LEGAL UPDATES
1. Pension auto enrolment update
We have been updating members on an ongoing basis in relation to the implementation of the Government Pensions Auto Enrolment Act 2024. Members will be aware that the act was signed into law on 9th July 2024 with an (ambitious) implementation date scheduled for 1st January 2025. There had been widespread concern by employers that there were insufficient details about the operation of the scheme and the framework to ensure payments were processed correctly.
By way of a reminder, when introduced, the act will:
- apply to employees between the ages of 23-60 whose gross pay is in excess of €20,000. Contributions based on gross pay of up to a maximum €80,000.
- Contributions will increase on a gradual incremental basis as set out in the table below.
Years 1-3 | Years 4-6 | Years 7-9 | Years 10 onwards | |
Employee
Contribution |
1.5% | 3% | 4.5% | 6% |
Employer contribution | 1.5% | 3% | 4.5% | 6% |
State contribution | 0.5% | 1% | 1.5% | 2% |
TOTAL | 3.5% | 7% | 10.5% | 14% |
- Employees will be eligible to ‘opt out’ in months 7 and 8 or suspend their contributions. Employees who opt out may be entitled to a refund of their own contributions, however the Bill does not currently provide for a refund of the employer.
- Employees who leave the plan or suspend their contributions will be automatically re-enrolled in the scheme after 2 years if they are still eligible.
If any employee leaves employment, their pension pot, and enrolment in the scheme is unaffected, and will continue in their new employment.
The government has now confirmed that the scheme will start on 30th September 2025. Minister Humphreys, Minister for Social Protection, confirmed that employers now have a full year lead-in time to enable sufficient preparations to be made.
The Government’s online guidance has also been updated which provides some useful information for employers, particularly where the employer already operates an existing occupational pension scheme to employees.
Under Section 51 of the Auto-Enrolment Act 2024, an employee will be in ‘exempt employment’ if there is a pension contribution from the employee or employer, paid through payroll.
For the first few years of auto-enrolment, any pension contribution greater than zero will be enough to exempt an employment. However, by the end of year six of the operation of the scheme, at the latest, standards for the exemption of existing pension schemes will be developed with the assistance of the Pensions Authority.
2. Budget
On 1 October 2024, the Irish government announced a number of significant measures that will apply for 2025, some of which seek to address the cost-of-living challenges in Ireland. In addition, some retrospective income tax credits may be available in 2024 for some taxpayers.
The key employment related measures are listed below:
- The national minimum wage will increase by 80 cent to €13.50 per hour from 1 January 2025
- The USC will be cut from 4% to 3% on incomes of €25,000 to €70,000, the second consecutive reduction to the USC rate
- Entry threshold to 3% rate increased by €1,622 to €27,382
A high-level overview of the budget is available here
3. The Maternity Protection, Employment Equality and Preservation of Certain Records Bill 2024
One of the last pieces of legislation to be passed before the Dáil is dissolved, ahead of a general election, is the Maternity Protection, Employment Equality and Preservation of Certain Records Bill 2024.
The Bill will be sent to the President for signing into law and will commence at a date in the future, following the introduction of a commencement order to give the new laws effect.
The Bill, when it becomes an Act, will see the introduction of two significant changes affecting employment law practice, namely:
- the postponement of maternity leave in the event of a serious health condition; and
- a restriction on the use of non-disclosure agreements in respect of allegations of discrimination, victimisation, harassment and sexual harassment, whereby such agreements will be null and void unless certain conditions are met.
Postponement of maternity leave in event of serious health condition
The Bill provides that:
- A relevant employee (i.e. someone who is pregnant or on maternity leave and has a serious health condition) can notify their employer that they intend to postpone the commencement of all or part of their maternity leave for up to 52 weeks. A serious health condition means a health condition that entails a serious risk to the life or health, including the mental health, of the employee and requires necessary medical intervention that is ongoing for a period of time.
- The notification to the employer must specify the date on which the postponement is to commence and end (which must be at least 5 weeks from the commencement of the postponement) and be accompanied by a medical cert which specifies those dates. The notification must be made at least 2 weeks before the postponement is due to commence.
- Where a notification is made in accordance with the above, the relevant employee will be entitled to the maternity leave (or any untaken part thereof) to be taken in one continuous period on the day immediately after the end date. The entitlement to resumed leave is subject to the employee notifying the employer in writing of their intention to commence the leave as soon as reasonably practicable but no later than on the day on which the leave begins.
- Where the employee has already postponed their leave, they may notify the employer in writing of their intention to postpone the commencement of the leave one further time only.
- An employee cannot postpone their maternity leave under both this provision and under section 14B (i.e. in the event of the hospitalisation of a child) in respect of the same birth.
Restriction on use of non-disclosure agreements
The Bill adds a new section 14B to the Employment Equality Acts, which provides that:
- An employer must not enter into a non-disclosure agreement and if they do the agreement will be null and void. A non-disclosure agreement is defined as an agreement, or provision thereof, whether or not in writing and howsoever described, between an employer and an employee that purports to preclude the making of a relevant disclosure by the employer or the employee or both.
- A relevant disclosure means a disclosure of information relating to either one or both of the following:
a. the making by the employee of an allegation that he or she was discriminated against, or subjected to victimisation, harassment or sexual harassment, in relation to his or her employment (or potential employment) by the employer;
b. any action taken by the employer or employee in response to the making of such an allegation, including any action taken in relation to any complaint made or proceedings taken, by the employee in relation to the subject matter of the allegation. - However, an employer may enter into an “excepted non-disclosure agreement” only where the employee requests the employer to do so and, prior to entering into the agreement, the employee has received independent legal advice in writing from a legal practitioner in relation to the implications of entering into an agreement. The employer must also pay the reasonable legal costs and expenses of obtaining the legal advice.
- In addition, any such agreement must:
a. be in writing;
b. be of unlimited duration, unless the employee decides otherwise;
c. be in clear language that is easily understood and a format that is easily accessible (including by any party with a disability);
d. provide that the employee has a right to withdraw from the agreement without penalty within 14 days; ande. include a provision that the agreement does not prohibit the making of relevant disclosures to one or more listed persons, where, at the time of the making of the disclosure, the person concerned is acting in the course of their office, employment, business, trade or profession. Listed persons include Garda, lawyer, medical practitioner, mental health professional, Revenue, Ombudsman, trade union official or such individual as may be specified in the agreement. - WRC Mediation Exception: NDAs included as part of a Workplace Relations Commission (WRC) mediation will be lawful. This will likely incentivise employers to use WRC services, but it is important to note that a mediation conference will only be held if both parties agree in advance to participate and where there are live WRC complaints.
We will advise Members of the commencement date for the Act in due course.
A copy of the Bill, including its history, can be accessed here
4. Menopause awareness month
October is menopause awareness month, with 18th October officially declared World Menopause Day.
The conversation regarding the menopause has changed considerably in recent years with individuals and employers more aware of the impact of the menopause on an employee’s working life, as well as the steps that can be taken to support menopausal employees.
One way of promoting awareness of menopause is by having a specific menopause policy setting out how staff can raise issues relating to menopause and how you will handle these issues when raised.
To coincide with World Menopause Day, we have produced a Menopause Policy that you may wish to adopt for your workplace.
This policy is intended to confirm your commitment to constructive, open and honest conversations about the impact of menopause on staff and to indicate the type of support that may be available to assist with any issues, that should be tailored to your organisation or reflect ones in place within the workplace.
A copy of this policy is available on the members’ area of the ROI website. If you have any questions, please do not hesitate to contact our ROI legal team
CASE LAW UPDATES
1. Karabko v TikTok Technology Limited
Right to request remote working
The WRC has issued its first decision in relation to the right to request flexible working and the right to request remote working, which is provided for in the Work Life Balance and Miscellaneous Provisions Act 2023.
In the decision, the adjudicator also gave helpful guidance on the Code of Practice on the Right to Request Flexible Working and Right to Request Remote Working (the “Code”) which was published by the WRC earlier this year following the introduction of the right to request Flexible Working through the Work Life Balance and Miscellaneous Provisions Act 2023 (the “Act”)
Facts
The Complainant, Ms. Karabko, was employed by the Respondent, TikTok Technology Limited. In her contract of employment, her normal place of work was the Respondent’s office in Dublin 2; however as a result of the pandemic the Complainant had primarily worked fully remotely, which was provided for in her contract of employment, since the commencement of her employment in January 2022.
In June 2022, the Respondent communicated its intention to have all staff work on a hybrid working basis through its ’ Return to Office’ (“RTO”) policy. The RTO policy provided for employees to attend at the office on a 2-day a week basis whilst encouraging employees to attend on site 3 days per week. The Respondent permitted the Complainant to work from home for the duration of 2022 on an “individual exception” basis however, in January
2023, the Respondent announced that the option for “individual exceptions” would cease from March 2023 and after this date all employees would be required to cooperate with the RTO policy.
The Complainant continued to work fully remotely which culminated in a disciplinary process and verbal warning being issued. On 11 March 2024, following publication of the Code, the Complainant submitted a request to work remotely on a full-time basis. As part of her formal request, the Complainant provided her reasons which included a lack of suitable accommodation in Dublin for her and her cat, reduction of her commute and improvement in quality of life.
The Respondent, complied with the timelines set out in the Act in its response to the Complainant and, following consideration of the request, refused the request and set out the reasons for the refusal.
