Welcome to the William Fry Employment Summer Round Up 2016. We have summarised the key employment law developments so far this year and hope that you find it useful. If you have a question arising out of any of the information do contact us.
- Increase in National Minimum Wage With effect from 1 January 2016, the National Minimum Wage in Ireland has been increased from €8.65 per hour to €9.15 per hour. Employers should ensure that the rate of pay for all employees in receipt of the minimum wage has been adjusted accordingly.
- Amendment to the Employment Equality Act 1998 Since 1 January 2016, employers in Ireland must objectively justify the setting of a fixed retirement age. While European case law has long required employers to objectively justify mandatory retirement ages in cases of age discrimination, the amendment to the 1998 Act has now placed this requirement on a statutory footing. The amendment to s.6 of the 1998 Act further requires employers to objectively justify offering a fixed-term contract of employment to a person who has reached the fixed retirement age for the business. [See our Age Report 2016 here]
- Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016 From 29 April 2016, (subject to exceptions), persons are entitled to regard certain criminal convictions as spent after a period of seven years and will not be required to disclose the conviction. The Act does not apply to any sexual offence, an offence that was tried in the Central Criminal Court, or an offence resulting in a prison sentence of greater than 12 months. Prior to the enactment of the 2016 Act, Ireland had no statutory provision in respect of spent convictions.
- Extension of Adoptive Leave to civil partners and cohabiting parents The Children and Family Relationship Act 2015 amends the Adoptive Leave Acts 1995 and 2005 such that civil partners and cohabiting same-sex couples can qualify for adoptive leave. This amendment to the legislation is expected to be commenced in 2016, once necessary changes have also been made to the Adoption Act 2010. Once the amendment is commenced, employers will need to update their adoptive leave policies to reflect the changes introduced.
- Introduction of the Paternity Leave and Benefit Bill The Government has passed the Paternity Leave and Benefit Bill granting two weeks' paternity leave to new fathers with effect from 1 September 2016. Once enacted, fathers entitled to statutory paternity leave will receive a State benefit of €230 per week, which is the same as the current maternity leave benefit. The paternity leave entitlement applies equally to children born or adopted and can be availed of within 26 weeks after the birth or adoption. It is recommended that employers amend their HR policies to reflect the introduction of statutory paternity leave.
- Labour Court Recommendation - Freshways Food Company & SIPTU The Labour Court recently issued its first landmark recommendation under the new regime in respect of collective bargaining introduced last summer by the Industrial Relations (Amendment) Act 2015. The 2015 Act provides an improved framework for employees to refer trade disputes to the Labour Court where their employer does not engage in collective bargaining. This particular Labour Court recommendation (which can be made binding and enforceable) is significant for employers who do not engage with trade unions but instead engage in collective bargaining with an employee forum (i.e. an excepted body). The Labour Court did not accept that Freshways engaged in collective bargaining with an excepted body on the evidence presented. Various recommendations were made by the Labour Court to include phased pay increases, sick pay and additional annual leave entitlements.
- Mona Jackson v James Cahill Following on from a recent case brought before the Court of Appeal which significantly reduced an award of damages in a workplace bullying action, the High Court in Mona Jackson v James Cahill has awarded €40,000 to an employee in a successful workplace bullying claim. The High Court held that in claims of workplace bullying, a variety of alleged instances of bullying will be considered cumulatively in assessing the impact on an employee in causing an identifiable injury, other than occupational stress. The High Court acknowledged that the test which should be applied in determining whether workplace bullying has occurred should always be an objective one and not a subjective one.
