Employment & Industrial Relations Group Newsletter
In this first edition of Employment Matters, the Arthur Cox Employment Law Group Newsletter, we look at a range of issues across our practice area and some recent and prospective developments in law.
Arthur Cox has Ireland's largest employment and industrial relations law practice, consistently top ranked in the area, with considerable experience in advising on a vast range of complex employment and industrial relations issues for a wide variety of clients at both national and global levels. The Employment Law practice group provides an extensive range of legal services to clients on all aspects of national and EU employment law and industrial relations. The group also provides a skilled mediation service.
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Irish Employment Rights Legislation Review: the winds of change?
2010 was the 20th anniversary of the enactment of the Industrial Relations Act 1990. The Report of the Special Group on Public Service Numbers and Expenditure Programmes (McCarthy Report) suggested radical changes to future structures and operations of the statutory employment relations dispute resolution bodies which would significantly reverse the purpose of the 1990 Act. The Labour Relations Commission has undertaken a specific and independent review of current employment rights provisions with a view to advising on appropriate changes to the current legislative framework and a consolidation of the principal processes and legal remedies.
We will keep you informed of developments and there will be detailed briefings as the outcome of the Review progresses.
Holiday pay and long term sick leave: Stringer et al
In March 2010, the European Commission initiated a consultation process with the European social partners about the Working Time Directive. The review process aims to establish whether, in light of changing work patterns across the EU, the Directive should be amended. One area that will be under the spotlight concerns the results of joined cases Schultz Hoff v Deutsche Rentenversicherungg Bund Case C-350/06 and Stringer v Her Majesty's Revenue and Customs Case C-520/06 (commonly referred to as Stringer).
Article 7 of the Working Time Directive (93/104/EC) provides that Member States must 'ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.' Payment in lieu of this minimum entitlement is prohibited except on termination of employment. In Ireland Art 7 is implemented by s 19 of the Organisation of Working Time Act 1997 (the Act of 1997). In Stringer, the European Court of Justice (ECJ) decided that the exercise of an employee's right to annual leave under national law cannot be made subject to a requirement to have worked during the relevant leave year. Under s 19(4) of the Act of 1997 employees who work more than eight months in a given year will be entitled to take two uninterrupted weeks of annual leave together, however this two week period includes any period during which the employee becomes ill.
When the case was referred back to the UK courts, the House of Lords in HM Revenue & Customs v Stringer and others [2009] IRLR 677 decided that, to give effect to the ECJ's decision, the UK's Working Time Regulations 1998 (WTR) must be interpreted as allowing employees on long-term sick leave to take (and be paid in respect of) their statutory holiday entitlement.
Following Stringer, the ECJ in Pereda v Madrid Movilidad SA (Case C-277/08) ruled that a worker who is on sick leave during a period of previously scheduled annual leave has the right, on his request and in order that he may actually use his annual leave, to take that leave during a period which does not coincide with the period of sick leave. The Court stated that this may involve allowing the worker to take leave outside the holiday year in question.
In the UK, an employment tribunal ruled that statutory holiday leave lost due to illness could be carried over to the next holiday year if there was not sufficient time remaining for it to be taken in the current holiday year. And in another UK case, an employment tribunal held that a worker who had been on sick leave for the last 15 months of his employment was entitled to statutory holiday pay in respect of that period. The non-payment of holiday pay amounted to an unlawful deduction from wages contrary to the Employment Rights Act 1996, even though the worker had not actually taken statutory holidays during the period in question.
Public sector employers will doubtless hear their employees argue that Art 7 of the Working Time Directive is sufficiently precise to enable them to rely on the ECJ's interpretation. Private sector employers have a number of options. They may choose to leave their sickness policies unchanged. They may decide to deal with any requests from employees on a case by case basis. Or they may decide to change their policies to allow, where an employee requests it, statutory holiday leave lost due to illness to be taken during the remainder of the current holiday year on the employee's return to work or, where there is not sufficient time remaining in the current holiday year on the employee's return to work, to permit statutory holiday leave lost due to sickness to be carried forward to the next holiday year. There are pros and cons regarding all these options, and employers are best advised to seek advice.
IBEC has estimated that the full costs of implementing Stringer in Ireland will be up to ¤90 million in a full year across the whole economy. Of the ¤90 million, up to ¤25 million would be payable by public sector employers. If the Directive is amended, as IBEC recommends it should, Ireland will not have to change its national law. At present the contradiction between Irish and EU law is not sufficiently understood in relation to claims under the Act of 1997.
Employee illness: medical opinions; fitness to attend disciplinary hearings
One of the challenges facing employers is how to deal with conflicting medical opinions and ambiguous medical reports. Another common problem is an employee's fitness to attend disciplinary hearings or investigatory meetings.
