In the context of intensifying Brexit negotiations, more UK companies are looking to Ireland as a base to establish business or increase their market presence.
From an employment law perspective, UK and Irish legislation is broadly similar. Very often as employment lawyers we are engaged to review an employment contract governed by the laws of England and Wales. Amendments are generally straightforward, though there are differences when dealing with matters such as sick pay, pension and other entitlements but they are easily addressed. It is a similar case when it comes to reviewing policies and procedures.
However, there are a number of key differences in the law between the two jurisdictions, some which benefit the employer and others which are more employee-friendly.
Irish employment law is generally more employer-friendly when it comes to the sensitive and political issue of trade union recognition. Under Irish law there is currently no legal obligation on an employer to recognize a trade union for collective bargaining purposes. However if an employer in Ireland does not collectively bargain with a trade union or an “excepted body” such an independent staff association which negotiates in relation to employee terms and conditions, the employee representatives can refer disputes over terms and conditions to the Labour Court. The Labour Court can ultimately issue a legally binding determination on the dispute referred but cannot make a binding determination to recognise a union for collective bargaining.
Irish law is also arguably more employer friendly in relation to the application of the Transfer of Undertakings Regulations (TUPE) in the important area of outsourcing. The scope of application of TUPE is much more restrictive in Ireland, in particular, for second generation outsourcing agreements. In order to trigger the application of TUPE, the change in service provider must involve the transfer of an economic entity which retains its identity. In addition, there should be an associated and related transfer of significant tangible or intangible assets or the transfer of a major part (in terms of numbers and skills) of the employees engaged in that particular function. This allows companies to compete for new business and to fall outside the scope of TUPE by providing the services using its own employees and assets.
Irish employment law is arguably more employee-friendly compared to UK law in the context of legal remedies and, in particular, the potential for an employee to apply to the High Court for an injunction to restrain a dismissal pending the hearing of a breach of contract proceedings.
Senior employees frequently seek interlocutory injunctions to restrain disciplinary processes or dismissals in certain circumstances. This can happen in many circumstances, such as where an employer has failed to follow a contractual disciplinary procedure, failed to ensure that the decision to dismiss was compliant with governance requirements, failed to afford fair procedures in conducting the disciplinary process, or terminated the employee’s employment in breach of contract. For example, in a recent High court case, a doctor secured an injunction preventing his dismissal based on retirement where there was no retirement clause in the contract. In the UK, employees can potentially obtain interlocutory injunctions to restrain disciplinary processes and dismissals. However, there has been a traditional reluctance on the part of UK employees to seek injunctions and for the UK courts to grant them.
In Ireland, save for certain limited exceptions, employees must have one year’s continuous service to qualify for an unfair dismissal claim. In the UK, the qualification period is two years continuous service, subject to limited exceptions. Therefore employees under Irish law gain important statutory rights against unfair dismissal at a much earlier stage than is the case in the UK.
Culture and practice
Finally, and while not a legal point, it is fair to say that the culture and practice between the two jurisdictions is very different and should be noted. For example, some UK based clients would comment that there is a higher sense of employee entitlement in Ireland when it comes to redundancy payments or severance terms and that there is less predictability in running cases before the Workplace Relations Commission than with the equivalent bodies in the UK.