An international technology company with operations in Dublin discovered – mid-project – that its Irish subsidiary had terminated a senior employee without following the termination procedure required under Irish employment legislation. The dismissal notice was issued without the required statutory minimum period, no performance improvement process was completed, and the employee's entitlements under a collective agreement in place at the subsidiary were disregarded entirely. The company's headquarters, based in continental Europe, had assumed that its standard European HR processes would apply. They did not.
Employment disputes in Ireland are resolved through a structured statutory system anchored by the Workplace Relations Commission and, on appeal, the Labour Court. A dismissed employee may bring a claim for unfair dismissal provided the qualifying service threshold under Irish employment legislation is met. The primary hearing process typically concludes within six to twelve months from the date of filing, though complex matters involving collective agreement interpretation may take longer.
This case study outlines the legal strategy adopted, the milestones reached, the complications encountered, and three transferable lessons for international businesses managing employment risk across borders.
Client profile and the challenge
The client was a mid-sized technology group with its primary entity registered in a civil law jurisdiction in continental Europe. Its Irish subsidiary employed approximately forty people. Following a restructuring programme, the subsidiary issued termination letters to three employees. including one with more than a decade of continuous service. without triggering the consultation obligations embedded in the employment law regime in Ireland applicable to collective redundancies.
The core challenge had two dimensions. First, the procedural dimension: the dismissal notice given to each employee fell short of both the statutory minimum and the enhanced notice period set out in the collective agreement binding the subsidiary. Second, the substantive dimension: the selection criteria used for redundancy had not been documented, creating exposure to an unfair dismissal claim before the Workplace Relations Commission (WRC) – Ireland's primary employment dispute resolution body.
The client had received no prior legal advice in Ireland. Internal HR had relied on a template redundancy process developed for its home jurisdiction. That template was incompatible with Irish employment legislation, which imposes procedural obligations that exist independently of – and often in addition to – contractual terms.
Legal strategy chosen and rationale
The first step was a rapid audit of the employment contracts, the collective agreement, and the redundancy process documentation. This audit established that the procedural failures were significant but not irreparable. The statutory claims had not yet been filed; the client had a short window to engage with the affected employees before WRC proceedings were initiated.
The strategy had three components. First, the firm advised on an immediate without-prejudice engagement with each employee. This approach is recognised under Irish civil procedure rules as a protected channel for settlement discussions. It carries risk – it signals that the employer acknowledges potential liability – but it also preserves the client's ability to resolve matters commercially before public WRC proceedings began.
Second, the team worked through the social security and tax implications of any settlement payments. Under Irish tax legislation, certain termination payments benefit from specific exemptions up to defined thresholds. Structuring the settlement correctly was essential to minimise the net cost to the client and maximise the net receipt to the employees. Failure to structure settlement payments correctly is a common and costly error that practitioners in Ireland encounter frequently.
Third, the firm prepared a parallel litigation-readiness file. This meant gathering and preserving all documentation relevant to the redundancy selection process. The reasoning was straightforward: if settlement failed, the client needed to be positioned for WRC proceedings without delay. Irish employment litigation moves on defined procedural timetables. Missing a response deadline at the WRC stage can result in a decision being issued in the employee's favour by default.
For the broader corporate governance issues arising from the restructuring, the client was directed to review related considerations through our analysis of corporate law matters in Ireland. There. Subsidiary governance and directors' duties intersect with employment risk during restructuring.
Key milestones and complications encountered
The without-prejudice process with two of the three employees was resolved within eight weeks. Both accepted settlement terms that reflected enhanced notice payments and a contribution to statutory entitlements under Irish employment legislation. The settlements were documented through compromise agreements, which – under Irish employment law – require the employee to have received independent legal advice to be enforceable.
The third matter was more complex. That employee had been employed for more than twelve years. The entitlements under the collective agreement included an enhanced redundancy payment formula that the client had not budgeted for. Initial negotiations stalled. The employee filed a claim before the WRC within the six-month limitation period applicable to unfair dismissal claims under Irish employment legislation.
The WRC process introduced two complications. First, the collective agreement's interpretation became a live issue. The client argued that the enhanced payment formula applied only to collectively agreed redundancy rounds, not to individual redundancy decisions. The employee's representatives argued the opposite. This interpretive dispute required detailed analysis of the agreement's drafting history and the industrial relations context in which it had been negotiated.
Second, the absence of documented selection criteria became the central factual issue at the WRC hearing. The adjudicator pressed the client's representative to explain why this particular employee had been selected when others in comparable roles had been retained. Without documented criteria, the client's position was difficult to defend on the substantive unfair dismissal ground – even though the redundancy itself was genuine.
The matter was resolved by mediated settlement at the WRC, arranged through the Commission's mediation service, before a formal adjudication was issued. The settlement figure exceeded the client's initial estimate but remained materially below the maximum award available under Irish employment legislation for an employee of that service length.
Transferable lessons
Three lessons from this matter apply directly to any international business managing employment relationships in Ireland.
First, the employment contract and the collective agreement are not interchangeable. In Ireland. A collective agreement binding on a workplace may impose obligations that go beyond. and in some respects override – the individual employment contract. International businesses that conduct due diligence on individual contracts but overlook collective agreements regularly encounter obligations they did not anticipate. Practitioners advising on Irish employment matters note that this is among the most frequently underestimated sources of exposure for inbound employers.
Second, the dismissal notice period is a minimum, not a target. Statutory minimums under Irish employment legislation represent the legal floor. Enhanced notice entitlements in contracts or collective agreements sit above that floor. Serving notice at the statutory minimum when a collective agreement or contract provides for more creates immediate exposure. The cost of getting this wrong is rarely limited to the notice shortfall alone – it typically shapes the credibility of the employer's position across the entire dispute.
Third, the absence of documented process is itself a risk. Irish employment tribunals apply a reasonableness standard to dismissal decisions. That standard is procedural as well as substantive. An employer who cannot produce written evidence of a fair selection process, a performance improvement plan, or a genuine consultation exercise will struggle before the WRC regardless of the underlying commercial rationale for the redundancy. Documentation is not administrative overhead – it is legal protection.
For businesses managing similar employment risk in comparable common law environments. Our case study on employment dispute resolution in Portugal illustrates how analogous procedural obligations operate in a civil law setting. Additionally. There, the practical differences lie for cross-border HR strategies.
To discuss how your business can structure employment risk management in Ireland before a dispute arises, contact us at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice covers workforce restructuring, dismissal procedures, collective agreement interpretation, and cross-border dispute resolution across both civil law and common law systems. As a law firm in Ireland and across the EU, we support international businesses that need practical, results-oriented counsel – not generic template advice. Our attorneys have advised on employment matters before the Workplace Relations Commission and equivalent bodies across Europe. Additionally. Our dual-tradition expertise. Portuguese civil law combined with English common law heritage. makes us particularly well placed for businesses operating across multiple legal systems. To explore how we can support your employment strategy in Ireland, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.