Update on Employment Policy Developments – December 2022
1. Work Life Balance and Right to Request Remote Work Bills to be Merged
The Government has recently decided to merge both pieces of proposed legislation with remote working being defined as one form of flexible working under the Work Life Balance and Miscellaneous Provisions Bill. Employers and employees will then be able to make and decide requests for flexible or remote working under one piece of legislation and one Code of Practice to be developed by the Workplace Relations Commission. The right to request any other type of flexible working, such as reduced working hours or adjusted working patterns, will remain limited to Parents and Carers, as defined in the Bill.
• The Work Life Balance and Miscellaneous Provisions Bill 2022
The Bill was published on 5 October 2022 and is currently working its way through the legislative process. This aims to bring the EU's Work Life Balance Directive into Irish law and to fulfil commitments set out in the EU Directive. The EU Directive is due to be implemented this year and means that employees who are in a caring role, such as parents or carers, will have the right "to request" flexible work arrangements.
The Bill contains three key measures to support both families and carers:
1. Unpaid leave of up to five days per year for medical care purposes.
2. A right to request flexible working for carers and parents of children up to the age of 12.
3. Extension of current entitlement to breastfeeding/lactation breaks from 6 months to 2 years.
Domestic violence leave will be paid at a rate to be prescribed by the Minister for Children, Equality, Disability, Integration and Youth and will be subject to a maximum of 5 days in any 12 months period.
Under the Bill, which reflects the intention of the EU Directive, employees as parents or carers of children under 12, will have the right to request flexible work arrangements such as remote working or compressed hours, but employers will not be under an obligation to grant the request but in refusing a request must engage with the employee and provide a reason for their decision.
However, the legislation will provide that an employee can challenge the view of their employer through the Workplace Relations Commission if the employer rejects a request for reduced or flexible hours to take care of children or relatives.
• Right to Request Remote Working Bill 2022
Despite the publication of the draft scheme for this Bill back in the New Year, it attracted much criticism mainly in respect of the number of grounds available to an employer to reject a request for remote work and to provide for greater opportunity for an employee to make an appeal where there request is denied. The bill has now been integrated with revisions as part of the Work Life Balance and Miscellaneous Provisions Bill.
The employee must have completed 6 months’ service before an approved flexible working arrangement can commence. The employer must deal with a request within 4 weeks, which can be extended in certain circumstances, either approving the request or setting out reasons for its refusal. Under the revised grounds there is to be an obligation on the employer “to consider both their needs and the needs of employees when considering a request.” Employers will also have to have regard to a Code of Practice.
Under the new Bill, a complaint can be taken to the WRC if an employer hasn’t complied with the Code of Practice or the other requirements of the Bill. An employee may make a complaint over an employer’s failure to (a) approve the request; (b) set out the reasons for refusal, or (c) correctly seek an extension. A review of flexible working to take place after two years is also to be provided for.
2. Commencement Order signed for the Sick Leave Act 2022
The Sick Leave Act is now due to commence on 1st January 2023. The Tánaiste and Minister for Enterprise, Trade & Employment on 29.1.22 signed the Commencement Order for the Sick Leave Act 2022 along with the Sick Leave Act 2022 (Prescribed daily rate of payment) Regulations 2022. From January 1st next, employees will be entitled, as a minimum, to three days paid sick leave in 2023, rising gradually to a minimum of ten days over the next four years. The entitlement is based on the calendar year.
The regulations give guidance on the calculation of the daily rate of payment which in summary is to be the gross amount payable in respect of any day of Statutory Sick Leave (SSL) to be the lesser of €110 or 70% of the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done, but excluding any pay for overtime or commission), in respect of the normal daily hours last worked before the SSL day.
If pay is not determined by reference to a fixed wage, fixed hourly or other time rate for a variable number of hours, the gross payment is based on the lesser of the €110 or 70% as outlined above, but is to be calculated over (i) the 13 weeks ending immediately before the SSL commences or (ii) if the person did not work during the 13 weeks period, then it is calculated over the period of 13 weeks ending on the day on which time was last worked by the person before the SSL commences, multiplied by the number of hours the person was due to work on the SSL day.
Issues for employers to consider:
It is still open to an employer to put a sick pay policy in place and to mitigate any risks for them from the pending commencement of the legislation. The Act does not preclude an employer including in an employment contract a provision that is more favourable to an employee than the SSL entitlement.
Employers with a sick pay policy should review their policy to see how it aligns with the terms of the Act and to ensure that the benefits “as a whole” are more favourable. Pending any further guidance from the Department, what may be considered to be more favourable “as a whole” remains unclear and is a matter for each employer to take a view. In our view, the focus should be on the overall benefits of the occupational scheme for the individual, rather than any single aspect given that the obligations contained in the Act will not apply to an employer with a sick leave scheme where the terms provided “as a whole”, are more favourable to the employee than SSL. However, compliance with this aspect of the Act is likely to give rise to dispute to be determined by caselaw.
