Wrongful dismissal and notice pay in Ireland: breach of contract, the notice bands and which route to use

"Wrongful dismissal" and "unfair dismissal" sound like the same thing. In Irish law they are different claims, with different questions, different forums and different money. Mixing them up can cost you the better claim. This guide separates them, sets out the statutory notice bands, explains pay in lieu, and shows how to choose between the civil courts and the Workplace Relations Commission (WRC).

Breach of contract versus unfair dismissal

Wrongful dismissal is a breach of your contract of employment. The usual breach is ending the job without the notice the contract or the Minimum Notice and Terms of Employment Acts 1973 to 2005 require. Less often it is ending a fixed-term contract early without a clause allowing that, or dismissing without following a disciplinary procedure that is itself a term of the contract.

The remedy is damages for what the breach cost you. Where the breach is a failure to give notice, that is the pay you would have received during the notice period, less anything you earned elsewhere in it. The courts do not generally award damages for the manner of the dismissal or for hurt feelings, and they do not ask whether the employer had a good reason: an employer can end a contract for any reason or none, provided it gives the notice the contract requires.

Unfair dismissal under the Unfair Dismissals Acts 1977 to 2015 asks a different question: was there a fair reason and a fair procedure? It generally needs 12 months' service, it is heard at the WRC, and it can lead to reinstatement, re-engagement or compensation for loss up to 104 weeks' pay.

A dismissal can be both wrongful and unfair, for example a dismissal without notice and without any procedure for conduct that was not gross misconduct. It can be wrongful and not unfair (a fair redundancy with no notice paid), or unfair and not wrongful (a sham redundancy with full notice).

The notice bands

Once you have 13 weeks' continuous service, the Minimum Notice Acts fix the least notice your employer can give:

You, as the employee, owe one week's notice after 13 weeks' service unless your contract says more.

A contract can lengthen the employer's notice and can never shorten it. If your contract says one month and the Acts say six weeks, you get six weeks. If your contract says three months and the Acts say two weeks, you get three months. Senior contracts commonly provide three or six months, which is where a wrongful dismissal claim becomes worth a court case rather than a WRC form.

The only exception is gross misconduct: where the dismissal is for conduct serious enough to justify summary dismissal, no notice is owed. Whether conduct reaches that level is a question of fact, and the gross misconduct guide sets out how the WRC approaches it.

Pay in lieu of notice

The Acts allow pay in lieu of notice: the employer ends the job immediately and pays you what you would have earned had you worked the notice period. Either side can accept pay in lieu, or waive notice, by agreement.

Pay in lieu is taxed as normal pay. It should reflect your normal weekly pay, including regular overtime, commission and allowances, and your contract may say how it is calculated. Annual leave accrued to the last day is paid on top of it. If you are paid in lieu, your date of dismissal for the unfair dismissal clock is still the day the notice would have ended, had it been given: that date is what the Acts use to count service and to start the six months.

What an employer cannot do is end the job today, pay nothing, and call it pay in lieu later. The dismissed without warning or notice guide covers that situation.

The civil-court route

A wrongful dismissal claim is a breach of contract action. Which court depends on the sum: the District Court for smaller claims, the Circuit Court for larger ones and the High Court above that, with the limits set by the Courts Acts. The time limit is the general limitation period for contract claims, which is far longer than the WRC's six months, but a claim that waits is a claim with a stale loss.

The court route makes sense where:

• your contractual notice is long (three months or more) and the statutory notice would recover only a fraction of it
• the contract gave other benefits during notice, such as bonus, pension contributions or share vesting, that the WRC cannot award
• you have under 12 months' service, so unfair dismissal is closed, and the sum is large enough to justify costs
• you want an injunction, for example to restrain a dismissal in breach of a contractual procedure, which only the High Court can give

The court route has costs. You pay your own solicitor, and if you lose you may be ordered to pay the employer's. It is slower than the WRC and the hearing is in public. For a claim worth a few weeks' pay, it is rarely proportionate.

The WRC route: the Minimum Notice Acts

The WRC does not hear breach of contract claims as such. What it does hear is a complaint under the Minimum Notice and Terms of Employment Acts for the statutory notice pay. The WRC can award the pay for the statutory period, and no more: if your contract gave three months, the WRC awards the statutory weeks and the balance is a court matter.

The practical points:

• No fee, no costs either way, and you can represent yourself.
• Six months from the date of dismissal, extendable to 12 for reasonable cause and never beyond.
• 13 weeks' service is enough; the 12-month unfair dismissal threshold does not apply.
• The complaint can go on the same form as an unfair dismissal complaint and a Payment of Wages complaint for unpaid wages or holiday pay.
• The decision is enforced through the District Court if the employer does not pay.

For most people whose contractual notice is the statutory minimum or close to it, this is the sensible route.

One or the other

The Unfair Dismissals Acts say that where you have started a court action for wrongful dismissal in respect of a dismissal, you cannot then claim unfair dismissal for the same dismissal, and the reverse. The choice is made when proceedings begin, so make it deliberately.

The usual pattern is:

1. Statutory notice only, and 12 months' service: WRC, with the Minimum Notice complaint and the unfair dismissal complaint together.
2. Statutory notice only, under 12 months' service and no exception: WRC, Minimum Notice complaint alone, perhaps with an Industrial Relations Acts dispute (see dismissed on probation).
3. Long contractual notice and a fair dismissal in substance: the courts for the contractual notice.
4. Long contractual notice and an unfair dismissal: the hard case. A solicitor compares the likely unfair dismissal award (loss-based, capped at 104 weeks, but it can exceed the notice period where the loss is long) with the certain contractual notice, and chooses.

Many of these cases end in a settlement agreement in which the notice pay is paid in full and a further sum compensates for the waived claims. Check the notice pay line separately: it is taxed as pay and should not be bundled into a tax-free ex gratia figure.

Where this leaves you

Run the notice tool with your start date, your last day and your contractual notice: it gives the statutory band, tells you whether the contract gives more, puts a figure on the notice pay and sets the six-month WRC deadline. Then check the unfair dismissal tool to see whether the dismissal itself can be challenged.

If you are in a union, ring them first: an official will recover statutory notice pay with a letter more often than not and will know whether the larger claim is worth running. See union. Where your contractual notice is long, or benefits beyond pay are at stake, a solicitor should make the WRC-or-court choice with you before anything is lodged, because it cannot be undone.