Policies & Procedures

No matter how big or how small your company may be – or whether your employees are part-time, seasonal or fixed-term - every Irish employer is obliged to enter into a contract with a PRSA provider and to provide access to at least one standard PRSA for all ‘excluded employees’.

What are ‘excluded employees’? Employees are considered to be ‘excluded employees’ if:

• their employer does not offer a pension scheme, or
• they are included in a pension scheme for death-in-service benefits only, or

• they are not eligible to join the company’s pension scheme or will not become eligible to join the pension scheme within six months from the date they began working there, or
• they are included in a pension scheme that does not permit the payment of additional voluntary contributions (AVCs).

    Even if there is only one ‘excluded employee’, an employer must:

• enter into a contract with a PRSA provider (there is no charge for doing this)
• provide employees with access to a Standard PRSA
• allow reasonable paid leave of absence, subject to work requirements, so that excluded employees can set up a  Standard PRSA
• make deductions from payroll if required
• advise employees in writing (normally on their payslip) at least once a month of their total contribution, including employer’s contribution, if any.

What an Employer is NOT responsible for:

• You’re not obliged to give any advice to employees in relation to PRSAs, but you must allow your PRSA provider or intermediary reasonable access to your employees to brief them on PRSAs.

• You don’t have to contribute to PRSAs on behalf of your employees, but if you decide to do so, your contributions must be paid to the PRSA provider within 21 days of the end of the month in which the employer contributions are due. And please note that you cannot make any deductions from this payment.

• You are not responsible for the investment performance of PRSAs

What are the consequences of non-compliance? Be aware that there are significant penalties for failing to discharge your obligations.  The Pensions Board will issue on-the-spot fines and prosecute any employers found in breach of theobligations, so it pays to get it right. As an Employer you may be subject to an on-the-spot fine if: (a)     You fail to respond to a request by The Pensions Board to furnish information about their provision of access to a Standard PRSA for ‘excluded employees’ and (b)     You do not provide at least a monthly statement to employees showing contributions deducted and employer contributions paid in the previous month. The bottom line is that this is not an issue that you can afford to get wrong. To find out more about your obligations, there’s a very helpful booklet on the Pension Board’s website.

IFG have many years of experience of providing Pension Scheme Design & Risk Advisory services to Irish companies. They would be delighted to answer any and all of your pension queries if you would like to find out more www.ifg.ie .

If a salary reduction is imposed without consultation or employee agreement, an employee now only has three (rather than four) potential legal opportunities to seek redress from his or her employer. If an employee’s wages are cut his or her first option is to claim Constructive Dismissal under the Unfair Dismissals Acts 1997-2007. Constructive Dismissal is the term used when an employee terminates his or her employment based on the conduct of the employer. In this instance, the employee must be able to prove that their position became unsustainable as a direct result of the involuntary reduction in pay. Secondly, where an employee’s salary is reduced, he or she has the opportunity to bring a trade dispute under the Industrial Relations Acts. The Industrial Relations Acts deal with disputes between employers and workers that are connected with the employment or non-employment, or the terms and conditions of or affecting the employment, of any person. Thirdly, if an employer cuts an employee’s pay, the employee could claim that their contract has been breached. Defending this could prove very costly for the employer. Furthermore, an injunction may be granted to prevent the contract breach/reinstate the original salary. In the past employees whose wages were cut without prior consent had a fourth option. They had the opportunity to take a case (and were likely to succeed) under the Payment of Wages Act 1991. Claims in relation to a reduction in wages, however, may no longer be successful if taken under this Act as a result of a recent Employment Appeals Tribunal determination. The specific EAT case referenced here is an appeal of a Right’s Commissioner decision in the case of Santry Sports Clinic v 5 employees. The employees in the aforementioned case were claiming for an 8% reduction in their pay that was imposed between February and March 2010. Santry Sports Clinic stated that the reduction was essential. According to the employer, all employees received letters detailing the 8% reduction in advance and, while only 30% of employees agreed to the reduction via return letters, no one officially objected or stated that they would not accept the pay cut and so it was implemented as planned. The Employment Appeals Tribunal considered all evidence and representations made at the hearing as well as all other submissions made. The Tribunal noted the High Court decision in the case of Michael McKenzie and others and Ireland and the Attorney General and the Minister for Defence Rec. No. 2009. 5651JR. In paragraph 5.8 of this decision the Judge stated that “the Payment of Wages Act has no application to reductions as distinct from ‘deductions’.” The Tribunal followed the High Court decision on a point of law and, therefore, the appeal was successful and the decision of the Rights Commissioner was entirely overturned in the case of Santry Sports Clinic v 5 employees. This case brought to light the fact that the Payment of Wages Act 1991 refers to “deductions” as opposed to “reductions” and, as a consequence, employees whose wages are reduced without prior consent are now unlikely to succeed if they opt to take a case against their employer under the Payment of Wages Act 1991. This is particularly significant for claims that are currently being processed by the Employment Appeals Tribunal. Employers need to remember that, although this option has essentially been closed off for employees as a result of the above-mentioned High Court decision and the EAT case, they still have several avenues open to them if they wish to take a claim where a reduction of wages has been imposed by the employer without prior consent.

