However, the decision has far reaching consequences beyond probationary dismissals. In making it clear that employment injunctions should be limited only to cases where an employee is being dismissed for misconduct, the case appears to have made it significantly more difficult for employees to secure an employment injunction outside of this narrow scope.
Background
In June 2020, in Donal O’Donovan v Over-C Technology Limited and Over-C Limited, the High Court granted an injunction preventing a Cork-based technology company from dismissing its then CFO on grounds of poor performance. The injunction was primarily awarded on the basis of the employee presenting a strong case that he was entitled to fair procedures in the assessment of his performance before being dismissed.
The case attracted widespread attention as the employee was in his probationary period at the time, with many commentators pointing to the case as evidence of a willingness on the part of the Irish courts to extend the remit of employment injunctions.
If that was the direction of travel of the Irish courts, the Court of Appeal has brought that journey to a shuddering halt.
Employment injunctions
Employment injunctions (i.e. injunctions to restrain the dismissal of an employee) are an unusual feature of Irish law in that they essentially prevent an employer from relying on the express terms of a valid contract – namely, the power to terminate it on notice. This is because the courts, in certain circumstances, are willing to impose an obligation on an employer to apply fair procedures before dismissing an employee.
Court of Appeal reverses High Court judgment
At a minimum, in order to secure an injunction that requires an employer to retain them in employment, an employee must establish that they have a strong case of succeeding in a full trial. This means that they must establish that they have an entitlement that requires protection (e.g., a contractual or constitutional entitlement) and that there is strong likelihood that their employer has (or intends to) breach that entitlement.
Key takeaways of the Court of Appeal judgment
- Fair procedures do not apply during a probationary period (except in cases of misconduct)
The Court of Appeal could not have been clearer in stating its position on the applicability, or otherwise, of fair procedures during probation: - Except in cases of misconduct, there is nothing to prevent an employer relying on contractual termination provisions, whether during or after probation
In paragraph 59 of her judgment, Costello J. identified and upheld two relevant principles arising from existing case law, as follows:
“Firstly…an employer can terminate employment for any reason or no reason, provided adequate notice is given. This applies whether or not the dismissal occurs during the probationary period. Secondly…the principles of natural justice apply to cases involving dismissal for misconduct, but not to termination on other grounds.” (Emphasis added) - Dismissal on grounds of poor performance in isolation does not trigger an entitlement to fair procedures – there must be an allegation of improper conduct
This case turned on whether fair procedures apply in a case of dismissal for poor performance only. On this point, the court noted that “there is no suggestion that the principles of natural justice must be applied where an employer terminates the employment contract of employee on the grounds of poor performance”.
Future impact
The judgment in this case provides a clear, unequivocal assessment of the circumstances in which (in the absence of express contractual provisions to the contrary) an employment injunction may be awarded – and, perhaps more importantly, when it generally will not. That it comes from the Court of Appeal means that it is binding on lower courts.
If you would like to discuss this article or have any other Irish related employment queries please get in touch with Niall Pelly.
