Brief Overview of Irish Employment Law
This overview gives an introduction to the principal areas of employment law which affect business in Ireland. Statute law and decisions of courts and the Workplace Relations Commission (formerly tribunals) impact on all aspects of the relationship between employer and employee, from recruitment through to retirement. Given that Ireland is one Europe’s most highly regulated environments in the area of employment law, it is imperative to take legal advice from the outset to avoid the pitfalls in this area.
Most employers seek staff through job advertisements. Such advertising must comply with legislation governing equality in employment, including access to employment. In addition, job advertisements should be carefully worded as applicants will rely on that wording and it may form part of a contract of employment.
The conduct of job interviews is important in that the prospective employer and/or employee may make representations which could be deemed to form part of the contract of employment. In addition, questions which breach the statutory code of equality cannot be asked. The potential for an unsuccessful job applicant to pursue the employer on the grounds that equality legislation was breached during the selection process can be minimised if the employer adheres to the best practice procedures in that process.
Contract of Employment
Under the Terms of Employment (Information) Act 1994-2012 an employer is obliged to provide an employee with a statement confirming the basic terms of the contract of employment no later than two months after commencement of employment. This includes stating the place of work, job title, date of commencement, pay details, terms and conditions relating to hours of work, time of breaks and the period of notice which the employer and employee are required to give to terminate their contract. This is not the complete list of mandatory terms.
A national minimum rate of pay was introduced in April 2000. Currently, this is set at Euro €8.65 per hour however on the 1st of January 2016 it will be increased to €9.15.
In certain industries and geographical areas, rates of pay and other terms and conditions were regulated by specific Employment Regulation Orders and Registered Employment Agreements, however, these were struck down by the Supreme Court. The Industrial Relations (Amendment) Act 2015 has reintroduced a twin-track system. This system allows for registered employment agreements to be re-established where all the parties of an employment agreement agree to be bound by it. It is reasonably similar to the previous system and is generally limited to individual enterprises. It operates as a two part system, the first system enforces agreements made by parties who agree to be bound. The second enforces agreements devised by orders of the Labour Court and made by the Minister for Jobs, Enterprise and Innovation and apply to the entire sector as a whole.
Ministerial Codes of Practice set out basic requirements for disciplinary procedures, grievance procedures and dispute resolution generally.
Most of the essential terms of the contract of employment are subject to the following legislation:
Employment Equality Act 1998 to 2011
Irish legislation provides that equality rights and obligations are implied into the employment contract. It is unlawful for an employer to discriminate on any one of nine grounds in any area of employment including recruitment, training and promotion. These being gender, civil status, family status, age, disability, race, sexual orientation, religious belief and membership of the Traveller Community. In addition employers must take steps to ensure that harassment (including sexual harassment) of employees does not occur. Otherwise the employer may be held liable and incur substantial costs.
Payment of Wages Act 1991
This sets out a number of approved methods for paying wages including commission, bonus payments, holiday pay and sick pay. However, it does not cover expenses, pensions or other benefits in kind. It also prohibits deductions from wages without the prior agreement of the employee, unless there are exceptional circumstances.
Maternity Protection Act 1994 and 2004
There is a minimum period of maternity leave of 26 weeks provided for with an option for an additional 16 weeks unpaid leave. The legislation sets out safeguards for protecting employment rights during that period and prescribes health and safety measures to be taken during pregnancy and after return to work including ante and post-natal care.
Safety, Health and Welfare at Work Act 2005
This legislation defines the duties and responsibilities of employers, employees and others in relation to health and safety in the workplace. Every employer must prepare a written Risk Assessment and Safety Statement identifying all potential hazards in the workplace, setting out how those hazards are controlled and managed. Employers must ensure, so far as is reasonably practicable, that the work place and work systems are safe.
Minimum Notice & Terms of Employment Act 1973 – 2005
This sets out the minimum periods of notice for termination of employment. The period of notice depends on the employee’s length of continuous service. The notice periods range from one week’s notice for an employee with up to two years service to eight weeks’ notice for an employee with 15 years or more service.
