Employment law in Ireland - a different kettle of fish

Relevant legislation of the Oireachtas, Ireland's parliament, includes the following:

• Redundancy Payments Acts, 1967 – 2007;
• Minimum Notice and Terms of Employment Acts, 1973 – 2001;
• Payment of Wages Act, 1991;
• Unfair Dismissals Acts, 1977 – 2007;
• Organisation of Working Time Act, 1997;
• The Pensions Act 1990;
• Employment Equality Acts, 1998 – 2008;
• Health, Safety & Welfare at Work Act, 2005;
• Protection of Employees (Fixed Term Work) Act, 2003;
• Protection of Employees (Part Time Work) Act, 2001;
• The Data Protection Acts 1988 and 2003; and
• The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 [known as TUPE].

While the above may appear to mirror the equivalent legislation in the UK, the manner in which the Irish courts and state agencies have interpreted and applied the legislation has created an entirely different environment here. In addition the Constitution of Ireland has had a pervasive effect on employment law, as in every other area of Irish jurisprudence. A further influence is the political doctrine of 'social partnership' promulgated in Ireland over the past 30 years.

The principal state agencies charged with administering employment legislation are the Labour Relations Commission, Rights Commissioner Service (RCS) and Employment Appeals Tribunal (EAT). Information on legal entitlements is provided by the National Employment Rights Authority. Also, many employee complaints are now brought before the Equality Tribunal. High level disputes between employers and trade unions are addressed by the Labour Court. Claims for personal injury arising from the workplace must initially be brought before the Injuries Board to obtain an 'authorisation'. The Health & Safety Authority also has employment law powers.

In addition to the state agencies, an employee can seek remedy in the courts. Upon receiving an authorisation from the Injuries Board, a claim for personal injury may be pursued in the Circuit Court (quantum capped at €38,092) or High Court. Also, an aggrieved employee may bring an action for breach of contract, breach of duty or misrepresentation in the Circuit Court or High Court (depending on quantum). The thorny subject of injunctions in employment law cases is addressed later in this article.

Multiplicity of forums

In a speech on 1 July of this year, Minister Richard Bruton TD referred to the multiplicity of channels through which an employee may currently bring a complaint and to "forum shopping" on the part of complainants. The Minister declared his intention to establish a single point of entry for employees bringing complaints against employers by merging the present half a dozen state agencies into two bodies, one of first instance and the other for appeals. Under the existing regime, an employer can find himself defending the same set of circumstances in several places at once and it is a recognised tactic for the employee to bring multiple complaints with the objective of inundating the employer.

The RCS/EAT website facilitates complainants bringing an action against an employer without the assistance of a solicitor. There is no charge for bringing a complaint and the same grievance is often complained of under several headings. In terms of limitation period, complaints to the RCS/EAT must filed within 6 months; however, there is a provision in the legislation allowing for an additional grace period of 6 months. Claims to the Injuries Board must be brought within 2 years. Under the Unfair Dismissals Acts, the minimum length of service is 1 year; under the Redundancy Payments Acts it is 2 years; under most other employment legislation, there is no minimum length of service for an employee to bring a complaint.

The advantage for an employee in bringing a complaint to the RCS is that a hearing takes place within 3 to 4 months (before a rights commissioner), whereas a complaint to the EAT may take over a year to come on for hearing (before a three person tribunal). Either party may appeal a decision of the RCS to the EAT while appeals to the High Court are permissible only on a point of law. In addition, in the case of complaints under the Unfair Dismissals Acts and Redundancy Payments Acts, if either party objects to a rights commissioner hearing the case, the matter must go to the EAT; in certain cases it may be advantageous for the employer to so object.

The jurisdiction of the RCS and EAT is two years' salary, although an award of more than one year would be unusual. Chillingly for the employer, the RCS and EAT also have jurisdiction to make an order of re-instatement. The RCS and EAT have no power to award costs; each side pays its own. Generally, where a compromise is reached, the employee would look for a contribution to his costs as part of the settlement sum. A compromise agreement is valid only where the employee was advised in writing by the employer to seek independent legal advice.

Significant legislation

The areas of employment legislation of most concern to our UK clients are the Unfair Dismissals Acts, Redundancy Payments Acts and TUPE and it might be useful to set out a summary of the principal provisions of that legislation.

Unfair Dismissals Act 1977 section 6(7) (as amended):

Section 6(7) provides that in determining if a dismissal is an unfair dismissal, regard may be had to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with any dismissal procedure or with the provisions of any code of practice.

