The setup of the Workplace Relations Commission (WRC) on 1 October 2015 brought in a new wave of dispute resolution mechanisms in Ireland. All first instance complaints now go to an Adjudication Officer and then, on appeal, to the Labour Court
This section outlines the major changes to employment legislation.
Retirement and fixed-term contracts
The Irish Human Rights and Equality Commission (IHREC) has recently published new guidelines on retirement and fixed-term contracts for employers and employees. The guidelines seek to ensure that older workers, who wish to continue in employment, are not discriminated against in workplaces in Ireland.
In view of the current challenges confronting employers as a result of ageing workforce and the need for employees to be aware of their right, the guidelines serve a dual purpose:
- equip employers in meeting obligations under the Employment Equality Acts; and
- inform employees about their right to equal treatment in the workplace.
The guidelines focus on the potential for discrimination arising from the compulsory retirement of staff on reaching a particular age, as well as the use of fixed-term contracts. They consider practical issues that arise from granting fixed-term contracts to employees who are over a compulsory retirement age, and explains how these issues may be addressed by both employers and employees.
While employers can set retirement age based on 'objective justification', the guidelines explore what 'objective justification' means and what the relevant test involves. It also explores the dismissal of employees who reach retirement age and its implications for employers.
It is important for employers to keep abreast of these provisions and guidelines in order to avoid unnecessary litigation. According to IHREC, cases of age discrimination related to employment made up 14% of cases raised by the Employment Equality Acts in 2017.
Similarly, the code of practice on longer working produced by the Workplace Relations Commission (WRC) (see below) provides practical guidance and guidelines on what employers and employees need to follow in respect to longer working.
Download the guidelines below
Code of Practice on Longer Working
The Workplace Relations Commission has produced a Code of Practice on Longer Working (S.I. No. 600 of 2017 under the Industrial Relations Act, 1990). The Code provides guidance on the principles and practices to follow during the engagement between employers and employees in the run up to retirement including responding to requests to work beyond the retirement age.
The Code was prepared following a request by the Minister for Business, Enterprise and Innovation arising from a recommendation of the 2016 Report of the Interdepartmental Group on Fuller Working Lives. This recognised the increasing proportion of workers who want to continue in employment beyond what would have been regarded as the traditional retirement age, that is, 65 years, and the expectation that this will grow significantly in the future.
Employers need to have a consistent way to retain older workers and deal with requests to continue to work beyond the traditional retirement age, within the context of the changing statutory and legal framework in regard to retirement and pension entitlements.The Code is useful in addressing ways to deal with:
- utilising the skills and experience of older workers as part of a diverse workforce
- retirement arrangements that support employees through the retirement process
- managing requests to work longer
- outlining what constitutes objective justification of retirement in the absences of a set retirement age
Retirement ages continue to be big news
The Equality (Miscellaneous Provisions) Act 2015, which commenced on 1 January 2016, still permits employers to set compulsory retirement ages. However, they must now be objectively justified by a legitimate aim and the means of achieving that aim must be proportionate and necessary.
Employers need to examine the reason for the specific retirement age for their business and ensure that it is objective and proportionate. Legitimate reasons may include:
- succession planning
- health and safety reasons
- intergenerational fairness
However, each situation will have to be determined on its merits.
The Act brings the Irish legislature in line with the grounding EU Directive and case law on the point.
Terms and conditions
Employment (Miscellaneous Provisions) Act 2018
The Government has increased the employment protections for casual and temporary workers by passing the Employment (Miscellaneous Provisions) Act 2018. This follows a commitment in the Programme for Government to address the increased casualisation of work and to strengthen the regulation of precarious work.
While these changes are stated to be targeted at low-paid workers, they go beyond this and will impact on all future employment relationships, with the need to give employment contracts to all employees within 5 days of commencing employment. Zero hours contracts are prohibited, there may be minimum payment for low/no hours worked, and if requested, employers will have to commit to higher banded hours, where these hours have been the norm but were not guaranteed in the contract of employment.
CIPD Ireland welcomes the recognition that additional protection is needed for low paid workers in precarious employment, but is concerned about the way the Act will increase the administrative burden and costs on employers and hence impact job creation.
The Act is due to come into force before April 2019 and amends other key pieces of legislation particularly the Terms of Employment (Information) Act 1994 and the Organisation of Working Time Act 1997.
1. Provide a basic employment contract in the first week of employment
Employers are required to inform employees in writing, within 5 days of commencement of employment, of the following five core terms of employment:
- The full name of the employer and employee,
- The address of the employer
- Where the contract is temporary, the expected duration of the contract or the date of expiry of a fixed-term contract
- The rate of method of calculating pay, and the pay reference period
- What the employer reasonably expects to be the normal length of the employee's working day and week.
