Annual Review of 2024 Employment Law

Increase in National Minimum Wage

The National Minimum Wage Order 2023 set the national minimum hourly rate of pay to increase from €11.30 to €12.70 per hour for employees aged 20 years and older effective 1st January 2024 with corresponding rates of pay for young workers as follows:

• Aged 19 = €11.43 – 90% of national minimum wage
• Aged 18 = €10.16 – 80% of national minimum wage
• Under 18 = €8.89 – 70% of national minimum wage

In September this year, the Low Pay Commission recommended that sub-minimum wage rates for workers under 20 be abolished no sooner than January 2025. The Commission when making these recommendations took into consideration evolving policy in the EU which shows growing moves against youth sub-minimum wages together with the EU Directive on Adequate Minimum Wages.

The Low Pay Commission has recommended that if youth rates are abolished, that a study be conducted after 2 years to evaluate if there were adverse consequences from removing sub-minimum rates, in particular for those aged under 18. It also recommends that consideration is given to how employers with a substantial proportion of young workers in receipt of sub-minimum wages can be supported during and after the period in which youth rates are abolished, if they are abolished.

Budget 2025 has maintained the current pay rates for employees under 20 and we will monitor this issue closely for any future changes.

Increase in Statutory Sick Leave

The Sick Leave Act 2022 gives employees the right to employer paid sick leave provided certain conditions are satisfied. From 1st January 2024 Statutory Sick Leave was increased from 3 to 5 paid days in a calendar year.

This statutory entitlement applies to all employees who have rendered continuous service for a period of 13 weeks or more. The eligibility for sick leave starts from the initial day of absence and does not necessitate consecutive days of sick leave. To avail of statutory sick leave, employees must provide a medical certificate from a registered Irish medical practitioner, affirming their incapacity to work. SSP is provided to all employees at a rate of 70% of their daily rate of pay subject to a threshold of €110 per day.

A significant case this year (A Worker v Service Provider to Financial Services ADJ-00048825) clarified that an employer should not include periods of absence on statutory sick leave into account when they are managing absenteeism Section 11(1) of the Sick Pay Act 2022 states that “(…) an employee shall, during a period of absence from work by the employee while on statutory sick leave, be treated as if he or she had not been so absent (…)”. In this case because the employer took the period the employee was on statutory sick leave into account when it imposed a written warning for significantly high levels of absenteeism the adjudicator determined the employer was in breach of the act and the worker was awarded €1400.

New on the Spot Fines for Businesses

The Workplace Relations Act 2015 (Fixed Payment Notice) Regulations 2023 (the “Regulations”) were published on 12th January 2024. The Regulations consolidate new and existing fixed payment notices for employment law offences and set out the form of fixed payment notices that may be issued by a Workplace Relations Commission (WRC) Inspector.

New offences under the Regulations include a fine of €1,500 for failure by an employer to provide an employee with their terms of employment within one month of starting or providing false or misleading information; a fine of €750 for failure to give employees a written statement on the distribution of tips and gratuities or misrepresenting a service charge as a tip; and a fine of €500 for failure to display the required ‘tips and gratuities’ notices.
It is crucial to note that on-the-spot fines are imposed for each breach, which could result in significant penalties for larger employers.

Code of Practice for Employers and Employees Right to Request Flexible Working and Right to Request Remote Working

On 7th March 2024, the WRC introduced a Code of Practice outlining employees’ rights to request flexible and remote working, as per the Parental Leave Acts 1998 as amended and the Work Life Balance and Miscellaneous Provisions Act 2023. The Code provides comprehensive guidance for employers to facilitate requests for flexible or remote work arrangements. Employees can now make statutory requests for flexible work to support caregiving for children under 12 (or 16 for children with disabilities) or other dependents with significant medical needs. All employees are now entitled to request a remote working arrangement. Both requests can be made from the first day of employment, however employees must have completed 6 months of service for the approved arrangement to commence. Should an employee make a request for flexible or remote working, and they have had a gap in service of up to 26 weeks this period will not be taken into account when assessing if the employee has the requisite service under the legislation.

The process requires written requests to be submitted eight weeks prior to the proposed start date, with employers mandated to respond within four weeks of receiving the request. Employers are advised to assess such requests objectively and consider the business’s needs alongside the employee’s needs. For further information on the Code of Practice read our previous article here.

