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.

Is Travelling to Work Working Time? The Tyco Case

 

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Tyco was a Spanish security firm who closed all their regional offices across Spain in 2011. This meant that the employees did not have a fixed place of employment and had to travel to all their jobs to install security equipment.

The workers brought a case to the Court of Justice of the European Union (CJEU) arguing that time spent travelling to work should be counted as working time. The CJEU agreed with them.

This decision applies to workers who do not have a fixed place of work and are required by their employers to travel to service clients. This could include, for example sales reps, care workers or tradesmen employed by companies.

This could result in employers having to pay such workers for time spent travelling to and from work. The journey from home to their first work appointment, and the journey from their last appointment to home in the evening, must be included when pay, working hours and rest breaks are being calculated, according to the CJEU decision.

Employees may also be entitled to a reduction in hours actually spent working, as travelling time would also go towards the 48 hour maximum working week permitted under EU working time legislation.

In Ireland, the Organisation of Working Time Act 1997 (“the Working Time Act”) implemented the original Working Time Directive (Council Directive 93/104/EC) into Irish law. The Working Time Act sets down minimum requirements around working hours, rest periods and accrual of annual leave. The purpose of the Directive is to make provision for the protection of the safety and health of workers.

Working time, according to the working time directive is considered to be time during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice.

The Tyco case is relevant from an Irish context in that our national courts are obliged to interpret Irish laws in line with European legislation, and decisions of the European courts. The decision has direct effect with regard to public sector workers, however legislation will be required to make it effective for private sector workers.

The Labour Court in Ireland has addressed this issue in the past.

In Breffni Carpentry Services Ltd and Deniss Solodounikovs (DWT0816) the Labour Court held that only the hours which the Complainant spent at the workplace, and not travelling time, could be regarded as working time.

In this case, however, the employee appears to have been based out of his employer’s premises.

The National Minimum Wage Act 2000

A further complicating factor in Ireland arises from the National Minimum Wage Act 2000 (NMWA), which provides a statutory basis for setting minimum rates of pay in Ireland. It also sets out the basis for calculating the working hours of an employee, to establish whether an employee is being paid the applicable minimum hourly rate of pay.

Irish cases in respect of claims for wages while travelling are likely to be brought under the heading of non payment of wages in accordance with the NMWA.

Implications for employers and employees?

Clearly, there are huge implications for Irish employer and employees if this decision is given a statutory basis in Ireland.

Employers would be well advised to agree some type of arrangement or protocol with their employees, if it is not already provided for in the contract of employment.

It would also be advisable for employers to try to schedule the first and last call of the day close to the employee’s home so that travelling time is kept to a minimum. Many employers currently do this, as well as agreeing a fixed rate for travelling time.

It is probably prudent for employers to treat travelling time in circumstances where the employee travels to a variety of locations in discharge of his/her duties as working time.

The Working Time Records All Irish Employers Must Keep

working-time-records

Are you a small employer?

Confused about the working time records you need to keep?

I don’t blame you.

You’ve plenty of other stuff to do. But creating and keeping these records is important.

After reading this you will be clear about what you need to do.

And I will give you a form which will keep you right.

Let’s get started.

The Legal Obligation

The Organisation of Working Time Act 1997 obliges employers to keep records for 3 years; these records should record the following:

  • the starting time,
  • finishing time,
  • hours worked each day,
  • hours worked each week
  • leave taken.

If you don’t have an electronic clocking in system you need to complete a form, OWT1, on a daily and weekly basis.

Here’s the OWT1 form which is contained in the relevant regulations, the Organisation of Working Time (Records) (Prescribed Form and Exemptions) Regulations 2001. These regulations derive from the Organisation of Working Time Act, 1997 and they provide some important exemptions in respect of the record keeping.

There are exemptions:

  1. for workers who determine their own working time and
  2. for work performed voluntarily by the employee.

In addition to the working time records referred to above you, as employer, are obliged to keep a record of the statement you have given each employee in accordance with the Terms of Employment (Information) Act, 1994-2001.

You have given all your employees these statements, haven’t you? If you haven’t, you are leaving yourself open to a claim from each employee.

Completing the OWT1 Form

Where you and the employee agree, an employee can fill out this form and have you counter-sign it. You then keep it for inspection from inspectors from NERA or the Department of Jobs and Enterprise.

Rest Breaks

You will be exempt from keeping records of rest breaks if

  • you have an electronic record keeping system or
  • you record the working hours on form OWT1 and the following conditions are complied with:
  1. you inform the employee in writing of their entitlement to rest breaks as set out in sections 11, 12 and 13 of the Organisation of Working Time act, 1997
  2. you inform the employee of procedures to allow the employee notify you when he is unable to take a break that he is entitled to, and the reason why he has been unable to take the break.

Once your employee tells you he has not been able to take his break you must allow him to take the break he was due. If your employee does not take this opportunity then he is at fault, not you.

You must also keep proof of having told the employees of the breaks they are entitled to, the procedure for when he is unable to take it, and records of the occasions when the employee tells you he was unable to take the break.

Failure to keep the required records can lead to a Court conviction and fine of up to €1,900.

Read more about rest breaks here.

What to Do Now

Keeping these records is not rocket science, but just require a little bit of discipline.

Download the OWT1 form here if you don’t have electronic recording, and you will not have to worry when the inspector calls.

Your records may also prove very useful in defending other claims against you and will certainly indicate that you are a responsible employer.