If a contractual occupational scheme exceeds the minimum SSL entitlements an employer may review their policy to reference that payment of contractual sick pay is inclusive of statutory obligations.
For employers covered by collective bargaining (CB) arrangements, they may wish to include consideration of the costs of SSL in the context of discussions with trade unions.
Employers should anticipate:
the payment of statutory sick leave from day 1 may lead to some increased absence,
a need to review the accuracy of absence recording and timekeeping data,
a need to pay more attention to return to work protocols following absence and to introduce return to work interviews where they do not already exist,
placing greater emphasis on policy compliance during induction and probation, and to manage attendance generally more actively.
3. Gender Pay Gap Information Act 2021 and Reporting
As the deadline draws closer, many employers are actively preparing the details of their gender pay gap report. Employers with 250 or more employees are required to choose a snapshot date in June 2022 and report their gender pay gap no later than the same date in December 2022. The Minister has indicated that a central portal will be established in 2023 to which employers will be required to upload their report. This system will allow members of the public to search for and view individual employers’ returns, as well as returns for employers in given sectors and regions.
Those employers with over 150 employees will be required to comply in 2024 and those with over 50 employees in 2025.
A gender pay gap does not indicate discrimination or an absence of equal pay for equal value – it reports a gender representation gap. It simply compares the difference in average earnings of all men with the average earnings of all women employed in your organisation at a given point in time.
An employee can bring a claim against their employer to the WRC in respect of non-compliance. While the Act does not provide for sanctions in the form of compensation for the employee or for a fine to be imposed on the employer, the Director General of the WRC can make an order requiring the employer to take a specified course of action to comply with the Act.
4. Employment Permits Bill 2022 Published as Permit Numbers Double
The Employment Permits Bill 2022 was published on 4 October 2022 by the Department of Enterprise, Trade and Employment. Its stated purpose is to make the system more responsive to Ireland’s evolving labour market. This proposed legislation will consolidate the previous Employment Permits Acts (2003, 2006 & 2014) into one piece of legislation and operational matters will be covered in regulations.
Meanwhile, over 34,000 work permits have been issued in 2022 to date – more than double the 16,275 issued for 2021. Almost all the permits issued are for ‘critical skills’ (17,660) and ‘general employment’ (13,612). Some 1,587 intra-company transfer employment permits were issued so far this year. In terms of the sector profile of where permits were issued, ‘IT’ was the largest, with 9,226 (more than 25% of all permits) issued in 2022 so far. This was followed by ‘health and social work activities’ at 7,866, ‘financial and insurance’ (2,722), ‘accommodation and food service’ (2,141) and ‘construction’ (1,215).
The Bill introduces two new types of permits:
Firstly, section 9(2)(e) provides that an employment permit can be granted for a foreign national who is employed outside the State by a contractor or a subcontractor to perform duties in Ireland that arise out of a contract service agreement (a contract for service employment permit). Previously only direct employees could work in Ireland.
Secondly, the Bill creates a new permit for seasonal workers, (a seasonal employment permit). This is to facilitate foreign nationals employed in “seasonally recurrent employment” which is to be specified in regulations under S.4 of the Bill. Seasonally recurrent employment is defined as ‘employment that relates to a certain time of the year or seasonal conditions.’ These permits will be made by reference to certain economic sectors to which they relate.
Additional conditions to be attached to the granting of employment permits:
Section 40(10) stipulates that the Minister has the power to specify conditions related to the grant of employment. These include accommodation, training or expenses, which should be provided to a foreign national to whom an employment permit is granted.
The Minister can also make regulations / specify measures to be taken by the employer of the foreign national to increase skills, knowledge, qualifications, or experience of employees (other than the foreign national) in respect of the employment including the employment of new trainees or apprentices in that employment, or to otherwise reduce reliance on the employment of foreign nationals including by way of technical changes to work processes.
It is significant that the conditions can relate to training and provision for employees other than those to whom the employment permits relate. It is currently expected that the Bill will become law early in 2023.
5. Automatic Enrolment Retirement (AE) Savings System Bill
Government has approved details of the new pension auto-enrolment scheme well ahead of its expected introduction in 2024.
The General Scheme of the Automatic Enrolment (AE) Retirement Savings System Bill is sponsored by Minister for Social Protection Heather Humphreys and the heads of a bill will, in early 2023, go before the Oireachtas Committee on Social Protection for Pre-Legislative Scrutiny ahead of its expected introduction in early 2024.
At the end of March 2022, Minster Humphries announced the intention to legislate for auto enrolment. This has been mooted for some years but has been delayed due to consultations and design complications. Minister Humphries has accepted there is still much to be done, with legislation required to set up the system on a statutory footing. A Central Processing Authority will also be needed to operate the system, and a communications campaign to ensure people understand it.
