Employment Law | Terry Gorry & Co. Solicitors

Redundancy in Ireland | The Employers’ Obligations in Non-Collective Redundancies

An employer’s obligations in redundancy situations will depend on whether a collective redundancy is proposed or it is a “normal” redundancy in a small business in Ireland. This piece will look at non-collective redundancies; in collective redundancies there will be additional requirements on the employer imposed by the Protection of Employment Acts 1977 to 2007 and various regulations and other legislation.

Non Collective Redundancies

In non-collective redundancies in Ireland there are no specific procedural requirements set out to carry out a redundancy dismissal. What the employer must be very aware of though is the Unfair Dismissals (Amendment) Act, 1993 as this act holds that if the conduct of the employer is unreasonable in carrying out a redundancy then it may amount to unfair dismissal.

So it is vital that the employer act reasonably in carrying out a redundancy and a principal factor in how reasonable the behaviour was will be how the employer selected the employee(s) for redundancy and whether there were other alternatives to redundancy such as alternative employment or some other type of work in the employer’s business.

From an employer’s perspective it is important to be able to point to the reasonableness of his conduct when faced with the necessity for redundancy. Even though it is not a procedural requirement from a legal perspective it is good practice for the employer to hold meetings and discussions to explore any alternatives and it would be prudent for the employer to make a record of these discussions and proposals.

The ability of the employer to be able to point to a paper trail of how the decision to carry out redundancies was arrived at can prove invaluable at a later date, for example at an EAT or Rights Commissioner hearing.

The key point for an employer is to be able to demonstrate that people were selected fairly for necessary redundancies and that the employer acted reasonably at all stages of the process. The selection of employees for redundancy has led to many employers paying quite a high price at a later date before the Employment Appeals Tribunal and unfortunately there are no criteria laid down in legislation for the selection of employees.

Some factors to be considered by the employer should include

Attendance record
Ability
Disciplinary record
Skill level

While many employers employ a policy of “last in, first out”. If there is a procedure in place in the workplace to deal with redundancy, as there is with most unionised workplaces, the employer will have to be able to show that the procedure was used to select each employee made redundant.

Nevertheless, no matter what criteria are used, the employer may well have to stand over his/her selection procedures at a later date and being able to objectively justify his choice will be his best defence.

TUPE Regulations -Transfer of Undertakings Directive

The Transfer of Undertakings Directive of 1977, which became part of Irish law by the European Communities (Safeguarding of Employees’ Rights on Transfer of Undertakings) Regulations, 1980, protects the rights of employees where the business in which they are employed is transferred to a new owner.

What is an undertaking?

It is important to note that the TUPE directive covers undertakings and businesses or parts of undertakings and businesses-this leads to the critical question of what an undertaking is and as there is no definition in the legislation it has led to much case law with each case being decided on it’s own particular facts.

Key elements of the TUPE regulations

The key thrust of the TUPE directive is that the rights and obligations in respect of employment contracts of the transferring business are transferred to the new business.

There must be a change of employer-this is a fundamental criteria
A change of employer can occur where full ownership does not change (management responsibility may change and transfer to a subsidiary for example)
Pension entitlements are excluded insofar as they do not have to be continued by the new company
The parties to a transfer have an obligation to notify, inform and consult with employees or their representatives
If TUPE legislation is breached the problem rests with the new business (the transferee)
The TUPE directive does not apply where the reason for the transfer is the insolvency of the transferring business.
TUPE also does not apply where the business is transferred by a transfer of shares
TUPE may apply even where there is no agreement between the two businesses, for example where a lease or franchise is surrendered by operation of law.

(This is part of the employment law Ireland series)

Who does TUPE apply to?

Firstly employees but also persons having an employment relationship with the transferor. This may mean agency workers, depending on who pays them, for example and the Labour Court has held that agency workers can be covered by the directive, depending on the particular circumstances of the case.

Conclusion

If you are thinking about purchasing a business in Ireland or the EU there is quite a lot of complex issues which you would be well advised to obtain legal advice for.
There is considerable body of decided case law which teases out many issues that have arisen in this area-matters like

the cessation and resumption of a business prior to transfer,
what is an undertaking,
who is covered by the legislation,
whether public bodies are undertakings,
questions surrounding dealerships and franchises,
transfer of part of an undertaking,
the difference between an “activity” and an undertaking and so forth.

For this reason do consult a solicitor if you feel that your rights have not been upheld in this potentially complex area.

Filed Under: Employment Law Tagged With: transfer of undertakings, tupe, tupe regulations

Constructive Dismissal in Ireland-What is Constructive Dismissal?

