Ireland: The Enforcer – Coming Soon To A Workplace NERA You

Last Updated: 21 August 2008
Article by John Doyle
Most Read Contributor in Ireland, September 2019

In March of this year the Government, as part of its commitment in Towards 2016, introduced The Employment Law Compliance Bill 2008 ("the Bill"). The purpose of this article is to set out briefly the most important provisions of the Bill. It is possible that the Act which is ultimately passed may differ from the Bill but for the purposes of this article it is assumed that the Bill will be enacted in its entirety.

The Bill has very far-reaching consequences for employers and employers have been alarmed at the increased possibility of individuals and companies facing criminal prosecution resulting in heavy penalties, costs and publicity.

The first purpose of the Bill is to establish the National Employment Rights Authority ("NERA") whose objective will be to promote, encourage and secure compliance with employment legislation by means of the appointment of authorised officers and increased penalties for breaches of employment legislation.

The Director of NERA will be responsible for the enforcement of almost all employment legislation through the inspection and examination of employment records and the carrying out of investigations and the prosecution of offences. In addition, NERA will have a role in promoting awareness amongst both employers and employees of their rights and obligations under employment legislation.

The Director will have power to enter into co-operation agreements with official agencies including the Garda Siochana, the Revenue Commissioners, the Director of Corporate Enforcement, the Health and Safety Authority, the Competition Authority and the Pensions Board as well as employment law enforcement agencies of other countries. This will include the exchange of information which may be required and the co-ordination of any actions which may be contemplated by NERA and any other official agency.

The Director will also have power to introduce codes of practice aimed at providing practical guidance to employers.

NERA will be able to acquire, use and disclose to various bodies an employee's PPS number, an employer's registration number, the particulars of a valid passport or an employee's identification number under immigration legislation.

Official agencies will be able to disclose information to NERA which may relate to the commission of an offence under employment legislation and in turn NERA may disclose information to the Garda Siochana, the Revenue Commissioners, the Director of Corporate Enforcement, the Health and Safety Authority, the Competition Authority or any other person charged with a detection, investigation or prosecution of offences if that information relates to the commission of an offence which is not an offence under employment legislation. Accordingly, if information comes into the hands of NERA it is at liberty to disclose that information to other investigating authorities. The Freedom of Information Act and the Data Protection Act will not apply to records held or created by NERA.

There will be a new obligation on every employer to display in a prominent position in the workplace a notice in a form, manner and language or languages that is reasonably likely to be understood by the employees. The notice will have to set out entitlements under employment legislation, complaints procedures and the contact details of the Director of NERA both for the purpose of making general enquiries regarding employment law and communicating information to the Director in circumstances where a person believes that an offence under employment legislation has been or is being committed or that any other provision of employment legislation is not being complied with. The Bill provides protection to a person making such a disclosure unless it is proved that they did not act reasonably and in good faith.

Where an employer fails to display the appropriate notice they will be guilty of an offence. The information which the employer is obliged to contain in its notices will be available from the NERA website.

Employees and employers will be required to try, as far as possible, to resolve disputes at workplace level and either party may request information about employment law from NERA who must try to provide the information to the extent practicable. The enforcement of employment legislation will be effected by means of authorised offices who will have wide ranging powers in order to monitor and enforce compliance. Authorised officers will have powers of inspection, examination or investigation and subject to certain rules and procedures, will be entitled to enter premises where necessary to inspect the premises or any books, records or other documents relating directly or indirectly to employees. Authorised officers will have powers of search and inspection and seizure of documents or the taking of copies. Authorised officers may require individuals to provide assistance and furnish information which they reasonably require to carry out their duties. Where necessary, an authorised officer may obtain a search warrant from the District Court. The Director may require an employer to give evidence on oath or to produce documents and if the person fails to do so without reasonable excuse they will be guilty of an offence. The Bill sets out a number of offences relating to failure to co-operate fully with NERA or its authorised officers.

Statutory employment records will have to be kept for 3 years up to termination and for a further 2 years after termination. The Director may request information of an employer regarding any employee who had been in their employment at any time during the previous 3 years and this information must be provided. The employer may also be required to produce any books or records relating to such an employee. This obligation is also placed on an examiner, administrator, receiver or liquidator. The Director or an authorised officer may serve a compliance notice on an employer if it is believed that the employer has failed to pay any sum due under employment legislation. The employer will have the opportunity to object to and appeal any such compliance notice.

The Director may apply to the High Court for an Order requiring an employer to comply with any provision of employment legislation. This application may have similar effect to an interim injunction application.

There will be a new statutory protection for any person who reports their concern of an offence under employment law having been committed or employment legislation not being complied with provided they do so reasonably and in good faith.

If an employer penalises an employee who seeks to invoke their employment rights then the employer is guilty of an offence.

Employers will be required to provide employees within 14 days of the termination of their employment with a statement setting out the duration and nature of their employment and a general description of the work involved and the employer must return to the employee any personal documents or other property and failure to do so is an offence.

Where an offence is committed by a company and is proved to have been committed with the consent, connivance or approval of or to be attributable to any neglect on the part of a director, manager, secretary or other officer then that person as well as the company is guilty of an offence and is liable to be prosecuted.

There will be a large number of offences and in the event of a summary conviction there may be a fine not exceeding €5,000.00 and / or imprisonment for up to 12 months. Where the conviction is on indictment, the penalty may be a fine of up to €250,000.0 and / or a term of imprisonment not exceeding 3 years.

Where a party is convicted of an offence under employment legislation then they will be ordered to pay the costs of the Director unless there are special and substantial reasons for not doing so. These costs will include the Court costs as well as the underlying investigation and detection costs and may be very significant. In addition, names of those convicted may be published by NERA.

As can be seen from the areas mentioned above, if the Bill is enacted in its present form, it will have the potential to criminalise employers and possibly individuals within companies, with the consequence of severe penalties, costs and adverse publicity. As the ODCE has done in the field of company law compliance, so NERA will aim to do in the area of employment law. Employers would be well advised to use the interval between now and the full implementation of the Bill to review their compliance with employment legislation to ensure that their systems are adequate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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