Home Knowledge Brief overview of Irish Employment Law

Brief overview of Irish Employment Law

October 9, 2013

This overview gives an introduction to the principal areas of employment law which affect business in Ireland.  Statute law and decisions of courts and tribunals impact on all aspects of the relationship between employer and employee, from recruitment through to retirement. Given that Ireland is one of Europe’s most highly regulated environments in the area of employment law, it is imperative to take legal advice from the outset to avoid the pitfalls in this area.

Pre-Contract Matters

Most employers seek staff through job advertisements.  Such advertisements are required to comply with legislation governing equality in employment, including access to employment. In addition, job advertisements should be carefully worded as applicants will rely on that wording and it may form part of a contract of employment.

The conduct of job interviews is important in that the prospective employer and/or employee may make representations which could be deemed to form part of the contract of employment.  In addition, questions which breach the statutory code of equality cannot be asked.  The potential for an unsuccessful job applicant to pursue the employer on the grounds that equality legislation was breached during the selection process can be minimised if the employer adheres to best practice procedures in that process.

Contract of Employment

Under the Terms of Employment (Information) Act 1994 and 2001, an employer is obliged to provide an employee with a statement containing the basic terms of the contract of employment including the place of work, job title, date of commencement, pay details, terms and conditions relating to hours of work and the period of notice which the employer and employee are required to give to terminate the contract.

A national minimum rate of pay was introduced in April 2000.  Currently this is set at Euro €8.65 per hour. In certain industries and geographical areas, rates of pay and other terms and conditions are set out in specific Employment Regulation Orders.

Ministerial Codes of Practice set out basic requirements for disciplinary procedures, grievance procedures and dispute resolution generally but case law requires a higher standard of process to be followed.

Most of the essential terms of the contract of employment are subject to the following legislation:

Employment Equality Act 1998 to 2011

It is unlawful for an employer to discriminate on grounds of gender, civil or family status, sexual orientation, religion, age, disability, race or membership of the Traveller community, in any area of employment including recruitment, training, promotion and termination.  In addition employers must take steps to ensure that harassment (including sexual harassment) of employees does not occur.  Otherwise the employer may be held liable and incur substantial costs.

Payment of Wages Act 1991

This sets out a number of approved methods for paying wages including commission, bonus payments, holiday pay and sick pay. However, it does not cover expenses, pensions or other benefits in kind.  It also prohibits deductions from wages without the prior agreement of the employee, unless there are exceptional circumstances or the deduction is required or authorised to be made by virtue of statute.

Maternity Protection Act 1994 and 2004

There is a minimum period of maternity leave of 26 weeks provided for with an option for an additional 16 weeks unpaid leave. The legislation sets out safeguards for protecting employment rights during that period and prescribes health and safety measures to be taken during pregnancy and after return to work including ante and post natal care.

Safety, Health & Welfare at Work Act 2005

This legislation defines the duties and responsibilities of employers, employees and others in relation to health and safety in the workplace.  Every employer must prepare a written Risk Assessment and Safety Statement identifying all potential hazards in the workplace, setting out how those hazards are controlled and managed.  Employers must ensure, so far as is reasonably practicable, that the work place and work systems are safe.

Minimum Notice & Terms of Employment Acts 1973-2005

This sets out the minimum periods of notice for termination of employment.  The period of notice depends on the employee’s length of service. The notice periods range from one weeks notice for an employee with up to two years service to eight weeks for an employee with 15 years or more service.

Organisation of Working Time Act 1997

Under this legislation employees are entitled to certain minimum rest periods in the working day and between one day’s work and the next.  The average working time in a seven-day period may not exceed 48 hours. Under this legislation employees are entitled to 4 weeks paid vacation plus an additional 9 public holidays. It also requires employers to keep records of employees’ working hours and rest breaks.

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003

Where a business is transferred from one entity to another, resulting in a change of employer (e.g. a merger or acquisition), the rights and obligations of the transferor in relation to the contracts of employment of its staff are transferred to the new owner.  The new owner must continue to observe the terms and conditions of the contracts of employment that have been transferred, with the exception of pension. Employers are required to notify and consult with their employees 30 days in advance of the proposed business sale. Dismissal on the grounds that the undertaking or business has been transferred is prohibited.  Dismissal can be justified if it can be shown that it is necessitated by economic, technical or organisational reasons which require changes in the workforce. Further details are set out in our article “Employee Rights on Business Transfers”.

