General Guide to Employment Law Introduction

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1 General Guide to Employment Law Introduction In recent years, the relationship between employer and employee has been regulated more and more by legislation, much of which has originated at EU level. Human resources (HR) management has also undergone significant change, with most organizations facing the challenge of keeping up to date and compliant with the changes in employment whilst managing staff at all levels in a difficult economic environment. One of the effects of the increase in legislation has been to weaken the value of the actual employment contract as increasingly employee rights are being enshrined in law. There are three principal sources of employment law: - Bunreacht na heireann/irish Constitution - Precedent Law/ Common Law - Legislation Bunreacht na heireann/irish Constitution The Irish Constitution grants 3 basic rights to employees whose effect on the employer/employee relationship should not be under-estimated: - Each person has the right to earn a livelihood. - Each employee has the right to decide whether or not to join a trade union this does not impose a requirement on the employer to recognise that trade Union. - Each employee has a right to Natural Justice. In short, where an employee is accused of wrongdoing or his/her employment is terminated, they have the right to know the nature of the allegations made and to be given the opportunity to answer same. Precedent law/common law The relationship between employer and employee is a legal one, usually regulated by an page 1 / 8

2 employment contract, and therefore may also be influenced by the common law principles of contract, either in respect of the actual terms agreed between the parties or by court decisions involving such issues in the past. Legislation As with any EU member state, Ireland is obliged to incorporate EU law into domestic legislation. Consequently events at the European level have helped to shape Irish employment law, including EU Directives, Regulations and decisions of the European Courts. The National Employment Rights Authority (NERA) The National Employment Rights Authority (NERA) was established by the Government in February 2007 on foot of a commitment in the social partnership agreement. NERA aims to secure compliance with employment rights legislation among employers and to foster a culture of compliance in Ireland through five main functions: - Information - Inspection - Enforcement - Prosecution - Protection of young persons It should be noted that random inspections do take place with inspectors examining all employment and work records of employees including employee contracts and handbooks. NERA can take legal action against non-compliant employers and impose fines. Commencement of employment Under the terms of the Employment (Information) Act 1994, an employer is obliged to provide a new employee with a Statement of Terms & Conditions outlining the following information: - Name and address of employer and employee - Place of work and date of commencement of employment - Job title and description of duties page 2 / 8

3 - Hours of work, including overtime - Rates of remuneration and payment details - Entitlements to rest periods and breaks - Periods of notice that must be given by both parties - Grievance and disciplinary procedures - Pensions/ PRSA information Wages All employees are entitled to a written statement showing details of the gross salary payable and of any deductions made (Payment Of Wages Act 1991). In accordance with the National Minimum Wage Act 2000, a minimum hourly wage now apples to any person working under a contract of employment, including part-time employees. The current minimum wage is 8.65 per hour; there are exceptions to this including employees in industries which are covered by registered employment agreements and employees who are under 18 years of age. Equality/discrimination It is illegal to discriminate against any employee or prospective employee through the recruitment process on the grounds of: - Gender - Age - Marital status - Sexual orientation - Religious belief - Disability - Race - Membership of the travelling community Employers are responsible for the action of their employees during the course of employment, even if such actions are carried out without their knowledge or approval. Therefore employers should take reasonable steps to prevent harassment and discrimination within their workforce. Part-time workers page 3 / 8

4 Legislation is in place to ensure that part-time employees enjoy the same rights and protection as full-time employees and prohibit discrimination against part-time employees. If a part-time employee is treated less favourably than his full-time colleagues, the employer must justify the treatment on objective grounds. Holidays Every employee is entitled to 4 weeks paid annual leave per year (Organisation Of Working Time Act 1997). Employees are also entitled to 9 further days of paid leave for Bank Holidays. It should be noted that employees out on maternity leave are deemed to be in employment while on such leave and therefore are entitled to their 4 weeks holidays per year. Maternity leave All employees are entitled to maternity leave of 26 consecutive weeks. Employers are not obliged to pay the employee during this time but maternity benefit may be available from the state provided appropriate PRSI contributions have been made. The employee is also entitled to extend this maternity leave by up to 16 additional weeks. Again this is unpaid leave and it should also be noted that maternity benefit is not paid by the Department of Social Protection for this extended period. Employees must give 4 weeks written notice to the employer of her intention to take maternity leave. Employees are also entitled to paid time off during working hours for pre-natal and post-natal medical checks. The employee has the right to return to her old job after returning from maternity leave, or to a suitable replacement post with the same terms. Notice of termination of employment given during maternity leave is void. Adoptive leave An adopting mother (or sole adopting father) is entitled to 24 weeks adoptive leave commencing on the date of placement. Again the employer is not obliged to pay the employee during this period but social welfare payments may be available. As with maternity leave, the adoptive leave may also be extended by 16 weeks. The employee has the right to return to her old job or a suitable replacement. Parental leave page 4 / 8