This will cause a significant added administrative burden especially on small employers who depend on a single professional to produce such documents. An employer will still be required to give the current 15 terms of employment to employees within the current two month period.
In essence, to avoid duplication of effort, it is in the interest of both HR and employees to apply good practice and provide a full contract of employment in advance of starting employment, and reduce the risk of breaching the legislation.
The Act provides protection for employees against an employer penalising or threatening to penalise them for exercising their rights under the legislation. Penalisation covers a detriment to terms and conditions of employment, discipline or dismissal, transfers, changing hours, reducing pay or intimidation. Generally employees must have more than one month of continuous employment to raise a complaint under the Workplace Relations Act 2015.
Breaches can result in fines, imprisonment for both the company or individuals found guilty, and provides for an order to pay costs.
2. Prohibiting zero hours contracts in most circumstances
The Act amends Section 18 of the Organisation of Working Time Act 1997 to prohibit zero hours contracts. An employer will no longer be able to engage an employee on a contract on an ‘as and when’ basis or where the stated contracted hours are zero, unless it is genuinely casual work, emergency cover or short-term relief work.
Where an employee is not required to work at least 25% of the stated hours in a week, or the hours of this type of work carried out by other employees, then the employee must be paid 25% or 15 hours, whichever is the lesser. Minimum payment is calculated as 3 times the national minimum hourly rate of pay or the appropriate employment regulation order.
3. Entitlement to move from a low hour contract to a band of hours that reflects the hours worked
The Act brings into force a new right for an employee whose contract of employment does not reflect the reality of the hours worked on a consistent basis. After a reference period of 12 months, employees will be able to request and be placed in a band of hours that better reflects their average weekly hours worked over that period. Employers have four weeks to do this.
This aims to provide a truer reflection of an individual’s working hours and improve the predictability of both hours of work and earnings. The reference period of 12 months is designed to allow for normal peaks and troughs, including seasonal fluctuations. An employee placed in a band of weekly working hours has to work their average weekly hours in that band for a period of at least 12 months.
This provision will not apply to an employer who has entered into a banded hour arrangement following collective bargaining with their employees. Redress will be through the Workplace Relations Commission but limited to being placed in an appropriate band of hours.
The Banded hours are laid down in law as follows, starting with a 3 hour band and raising to five hour bands.
BANDS OF WEEKLY WORKING HOURS:
|A||From 3 hours to 6 hours|
|B||From 6 hours to 11 hours|
|C||From 11 hours to 16 hours|
|D||From 16 hours to 21 hours|
|E||From 21 hours to 26 hours|
|F||From 26 hours to 31 hours|
|G||From 31 hours to 36 hours|
|H||From 36 hours and over|
The Parental Leave (Amendment) Bill 2017, though a Private Members Bill, is working its way through the Oireachtas with government support.
The legislation aims to extend the current 18 weeks entitlement to a significantly longer 26 weeks between 2019 and 2022. It is also expected to be made available for children up to 12 years. Those who have already availed of all or part of their entitlement, will be eligible for extra parental leave.
The scaling of the entitlement will add to the complexity of managing parental leave, as entitlements will vary continually over a four year period.
The government is also drafting a Bill which will consolidate all existing family leave legislation including maternity, parental, adoptive and carers' leave.
The Employment Permit Regulations 2017 consolidate a number of individual Regulations into a one set to make them easier to understand and easier to use. They prescribe specific criteria for the granting and renewal of employment permits including documentation requirements, remuneration levels, registration requirements, and lists of highly skilled and ineligible employments.
Key changes to the lists are:
- Level 10 (PhD) academics in designated Universities and Institutes of Technologies are added to the highly skilled list.
- HGV drivers with CE or C1E driving licences are removed from the ineligible list on a temporary basis and subject to a maximum quota of 120 permits.
- Meat deboners remain off the ineligible list subject to a further maximum quota of 160 General Employment Permits, bringing the total to 360.
For more info, see the DBEI's press release on the Regulations.
The Department of Business Enterprise and Innovation has announced the new Employment Permits (Amendment) Regulations 2018 (S.I. No. 70 of 2018) to help ease certain skills shortages. These Regulations came into effect on the 26 March 2018.
The Regulations respond to the changing skills needs in the Irish economy widening its scope as follows:
- Animation occupations have joined the list of highly skilled eligible occupations in short supply.
- Among general skills in short supply certain grades of chef will now be eligible.
In addition the Regulations make a number of administrative changes, including the need for a copy of the contract of employment to be submitted with all new and renewal employment permit applications.
For more info, see the DBEI's latest update on employment permits.
