A recent WRC award of €183,000 for unfair dismissal against an Irish construction employer is a sharp reminder that no dismissal, regardless of seniority, is safe from scrutiny without a fair and documented process behind it Read more
A recent WRC adjudication resulted in a €183,000 unfair dismissal award against an Irish construction employer, after shareholders removed the company’s chief executive without following a fair dismissal process. As reported by The Irish Times, the adjudicator found the executive had been “beyond reproach” in his role. The size of the award will focus minds in boardrooms across Ireland.
The case carries a lesson that applies well beyond construction. Senior employees, including chief executives, are not outside the reach of unfair dismissal law in Ireland. And when the dismissal process is flawed, the financial consequences are severe.
Under the Unfair Dismissals Acts 1977–2015, an employee with at least one year of continuous service can bring a claim if their employer terminates their employment without substantial grounds or without following fair procedures. The WRC assesses both the reason for dismissal and the process used to reach that decision. The maximum compensation award is two years’ gross remuneration.
One assumption that generates serious exposure for employers is the belief that senior executives sit outside the normal employment law framework. They do not. A chief executive who qualifies as an employee under the Unfair Dismissals Acts carries the same statutory protections as any other staff member once qualifying service has been reached.
The distinction that catches employers out is the difference between someone who holds a director title only and someone who is a director and an employee. A person with a contract of employment, receiving a salary, working under the direction of a board, is typically an employee regardless of their seniority or their shareholding in the business. Removing them requires the same procedural fairness as dismissing anyone else.
In our experience advising employers across Ireland, this misunderstanding is most common where founders, shareholders, or family members hold senior roles. The belief that ownership of a company removes the obligation to follow correct dismissal procedures is one the WRC addresses firmly.
The construction sector case is instructive for any employer considering the removal of a senior figure. A chief executive was dismissed following a shareholder decision, amid a backdrop of financial disputes within the company. The WRC found the dismissal to be unfair and awarded €183,000 in compensation.
Board votes and shareholder resolutions are governance tools. They are not a substitute for a fair dismissal process. A loss of confidence in a senior employee is not, on its own, a documented performance or conduct investigation. The WRC does not accept shortcuts at this stage of proceedings, regardless of how senior the individual involved.
When genuine concerns exist about an executive’s conduct or performance, the employer still has to gather evidence, put the concerns to the individual in writing, give them a meaningful opportunity to respond, and reach a reasoned and documented conclusion. Any employer at a WRC hearing will be asked to produce that paper trail. If it does not exist, the claim will be very difficult to defend.
Every unfair dismissal claim before the WRC is assessed against two questions. First, did the employer have a substantial ground justifying dismissal? Second, did the employer act reasonably in all the circumstances, including the procedure followed?
Passing the first test alone is not sufficient. An employer may have a legitimate concern: sustained underperformance, a conduct issue, an irretrievable breakdown in a working relationship. But if the process used to reach the dismissal decision was inadequate, the WRC can still find in favour of the employee. Both tests must be satisfied.
The WRC also applies what is known as the range of reasonable responses standard. The question is not whether the adjudicator would have dismissed the employee in the same circumstances. The question is whether a reasonable employer in the same situation could have reached that decision, having followed a fair process. This distinction matters enormously in practice, and it is one that employers often encounter for the first time only after a claim has been filed.
Purpletree’s employment advice service supports employers through each stage of this process, from the initial investigation through to WRC hearing preparation, so that both tests are addressed before any decision is made.
Most unfair dismissal claims that succeed at the WRC do not succeed because the employer had no reasonable basis to act. They succeed because the employer failed to follow the correct steps. A situation we see frequently is where a decision to dismiss is reached quickly, at management or board level, without the employee ever being formally notified of the concerns or given a genuine opportunity to respond.
The Code of Practice on Grievance and Disciplinary Procedures (S.I. 146 of 2000) sets out the procedural expectations a WRC adjudicator will measure an employer against. Employees must be informed of concerns in writing, given a right to be heard, and allowed representation at any formal hearing. Final decisions must be communicated in writing with a right of appeal to an uninvolved party.
