New Entitlements for Employees in Ireland
Thus far, 2022 has seen the introduction or enhancement of a range of entitlements for employees in Ireland, such as a new statutory sick leave scheme, extended family leave for parents, an increased minimum wage rate and new protections for employees’ tips. This trend will likely continue with further legislation coming down the track, including provisions regarding an employee’s right to request remote/flexible working conditions, provisions ensuring transparent and predictable working conditions, provisions to ensure a greater work-life balance for employees and provisions to enhance individual accountability at executive level in the financial services industry. The overarching trend is towards an increase in the regulation of the employer-employee relationship, and it shows no signs of abating.
Introduction of a statutory sick leave scheme
Until 2022, Ireland stood out as one of the few countries in Western Europe which did not legally require private employers to pay their employees for any period of absence from work due to illness or injury. For the first time, in July 2022, the Oireachtas (Irish Parliament) introduced a scheme affording employees in Ireland a basic entitlement to statutory sick leave and pay. The Sick Leave Act 2022 (the "Sick Leave Act") provides, subject to certain conditions, a general right to statutory sick pay in Ireland that will be legally enforceable by employees through the Workplace Relations Commission and the civil courts. The Sick Leave Act is expected to be commenced shortly.
Under the Sick Leave Act, an employee will be entitled to up to three paid sick days per year, or such additional number of days as may be specified by Ministerial order. This entitlement is due to be increased on a phased basis to five days in 2024, seven days in 2025 and ultimately ten days in 2026. The prescribed rate of pay will be set out in regulations under the Sick Leave Act and is expected to be 70% of an employee’s normal salary/wage, subject to a maximum limit of EUR110 per day.
In order to qualify for statutory sick leave, employees will be required to produce medical certificates evidencing the reasons for their sick leave and must have completed a minimum of 13 weeks’ service with their employer. Once the statutory sick leave entitlement period ends, and provided the employee has the requisite social insurance contributions, the employee may then qualify for the existing social welfare illness benefit from the Irish State.
The Sick Leave Act expressly provides that the obligations under the legislation will not apply to an employer who provides their employees with a sick leave entitlement which is, as a whole, more favourable than the statutory entitlement. The Sick Leave Act therefore will not prevent employers offering superior terms to employees than the statutory minimum.
The Sick Leave Act provides that an employee, during a period of statutory sick leave, must be treated as if they had not been absent from work and such absence must not impact on any of the employee’s employment rights. The Act also contains a protection against penalisation for an employee proposing to exercise, or having exercised, their entitlement to statutory sick leave.
Employers are required to keep records for four years of the statutory sick leave taken by each employee. Failure to do so is an offence and a person guilty is liable on summary conviction to a maximum fine of EUR2,500. Moreover, an employee who believes that their employer has failed to comply with the provisions of the Sick Leave Act may make a complaint to the Workplace Relations Commission. The Workplace Relations Commission may award compensation of up to four weeks’ remuneration.
Extension of parent’s leave
A new type of family leave, parent’s leave, was first introduced in Ireland in November 2019 for the purpose of enabling the relevant parent to provide, or assist in the provision of, care to their child.
The Parent’s Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2022, which came into force on 1 July 2022, has increased the parent’s leave entitlement from five weeks’ to seven weeks’ leave. This leave can be taken within the first two years of the child’s life or in the case of adoption, within two years of the placement of the child with the family and can either be taken together or as separate blocks. Parent’s leave is available to each parent.
The parent’s leave period may be extended in the future up to a maximum of nine weeks.
Increase to the national minimum wage
As of January 2022, the national minimum hourly rate of pay rose to EUR10.50 for the majority of workers in Ireland above 20 years of age.
New protections for employees’ tips and gratuities
The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 was signed into law on 20 July 2022. It is expected to be commenced shortly.
The key provisions of the Act are as follows:
New Obligations on Irish Employers in Relation to Whistle-Blowing
Prior to the transposition of the EU Whistleblowing Directive (Directive (EU) 2019/1937), Irish law already had a relatively advanced framework for dealing with protected disclosures in the workplace in place, in the form of the Protected Disclosures Act 2014. Following the transposition of the EU Whistleblowing Directive, a number of amendments were required to the Irish legislative regime in order to ensure compliance with the Directive. As a result, the Protected Disclosures (Amendment) Act 2022 (the "2022 Act") was signed into law on 21 July 2022. The 2022 Act is expected to be commenced shortly.
