The Statutory Penalties for Breaches of Employment Law in Ireland

Are you aware of the range of penalties that are set down in legislation in Ireland for breaches of employment law?

There is a large number of statutes/acts dealing with all aspects of employment law in Ireland. These acts cover overnighting from unfair dismissal to working time to payment of wages to health and safety to annual leave and rest breaks, etc.

In addition to these penalties and employee can always go to the Civil Courts for common law claims such as breach of contract, personal injury, negligence, health and safety breaches, breach of constitutional rights, etc. That is another day’s work.

This piece is going to look at the penalties and redress for employees as set out in statute, that is, the various acts on the statute book.

Regardless of whether you are an employer or employee, you should find it useful.

Unfair Dismissal/Constructive Dismissal

The redress is set out in section 7, Unfair Dismissals Act, 1977, and in summary comprises

  1. Reinstatement or
  2. Reengagement or
  3. Compensation of up to 104 weeks’ remuneration in respect of the financial loss due to the dismissal.

If there is no financial loss an employee can be awarded 4 weeks’ remuneration.

Working Time/Rest Breaks

The penalties are set out in section 27, Organisation of Working Time Act, 1997:

  1. Require the employer to comply with the relevant provision of the act
  2. Compensation of up to 2 years’ remuneration.

Written Terms of Employment

Failure to provide a written statement of terms and conditions of employment within 2 months of starting can be punished as set out in section 7 of the Terms of Employment (Information) Act, 1994.

The WRC adjudicator can order the employer to give the statement to the employee and can award up to 4 weeks’ remuneration by way of compensation.

Protected Disclosures/Whistleblowing

The Protected Disclosures Act, 2014 provides severe penalties in section 11 for dismissal of an employee for making a protected disclosure:

  • 260 weeks (5 years) remuneration

The employee can also bring a tort action for having suffered detriment as a result of making a protected disclosure, as set out in section 13, Protected Disclosures Act, 2014, and can seek an order from the Circuit Court as set out in section 11 of the act preventing dismissal prior to the determination of a claim for unfair dismissal.

Payment of Wages

Section 6, Payment of Wages act, 1991 sets out the penalties for breaches of the act. These include

  • Compensation of the net amount of the wages which would have been paid the previous week prior to the deduction/non payment or
  • Twice the net amount of wages that would have been paid to the employee in the week immediately preceding the deduction or payment

Minimum Notice

Compensation can be awarded pursuant to Minimum Notice and Terms of Employment Act, 1973: “may award to the employee compensation for any loss sustained by him by reason of the default of the employer.”

Agency Workers

Penalties for breach of Protection of Employees (Temporary Agency Work) Act 2012 are set out in schedule 2 of the Act. It states that the WRC can order rectification of whatever breach of the act is proved, including reengagement or reinstatement, and/or order compensation of up to 2 years’ remuneration be paid to the employee.

Adoptive Leave, Carer’s Leave, Parental Leave

Breach of the adoptive leave provisions of the Adoptive Leave Act, 1995 can see compensation of up to 20 weeks’ remuneration awarded to the employee, or the WRC making whatever directive order it feels is expedient in the circumstances.

Carer’s leave: a WRC adjudicator can award a grant of carer ’ s leave to the employee of such length to be taken at such time or times and in such manner as the adjudication officer may specify, and/or up to 26 weeks’ compensation.(Carer’s Leave Act, 2001).

Parental Leave and Force Majeure Leave:  an adjudicator can award (a) the grant to the employee of parental leave of such length to be taken at such time or times and in such manner as may be so specified, and/or compensation of up to 20 weeks’ remuneration.(Parental Leave Act, 1998).

Maternity leave: breaches of the employees entitlement can lead to an award of compensation of up to 20 weeks’ remuneration and or grant of the leave to which the employee is entitled.(Maternity Protection act, 1994).

Transfer of Undertakings

Complaints about breaches of S.I. No. 131/2003 – European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 can lead to compensation being awarded depending on which regulation has been breached.

The compensation can range from a maximum of 4 weeks’ remuneration to 2 years’ remuneration.

Part Time Workers

The Protection of Employees (Part-Time Work) Act, 2001 is the relevant act for part time workers.

It provides that the WRC adjudicator can require the employer to comply with the relevant provision and/or award 2 years’ remuneration to the employee.

Fixed Term Workers

The Protection of Employees (Fixed-Term Work) Act 2003 is the relevant act for fixed term workers. Section 14 of the revised act provides the WRC adjudicator can:

(b) require the employer to comply with the relevant provision,

(c) require the employer to reinstate or reengage the employee (including on a contract of indefinite duration), or

(d) require the employer to pay to the employee compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all of the circumstances, but not exceeding 2 years ’ remuneration in respect of the employee ’ s employment.