The issue of conflicting medical opinions often occurs when an employee has been seen by their GP and also by an Occupational Health Physician (OHP) on behalf of the company. A GP owes a duty of care to their patient as they are their primary medical carer, whereas an OHP owes no duty of care to the employee. It is important for the OHP's opinion to be independent and, therefore, for the OHP to be a consultant or a contractor rather than a member of the staff of the employer company.
Where conflicting medical opinions have been provided to an employer, there are three recommended options available to an employer. The first is to obtain a consensus agreement from the two doctors, however, in reality this is usually difficult. The option is to accept the opinion of the OHP. It is for the OHP to defend the reasonableness of the report. In order to be able to rely on the opinion of the OHP, the OHP's report must be comprehensive and independent.
The final recommended option is to obtain a third opinion. This is particularly relevant if a medical opinion is woolly and indeterminate. It may also be relevant in circumstances where an OHP has not had a face to face meeting with the employee when carrying out the assessment. A third opinion may also be required if the OHP lacks the particular necessary expertise. Difficulty can arise, however, if an employer wants a third opinion just because the opinions from both sides do not match. Ideally the OHP will advise an employer when a third opinion is necessary and why.
The UK Faculty of Occupational Medicine has published a useful booklet called the Health and Work Handbook which lists a number of questions that should be asked of an employee in order to ascertain whether or not he/ she is fit to attend a disciplinary hearing or investigatory meeting. Ideally the employer will want to resolve this issue. But if it arises before the OHP, he or she should try to ascertain whether or not the employee understands the allegations, whether or not they can distinguish right from wrong, whether they can instruct a friend/colleague/family member/union representative to represent them and their interests, whether they need extra time or whether they need a written explanation.
Fitness to attend a disciplinary hearing may often be determined with reference to the employee's soundness of mind. An employee's absence often occurs when he/she is informed of the disciplinary hearing or investigatory meeting. In such a situation, it is advisable to refer the employee to an OHP on the day the employer receives the employee's doctor's certificate. It is in the best interests of all parties to deal with a disciplinary hearing or investigatory meeting as soon as possible.
A successful hearing/meeting can be achieved by taking certain actions that accommodate the employee such as, for example, hold the hearing/meeting in a hotel, providing an agenda to the employee, allowing extra time, allowing the employee instruct a representative and, if the employee will still not attend, then hold the hearing/meeting may be held with the employee in absentia.
Based on presentations given in May2010 by Dr Philip McCrea, OHP, in Arthur Cox.
Employee Wellness
The Employment Law Group have developed a policy and training programme for employers and employees called Working Wellness.
Working Wellness involves training and draft policies for HR practitioners/employers on how to ensure the well-being of employees. The training and policies are concerned with maintaining good health at work rather than extreme situations where allegations of workplace stress has become a problem, in the form of, for example, sick absences, resignations etc. The approach is intended to ensure that employers and employees are clear that all work can at times be stressful and that the key to ensuring a healthy working environment is to be able to manage and respond to the natural pressures of work. The effect of such awareness will be a more efficient and healthy working environment.
The proposed training will be given to employers and/ or HR managers by Arthur Cox in conjunction with an occupational health advisor/expert. It will involve a legal overview of the employer's obligations in relation to stress and a practical occupational health presentation on creating and maintaining a healthy working environment. It will also consider training and guidelines that should be given by employers and/or HR managers to line-managers to ensure that management is informed of, and by, these obligations.
Employer records
Employer records are required under many employment statutes. For instance, s 25(4) of the Organisation of Working Time Act 1997 provides that where an employer fails to keep records of the working time of its employees as prescribed by the legislation, the burden of proving compliance with the legislation shifts to the employer. An employer who does not have records of the working time of employees will probably not be able to satisfy the court that it has fulfilled its obligations under the Act, a point well illustrated in the recent Rezmerita Ltd v Uciechowska WTC/09/27 Determination No DWT1018 where the Labour Court referred to the overriding significance that the employer had not kept appropriate records:
Where statutory records are not maintained the employer is faced with the burden of rebutting what is in effect a presumption of non-compliance.
It is the experience of the Court that, in practice, this is often a heavy burden which cannot be easily discharged where there is contradictory oral testimony and an absence of reliable corroborative evidence.
In the case before it, with no independent and probative corroborative evidence, the employer was found not to have satisfied its burden of proof under the Act.