There are several types of leave that an employee may be entitled to. Some forms of leave are statutory entitlements and some other forms are not. Maternity Leave, for instance, must be given to employees when they are pregnant. Some forms of leave are paid and others are not. This can depend on statutory obligations and on the terms and conditions set out in the Contract of Employment. Annual Leave is a statutory entitlement and it must be paid by the employer. Sick Leave, however, is not always paid by the employer (this depends on individual company policies). Force Majeure Leave is less commonly discussed. The purpose of Force Majeure Leave is to provide limited, paid leave to enable an employee to deal with family emergencies resulting from injury or illness of a close family member. Force Majeure Leave applies where the immediate presence of the employee is urgent and indispensable (essential). A close family member is defined as one of the following:

• A child or adopted child of the employee
• The husband/wife/partner (same or opposite sex) of the employee
• A parent/grandparent of the employee
• A brother/sister of the employee
• A person to whom the employee has a duty of care (where he or she is acting in loco parentis)
• A person in a relationship of domestic dependency with the employee
• Persons of any other class (if any) as may be prescribed

By its nature, an employee will not usually be able to give notice of the need to take Force Majeure Leave. The employee should, however, inform the employer (in writing) of reasons for taking the leave as soon as is reasonable practicable. The employee should provide details regarding the need for the leave and should confirm who the leave was taken in respect of. Employers are obliged to keep a record of Force Majeure Leave taken by employees. Employees will be entitled to: -   up to 3 days paid Force Majeure Leave in any consecutive 12 month period; or -   up to 5 days in a 36 consecutive month period. Absence for part of a day is usually counted as a full day of Force Majeure Leave. Employees are entitled to receive pay for this type of leave. Employers can grant employees more than the number of days outlined above; however, they are not obliged to do so. Employees are protected against Unfair Dismissal for taking Force Majeure Leave or for proposing to take it. Death is not covered under Force Majeure Leave – Leave taken when a death occurs falls under Compassionate Leave and this tends to depend on employee contracts as well as custom and practice within the workplace.

The Budget 2014 announcement that Maternity Benefit is to be capped at €230 per week has significant implications for numerous employees and employers alike. The current upper rate of €262 per week is an entitlement enjoyed by the vast majority of women in Ireland claiming Maternity Benefit. The reduction by €32 per week, which will be effective for new Maternity Benefit claims from January 2014, may discourage women from having children. Alternatively, it may force mothers to avail of shorter periods of Maternity Leave than they would like because they simply cannot afford to remain out of the workplace for the full 6 month period. The reduction of €32 per week over 6 months will see many new mothers lose out on €832 in Maternity Benefit. Some employers pay the difference between the Department of Social Protection Maternity Benefit figure and the employee’s regular salary (a "top-up" amount) as a gesture to employees so that they do not suffer major financial implications while on Maternity Leave. The Budget 2014 decision to reduce the amount paid by the State means that employers who cover the difference between Maternity Benefit and an employee's regular salary will now have to find an additional €832 per employee over the 6 month period in order to maintain the same level of maternity pay for employees while they are availing of maternity leave.             Click the image below to download your guide to Public holiday Entitlements

Sick pay from employers is not a statutory entitlement. It is up to the employer to decide whether or not to pay employees while they are out of work sick (once all employees are treated equally). Employers are obliged to provide details of their sick pay policy in employment contracts.   During times of incapacity or illness the employee can apply to the Department of Social Protection for Illness Benefit (once the employee has paid enough in PRSI contributions he or she should be entitled to Illness Benefit). If it is Company policy to continue to pay employees while they are ill or incapacitated, the employer often requires that the employee signs over any State Illness Benefit received to the Company.   A Budget 2014 announcement confirmed today (15^th October, 2013) that the number of “waiting days” for Illness Benefit will be increased from 3 days to 6 days from 1^st January 2014. What this means is that an employee will not be entitled to receive Illness Benefit for the first 6 days of any period of incapacity for work. This is more than one full working-week.   This has the potential to significantly affect a large number of people - employees and employers alike. The extension, which is said to save the state €22million, will negatively impact employees who work for companies that do not pay for sick leave – doubling the number of days that must elapse before they are entitled to receive any income. The decision will also have an impact on companies who continue to pay employees during periods of illness or incapacity but recover some of the costs of doing so by forcing employees to sign over any State Illness Benefit received as, from January of next year, the employer will not now receive any refund for the first 6 days of absence.    