Redundancy

The Redundancy Payments Act, 1967, section 7 sets out the employee’s right to a redundancy payment. Section 39 allows you to appeal the amount you have been awarded.

The Protection of Employment Act, 1977 also obliges the employer to inform and consult with employees in a collective redundancy situation. Section 11 of the Act sets out the penalties for the employer’s failure to consult and notify: a fine of up to €5,000 on summary conviction in respect of a breach of section 9 or section 10.

Discrimination and Equality Based Claims

Breaches of the Employment Equality Act, 1998 can see redress being ordered pursuant to section 82 of the Employment Equality Act, 1998:

Various orders including for re-engagement, re-instatement or compensation of up to 2 years’ remuneration or €40,000, whichever is the greater.

€13,000 can be awarded in contravention of the law in relation to a discriminatory claim in relation to access to employment.

Equal Status Acts Breaches

Equal status breaches can be penalised in accordance with the Equal Status Act, 2000. This protects you in relation to discrimination in respect of the supply of goods or services.

The maximum amount that can be awarded is the amount of the District Court limit in civil cases in contract (€15,000).

Minimum Wages

The National Minimum Wage Act, 2000 protects employees in relation to minimum wage rates. Complaints can be dealt with under section 26 of the act. The adjudication officer can order that the shortfall be rectified and paid to the employee, and the employee can also be awarded reasonable costs in respect of bringing the claim.

The employer can also be prosecuted in the District Court for breaches of this minimum wage act.

Health and Safety

Breaches of the Safety Health and Welfare Act 2005 can see an adjudication officer awarding compensation of such amount as he feels equitable in the circumstances for breach of section 27 of the act, which protects employees from penalisation or dismissal for making a complaint in respect of health and safety in the workplace.

Conclusion

The list above is not definitive, but certainly covers the most common types of employment law claim that will be brought to the WRC (Workplace Relations Commission), or Labour Court. A WRC adjudicator has a wide range of discretion for breaches of any particular act, so the various acts referred to above set out the maximum awards possible.

8 Redundancy/Employer Insolvency Claims to the Workplace Relations Commission (WRC)

redundancy claims

If you have lost your job due to redundancy, or your employer has become insolvent-that is, in receivership or liquidation-there are approximately 8 types of claim you can bring to the Workplace Relations Commission.

Let’s take a look:

  1. You did not receive a redundancy payment.

Section 7 of the Redundancy Payment act, 1967 provides for a redundancy payment entitlement. Learn about how you qualify for redundancy here.

  1. You did not receive the correct redundancy payment amount.

You are entitled to 2 weeks’ gross pay for every year of service, subject to a maximum of €600 per week. In addition, you are entitled to 1 bonus week. This is tax free.

  1. Your employer is not able to pay but you have not received proof of his inability to pay.
  1. Your representative was not consulted in relation to a proposed collective redundancy.

Section 9 of the Protection of Employment Act, 1977 requires this consultation.

  1. Your representative was not given all the relevant information concerning the redundancy

Section 10 of the Protection of Employment Act, 1977 provides that the employer must give certain information to your representative.

  1. Your employer did not give a copy of the prescribed information to the Minister (for Labour).

Section 10 (3) of the Protection of Employment Act, 1977 sets out this obligation.

  1. You are unhappy with the amount of redundancy the Deciding Officer has decided on.

Section 39 of the Redundancy Payment Act, 1967 allows you to appeal this decision to the WRC.

  1. You did not receive a payment, under the Insolvency Payments Scheme, or did not receive the full amount, to which you were entitled.

When your employer is insolvent eg in receivership or liquidation, you are entitled to claim from the Insolvency Payments Scheme in respect of arrears of pay, holiday pay, and other statutory entitlements. Section 9 of the Protection of Employees (Employers’ Insolvency) Act, 1984 allows you to make a complaint to the WRC.

Redundancy in Ireland-What Employers and Employees Ought to Know About Non Collective Redundancies

redundancy in ireland

Let’s admit it.

Redundancy is not a pleasant topic to discuss.

But not discussing it, and not understanding your obligations if you are an employer, can prove very costly.

Therefore,  this piece about redundancy in Ireland will look at:

  • what is a redundancy,
  • redundancy payments,
  • where to access a redundancy payment calculator,
  • fair selection for redundancy
  • short time and lay offs
  • disentitlement to redundancy.

Hopefully it will give both employers and employees a good overview of 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 (non-collective redundancy) in a small business in Ireland.

The focus of this piece is non collective redundancies; elsewhere on this site you can read about collective redundancies.

Firstly let’s take a look at what a redundancy is..