The Complainant issued correspondence to the Respondent stating that her needs had not been considered and alleging that the Respondent failed to consider her request in an objective, fair and reasonable manner. Following from this, a meeting took place where the reasons for the Respondent’s refusal were discussed in detail. The Complainant was also offered the option to raise a grievance, which is provided for in the Code, which was not pursued by the Complainant.
The Complainant’s position was that the Respondent did not consider her request in line with the Code or the Act, namely by the Respondent considering only its needs and not hers as well. The Complainant pursued a complaint to the WRC that the Respondent was in breach of its legal obligations.
The Respondent contended that the Complainant’s request was considered, and responded to, by the Respondent in accordance with its obligations under the Act. It was submitted that the Complainant was in effect seeking to have the merits of the Respondent’s decision to refuse the request examined by the WRC, when doing so is expressly prohibited by Section 27 (6) of the Act, as confirmed by the Code.
The Respondent submitted that the fact the Complainant’s request was not granted does not give rise to an actionable breach under the Act.
Decision
The Adjudication Officer (the “AO”) found that the Complainant’s complaints were not well founded. The AO noted that one of the purposes of the Act is to “provide for the entitlement of employees to request remote working arrangements” and practical guidance on how to handle those requests are set out in the Code. The AO was clear that her remit was strictly limited to assessing whether an employer considered a request for remote working in line with the Act and in accordance with the Code of Practice.
The Adjudication Officer stated that there were three distinct duties on an employer who receives a remote working request:
- Section 21(1)(a) of the Act obliges the employer to consider the request having regard to its needs, the employees needs and the requirements of the Code of Practice.
- Section 21(1)(b) of the Act obliges the employer to either approve a request for remote working or notify the employee in writing of its refusal to approve the request within four weeks of the receipt of the request.
- Section 21(2) of the Act provides for an extension of the consideration period of up to eight weeks.
The AO was satisfied that the Respondent had carefully considered the request and had complied with its obligations under the Act and Code of Practice.
Learning points for employers
As a reminder, neither the Code nor the Act give a legal right to flexible or remote working. The Act provides for a right to request flexible or remote working, that an employer must consider that request and provides statutory timelines in which those requests should be considered. The Code sets out steps to assist employers and employees in navigating requests for flexible and remote working, in compliance with the Act.
The above case is helpful in that it reaffirms that the Act and Code provide the right to request remote working, as opposed to the right to work remotely. However, employers should also ensure that they are able to evidence that they have considered any request and have complied with the prescribed timelines; for this reason, we would encourage all employers to document their decision-making process. It is important for employers, if they have not done so already, to ensure that they have a policy on remote and flexible working that complies with the Code as, if they do not and an employee takes a claim under the Act, it will be read against the employer.
A copy of our specimen Flexible Working Policy is available on the members area of our website.
2. Dean Hart v Komfort Kare (ADJ00051923)
Section 13 of the Parental Leave Act 1998
The Complainant presented a complaint to the WRC alleging that his employer, Komfort Kare, had denied him his statutory right to take force majeure leave, which resulted in an extended period of sickness absence.
Section 13(1) of the Parental Leave Act, as amended, sets out the right to force majeure leave, which provides for an employee to leave, with pay, from his employment for ‘urgent family reasons’ owing to an injury or illness of a specific person whereby the ‘immediate presence’ of the employee at the place where that person is, whether at his or her home or elsewhere, is ‘indispensable’
Any infringement on the right to take force majeure leave, including any detriment as a result of exercising the statutory right, can result in an award of up to 20 weeks pay.
Facts
The Complainant notified his employer that his wife was miscarrying and he requested to take force majeure leave, in accordance with Section 13 of the Parental Leave Act 1998. The Respondent agreed to the request.
On the second day the complaint contacted his employer to advise that his wife was still bleeding heavily and was unable to look after their 3 year old son.
The employer responded stating:
“Please note ‘Force Majeure means urgent family reasons where, owing to an injury or to the illness of an immediate relative the presence in the same place is indispensable. As a gesture of good will, the company will take your application into consideration if you furnish us with a letter from the maternity hospital which supports the issues you have outlined, including care instructions and support required, appointment dates. I look forward to hearing from you.”
The Complainant considered the request invasive and insensitive. He subsequently submitted a doctor’s certificate covering the absence.
Decision
The AO considered the relevant authorities which had examined the issue of ‘indispensable’ within the meaning of the Parental Leave Act and the circumstances in which force majeure leave would and would not apply.
Those authorities included:
Julie Murphy v Abtran (ADJ-00045486), Mc Galey v Liebherr Container Cranes Ltd, Giles v Outhaus Group Country Manor Bricks in ADJ 27631, and MJER v Skibal [2018] IESC.
In considering those judgments, the AO determined that the Complainant had been entitled to take force majeure leave and the failure of the Respondent to grant the complainant the leave was in breach of Section 13 of the Act.
The complainant was awarded €7000 in compensation.
Learning Points for Employers
There is limited jurisprudence in relation to force majeure leave, however those authorities that are available demonstrate that employers must apply wider interpretation to circumstances which would be considered as abnormal, exceptional or unforeseeable as well as the grounds in which an employee’s attendance would be ‘indispensable’. Whilst the law does not stipulate a medical certificate to be provided, if one were available, this might assist the employer in considering the request. The employer must of course be mindful of its obligations in relation to processing sensitive data relating to third parties.
Employers must be particularly mindful of the damage to the working relationship, as well as reputational damage, where it adopts a rigid application to the right and denies a request for force majeure leave.
3. McCabe v AA Ireland Ltd [2024] IECC 6
Data protection breach
Facts
The employee (Mr McCabe) was employed by AA Ireland Ltd and was absent form work on sickness leave in August 2022. On the last day of his sick leave, his manager recorded him with his mobile phone as he cut overhanging branches at a relative’s home. The employee challenged the manager, angrily, regarding the recording on the basis that he was wrongfully recorded at home and when he was not at work.
The employee was subsequently suspended in relation to his absence, and his reaction to his manager on the day in question and was eventually dismissed from employment. He challenged the dismissal at the WRC where he was unsuccessful.
McCabe proceeded to lodge proceedings with the Circuit Court alleging that his former employer was not entitled to use, disclose or process his confidential information without prior consent for an unlawful purpose. He alleged that the information was recorded, used, and processed in breach of the GDPR and Data Protection Act 2018 (DPA). He also alleged that the publication of confidential and sensitive information violated his constitutional right to privacy under the ECHR. Negligence, breach of duty and breach of confidence were also alleged against the defendant in the manner it used the plaintiff’s personal data. He claimed damages, including nonmaterial damages for wrongful invasion and breach of his right to privacy. Mr McCabe also sought an order under Section 117 of the DPA directing the defendant to comply with his subject access request and furnish him with a copy of his personal data, including a copy of the Recording. McCabe also sought an order, if necessary, that the former employer account to him for the loss, erasure or destruction of the recording.
Decision
The Court referred to the Circuit Court decision of Kaminski v Ballymaguire
Foods Limited [2023] IECC 5, which set out the legislative provisions of the GDPR and the DPA, which were of particular relevance to this case. Those provisions included the principles relating to the processing of personal data under Article 5(1) of the GDPR and the lawfulness of processing of personal data under Article 6 of the GPDR. The Court also referred to Article 82, which provides for the right to compensation for material or non-material damage suffered by a data subject because of an infringement of the GDPR.
The Court accepted that, whilst the recording was not relied on by the employer in the disciplinary process which resulted in the employee’s dismissal, there was a sufficient causal connection between the act of the Recording and the dismissal itself. Therefore, the Court directed the defendant to account to the plaintiff for the loss, erasure or destruction of the Recording and provide sworn testimony of its current status. The Court expressed concern about the appropriate provision of information to the plaintiff, as the data subject, regarding the destruction or availability of the Recording because it may have assisted his WRC appeal or related litigation.
The Court noted that Mr McCabe enjoyed a right to data collected by his employer which is closely connected to his role. For this infringement, the Court made an award of compensation for the damage suffered by the plaintiff under section 117(4)(b) of the DPA in the sum of €5,500, together with costs. This re-enforces the position that compensation for non-material damages in data protection claims will be modest.
The Court did not uphold the claims of breach of privacy, negligence, breach of duty, and breach of confidence.
Learning points for employers
Employee monitoring, whether covertly or otherwise, is becoming increasingly common in the workplace. Employers must be aware of theirobligations under the DPA and GDPR in respect of processing and storing employee data, as well as the rights of data subjects to access that data.
On 12 September 2024, in the case of Tesco Stores Ltd v USDAW and Others [2024] UKSC 28, the UK Supreme Court unanimously allowed an appeal brought by USDAW (the Union) on behalf of employees and restored an injunction preventing Tesco from firing and rehiring employees for the specific purposes of depriving them of Retained Pay (RP) as it was agreed that RP was a permanent benefit.
The appeal raises fundamental questions about an employer’s right, under contract law, to terminate a contract of employment by giving notice and the remedies for breach of employment contract.
Background
RP was a financial contractual entitlement that was agreed between the Union and Tesco to be a permanent benefit.
In 2007, Tesco closed some Distribution Centres to incentivise existing employees to relocate. Tesco and the Union collectively agreed to provide RP to employees that agreed to relocate.
As this RP was agreed via a collective agreement, the right to RP was then incorporated into those employees’ contracts of employment as an express term.
