The bulk of the Workplace Relations Act (the "Act") comes into effect today. This is the biggest overhaul of the dispute resolution procedures in employment law in Ireland since the EAT was established nearly 50 years ago and it's vital for employers to know how the new regime will work. The Act itself is not free from controversy (there have been rumours in legal circles of a potential constitutional challenge), but most would welcome its objective of attempting to provide swifter access to justice and quicker resolution of disputes for everyone.
Now What? – The Transitional arrangements
From 1 October the new system will commence and any claim submitted on 1 October or after will proceed under the new Rules. However, in general, any claim already submitted or appealed prior to that date will proceed under the old regime and as such there will be an orderly wind-down of the old regime over the coming 18 – 24 months as any outstanding cases are worked through.
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The Best Small Country in the World in which to do Business
The Act will reform Ireland's workplace relations bodies by delivering a world-class workplace relations service that provides an integrated industrial relations, adjudication and enforcement service that is simple to use, independent, effective, impartial and cost-effective. It will also provide for workable means of redress, and enforcement within a reasonable period.
This Act forms part of the government's stated aim to make Ireland the best small country in the world in which to do business. The idea is to reinforce this by simplifying and streamlining workplace disputes procedures and bodies.
- Under the current system and depending on the type of workplace dispute, an employee may have to take their case to one or more of: the Labour Relations Commission; the Equality Tribunal; a Rights Commissioner; the Employment Appeals Tribunal (EAT); or the National Employment Rights Authority. Each of those bodies currently has different procedures for appeals (i.e. you appeal a decision of the EAT to the Circuit Court and appeal a decision of the Equality Tribunal to the Labour Court) and have different limitation periods for taking cases (i.e. six months after the event).
- In harmonising and de-cluttering the current system, the Act provides a single gateway for employment disputes in Ireland and replaces the current maze of tribunals and courts. From now on, all employment disputes – everything from unfair dismissals and discrimination claims to working time issues, pay claims and any industrial relations issues – will be referred to an Adjudication Officer in the newly established Workplace Relations Commission (WRC) in the first instance. There is now one appeal body and that is the Labour Court.
- This is in complete contrast to the current system where the EAT sits in a panel of three with appeals going to the Circuit Court and the Equality Tribunal acting as a single decision maker with appeals going to the Labour Court. In short, it is a spectacular streamlining of what was a complex and confusing process.
What's New? - Time Limits to bring Claims
- Limitation periods for the referral of a dispute under any employment or equality legislation will be standardised to six months. This can be extended to twelve months where "reasonable cause" can be shown.
- This introduces a lower bar than the "exceptional circumstances" that was previously required by the EAT in order to extend time, and may make it easier for employees to extend the time limit in respect of employment protection claims.
What's New? - Early Resolution
- The Act encourages mediation and the early resolution of disputes as close to the workplace as possible, and where possible without the need for parties to have to resort to formal adjudication.
- An Early Resolution process is currently being trialled. When a complaint arrives at the WRC it may be referred to a mediation officer if it is deemed suitable for early resolution. If so, and if both parties agree to it, then a mediation conference (potentially held over the phone) will be convened. Any resolution arising from this will be binding on the parties and enforceable in the Courts.
What's New? - Adjudication of Disputes
- If early resolution is not deemed appropriate, is refused by the parties, or if an attempted mediation is unsuccessful, a dispute will be referred to a single adjudicator at the WRC. Employers no longer have the choice to opt out of a first instance hearing in private with a single decision maker, as was the case previously with Rights Commissioners. However, parties may still object to an Adjudication Officer investigating an industrial relations dispute at first instance.
- This process is envisaged as being more inquisitorial than adversarial - the hearing will be held in private and evidence will not be on oath. One school of thought is that employers will benefit from this new element of privacy in that the company's name – and that of any witnesses – will not necessarily be splashed across the media as happened in the past when the EAT heard a case at first instance. This increased privacy also can benefit employees as it removes the potential fall-out and damage from a very public dispute with their former employer. If the matter is appealed, then except for matters referred under the Industrial Relations Acts and in other special circumstances, the matter will be heard in public before the Labour Court.
- Representation, legal or otherwise, will be allowed but there are no references in the Act to the examination or cross-examination of witnesses.
