ending an employment relationship

There are several ways in which employment relationships may be ended. We set out the most common ones here.

• Fixed-term agreements
• Resignation
• Forced resignation
• Retirement
• Dismissal
• Redundancy

If an employee believes that the employer acted unjustifiably in ending the employment relationship, the employee can challenge the employer's decision. 

Fixed-term employment agreements

A fixed-term agreement can be ended when the agreement says it will end, for example, at a specified time or after a particular job or project is finished. However, the agreement must have a fixed term for genuine reasons. An employee who believes that the job was really a permanent one can take a personal grievance for unjustified dismissal.

Fixed term arrangements must be recorded in writing in the employment agreement.

Resignation

Employees may resign at any time, provided they give reasonable notice (i.e. saying ahead of time what date they plan to leave). What is reasonable will depend on the circumstances, such as length of service or seniority, or what is agreed in the employment agreement.

Giving notice & final payment

If the employee gives the required notice, the employer must pay the employee to the end of the notice period, unless the employee is justifiably dismissed during that period. The employment relationship continues until that date.

The employee may be required to work for the full notice period or may be asked to stop coming to work before this date. In either case, the employee should be paid to the end of the notice. If pay is stopped before the end of the notice period, the employee may be able to claim for wages owed.

If an employee leaves work without giving notice, the employer is not required to pay for time beyond the employee's last actual working day. The employer must not deduct pay in lieu of notice from any amount owed to the employee unless the employee agrees in writing or the employment agreement specifically allows it.

The employer must pay all holiday pay owing to the employee in the pay for the employee's final period of employment.

Forced resignation (also known as constructive dismissal)

If an employer puts pressure (directly or indirectly) on an employee to resign, or makes the situation at work intolerable for the employee, it may be a forced resignation or "constructive dismissal". A constructive dismissal may be where, for example, one or more of the following occurs:

• the employer has followed a course of conduct deliberately aimed at coercing the employee to resign
• the employee is told to choose between resigning or being dismissed
• there has been a breach of duty by the employer (i.e. a breach of the agreement or of fair and reasonable treatment) such that the employee feels he or she cannot remain in the job.

If an employee has been forced to resign, they may have a personal grievance.

Retirement

In law, there is in general no set age to retire from work. Employers cannot require employees to retire just because of their age.

There is an exception to this rule if the parties have a written employment agreement that was in force on April 1 1992 and remains in force. If this agreement specified a retirement age, and the employer and the employee agreed in writing on or after 1 April 1992 to confirm or change this retirement age, then the employee must retire at that age. If there is no written confirmation on or after 1 April 1992, the employer must not make an employee leave because of his or her age.

Dismissal

There must be a good reason for a dismissal and the dismissal must be carried out fairly. Otherwise, the employee may have a personal grievance claim against the employer.

What is fair depends on the circumstances. Some general principles must be kept in mind:

• Any relevant provisions in the employment agreement must be followed
• If an employment agreement does not have a notice period, then reasonable notice must be given. What is reasonable depends on the circumstances
• Employees have the right to be told what the problem is and that dismissal or other disciplinary action is a possibility. Employees must then be given a genuine opportunity to tell their side of the story before the employer decides what to do
• The employer should investigate any allegations of misconduct thoroughly and without prejudice
• Unless there has been misconduct so serious that it warrants instant dismissal, the employee should be given clear standards to aim for and a genuine opportunity to improve. The sort of conduct that warrants instant dismissal may be set out in the employment agreement
• The employer should treat all employees in the same circumstances in the same way, or be prepared to justify the difference.

It is in everyone's interests that it is clear from the start what the job requires, what behaviour is expected, and what could lead to dismissal.

Explanation of dismissal

If an employee is dismissed, he or she has the right under the Employment Relations Act to ask the employer for a written statement of the reasons for dismissal. This request can be made up to 60 days after the dismissal, or 60 days after they find out about the dismissal if that is later.

The employer must provide the written statement within 14 days after such a request. If the employer fails to provide this written statement, the employee may consequently be able to raise a grievance long after the required 90-day limitation period.

Redundancy

This happens when:

• a position filled by an employee is no longer needed, or
• the employer has made a genuine decision for commercial reasons to discontinue employment.

Compensation

Generally, there is no right to redundancy compensation unless employers and employees and/or their union have agreed to it. This can be done before or after an actual redundancy is planned. It is also up to the parties to decide what any redundancy compensation should be.

However, in some restructuring situations, employees (who do certain catering, cleaning, caretaking, laundry and orderly work) can ask the Employment Relations Authority to decide what redundancy entitlements they should receive (see the restructuring fact sheet for further information )

Challenging redundancy

Employees can raise a personal grievance if they believe their employer has acted unjustifiably. If the grievance is not resolved by the parties themselves or by mediation the Employment Relations Authority or the Employment Court will look at each case individually, including whether:

• the redundancy is for genuine commercial reasons
• the provisions of the relevant employment agreements have been observed
• the employer has acted reasonably and fairly in the way the redundancy was carried out.

The employer cannot use redundancy as a way of dismissing someone for reasons relating to the employee personally (such as the employee's performance).

Remedies

If an employer is found to have acted unjustifiably in a redundancy, the Employment Relations Authority or the Employment Court may decide on one or more of the remedies for personal grievances.

Generally, the Authority and the Court have no power to award redundancy compensation in a genuine redundancy situation, except where the employment agreement says that a redundancy payment will be made.