Irish misconduct dismissal ruling shows risk of failing to apply fair procedures

The judgment in the dispute between Anna Buttimer and Oak Fuel Supermarket (43 pages / 362KB PDF) provides useful guidance on the often difficult distinction between poor performance and misconduct. It also makes clear that excluding the application of a disciplinary procedure does not equate with contracting out of the right to fair procedures in the context of misconduct dismissals. 

Investigation and dismissal

Buttimer commenced employment as a supervisor on 7 March 2022 and was promised, subject to her performance, that she would be promoted to store manager a month later. Towards the end of March, however, another employee made a number of allegations against Buttimer, relating to her “management duties and interpersonal relationships with [the complainant] at work”. The employer engaged an external HR company to conduct a formal investigation of the allegations under its bullying and harassment policy.

The investigation progressed throughout April and May and was ongoing when Buttimer was promoted to store manager. She signed an indefinite contract of employment on 25 April 2022, terminable on one week’s notice after completion of 13 weeks’ service, subject to a probationary period of six months extendable for a further five months. The contract provided that, during the probationary period, management would regularly assess Buttimer’s performance and monitor her progress.

The contract also made clear that if feedback was given to Buttimer about her performance, the feedback had to be listened to because she would not pass the probationary period and her employment would be terminated if she was reasonably deemed unsuitable. The contract referred to the company handbook, which included the disciplinary procedure. The contract specifically provided that: “[t]he standard disciplinary procedure will not be used during the probationary period”.

During the investigation into the first set of allegations of bullying made against Buttimer, her manager received a text message from another employee which contained additional similar allegations. The manager asked Buttimer to meet with him on 17 May 2022. The nature of the issues discussed at that meeting, and during later telephone conversations, was strongly disputed. According to Buttimer, she was dismissed for misconduct. The employer maintained that she was dismissed for poor performance.

Fair procedures

Mr Justice Dignam was satisifed that Buttimer had established a strong case that the allegations against her were discussed at the meeting on 17 May and, significantly, that they “formed the basis, at least in part, for the decision to terminate her employment.” His analysis did not stop there, however, and he went on to assess the nature of the behaviour alleged against the plaintiff.

He held that he “had no hesitation in concluding that [the alleged behaviour]… amounts to misconduct and would be understood as such by reasonable persons.” In practice, it can often be difficult to distinguish between issues of poor performance and issues of misconduct. In this case, the employer contended that performance and misconduct were mutually exclusive – a proposition which was rejected by the High Court. 

Having found that the dismissal was on grounds of alleged misconduct, and having reviewed a number of relavant autorities, Mr Justice Dignam held that “an employer is free to terminate an employee’s employment for no reason during probation and, even where it relates to poor performance, the employer is not obliged to observe fair procedure but where the termination is for misconduct fair procedures must be observed.” Fair procedures were not followed in this case.

The employer argued that Buttimer was not entitled to fair procedures because her contract “expressly contracted out the application of the company’s standard disciplinary procedure in such circumstances given the nature of her probationary status.” Mr Justice Dignam, however, emphasised that all that had been contracted out of was the disciplinary procedure and not the fair procedures provided by the Constitution and the common law.

The High Court concluded that it would not be appropriate to make an order which would compel the employer to bring Buttimer back to work. However, the judge held that the balance of justice required that some relief be granted “in order to avoid irredeemable harm to the plaintiff in the event that she is ultimately successful at trial”.

He made orders restraining the employer from taking any steps to appoint any other person to Buttimer’s position or from assigning her duties to any other person. He also made an order restraining the employer from publishing or communicating that Buttimer is no longer connected to the employer, in each case pending further order.

Key lessons for employers

In light of this ruling, it is critical that employers do not assume that a dismissal, during probation or at any other time, is risk free. The exclusion of the application of the disciplinary procedure to any termination during probation will not provide a defence to an injunction application by an employee who is dismissed for alleged misconduct without being afforded fair procedures.

Where alleged misconduct may form part or all of the basis for any decision to terminate, it is essential for the employer to ensure that the employee is afforded fair procedures. Performance and misconduct are often difficult to differentiate from one another. An alleged behaviour may be both a performance issue and a conduct issue. If that is the case, the employee is entitled to fair procedures. Injunction applications result in expenditure of management time and financial resources and therefore it is important to take appropriate legal advice in good time.