The RP clause stated that RP would “remain a permanent feature” of an employee’s contractual entitlement, subject to certain qualifications.
A separate clause gave Tesco a contractual right to dismiss employees without cause, on notice.
In 2021, Tesco offered to buy out the right to RP. Tesco informed employees that, if they did not agree to the removal of the RP term, they would be dismissed and offered re-engagement on identical terms, but with no RP term
Some employees refused to accept the offer; the Union then successfully applied to the High Court for an injunction to restrain Tesco from terminating their employment for the purposes of removing their right to RP.
Tesco appealed to the Court of Appeal, who overturned the High Court’s decision to impose an injunction.
Supreme Court (SC)
The SC unanimously restored the injunction and, by virtue of doing so, have restrained Tesco from terminating employees for the purposes of removing their right to RP.
The SC held the employment contracts contained a term implied by fact meaning
Tesco’s right to terminate could not be exercised to deprive employees of their right to RP.
In arriving at that decision, the SC started by interpreting the express RP term.
The SC rejected Tesco’s argument that the RP term simply meant that the RP entitlement was only “permanent” for the contract duration and was subject to Tesco’s unqualified right to dismiss on notice.
The SC stated that such an interpretation would give no substance to the express promise that the entitlement is “permanent”. The correct interpretation of the RP clause was that it would continue for as long as the employee remained employed in the same role, subject only to the qualifications stated within the clause.
Indeed, the SC acknowledged that the right to RP was deprived of value if Tesco could at any time unilaterally terminate the employment; therefore, the right to dismiss was qualified by an implied term not to dismiss in a way that would deprive employees of the right to RP.
The SC found it ‘inconceivable’ that the parties’ objective mutual intention was that Tesco could unilaterally dismiss to deprive these employees of the right to RP.
Importantly, the SC noted that Tesco’s right to dismiss for any other reason was entirely unaffected by this implied term. The SC drew an analogy to employees with entitlement to Permanent Health Insurance (PHI) benefits and the implied term that employer was restrained from dismissing to deprive them of PHI.
On remedy, the SC recognised that an injunction would amount to indirect specific performance of Tesco’s obligation to continue to employ the employees on RP. Whilst the general rule is that specific performance will not be granted: (i) of an employment contract; or (ii) where damages are an adequate remedy, this was an exception to that rule. Here, the SC found that damages would be inadequate and, as there was no breakdown of trust and confidence between Tesco and the employees, the contract could continue. In those circumstances, the injunction was granted.
Commentary
This is a reminder that any contractual term is underpinned by implied obligations by law and fact. Here, the implied obligation that had arisen out of the facts was to not act in a way that deprived the employee of a benefit which they were entitled to. It demonstrates the willingness of the Supreme Court to stand back and assess the reality of the situation. Here it was ‘inconceivable’ that when RP was agreed that the parties intended that Tesco could unilaterally terminate their contracts at any time to deprive them of this permanent benefit to RP.
It is also a noteworthy development from the SC that by issuing the final injunction it was thereby preventing Tesco, a private sector employer, from dismissing an employee for an indefinite period if the purpose of the dismissal is to remove the RP benefit. It may well be the case that we will see more claims for specific performance in breach of contract claims with arguments being made that compensation is an inadequate remedy.
This is another case that casts a bad light on the use of fire and re-hire. This is so when both Northern Ireland and Great Britain are looking at strengthening the rights of workers that includes curtailing the use of fire and re-hire.
LEGAL UPDATES
Implementation of the Employment Permits Act 2024
The new Employment Permits Act will come into force today, Monday 2nd September 2024.
This Act consolidates and modernises employment permits law and will apply to non-EEA nationals who wish to take up eligible employment and residence in the Republic of Ireland.
Main provisions of the Act
The Employment Permits Act 2024 will introduce a number of changes to the existing system, including:
- the introduction of a Seasonal Employment Permit, based on strong labour rights, which will support the seasonal needs of certain sectors.
- the ability to change an employment permit to a new employer after nine months to allow for better opportunities for workers and improve working conditions.
- moving operational details, such as the requirements of the Labour Market Needs Test to secondary legislation, which will allow the system to adapt quickly to changes in the labour market.
- requiring additional conditions such as training and accommodation support for employment permit holders, which will make Ireland a more attractive destination.
- allowing for non-consultant hospital doctors to have a permit which will allow them to work at multiple sites, which will help to further streamline the system.
- allowing permit holders to be promoted within their roles without the need for a new permit.
Seasonal Employment Permit
The new Seasonal Employment Permit is a short-term employment permit which will allow the permit holder to work for a maximum of 7 months per calendar year in a seasonally recurrent employment. It is designed to support targeted economic sectors, such as horticulture and agriculture, in addressing labour shortages and will be renewable across multiple years for the set calendar season. Arrangements for the provision of accommodation and health insurance will be included in the scheme. The permit will be first introduced under a limited pilot scheme later this year with the intention that it commence in early 2025.
Change of employer
The Act introduces a new provision allowing certain employment permit holders to change their permit employer to another employer after a period of nine months has elapsed.
- The change of employer applies to the General Employment Permit (GEP) and the Critical Skills Employment Permit (CSEP).
- The holder of a GEP can apply to change to an employer within the type of employment for which they have been granted a permit.
- The holder of a CSEP can change to an employer across a broader category of employments, for example, different engineering roles. This is because there is a high demand of these skills in the Labour market.
Progression within the role
The Act aims to improve the status and employment opportunities of permit holders by including a provision to allow for promotion and internal transfer in the same company where a permit holder would use the same skills, thus removing the requirement for the permit holder to undergo a new employment permit application process should this situation arise.
Modernised Labour Market Needs Test
The Act also addresses the inflexibility inherent in the Labour Market Needs Test, which requires that a role be advertised across the EEA and in print media prior to a permit being sought. The new Bill will simplify the process by requiring employers to publish vacancies online only and will reflect modern advertising practices.
The Department of Enterprise, Trade and Employment has published additional information in relation to the 2024 Act which is available here
A copy of the of the Employment Permits Act 2024 Is available here
CASE LAW UPDATES
ADJ-00037668
Matt McGranaghan (Complainant) V MEPC Music Limited
Unfair dismissal, failure to pay notice pay, failure to pay holiday pay, failure to compensate for Sunday working
Background
This case is of particular significance to employers as it is the first WRC decision on employment status since the Supreme Court handed down its judgement in The Revenue Commissioners v Karshan Midlands t/a Domino’s Pizza in October 2023. You will recall from our update here that the Supreme Court found Domino’s Pizza delivery drivers in this case (which is a tax case) ought to be treated as employees and not as independent contractors.
The decision of the Supreme Court was the final instalment in a long series of adjudications which originated in the Tax Appeals commission.
Legal arguments centred on the key components required to demonstrate employee status, with mutuality of obligation central to the arguments. This principle being that an employer is obliged to offer, and an employee is obliged to accept, any work.
However, the Supreme Court took the view that the term ‘mutuality of obligation’ has ‘generated unnecessary confusion’ and should be ‘avoided’ going forward; removing the notion that mutuality of obligation is a decisive or determinative factor in establishing employee status.
The Court reiterated the importance of considering all the circumstances to identify features that are consistent with an employment contract or a self-employed/independent contractor, and considered the following five steps as being determinative:
- Does the contract involve the exchange of wage or other remuneration for work?
- If so, is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party, to the employer?
- If so, does the employer exercise sufficient control over the employee to render the agreement one that is capable of being an employment agreement?
- If these three requirements are met, the factual matrix and working arrangements must be considered.
- Is there anything in the particular legislative regime under consideration that requires the court to adjust or supplement any of the foregoing?
Adjudication Officer (AO) Caroline Reidy considered the Supreme Court Judgment when determining the claim below.
Facts
The Complainant was a fiddle player who, since 2013 had performed with leading Irish country music singer, Michael English and his band. Following a series of disputes between Michael English/his manager regarding a variety of issues, including the Complainant’s employment status, he was advised, by an email, in September 2021 that ‘his services were no longer required’. The Complainant asserted that he was an employee of the Respondent and his classification as self-employed by them was a ‘sham’.
He presented the following complaints to the WRC:
- That he had been unfairly dismissed.
- That he had been dismissed without notice pay.
- That he did not receive compensation for Sunday working.
- That he did not receive statutory annual leave.
- That he did not receive payment for public holidays.
- That he did not receive a statement of his core terms of employment.
He relied on the following facts to demonstrate that he was an employee:
- The Respondent directed him what songs to play/rehearse and when to do so.
- He was required to wear a uniform.
- He was paid each week by the Respondent for gigs performed.
- The Respondent covered expenses, including travel and accommodation.
- He was required to undertake rehearsals for gigs which was also paid at a set rate.
- If he was unavailable for work, the Respondent was solely responsible for arranging a substitute in his absence.
- He had contacted the Department of Social Protection who conducted a Scope investigation and found that he was ‘employed under a contact of service and is an employee’.
The Respondent asserted that there was no mutuality of obligation between the parties, demonstrated by the Complainant’s refusal to accept certain gigs and that he was free to work elsewhere at any time. The Respondent’s representative also stated that the very nature of a band means that all musicians will have to take direction/instruction from one person who will control the performance. The Respondent also contended that the Complainant’s claims had not been made within the statutory time period of 6 months, or even within the further 6 month extended period provided for by the legislation taking into consideration the prolonged period in 2020 that the Complainant had not worked for the Respondent due to the COVID pandemic.