Essentially, all employees not already in an occupational pension scheme, aged between 23 and 60, and earning over €20,000 across their employments, will be automatically enrolled. On commencement, some 750,000 workers will initially be enrolled. Assuming the system is set up by 2023 for employee enrolments in 2024, the introduction of Auto Enrolment will be phased in over a decade, with both employer and employee contributions starting at 1.5%, and increasing every three years by 1.5% until they reach 6% by Year 10 (2034). This is to allow time for employers and employees to adjust.
6. National Minimum Wage / National Living Wage Issues
As a first step towards reaching a living wage, the national minimum wage rates of pay will increase from 1 January 2023 and for people aged 20 and over will increase by 80c or 7.6% to €11.30. This is estimated to benefit 164,700 people.
On 14.09.22, the Tánaiste also announced that the Low Pay Commission has set an indicative National Living Wage for 2023 of €13.10 per hour (60% of median earnings). On 16.11.22 the Government agreed to the national living wage being set at that level of 60% of hourly median wages in line with the recommendations of the Low Pay Commission. It will be introduced over a four-year period and will be in place by 2026, at which point it will replace the National Minimum Wage. The intention is to phase in the Living Wage over four years between 2023 and 2026 when it will become mandatory. The Low Pay Commission has recommended setting a fixed threshold at 60% of the median wage. In the meantime, it will be revised annually as a benchmark for employers.
However, the Living Wage Technical Group (LWTG), supported by trade unions and voluntary groups has recently argued that the hourly living wage rate should increase to €13.85 per hour.
7. LEEF Working Group Report on ‘Collective Bargaining’ Published
In 2021, the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar set up the High-Level Group on Collective Bargaining under the auspices of the Labour Employer Economic Forum (LEEF) to review collective bargaining and the industrial relations (IR) landscape in Ireland. The final report of the Review Group, published on 05.10.22 has a primary focus on issues around collective bargaining in the private sector and on efforts to boost collective bargaining coverage through sectoral agreements such as the Joint Labour Committee’s (JLC’s). The following are some areas of controversy from the Report.
Firstly, in relation to the operation of Joint Labour Committees (JLC’s), in the absence of employer nominees to participate in a JLC, it is proposed to allow the Labour Court to proceed to still draft an Employment Regulation Order (ERO) for consideration by the Minister. It is also proposed that where a JLC fails to adopt proposals following a Labour Court recommendation that additional opportunities be given to employer representatives in the sector to participate and to have the right to be heard.
Secondly, in relation to cases where a trade union has organised members in an enterprise, but where the employer does not engage in collective bargaining, the introduction of ‘good faith’ engagement, is being proposed, as an obligation, with enabling procedures which will provide trade unions a recourse to the Labour Court and the opportunity to seek enforcement in the Circuit Court. The LEEF Report concentrates on means to facilitate and promote good faith ‘engagement’ which will not compel collective bargaining on the employer or require the parties to reach any outcomes or agreement.
The proposal for the introduction of ‘good faith’ engagement is additional to the existing procedural options open to trade unions and their members where they wish to pursue matters of interest to them at the level of the enterprise, where the employer does not engage in collective bargaining. Part of the rationale for the proposed adoption of this ‘good faith’ principle arises from the Draft EU Directive on Adequate Minimum Wages which will force Member States to provide a framework for collective bargaining and establish an action plan to promote collective bargaining, if, as would be the case in Ireland, at least 80% of workers are not covered by collective agreements. It seems the reforms being contemplated to the JLC system are designed to boost collective bargaining coverage to meet this end.
8. The Protected Disclosures (Amendment) Act 2022 to be Effective from 1st January 2023
Employers are reminded that the Protected Disclosures (Amendment) Act 2022 has introduced substantial changes to the Protected Disclosures Act 2014 by significantly enhancing the protections for whistle blowers in Ireland, thereby giving effect to the EU Whistleblowing Directive (Directive (EU) 2019/1397 on the protection of persons who report breaches of Union law). The Act gives further enhanced protections for workers who suffer penalisation as a result of making a protected disclosure. Employers should be fully aware of the changes that will take effect from 01.01.23 to ensure they are fully compliant with the Act, to avoid expensive claims and potential criminal penalties. The law obliges the employer to create and maintain internal reporting channels that will be subject to inspection by the WRC. The new Act includes strict regulations in relation to the acknowledgement and follow up of protected disclosures made by workers.
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Brendan McGinty | Managing Partner
‘Strategic Employment Relations’
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Disclaimer: The information in this paper is for general guidance only and does not constitute legal or specific case advice. The answers to specific situations will vary depending on the circumstances of each case. This is not a substitute for specific professional advice relevant to individul circumstances facing your business.