by Anne Lyne January-12-2016 in Employment Law
2015 was a very busy year for Irish Employment Law practice. With reform of the basic framework for dealing with employment disputes and a new Industrial Relations Act, the procedural landscape of employment law in Ireland has been significantly altered. Anne Lyne outlines the key developments.
Workplace Relations Commission
The introduction of the Workplace Relations Commission (“the WRC”) was the most important change implemented in the past year. This represented a substantial overhaul of the former system for the resolution of employment disputes. The previous system comprised five separate bodies, has now been simplified. There is now one single point of entry for work-related disputes and one route of appeal to the Labour Court, with a further appeal to the High Court on a point of law only. It is hoped that the new, simplified system will reduce costs, increase efficiencies and simplify the process of referral of complaints. See www.workplacerelations.ie for further information.
Industrial Relations
In industrial relations, significant changes have been introduced which have increased the protections available for employees seeking to engage collectively with their employer.
First, a new Code of Practice has introduced a prohibition on the victimisation of employees as a result of their membership, or non-membership of a trade union. It is open to an employee who believes they have been victimised to bring a claim against their employer to the WRC.
Second, the introduction of the Industrial Relations (Amendment) Act 2015provides for an enhanced collective bargaining structure in Irish workplaces. The 2015 Act provides that where there are no collective bargaining facilities in place between an employer and employees (or a trade union/independent in-house employee forum on their behalf), a trade union can refer the dispute to the Labour Court which can then make a legally binding order regarding the terms andconditions of employment in question.
In order to prevent referral to the Labour Court in this manner, an employer must be able to show that it engaged in a meaningful way with a trade union or in-house employee forum with the aim of reaching an agreement on the disputed terms. In this context, an employer should assess any existing arrangements it may have in place to facilitate collective bargaining. If no such facilities are in place, an employer should consider whether these should be introduced in order to prevent escalation and referral to the Labour Court. This will depend on the nature of the business.
Another change introduced under the 2015 Act is the reintroduction of Registered Employment Agreements (REAs) governing terms and conditions, which can be submitted to the Labour Court for registration. REAs applicable to the contract cleaning and contract security sectors have already been agreed.
Working Time
Employees can now accrue statutory annual leave entitlement while out of work on a period of certified sick leave. This development is particularly significant when it comes to employees who are on long-term sick leave as they are now permitted to carry over accrued annual leave for a period of 15 months after the leave year in question. This essentially means that an employer could be faced with an employee returning from a period of sick leave with a substantial amount of annual leave to take in the following 15 months after his/her return. This will undoubtedly have considerable organisational and financial implications for employers. In light of these changes, it is recommended that employers ensure that their policies and other contractual documents reflect this change.
Recent developments from the EU Court of Justice also broaden the concept of working time to the extent that time spent travelling to and from work (in certain circumstances) and time spent sleeping at an employer’s place of work, can be considered working time.
Paternity Leave
From September 2016, fathers in Ireland will be entitled to take paternity leave on the birth of their child. This leave will be confined to two weeks’ duration and will be paid by the State at the same rate as statutory maternity leave. In the meantime, it is suggested that employers update their policies to reflect this and to budget for the cost associated with the absence.
Equality
While yet to be finalised and implemented, there are currently two pieces of draft legislation making their way through the Houses of the Oireachtas which propose a number of important changes to matters relating to equality in Ireland.
Among the reforms envisaged, is an important change in respect of retirement age. At present, it is open to an employer to fix a retirement age. However, this is in conflict with EU Court of Justice case law. Under the proposed new regime employers must demonstrate that any contractual retirement age is justified by a legitimate aim, and also, that the means of achieving that aim is appropriate and necessary. What is considered an “objective justification” will depend on factors relevant to the particular business or industry but may include social, economic and budgetary considerations. In order to deal with the proposed change, it is suggested that employers ensure that retirement age is specified in all employment contracts and that policies dealing with retirement set out the corresponding legitimate business reasons. Employers should also consider engaging with soon-to-retire employees well in advance of their retirement date.
Other proposed reforms include the ability of an individual to bring a case to the WRC in the event of discriminatory advertising. This is provided there is a sufficient link between the complainant and the advertising company. Previously, these cases could only be brought by the Irish Human Rights and Equality Commission.
EAT award to Philip Smith
Without doubt, the most high profile employment decision last year was the award made by the EAT in June 2015 of €1.5m to the former CEO of RSA Ireland, Philip Smith. When Mr Smith resigned, following an internal investigation, he was on a basic salary package of €405,000. The substantial award was made in circumstances where the Tribunal raised a number of concerns regarding the way in which Mr Smith’s former employer conducted the investigations which it said amounted to “a fact-finding exercise to justify its pre-determined decision”.
In some industries it is common practice for senior executives to be simply “taken out” with little or no regard to fair procedures provided a negotiated settlement is reached. This landmark decision constitutes a reminder and warning to all employers that all employees are entitled to the benefit of due process and fair treatment, whatever their status or salary level.
In light of the vast array of changes implemented and proposed in 2015, it is recommended that employers familiarise themselves with the above updates and amend their practices and policies accordingly. For 2016, we will be looking to how the new WRC and Labour Court operate in practice and how this will impact on organisations.
A version of this article appeared in the Sunday Business Post on 11 January 2016
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About the Author
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Anne Lyne
Anne is a partner in the Employment team at Hayes solicitors. She has considerable experience advising and representing employers and employees on all aspects of the employment relationship from pre-employment matters to termination.