€8,500 WRC Award: ‘Breakdown in Trust’ Did Not Replace a Fair Disciplinary Process

What happens when an employment relationship has genuinely deteriorated?

An employee is repeatedly challenging management instructions.

Communication has become difficult.

Grievances are continuing.

The line manager says the situation has become unmanageable.

Can the employer simply conclude that trust and confidence has broken down and end the employment relationship?

A recent Workplace Relations Commission decision shows why employers should be extremely cautious.

The employee worked remotely for a large online marketplace business.

Over a period of several months, the relationship between the employee, management and HR deteriorated significantly.

There were multiple grievances.

There were concerns about the employee’s communications and refusal to follow certain management instructions.

The employee had also made clear that he no longer trusted his line manager and wanted communications to take place in writing.

Eventually, the employer concluded that mutual trust and confidence had irretrievably broken down and terminated his employment.

But the WRC looked beyond the label used in the dismissal letter.

It found that the real issue was misconduct — particularly alleged insubordination and refusal to comply with management instructions.

And because the employer’s own disciplinary procedure had not been followed, the dismissal was unfair.

The employee was awarded:

€8,500

For HR professionals, the wider lesson is important:

A breakdown in trust and confidence should not become a shortcut around the disciplinary process.

WRC Case Reference

Adjudication Reference: ADJ-00048231
Protected Disclosure Complaint: CA-00059268-003
Unfair Dismissal Complaint: CA-00059268-004
Adjudication Officer: Aideen Collard
Decision Date: 31 July 2026
Unfair Dismissal Outcome: Well founded
Compensation: €8,500

The employee also alleged that he had been penalised after making protected disclosures.

That complaint was not upheld.

The WRC found that the two issues relied upon did not amount to protected disclosures within the meaning of the legislation. Pasted markdown Pasted markdown

What Happened?

The employee worked remotely in a customer-support role.

His relationship with his line manager had originally been relatively uneventful but later became increasingly difficult.

There were disagreements concerning:

• promotion;
• communication style;
• management instructions;
• work allocation;
• grievance outcomes;
• meetings with management;
• and the employee’s request that communications take place in writing.

The employee submitted multiple grievances and appeals.

He also raised concerns about two workplace issues which he later argued amounted to protected disclosures.

One concerned access to a former employee’s account details and a potential data-protection issue.

The other concerned the disposal of a customer’s damaged property.

The employer investigated the grievances but did not uphold them.

The WRC later found that these issues did not meet the statutory definition of protected disclosures.

That part of the employee’s case therefore failed.

But a separate problem remained.

1. The WRC Looked at the Real Reason for Dismissal

The employer said the employee was not being dismissed for misconduct.

Instead, it relied on an irretrievable breakdown in mutual trust and confidence.

But the WRC examined what had actually led to the dismissal.

The employee had previously been given informal verbal counselling concerning issues including:

• refusal to follow a management instruction;
• the manner of his communications;
• interactions with colleagues;
• and resistance to management feedback.

The employer’s own correspondence had identified some of this behaviour as potential insubordination.

The WRC concluded that the dismissal was essentially based on alleged misconduct.

That distinction mattered.

If the real issue is misconduct, HR should normally use the disciplinary process designed for misconduct.

Changing the label does not necessarily change the substance.

2. Follow the Procedure That Fits the Problem

The employer had a Performance and Corrective Action Policy.

That policy classified insubordination, including refusal to comply with a direct management request, as serious misconduct rather than gross misconduct.

It also provided for a progressive process which could include:

Verbal warning

then

First written warning

then

Final written warning

then

Dismissal

But that staged process was not followed.

Instead, the employer moved to a separate process examining whether trust and confidence had broken down.

The WRC found that this effectively allowed the employer to fast-track the employee out of the organisation without giving him the procedural safeguards contained in its own disciplinary policy.

For HR, that is an important warning.

The process should follow the issue.

If the concern is:

Misconduct → use the disciplinary process.

Performance → use performance management.

Capability → use the appropriate capability procedure.

Redundancy → use a redundancy process.

Workplace conflict → consider whether mediation or another intervention is appropriate.

Problems arise when employers use one process to avoid the safeguards contained in another.

3. ‘Breakdown in Trust’ Is Not a Magic Dismissal Category

Employers sometimes reach a point where they genuinely believe a working relationship cannot continue.

That can be understandable.

But phrases such as:

“Loss of trust”

“Breakdown in confidence”

or

“The relationship is no longer sustainable”

should not automatically be treated as standalone reasons permitting immediate termination.

HR needs to ask:

Why has trust broken down?

If the answer is:

• repeated refusal to follow instructions;
• inappropriate communications;
• unacceptable conduct;
• failure to cooperate;
• or insubordination,

then the employer may actually be dealing with misconduct.