The 2022 Act places an obligation on all private sector organisations with 50 or more employees to establish formal channels and procedures for their employees to make protected disclosures. It provides a derogation from these obligations until 17 December 2023 for organisations with between 50 and 249 employees. The threshold of 50 employees does not apply to employers who are public bodies or who fall within the scope of the certain EU acts, including in relation to financial services, products, markets, prevention of money-laundering and terrorist financing, transport safety, and protection of the environment. Such employers, regardless of size, must comply with the obligations contained in the Act.
All public sector organisations, regardless of size, are already required under the 2014 Act to have formal protected disclosures procedures in place. The 2022 Act also provides that the Minister may, by way of Ministerial Order, extend the application of the 2022 Act to classes of employees with less than 50 employees.
The Act also extended the scope of the protected disclosures regime to cover volunteers, unpaid trainees, board members, shareholders, members of administrative, management or supervisory bodies and job applicants.
Reporting channels and procedures
Under the 2022 Act, employers will be required to establish and operate internal reporting channels that maintain the confidentiality of the identity of the reporting person.
Employers will have to acknowledge a report, in writing, to the reporting person within seven days of receipt of the report.
Employers will be required to designate an impartial person who is competent to follow up on reports. This designated person will be tasked with maintaining communication with the reporting person.
The designated person will be required to diligently follow up on the report. Diligent follow-up includes the provision of feedback within a reasonable period and, in any case, within three months, and if requested by the reporter in writing, at three-month intervals, until such time as the procedure relating to the report is closed. It must include the carrying out of an initial assessment.
If, having carried out an initial assessment, the designated person decides that there is no prima facie evidence that a relevant wrongdoing occurred, the procedure can be closed and the reporting person notified, in writing, as soon as practicable, of the decision and the reasons for it.
However, if, having carried out an initial assessment, the designated person decides that there is prima facie evidence that a relevant wrongdoing may have occurred, appropriate action must be taken to address the relevant wrongdoing, having regard to the nature and seriousness of the matter concerned.
In a move that will be welcomed by employers, the 2022 Act confirms that internal reporting channels and procedures may be operated internally by a person or department designated by an employer, or externally by a third party authorised by the employer. It also provides that employers with less than 250 employees may share resources as regards the receipt of reports and any investigation to be carried out as part of the process of follow-up.
Clear and easily accessible information on the procedures applicable to the making of reports using internal reporting channels must be provided. Employers are also obliged to provide workers with clear and easily accessible information on the procedures for making a report to prescribed persons and the Protected Disclosures Commissioner (and, where relevant, to institutions, bodies, offices or agencies of the EU).
Under the 2022 Act, similar provisions to those in relation to internal reporting channels and procedures also apply to reports to prescribed persons. Prescribed persons are those who have specific regulatory functions in the relevant sector or area, which is the subject of the protected disclosure. Examples include the Central Bank of Ireland, the Health and Safety Authority and the Data Protection Commissioner. The 2022 Act also provides for the obligation of government Ministers to receive reports from public sector employees in certain circumstances.
The 2022 Act establishes the Office of the Protected Disclosures Commissioner. The Commissioner will receive and redirect to the most suitable authority, protected disclosures made to prescribed persons and to Ministers and will effectively act as recipient of last resort in respect of certain reports, ie, where no prescribed person or other suitable person can be identified. The Commissioner will have extensive powers to carry out their duties. They will have the power to require the production of information and/or or records, books, documents or other things and to require the attendance of any person for this purpose. It is an offence for a person to withhold, destroy, conceal or refuse to provide any information or record, book, document or other thing required, fail or refuse to comply with any requirement of the Commissioner in this regard, or otherwise obstruct or hinder the Commissioner in the performance of their functions.
Interestingly, the 2022 Act specifically excludes interpersonal grievances from the purview of the protected disclosures regime. Such matters should be raised by the individual separately through their employer’s internal grievance procedures.
The employer is under no obligation to accept or handle disclosures made anonymously, but may decide to do so at their discretion.
The 2022 Act expanded the definition of penalisation as follows: "any direct or indirect act or omission which occurs in a work-related context, is prompted by the making of a report and causes or may cause unjustified detriment".
"Work-related context" is defined as "current or past work activities in the public or private sector through which, irrespective of the nature of those activities, persons acquire information concerning a relevant wrongdoing and within which those persons could suffer penalisation if they reported such information".
Furthermore, examples of penalisation have also been extended to include the following:
New Obligations on Employers in relation to Gender Pay Gap Reporting
While the principle of equal pay for equal work has been enshrined as a tenet of our employment law for decades, it forming part of the original constitutional architecture of the EU at the time of the adoption of the Treaty of Rome in 1957, no gender pay gap reporting obligations existed for Irish employers prior to this year.