There have been a number of complaints to the WRC since the Code of Practice was published. The first reported case was Alina Karabko v. Tiktok Technology Ltd (ADJ-00051600) where the Complainant argued that the Respondent did not consider her application for a fully remote working arrangement, that they completely disregarded her needs when deciding on her request and they did not consider the request in an objective, fair and reasonable manner.

The WRC highlighted the limitations of its authority stating that an adjudication officer has no power to assess the merits of an employer’s decision they can only look at the process that led to the decision.

In reaching its conclusion, the WRC acknowledged that the Complainant presented a thorough case for full-time remote work. Nevertheless, it found that the Respondent had adhered to all the obligations outlined in the Code of Practice and the Act. On these grounds, the WRC determined that the Complainant’s claim was not well-founded.

It is therefore imperative that employers familiarise themselves with the process outlined in the Code and the Act and ensure they apply it fairly consistently and reasonably when considering requests for remote and flexible working.

Updated Revenue Guidance on Determining Employment Status

Following the Irish Supreme Court’s unanimous decision in The Revenue Commissioners v Karshan (Midlands) Limited t/a Domino’s Pizza in October 2023, Revenue have published their ‘Guidelines for Determining Employment Status for Taxation Purposes’, to reflect the principles set out in the Supreme Court judgment in the Karshan Case.

The Revenue has issued this comprehensive guide outlining the Five-step framework set out in the Karshan Case that businesses are required to use in determining whether an individual is an employee or self employed including a number of practical examples which will assist businesses in making that determination In November this year, the Department of Social Protection, Revenue and the WRC published an updated Code of Practice on Determining Employment Status requiring employers to apply the same Five-step framework and providing clearer guidance on the classification of workers in Ireland.
It is advisable for all businesses to familiarise themselves with both the Revenue Guidelines and the Code of Practice. It is crucial for businesses engaging contractors, sub-contractors, or other workers on a self-employed basis (currently or in the past) to review these arrangements in light of the five-step framework to ensure that their employment status is correctly determined.

The Supreme Court Case on Mandatory Retirement Age

The long awaited and one of the most significant cases in 2024 was the Supreme Court case of Seamus Mallon -v- The Minister for Justice, Ireland, and the Attorney General [2024] IESC 20. The case provided welcome clarification that an individual assessment is not needed for a general mandatory retirement age to be lawful pursuant to the EU Directive and the Employment Equality Acts. In fact, conducting individual assessments can undermine the consistent and systematic nature of a mandatory retirement age, making it appear disproportionate. The Supreme Court held that avoiding the need to individually assess each employee’s ability to work as they get older is a valid reason for setting a general retirement age as assessing every person individually could lead to disagreements and could also affect employees’ dignity. The CJEU has acknowledged that setting a fixed retirement age for everyone can be a reasonable approach to avoid these issues.

Following the Donnellan v Minister for Justice, Equality and Law Reform [2008] IEHC 467, certain WRC decisions emphasised the need for objective and reasonable justification of mandatory retirements to achieve a legitimate aim, with a focus on the need for such aims to be individually assessed on a case-by-case basis. When such assessments were not carried out, the WRC concluded that the employer could not prove that the mandatory retirement age served a legitimate aim or that these aims were proportionate to the particular circumstances of the employee. However, the Mallon case confirms that there is no obligation for such individual or case by case assessments.

Read more on retirement age in Ireland in our previous blog here.

Collective Redundancies

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 came into force on 1st July 2024. The Act introduces enhanced protection for employees in cases of collective redundancies during insolvency situations.

The existing legislation has been amended to align with the case law of the Court of Justice of the European Union. The amendments specify that the obligations imposed on employers concerning collective redundancies must also be adhered to by a Responsible Person (liquidator, receiver or a person appointed by the Court) when carrying out collective redundancies as part of an insolvency process.

The obligations around consultation, information and notification apply to Responsible Persons as well as employers. Responsible Persons are required to engage collectively with employee representatives in situations involving collective redundancies, ensuring a minimum consultation period of thirty days for the protection of employees. Notably, if an employer has already initiated the consultation process with employees, a Responsible Person may continue this process once appointed.

During the consultation period, the Responsible Person must provide employee representatives with all relevant information regarding the proposed redundancies. Additionally, the Responsible Person must inform the Minister for Enterprise, Trade and Employment in writing of their intention to proceed with collective redundancies as soon as possible, and no later than thirty days before the first dismissal takes effect.

