Article by: Employment and Industrial Relations Group at Arthur Cox
Reform of Irish Employment Rights and Industrial Relation Structures and Procedures
Ireland's current system of employment rights and industrial relations is "extremely complex and protracted" according to the recent Consultation Paper on Reform of the State's Employment Rights and Industrial Relations Structures and Procedures.
The key stated objectives of the Minister for Jobs, Enterprise and Innovation's reform proposals in August 2011 are:
- Resolution of grievances and disputes as close to the workplace as possible and as early as possible after they arise.
- A simple and efficient institutional structure
- Minimising the number of cases that present for resolution at formal hearings through active case progression and an increased range of interventions.
Arthur Cox made a Submission on the Consultation Paper. A summary and analysis of the Submissions are available on: http://www.djei.ie/employment/rights/erirproject.html
Transfer of Undertakings
Article 3(1) of the TUPE Directive provides that "the transferor's rights and obligations from a contract of employment ... existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee." The UK Supreme Court in Alemo-Herron v Parkwood Leisure Ltd (2011) recently decided to ask the European Court to clarify the interpretation of a transferee's obligations under this Article, specifically whether the interpretation is 'static' or 'dynamic'. What does this mean?
In Werhof v Freeway Traffic Systems (2006) the European Court gave a 'static' interpretation to Article 3(1) when it held that transferees who are not members of an employer's association do not have to apply new collective agreements entered into by the association after the transfer. Good news for employers. However, there is a consistent line of UK EAT cases to the contrary which have given a different, 'dynamic,' interpretation to a transferee employer's obligations. These cases held that where an employee has a contractual term that their pay will be determined in accordance with collective agreements negotiated from time to time, that term transfers with the employee under TUPE, thus obliging the transferee to apply the results of collective negotiations to which the transferor was a party, even if the transferee themselves were not.
Employers had hoped the UK Supreme Court would uphold a static interpretation and invalidate EAT cases to the contrary.
In Ireland with plans for cost reductions in the public sector and possible takeovers by private companies of public sector business, this is a highly relevant case particularly because the restatement of the core legal question by the UK Supreme Court is applicable to Ireland's common law.
Reforms to JLC/REA systems
In July 2011 the Minister for Jobs, Enterprise and Innovation announced reforms to the Joint Labour Committee (JLC) and Registered Employment Agreement (REA) wage-settling mechanisms, following a Government decision to reform the law when the High Court ruled the relevant wage-settling agreements were unconstitutional.
The case in question was taken by John Grace Fried Chicken Ltd and the Quick Service Food Alliance Ltd which represents the interests of owners of fast food restaurants. They succeeded in their claim that neither the Industrial Relations Act of 1946 nor the Act of 1990 identified any standards, goals or factors to be applied by the catering JLC and/or the Labour Court in exercising their powers under the Acts. The High Court held the delegated power was 'excessive' and therefore unconstitutional.
While the case related to workers in the catering industry, the outcome has implications for all 190,000 or so workers under this system.
Following Grace, the Industrial Relations (Amendment) Bill 2011 was introduced, see Watching Brief. Once enacted the Bill will enable the Minister for Jobs, Enterprise and Innovation to make new Employment Regulation Orders under a new statutory mechanism that takes into account and rectifies the failings in the Acts of 1946 and 1990 identified by the High Court. The Bill provides for the ''principles and policies'' to which a JLC must have regard when formulating proposals to submit to the Labour Court for Employment Regulation Orders.
Fixed-term work
Cases on atypical workers continue apace. Recent High Court actions have sought to restrain termination for redundancy of employees who as a result of the Protection of Employees (Fixed Term Work) Act 2003 (the 2003 Act) were deemed to have contracts of indefinite duration. In McGrath v Athlone Institute of Technology (2011) the applicant claimed he was a permanent employee pursuant to the 2003 Act and, although the High Court accepted that it could grant injunctive relief in such circumstances, it refused as in law an employer can dismiss for any reason or for none on giving reasonable notice, even in the case of a permanent employee.
In a later application, Holland v Athlone Institute of Technology, the plaintiff again sought an injunction restraining termination of his employment for redundancy. Holland brought up two new issues: the legal enforceability of the Croke Park Agreement (CPA), and whether the CPA, along with certain circulars issued by the Department of Education, created enforceable legitimate expectations on which the plaintiff could rely. The circulars provided that "A person [who has a contract of indefinite duration] has an expectation that, subject to the normal date of retirement in the employment, she or he will be retained in the employment and will not be dismissed..."