Constructive dismissal in Ireland is covered by the Unfair Dismissals Act, 1977 in section 1(b) as it provides that a dismissal is, among other definitions,

“the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer.”

Essentially where an employee terminates his employment as a result of his employer’s conduct he may be able to successfully bring a case for constructive dismissal.

It is vitally important to note that in a constructive dismissal case the onus of proof is on the employee as he/she needs to prove that his/her resignation was justified. This can be contrasted with a case of unfair dismissal where the employer must prove that the dismissal was fair and justified.

Examples of potential constructive dismissal cases

Some examples of circumstances giving rise to a claim for constructive dismissal are set out below. However it is vitally important to understand that in all legal cases, the particular circumstances of the case will be a huge factor in success or failure and the examples below are not definitive or exhaustive.

A unilateral reduction in pay

This may give rise to a case for a successful constructive dismissal case as it may be a material breach of a fundamental clause in the contract of employment.

A change in job function

A unilateral change in the functions of your job may give rise to a successful constructive dismissal claim.

Adverse working environment

Change of work location

Where the contract of employment does not make provision for a change of work location it can give rise to a claim.

Undeserved warnings
Sexual harassment in the workplace
Abuse in the workplace
Change in work hours
Conduct of fellow employees.

All of the examples above have given rise to successful claims for constructive dismissal on one occasion or another; however this does not mean that these situations will automatically lead to a successful claim.

Remedies for constructive dismissal

Possible remedies for unfair or constructive dismissal which the EAT (Employment Appeals Tribunal) can order include

Reinstatement in the job
Re-engagement
Compensation.

To bring a case under the Unfair Dismissals Act, 1977 you will need to have at least one year’s continuous service with the employer and have exhausted all internal grievance procedures of the company.

You must also bring your claim within 6 months of the date of termination of your employment (12 months in exceptional circumstances) and can bring it to a Rights Commissioner who will make a recommendation or you can bring your complaint directly to the Employment Appeals Tribunal who will issue a determination.

This determination of the EAT can be appealed to the Circuit Court by either you or the employer.

Word of warning

Take legal advice before doing something as drastic as resigning your position of employment and exhaust all internal grievance/complaints procedures as this will ultimately strengthen any case you bring.

Filed Under: Employment Law Tagged With: constructive dismissal, unfair dismissal, unfair dismissals act

Redundancy Entitlements-Redundancy Calculator Ireland

Calculating your redundancy entitlements is pretty straightforward with the redundancy calculator provided online by the Department of Social Protection.

What is redundancy?

The definition of redundancy in Ireland is set out in the Redundancy Payments Act 1967 and amended by the Redundancy Payments Act 1971 and 2003-

an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) 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

(b) 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

(c) 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

(d) 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

(e) 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.

Key factors in redundancy

There are two critical factors to be gleaned from this definition-

The redundancy should arise from the doing away with the job, not the person. This feature of impersonality is necessary in a genuine redundancy situation.
Change-the change must arise as a result of change in the workplace which might range from a closing down of the business to a simple reduction in number of employees.

Redundancy payment entitlement

To be entitled to a redundancy payment you must have the requisite period of service served which is:

104 weeks of continuous employment attained after the age of 16 years.
Dismissal

To be entitled to redundancy you will need to have been dismissed from your job; if you are given a new contract of employment or your old contract is renewed you will not be entitled to redundancy.

Short time/lay offs

You can be placed on short time or laid off where the employer is unable to provide work but only where the employer reasonably believes that the lay off will not be permanent.

The employer is generally obliged to pay the employed during this time although there are exceptions to this general rule depending on custom and practice in specific situations.

Redundancy payments

Redundancy payment entitlements are calculated by reference to weeks per year of service and is basically calculated as follows:

2 weeks’ pay for each year of continuous employment over the age of 16 years
An additional one week’s normal earnings.

All earnings over €600 per week are disregarded though in calculating statutory redundancy payments and redundancy payments are tax free.

(Continuous employment is not broken by layoffs, holidays or sickness.)

Redundancy calculator

You can access a redundancy calculator on the website of the Department of Social Protection to calculate your redundancy entitlements.

Filed Under: Employment Law Tagged With: redundancy calculator, redundancy calculator ireland, redundancy entitlements

Do You Make Costly Mistakes in These 9 Areas as an Irish Employer?

Being an employer in Ireland is a difficult challenge at the best of times.

There is a huge body of employment law which places fairly onerous obligations on the employer.

There are key areas of possible friction for you as an employer and which can lead to costly and expensive mistakes in your dealings with your employees.

