• Insights

What’s new in Irish employment law? 3 key areas to watch

Written by
Lewis Silkin, widely recognised as Ireland’s leading specialist employment law practice
Authors
Ireland - Síobhra Rush
Siobhra Rush
Partner - United Kingdom
Lewis Silkin
United Kingdom
17.05.21
4
Three areas of employment law in Ireland have seen recent significant developments: employment status and the gig economy; collective bargaining arrangements; and gender pay gap reporting. Siobhra Rush, of Ius Laboris Irish firm Lewis Silkin Ireland, reports.

Employment status: will the UK Uber decision have an impact?

Three years ago, shortly after Lewis Silkin’s Dublin office opened, I wrote an article about the gig economy in Ireland. The thrust was that there were (and still are) the same challenges as in the UK, but less flexibility under Irish employment law to deal with them.

There was a proposal in the original draft of the Employment (Miscellaneous Provisions) Act 2018 whereby an employer who incorrectly designated an employee as a self-employed contractor would face a fine of up to EUR 5,000 and/or imprisonment. Interestingly, this was dropped due to heavy criticism and lobbying by business. Since then, Irish employment law simply has not adapted to take account of new ways of working. While there were certain helpful decisions on the gig economy in the UK, 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 company 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 had 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.

My view with regard to the Irish legal position has essentially not changed since 2018 and, if anything, was reinforced by the recent UK Supreme Court (SC) ruling that Uber drivers are workers rather than independent contractors . A key element of the judgment was that, in examining such arrangements, the approach should be one of ‘statutory interpretation, not contractual interpretation’. The SC observed that the purpose of employment legislation governing working hours, minimum wage and so on is to protect vulnerable workers: the fact that businesses are often able to 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. But this does not help, of course, 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.

Developments in collective bargaining

In other news, Ireland’s 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 nominees from government. It will report quarterly and:

  • Examine the issue of trade union recognition and its implications for collective bargaining processes.
  • Assess the adequacy of the workplace relations framework supporting the conduct and determination of pay and conditions of employment, having regard to the legal, economic, and social conditions in which it operates.
  • Consider the legal and constitutional impediments that may exist to the reform of the current systems. In doing so, the group needs to be cognisant of the individual employment rights framework and the EU context and may wish to consider other models of employee relations and pay determination established in other member states.
  • Review the current statutory wage-setting mechanisms and, where appropriate, make recommendations for reform. (This aspect will commence following the Supreme Court’s ruling in the National Electrical Contractors Ireland case, which is expected in Quarter 2 of 2021).

 

We can expect the LEEF working group’s first report by the end of July 2021. The employers’ organisation Ibec has called for this review to be consistent with Ireland’s global competitiveness. The country’s IR environment has generally been welcomed by large multinational employers who 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, we tend only to see IR situations and issues arising in the historically older employers and industries in Ireland. 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 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 well be that the works council-style operating model of continental Europe is ultimately imposed on Ireland as a result of its EU membership.

Gender pay gap reporting coming soon

Finally, on International Women’s Day at the beginning of March, the 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, he obtained Cabinet approval to amend the Bill, including by strengthening the Irish Human Rights and Equality Commission’s ability to pursue organisations that have not complied with the legislation (as and when it is in force). See here for further details of the proposed legislation.

 

Even when the legislation is passed, we are expecting regulations to provide clarity on what will be involved and when employers’ obligations will kick in. The first tranche of employers to be affected are those with more than 250 employees. We expect that several organisations who employ that many people will have operations in other jurisdictions where they have already had to compile a gender pay gap report, and so will be broadly familiar with the process.