Important Supreme Court decision on employee suspension pending investigation

A recent Supreme Court decision O'Sullivan v HSE [2023] IESC 11 has clarified the law in Ireland regarding suspension of an employee pending the investigation of a disciplinary matter.

Employer's decision making process

The Supreme Court approved the test set out in the English Supreme Court case Braganza v BP Shipping [2015] 1 W.L.R. 1661 which stated:

"… a decision maker's discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith and genuineness and the need for absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused.",

The Supreme Court also found that such a decision could only be challenged where it was "one that no reasonable decision-maker could have reached" and where " the decision-making process had failed to exclude extraneous considerations, or to take account of all obviously relevant ones."

The court further determined the importance of fair procedures at the stage of the process where the employer is proposing to suspend the employee pending investigation.

Employer actions

Where an employer is proposing to suspend an employee pending investigation it must make sure that:

1. The actions of the decision maker are not arbitrary, capricious, perverse, or irrational in light of the alleged misconduct and on full consideration of all the evidence available. In simple terms this means an employer must take a rational and fairly judged view in good faith that the suspension is necessary.
2. The employee is given the opportunity to make representations on the proposal to suspend. In other words, the employee is given the chance to explain themselves before the decision to suspend is made; and
3. In any event, at the outset, in order for the suspension to be possible, there is a legal basis for the action ie relying on (i) a suspension clause in an employee's contract; or (ii) a procedure set out in an Employee Handbook or policy (a copy of which has been provided to the employee prior to the event occurring leading to suspension).

Following suspension, as further stated in O'Sullivan, the employer is obliged to carry out the investigation "with all practicable speed" and the need for the suspension to remain in place should be reviewed regularly and not only at the request of the employee.

Comment

The law in Ireland permitting suspension pending investigation can be complex. Every set of circumstances is different and must be carefully considered by an employer before action is taken. The risk of an injunction is great, bringing with it a potentially significant award of costs against an employer and reputational damage.  The courts are very alive to the potentially devastating consequences which being placed on suspension has on an employee's reputation and their ability to earn a living.  Employers should take legal advice before considering any suspension pending investigation.

For more information, please contact Shane Costelloe or your usual contact in Beauchamps.