Irish Employment Legislation Updates and Guidance

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

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.