Parent’s Leave Increased to 9 Weeks

From 1st August, 2024, Parent’s Leave has been extended from seven weeks of leave to nine weeks. Parent’s Leave was extended for parents of children born or adopted on or after 1st August, 2024. The additional two weeks of Parent’s Leave also apply to parents who have already taken seven weeks of Parent’s Leave before August 2024 if their child has not yet reached the age of two or two years have not passed since their adoption placement.

Employment Permits Act 2024

The Employment Permits Act 2024 brings new and revised provisions to the existing legislation, effective from 2nd September 2024.
A lot of the operational detail has been moved to regulations to facilitate a more agile employment permits system, without having to amend primary legislation continuously as the labour market evolves.

Key changes include the modernisation of the Labour Market Needs Test (LMNT), removing the requirement to advertise a job vacancy in a newspaper in advance of an employment permit application being made, requiring only that the job vacancy be published on one or more online platforms for 28 days.
The 50:50 rule, requiring businesses to employ at least 50% EEA nationals, has been relaxed to allow greater flexibility for small businesses and startups, especially those with no employees at the time of application.

Additionally, the process for obtaining permits has been streamlined, allowing for automatic cancellations of old permits, internal transfers without reapplying for a new permit, and allowing permit holders to apply to change employer after nine months.

Other important changes include the introduction of an annual wage review for Critical Skills Employment Permits (CSEPs), aimed at aligning wage thresholds with market growth, and the creation of a new seasonal employment permit scheme for non-EEA nationals with a pilot project commencing in horticulture and food production sectors in 2025.

The Act also introduces a new provision allowing spouses and partners of CSEP holders to access the labour market without a separate permit. Additionally, employment agencies and contractors can now employ permit holders working on behalf of clients or subcontracted projects.
Auto Enrolment Retirement Savings System

Automatic Enrolment Retirement Savings System Act 2024 was signed into law on 9th July 2024 and Budget 2025 announced the system will commence on 30th September 2025.

Under the new legislation, approximately 800,000 individuals aged 23 to 60, who are currently not paying into an occupational private pension scheme or PRSA through payroll and earn more than €20,000 per year across all employments, will be automatically enrolled in the new system.

Contribution rates for employees and employers will be phased in gradually over ten years, beginning at 1.5% next year and rising by 1.5% every three years until 6% is reached in year 10. Contributions made by the employee will be matched by the employer and topped up by the State. For every €3 put in by an employee, the employer will also contribute €3, and the State will contribute €1. This will apply up to a maximum of €80,000 of employee’s earnings. The contributions will be calculated based on gross pay. The pot-follows-member approach will allow employees to keep the same auto enrolment pot as they move from job to job through their career.

A central state retirement savings system will be introduced, to be run by a newly established National Automatic Enrolment Retirement Savings Authority (NAERSA) which will collect the contributions from the employee, employer and State, and then pool and allocate them to the investment management companies who will invest the money and returns and allocate it to the employee’s personal fund.

The NAERSA will also have a range of inspection and enforcement powers, including the power to issue compliance and fixed-penalty notices.
Find out more about Auto Enrolment in our previous article here.

Maternity Protection Legislation

The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 has been signed into law in October this year. One of the key changes allows for the postponement of all or part of an employees’ maternity leave due to serious health conditions. Employees will now be able to delay their maternity leave for up to 52 weeks if they face a serious health issue. Notice must be provided at least two weeks in advance, include specific dates on which the postponement is to start and end and accompanied by a medical certificate. If the leave is postponed once, employees may notify their employer a second time to extend the postponement, provided it occurs within 52 weeks of the original postponement. However, an employee cannot postpone leave under both this provision and in the event of the hospitalisation of a child for the same birth.

The Act also amends the Employment Equality Acts to provide for restrictions on the use of Non-Disclosure Agreements (NDAs). Any NDAs related to discrimination, harassment, or victimisation will be deemed void unless certain conditions are met. These conditions include that the employee must request an agreement, the employee must receive independent legal advice in writing at the expense of the employment prior to entering into an agreement, and the agreement must include that the employee has the right to withdraw from the agreement within 14 days without penality. Furthermore, the NDA must allow for relevantdisclosures to certain professionals such as legal advisors, Gardaí, medical experts, and trade union representatives. This is aimed at ensuring transparency and safeguarding the rights of employees in cases involving discrimination or harassment.

This article was written by Mislav Magas, HR Consultant at Action HR Services.

Contact any of our consultants if you are in need of expert HR Advice.

DISCLAIMER:
The information in this article is provided as part of the Action HR Services Blog. Specific queries should be directed to a member of the Action HR Services Team and it is recommended that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct on 18th December 2024.