Employers will find the recent Inspection Procedures 2010 from the National Employment Rights Authority (NERA) critical in this regard. NERA's Annual and Quarterly Reviews underline the importance of employers keeping good records. In 2009, over 8,800 employers were inspected with an overall compliance level of 69%. NERA inspectors have the power to enter any premises at a reasonable time and demand sight of records required under employment legislation. They may inspect and take copies of the records and interview any relevant person. NERA's Inspection Procedures were published in May 2010, and are available on its website.
Mediation in the Superior Courts - Rules of the Superior Courts (Mediation and Conciliation) 2010, Order 56A
The Minister for Justice and Law Reform recently introduced new court rules to promote mediation and conciliation in proceedings in the Superior Courts. The Rules of the Superior Courts (Mediation and Conciliation) 2010, SI No 502 of 2010 come into operation on 16 November 2010.
Henceforth a High Court judge may adjourn legal proceedings to allow the parties engage in an ADR process (mediation, conciliation or any other dispute resolution process approved by the High Court). The court can invite the parties to attend an information session on the use of mediation. The provisions specify that the refusal or failure without good reason of a party to participate in mediation or conciliation where an order has been made under Order 56A may be taken into account by the court when awarding costs. No doubt judges will prefer if the parties embrace ADR at a much earlier stage and have first explored their options rather than be required to engage in a process which should be entered into voluntarily.
Watching Brief: forthcoming legislation/Directives - Arthur Cox will provide a detailed analysis once these laws/Directives are in force
Employment Agency Regulation Bill 2009
This Bill concerns the regulation of employment agencies, the recognition of employment agencies that are permitted to carry on business in certain EU countries, and will replace the Employment Agency Act 1971. The Bill went to Committee stage on 2 June 2010.
Industrial Relations (Amendment) Bill 2009
This Bill, to make further and better provision for promoting harmonious relations between employees and employers, to amend and extend the Industrial Relations Acts 1946 to 2004, to amend the Employment Permits Act 2006, and the Organisation of Working Time At 1997, was referred to a Select Committee on Enterprise, Trade and Innovation on 11 February 2010.
Transfer of Undertakings (Pensions) Bill
The Government Legislation Programme for Spring 2010 indicated that the Transfer of Undertakings (Pensions) Bill is expected to be published in 2010. The Bill, which has been in the pipeline since as early as 2007, is expected to extend protections to pension entitlements, on a basis similar to those afforded to employment rights, adding yet another layer to an already complicated area of law.
Directive 2009/38/EC on a European Works Council (EWC)
As from 6 June 2011, when Member States have finished transposing the provisions of this recast Directive into their legal order, EWCs will be established and will operate within its framework. Building on the results of the existing legal framework, recast Directive 2009/38/EC aims, in particular, at ensuring the effectiveness of employees' transnational information and consultation rights, favouring the creation of new EWCs, and ensuring legal certainty in their setting up and operation. Consultation on implementation has begun with the social partners.
Directive 2009/104/EC on Temporary Agency Employees
The Directive provides that Temporary Agency Employees must have equal treatment with regular employees in respect of the duration of working time, rest periods, night work, annual leave and public holidays; pay; work done by pregnant women and nursing mothers, children and young people; action taken to combat discrimination on the grounds of sex, race or ethnic origin, religion or beliefs, disabilities, age or sexual orientation. Deadline for transposition: 5 December 2011.
Directive 2010/41/EU of the European Parliament and of the Council of 7 July 2010 on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity and repealing Council Directive 86/613/EEC
The Directive lays down a framework for putting into effect in the Member States the principle of equal treatment between men and women engaged in 'an activity in a self-employed capacity, or contributing to the pursuit of such an activity' (Art 1), as regards those aspects not covered by Directives 2006/54/EC (equal opportunities and equal treatment of men and women in employment and occupation) and 79/7/EEC (equal treatment of men and women in social security). Art 8 requires Member States to take the necessary measures to ensure that female self-employed employees and female spouses and life partners may, in accordance with national law, be granted a sufficient maternity allowance enabling interruptions in their occupational activity owing to pregnancy or motherhood for at least 14 weeks. Member States may decide whether the maternity allowance is granted on a mandatory or voluntary basis. Implementation date: 5 August 2012.
European Commission: Proposed scheme for intra-corporate temporary transfer of non-EU skilled employees
The European Commission has proposed a new Directive to facilitate multinational companies temporarily to transfer third-country national skilled employees from a company located outside the EU to branches or subsidiaries in EU Member States. It is proposed to create a common set of rules for a new fast-track entry procedure (30 days time-limit, combined residence/work permit) for a targeted group of highly specialised staff ('manager', 'specialist' and 'graduate trainee') from non-EU countries. The proposal also aims to establish more attractive residence conditions for these staff and their families.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
