We hope that 2013 was a good year for you and your firm and that 2014 brings new opportunities and further success. We saw a number of developments in the Irish market last year and you can watch a short video from IDA Ireland with local highlights here, including updates on a number of our clients.
We have prepared a short overview of key developments in the real estate environment during 2013. We hope this proves helpful and if you require any additional information on these topics do please contact one of our team.
- Registered Employment Agreements
On 9 May 2013, the Supreme Court held that the Registered Employment Agreement ("REA") system for determining pay rates and working conditions was unconstitutional.
The Supreme Court held that whilst the legislature may delegate the power to make administrative rules and regulations, and to exercise certain functions under statute to subordinate bodies, such delegated authority should not, and could not, extend to law- making.
This decision not only has significant consequences for employers and employees in the electrical industry, as it was the Electrical REA which was being challenged, but also other sectors governed by REAs, including construction and retail.
The immediate impact for employers in any sector previously covered by an REA is that such employers may hire new employees on terms and conditions less favourable than those set by the REAs. Such terms would ofcourse have to comply with standard employment legislation such as the Minimum Wage Act, 2000 and Organisation of Working Time Act, 1997.
While outlining that the Government intended to study the decision and take legal advice on it, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, acknowledged that the decision had the effect of striking down REAs.
For existing employees whose terms and conditions of employment were governed by an REA, the Minister stated that existing contractual rights of workers in sectors covered by REAs were unaffected as their contractual rights can only be altered by agreement.
This issue, however, may not be black and white and depending on the circumstances, including the wording of the employment contract, if any, there may be situations where employers may lawfully vary certain terms arising out of this significant decision.
It is worth noting that no further or fresh criminal prosecutions for non-compliance with REAs can be taken. Any current prosecutions are likely to be struck out.
For a more detailed analysis of the Supreme Court decision of 9 May 2013, you can read our ezine article here from August 2013.
- Protected Disclosures Bill 2013
On 3 July 2013, the Minister for Public Expenditure and Reform, Brendan Howlin TD, published the Protected Disclosures Bill 2013 (the "Bill") which he referred to as “Ireland’s legal framework for combating corruption”. This is the first time that a single overarching piece of legislation will apply to protect persons who make disclosures, often referred to as ‘whistleblowers’, in all sectors of the economy.
The Bill aims to protect workers from penalisation where they make a disclosure of information that comes to their attention in their workplace and which is a “protected disclosure” as defined in the Bill.
The Bill does not confine itself to protecting persons in the traditional employer/employee relationship but instead, it uses the wider term “worker”. Therefore the protection and remedies provided for will also apply to contractors, trainees, agency staff and home workers engaged by the employer.
A number of distinct disclosure channels for potential whistleblowers are contained in the Bill. These include:
- disclosure to an employer or “responsible person”;
- disclosure to a prescribed person;
- disclosure to a Minister;
- disclosure to a legal advisor, and
- disclosure in other cases, where options 1-4 do not apply.
While there is no guarantee of anonymity under the Bill for the person who makes a protected disclosure, the person to whom a protected disclosure is made should take all reasonable steps to avoid disclosing to another person any information that might identify the person who made the protected disclosure.
The Bill passed through the Seanad on 20 November 2013. As we now await its enactment, employers might consider drafting policies and putting in place internal structures and training programmes to deal with protected disclosures.
For a more detailed analysis of the Bill, you can read our article here from August 2013.
- A Progressive Year for Pensions
2013 was a progressive year for pensions - a year that saw a number of high profile pension disputes enter the Commercial Court concerning, in the main, scheme funding disputes between sponsoring employers and trustees. The year ended with the signing into law of the Social Welfare and Pensions (No.2) Act 2013 (“the Act”) which introduced two new wind-up priority orders and expanded the type of benefit reductions which the Board may direct under section 50 of the Pensions Act 1990. Essentially, the single insolvency order will apply if the scheme’semployer is solvent at the date of wind upand the double insolvency order will apply if the scheme’s employer is insolvent at the date of wind up. In a multi-employer scheme, all participating employers must be insolvent for the double insolvency order to apply.
April 2013 saw the Court of Justice of the European Union deliver its landmark judgment in the Hogan & Ors. v Minister for Social and Family Affairs, Ireland and the Attorney General case (C398.11) ("The Waterford Crystal case") and held that the Irish State had failed in its obligation to correctly implement European Directive 2008/94EC which in the main, directs Member States to take measures to protect employees’ defined benefit entitlements in the event of the insolvency of their employer and their pension scheme.
To meet the state liability that is likely to arise as a result of this judgment, the Minister for Finance introduced an additional 0.15% levy on private pension funds. While due to remain in force for 2014 and 2015, it is possible that this levy could be further extended as the full effect of the Act is realised.