There are a number of key areas where things can go badly awry-lets take a look at some of the most common ones.

Key areas of concern for an Irish employer

1) The Contract of employment

This is a critical area to get right from the outset and to prevent problems arising in the future. Watch out for implied terms as well as the express terms you agree with your employee. (See contract of employment for more information)

2) Payment of wages

The Payment of Wages act 1991 governs the payment of wages by an employer to the employee.

3) Time and leave entitlements

This area covers rest periods, sickness of the employee as well as holiday and maternity periods and is an area of friction between employer and employee. The Organisation of Working Time Act, 1997 and various EU directives have a lot to say in this area.

4) Discrimination and equality in the place of work

This is another huge area of law with rights and entilements arising from the Constitution, EU directives and our own Irish legislation such as Employment Equality Acts.

Many employers get caught out, not by direct discrimination but, by indirect discrimination.

5) Health and safety

Health and safety law places some very serious obligations on the employer and there are common law obligations as well as statutory obligations. Breaches of health and safety law can lead to criminal convictions for you as an employer.

6) Transfer of undertakings

This covers situations where one business buys another in which there are employees. The Transfer of Undertakings Directive govern this area.

7) Unfair dismissals

Need I say more? This area also covers constructive dismissals and has proven to be an area of considerable cost and expense to employers.

8) Redundancy

If you wish to make an employee redundant it had better be a proper redundancy and the procedure for choosing an employee for redundancy must be fair and non-discriminatory. Read more about redundancy law here.

9) Trade union recognition/disputes

These are 9 broad areas of employment law which can lead to costly mistakes and expense for you as an employer if not handled correctly.

Filed Under: Employment Law Tagged With: contract of employment, employment law ireland, redundancy, unfair dismissal

Working Time And Rest Periods-Organization Of Working Time Act 1997

The leave entitlements and rest periods of employees are governed by the Organization of Working Time Act,1997 which regulates employees rights in relation to maternity leave, paternity leave,sick pay and holiday entitlements.

How working time is defined is important in this regard for example what is the position for employees who are on call. This appears from case law to require that the employee be on call in a particular place for it to count as working time;if the employee has to be on standby but can go home for example it has been held by the courts that this is not working time. This is particularly for doctors, for example, but the same principle applies to all workers.

It is worth noting that the Organization of Working Time Act does not apply to the defence forces or gardai or to certain other employees such as those working in an emergency situation, people working at sea and most importantly does not apply to people who can set their own working hours.

Rest Periods

An employee is entitled to a rest period of at least 11 hours in every work period of 24 hours. While at work an employee is entitled to a 15 minute break every 4.5 hours and an employee can not be obliged to work for more than 6 hours without a 30 minute break.

In a 7 day period an employee is entitled to a rest period of at least 24 hours and employees who are required to work on Sunday must be compensated by extra pay or paid time off or some other arrangement arrived at with the employee.

An employee can not be expected to work in excess of 48 hours per week; note that this is an average period and the average is calculated over 4-6 months so in any one week it is possible for the employee to work in excess of 48 hours but by law employers should not let employees to average over 48 hours per week in a 4-6 month period.

(Check out employment law Ireland also)

Night Workers

Employers can not expect or oblige night workers to work over 8 hours in a 24 hour period; a night worker is a worker who works at least 3 hours post midnight as night work is considered to be from midnight to 7 am.

Filed Under: Employment Law Tagged With: organization of working time act 1997, rest periods, working time

Payment of Wages-The Legal Position

The payment of wages in the employment contract is governed by the Payment of Wages Act, 1991 and this piece of legislation stipulates that wages be paid by cheque, cash, draft, credit transfer and postal order.

The employer is obliged to provide a written statement of wages and deductions at the time of payment.

There are only a few situations where deductions may be made from the emplyee’s wages and these situations include 1) if the law requires it, 2) if provision is made for the deduction in the contract of employment and 3) where the employee has given written consent for the deduction.

The act also goes on to say that where an employee is shortchanged or not paid at all, then the shortage will be considered by the act to be a deduction which is unlawful. Any employee who has a problem in this regard can make a complaint to the Rights Commissioner (within 6 months) and the Rights Commissioner can make an order directing the employer to make payment up to twice the net amount of wages that should have been made to the employee.

Any decision of the Rights Commissioner can be appealed to the Employment Appeals Tribunal and from there to the High Court, but only on a point of law in relation to the latter appeal. It is worth noting that a decision of a Rights Commissioner or a decision of the Employment Appeals Tribunal has the same force as an order of the Circuit Court.