Employment references for prospective employees can be great indicators of employee skills or characteristics and they should always be thoroughly vetted. However, for various reasons, they may not always give a true and present reflection of the candidate or they may reflect what the employee’s capabilities were at a different time and this may not necessarily match their current skills. References can also depict suitability for a role that is dissimilar to the one being filled. For this reason it is advisable for employers to engage new members based on multiple evaluations to protect themselves and to ensure not to waste any time or resources on someone who is not adequately equipped for the role. An applicant’s cover letter and curriculum vitae, as well as the resulting interview(s), can tell an employer a lot about the potential new employee - it is not uncommon, however, to ask shortlisted candidates to perform competency-based assessments or aptitude tests so that the employer can acquire a full picture of the candidate’s abilities and determine whether or not he or she is the right fit for the vacancy. It is customary for employers to hire new members on a probationary period of 6 months or a term not dissimilar to this. This probationary period does not prejudice the Company’s right to dismiss in accordance with the notice provisions contained in the employee’s individual statement of main terms of employment, or without notice for reasons of gross misconduct, should this be necessary. This period should be used by the employer to fully assess the employee’s work performance and establish suitability. If the work performance is not up to the required standard or the employee is considered to be unsuitable the employer should either take swift remedial action or terminate the employment, without recourse to the disciplinary procedure. At the end of the probationary period the employee should again be reassessed. If he or she has not reached the required standard the employer should, at their discretion, either extend the probationary period in order that remedial action can be taken or terminate the contract of employment. The probationary period should not in any case exceed eleven months in total.  The employee should receive notice of the Company’s intention to extend the probationary period before or at the end of the initial 6 month probationary period. A clause should allow that any continuous period of absence of four weeks or more would suspend the probationary period until the employee’s return to work. To avoid any risk of discrimination, policies (like the probationary period outlined above) should be fair and consistent and should apply to all new employees throughout the Company.  In disciplinary proceedings, when dealing with employees on probationary periods, progressive steps can be skipped but it is a common misconception that fair procedures and natural justice need not be adhered to during the probationary period. The Unfair Dismissals Acts 1997-2007 will not apply to the dismissal of an employee during a period at the beginning of employment when he/she is on probation or undergoing training provided that: •the contract of employment is in writing •the duration of probation or training is one year or less (including annual leave) and is specified in the contract It is important to bear in mind that this exclusion from the Acts will not apply if the dismissal results from trade union membership or activity, pregnancy related matters, or entitlements under the maternity protection, parental leave, adoptive leave and carer's leave legislation.

Since 2001 The HR Company, B2E Ltd. has been successfully providing a cost-effective HR and advice support service(s) for small to medium sized businesses (SMEs) across Ireland. The HR Company also assists several large corporations and multinationals with their HR operations. With so many pieces of employment legislation in place in Ireland it is a challenge for companies to ensure that they are fully compliant on all counts. The HR Company is an Irish-owned company headed up by Philip Carney, former head of HR for Microsoft’s European Operations Centre, and Angela O’Grady, former Staffing and Recruiting Manager. A team of 20 HR specialists provide peace of mind for Employers by guiding them on all aspects of Irish Employment Law.   The HR Company provides a very affordable 24/7 protection service to those who wish to offload the burdens and risk associated with HR activities.  Whether it relates to disciplinary procedures, annual leave, redundancy or anything in between; a dedicated account manager is at the end of a phone to guide Employers and help insulate companies whenever a query about best practices in HR arises. Not only does The HR Company provide bespoke employment documentation to ensure companies pass a National Employment Rights Authority (NERA) inspection, tailored disciplinary letters and any other relevant material are prepared by dedicated account managers to ease the load on the Employer. The HR Companyacts as the eyes and ears of the Employer on all HR related issues – protecting companies by keeping them informed on any relevant legislation updates. In this era of increased employee litigation employees know their rights – companies should shield themselves against the risk of a costly dispute by arming themselves with the best on-call support.