The misconduct should be identified clearly and managed through the relevant process.

4. Employees Need to Know Dismissal Is a Possible Consequence

The employee had previously received verbal counselling.

The correspondence warned that further issues could result in escalation into the formal stages of the employer’s corrective-action procedure.

But the WRC noted that he had not been explicitly warned that continued behaviour of this kind could result in dismissal.

That mattered.

Where an employer is using a progressive disciplinary process, the employee should understand:

• what conduct is unacceptable;
• what improvement is required;
• what stage of the procedure they are at;
• what support is available;
• what timeframe applies;
• and what could happen if the conduct continues.

A disciplinary process should provide an opportunity to correct behaviour where that is appropriate.

Dismissal should not appear suddenly at the end of what the employee believed was an informal process.

5. Serious Misconduct and Gross Misconduct Are Not the Same Thing

This distinction was particularly important in the decision.

The employer’s policy categorised insubordination as serious misconduct, but not gross misconduct.

That meant the policy itself contemplated a staged process.

Employers should check their own disciplinary policies carefully.

If a policy says particular conduct normally attracts:

a warning

followed by

further warnings

before

dismissal

management should not casually jump directly to termination.

There may be circumstances where progression can reasonably be accelerated.

But the employer should have a clear contractual, policy and evidential basis for doing so.

6. Internal Policies Matter

An employer’s disciplinary policy is not just something kept in an employee handbook.

It can become important evidence at the WRC.

If the organisation says:

“This is how we manage serious misconduct.”

but then follows a materially different process when the problem arises, the employer may have to explain why.

In this case, the WRC expressly noted that the employer’s own Performance and Corrective Action Policy had been bypassed.

That significantly weakened the dismissal.

HR should therefore know:

• what the policy requires;
• whether each stage has been followed;
• what discretion exists;
• when stages can legitimately be skipped;
• and whether any departure from procedure has been documented and justified.

7. A Difficult Employee Still Has Procedural Rights

Another useful aspect of this decision is that the WRC did not present the employee’s conduct as unproblematic.

The Adjudication Officer found that the employee had become difficult to manage.

Considerable management and HR resources had been spent dealing with repeated grievances.

His communications had caused difficulties.

His line manager had experienced significant stress.

The employee himself accepted at the hearing that the tone of some of his communications had been inappropriate.

Those findings matter.

This was not a case where the WRC concluded that the employer had invented a reason to dismiss somebody who had done nothing wrong.

The problem was procedural.

The WRC considered that, had a proper staged process been followed and the conduct persisted, dismissal for misconduct could have been lawful. Pasted markdown

That is perhaps the most important employer lesson from the entire case.

Fair procedure does not mean ignoring difficult conduct.

It means managing that conduct through the correct process.

8. Grievances and Discipline Can Run at the Same Time

The employee had numerous grievances underway while management concerns about his conduct were also developing.

That situation can make employers hesitant.

Can disciplinary action continue while an employee has an active grievance?

Sometimes, yes.

The existence of a grievance does not automatically prevent the organisation from addressing separate conduct or performance concerns.

But HR needs to carefully identify:

• what the grievance is about;
• what the disciplinary concern is about;
• whether the issues overlap;
• whether one process could prejudice another;
• who should investigate;
• who should make decisions;
• and whether temporary separation of the processes is required.

The key is not to allow the existence of one process to become either:

a shield against legitimate management action

or

a reason to shortcut fair procedure.

9. Independence Between Processes Matters

The WRC also expressed concern about the people involved in the different processes.

The Adjudication Officer accepted that the grievance processes had generally been conducted in accordance with the employer’s procedures.

However, she questioned the objectivity of having someone involved in investigating the employee’s grievances also involved contemporaneously in the process that resulted in termination.

That is a valuable HR governance point.

Where possible, keep separate:

the person investigating the grievance

from

the person deciding disciplinary action

and, where appropriate,

the person hearing the appeal.

This becomes particularly important where an employee alleges that management action is retaliation for having complained.

10. Mediation Was Offered — But It Was Not Accepted

The employer had proposed mediation as a way of addressing the deteriorating relationship.

The employee declined.

Employees generally cannot be compelled to participate in voluntary mediation.

But the fact that mediation does not proceed does not mean the employer has no options left.

The next question should be:

What is the actual workplace issue now?

If it is interpersonal conflict, another management intervention may be appropriate.

If it is misconduct, use disciplinary procedure.

If it is performance, use performance management.

If the employment relationship is becoming impossible to manage, HR should identify exactly what conduct or issue is causing that situation and choose the appropriate process.