Decision
Based on the 5-step test set out by the Supreme Court (detailed above), and other relevant authorities, as well as the evidence presented by the parties, AO Reidy found the Complainant met the requirement of the legislation and case law to be considered an employee.
Having found that the Complainant was deemed to be an employee, AO Reidy then considered the relevant chronology provided and found that the dismissal was deemed to have taken effect on 22nd September 2021 and, as the Claim to the WRC was presented on 4th March 2022, the claims were in time.
The AO then determined each of the separate claims that the Complainant had presented, as set out above, and found the Complainant’s claims had been made out. The Complainant received a total of €43,840 in respect of his complaints.
Learning points for employers
Employers should review the working arrangements with independent contractors, having regard to the 5-step test set out by the Supreme Court in Karshan, to ensure they have been properly categorised, and they are not falling foul of the employment protections for employees.
Any Member who requires further assistance in relation to this issue should contact the ROI legal team.
LEGAL UPDATES
- Extension of paid Parent’s Leave and Benefit
The Parent’s Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2024 has been signed into law and, with effect from 1st August 2024, parents will be able to avail of nine weeks paid Parent’s Leave and Benefit during the first two years of a child’s life, or in the case of adoption, within two years of the placement of the child with the family.
The leave will also apply retrospectively to parents who have taken seven weeks’ Parent’s Leave prior to August 2024 (i.e. they will now have an entitlement to an additional two weeks) if their child had not reached the age of two when the leave is taken (in the case of an adopted child it is still within two years of the date of placement of the child when the leave is taken).
A copy of the Parents Leave and Benefit Act 2019 is available here.
A copy of the Parent’s Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2024 is available here
Members should update their internal policies accordingly.
- The Automatic Enrolment Retirement Savings System Act 2024
The Automatic Enrolment Retirement Savings System Bill 2024 has been passed by both Houses of the Oireachtas and on 9th July 2024 was signed into law by President Higgins.
The Act provides for a new retirement savings scheme for workers who earn over €20,000 and who are not already members of a pension scheme.
The Act also establishes an independent public body, the National Automatic Enrolment Retirement Savings Authority (NAERSA) to administer the system and ensure compliance, under the auspices of the Department of Social Protection.
Tata Consultancy Services (TCS), a leading global IT services, consulting, and business solutions organisation, has been selected to provide this administration as a managed service.
NAERSA will identify and enrol participants, collect and pool contributions, arrange for the investment of contributions, manage participant accounts including opt-outs, suspensions and opt-ins, and facilitate the payment of savings at retirement. This will mean employers will have minimal administrative work in relation to Auto Enrolment.
We previously set out details of the proposed scheme to members here, however we have summarised the main provisions below.
- All employees not already in an occupational or equivalent pension scheme, aged between 23 and 60, and earning over €20,000 across all of their employments, will be automatically enrolled. Exempt employment is defined in chapter 2 of the Act.
- Auto Enrolment will commence in 2025 on a gradual phased basis over a 10 year period. Initially employer and employee contributions starting at 1.5% and increasing every three years by 1.5% until they eventually reach 6% by Year 10 (2034).
- Matching contributions will be made by employers to those contributions made by employees up to a maximum of €80,000 of earnings.
- The State will also top up contributions by €1 for every €3 saved by the employee, up to a maximum of €80,000 of earnings. This is in addition to the €3 that will also be contributed by the employer.
- The system will be voluntary but will operate on an ‘opt-out’ rather than an ‘opt-in’ basis.
- Eligible employees will be automatically enrolled/ ‘opted-in’ but will have the choice after six months’ participation to opt-out or suspend participation.
- Participants will have a range of four retirement savings strategies to choose from. Those who do not express a preference for any strategy will be enrolled into the default strategy.
- Workers moving between jobs will not have to change pension schemes or join a new scheme. They will remain members of the Auto Enrolment scheme on a ‘pot-follows the member’ basis. In addition, people with multiple employments will have their pension savings consolidated into one AE ‘pension pot.’
A copy of The Automatic Enrolment Retirement Savings System Act 2024 is available here. We will keep Members updated of the provision of Regulations for any matter referred to under the Act.
SUMMER 2024
LEGISLATIVE UPDATE
- Changes to collective redundancies- Insolvent Employers
With effect from Monday 1 July 2024, a number of important changes will be coming in relating to collective redundancies.
The Protection of Employment Act 1977, which governs collective redundancy rules, has been amended to:
- Remove the exemption from notification requirements in respect of collective redundancies caused by the employer’s insolvency. This means all collective redundancies are subject to a 30-day notification period before they take effect, including where the employer is insolvent.
- Provide that employees may seek redress from the Workplace Relations Commission (WRC) where their employer makes them redundant before the 30-day notification period finishes. This change applies to all collective redundancies, not just those precipitated by insolvency. This is in addition to employees’ existing right to make a complaint to the WRC should their employer fail to consult with or provide information to their representatives.
- Align the 1977 Act with case law of the Court of Justice of the European Union (CJEU), by explicitly providing that the employer’s obligations must also be complied with by a liquidator or similar appointee, where they are managing the collective redundancy process in an insolvency situation.
- Provide that, where a liquidator or similar appointee is managing the collective redundancy process in an insolvency situation and they fail to comply with their duties under the Act, the WRC may prosecute them, with a maximum fine on conviction of €5,000.
- Update the methods by which employers can notify the Minister of proposed collective redundancies.
For more information on the changes being introduced by the Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 see here.
- Increase in rate of Pay for Contract Cleaning Industry
The Employment Regulation (Amendment) Order (Contract Cleaning Industry Joint Labour Committee) 2024 (ERO) came into effect on 1 June 2024 providing for an increase in the hourly rate of pay for the contract cleaning industry.
The Employment Regulation Order (ERO) fixes the statutory minimum rates of pay and other conditions of employment for workers employed in the contract cleaning industry.
As of this date, all workers aged 18 and over in the sector are entitled to a minimum rate of pay of €13.30 per hour.
A full breakdown of the hourly rates of pay are detailed below:
Age | Hourly Rate of pay |
Under 18 | €9.31 |
18 years old | €10.64 |
19 years old | €11.97 |
20 years old+ | €13.30 |
All the terms and conditions from the previous Employment Regulation Order (ERO) are maintained. For more information see Contract Cleaning – Workplace Relations Commission.
- Review of the Code of Practice on access to Part-Time Working
The Workplace Relations Commission has launched a review of the Code of Practice on access to Part-Time work (SI No. 8 of 2006).
The Code of Practice, which was introduced in 2006, sets out best practices for employers when considering to a request by workers to transfer from part-time to full-time work or to increase their working time should the opportunity arise.
The introduction of a Code of Practice on access to part-time working accords with the principle of minimising the potential for indirect discrimination in relation to part-time working and introduces positive measures to eliminate obstacles and barriers and encourage greater participation in employment on a number of grounds, as set down in the Employment Equality Acts 1998-2004.
The Code seeks to:
- Promote the development of policies and procedures to assist employers, employees, and their representatives, as appropriate, to improve access to part-time work for those employees who wish to work on a part-time basis;
- Promote discussion and encourage employers, employees, and their representatives, as appropriate, to consider part-time work and to address any barriers that may exist;
- Stimulate employers – where consistent with business requirements – to provide wider access to part-time work options;
- Provide a framework and practical guidance on procedures for accessing part-time work;
- Inform those who are interested in part-time work.
New pieces of legislation have been introduced since the Code was published which may impact on its effectiveness for certain employers and employees, such as the introduction of the European Union (Transparent and Predictable Working Conditions) Regulations 2022 as well as the introduction of banded hours of work, provided for by the Employment (Miscellaneous Provisions) Act 2018.
The WRC is inviting submissions from interested parties on the matter to be sent to it on or before 17:00 on Friday, 12 July 2024. There is no set format specified for stakeholders who wish to make a submission to the WRC.
The Association will submit a response to the WRC on behalf of Members. Any Member that wishes to feed into the review should send their submission to kathryn@employersfederation.org by Wednesday 10th July 2024 to allow sufficient time to formulate a detailed response. Members are encouraged to detail the points they wish to raise about the Code of Practice and how they have found its operation in the workplace.
For more information on the review of the Code of Practice please see here.
- The Future of Work- A Review of Labour Market and Workplace Relations Challenges.
The WRC commissioned the University of Limerick (UL), to carry out a piece of research on Work and Employment Transformations in Ireland: A Review of Labour Market and Workplace Relations Challenges. The WRC commissioned the University of Limerick, to carry out a piece of research on Work and Employment Transformations in Ireland: A Review of Labour Market and Workplace Relations Challenges.
The report examines how four key developments – inflation, recruitment and retention challenges, technology (with a particular focus on remote work and artificial intelligence), and climate change – are impacting work and workplace relations in Ireland.
A summary of some of the key interview findings are set out below:
Inflation
Inflation was viewed as having greater priority for employers and workers given its immediate impacts on business costs, incomes, and related, wage negotiations. Inflation was inextricably linked to recruitment and retention challenges with significant pay rises for certain roles with acute labour shortages.
Interviewees expected inflation to be an ongoing issue for the medium term with some business closures and weakened economic growth, but they also expected strong labour market activity in terms of the recruitment intentions of employers.