Any term in an employment contract which seeks to limit or exclude the operation of the Payment of Wages Act, 1991 is void and won’t be recognised.

Filed Under: Employment Law Tagged With: employment appeals tribunal, payment of wages, payment of wages act 1991, rights commissioner

The Contract Of Employment

The contract of employment in Ireland is made up of both express terms and implied terms with the Terms of Employment (Information) Act, 1994 stipulating that certain basic information must be given to the employee in writing.

This includes the names and addresses of both employer and employee, the place of work, the title of the job, pay, any terms relating to sick pay, periods of notice and many other basic details.

(This part of the employment law Ireland series of articles)

Implied Terms

In every contract of employment, written or otherwise, there are 4 categories of implied terms which fall under the headings of
a) terms implied by custom/practice(depending on the industry)
b) terms implied by statute (right to redundancy, right not to be unfairly dismissed)
c) terms implied by law (employers duty of care and employees duty of trust and confidence)
d) collective agreements in unionized employment.

Express Terms of Employment

The express terms of employment set out below is a pretty extensive list but it should provide a decent check list of what should be included in a contract of employment and be contained in writing in the contract.
1. Who-the employer and employee
2. When-when does employment start
3. What-what is the job role
4. Hours-hours of work?
5. Where-the workplace
6. Is there a period of probation? For how long?
7. Pay-the salary package
8. Holidays-what is the position re holidays and is there extra days over and above those set down by statute in the Organization of Working Time Act,1997
9. Sick pay-what is the situation re sick pay
10. Retirement age
11. Pension
12. Disciplinary and grievance procedure
13. Any restrictions re competition and setting up against the employer in the future using trade secrets/contacts
14. Notice re termination of employment
15. Email and internet use

This list is not exhaustive but should give a good basis for both employer and employee when it comes to negotiating an employment contract.

Filed Under: Employment Law Tagged With: contract of employment, employment contract, express terms, implied terms, terms of employment act 1994

Unfair Dismissal | Unfair Dismissals In Ireland

Unfair dismissal in Ireland is governed by the Unfair Dismissals Act 1993 and two points need to be made about this legislation at the outset-
1. an employer must have substantial grounds for dismissing an employee
2. in doing so the employer must apply fair procedures to the process.

The Unfair Dismissals Act covers people who have been in employment for at least 52 weeks continuous service. Employees who are not covered include FAS trainees, members of the Defence Forces and Gardai and civil servants.

It may seem blindingly obvious but only employees may use the legislation in respect of a termination of employment-sub contractors for example would not be covered.

Constructive Dismissal

An employee may succeed in a claim for constructive dismissal in circumstances where the employee resigns the employment as a result of the employer’s conduct towards the employee. Circumstances giving rise to this situation include a reduction in pay, a deterioration in the working environment, change of job roles, unwarranted warnings, change of location of the job and many others. Not all of these situations will always give rise to a successful claim for constructive dismissal but these are the kinds of things that employers must be very careful about if they don’t want to end up in the Employment Appeals Tribunal.

However employees on probation up to a period of one year are excluded from the protection of the legislation.

Unfair Dismissals

There are a number of categories of dismissals which the Unfair Dismissals Act 1977 and 1993 deem to be automatically unfair. They are
1. trade union membership
2. the colour, race or sexual orientation of the employee
3. the employee’s religious or political opinions
4. where the employee is involved in legal action against the employer
5. the employee’s age
6. the fact that the employee is a member of the traveling community
7. the employee becoming pregnant
8. the employee taking part in industrial action.

These are the main grounds which the legislation deems to give rise to an unfair dismissal claim and are deemed by the law to be automatically unfair.

Redundancy Defence

The employer has a defence in the form of redundancy but he must be able to show that the employee has been fairly selected for redundancy. However if the employer seeks to employ the redundancy defence he can expect that if an unfair claim is made against him he will find that his redundancy defence is put under a fair degree of scrutiny.

For example, it is not enough that the employer can show that his workforce numbers requirement is expected to decline some time in the future-he must be able to show that is requirements will lower in the very near future to the redundancy that he has just carried out.

Fair Procedure

The Employment Appeals Tribunal is very strong on fair procedure in relation to the termination of an employee’s job; they have held many times in the past that if they find that fair procedure was not followed then they will deem the dismissal to be unfair, regardless of the circumstances.

Filed Under: Employment Law Tagged With: constructive dismissal, unfair dismissal, unfair dismissals, unfair dismissals act

Employment Rights

Employment rights

Filed Under: Employment Law Tagged With: Employment Law, employment rights