Employers may think that if they provide notice of termination to an employee as required by the notice provisions in the employee’s contract of employment, they will be safe from a claim for breach of contract. This is not necessarily the situation, as highlighted by a recent High Court decision.

A senior employee of the Dairygold group of companies claimed that he had been wrongfully dismissed as his employer had failed to provide him with reasonable notice.  The employee joined Dairygold in 2000 as a site manager with a starting salary of €63,487. Over a number of years the employee was promoted, eventually becoming managing director of a group company. When his employment was terminated in November 2007 his final salary was €207,000.  The employee was given 4 weeks’ notice in accordance with the written terms of his contract of employment.

The employee argued that the CEO of the Dairygold group had been provided with a one year notice period and he was entitled to at least 6 months’ notice, if not the 12 months’ notice given to the CEO. 

The Judge considered that when the employee was given notice in 2007, the nature and responsibility of his position had changed beyond recognition from his initial appointment as site manager.  His contract of employment bore no resemblance to the realities of the position he held at the end of 2007.  The Court decided that, notwithstanding the terms of his written contract, the employee was entitled to receive “reasonable notice” from his employer and that reasonable in the circumstances was 6 months, not the 4 weeks given, and therefore he had been wrongfully dismissed. The employee was awarded €301,479, which included 6 months pay (less the 4 weeks notice already received), benefits and annual bonus.

This case emphasises that when an employee rises through the ranks of a company his terms and conditions should be reviewed on a regular basis.  When terminating the employment of an employee, consideration should always be given as to whether the notice period is commensurate with the seniority of that employee.