This is part one of a series of articles exploring the employment law regime in jurisdictions where businesses may be considering moving some of their staff post-Brexit. It is intended to provide a high-level overview of the local regime, drawing out the main legal requirements to consider. This month’s focus: The Republic of Ireland.
Verdict – The Republic of Ireland provides the closest employment law alternative to the UK, not just in language and culture, but also in the legal structure and rights. Although Ireland has its own laws and courts, it remains remarkably close to the UK employment law position and UK judicial decisions can have persuasive authority in Irish courts. The key differences are the ability of employees to use an injunction to stop an unfair dismissal process and the uncapped awards available to employees of up to two years pay.
Overview – Employment Relationship
There are no legal requirements as to the length of probation periods, other than they should be express and included in the contract.
Contracts of employment
A contract of employment may be implied, oral or in writing. Where it is in writing, it may be subject to implied terms. However, an employer is obliged to set out in writing a certain minimum number of terms and conditions to employees within two months of commencement of employment. These are broadly the same as the UK requirements.
Minimum wage requirements
The current national minimum wage for a full-time adult employee is €9.25 per hour.
Registration with authorities
An employer must register with the Revenue Commissioners once they begin employing staff.
Taxes and employment related charges
Employers are required to pay Employer PRSI (social security), which is charged at a rate of 10.75% on salaries paid to Irish based employees. Employees must pay Employee PRSI, income tax and the Universal Social Charge. The employer must deduct these taxes through payroll.
Overview – Termination
Termination primarily arises where an employee resigns after providing the requisite notice to an employer. An employment contract can also be terminated where an employee is dismissed with or without notice for a reason. Termination can also arise where an employee resigns because of a fundamental breach of contract by the employer where it was reasonable for the employee to resign due to the unreasonableness of the employer’s conduct (constructive dismissal). Finally, a termination will occur on expiry of a fixed-term contract or specified purpose contract.
The statutory minimum notice for an employee depends on their length of service. It ranges from one week’s notice for new joiners to eight weeks’ notice for those with more than fifteen years of service.
Employees enjoy statutory protection from being unfairly dismissed from their employment. Generally speaking, employees must have one year’s continuous service to bring a claim. Some claims, such as dismissals due to discrimination, maternity leave, trade union membership and whistleblowing can be brought regardless of length of service.
An employee must institute proceedings with the Workplace Relations Commission (similar to the Employment Tribunal in the UK) within six months of the date of dismissal or, where there is a reasonable cause, within 12 months.
The five potentially fair reasons for dismissal are:
The dismissal must be fair in all the circumstances, including the process.
Impact of the Irish Constitution
Employees have rights to fair procedures and natural justice in accordance with the Irish Constitution. In conduct-related dismissals, an employee is entitled to:
Remedies for Unfair Dismissal
In the event of a finding of unfair dismissal, the remedies that may be awarded are reinstatement, re-engagement or compensation.
The maximum award of compensation is an uncapped amount of two years remuneration. This is based on actual loss suffered by the employee as well as future prospective loss. Where an employee cannot prove that any loss was suffered (for example, if they obtained a better-paying job on the day following the dismissal), there is a basic award of four weeks’ pay.
If an employer fails to adhere to a fair, reasonable and transparent process in a disciplinary process or in the lead up to dismissal (for whatever reason), an aggrieved employee may successfully challenge the legitimacy of the process and be granted an injunction. This will restrain the employer from giving effect to the purported disciplining and/or removal, pending a full trial. Employment injunctions are only usually sought by senior executive employees.
For government information relating to being an employer in Ireland, see here.