Recruitment and retention
Interviewees reported a prevailing tight labour market in Ireland with some sectors such as hospitality having particularly severe difficulties recruiting workers. Skills gaps were evident across all sectors but in general, interviewees noted a need for developing digital, interpersonal, and managerial skills. The availability and costs of housing, childcare costs, and cost of living crisis were identified as key challenges in recruiting and retaining workers from within Ireland and from abroad.
International recruitment was identified as a means of addressing labour and skills shortages with the work permit schemes helping to some extent – although concerns were raised whereby certain jobs found it difficult to access the scheme as well as high fees for work permits and inability to bring families to Ireland.
There were concerns about the participation rate of persons with a disability and men over the age of 50.
Technology
There were mixed views on the predicted impact of digitalisation and automation on job quantity. Some interviewees noted that there was little evidence of job loss to date whilst others felt that there was a real threat to jobs. The potential threat to jobs needed to be ameliorated by an emphasis on upskilling/reskilling. Technology and automation are viewed as having the potential to contribute to safer working environments, smarter ways of working, and increased leisure time for workers.
Remote/hybrid working was cited as presenting many opportunities and challenges. There was a concern about the potential for a ‘work life balance privilege gap’ where those working under hybrid arrangements are more likely to have flexible working compared to those who do not work remotely. Of all the forms of technological change discussed, AI was most frequently cited as likely having the greatest consequences for work.
Issues around GDPR and the potential monitoring of employees’ work raised questions about the suitability of existing legislation for the workplace relations implications of technological change.
Climate change
Interviewees recognised the importance of climate for societies and economies, and that the climate crisis will impact the labour market, jobs, and employment but strategic planning and action have tended to be limited.
There is uncertainty over the wider workplace relations impacts of climate change, and these may take 10-20 years to emerge. Significant changes to the existence and nature of jobs because of climate change is expected and more upskilling and re-skilling is necessary, particularly building-related skills.
Overall, there was no sense that significant conflict will arise from climate change, or from mitigation and adaptation measures, if there is adequate planning for job changes. Conflict is as likely between employers/workers and the state as between workers and employers with the state expected to play a significant role in managing the consequences of climate change.
The full Report can be accessed here.
CASE LAW UPDATE
- An Employee v A Service Provider to Financial Services
Sick Leave Act 2022
Facts
The complainant employee worked as a customer service adviser at an unidentified service provider to the financial services sector. He was issued with a verbal warning in September 2023 following “a number of unplanned absences” from work that year. The employee stated that his absences were because either he or members of his family were unwell. The employee did not have an underlying medical condition.
The employee said he became “very sick with flu-like symptoms” at work on October 12th 2023, and went out sick for a day and a half, submitting a doctor’s note to his employer and availing of his statutory sick pay rights under the Act.
After this he was disciplined by the employer and received a written warning based on his level which was upheld in an internal appeal.
The employee asserted that he had been penalised for “exercising his rights under the Act” when his employer issued the warning and that in accordance with the legislation he was entitled to be treated ‘as if he had not been absent’ during a period of statutory sick leave.
The employers’ position was that the worker had been absent six times in ten months, totalling 11.5 days, which it regarded as a “significantly high” level of absence and “beyond what is deemed as an acceptable level of attendance.”
It told the WRC it was “entitled to discipline” the employee, adding that “bad timekeeping” and “unauthorised absence” were listed as misconduct in its disciplinary policies. The company said that it had at all times followed the fair procedures and the relevant statutory code, and denied any breach of the Sick Leave Act.
Decision
The Adjudication Officer (AO)found that the warning issued to the employee in November 2023 was directly “linked to the complainants certified sick leave” on 12th October 2023 and as such was a breach of the Act. Whilst she accepted the company had followed its attendance and disciplinary policy, she found that by taking into account the worker’s absence on statutory sick leave when it imposed the written warning, the employer was in breach of the legislation.
The employee was awarded 3 weeks’ pay, in excess of €1400, for breach of the Sick Leave Act 2024.
Learning points for employers
This decision will come as a surprise to many employers as it suggests employers will not be able to take action against an employee, or take into account, any absence which occurs during a period of statutory sick leave where the employee is in receipt of statutory sick pay.
When considering the intention of the legislation, we believe that the decision Is wrong and expect that an appeal will be lodged to the Labour Court by the employer.
The WRC decision occurs against the backdrop of doubts as to whether the scheme will be extended as Initially planned. When the scheme was announced in 2022 then-Tánaiste Leo Varadkar said the statutory scheme would expand a worker’s basic entitlement to seven days’ leave in 2025 and 10 days in 2026 – but the further expansion of the scheme is now in doubt.
In answer to questions in the Dáil, Minister of State at the Department of Enterprise, Emer Higgins TD, stated that any further expansion of the scheme in 2025 would be subject to an economic assessment highlighting that the business community have raised concerns about the overall impact of increased labour regulation on the cost of doing business.
SPRING 2024
LEGISLATIVE UPDATES
- Publication of Automatic Enrolment Retirements Savings System Bill 2024
Further to our previous updates, we can confirm that on 5th April 2024, the Government published the long-awaited Automatic Enrolment Retirement Savings System Bill 2024 (AE Bill).
The publication of the landmark legislation sets out the framework for the introduction of a pensions auto enrolment savings systems in Ireland.
Under Auto-Enrolment (AE), employees will have access to a workplace pension retirement scheme which is co-funded by their employer and the State.
Announcing the publication of the Bill, Minister Humphreys stated that the introduction of the legislation ‘represents one of the biggest reforms of the pension system in the history of the State’.
It is intended that the first ‘in scope’ workers, thought to be approximately 800,000 employees, will be enrolled in January 2025, and a new public body, the National Automatic Enrolment Retirement Savings Authority (NAERA), will be established to administer the system.
‘In scope’ employees will be those who are aged between 23 and 60, whose gross pay exceeds €20,000 and who are not already in “exempt employment”. Exempt employment is broadly defined as when an employee participates in a pension scheme or personal retirement savings account (PRSA). At present there is no minimum threshold on employee or employer contributions for employment to be considered as “exempt employment”.
Employers who fail to meet their obligations in respect if auto enrolment will be subject to penalties and potential prosecution.
We have summarised below, the key details of the draft Bill which is now making its way through the various stages of the Oireachtas.
- AE will apply to employees between the ages of 23-60 whose gross pay is in excess of €20,000. Contributions based on gross pay of up to a maximum €80,000.
- Expected enrolment date in January 2025 (subject to legislative process being completed) and will be phased in over a 10-year period (see below)
- Contributions will increase on a gradual incremental basis as set out in the table below.
Years 1-3 | Years 4-6 | Years 7-9 | Years 10 onwards | |
Employee Contribution | 1.5% | 3% | 4.5% | 6% |
Employer contribution | 1.5% | 3% | 4.5% | 6% |
State contribution | 0.5% | 1% | 1.5% | 2% |
TOTAL | 3.5% | 7% | 10.5% | 14% |
- The AE authority will notify employers of any ‘in scope’ employees via payroll notification of contributions to the AE system. Upon receiving such notification employers must:
- Calculate, deduct and pay employee contributions to the AE authority
- Calculate and pay employer contributions to the AE
- Employees will be eligible to ‘opt out’ in months 7 & 8 or suspend their contributions. Employees who opt out may be entitled to a refund of their own contributions. However, the Bill does not currently provide for a refund of the employer’s contributions
- Employees who leave the plan or suspend their contributions will be automatically re-enrolled in the scheme after 2 years if they are still eligible.
- If any employees leaves employment, their pension pot, and enrolment in the scheme is unaffected, and will continue in their new employment.
The government has produced guidance for employees /employers on auto enrolment, including a FAQs section, which can be accessed here.
The draft Bill is also available to view by visiting here.
- Publication of the General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill (the General Scheme)
The government has recently published the General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill (the General Scheme). This Bill proposes to introduce a ban on employer enforced mandatory retirement ages that are below the state pension age of 66, where the employee does not consent.
Under the Bill, as currently drafted, an employee whose employer has a mandatory retirement age in operation which is earlier than the state pensionable age:
- who wishes to remain in employment until that date,
- can make written notification to their employer that they do not consent to the operation of the employer’s mandatory retirement age.
- Employee must provide at least 3 months written notice.
- If the employer proceeds to dismiss, the employee will be able to seek redress under the Unfair Dismissals Act or the Employment Equality Acts, but not both.
Currently in Ireland there is no statutory mandatory retirement age for private sector employers. Any provision for a mandatory retirement age in private sector should be set out in the employees’ contract of employment. Additionally, any employer who wants to enforce on mandatory retirement age must demonstrate that it is a proportionate means of achieving a legitimate business aim i.e. objectively justify it. If the employer is unable to objectively justify it, then any age-related discrimination will be successful.
The Workplace Relations Commission (WRC) Code of Practice on Longer Working (the Code) sets out best industrial relations practice in managing engagement between employers and employees in the run up to a mandatory retirement age. It also sets out a number of potential legitimate aims for having a mandatory retirement age in the first place, these include:
- intergenerational fairness (allowing younger workers to progress);
- motivation and dynamism through the increased prospect of promotion;
- health and safety concerns (generally in more safety critical occupations).
Decisions from the WRC and Labour Court in recent years have highlighted the difficulties for employers in operating mandatory retirement ages. However, in the recent case of Deasy v Daughters of Charity Child and Family Service (see below) the Workplace Relations Commission found that the employer could successfully rely on a mandatory retirement age within their workplace.