- Bărbulescu v Romania The European Court of Human Rights ("ECtHR") found that a Romanian employer was entitled to access employees' work instant messenger accounts to confirm that employees were completing professional tasks during working hours. Mr Bărbulescu created the instant messenger account to respond to clients' queries. His employer monitored the account for just over a week which showed he had been using the messaging service for personal purposes during working hours. His employment was terminated on the basis of a breach of the employer's internal regulations. Mr Bărbulescu challenged his termination before the Romanian courts and was unsuccessful. Ultimately the case was referred to the ECtHR as Mr Bărbulescu claimed that the Romanian court had disproportionately breached his right to respect for his private life and correspondence. The ECtHR held there was no breach as a fair balance had been struck by the Romanian court between the employee's rights and the business interests of the employer. The case highlights the increasing importance of social media policies in the workplace. [See our Social Media Report here]
- Schrems v Data Protection Commissioner In October 2015, the Court of Justice of the European Union ("CJEU") held that the EU-US Safe Harbor Agreement did not prevent a national supervisory authority of a Member State from examining a claim concerning the protection of a person's rights and freedoms in respect of the processing of personal data relating to him, which has been transferred from a Member State to the US, when that person contends that the law and practices in force in the US do not ensure an adequate level of data protection. Employers should be aware that the Safe Harbor Agreement no longer applies to the transfer of employee personal data between Europe and the US and alternative methods of transferring data may need to be put in place. The first alternative method is the EU-US Privacy Shield - the successor to the Safe Harbor Agreement. From 1 August 2016, the EU-US Privacy Shield permits European employers to transfer employee personal data from Europe to the US. In the specific case of the transfer of employee personal data under the EU-US Privacy Shield, transfers must be from a European data controller to a US-based Privacy Shield certified entity and there will be an obligation on a EU-US Privacy Shield certified entity to have regard to guidance issued by national supervisory authorities in Europe. The second alternative method to transfer employee personal data outside Europe is to do so pursuant to Standard Contractual Clauses ("SCCs"). SCCs are an agreement which an employer can enter into with a data controller situated outside Europe in order to transfer employee personal data. SCCs will govern the transfer and form a contractual relationship between the employer and recipient data controller. It should be noted that the law in respect of SCCs is in a state of flux due to a case which is currently before the Irish High Court (Data Protection Commissioner v Facebook Ireland Limited and Maximilian Schrems). This case may be referred to the CJEU in the near future and therefore SCCs will have to be closely monitored by employers. Irrespective of the transfer method chosen, employers must ensure they adhere to the provisions of the Data Protection Acts 1988 and 2003 in processing the personal data of employees.
- Annual Report of the Data Protection Commissioner – lessons for employers The recent publication of the Annual Report of the Data Protection Commissioner highlighted a number of interesting issues for employers. One case of particular importance in the report relates to the removal of records from the workplace to a private residence. The Commissioner found this to be in contravention of the Data Protection Acts as there had been a failure to take appropriate security measures in respect of personal data by allowing it to be stored at an unsecure location, namely a private house. In such a scenario, the employer as data controller loses control of the personal data which they are obliged to safeguard by law. It is recommended that employers examine their policies in respect of the removal of workplace records from the workplace.
- Brexit Considerations for Employment Law In June, we published our guidance for employers post - Brexit as follows:
- Risk of restrictions on free movement of workers - Risk of UK nationals employed in the EU and non-UK EU nationals employed in the UK no longer having the right to work where they are currently located post-Brexit thereby restricting the ability of cross-border businesses to allocate resources as freely as they are able to do at present and risking the loss or redeployment of staff.
- Risk of EU and UK employment laws diverging - Irish employment law is closely aligned with UK employment law in many respects. However, if the UK decides not to retain certain employment law rights that are required under EU law, Irish businesses with UK operations will no longer be able to rely on a similar employment law regime being in place in the UK.
- Employment law risks in mergers and acquisitions - If the UK is no longer required to abide by EU law, and the UK opts to amend its existing law relating to the protection of employees upon a transfer of undertakings and concerning employee consultation and information rights, this may have a material impact on M&A deals.
- Remuneration - Risk that if the UK is no longer subject to restrictions on remuneration and bonuses under EU regulations applicable to regulated financial service providers (e.g. CRD IV) and the UK uses its freedom to permit higher remuneration in the financial services sector, this will have an adverse impact on regulated financial service providers in the EU when competing to recruit senior talent as they will remain subject to such remuneration caps.
- Risks re cross border EU/UK pension schemes - Risk that it may no longer be possible to establish new EU/UK cross-border pension schemes or that, even if it is possible to do so in theory, divergences in the approach between the EU and the UK may make them less attractive.