Employer Protection

Much of the employment legislation is aimed at providing protection for employees rather than employers.  For employers, therefore, it is advisable to ensure that the contract of employment contains provisions to protect their interests.  For example matters such as non-disclosure of confidential information by employees or the securing of intellectual property rights should be considered or an employer may have a particular requirement regarding the availability of employees for shift or weekend work.  Any particular requirements must be set out in the contract of employment.  These stipulations should be augmented by the employer’s relevant personnel policies, for example in relation to disciplinary, grievance, equality, harassment, e-mail usage and social media restrictions.  The importance for employers to have well drawn up and active personnel policies cannot be overstated.

Termination of Employment

Where the contract of employment is terminated by reason of retirement or resignation, there is rarely much cause for dispute between employer and employee. The retirement age should be notified to the employee and specified in the contract at the start of employment.  The position is usually very different where it is necessary to dismiss an employee.

Practically every employee with at least one year’s service enjoys the protection of the Unfair Dismissals Acts 1977 to 2007.  The two central principles of the legislation are that dismissal of an employee is deemed unfair unless there are substantial grounds justifying the dismissal and that fair procedures have been followed before dismissal is effected.  A dismissal that meets only one of these criteria runs a grave risk of being held to be unfair. The Employment Appeals Tribunal adjudicates upon claims for unfair dismissal.  If the Employment Appeals Tribunal finds in an employee’s favour it can direct that the employee be reinstated or re-engaged.  Alternatively and most commonly compensation can be awarded up to a maximum of two years’ remuneration.  Remuneration is defined widely and includes not only salary but also benefits in kind such as car, pension contributions, health insurance, etc.

An aggrieved employee can also bring proceedings for damages in a court of law for wrongful dismissal.

Dismissals by reason of redundancy are governed by the Redundancy Payments Acts 1967 to 2012.  Employees with more than two years’ service are entitled to be paid a redundancy lump sum by their employer in the amount of two weeks salary per year of service plus one additional week’s pay.  For this calculation, only earnings up to Euro €600 per week are taken into account.   The statutory redundancy employer rebate no longer applies where the date of dismissal due to redundancy is on or after 1 January 2013.  If collective redundancies are contemplated, the Protection of Employment Act 1977-2007 requires that 30 days’ prior notification in writing be given to the Minister for Enterprise, Trade and Employment and to employee representatives before an employer can give the employee notice of termination for redundancy. For trans-EU employers, the Transnational Information and Consultation of Employees Act 1996 may apply.

Industrial Relations

The Industrial Relations Acts provide for a mainly non-compulsory regime of conciliation and arbitration for disputes between employers and employees.  An employee cannot be prevented by the employer from joining a trade union, should there be one in existence in the place of employment, but neither is there an obligation on the employer to recognise or enter direct discussions with the employees’ union.

Employment of Foreign Nationals

EU law provides that a national of any EEA state or Switzerland may work in another member state without a work permit, visa or other equivalent document.  Save for some exceptions, nationals of non-EEA  countries require a work permit.  The procedure is that either the employer or employee can apply for a work permit, based on the offer of employment. Previously, non-EEA nationals could only apply for a work permit in the case of jobs in a recognised highly skilled shortage occupation. As of July 2013, non-EEA nationals who have been offered a job in any occupation except those which on a list of ineligible categories may apply for an employment permit. Work permits are usually granted for an initial two year period and for a further three years upon renewal, after five years there may no longer be a need for a work permit.

Parental Leave

The Parental Leave Act 1998 gives employees who are the natural or adoptive parents of a child under 8 years of age, the right to take unpaid parental leave for a period of 18 weeks.  Employees are required to have 12 months continuous service with the employer in order to be entitled to parental leave but employees who do not meet this criteria will be entitled to parental leave on a pro-rata basis.

Part-time Workers, Fixed Term Workers and Agency Workers

The Protection of Employees (Part-time Work) Act 2001 provides that a part-time employee should not be treated less favourably than a comparable full-time employee in respect of his/her conditions of employment.  A part-time employee may only be treated in a less favourable manner than a comparable full-time employee where such treatment can be justified on objective grounds.  The right not to be treated in a less favourable manner than a comparable full-time employee does not apply in relation to any pension scheme or arrangement or to a part-time employee who normally works less than 20% of the normal hours of a comparable full-time employee.

The Protection of Employees (Fixed-Term Work) Act 2003 introduced similar provisions and protections for fixed-term workers as had been implemented in respect of part-time workers under the above legislation.

The Protection of Employees (Temporary Agency Work) Act 2012 provides that agency workers should be treated the same as an employee of the hirer in terms of basic working and employment conditions. It also provides for equal treatment of agency workers regarding “collective facilities and amenities”, unless there is an objective reason to justify less favorable treatment, and that agency workers should be informed of any vacant position of employment where such information would be given to the hirer’s employees. There is no qualifying period for equal treatment included in the Act and so agency workers must receive equal treatment from day one.