11. Do Not Mix ‘Relationship Breakdown’ With Conduct Findings

One difficulty in the employer’s position was that it simultaneously maintained:

This is not a misconduct dismissal

while relying heavily on examples of allegedly inappropriate conduct to justify why the employment relationship could no longer continue.

That creates a process problem.

If the employer relies on conduct such as:

• inappropriate communications;
• refusal to attend meetings;
• refusal to follow instructions;
• lack of cooperation;
• or repeated conflict,

those matters should normally be put clearly to the employee.

They should know:

What am I alleged to have done?

What policy does it breach?

What does the employer say needs to change?

What evidence is being relied upon?

What can happen if it continues?

That is much more defensible than allowing conduct concerns to accumulate and later describing the result as an undefined breakdown in trust.

12. A Protected Disclosure Claim Can Fail While an Unfair Dismissal Claim Succeeds

This case also demonstrates why different legal complaints need to be considered separately.

The employee argued that two issues he had raised amounted to protected disclosures and that he had been penalised as a result.

The WRC did not agree.

It found that neither issue met the statutory requirements for a protected disclosure.

The protected-disclosure complaint therefore failed.

But that did not automatically make the dismissal fair.

The WRC separately examined the dismissal under the Unfair Dismissals Acts and concluded that fair procedures had not been followed.

This is a useful HR reminder:

Winning one legal argument does not automatically resolve every other issue arising from the same workplace dispute.

Each complaint needs to be assessed on its own legal and factual basis.

13. The Award Was Based on Financial Loss

The employee was unemployed for approximately 15 weeks before obtaining another job.

His loss of earnings was approximately €8,500.

He then secured new employment on a higher salary.

The WRC was satisfied that he had mitigated his loss.

Although the Adjudication Officer considered that the employee had contributed significantly to the situation leading to his dismissal, she did not reduce the award, taking account of his mental-health difficulties at the relevant time.

The compensation awarded was:

€8,500

representing the employee’s loss of earnings during his unemployment. Pasted markdown

A Practical HR Checklist Before Dismissing for ‘Loss of Trust’

Before relying on a breakdown in trust and confidence, employers should ask:

What caused the breakdown?

Can the issue actually be identified as misconduct, performance, capability or another recognised employment issue?

What policy applies?

Is there an existing disciplinary or performance procedure designed for this situation?

What stage has been reached?

Has informal management taken place?

Have warnings been issued?

Has the employee been clearly told what is wrong?

Avoid vague statements about attitude or trust where specific conduct can be identified.

Has improvement been possible?

What expectations, support or training have been provided?

Does the employee know dismissal is a possible consequence?

Do not allow termination to come as a procedural surprise.

Are grievances also running?

Separate the issues and identify any overlap.

Are decision-makers sufficiently independent?

Avoid unnecessary crossover between grievance investigators, disciplinary decision-makers and appeal officers.

Is dismissal proportionate?

Why is termination appropriate rather than another warning or intervention?

Can the reasoning be evidenced?

The case file should explain how the organisation moved from the original concern to dismissal.

The WRC Outcome

The WRC found that the employee’s protected-disclosure complaint was not well founded.

However, the unfair-dismissal complaint succeeded.

The Adjudication Officer found that the real basis for dismissal was effectively misconduct involving insubordination and refusal to follow management directions.

The employer had a disciplinary policy capable of dealing with that conduct.

But instead of following its staged process, it adopted a faster procedure based on an alleged breakdown in trust and confidence.

The WRC concluded that the employee had not been given sufficient warning that his conduct could lead to dismissal or the checks and balances of the formal disciplinary process.

The dismissal was therefore unfair.

€8,500 COMPENSATION

WRC Reference: ADJ-00048231

The Practical Lesson for Employers

A genuinely difficult employment relationship does not mean an employer has to tolerate unacceptable conduct indefinitely.

But employers should identify the actual issue before deciding how to deal with it.

If the problem is misconduct:

Use the misconduct process.

If improvement is possible:

Set expectations and give the employee an opportunity to improve.

If warnings are required:

Issue them clearly.

And if dismissal ultimately becomes necessary:

Make sure the employee knew what was expected, what could happen and had a fair opportunity to respond.

A breakdown in trust may describe the state of an employment relationship.

It does not necessarily provide a shortcut around the procedure that should have been used to manage the conduct that caused it.

How Employment Matters Can Help

Employment Matters supports employers with difficult employee relations situations, including:

• workplace investigations;
• disciplinary and grievance processes;
• performance management;
• workplace mediation;
• protected-disclosure process support;
• redundancy and dismissal;
• defending employment claims; and
• manager training and workshops.

Where a workplace relationship has deteriorated significantly, identifying the correct process early can prevent an already difficult situation becoming an unfair-dismissal claim.

This article is for general information purposes only and does not constitute legal advice.

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