the view that the intended employment is, for whatever reason, not something with which they wish to continue”. The Court of Appeal did not accept that, in the absence of an express contractual right, a court could imply a right to fair procedures in relation to an employee's performance during probation. Accordingly the employee did not have a strong case for an injunction. The contract expressly provided that the employer could terminate during probation if the employee's performance “was not up to the required standard”.
The Court considered that while the concept of fairness was a central consideration in statutory unfair dismissals cases, the concept of fairness could not be imported into common law wrongful dismissals cases in the absence of an allegation of misconduct.
The Court of Appeal confirmed that at common law an employer can terminate an employment contract for any reason or for no reason provided adequate notice is given, whether or not the employee is on probation, and that fair procedures are not required unless there is an allegation of misconduct. The Court of Appeal decided that the employee had not satisfied it that he had a strong case that he was likely to succeed at trial and that the employer's appeal should succeed.
The Court of Appeal then went on to say that it considered that even if the employee had had a strong case, damages would have been an adequate remedy and that that alone would have been sufficient ground to allow the appeal. The Court of Appeal made a costs order against the employee in respect of the proceedings in the High Court and the Court of Appeal.
This judgment has provided welcome clarity for employers that fair procedures are not required for dismissal during a probationary period for performance reasons. As always, the terms of the employee's contract should be carefully reviewed to ensure that the employer fully complies with any applicable notice periods. Lastly, it is important to note that fair procedures will still be required in cases of misconduct even while an employee is on probation.
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