Contract - Breach of contract – Damages – Termination of employment

By Denis Ryan , Tuesday, 9th May 2017 | 0 comments
Filed under: Compensation , Employment Appeals Tribunal, Employment Law, Contract Law, Irish Courts.



Contract - Breach of contract – Damages – Termination of employment – Appellant seeking to appeal against an interlocutory order – Whether trial judge was in error in failing to accept that the respondent’s claim was in substance a claim for damages for breach of contract 

Facts: The defendant/appellant, Irish Pride Bakeries, was restrained pending the determination of proceedings by an interlocutory order made by the High Court (Gilligan J) on 22nd October 2015 from: (1) taking any steps for the purpose of effecting or implementing the purported termination of the  employment of the plaintiff/respondent, Mr Brennan, by letter dated 18th August 2015; (2) terminating the respondent’s employment save in conformity with his contractual entitlements; and (3) ordering that the appellant continue to discharge the payment of the respondent’s salary, emoluments and other benefits under his contract of employment. The appellant appealed to the Court of Appeal against that order. The appellant submitted that the trial judge was in error in failing to accept that the respondent’s claim was in substance a claim for damages for breach of contract. Secondly, he submitted that the trial judge was in error in not concluding that damages were an adequate remedy. In support of both these submissions, it was contended that the issue, both before the trial judge and the Court of Appeal, related to the question of priorities in an insolvency situation and that the trial judge, in making the interlocutory orders, wrongly elevated the position of the respondent from a category of unsecured creditor to one of a preferential or super preferential. A separate submission was made that even if the trial judge was correct in granting an interlocutory injunction restraining termination of employment, that he was wrong to direct the continuing payment of salary given the insolvency of the appellant. 
Held by Finlay Geoghegan J that the trial judge was correct in not considering the substance of the claim made by the respondent as being one for damages for breach of contract. Referring to Giblin v Irish Life & Permanent Plc. [2010] 21 ELR 173, the Court upheld the determination of the trial judge that damages were not an adequate remedy for the respondent on the facts. Finlay Geoghegan J concluded on the facts of the case that the trial judge was entitled to exercise his discretion on the balance of convenience in favour of making the order directing payment of salary; if no such order was made, then it would set at naught the very reasons for which the Court favoured granting an injunction restraining dismissal, or in effect, a mandatory injunction requiring a continuation of employment in cases where an employee makes out a strong case that the dismissal is in breach of the contract of employment. Finlay Geoghegan J did not accept that the order made interfered with any statutory priority applicable pursuant to s. 440 and Part 11 of the Companies Act 2014; the order made was against the appellant which then continued to trade and the payments to be made to the plaintiff were not in respect of any debt due at the date of appointment of the receivers nor was his employment terminated prior to or by the effect of the appointment of the receivers. Finlay Geoghegan J held that the appeal should be dismissed. Appeal dismissed. 
Brennan, Conor v Irish Pride Bakeries (In Receivership)
29/3/2017 No. 2015 547 [2017] IECA 107

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