Many employers have experienced theft by an employee in the workplace and, consequently, need to put certain measures in place in order to protect the profits of the company. It is the policy of some companies to search employees’ personal belongings when they are leaving the work premises. Employers can also reserve the right to search employee lockers and vehicles if this is agreed with the employee in advance.   If the employer wishes to have the option to carry out personal searches then it is crucial that all details surrounding these searches are clearly communicated to the employees in the contract of employment. Employees sign this contract and by doing so agree to the policies and procedures contained therein.  If an employer reserves the right to search an employee’s belongings then he or she must do so in a dignified manner – giving the employee appropriate levels of privacy. There are several significant procedures to observe when performing a personal search. The individual carrying out the search should be in a management position and, in the interest of clarity; the employees should be made aware in advance who it will be. The location of the search is also something that should be considered very carefully – it is important to maintain consistency and to carry out searches in an area that offers privacy to the employee involved. Employees should be notified of the location of the search and, ideally, it should be out of the view of customers and other employees. The shop floor is not appropriate search setting – the canteen is not suitable either. Ideally the area should be covered by CCTV in order to prevent a “he said she said” situation from arising. If this is not possible then a witness should be present so that this scenario is avoided. Either way discretion is of cardinal importance. As is procedure with airline security screening a male should search a male and a female should search a female, although, as the searches should not involve body contact this is less of a priority. It is essential that the employee is asked to open his or her bag, for instance, and that the person performing the search doesn’t breach privacy by putting their hands into the employee’s bag or on the employee’s person. Employees should be asked politely to remove any suspicious items from their bag for further inspection – the item/items should be placed on a clear surface in order to ensure that there is no confusion over what was actually in the bag. The searching employee (management/security where possible) should never assume that an item has not been paid for. If the item in question was from the store then the employee should be asked to produce a receipt for same. Further action can be taken if the employee cannot furnish proof of purchase. When an employee purchases an item in the store during the working day it is good practice for companies to put in place a policy where the bag is sealed and the receipt is attached to the bag. This removes any ambiguity. Some companies will carry out spot checks on employee belongings rather than checking them on a daily basis – it is vital to be fair and to ensure that the same employees are not targeted all the time. Not following appropriate procedures can lead to employees being awarded large sums of money. 

The Protected Disclosure Bill 2013 was published on July 3^rd 2013 by Minister for Public Expenditure and Reform, Brendan Howlin, T.D. The Bill is to establish a comprehensive legislative framework protecting whistleblowers in all industries in Ireland. The purpose of the legislation is to protect workers who raise concerns regarding wrongdoing (or potential wrongdoing) that they have become aware of in the workplace. The Bill will offer significant employment and other protections to whistleblowers if they suffer any penalties at the hands of their employer for coming forward with information of wrongdoing in the workplace.   The legislation, which is due to be enacted in the autumn, closely reflects best practices in whistleblowing protection in developed nations around the world. According to Minister Howlin the Bill “should instil all workers with confidence that should they ever need to take that decisive step and speak-up on concerns that they have about possible misconduct in the workplace, they will find that society values their actions as entirely legitimate, appropriate and in the public interest”. Some key elements included in the Bill are as follows: Compensation of up to a maximum of five years remuneration can be awarded in the case of an unfair dismissal that came about as a result of making a protected disclosure. This would be a massive step forward in Ireland’s attempt to match the standards set by other established nations. It is important to note that limitations relating to the length of service that usually apply in the case of Unfair Dismissals are set aside in the case of protected disclosures. As a result of this Bill whistleblowers will benefit from civil immunity from actions for damages and a qualified privilege under defamation law. The legislation provides a number of disclosure channels for potential whistleblowers and stresses that the disclosure, rather than the whistleblower, should be the focus of the attention. Protections for the whistleblower remain in place even where the information disclosed does not reveal any wrongdoing when examined. Deliberate false reporting, however, will not be protected. These measures, when enacted, should encourage more people to come forward, and feel comfortable doing so, when they become aware of (or suspect) any criminal activity, misconduct or wrongdoing in the workplace.

The Minister for Finance, Michael Noonan T.D., published the Finance Bill 2013 on 13^th February 2013. The Bill provided for the Budget day announcement that, effective 1^st July 2013, Maternity Benefit, Adoptive Benefit and Health & Safety Benefit payments will be treated as taxable income. As with all other Social Welfare payments; Maternity, Adoptive and Health and Safety Benefit will remain exempt from Pay Related Social Insurance (PRSI) and Universal Social Charge (USC). 

 

This measure will mean that women entitled to these benefits will pay the same level of income tax while in receipt of the benefit as they do when they are working.

Once the benefit is approved by the Department of Social Protection, Revenue will be notified of the applicable figure and will reduce the relevant allowances (tax credit and standard rate cut-off point in respect of the employee) accordingly. Revenue will notify the employer or pension provider of the applicable adjustment by means of a new P2C in respect of the employee. The P2C is the employer copy of the employee tax certificate.

The issuance of a revised P2C is the only thing that the employer needs to be actively aware of in relation to maternity or adoptive benefit. However, since the employer pays the first 21 days of the Health and Safety benefit the new taxation provided for in the Finance Bill may have more of an impact on the employer and the payroll administrator here.

The net income paid to the recipient for the period is going to be reduced by the new taxation. Consequently, one significant result of this new provision might be mothers/expecting mothers availing of reduced periods of maternity/adoptive leave.