The Labour Court case of Francis Brophy & Company Chartered Accountants and Oliver Dixon dated 18th December 2024 is another example of recently published cases whereby an award of compensation for unfair dismissal was made however the award was reduced on the basis that the employee contributed to their own dismissal.
This case concerned an appeal by the Complainant employee. The appeal was of a decision of an Adjudication Officer (ADJ-00032541, dated 5 January 2023). This was under the Unfair Dismissals Act 1977 (‘the Act’). The Adjudication Officer in the Workplace Relations Commission held that his complaint of unfair dismissal against his former employer was not well founded. The decision was appealed to the Labour Court on 9 February 2023.
The Labour Court ultimately found that “It is for the Respondent to demonstrate that, having regard to all of the circumstances, the dismissal was fair. Having regard to the band of reasonableness test, and the facts as set out in this case, the Court does not consider that the decision to dismiss was an impartial one or that due consideration was given to mitigating factors or to any alternative options to dismissal. Considering that fact, the Court concludes that the dismissal was not procedurally fair“
Interestingly, in terms of the compensation to be awarded for unfair dismissal, the Labour Court summed up the law as follows:
Awards of Compensation under the Unfair Dismissal Act 1977 (as amended)
Section 7(1)(c) of the Act sets out the limit in respect of any award of compensation as follows:
(i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances, or
(ii) if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances,”
As noted, any award of compensation for unfair dismissal is to compensate for financial losses actually incurred because of the dismissal. There is no provision for a punitive award. The Court then went on to look at the meaning of financial loss and noted:
Section 7(3) of the Act defines financial loss as follows:
“In this section— “financial loss”, in relation to the dismissal of an employee, includes any actual loss and any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts 1967 to [2014], or in relation to superannuation;
“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.”
In determining the amount of compensation payable under the Act the Court is obliged to consider a number of different factors. Section 7(2) of the Act sets out as follows:-
“Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to—
(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,
(b) the extent (if any) to which the said financial loss was attributable to an action, omission or conduct by or on behalf of the employee,
(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,
(d) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved of by the Minister,
(e) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the said section 14, and
(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.”
In determining the amount of compensation, which is just and equitable, the Court also has regard to the contribution made by an employee to his or her own dismissal. In this case, the Court is of the view that the Complainant contributed significantly to his own dismissal and observed:
“As an experienced chartered accountant, the Complainant lacked judgement in relation to the manner in which he undertook private work for three clients under the banner of the firm”.
In this case the court considered that an award of €5,000 was just and equitable.
Case Learning
Both employers and employees should be aware of an important fact. The Workplace Relations Commission and the Labour Court can consider an employee’s behaviour or conduct in an unfair dismissal claim. They also assess whether the employee contributed to their own dismissal. Many awards of compensation are being reduced on this basis.
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