Proposed Change to Employees’ Annual Leave Entitlement to Prove Costly for Employers

There is a provision proposed in the new Workplace Relations Bill 2014 which, if passed, will have serious cost implications for employers in Ireland.

annual-leave-entitlements

This new provision will change section 19 of the Organisation of Working Time Act 1997, and provides that time spent by an employee on certified sick leave will be counted as time spent at work, and carrying out his/her duties. This means that the employee will accumulate annual leave during the leave year or within 6 months of the leave year, or within 15 months from the end of that leave year if the employee was unable to take annual leave due to illness.

The cost implications of this new provision are obvious for small business owners who have employees returning from long term sick leave, as the employee will have accrued annual leave while they were out sick.

The background to this is a number of European employment related decisions in 2009-Stringer v Revenue and Customs Commissioners and Schultz-Hoff v Deutsche Rentenversicherung Bund-which saw the Court of Justice of the European Union (CJEU) decide that employees who could not take annual leave due to being on sick leave were entitled to take the leave at a later date.

Public sector employees derived the benefit of the CJEU decision above because of the legal principle of Direct Effect-that is, that public sector employers as emanations of state are bound by the EU decisions.

However the Labour Court in Ireland has held that in respect of private sector employees and companies, the Labour Court was bound by Irish legislation-the Organisation of Working Time act, 1997.

However that Act is due to change now, courtesy of the Workplace Relations Bill, 2014.

Update August, 2015

This change in entitlements to sick employees has now come into effect from Saturday, August 1st, 2015.

Workers will now

  • Accrue holiday entitlements when they are out on certified sick leave and
  • be able to carry over annual leave for a period of 15 months after the leave year in question.

7 Simple Steps For Employers to Avoid Costly Employment Law Claims from Employees

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It’s an easy mistake to make.

If you are an employer you are in danger of leaving yourself wide open to expensive claims by your employees if you fail to follow some basic but essential steps in your employment relationship with your employees.

In addition to settling successful claims brought by employees you also run the risk of fines and other sanctions from the National Employment Rights Authority (NERA) which has a dedicated unit, the Prosecution Services Unit, which can refer cases to the Chief State Solicitors Office for prosecution.

There is a wide body of employment legislation in force in Ireland which can be confusing for many employers.

In addition some industries have their own industry specific agreements called registered employment agreements (REA) and minimum wage rates. It is worth noting that these registered employment agreements are binding on all parties once registered with the Labour Court.

UPDATE May 2013

The Supreme Court, in May 2013, ruled that registered employment agreements are unconstitutional. You will find more updated information about registered employment agreements and employment regulation orders here.

Minimum requirements in employment law

1. Written statement of certain terms and conditions of employment

This statement must be given to the employee within two months of commencing employment.

The relevant act is the Terms of Employment (Information) Act 1994 which sets out the basic information that an employee is entitled to be given in writing about their contract of employment. You need to be careful that you provide the additional information set out in the revised act, which is

( fa ) a reference to any registered employment agreement or employment regulation order which applies to the employee and confirmation of where the employee may obtain a copy of such agreement or order, ]

F6 [ (g) the rate or method of calculation of the employee ’ s remuneration and the pay reference period for the purposes of the National Minimum Wage Act, 2000,

( ga ) that the employee may, under section 23 of the National Minimum Wage Act, 2000, request from the employer a written statement of the employee ’ s average hourly rate of pay for any pay reference period as provided in that section,

You need to be aware of statutory instrument S.I. No. 49/1998 – Terms of Employment (Additional Information) Order, 1998, which provides that you must give the employee a statement in writing containing particulars of the times and duration of the rest periods and breaks referred to in sections 11, 12 and 13 of the Act (The Organisation of Working Time Act, 1997.)

2. Written statement of pay

The Payment of Wages Act, 1991 obliges the employer to give a written statement of wages and deductions at the time of payment. Learn more about payment of wages here.

3. The minimum wage

There are exceptions to the minimum wage in Ireland of €8.65 per hour but most adults will be entitled to it; in addition certain industries have their own higher minimum wage. Learn more about minimum wage rates.

4. Maximum hours worked

Employers must keep records of hours worked by employees to ensure compliance with the maximum working week average of  48 hours which may be calculated over a 4, 6 or 12 month period depending on the industry. Learn more about working time and rest breaks here.

5. Working time and breaks

The breaks to which employees are entitled are set out in the Organization of Working Time Act, 1997. Currently break entitlements are 15 minutes per four and a half hours work and a 30 minute break for six hours worked.

6. Holiday entitlements

Holiday entitlements are also covered in the Organization of Working Time Act, 1997. In general full time workers are entitled to four  paid weeks holidays per year with part timers being entitled to similar holidays on a pro rata basis depending on hours worked which equates to one third of a week per month worked. (Learn more about how to calculate holiday entitlements.)

7. Minimum notice of termination of employment

The minimum notice periods are set out in the Minimum Notice and Terms of Employment Acts 1973 to 2001 and depend on the length of service with the minimum regardless of service being 1 week.

Conclusion

Employers can save themselves the considerable costs in money and time involved in defending or otherwise dealing with claims by their employees by some prudent management and housekeeping.

The list above is not exhaustive, but if you took care of those 7 areas you would be in good shape as an employer.

Doing business nowadays can be a worrying enough activity without inviting needless trouble on yourself for the want of a straightforward contract of employment and/or letter of offer and/or statement of your employees’ terms and conditions.

At a minimum you should carry out an audit of your

  • Contracts of employment
  • Staff handbooks
  • Disciplinary and grievance procedures
  • All workplace policy documents.

If you don’t have any of the above, you are asking for trouble, especially when there is a dispute or a NERA inspection.