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-

  1. 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.
  2. 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.

Required period of employment

The required period of employment is 104 weeks of continuous employment.

Dismissal by the employer

To qualify for a redundancy payment, the employee must be dismissed.

This does not occur if the employee’s employment is renewed or re-engaged by the same employer and the terms and conditions do not differ from the previous one.

So if an employee resigns, redundancy payments are not available to him/her.

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.

Short time is the situation where the employee’s pay is less than one half of his normal weekly pay or his hours of work are reduced to less than half his normal weekly hours.

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.

There is no general right to lay off employees and not pay them; in fact, without an implied or express term in the employment allowing lay off the employer may well be in breach of contract.

The right to lay off without pay may be permissible in pretty limited circumstances established through custom and practice.

However  EAT decisions in the past have held that the custom and practice in Ireland since the introduction of the legislation is that there is no obligation to pay during lay off.

You can learn more about the EAT’s decisions in relation to payment during lay off  in this article.

An employee who has been laid off for 4 or more consecutive weeks can give a written notice to his employer indicating his intention to claim redundancy.

The employer can then give the employee a counter notice which must inform the employee that their employment will recommence not later than four weeks after the notice and this period of employment will be at least 13 weeks without lay off or short time.

Disentitlement to Redundancy

An employee is not entitled to a redundancy payment in the following circumstances:

  • Termination of the employment contract due to misconduct
  • If the employer offers a new contract of employment or to renew his existing contract of  employment (see note)

Note: the new contract or the offer of a renewed contract must contain the same terms and conditions as the previous contract of employment and must involve the same place and capacity as the previous contract.

If these are different, then the offer of employment must be ‘suitable’ in relation to that employee. If the employee unreasonably refuses an offer of employment then she will be disentitled to a redundancy payment.

These types of cases often involve offers of employment at a different location and each case will be judged on its merits as to whether the offer is reasonably or unreasonable refused by the employee.

See section 15 of Redundancy Payments Act, 1967.

Notice of Redundancy

An employee who is entitled to a redundancy payment (service of at least 104 weeks) are entitled to at least 2 weeks notice. However, longer serving employees have greater entitlements under the Minimum Notice and Terms of Employment Act, 1973. 

In addition contractual notice provisions must be complied with to avoid a claim for wrongful dismissal.

A copy of the  RP 50 form is given to the employee; this form combines RP 1 (notice of redundancy), RP 2 (certificate of redundancy), RP 3 (rebate claim), and RP 14 (employee’s application for a lump sum from the Social Insurance Fund).

The employer then sends the RP 50 form to the Minister for Enterprise, Trade and Employment to obtain a rebate of the payment made.

UPDATE

There is now no need to issue RP 50 forms as no redundancy rebate applies where the date of dismissal by reason of redundancy occurs on or after 1st January 2013. Please refer to this page on the Department of Social Protection website for the procedure.

Collective Redundancies

In a collective redundancy situation there will be additional requirements on the employer imposed by the Protection of Employment Acts 1977 to 2007 and various regulations and other legislation.

As indicated already in relation to unfair dismissals, redundancy is a defence to a claim for unfair dismissal.

Genuine Redundancies

However it must be a genuine redundancy within the terms of the Redundancy Payments Acts 1967 to 2003 which sets out 5 redundancy definitions/situations.

These are:

1. The employer has ceased or intends to cease the business for which he employed the employee;

2. The requirements of the business have changed to the point where the employee is no longer required for the particular work for which he was employed;

3. The employer intends carrying on business with fewer or no employees;

4. The employer has decided the work which is being done by the employee will be done in a different way in the future and the redundant employee is not qualified or trained;

5. The employer has decided that the work will be done by another employee who is capable of doing other work for which the redundant employee is not trained or qualified.

Conduct of the employer in carrying out redundancies

In non-collective redundancies in Ireland there are no specific procedural requirements set out to carry out a redundancy dismissal.

redundancy-payments

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.

As well as the reasonableness of the employer’s conduct in making a position redundant, she would be well advised to carry out the following steps:

  1. The employers should consider all options before deciding on redundancy. Are there alternatives? The employer should record this decision making process.
  2. Is alternative employment an option for the employee?
  3. Has the selection for redundancy been fair? (see below)

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 (now,  the Workplace Relations Commission service deals with these claims).

Because the onus is on the employer to justify the selection for redundancy.

 Fair Selection for Redundancy

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. This obviously only arises in circumstances where the employee is made redundant and there are other employees in similar employment who were not dismissed.

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.

It is up to the employer to set her own criteria for selection for redundancy.

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.

Decided Redundancy Cases

Here are two cases concerning redundancy which should be instructive.