Organisation of Working Time Act 1997
Under this legislation employees are entitled to certain minimum rest periods in the working day and between one day’s work and the next. The average working time in a seven-day period may not exceed 48 hours. Under this legislation employees are entitled to 4 weeks paid vacation plus an additional 9 public holidays. From the 1st August 2015, employees who are on sick leave accrue annual leave. However, the employee only has up to 15 months after the end of the statutory leave year (April – March) to use this annual leave, after which it is lost.
The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.
Where a business is transferred from one entity to another, resulting in a change of employer (e.g. a merger, acquisition or outsourcing), the rights and obligations of the transferor in relation to the contracts of employment of its staff are transferred to the new owner. The new owner must continue to observe the terms and conditions of the contracts of employment that have been transferred. Dismissal can be justified if it can be shown that it is necessitated by economic, technical or organisational reasons which require changes in the workforce. Employers are now subject to more onerous obligations to notify and consult with their employees in advance of a proposed business sale or transfer.
Much of the employment legislation is aimed at providing protection for employees rather than employers. For employers, therefore, it is advisable to ensure that the contract of employment contains provisions to protect their interests. For example, matters such as non-disclosure of confidential information by employees or the securing of intellectual property rights should be considered or an employer may have a particular requirement regarding the availability of employees for shift or weekend work. Any particular requirements must be set out in the contract of employment. These stipulations should be augmented by the employer’s relevant personnel policies, for example in relation to disciplinary, grievance, equality, harassment and e-mail/internet usage. The importance for employers to have well drawn up and active personnel policies cannot be overstated.
Termination of Employment
Where the contract of employment is terminated by reason of retirement or resignation, there is rarely much cause for dispute between employer and employee. The position is usually very different where it is necessary to dismiss an employee.
Practically every employee with at least one year’s service enjoys the protection of the Unfair Dismissals Acts 1977 to 2007. The two central principles of the legislation are that dismissal of an employee is deemed unfair unless there are substantial grounds justifying the dismissal and that fair procedures have been followed before dismissal is effected. A dismissal that meets only one of these criteria runs a grave risk of being held to be unfair.
If the Workplace Relations Commission (“WRC”) finds in an employee’s favour it can direct that the employee be reinstated or re-engaged. Alternatively and most commonly compensation can be awarded up to a maximum of two years’ remuneration. Remuneration is defined widely and includes not only salary but also benefits in kind such as car, pension contributions, health insurance, etc.
An aggrieved employee can also bring proceedings for damages in a court of law for wrongful dismissal where the dismissal is in breach of the employee’s contract of employment and/or the company’s constitutional documents.
Dismissals by reason of redundancy are governed by Redundancy Payments Acts 1967 to 2012. Employees with more than two years’ service are entitled to be paid a redundancy lump sum by their employer in the amount of two weeks salary per year of service plus on additional weeks’ pay. For this calculation, only earnings up to Euro €600 per week are taken into account.
If collective redundancies are contemplated, the Protection of Employment Act 1977 to 2007 requires that 30 days’ prior notification be given to the Minister for Jobs, Enterprise and Innovation and to employee representatives before an employer can give the employee notice of termination for redundancy. For trans-EU employers, the Transnational Information and Consultation of Employees Act 1996 may apply.
The Industrial Relations Acts provide for a mainly non-compulsory regime of conciliation and arbitration for disputes between employers and employees. An employee cannot be prevented by the employer from joining a trade union, should there be one in existence in the place of employment, but neither is there an obligation on the employer to recognise or enter direct discussions with the employees union.
The Industrial Relations (Amendment) Act 2015 (the “2015 Act”), introduced on the 1st August 2015, amended the law relating to collective bargaining and gave powers to the Labour Court to make legally binding determinations in respect of the disputes referred to it by a trade union or excepted body against employers who do not offer collective bargaining arrangements.
It should be noted that the 2015 Act defines “collective bargaining” as either voluntary agreements or negotiations by an employer with trade unions or an excepted body. Therefore, if an employer ensures an excepted body is in place then it can avoid negotiating with trade unions without risk of recourse under the 2015 Act. An “excepted body” is defined as a body that is independent from the control of an employer or trade union of employers, its members are employed by the same employer and carries on engagements or negotiations regarding the wages or other conditions of employment of its members.
The 2015 Act has also inserted a number of protections for employers by inserting a de minius type threshold to be met by employees enabling employers to avoid having to address disputes where the Labour Court is of the opinion that the dispute involves an insignificant number of workers. A restriction on referrals has been introduced limiting a fresh application on the same issue for 18 months following a recommendation or determination. The Labour Court is further obliged to have regard to the long term sustainability of the business of the employer before making a decision.
