Unfair dismissal claims: what happens if the employee doesn't appeal their dismissal internally?

Unfair dismissal claims: what happens if the employee doesn’t appeal their dismissal internally? A standard aspect of any sound internal disciplinary procedure is the right for the employee to appeal any sanction they receive, up to and including dismissal. But what happens if an employee is dismissed but they claim unfair dismissal without having ever invoked the internal right of appeal? Why is there an internal right of appeal? The internal right of appeal is considered a vital element of fair process. It is important to note that employees have a constitutional right to natural justice and fair procedure, and it is long recognized that a right of appeal is vital for safeguarding this employee right. Importantly, the Code of Practice for Disciplinary Procedures (S.I. 146 of 2000) also states that: “The essential elements of any procedure for dealing with … disciplinary issues are that they be rational and fair, that the basis for disciplinary action is clear, that the range of penalties that can be imposed is well-defined and that an internal appeal mechanism is available.” What if an employer does not offer a right to appeal? If an employer does not allow for a right of appeal of a dismissal then this can seriously hamper the employer’s ability to defend a subsequent unfair dismissal claim. For example, in Heffernan -v- Dunnes Stores (UD1355/2009) the EAT stated that the failure to conduct an appeal hearing was an unfair process and did not have “any regard for the principles of natural justice”. Similarly, in Morrissey -v- Galmor Limited (UD2237/2010), the decision to make the employee redundant was deemed unfair and the EAT specifically noted the failure to allow the employee the right to appeal as contributing to his dismissal being unfair. But what if an employee claims unfair dismissal without invoking their internal right of appeal? It is not uncommon for an employee to lodge unfair dismissal proceedings, following their dismissal, without having invoked the internal right of appeal. What impact does this actually have on their claim? Traditionally, it would seem that the EAT did not consider the failure to appeal internally as being of any material consequence to the employee’s claim. This has led to a number of employees successfully winning their unfair dismissal proceedings, notwithstanding the fact that they did not exhaust internal procedures prior to lodging their claims. Examples can be found in Graham -v- Newlands Cross Hotel (UD886/2012) In An Employee -v- A Montessori School (UD919/2011) the employee did not appeal her dismissal. The employee still won her claim and was awarded €32,500 with the EAT going as far as to say that an employee is “not compelled to invoke the appeals process”. Comment Peninsula are extremely dissatisfied with such developments. It is very clear from case law that an employer must provide a right of appeal to ensure fair process is observed and that a failure to provide a right of appeal can be detrimental in defending an unfair dismissal case and will be taken very seriously by a tribunal. It is therefore our view that is entirely unsatisfactory that when an employer does provide a right of appeal and the employee does not utilise it that the employee can still successfully claim unfair dismissal without any meaningful discussion of the employee’s failure to appeal being outlined in the decision. If a right of appeal is such an essential aspect of fair process then the employee should be required to exhaust it before they lodge proceedings with a third party tribunal. In this respect we would highlight that it is often detrimental to an employee’s constructive dismissal claim if they have not raised their grievance concerns internally with their employer prior to lodging the claim. The employee in such circumstances must justify why they did not do so if they are to be successful. It is suggested that a similar approach should be adopted when an employee fails to appeal their dismissal.   Pungor -v- MBCC Foods Ltd (UD584/2015) It was as a result of the above that the recent EAT decision of Pungor -v- MBCC Foods Ltd (UD584/2015) was greatly welcomed. In that case the employee had been dismissed for abusing a loyalty card scheme and she lodged unfair dismissal proceedings without ever exercising her internal right to appeal. The EAT stated as follows: “The [employee]… was afforded the right of appeal, which she did not avail of. The [employee] has an obligation to exhaust the internal disciplinary process prior to seeking to enforce her rights externally. She has not satisfied her obligation and did not adduce any evidence that might justify her decision not to exhaust the internal process.” The EAT here expressly noted that an employee has an “obligation” to exhaust internal disciplinary and appeal procedures prior to lodging any unfair dismissal claims. They went on to state that an employee can potentially lodge unfair dismissal proceedings without exhausting the internal appeal if they can provide justifiable reasons for doing so. This appears to be a common sense approach that is more in keeping with the general constructive dismissal / grievance principles highlighted above. Looking to the Future The EAT is in the process of dissolving following the recent employment tribunal reform process. Unfair dismissal claims will now be heard by the WRC and the Labour Court and it is difficult to identify how influenced those bodies will be by EAT decisions going forward. It is hoped that these bodies will take a stronger view of an employee’s failure to appeal and adopt a similar view to that of the EAT in Pungor -v- MBCC Foods Ltd (UD584/2015).