In Kearney v Byrne Wallace the Court of Appeal reaffirmed that where a statutory regime is in place to challenge a redundancy that a court will not intervene.

Background

Mr Kearney was employed by Byrne Wallace as an associate solicitor since 2006. On 28 August 2017, following a series of absences due to illness, Mr Kearney’s employment was terminated on the grounds of redundancy and he was given two months’ notice in accordance with his contract of employment.  Mr Kearney disputed that a genuine redundancy situation existed and sought an injunction restraining his dismissal on the basis that his employer failed to follow fair procedures prior to his termination. 

Nolan v Emo Oil Services

The facts of Mr Kearney’s case were similar to the facts in the previous decision of the High Court in Nolan v Emo Oil Services.  In that case, the employee also received his full contractual notice entitlements but alleged a failure to apply fair procedures in relation to his dismissal on the basis of redundancy.

Laffoy J., in refusing Mr Nolan’s application for an injunction, distinguished between cases where a genuine redundancy existed but the employer failed to adhere to their contractual obligations and cases where the redundancy was a sham but the employer “properly engaged the contractual provisions.”  Laffoy J. held that the courts “had no role to play” in the latter because there was no breach of contract (i.e. notice under the employment contract was given) and therefore no cause of action before the Court. In Laffoy J.’s view, the appropriate remedy for alleged unfair dismissal is as prescribed under Unfair Dismissals Acts via a claim before the Workplace Relations Commission. 

Fair procedures as an implied contractual term?

In Mr Kearney’s case, he argued that the right to fair procedures is an implied term of the contract of employment and therefore sought an injunction restraining his dismissal on the basis that his employer breached his contract by failing to observe fair procedures. However, his employer argued that as there was no express term in Mr Kearney’s contract of employment which had been breached the Court had no jurisdiction to deal with the matter.  

The High Court held that there was a contractual right to terminate Mr Kearney’s employment and Mr Kearney had failed to establish a cause of action.  It applied the principle established in Nolan and dismissed Mr Kearney’s application for an injunction on the basis that appropriate mechanism for seeking redress was as prescribed under the Unfair Dismissals Acts. 

Court of Appeal

On appeal Mr Kearney argued that injunctive relief in dismissal cases should not be constrained to situations where there has been a breach of an express term of a contract of employment and that his case should be distinguished from Nolan on the basis of alleged breaches of several implied contractual terms including, mutual trust and good faith. 

The Court of Appeal rejected the appeal and confirmed the decision in Nolan as “firmly embedded jurisprudence in this area” on the basis that an employer is entitled to terminate a contract of employment with proper notice. Interestingly, the Court of Appeal did not reject the idea that a breach of an implied term such as mutual trust and good faith could amount to a breach of contract for the purpose of injunctive relief.  However, Mr Kearney failed to establish a strong case that his employer acted in bad faith in reaching a decision to terminate his employment on the basis of a redundancy.

Key Takeaways

Employers should observe all contractual obligations when seeking to terminate the employment relationship in a redundancy situation.

Fair procedures should also always be followed in a redundancy situation. While this decision reaffirms that injunctive relief will not be granted against an employer for failing to adhere to fair procedures in such a scenario, an employer may still face a claim for unfair dismissal.  If upheld, the Workplace Relations Commission can order that an employee be reinstated, re-engaged or make an award of compensation up to maximum of two years’ remuneration. 

Contributed by: Maeve Griffin 

Follow us @WFEmploymentLaw and @WilliamFryLaw