If you currently have a mandatory retirement age in place which is below the state pension age, you should carefully consider if you can continue to justify retaining it. In our view this may be difficult to do without a particularly strong business case. If you have any concerns about your ability to justify it, then you should review and amend your policy to increase your mandatory retirement age in line with the statutory pension age. Having a mandatory retirement age of 66 or above will avoid the inherent uncertainty in dealing with notices of objection and will be easier to justify in the event of a challenge.
- IN FOCUS- The implementation on the Adequate Minimum Wages Directive.
Recap
On 14th September 2022 the European Parliament voted to approve a directive on adequate minimum wages across member states. The Directive was subsequently published on 19thOctober 2022 and must be transposed by member states by 15th November 2024.
What does the Directive require Member States to do?
The Directive aims to improve the conditions of all workers in the EU to promote ‘economic and social progress’ ensuring that all workers have protection of a guaranteed minimum wage. Interestingly however the directive does not require Member States to have a minimum rate of pay for workers.
The Directive has 3 sets of measures:
- To increase the number of workers who are covered by collective bargaining on wages.
- For those countries with statutory minimum wages (which includes Ireland) they must put in place clear and stable criteria for minimum wage setting, indicative reference values to guide the assessment of adequacy and to involve social partners in the regular and timely updates of minimum wages.
- To provide for improved enforcement and monitoring of the minimum wage protection established in each country. The Directive introduced reporting by Member states on its minimum wage protection data to the European Commission.
The Directive does not require member states who currently do not have national minimum rates of pay to introduce same, nor does it intend to set a figure for what minimum wage should be.
The Directive seeks to promote and strengthen collective bargaining on wages. Where less than 80% of workers are covered by collective bargaining, member states are tasked to establish an action plan to increase the percentage in conjunction with social partners (i.e. trade unions and business organisations). This action plan must set out a clear timeline as well as concrete measures to increase the rate of collective bargaining coverage and must be regularly reviewed and updated where necessary.
Currently, there is no statutory recognition process in ROI. Recital 25 of the Directive is clear however thar “the threshold of 80% of collective bargaining coverage should only be construed as indicator triggering the obligation to establish an action plan” (our highlighting) and not a mandatory threshold.
What impact will this have on employers?
It is unclear at present what legislative changes, if any, are required to give effect to the Directive and what immediate impact this will have on employers. We expect that employers will see an increase in collective bargaining in their workplaces in the years ahead.
There has been ongoing dialogue on the issue of collective bargaining through the Labour employer Economic Forum (LEEF). LEEF have made a number of recommendations including funds being made available from the National Training fund to both employers and trade unions for training /upskilling in collective bargaining.
Ireland also has a national minimum wage in place, governed by the National Minimum Wage Act 2000. The Low Pay Commission (the “LPC”) is the consultative body tasked with making recommendations to the Minister regarding a national minimum hourly rate of pay. Each year the LPC examines the national minimum hourly rate of pay and makes a recommendation to the Minister. This recommendation must have regard to various factors including: changes in earnings; income distribution; the level of unemployment and productivity; the need for job creation; the likely effect that any proposed order will have on levels of employment; the cost of living and; national competitiveness. A detailed report accompanies each recommendation. It is expected that the current arrangement in ROI will satisfy the obligations under the Directive.
On 20th March 2024, Simon Coveney, Minister for Enterprise, Trade and Employment was asked in the Dail about how the Directive will be transposed into Irish law. He confirmed that officials were obtaining legal advice to assess the legal obligations under the directive as well as transposition options.
We will keep members informed on any updates from Government as and when they are published.
Policy Update
Members are aware that the WRC published the Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working and we updated our suite of specimen documentation to include a Flexible Working Policy and Remote Working Policy. These have been emailed to Members on our mailing list and are also available in the ROI Members area of our website.
CASE LAW UPDATE
Age Discrimination, employer enforced mandatory retirement age.
Facts
Ms Deasy (D) was employed by the Respondent as a Family Centre Manager. Her contract of employment stated that a mandatory retirement age of 66 applied, albeit the Respondent’s policy stated that the retirement age was in fact 65.
Prior to her 66th birthday, D asked for her employment to be extended for a year. The Respondent refused the request on the basis that no colleague had worked beyond this age. D complained that no reasons were provided for the refusal and submitted a grievance about applying the mandatory retirement age. The respondent did not uphold her complaints. D subsequently complained to the WRC for age discrimination arising from the employer’s decision to terminate her contract of employment when she reached 66.
At hearing in the WRC, D stated that she had been discriminated against by the employer on grounds of age as it could not demonstrate that the operation of its mandatory retirement age was a proportionate means of achieving a legitimate aim. The Respondent admitted at hearing that a very limited number of staff remained in employment beyond 66 years of age. The Respondent’s case was that those were limited and unique situations as progression or promotion to those roles were not possible. This meant that those unique situations did not affect its aim of careers progression for younger employees.
The Respondent relied on a number of grounds to justify the operation of its mandatory retirement which included:
- intergenerational fairness – to allow succession and promotional opportunities;
- an objective of increasing staff motivation and dynamism through the increased prospect of promotion; and
- assisting staff retention and creating a balanced age structure across the organisation.
The Respondent gave evidence that there was an increase in staff turnover, which they argued was mainly due to lack of opportunity. The Respondent stated that in 2023 it lost three high potential employees due to lack of progression or promotional opportunities.
Decision
The Adjudication Officer found the Respondent did not communicate their legitimate aims to staff that underpinned their retirement policy. However, there was sufficient evidence to demonstrate that the Respondent was taking measures to help retain staff and their mandatory retirement sought to promote those aims. The WRC found that D’s retirement was objectively and reasonably justified by these legitimate aims and the means of achieving those aims were proportionate, appropriate, and necessary.
Learning Points for Employers
Whilst this latest decision on the issue of mandatory retirement ages will be welcomed by employers, it should be read with caution. Generally, decisions from the WRC and Labour Court demonstrate that employers must be able to clearly and evidentially demonstrate the need for a mandatory retirement age and that it is consistently implemented in the workplace.
1. ADJ-00042625 – Wim Naude v University College Cork
Unfair Dismissal, Remote Working
Facts
Mr Naude (N) was a Dutch economics scholar and was hired as a Professor of Economics by University College Cork (‘UCC’) during the Covid-19 pandemic. Given the pandemic N initially taught fully remotely while residing in the Netherlands.
Due to difficulties obtaining appropriate accommodation for himself and his family, in the 2021/2022 academic year, N only attended UCC on campus for one week each month. N resided in the Netherlands the remainder of the time.
UCC required the professor to be based in Cork and had made this clear at the time of his appointment. N wrote to UCC on 1 August 2022 suggesting two options in respect of his work for the upcoming academic year 2022/2023:
- Continuation of his full workload in the ‘blended format’ he had been working.
- 33% reduction of hours (unpaid leave).
In response to his proposal, and without any warning or further discussion from anyone in UCC, N received an email from UCC’s HR Director dismissing him with 3 months pay in lieu of notice. UCC alleged that his contract was ‘frustrated’ by his actions and was now ‘null and void’.
N brought a claim of unfair dismissal to the WRC.
Decision
N argued that he was unfairly dismissed, without warning or adherence to any internal procedures, fair process, or the principles of natural justice. He reiterated his intention to move to Cork, but the accommodation difficulties prevented him from doing so. N further added that he believed that UCC failed to adequately support him with his relocation.
UCC in their response and evidence stated that N had delayed his relocation and that 20 months into his employment, and that his proposal regarding ‘blended’ working was not acceptable as it did not meet the university/student’s needs. UCC asserted that N had fundamentally breached his contract of employment by his failure to relocate to Cork and as such he contributed entirely to his dismissal which was, in any event, fair and reasonable.
Decision
Unsurprisingly, the Adjudication Officer (AO) found that N had been unfairly dismissed in what she described as ‘astonishing’ acts on behalf of the employer. AO found it bizarre that the respondent continued to argue that the dismissal was fair at hearing despite following no procedure, not adhering to the legislative framework or the principles of natural justice.
In her decision, the AO reiterated that if an employee is at risk of any disciplinary sanction, including dismissal, then they are entitled to the benefit of fair procedures and natural justice. These are the minimum standards provided in Code of Practice on Grievance and Disciplinary Procedures, with a right of appeal.
In recognition of the impact of UCC actions, AO directed UCC pay him the maximum monetary awards provided for by the Unfair Dismissals Act. In directing this, AO took into account N’s financial losses, his loss of the ‘Professor’ title and his inability to gain consultancy as he was not attached to a state university. As such N received an award of €300,000.
Learning point for employers
It is critical that employers adhere to the Unfair Dismissals Act, the WRC Code of Practice on Grievance and Disciplinary Procedures as well as internal procedures when dismissing an employee. Where the dismissal is because of alleged misconduct, employers must ensure that the principles of fair process and natural justice are also not infringed. Employees must be provided with written notice of the allegation prompting the employer to consider dismissing or taking action against them and have the opportunity to respond to those concerns before a decision is made. The employee should also be afforded the right to appeal the decision.
The timing of this decision is particularly apt following the introduction of The Statutory right to request flexible and/or remote working in April 2024 which will undoubtedly see a rise in requests by employees to work flexibly/remotely, particularly as many employers continue to experience difficulties in getting employees back onto the office post covid.