Low Pay Commission
The Low Pay Commission was set up to examine the rate of the national minimum wage (NMW) on an annual basis.From 1 January 2019, the national minimum wage has been increased to €9.80 per hour for an adult, as provided for in the National Minimum Wage Order 2018.
ESRI research report
In November 2017, the ESRI published a study, A study of minimum wage employment in Ireland: the role of worker, household and job characteristics funded by the Low Pay Commission, on the characteristics of workers earning the NMW in Ireland. According to the ESRI, the research found that 4.9% of employees were in receipt of the minimum wage in 2014. However, the percentage was substantially higher among particular sub-groups of workers. Specifically:
- 9% of female employees were in receipt of the NMW, compared to 2.7% of male employees. Females on the NMW were more likely to work in part-time jobs, in smaller firms or in sectors such as accommodation and food. Jobs with these characteristics raise the likelihood of minimum wage employment.
- At 9%, the incidence of minimum wage pay among non-Irish nationals was over twice that of Irish employees (4.2%). Non-nationals were found to experience a higher incidence of NMW, up to 3 percentage points relative to Irish employees even after job characteristics were controlled for.
- Young people aged 18–29 are more likely than people in other age groups to be on the minimum wage (13.9%). The greater likelihood of being on the NMW among young workers disappeared when job tenure, job type, occupation and sector is taken into account.
- In relation to households, economically disadvantaged people make up a minority of minimum wage employees. With 28% of employees on the minimum wage in 2014 coming from deprived households, the remaining 72% came from households not classified as being deprived. Therefore, minimum wage increases do not specifically benefit those from economically disadvantaged or deprived households.
Employment Regulation Orders
The government published an Order establishing statutory minimum rates of remuneration and conditions of employment for the contract cleaning industry on 1 June 2017. See the Workplace Relations Commission (WRC) Notice on the order.
The government published an Order establishing statutory minimum rates of remuneration and conditions of employment for the contract cleaning industry on 27 October 2016. See the Workplace Relations Commission (WRC) Notice on the order.
Information on Employment Regulation Orders can be found on the WRC website.
In May 2017, the Government published the General Scheme of the Social Welfare and Pensions Bill 2017. This sets out to increase protection for members of defined benefit occupational pension schemes, to improve access to pensions for same-sex couples and to make it easier for people with disabilities to take up work.
Defined benefit pensions
The number of defined benefit (DB) schemes open to new entrants has reduced in recent years. The Bill increases the controls on the way employers ceasing contributions to DB funds and pension funds in deficit will be handled. These measures reflect ongoing funding difficulties in many DB schemes. The Bill:
- Requires employers who sponsor DB schemes, whether those schemes are in deficit or not, to give 12 months’ notice of their intention to cease contributions. For a scheme in deficit, the employers and trustees are required to enter into discussions to agree a funding proposal before the 12 month period expires.
- Introduces a time limit of six months, from the date of the actuarial funding certificate, for trustees of a DB scheme which is in deficit, to submit a funding proposal to the Pensions Authority.
- Provides powers to the Pensions Authority to determine a schedule of contributions that will restore DB pension schemes which do not satisfy the funding standard or funding standard reserve, to an adequate funding position, in circumstances where a funding proposal has not been agreed.
Provisions for same sex couples
The Bill aims to ensure that same sex spouses and civil partners of members of occupational pension schemes will be able to obtain, in certain circumstances, a spouse’s pension. This equal treatment proposal aims to provide that same-sex couples have the same rights and entitlements as married couples.
Relaxing rules to work for people with disabilities
The Bill seeks to remove a barrier to employment for people on Disability Allowance and the Blind Pension. It will allow them to keep some or all of their weekly welfare payment if they take up work, which will no longer have to be of a strictly rehabilitative nature. This will open more jobs to this group of people and enable employers be more supportive.
The Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016 fundamentally changes what employees have to reveal about themselves to employers.
An individual is not obliged to disclose certain criminal convictions which date back seven years or more to a future or current employer. The Act ensures that only certain convictions arising from minor offences can become 'spent'.
The following offences will never become 'spent':
- a conviction for a sexual offence
- an offence tried in the Central Criminal Court
- an offence resulting in a prison sentence of greater than 12 months
The National Vetting Bureau (Children and Vulnerable Adults) Act 2012 also makes it mandatory for people working with children or vulnerable adults to be vetted by the National Vetting Bureau.
Combined these two pieces of legislation will affect how employers screen employees. It is commonplace for employers to have self declaration forms as part of their recruitment policies. These Acts now significantly limit the usefulness of these forms as employees will not have to disclose a spent conviction. Employees cannot be penalised for not doing so.
Employers may have to consider other ways of assessing potential hires through their recruitment policies.