- All decisions will be required to be produced in a standard format, and there will be a requirement to give reason for any awards made. As well as this, all decisions of adjudicators will be published on the internet on an anonymised basis. Practitioners are optimistic that this will enhance the transparency of the decision making process. At the moment, the level of detail contained in decisions varies enormously and there is little if any transparency in relation to the decisions of Rights Commissioners for anyone who is not a party to the proceedings.
What's New? - Appeals
- From now on, any appeal from a decision of an Adjudicator will simply go to the Labour Court (within 42 days) in all instances. The Labour Court hearings will be public and decisions will be published in full, unless special circumstances arise. Decisions of the Labour Court can then be appealed to the High Court on a point of law only (rather than rehearing the entire case).
- It should be noted that Labour Court hearings involving industrial relations disputes will be held in private.
- The Act also allows for the determination of disputes (at adjudication and/or appeal stage) based on written submissions alone, rather than by way of a full oral hearing. However, either side can object to this.
- New procedures are to be implemented for the enforcement of awards of an Adjudication Officer or the Labour Court through the District Court.
What's New? – On the Spot Fines & Compliance Notices
The Act goes far beyond simply reforming processes and procedures. In order to promote higher levels of compliance with employment and equality law, employers can now be hit with on–the-spot fines, with the possibility of imprisonment, for breaches of employment law:
1. Compliance Notices
Compliance Notices have triggered some controversy. While they are novel for the most part, it is important to bear in mind that they can only be issued under five pieces of legislation. Where a WRC inspector is satisfied that an employer has contravened specified sections of employment legislation in: Payment of Wages Act; Maternity Protection Act; Organisation of Working Time Act; Carer's Leave Act; or Protection of Employees (Temporary Agency Work) Act – they may issue the employer with a Compliance Notice.
The Compliance Notice is essentially a direction from an inspector to an employer to do or refrain from doing certain things. If an employer believes they are compliant with the relevant legislation, they may appeal the Compliance Notice to the Labour Court.
Failure to comply with a Compliance Notice will be an offence and on indictment may result in a fine of up to €50,000 or imprisonment for up to 3 years for the employer concerned.
2. Fixed Payment Notice
Fixed Payment Notices have also triggered controversy. Again, their scope is relatively limited and they can only be issued under three pieces of legislation. Where a WRC inspector has reasonable grounds for believing that an employer has committed an offence under the Protection of Employment Act; Payment of Wages Act; or National Minimum Wage Act, they may issue the employer with a fine or "Fixed Payment Notice", which may not exceed €2,000.
This in some respects could be viewed as a plea-bargain; if the employer agrees to pay the Fixed Payment Notice within 42 days, the WRC will not prosecute the relevant offence.
There is no option to appeal a Fixed Payment Notice. If an employer disputes it, they would simply not pay it and defend the resulting prosecution.
Will Fees be introduced?
For the first time, the Act gives the Minister for Jobs the power to charge fees to employees wishing to bring claims against their employer. However, fees were introduced recently in the UK and this has been criticised by some commentators as a barrier to justice for employees.
While there are no plans to introduce blanket fees, it has been suggested in recent Dáil and Seanad debates that where a party fails to appear at an adjudicator hearing without good cause and wishes to appeal the decision to the Labour Court, that party will have to pay a fee of €300 when lodging its appeal. If the Labour Court determines that the party in question had good cause for failing to attend the first-instance hearing, the fee will be refunded.
No decisions have yet been made, but a relatively broad power has been granted to the Minister.
Sharing Information on 'rogue' employers
The Act allows for increased sharing of information on employers who are in breach of employment law between various State agencies. This would allow the WRC to potentially share PPS numbers, ERN numbers and any other relevant information regarding non-compliant employers with, among others: the Revenue Commissioners; the Gardaí; the Director of Corporate Enforcement; the Health and Safety Authority; the Pensions Ombudsman and HIQUA.
A notable inclusion in the Act allows the WRC to contact any public contracting authority that awards public works contracts and inform that body of a breach by a contractor (or sub-contractor) of any relevant legislative provision. This may exclude certain employers from being considered for certain public tenders or may result in payments under an existing contract with a public body being withheld pending compliance with the relevant law.
The Small Print
When the legislation was enacted earlier this year, it transpired that a small number of additional legislative provisions were required as certain elements of the new system were not provided for in the version of the Act which was passed by both Houses of the Oireachtas. These provisions which rectify the gaps which were identified have subsequently been included as part of the National Minimum Wage (Low Pay Commission) Act 2015.