The WRC Code of Practice sets out a number of steps that an employer must take when considering an employee’s request. Whilst an employer is not obliged to grant a request, failure to follow the code may be taken into account as evidence.
The Introduction of Flexible Working & Right to Request Remote Working & Code of Practice on Handling Requests for Flexible & Remote Working
We write further to our ongoing updates in respect of the implementation of the outstanding aspects of the Work Life Balance Act and Miscellaneous Provisions Act 2023. On Thursday 7th March 2024, Minister for Enterprise Trade and Employment, Simon Coveney TD confirmed that the eagerly awaited final instalments of the Work Life Balance and Miscellaneous Provisions Act 2023 (i.e. the right to request flexible working and the right to request remote working) were introduced. On the same date, Minister Coveney, also confirmed that, in consultation with Minister O’Gorman, he had also approved and published the WRC Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working.
Minister Coveney stated:
“I am pleased to announce that the right to request remote working arrangements is now available to all employees. Remote working became a new norm for many employers and employees in the wake of Covid-19 and it is clear it is here to stay. This Government committed to facilitating and supporting remote working, to reduce our time commuting and to enable families to spend more time together.
The approval and publication of the Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working will support employees to avail of their rights and employers to operate under the Act.”
The Right to Request Flexible Working
The right to request Flexible Working applies to parents of children under 12 year of age (16 if the child as a disability) and those with caring responsibilities. Although an employee can make a request from day 1 of employment, the arrangement cannot commence until the employee has 6-month’s service. The right to request flexible working for parents and carers transposes Article 9 of the EU Work Life Balance Directive. Ireland has now fully transposed the Directive.
All employees will have the right to request remote working but there is no obligation to approve this request.
The Right to Request Remote Working
As with Flexible Working requests, employees can make a Remote Working request from their first day of employment but must have 6 month’s employment before any arrangement starts. Any request must be made at least 8 weeks before the date the employee wants to start the proposed arrangement. Employers must respond to the request within 4 weeks of receiving it, with the option to extend by a further 4 weeks if required.
The Code of Practice
The Code of Practice was developed by the Workplace Relations Commission (WRC), in consultation with trade unions and employer representative bodies. Employers Federation provided a response to the consultation on behalf of our members. The Code provides guidance to employers on how to manage a request and what factors they should consider when deciding whether to grant the request or not. It is not an offence to fail to follow the Code, but a failure to do so is admissible in evidence before the WRC in any employment rights claim.
The Code provides guidance on how to handle a range of situations which may arise when considering a request as well as those that may occur when a request has been granted. Very helpfully, the Code also includes templates documents and guidance on implementing a work life balance policy.
The Code stipulates the time frame that Employers must comply with when considering request for Flexible Working or Remote Working is within 4 weeks of receiving the request, with the option to extend by a further 4 weeks if required.
When responding to the request for Flexible Working or Remote Working , the Employer must either:
- Approve the request and include an agreement prepared and signed by the employer and employee which sets out the details of the agreed arrangement, the start date and duration, of the arrangement, or;
- Provide notice in writing informing the employee that the request has been refused and the reasons for the refusal, or;
- Provide notice in writing informing the employee that more time is needed to assess the request and set out the length of the extension.
Employers and employees are obliged to have regard to the Code when considering applications for remote working arrangements. Employers must also have regard to the Code if terminating a flexible working arrangement. Employees will be able to refer a dispute to the WRC where an employer fails to fulfil their obligations under the Act and the Code will be admissible in evidence in proceedings before a court, the Labour Court or the WRC.
Where a complaint is made about the right to request Remote Working or Flexible Working, the Code confirms that the WRC will not consider the merits of any application but rather the process that the employer has followed, or failed to follow, when reaching its decision.
The maximum award for a breach of the right to request Remote Working is 4 weeks’ pay and for a breach of the right to request Flexible Working is 20 weeks’ pay. Employers must keep specific records of Remote Working and Flexible Working arrangements taken by employees for up to 3 years or risk a fine of up to €2,500.
We will carefully consider the contents of the Code, including the specimen documentation, before finalising our specimen Flexible Working Policy.
Our latest ROI circular is available for download using the link below.
Our Annual Employment Law & HR Conference was held at the Crowne Plaza on 27 September 2023.
This year our Conference was fully booked and we were delighted to be joined by so many managers and HR professionals from both Member and non-Member organisations.
Our Conference is our flagship event of the year and it’s a great opportunity for networking amongst the various businesses and to catch-up on a personal level.
Importantly, it is also a day full of learning with lots of insights and practical take aways.
Karen Moore, Head of Training (NI & ROI) welcomed all delegates and opened the day.
The morning session then started with Kathryn O’Lone, Head of ROI & Business Improvement leading us through the most topical cases of the year and providing key learnings for employers. Amongst the variety of cases covered, Kathryn looked at the balancing of competing beliefs in the workplace and the latest decision around menopause in the workplace.
Next we had a very practical “What if” session from Sara Plower, Employment Lawyer dealing with the complex issues that can arise when managing absence such as ‘When can you withhold sick pay?‘ and ‘What if they refuse to attend OH?’
After the mid-morning break we heard from our three external speakers. Sharon Didrichsen is the Founder and Managing Director of Specialisterne NI, an organisation whose aim is to help neurodivergent people secure and sustain rewarding careers. Sharon provided a real insight into how businesses can unlock the potential of neurodivergent persons.
Sarah McKay, Vice President of Service Delivery at Concentrix followed with ESG, ‘What does it mean?’ identifying the why in ‘Why even do it?’ and provided a practical pathway explaining how a business can develop their ESG strategy.
The Federation was then privileged to be joined by Vice President of OITFET, Maxine Orr who delivered a thoroughly engaging session overviewing of the process of Judicial Mediation in NI. The Vice President was able to give us an insight into how it is working, including up to date statistics and experience of the Tribunal to date.
Lunch provided a further opportunity to network and catch-up.
After lunch, Kathryn O’Lone lead us through a panel session with: Helen McCann, HR Manager at Kyocera AVX UK; Bridgeen Mullin, Head of Employee Relations – Senior Vice President, Fintru; Sharon Didrichsen and Peter Bloch, Managing Director of Employers Federation. The panel shared insights and experiences on issues such as diversity, recruitment, industrial action and Artificial Intelligence.
Karen Moore then led delegates through a practical scenario covering requests for anonymity during a disciplinary process.
This was followed by Lorraine Toolan, Employers Federation Consultant who addressed workplace grievances through the lens of whether the employer’s approach is helping or harming.
Finally Michelle McGinley, Director of Legal and Policy ended the day with a review of the policy and legal developments throughout the last year and a look forward into 2024.
We would like to thank all who attended the day and to the exhibitors that included:
Action Mental Health; Autism NI; AWARE NI; Cedar Foundation; Disability Action Northern Ireland; Employers For Childcare; Inspire Therapeutic & Wellbeing Services; The Labour Relations Agency; Parenting NI Charity; PIPS Suicide Prevention Ireland Charity; Rainbow Charity and; Women in Business NI
ROI MEMBER NEWSLETTER
AUTUMN 2023
- PROTECTED DISCLOSURE (AMENDMENT) ACT 2022- IMMINENT STAGING DATE APPROACHING.
The Protected Disclosures (Amendment) Act 2022, came into operation on 1st January 2023, substantially overhauling the 2014 Protected Disclosure Act. We previously updated Members on the provisions of the 2022 legislation. See here
One of the key changes in the 2022 act was the requirement for employers to set up reporting channels and procedures for employees to make a protected disclosure. This included the obligations to identify a designated person within the organisation to deal with protected disclosure, establish internal reporting channels to ensure the identity of the complaints remains confidential, as well as strict time periods for responding to complaints.
Under the Act, private sector and charity employers with 250 or more employees, were in scope to implement these changes from 1 January 2023. This was also the case for Employers in the areas of financial services, products and markets and prevention of money laundering and terrorist financing, transport safety, and protection of the environment.
There was a lead in period for many private sector and charity employers with between 50 and 249 employees to comply with the new rules. This lead in period ends on 16th December 2023 and therefore employers with 50 or more employees will have to comply from 17th December 2023 onwards.
If you employee 50 or more employees, you must ensure you are compliant with the legislation from this date. If you require any advice on understanding your obligations in respect of the 2022 Act, and in particular the reporting channels and procedures, please contact one of the legal team.
- IRISH GOVERNMENT PUBLISHES AUTUMN LEGISLATIVE PROGRAMME
The Government Legislation Programme for the Autumn 2023 session has been published.
The full list of employment related bills set out below, with a number getting priority publication:
- Protection of Employees (Employers’ Insolvency) (Amendment) Bill
- Registration of Trade Unions Bill
- Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Bill
- Civil Service Regulation and Public Service Management (Amendment) Bill
- Employment Permits (Consolidation and Amendment) Bill 2022
- Automatic Enrolment Retirement Saving System Bill
- State Pensions Reform Bill
- Equality Acts Amendment Bill
- Amendment of the Constitution (Family) Bill
- Amendment of the Constitution (Care) Bill
- Employment (Restriction of Certain Mandatory Retirement Ages) Bill
- Financial Services and Pensions Ombudsman (Amendment) Bill
See below for ‘in focus’ update in relation to the implementation of auto enrolment in the Republic of Ireland .