The Gender Pay Gap Information Act 2021 (the "2021 Act") and the accompanying Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) Regulations 2022 (the "Regulations") came into operation on 31 May 2022. The Regulations require organisations with over 250 employees to publish information relating to the pay of their employees in order to show any disparity in pay between male and female employees and, if so, the level of such disparity.
Employers must choose a "snapshot" date of their employees in June 2022 and will report on the hourly gender pay gap for those employees within six months from the "snapshot" date, ie, before the end of December 2022. The reference period for the calculations is the 12 months prior to, and including, the snapshot date. The Regulations specify the information to be published which must include, inter alia, the following:
Where the above information shows differences in remuneration between male and female employees, the employer is obliged to publish or make available a written statement setting out:
Employers must either publish the information on its website in a manner that is accessible to its employees and the public or, if the employer does not have a website, make the information available in physical form for inspection during normal business hours by employees and the public at the employer’s registered office or principal place of business. The information must be published or made available for inspection for at least three years.
Two New Codes of Practice published by the Irish Human Rights and Equality Commission
On International Women’s Day, 8 March 2022, the Irish Human Rights and Equality Commission (IHREC) published two new Codes of Practice, the first in respect of Sexual Harassment and Harassment and the second in respect of Equal Pay (each a "Code", together the "Codes").
Founded under the Irish Human Rights and Equality Commission Act 2014, IHREC was established to protect and promote equality and human rights and to build a culture of respect for equality, human rights and intercultural understanding in the Irish State.
Code of Practice on Sexual Harassment and Harassment
Many principles in the new Code restate or reiterate principles outlined in the original Code of Practice on Workplace Harassment from 2012. However, there have also been some notable updates in the new Code. The definition of sexual harassment has been updated to mirror the definition in the Employment Equality Acts 1998 to 2021, as follows: "Sexual harassment means unwanted conduct of a sexual nature, or other conduct based on sex affecting the dignity of women and men at work."
The Code restates the importance of employers having a harassment policy as "an integral part of equality strategies in the workplace". The new Code goes further, however, stating that a workplace harassment policy should now include "a statement encouraging employees to challenge harassment and sexual harassment in the workplace". The Code has also called for the modernisation of workplace policies to cater for the reality of harassment taking place online via social media.
The Code introduces a new concept of a "Senior Level Champion", whereby organisations (depending on size and scale) designate a senior level employee or employees to act as independent voices outside of the HR structure, advocating for a harassment-free workplace.
The Code also includes a non-exhaustive list of examples of behaviours which may constitute harassment, as follows:
The new Code will undoubtedly prompt employers to review and update their workplace harassment policies, but may also be food for thought for employees who are now called upon to take a more active role in ensuring their workplace is free of harassment.
As with many such Codes of Practice, the Code does not impose legal obligations in and of itself. However, employers should note that the Code is admissible as evidence before the civil courts, the Workplace Relations Commission and the Labour Court. As such, employers should follow the guidance in the Code or, where they do not, be able to explain their reasons for departing from the Code’s provisions.
Code of Practice on Equal Pay
IHREC’s Code of Practice on Equal Pay is the first of its kind to address the topic of equal pay. The Code has three stated aims, to provide employers, employers’ organisations, trade unions and employees with practical guidance on:
The Code provides a useful summary of the well-established principles of equal pay in Ireland, including the obligation on employers not to directly or indirectly discriminate, in respect of remuneration, against employees on the basis of any of the nine protected grounds in the Employment Equality Acts 1998 to 2021. These grounds are gender, civil status, family status, sexual orientation, religion, age, disability, race and membership of the Traveller community. It also provides useful guidance on how to resolve an equal pay dispute.
The Code lists the benefits of pay equity as the avoidance of legal costs and lost management time due to litigation, greater efficiency, improved employee retention, improved morale, better reputation and better quality of products/services.
Of particular note is the Code’s section on eliminating pay inequality in the workplace. It states that the most effective way of achieving pay equality is by carrying out a pay review. In this context, a pay review is an investigation into the employer’s pay practices and an evaluation of those practices with reference to the nine discriminatory grounds. The Code outlines the process for conducting a pay review, which should involve the following stages:
The Code makes clear that management and employees should conduct the pay review or investigation jointly, with mutual participation, at all stages. If necessary, an external expert may be required/helpful in directing the review process.
Similar to the above Code on Sexual Harassment and Harassment, the Code on Equal Pay does not impose legal obligations but is admissible as evidence before the civil courts, the Workplace Relations Commission and the Labour Court. Employers must therefore be keenly aware that, should they fail or refuse to comply with the Code, they may be liable to a claim for discrimination.