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The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

The employment relationship is governed by:

  • the written terms and conditions contained in the employment contract, handbook and policies;
  • legislative sources, including Irish and EU law;
  • constitutional law; and
  • common law (case law and implied).

Who do these cover, including categories of worker?

Permanent employees

Employees are typically engaged on a permanent part-time or full-time basis (usually subject to satisfactory completion of a probationary period), such that their employment continues indefinitely until:

  • termination by either party giving notice to the other; or
  • a fundamental breach by either party results in immediate termination.

Fixed-term employees Fixed-term contracts, although atypical in nature, fall within the scope of the direct employment model. Irish law prohibits less favourable treatment of fixed-term employees relative to comparable permanent employees, unless such treatment can be objectively justified. These obligations are set out under the Protection of Employees (Fixed-Term Work) Act 2003.

Zero-hours employees The Organisation of Working Time Act 1997 sets out particular protections for employees in relation to zero-hours employment practices. The 1997 act defines a ‘zero-hours contract’ as arising where an employment contract expressly requires the employee to be available to work for a certain number of hours each week or as-and-when required by the employer (or both).

Agency workers The Protection of Employees (Temporary Agency Work) Act 2012 obliges employment agencies to ensure that their workers are employed on the same basic working and employment conditions as if they had been recruited directly by the end user to the same job, subject to certain exceptions.

Misclassification

Are there specific rules regarding employee/contractor classification?

Under Irish law, a distinction is drawn between self-employed independent contractors or consultants and employees. The distinction is important because different tax treatment applies to self-employed individuals and employees. In addition, employees are entitled to certain mandatory employment rights which are unavailable to contractors, including:

  • the right to statutory leave;
  • redundancy entitlements; and
  • the right not to be unfairly dismissed (subject to minimum service requirements).

This distinction has led to a lot of case law relating to employment status and it is clear from such case law that the courts, employment rights bodies and the revenue commissioners of Ireland will consider the totality of the relationship between the parties to determine its true nature. This will involve analysis of various factors relating to the engagement, including any contractual documentation that exists. While a well-drafted independent contractor agreement will assist in demonstrating that the relationship is one of self-employment, case law has shown that contractual documentation will be disregarded if it does not accurately reflect the practical circumstances of the engagement.

Contracts

Must an employment contract be in writing?

Under the Terms of Employment (Information) Acts 1994 to 2014, an employer is obliged to provide an employee with a statement in writing no later than two months after the commencement of employment setting out certain specified terms and conditions of employment. This requirement is typically satisfied by providing an employee with a written employment contract. 

Are any terms implied into employment contracts?

Terms and conditions of employment are implied into employment contracts by various pieces of employment legislation which set out minimum employment rights, including:

  • the National Minimum Wage Act 2000;
  • the Protection of Young Persons (Employment) Act 1996; and
  • the Protection of Employees (Part-Time Work) Act 2001.

A term may be implied by custom and practice if it is so notorious, well known and acquiesced that – in the absence of agreement in writing – it is taken as one of the terms of the contract between the parties.

A term may also be implied at common law or by the Constitution, which includes the right to earn a livelihood and the freedom to associate and dissociate.

Are mandatory arbitration/dispute resolution agreements enforceable?

Historically, Irish courts have been very supportive of arbitration and this approach continues to be reinforced under the Arbitration Act 2010. The courts have displayed a strong policy of staying court proceedings in favour of agreements to arbitrate.

Under Section 39 of the Workplace Relations Act 2015, the Workplace Relations Commission (WRC) has discretion to offer mediation services in certain cases to facilitate the resolution of a complaint or dispute – where possible – at an early stage and without recourse to adjudication before the WRC. However, the complaint or dispute may be referred for mediation only with the agreement of both parties. 

How can employers make changes to existing employment agreements?

The terms of an employment contract cannot be varied, except by agreement of the parties to the contract. Unilateral variation of the terms of an employment contract by the employer without the employee’s consent constitutes a breach of contract and could expose the employer to a number of claims, including:

  • a breach of contract claim;
  • a constructive dismissal claim; or
  • a claim under the Payment of Wages Act 1991, depending on the circumstances. 

Employers may include an express variation clause in the employment contract that reserves the right to make reasonable changes to the employee’s terms and conditions. However, even with an express variation clause, any such discretion must be exercised reasonably.

Foreign workers

Is a distinction drawn between local and foreign workers?

In terms of permission to work in Ireland, a distinction is drawn between European Economic Area (EEA) nationals and non-EEA nationals, as EEA nationals need no employment permits to work in Ireland. Different types of employment permit are available for non-EEA nationals, depending on the circumstances.

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