That sequence sounds manageable. In practice, it rarely is. Timelines overlap with operational pressures. Managers without HR training conduct investigations that undermine the outcome. Appeals are assigned to someone who was involved in the original decision. Each procedural gap becomes a vulnerability if the matter proceeds to the WRC.
Senior employee dismissals add a further layer of complexity. Executives frequently hold bespoke contracts with specific termination clauses, garden leave provisions, or post-employment restrictions. Whether those clauses are enforceable, and how they interact with statutory dismissal protections, is not always clear from reading the contract alone.
Our strategic HR consulting team guides employers through senior-level dismissal processes, ensuring every step taken is properly documented and defensible. This is not a process employers should manage without specialist support.
The maximum WRC award for an unfair dismissal claim is two years’ gross remuneration. For senior employees earning €80,000 or more annually, that ceiling quickly translates into six-figure exposure. The €183,000 award in the construction case reflects the salary level involved. It is not exceptional generosity on the part of the adjudicator. It is the mathematical consequence of a poorly managed dismissal of a well-paid executive.
Awards are calculated on actual financial loss. If a dismissed executive finds new employment quickly, the award will reflect only the period of unemployment. Where the seniority of the role makes re-employment slower, the financial exposure for the former employer compounds accordingly.
Beyond the compensation figure itself, employers should factor in the management time consumed by WRC response preparation, the cost of legal representation at hearings, and the reputational exposure where cases attract press coverage. The real cost of a poorly managed dismissal is almost always higher than the award amount alone.
Our WRC readiness checklist gives employers a clear view of where their procedures stand before a claim arises. Addressing gaps at that stage costs significantly less than addressing them under the pressure of a live WRC hearing.
The lesson here is not that employers cannot dismiss senior employees. They can, and sometimes they must. The lesson is that no dismissal carries zero procedural risk without a structured, documented process behind it. Seniority does not simplify the legal obligations. In many cases, it increases the financial exposure if something goes wrong.
Every dismissal, from the most junior team member to a chief executive, requires a paper trail demonstrating that the employer acted reasonably. The earlier specialist HR support is engaged in that process, the stronger the employer’s position if a claim is subsequently filed.
Purpletree works with employers across Ireland, from construction and manufacturing to retail and healthcare, to build and implement dismissal procedures that hold up to WRC scrutiny. If you are considering a senior dismissal or want to review whether your current procedures are fit for purpose, speak to our team through our employment advice service or explore how our HR Essentials package supports employers with exactly these challenges.
Generally, one year of continuous service is required under the Unfair Dismissals Acts 1977–2015. There are exceptions: dismissals connected to pregnancy, trade union membership, or the making of a protected disclosure carry no minimum service requirement. Employers should not assume short-service employees carry no risk.
It depends on the substance of their relationship with the company. A person holding a director title who also operates under a contract of employment, receives a regular salary, and works under board direction is likely regarded as an employee for the purposes of unfair dismissal law. The WRC looks at the reality of the relationship, not the job title or the position on a company structure chart.
The maximum compensation under the Unfair Dismissals Acts is two years’ gross remuneration. Awards are calculated on actual financial loss rather than as a fixed penalty. For senior employees on higher salaries, this can reach substantial six-figure sums, as the recent construction sector case demonstrates.
An employee must submit their claim to the Workplace Relations Commission within six months of the dismissal date. This period can be extended to twelve months where the employee demonstrates reasonable cause for the delay. Employers should treat the six-month window as the effective deadline when preparing any WRC response.
Yes. The decision to dismiss can be sound and still attract a claim. What determines the outcome is whether the employer had substantial grounds and followed a fair, documented process. Employers who engage specialist HR support before making a dismissal decision are in a far stronger position if a claim is subsequently filed. This is where having the right procedures in place from the outset, and the right advisors supporting you through them, makes the difference.
This article is for general informational purposes only and does not constitute legal advice. Employment law is complex and fact-specific. For advice on your specific situation, contact the Purpletree HR team directly.
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