The High Court acknowledged that a formal commitment given by or on behalf of the executive in relation to employment matters was capable of giving rise to a "legitimate expectation". The defendant was an entity governed by statute and in principle the doctrine could be invoked. Having regard to the accepted legal position of collective agreements, the judge rejected the idea that the CPA could give rise to a legitimate expectation that no person working in the public sector would be subject to redundancy. It was otherwise however, so far as the Circulars were concerned.
The plaintiff had raised a "substantial issue" that the circulars created a legitimate expectation and Hogan J granted an interlocutory injunction restraining the plaintiff's dismissal. The decision in this case, albeit interlocutory, is a good reason why employers should review any circulars affecting their employees.
'Sham' redundancy
JVC Europe Ltd v Panisi (2011) took a long time to wind its way from the EAT to the High Court, where the employer was obliged to pay a substantial top-up to its former employee for what was a dismissal not, as the employer claimed, a redundancy. The employee had been told his position, and that of two others, would no longer be required and was paid a total of €101,000. However, three 'new' posts were being created at the same time and one of these closely mirrored the claimant's job. The Court observed that the "redundancy" was more like a process of removing the claimant, and ordered the company to pay an additional €197,000.
The judge was severely critical of the statutory procedure for challenging dismissal, describing the procedure as "cumbersome and redolent with the potential for unfairness".
Reform is in the Minister's hands, as the first item in this Newsletter reported.
Working Group on Human Rights and Equality Commission
In October 2011 the Minister for Justice, Equality and Defence announced the appointment of a Working Group to advise him on the establishment of a new and enhanced Human Rights and Equality Commission. He intends to have a new Commission in place by the end of February 2012.
The Working Group has begun a consultation process involving civil society, members of the public, and those interested in the future of human rights and equality in Ireland. The closing date for submissions was 23 November 2011.
European Communities (Transnational Information and Consultation of Employees Act 1996) (Amendment) Regulations 2011 S.I. No. 380 of 2011
The Regulations transpose into Irish law the (recast) Directive 2009/38/EC on the establishment of a European Works Council (EWC) or a procedure in Community-scale undertakings for the purposes of informing and consulting employees.
Important changes in the recast Directive include a definition of "information", improvement of the definition of "consultation," a definition of "transnationality" and clarification of the transnational competence of EWCs.
Watching Brief
Bills planned for the current session include:
- The Competition (Penalties and Sanctions) Bill, to strengthen the effective enforcement of competition law in Ireland;
- The Industrial Relations (Amendment) Bill, referred to above, to give effect to the Government's reform proposals concerning statutory wage-setting mechanisms and to address issues arising out of the recent High Court challenge to the JLC system;
- The Temporary Agency Workers Bill, to give effect to the Directive on Temporary Agency Work and give equal treatment to temporary agency workers in terms of basic working and employment conditions;
- The Human Rights and Equality Commission Bill, to replace the existing Equality Authority and Human Rights Commission with a new amalgamated structure.
- Bills of significance for the next Dáil session in 2012 include the Mediation and Conciliation Bill which will implement recommendations of the Law Reform Commission. Along with the recent new High Court rules on mediation and conciliation (S.I. No. 502 of 2010), the Bill will heighten public awareness of the availability of ADR.
In Brief
In this section, we let you in on what we have been up to in the past few months. If you would like further information about any of the items below, please contact any member of the Employment Law Group.
Arthur Cox Employment Law Yearbook 2011
Do you, like so many, feel it's impossible to keep up to the date in employment law, the fastest moving target in the legal landscape? The Arthur Cox Employment Law Yearbook 2011 is a new and exciting publication which will appear for the first time in February 2012. Published by Bloomsbury Professional, it will be an annual publication written by lawyers from Arthur Cox for all practitioners and professionals in the field. It will contain selected cases and materials for each successive year relevant to Employment Law, Data Protection, Taxation, Pensions, and Employee Benefits. It will cover Irish law: decisions of the superior courts, Labour Court, Equality Tribunal, Employment Appeals Tribunal; Irish legislation and statutory instruments; English law: relevant common law decisions; EU law: decisions of the Court of Justice of the European Communities, relevant Directives/Regulations, as well as decisions of the European Court of Human Rights.
Purchasers of the text will receive a voucher enabling them to access the selected material in full on the web. The Arthur Cox Employment Law Yearbook will be essential for every employer and HR Manager. The price of ¤75 makes the Yearbook excellent value for money.
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.