Coincidentally they both involve solicitor’s firms losing out.

The first case involved fair procedure and the reasonableness of the employer in terminating the employment.

 The Tribunal is mindful of the fact that the burden of proof rests with the respondent to show that it has acted fairly and reasonably in all the circumstances surrounding the termination of this employee.

On balance the Tribunal accepts that the telephone call from France during which the claimant was told that a decision had been made to make him redundant was an unfair way to treat a loyal and exemplary employee. No forewarning was given and no alternative was considered.

In considering compensation to be awarded the Tribunal acknowledges that the respondent’s Principal’s intention was to become a sole practitioner which the claimant did confirm in evidence. The Tribunal accepts therefore that with more consideration a lawful and fair termination of employment would have been implemented ultimately.

The Tribunal therefore awards €17,984.00 payable by the respondent under the Unfair Dismissals Acts, 1977 to 2007.

Brendan Campbell and Anthony Conleth Pendred Practicing As A.C. Pendred And Company Solicitors

The second case involves unfair selection for redundancy:

The Tribunal found that no meaningful consultation took place between the respondent and the claimant. The respondent failed to give advance warning of the nature of the meeting of 1 May 2013 when the claimant was informed that the decision had been made to make her redundant. The claimant was not afforded an appeal procedure. Furthermore, she was not offered the opportunity of having representation at the aforementioned meeting and at the follow-up meeting on 24 May 2013. There were no written notes or memos of the said meetings. There was no attempt to secure a voluntary redundancy. No consideration was given to an alternative to redundancy, such as a pay cut or reduced hours. The respondent did not consider a last in, first out policy. At the meeting on 24 May 2013 the claimant was offered a full time position in the Sligo office. This was not a viable option due to her domestic situation, and Sligo being 48km from the claimant’s home.

The respondent acted unreasonably in failing to apply objective criteria to the selection of the claimant for redundancy.

The Tribunal finds that the claimant was unfairly selected for redundancy and accordingly unfairly dismissed. The Tribunal awards the claimant the sum of €12,765.06 under the Unfair Dismissals Acts 1977 to 2007.

Mary Morris and Callan Tansey Solicitors UD143/2014

Redundancy Entitlements

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

Redundancy payment entitlement

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

  1. 104 weeks of continuous employment attained after the age of 16 years.
  2. 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.

 Therefore if you resign from your job you will not be entitled to a redundancy payment.

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.

Normal weekly earnings is her normal weekly wage at the date she was declared redundant together with her normal average overtime 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.)

NOTE: the definitions of ‘continuous employment’ and ‘reckonable service’ are important ones and can be seen in Schedule 3 of the Redundancy Payments Act,1967.

Payments are then calculated by reckonable service, not the period of continuous employment.

Reckonable service does not include time absent from work due to

  • absence in excess of 52 weeks due to an occupational accident or disease
  • absence in excess of 26 weeks due to illness
  • absence due to lay-off by the employer.

An employee who is being made redundant is entitled to two weeks’ notice and must be given a redundancy certificate by the employer. The employer was entitled to a rebate from the Irish government of 60% of the statutory element of each lump sum payment, provided he has given the requisite two weeks’ notice.

However from January 1st 2013, the employer statutory redundancy rebate was abolished. Where the date of dismissal occurred in 2012 the employer rebate is 15%. If the date of dismissal was in 2011 or earlier the employer rebate is 60%.

Collective redundancies place specific statutory obligations on the employer, for example the requirement to consult with employees. Failure to do so or advise the government of a collective redundancy situation can lead to a criminal conviction and hefty fines of up to €5,000.

The upper age limit of 66 years for entitlement to redundancy was removed by the Protection of Employment Act 2007.

Ex Gratia Payments

An ex gratia payment is an extra redundancy payment over and above the statutory entitlement. The employee is not entitled to one but it may be negotiated between the parties.

Statutory redundancy is not taxable; ex gratia payments are.

Redundancy calculator

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

Here’s an excellent guide to the redundancy payments scheme from the Department of Enterprise, Trade and Innovation. It dates from 2010 but, nevertheless, explains redundancy very well. Do check with a professional-solicitor or accountant-for any changes since then, though.

UPDATE

The December, 2012 budget made some significant changes re

  • redundancy rebates
  • prsi
  • maternity leave and
  • termination/ex gratia payments.

Since January, 2013 there is no employer rebate in respect of redundancy. See Department of Social Protection.

Disputes about Redundancy Payments Acts, 1967-2007

Disputes about redundancy payments and entitlements are dealt with by the Workplace Relations Commission.

Relevant Legislation

The Redundancy Payments Act, 1967

The Redundancy Payments Act, 2003

The Redundancy Payments act, 1979.