A better way forward

Karen Killalea and Jacqui Kelly outline the key aspects of the new Workplace Relations Act, which comes into effect on 1st October 2015.

The new Workplace Relations Act provides for the most substantial overhaul of dispute resolution procedures in employment law in Ireland since the Employment Appeals Tribunal was established nearly 50 years ago. Accountancy firms, large and small, should be aware that from 1st October 2015 the Act will aim to make it less complicated for employees to bring claims and for employers to respond to them.

The Act will reform Ireland’s workplace relations bodies by delivering an integrated industrial relations, adjudication and enforcement service that is simple to use, independent, effective, impartial and cost-effective. It will also provide for a workable means of redress, and enforcement within a reasonable period.

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; or the National Employment Rights Authority. Each of these bodies has different procedures for appeals. For example, you appeal an Employment Appeals Tribunal decision to the Circuit Court and appeal an Equality Tribunal decision to the Labour Court. The various institutions also have different limitation periods for taking cases.

The Act replaces the maze of tribunals and courts in the current system by providing a single gateway for employment disputes in Ireland. In future, all employment disputes – including 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 in the first instance. There is now one appeal body and that is the Labour Court.

The limitation period for the referral of a dispute under any employment or equality legislation will be standardised to six months. This can be extended to 12 months where “reasonable cause” can be shown. This introduces a lower bar than the “exceptional circumstances” previously required by the Employment Appeals Tribunal to extend time, and may make it easier for employees to extend the time limit in respect of employment protection claims.

The Act also encourages mediation and the early, and relatively informal, resolution of disputes as close to the workplace as possible. The goal is to resolve issues without the need for formal adjudication wherever possible. An early resolution process is currently being trialled whereby a complaint may be referred by the Workplace Relations Commission to a mediation officer if it is deemed suitable for early resolution. If so, and if both parties agree, a mediation conference – potentially held over the phone – will be convened. Any resolution arising will be binding and enforceable in the Courts.

If early resolution is not deemed appropriate, is refused by the parties, or if an attempted mediation is unsuccessful, the dispute will be referred to a single adjudicator at the Workplace Relations Commission. 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 as the company’s name – and that of any witnesses – will not necessarily feature in the media as happened in the past when the Employment Appeals Tribunal heard a case at first instance. The increased privacy also can benefit employees, as it removes the potential fall-out and damage from a public dispute with their former employer. This change alone may encourage more employees to bring claims.

If the matter is appealed, the matter will be heard in public before the Labour Court with the exception of matters referred under the Industrial Relations Acts and in other special circumstances. Representation, legal or otherwise, will be allowed at all stages but there is no reference in the Act to the examination or cross-examination of witnesses.  All decisions will be produced in a standard format and there will also be a requirement to give reason for any awards made. Furthermore, all adjudicators’ decisions will be published online on an anonymised basis. Practitioners are optimistic that this will enhance the transparency of the decision-making process as, currently, 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.

In future, any appeal will go to the Labour Court within 42 days in all instances. Unless special circumstances arise, the Labour Court hearings will be public and decisions will be published in full. 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. Labour Court hearings involving industrial relations disputes will be held in private, however. 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. Either side can object on this score.

New procedures are also due to be implemented for the enforcement of awards of an adjudication officer or the Labour Court through the District Court.

The Act goes beyond simply reforming processes and procedures. To promote higher levels of compliance with employment and equality law, employers may be issued with on-the-spot fines and possibile imprisonment for breaches.

Compliance notices have triggered some controversy. While they are novel for the most part, they can only be issued under seven pieces of legislation.

A Workplace Relations Commission may issue an employer with such a notice if he or she is satisfied that the employer has contravened specified sections of employment legislation in: the Unfair Dismissals Act; Payment of Wages Act; Maternity Protection Act; Terms of Employment (Information) Act; Organisation of Working Time Act; Carer’s Leave Act; or Protection of Employees (Temporary Agency Work) Act.

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 he or she is 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 and/or imprisonment for up to three years for the employer concerned.

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 Workplace Relations Commission 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 of up to €2,000. This could be viewed as a plea bargain. If the employer agrees to pay the fixed payment notice within 42 days, the Commission will not prosecute the relevant offence. There is also no option to appeal a fixed payment notice. If an employer disputes it, he or she would simply not pay the fine and defend the resulting prosecution.

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 adjudication 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 his or her 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 broad power has been granted to the Minister.

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 Workplace Relations Commission to 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 permits the Commission 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.

There has been discussion since the legislation was enacted regarding gaps that appear to be in need of remedy. There may have been a number of legislative omissions or oversights with respect to the version of the Act that was passed by both Houses of the Oireachtas. For instance, Part 5 and Part 6 of the Act provide respectively for the dissolution of the Labour Relations Commission and the Employment Appeals Tribunal, but there is nothing in the Act to provide for the dissolution of the Equality Tribunal once the Act is commenced.

It also appears that the Act has not actually amended the criteria for extending the time limit for referral of a claim under the Unfair Dismissals Acts. If this is the case, the standardised six month time limit still applies but it can only be extended for an additional six months where “exceptional circumstances” preventing the claim from being initiated are shown.  These anomalies will be addressed by the Oireachtas and it may be the case that certain amendments to the Act are included as part of the Industrial Relations (Amendment) Bill and the National Minimum Wage (Low Pay Commission) Bill, which are currently making their way through the Oireachtas.

From the point of view of accountancy firms, it is important to be familiar with the new structures – through which any employment disputes will progress – and to be aware that, in future, disputes will be dealt with more efficiently. 

Karen Killalea is Litigation Partner at A&L Goodbody.