Payment of Wages Resources:

• Guide to Payment of Wages under Irish Employment Law
• Bringing a Payment of Wages Claim
• Payment of Wages Cases and Claims
• Non Payment of Wages and Unfair Dismissal

Introduction to unfair dismissal and non-payment of wages

Can an employee who hasn’t been paid his or her salary, assume that their employment is terminated? 

Although there is no universal answer, as each case will be judged upon its own merits, a failure to pay wages, without lawful excuse, may be construed as an intention to terminate the employment relationship, as was decided in a recent case before the Workplace Relations Commission (WRC)(ADJ-00018294).

What is an unfair dismissal?

Section 6 of the Unfair Dismissals Act 1977 as amended (‘the Act’) provides, inter alia, as follows:

‘(1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.’

Lawful reasons for a dismissal

The lawful reasons for dismissal are set out in Section 6 (4) of the Unfair Dismissals Act 1977 which provides:

“Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

(a) the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) the conduct of the employee,

(c) the redundancy of the employee, and

(d) the employee being unable to work or continue to work in the position which he held without contravention (by him or by his employer) of a duty or restriction imposed by or under any statute or instrument made under statute.”

Further, an onus is placed on the employer by Section 6 (6) of the Unfair Dismissals Act 1977 which provides:

“In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal”

Contract at an end? Failure to pay salary?

Both parties in the present case referenced Redmond on Dismissal wherein it is stated that “in general, a person is dismissed when the employer informs him clearly and unequivocally that contract is at an end or if the circumstances leading to a dismissal was intended or may reasonably be inferred as having been intended .... dismissal requires communication to the employee to be effective.”

The employee contended that the failure to continue salary payments amounted to such an act and communication, as to clearly signal an intention to terminate the employment relationship.

Conclusion

The WRC accepted the position of the employee that the unilateral act of the termination of salary payments, clearly and unequivocally conveyed the intention of the employer that the contract between the employer and the employee was at an end. The WRC further accepted that the letter confirming same, fulfilled the requirement that the communication of the dismissal to the employee to be effective as per the aforesaid definition. 

It was noted that the employee did not provide the employer with any form of communication indicating he had either resigned or abandoned his position.