Employment of Foreign Nationals
EU law provides that a national of any EEA state may work in another member state without a work permit, visa or other equivalent document. Save for some exceptions, nationals of non–EEA countries require a work permit. The procedure is that the employer applies for the work permit in respect of each foreign employee, specifying the particular employment and the particular skill or knowledge of the proposed employee. Work permits are usually granted for an initial two year period and for a further three years upon renewal.
The Employment Permits (Amendment) Act 2014 provides a means of redress for vulnerable migrant workers who had no means of enforcing their employment rights unless they held a valid work permit and were entirely dependent on their employer to process their application. Civil action may be brought seeking compensation for work done provided all reasonable steps to comply with the requirement to have a permit were taken by the employee.
The Parental Leave Act 1998-2006 together with the European Union (Parental Leave) Regulations S.I. 81/2013 gives employees who are the natural or adoptive parents of a child under 8 years of age, the right to take unpaid parental leave for a period of 18 weeks. Parents of children adopted between the ages of six and eight years of age must take parental leave within two years of the adoption order. Employees are required to have 12 months continuous service with the employer in order to be entitled to parental leave but employees who do not meet this criteria will be entitled to parental leave on a pro-rata basis. Employees returning from a period of maternity may request a change in their working hours which although not legally obliged to facilitate, much duly consider the request.
Part-time Workers and Fixed Term Workers
The Protection of Employees (Part-time Work) Act 2001 provides that a part-time employee should not be treated less favourably than a comparable full-time employee in respect of his/her conditions of employment. A part-time employee may only be treated in a less favourable manner than a comparable full-time employee where such treatment can be justified on objective grounds. The right not to be treated in a less favourable manner than a comparable full-time employee does not apply in relation to any pension scheme or arrangement or to a part-time employee who normally works less than 20% of the normal hours of a comparable full-time employee.
The Protection of Employees (Fixed-Term Work) Act 2003 introduced similar provisions and protections for fixed-term workers as had been implemented in respect of part-time workers under the above legislation.
Temporary Agency Work
The Protection of Employees (Temporary Agency Work) Act 2012 affords protection to agency works who are temporarily assigned by an employment agency to work for/under the direction of a hirer. Agency workers are entitled to the same basic working and employment conditions as those enjoyed were they employed by the hirer under a contract of employment. Access to a pension or any form of sick pay is not included.
The Protected Disclosures Act 2014 applies to all levels of employment both public and private, protecting current and former employees, contractors, trainees, apprentices and agency staff. It provides for a stepped disclosure regime encouraging initial disclosure to the relevant employer, Minister or prescribed person. No sufficient public interest requirement has been put in place, instead employees must be of reasonable belief that the disclosure is true. Employees may not be penalised for any disclosures, any dismissal for making a protected disclosure will be unlawful. Compensation of up to five years remuneration is provided for and the normal one year service requirement is waived. All public sector employers are required to put a whistleblowing policy in place and it is strongly recommend that private sector employers put in place policies on whistleblowing in the staff handbook.
Workplace Relations Act 2015
As of the 1st October 2015 the Workplace Relations Act 2015 provides that there will be two bodies, the Workplace Relations Commission (WRC) and the Labour Court who will deal with complaints and disputes relating to industrial relations and employment law which were previously heard by the Rights Commissioner Service, Employment Appeals Tribunal and the Equality Tribunal.
As well as operating as a guiding and monitoring body the WRC has special functions in relation to the resolution of industrial disputes and implementation of employment laws as it took over the role of the Labour Relations Commission and the National Employment Rights Authority.
The WRC is the body to which all industrial relation disputes and complaints involving employment law are initially referred. Complaints are initially presented in writing to the Director General of the WRC who either refers them to a mediation officer if it is considered capable of being resolved or to an adjudication officer if mediation is unsuccessful. The adjudication officer shall then conduct an inquiry where both parties have an opportunity to be heard and present relevant evidence. The adjudication officer then delivers a decision in accordance with relevant law which may be appealed to the Labour Court. Either party may refer the decision of the Labour Court to the High Court on a question of law only.
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