02/09/2024

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:

1. Does the contract involve the exchange of wage or other remuneration for work?
2. 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?
3. If so, does the employer exercise sufficient control over the employee to render the agreement one that is capable of being an employment agreement?
4. If these three requirements are met, the factual matrix and working arrangements must be considered.
5. 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:

1. That he had been unfairly dismissed.
2. That he had been dismissed without notice pay.
3. That he did not receive compensation for Sunday working.
4. That he did not receive statutory annual leave.
5. That he did not receive payment for public holidays.
6. 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 22^nd September 2021 and, as the Claim to the WRC was presented on 4^th 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.