Contracts of employment that provide for a probationary period can be a very useful tool for employers. A new employee?s performance can be evaluated during the probationary period and, based on the strength of the performance, the employer can make a decision on the employee?s continued employment.
It is important to note that the placing of a new employee on probation has no legal effect on the employment relationship and that a probationary period itself has no legal standing. A common misconception amongst many employers is that they are entitled to dismiss an employee who is on probation without affording that person the benefit of fair procedures and natural justice. That is not the case.
The Unfair Dismissals Acts, 1977?2001 entitle employees covered under the Acts to bring a case to the Employment Appeals Tribunal (the ?EAT?) in the event that they are unfairly dismissed. The EAT has jurisdiction, under those Acts, to award reinstatement, re-engagement or compensation (up to a maximum of two years? remuneration). For an employee to be covered under the Unfair Dismissals Acts, he/she must have one years continuous service (except in the case of dismissal for pregnancy related matters or trade union membership activities, in which case a claim can be brought regardless of the length of service). This qualifying period lead many employers to believe that an employee with less than one years? service has no entitlement to issue proceedings against his/her employer; however this is not entirely accurate.
An employee with less than one years? service can bring a claim under the Industrial Relations Act, 1969 (as amended) alleging unfair dismissal. There is no service qualification under this Act. A claim under this Act may either be referred to a conciliation officer of the Labour Relations Commission or to a Rights Commissioner and subsequently on appeal to the Labour Court. However, it is worth noting that, in general, the compensation awarded by Rights Commissioners/the Labour Court under the Industrial Relations Acts tends to be lower than awards of the Employment Appeals Tribunal under the Unfair Dismissals Act and, strictly speaking, is not legally enforceable.
Alternatively, an employee (regardless of whether he/she is on probation) and who has been dismissed from his/her employment may issue proceedings at common law for wrongful dismissal/breach of contract in the civil courts (to include injunction proceedings). Again, there is no service requirement to bring such a claim.
Similarly, there is no service requirement for an employee to bring a claim under the Employment Equality Acts 1998?2004. Accordingly, in the event that an employee on probation believes that he/she was discriminated against on any of the nine grounds prohibited by those Acts, he/she may bring a claim of discrimination to the Equality Tribunal. The maximum award of compensation that may be awarded in such a case is two years remuneration.
The wording of clauses in contracts of employment may sometimes give rise to a possible construction that the probationary period is, in itself, a fixed term within the contract. For example, if a contract were to state that ?The first six months of this contract shall be a probationary period? and the employee was dismissed after one month, this may give rise to a claim that the employee is entitled to be paid the balance of five months? salary. (There has been a District Court finding to this effect). Accordingly, prudent employers should insert a clause in to the contract of employment to the effect that the employment may be terminated by providing a specific period of notice.
The dismissal of any employee should be handled with care. Employers should never assume that they can dismiss or demote an employee on probation without giving that person the benefit of fair procedures and, importantly, an opportunity to improve. Many of the cases brought under the Industrial Relations Acts emphasise the clear need for correct and fair procedures to be followed, even during the probationary period.
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