Where employers often fall down is in failing to observe fair procedure. Article 40.3 of the Constitution - as interpreted by the High Court and upheld by the Supreme Court in two seminal cases, Ryan v Attorney General [1965] and Garvey v Ireland [1980] - imports the principle of due process into Irish law. The courts and state agencies have applied this principle extensively with the result the employee is afforded a higher level of protection than in the UK. The EAT frequently finds that the employer has breached fair procedure, in many cases the employer's own procedure as contained in the staff manual. In Fennell v Resource Facilities Support Limited [2009], the EAT awarded the employee €127,350 in a situation where it was held the redundancy was genuine but the employer had breached fair procedure.

Pursuant to the primary legislation, a number of state agencies have published various codes of practice on matters such as grievance procedures, bullying, health and safety at work and other employment topics.

Redundancy Payments Act, 1967 section 7 (as amended)

Section 7 provides that an employee dismissed by his employer by reason of redundancy is entitled to a redundancy payment and that an employee is taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to:

1. The fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or
2. The fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or
3. The fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or
4. The fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or
5. The fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

Redundancy is a defence to unfair dismissal but the employer must prove it was a genuine redundancy. The guiding principle is that it's the position that is being made redundant, not the person. Where there are two employees of similar competence doing the same job and only one position is being made redundant, the principle of last in/first out applies.

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 [known as TUPE]:

TUPE applies to asset sales, not sales of shares. It applies where the entire undertaking or only part of it is transferred. It protects full-time and part-time employees. Both the transferor (old employer) and the transferee (new employer) have a disclosure obligation to inform the employees concerned at least one month prior to the date of transfer; the EAT is known to award up to 4 weeks' pay against an employer who fails to fulfil this obligation.

The legislation affords the following protection to an employee:

1. Transfer with accrued service;
2. Transfer with existing terms & conditions;
3. Dismissal is prohibited;
4. Includes collective agreements;
5. But, excludes any pension arrangements with the old employer.

There is no minimum period of service for an employee to come under the protection of TUPE. For example, an employee who had completed four months' probation with the old employer would be entitled to complete the remaining two months' probation with the new employer. There is a significant difference in the application of TUPE in Ireland compared to the UK arising from the TUPE Regulations 2006 which codified the law in the UK. No similar regulations were introduced in Ireland and as a result the Irish courts and state agencies are bound by EC regulations and rulings of the European Court of Justice (ECJ). Crucially, Ireland has followed the ECJ ruling in the Süzen case, which concerned the awarding of a cleaning contract to a new contractor after a tendering process, whereas the UK hasn't.

To what extent do employers/employees have recourse to the High Court?

Whereas in the London courts, applications by employers for orders restraining the actions of trade unions are commonplace, this is not the practice in Ireland since a series of failed applications in the 1970s. A complex structure of government/employer/trade union partnerships has sprung up in Ireland in the interim. However, a decision of the High Court on 7 July of this year has put the cat among the pigeons.

In the case of John Grace v The Catering JLC, the Labour Court & the Attorney General, Mr Justice Feeney ruled that sections of the Industrial Relations Acts are unconstitutional and the court quashed an Employment Regulation Order in the catering industry and impugned the basis on which Joint Labour Committees are established. Nobody is certain what the consequences of this ruling will be; it is possible the situation in Ireland will now move away from consensus to a more fractious environment.

As regards applications by employees seeking to restrain the actions of employers, for example injunctive relief against dismissal, it had been thought the law in Ireland was settled in light of three leading decisions. In O'Mahony v Examiner Publications (Cork) Limited [2010], Miss Justice Laffoy, restating her judgment of the previous year in Nolan v Emo Oil Services, denied an application for an injunction restraining dismissal on the purported grounds of redundancy, ruling that the applicant should have sought redress in the EAT pursuant to the Unfair Dismissals Acts rather than seeking relief in the High Court. This position was restated in the High Court on 14 June of this year in McGrath v Athlone Institute of Technology when Mr Justice Hogan said the law was such that an employer could terminate a contract of employment at will, adding that the fairness of any termination could be challenged through the Unfair Dismissals Acts. The applicant failed to obtain an injunction restraining termination of his employment.

Notwithstanding the decisions in the O'Mahony, Nolan and McGrath cases, on 13 September of this year in Craig v Fás, Mr Justice Gilligan granted an injunction restraining the employer from taking any further steps to implement the purported dismissal of a senior manager. The court granted a further order restraining the employer from making or communicating or publishing any adverse or disparaging statements concerning the applicant. On 28 September in McCourt v Cavan Credit Union, the High Court granted an order restraining the employer from dismissing the applicant and on 3 October this order was extended for a further two weeks by Mr Justice Charleton. While there were extenuating circumstances in the Craig and McCourt cases, nevertheless it is evident the law in Ireland regarding injunctions in employment cases is far from settled.

Conclusion

It is hoped the foregoing gives readers a sense of the significant difference in employment law as between Ireland and the UK. Employers versed in the law prevailing in the UK are strongly advised to seek the advice of local solicitors in respect of their activities in Ireland.