5 The Parental Leave Act 1998 grants 14 weeks leave to both parents following the birth or adoption of a child. There is no obligation on the employer to pay the employee during this leave nor is there any entitlement to social welfare payments. The leave may be taken as a continuous 14 week period or may be broken up over a period of time. Normally agreement is reached between both parties. The employee is entitled to return to work on the terms and conditions as before. In general the employee must have 1 year of continuous service before being entitled to parental leave. Emergency leave Emergency leave is also available whereby an employee may leave work when his/her presence is required due to an injury or illness of certain close relations. This is limited to 5 days in 3 years, with a maximum of 3 days in any 1 year. The employer must pay the employee during this period. Carer s leave The Carer s Leave Act 2001 provides an entitlement for employees to avail of unpaid leave for a maximum of 65 weeks to personally care for someone who requires full-time care and attention. The employee must have 12 months of continuous service before being entitled to avail of carer s leave. Working hours The Organisation of Working Time Acts set out the rules regarding working hours. The maximum average hours an employee may work is 48 hours per week not including rest periods or break time. The average is generally based on a 4 month period. Employees are entitled to rest periods of at least 11 continuous hours in every 24 hours, and must have at least one weekly rest period of 24 continuous hours. There are various exception to the above including different rules for Sunday workers and night workers. The Acts impose an obligation on employers to maintain appropriate records to demonstrate that they were complying with the statutory provisions. The following is a summary of the records to be kept: - A record of the number of hours worked by each employee on a daily basis. page 5 / 8

6 - A weekly record of the notification of the starting and finishing time of employees. - A record of leave granted to employees each week and details of payment made in respect of same. Redundancy The area of redundancy has been heavily regulated in recent years, particularly areas such as redundancy payments and selection processes. Then following is a brief summary of some of the issues involved: Redundancy payment The Redundancy Payment Acts outline the various situations which would constitute Redundancy for legal purposes, including for example: - The requirements of the business for employees to carry out work of a particular kind in that particular place have ceased or diminished - The employer had decided to carry on the business with fewer employees and the work performed by the employee(s) in question is to be allocated to other employees Where an employee is being made redundant, he/ she may be entitled to a statutory redundancy payment provided certain conditions are met, the main ones being: - The employee must be over 16 years of age - The employee must have been continuously employed for 104 weeks The statutory redundancy payment is calculated by reference to the employees weekly wage as at the time he/she is declared redundant. However, this figure is subject to a maximum of 600 per week. The payment, which is exempt from income tax, is then calculated as 2 weeks normal pay for each year of service plus 1 bonus weeks pay. The employer is entitled to a rebate from the Department of Enterprise, Trade and Innovation of 60% of the redundancy amount paid to the employee. page 6 / 8

7 Where an employer is unable, due to financial circumstances, to pay an employee their statutory redundancy entitlement, there are provisions under the scheme for the employee to be paid their entitlement directly by the Department with the employer then obliged to repay the Department their portion of the cost (40%) at a later date. While employers are obliged to make a statutory redundancy payment when the relevant conditions are met, often an additional payment is made either as a goodwill gesture or because the terms of the employment contract provide for same. The tax status of such a payment will depend on the circumstances involved. Fair selection for redundancy Where an employee feels he/she has been unfairly selected for redundancy, he/she may file an unfair dismissal suit in accordance with the Unfair Dismissal Acts. An employee selected on the basis of any of the following grounds would be regarded as unfair : - Trade union membership - Religious or political opinions - Race, colour, age or sexual orientation - Membership of the travelling community - Pregnancy - The employees involvement in any criminal proceedings against the employer If the selection method is different to any selection procedure previously agreed between the employer and employee(s) or trade union, the employer must show that there were special reasons which justified doing so. Unfair dismissal Where an employee feels they have been unfairly selected for redundancy, they may apply to for a hearing with the Employment Appeals Tribunal (EAT). It should be noted that the employee must have at least 1 year of continuous service before he/she can make an unfair dismissal claim. An employee may also make a constructive dismissal claim, i.e. the employer s behaviour was such that the employee was forced to leave. If EAT finds that there was an unfair dismissal - for example if the situation did not constitute a genuine redundancy or if the employee was unfairly selected they have the power to: - Re-instate the employee to their former position or to re-engage him/her in a new position. - Award compensation - up to a maximum of two years gross salary. page 7 / 8

8 In unfair dismissal claims, the burden of proof rests with the employer who must justify his position and the action taken. In this connection, an employer should always ensure that the correct procedure is followed when dismissing an employee. Collective redundancies The Protection of Employment Act lays down certain procedures which an employer must comply with if considering group redundancies. First and foremost the employer should enter into negotiation with employee representatives usually but not always a trade union. The employer is also obliged to notify the Minister of Enterprise, Trade & Innovation of the planned redundancies. Redundancy procedure The Minimum Notice and Terms of Employment Act provides basic minimum periods of notice that must be given by the employer when terminating an employment irrespective of the terms set out in the contract of employment. All employees with 13 weeks or more continuous service are entitled to a minimum period of notice which is based on their length of service: 13 weeks to 2 years service 1 week 2 years to 5 years service 2 weeks 5 years to 10 years service 4 weeks 10 years to 15 years service 6 weeks 15 years or more 8 weeks The employee may be entitled to a longer period of notice if provided for in the contract of employment. The employee has the right to waive his/her right of notice and may accept a payment in lieu of notice. A Form RP50 must be given to the employee by way of notice of redundancy. A copy of this form is also submitted to the Minister of Enterprise, Trade & Employment.. Related Article: 10 Tips for Successful Staff Retention Please call Noel Murphy today on if you need further information on employment law or a free consultation. page 8 / 8

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