A “No-Fault” Dismissal Can Still Cost Employers: What Businesses Should Learn from a Recent WRC Award
A recent Workplace Relations Commission decision serves as a useful reminder for employers that the way a dismissal is handled can be just as important as the reason behind it.
In this case, a former salesman was awarded almost €40,000 after his dismissal from an international medical devices company was accepted as unfair. The employee argued that the manner of his dismissal, and the way his departure was communicated internally, had damaged his reputation within a small and closely connected industry.
For employers, the lesson is clear: even where an employer believes there is “no fault” on the part of an employee, a dismissal still needs to be managed carefully, fairly and professionally.
What happened?
The employee had worked as a territory manager in the medical devices sector. He claimed that he had raised a grievance about a disparity in performance-related pay, with a bonus payment at issue.
Following this, he was dismissed. The dismissal was described by the employee as a “no-fault” termination. The employer later accepted before the WRC that the dismissal was unfair and confirmed that there was no fault on the part of the employee.
However, the employee’s complaint was not only about the fact of the dismissal. He also argued that the manner in which his departure was handled caused significant professional damage.
An internal email was sent to staff stating that the company had decided to “part ways” with him with immediate effect. The employee said this created speculation and rumour within the industry, which he described as a small sector where “everyone knows everyone”.
He told the WRC that rumours began to circulate that he may have done something seriously wrong. He said this damaged his ability to secure new employment and made him feel like “damaged goods” when applying for roles.
Why the communication mattered
One of the most important points for employers is that the wording and tone of an exit communication can have consequences.
A short, blunt or vague announcement may seem harmless internally. However, in certain sectors, particularly small or specialist industries, the way an employee’s departure is communicated can create assumptions.
Where an employee leaves suddenly and without explanation, colleagues, clients or industry contacts may speculate. That speculation can create reputational damage, especially where the employee is applying for similar roles in the same sector.
Employers do not need to provide unnecessary detail or disclose confidential information. However, they should ensure that any internal communication is measured, fair and does not imply misconduct where no misconduct has occurred.
In this case, the employer confirmed there was no fault on the part of the employee. That made the communication issue particularly important from an employer risk perspective.
The WRC’s award
The WRC awarded the employee €39,858.13 for losses arising from his unfair dismissal.
The award covered a period of unemployment, including loss of base salary and employer pension contribution. The WRC did not award compensation for bonus losses. It also did not award ongoing losses beyond the hearing date, as the adjudicator found the employee’s job search efforts were limited in scope and consistency.
However, the adjudicator also accepted that the employer’s conduct, including the manner of dismissal and the operation of the restrictive covenant, had an adverse impact on the employee’s ability to secure employment.
This is an important distinction for employers. While the WRC considered the employee’s obligation to mitigate his loss, it still recognised that the employer’s handling of the dismissal had affected his job prospects.
What employers should take from this
This case highlights several important lessons for employers.
First, a dismissal should not be treated as low-risk simply because it is described as “no fault”. If the employee has the required service to bring a claim, fair procedures and proper process remain essential.
Second, employers should be careful about how they communicate departures. Internal announcements should be neutral, accurate and consistent. If an employee is not guilty of misconduct, the wording should not leave room for that implication.
Third, employers should document the reason for dismissal and ensure the employee understands the basis for the decision. A lack of clarity can create additional risk, particularly where the employee later has to explain the circumstances to prospective employers.
Fourth, restrictive covenants should be reviewed carefully. If a former employee is subject to restrictions after dismissal, those restrictions may affect their ability to secure alternative employment. This can become relevant in assessing loss.
Finally, employers should remember that senior or high-earning employees are not automatically expected to secure replacement work quickly. The WRC will consider the evidence, the market, the employee’s efforts to find work and any conduct by the employer that may have affected their prospects.
Practical steps for employers
Before dismissing an employee, employers should consider the following:
- Has the reason for dismissal been clearly identified and documented?
- Has the employee been given a fair process?
- Has the employee been told the reason for the decision?
- Is there a right of appeal where appropriate?
- Is the exit communication neutral and non-damaging?
- Could the wording of any internal announcement imply wrongdoing?
- Are restrictive covenants necessary, reasonable and enforceable?
- Could the dismissal affect the employee’s reputation in a small industry?
- Has legal or HR advice been taken before action is confirmed?
Dismissals are rarely risk-free. However, risk can be significantly reduced where employers follow a fair process, communicate carefully and avoid creating unnecessary reputational damage.
Final thought
A dismissal is not only a legal event. It is also a communication event.
The way an employer explains a departure, both to the employee and to the wider business, can have a lasting impact. Poor wording, vague explanations or sudden announcements can create speculation that may later form part of an unfair dismissal claim.
For employers, the message is simple: if there is no fault, do not communicate in a way that suggests there might be.
A fair process, clear reasoning and careful communication remain essential.
📞 Contact us today for confidential guidance.
Disclaimer: This article is for general information purposes only and does not constitute legal advice.
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