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12 May 2021
This article focuses on three areas of employment law in Ireland that have seen recent significant developments:
Although Ireland faces the same challenges with respect to the gig economy as the United Kingdom, there is less flexibility under Irish employment law to deal with them.(1)
There was a proposal in the original draft of the Employment (Miscellaneous Provisions) Act 2018 whereby an employer which incorrectly designated an employee as a self-employed contractor would face a fine of up to €5,000, imprisonment or both. Interestingly, this was dropped due to heavy criticism and lobbying by businesses. Since then, Irish employment law has failed to adapt to take account of new ways of working. While there were certain helpful decisions on the gig economy in the United Kingdom, it was clear that they would have limited value in Ireland until the law changed in Ireland – in particular, towards some form of hybrid 'worker' status.
In December 2019 the High Court rejected an appeal by a Domino's Pizza franchise against a finding of the Tax Appeals Commission (TAC) that its delivery drivers should be treated as employees for tax assessment purposes. Part of the appeal included a submission that the TAC had failed to properly consider the written terms and conditions agreed between the company and the drivers by concluding that "the decisive factor is to look at how the contract is worked". The result of the case was unsurprising, given that this has been the general approach taken by the Irish courts for more than 20 years. This decision has nonetheless been appealed to the Court of Appeal.
While the Irish approach to determination of employment status was reinforced by the recent UK Supreme Court ruling in Uber, it also highlights that a binary system of employment status is too rigid for the world of work in Ireland. A key element of the judgment was that, in examining such arrangements, the approach should be one of "statutory interpretation, not contractual interpretation". The Supreme Court observed that the purpose of employment legislation governing working hours, minimum wage and so on is to protect vulnerable workers; the fact that businesses can often dictate contract terms gives rise to the need for statutory protections in the first place. Accordingly, it could not be right that a business could use its written contracts to determine who qualifies for protection.
This largely echoes the analysis in the main Irish authorities on determining employment status. Rather than presaging any significant change of direction, it merely cements the approach already being taken. However, this does not help with the continuing issue that Ireland's binary approach of 'employee or contractor' – with nothing in between – can be difficult to manage in the modern world of work.
Former Taoiseach Leo Varadkar, now tánaiste and minister for enterprise trade and employment, has announced the setting up of a high-level working group under the auspices of the Labour Employer Economic Forum (LEEF) to review the collective bargaining and the industrial relations landscape.
The working group, chaired by a university professor in labour law, comprises three trade union members, three members from employers' groups and three government nominees. It will report quarterly and:
The LEEF working group's first report is expected by the end of July 2021. Employers' organisation Ibec has called for this review to be consistent with Ireland's global competitiveness. The country's industrial relations environment has generally been welcomed by large multinational employers which like the fact that they are not statutorily obliged to recognise trade unions, despite employees having a constitutional right to join one. As a result, Ireland tends to see industrial relations situations and issues arise only among historically older employers and industries. One current example is a threat of legal action by ESB Networks against the Independent Workers Union, which it does not recognise or bargain with, claiming that its industrial action is unlawful.
There is clearly a link between the LEEF review and the EU Commission's proposed directive on adequate minimum wages, which would establish a framework that governments would have to consider in setting minimum wage levels. Largely unnoticed, the proposal also promotes the concept of collective bargaining for wage setting. It would require member states to provide a framework (whether by law or agreement between the social partners) to promote collective bargaining where it covers less than 70% of the workers. Given Ireland's position on trade union recognition, it is inevitable that it will fall below this threshold. The upshot may be that the works council-style operating model of continental Europe is ultimately imposed on Ireland as a result of its EU membership.
On 8 March 2021 Minister for Children, Equality, Disabilty, Integration and Youth Roderic O'Gorman announced his intention to bring forward a strong Gender Pay Gap Information Bill and seek to have it enacted as soon as possible after the Easter recess. At the end of March 2021, he obtained Cabinet approval to amend the bill, including by strengthening the Human Rights and Equality Commission's ability to pursue organisations that have not complied with the legislation (as and when it is in force) (for further details please see "Gender pay gap reporting in Ireland – are we there yet?").
Even when the legislation is passed, regulations providing clarity on what will be involved and when employers' obligations will kick in are expected. The first tranche of employers to be affected are those with more than 250 employees. Several organisations which employ that many people will likely have operations in other jurisdictions where they have already had to compile a gender pay gap report, so they will already be broadly familiar with the process.
For further information on this topic please contact Síobhra Rush at Lewis Silkin Ireland by telephone (+01 566 9874) or email (email@example.com). The Lewis Silkin Ireland website can be accessed at www.lewissilkin.com/en/ireland.
(1) For further details please see "The gig economy and employment law in Ireland".
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