We will keep Members updated on all draft employment related legislation as it makes its way through the Irish parliament.
To view the Government’s Autumn legislative programme , click here
- WORK LIFE BALANCE AND MISCELLANEOUS PROVISIONS ACT 2023- UPDATE
We have been updating Members in relation to the various implementation dates for the rights enacted under the Work Life Balance and Miscellaneous Provisions Act 2033.
Under the legislation the right to 5 days paid domestic violence leave will be introduced by Regulations due in the Autumn.
In August 2023, the Government announced that when the right to Domestic Violence leave is introduced, it will be paid at the normal rate of pay.
Trade unions, employer groups and organisations supporting victims of domestic violence had been consulted in the process to determine the percentage of rate of pay.
Minister for Children, Equality, Disability, Integration and Youth Roderic O’Gorman also confirmed that employee would have to notify their employer but would not have to provide any evidence. He added that this was a deliberate decision to make access to the paid leave as easy as possible.
We will provide a further update to members once the regulations are published.
- IN FOCUS- THE INTRODUCTION OF AUTO ENROLMENT IN IRELAND
In 2022, it was announced that a pensions automatic-enrolment retirement savings system (Auto-Enrolment System) was to be introduced in Ireland. At present, Employers in Ireland are legally obliged to provide their employees with access to at least one standard Personal Retirement Savings Account (PRSA) within six months of the commencement of employment if they do not provide an occupational pension scheme for their employees or if an employee cannot join such a scheme within six months of beginning employment. There is no obligation however on the employer to make any contributions.
The design of the Auto-Enrolment System was announced last year, and details are set out in the Draft Heads and General Scheme of the Automatic Enrolment Retirement Savings Systems Bill 2022 (Draft Bill).
The proposed new system is intended to operate on an “opt out” rather than an “opt in” basis, to ensure that as many employees as possible participate in the system.
The Draft Bill outlines some of the following key features:
- Private sector employees aged between 23 years and 60 years old earning over €20,000 per annum (not already in a qualifying occupational pension scheme) will be automatically enrolled.
- Contribution rates will be levied as a percentage of an employee’s gross earnings.
- Employees will be required to make certain fixed minimum contributions starting at 1.5% of gross earnings initially (increasing to 3% in year 4, 4.5% in year 7 and 6% in year 10).
- Employers will be obliged to match employee contributions.
- The State will top up employee and employer contributions (State contributions to range from 0.5% to 2% on a phased basis).
- Contributions will be calculated on the earnings of an employee up to €80,000.
- Employees must remain in the scheme for six months and will be free to opt out at a later date.
- There will be a facility to suspend or pause contributions and to leave the scheme under certain conditions.
- Eligible employees who opt out or suspend contributions will be automatically re-enrolled at a later stage.
- There will be limited scope to access retirement funds before retirement.
- Employees who are actively contributing members of a qualifying scheme (i.e. one that meets prescribed minimum standards and contribution levels) will not be automatically enrolled.
The Bill has been marked for priority publication in the Government’s Autumn legislative programme , with the most recent official update from government that auto enrolment will be implemented in the second half of 2024.
Next Steps
Employers and those operating in the pensions sector eagerly await further details of the Auto-Enrolment System later this year.
Employers without any existing pension scheme or any plans to implement one will need to ensure that they are prepared for the system once it is introduced.
Employers should seek advice and review any existing pension scheme(s) to determine whether they are compatible with the auto enrolment requirements.
CASE LAW UPDATE
- Karolina Leszczynska and Musgrave Operating Partners Ireland, ADJ-00044889.
Complaint seeking adjudication by the Workplace Relations Commission under the Sick Leave Act 2022
Facts
The complainant was employed by the Respondent since 2007 and had the benefit of an enhanced sick pay scheme, on the terms set out below:
- An employee with six months’ service is entitled to paid sick leave
- The first three days of absence are unpaid “waiting days” and paid sick leave commences on
- the fourth day of absence.
- Employees are entitled to eight weeks’ full pay in a rolling 12-month period (less any social welfare benefit).
- The daily rate of pay is based on the average of the employee’s weekly hours in the 13 weeks preceding the fourth day of absence, divided by five.
- To be entitled to sick pay, employees must submit medical certificates on a weekly basis.
The complaint was absent from work for 4 days in January 2023 and in line with the respondent’s policy above, the first 3 days were waiting days, and the fourth was paid based on the average days’ pay calculated within the last 13-week period.
The complainant asserted that she should have been paid for the first 3 days in accordance with the Sick Pay Act.
Decision
The Adjudication Office (AO) confirmed that all sections of the Act must be read together which clearly outlined that where there was an enhanced sick pay scheme in operation in the employment, which was, on a whole more favourable, then that would substitute the requirement for statutory sick pay. Whilst there was a longer service requirement, and the inclusion of waiting days within the respondents enhanced scheme, the AO found that the Respondent’s sick pay scheme was, on the whole, more favourable than statutory sick leave, and as such the Sick Leave Act did not apply.
Learning Points for Employers
This is the first decision to be handed down by the WRC in respect of the Sick Leave Act 2022, which came into effect from 1 January 2023 and is one that was eagerly awaiting by employers, particularly those who offer enhanced contractual sick pay schemes which, on a whole, confer more favourable terms that statutory sick pay.
- CATHERINE KELLY V AN POST – ADJ-00040021
Section 77 of the Employment Equality Act 1998- Sex discrimination/sexual harassment
Facts
The Complainant commenced employment with the Respondent as a postal operative on 3 April 2017. The Complainant alleged that she was inappropriately touched by a colleague on 22 February 2022 whereby he allegedly touched the inside of her thigh. The complainant subsequently told the colleague to leave her alone, and an argument ensured. The complainant made a written complaint a few days later, which was investigated, albeit poorly, by the employer. The Respondent initially proposed to resolve the matter informally to which the complainant objected. The employer did not meet with the complainant as part of the investigation to obtain more details from her. The complainant continued to work alongside the alleged harasser, who publicly said she was telling lies about the allegations.
Nearly two months after her complaint was first raised, she was informed that the investigation was inconclusive. The complainant appealed these findings and was spoken to by HR for the first time on 9 June 2022, despite having raised a serious complaint of sexual harassment.
The Respondent asserted that it had complied with its Dignity at Work Policy and had conducted a thorough investigation, having reviewed CCTV footage as well as speaking to relevant witnesses. The investigator found that there was insufficient evidence to uphold the complaint. The Respondent alleged the CCTV footage appeared to show the Complainant and the alleged harasser laughing and joking after the incident.
The Complainant pursued a complaint to the WRC that she had been sexually harassed and that the Respondent had failed to follow its Dignity at Work Policy (the manager to whom the complainant first reported the incident having responded ‘I don’t know what that is).
Decision
The Adjudication Officer found the Respondent did not adequately investigate or take seriously the Complainant’s complaint. The Respondent’s procedure fell “very short” of what is required by the WRC Code of Practice for the investigation of harassment or what is required to defend an allegation of discrimination under the Employment Equality Act. Having regard to the policies available for the Respondent, and its size and resources available to ensure compliance with those policies, the Adjudication Officer ordered the maximum compensation of two years’ salary to be paid to the Complainant, a sum of €53,560.
Learning Points for Employers
Employers must treat allegations of sexual harassment seriously and ensure that a thorough and detailed investigation takes place, particularly where allegations of physical sexual assault have been alleged. Appropriate support must be afforded to complainants of sexual harassment as well as ensuring suitable measures are put in place in the workplace to protect complainants from acts of victimisation. Employers must be satisfied that managers are suitably trained on conducting workplace investigations, and understand their obligations under the various codes of practice.
- Irene Glynn v Carlow Dental Centre ADJ 00043734
Unfair dismissal
Facts
The complainant was employed by the Respondent from February 2015.
The complainant had been contacted by the respondent during a period of certified sickness absence, in relation to comments/posts she had made on her private Facebook page, outlining her views on immigration in Ireland and asked the complainant to remove the posts.
Those posts/comments included the following ‘Ireland is on its knees, Irish working people can’t afford heating or food yet refugees think it’s a free for all, stay fight for your country our grandparents fought against the English do the same’ and had been brought to the respondents attention by a member of the public who consolidated the views to be ‘very extreme’
When the complainant returned to work just under a week later, the respondent sent her an email to confirm that she had been summarily dismissed for gross misconduct.
The Complainant brought a complaint of unfair dismissal following the termination of her employment for gross misconduct on the basis that at no stage during her 7 year employment had she been told not to post on social media.
Decision
The AO found the dismissal was both substantively and procedurally unfair and upheld the complainant’s complaint. The complainant should have been afforded the opportunity to respond to the allegations against her and provide representations regarding the alleged misconduct.
The AO held that summary dismissal was not within the “range of reasonable responses” for an employer to dismiss an employee for the act alleged, and that consideration of the complainant’s prior record was not taken into account. The Complainant was awarded the equivalent of four months’ wages, €8,552.31, in respect of the unfair dismissal and a further €2,012.31 (four weeks) in respect of a failure to provide the minimum notice of her dismissal.
Learning Points for Employers:
This decision is a reminder to employers that fair process must be followed, even when the employer believes the alleged misconduct is so serous to warrant dismissal without warning.
The case also highlights the importance of having a social media policy in place, and ensuring employees are clearly aware of the rules regarding posting online, particularly where their posts may be a considered to be a manifestation of an employee’s religion or belief.