News & Events

New Employment Legislation to have significant impact on business in Ireland

01 July 2005

Mason Hayes & Curran, a leading business law firm, has today described the recently announced Employees (Provision and Employment and Consultation) Bill 2005 as having the potential to revolutionise the relationship between employers and employees in the workplace.

The Bill gives important new rights to employees and imposes new obligations to inform and consult with employees on a range of issues in relation to the business which would have an impact on employees.

The provisions of the Bill, which outline in detail how employers should inform and consult with their employees in organisations with at least 50 staff members (by 2008), will be phased in over two years, with initial relevance for undertakings with at least 150 employees by March 23rd 2007.

Under the terms of the Bill, employers will be obliged to provide information on recent and probable structural developments as well as details of the organisation's economic situation. This means that an employer who plans to expand a business, change the direction of the business or anticipates financial losses must provide this information to their employees. Furthermore, an employer must also arrange for the election of an employee representative to act as a liaison, between the employer and the employees in the information and consultation process.

Commenting on the new legislation Liz Ryan, Solicitor, Mason Hayes & Curran said that "The Bill could have a significant impact on the Irish business community. Employers will be charged with the responsibility of not only providing information but consulting with employees where business decisions would lead to a threat to employment or substantial changes in work organisation. Employers will be placed in a position where they are required to provide information in relation to matters such as profitability, potential takeovers, and market share"..

Because the Bill provides for an "opt in arrangement", employers can instigate a system for providing information on their own initiative or by the written request of at least 10% of employees.

Employers can set in place an agreed system for providing information and consulting with employees in advance of the Act being passed. Otherwise once the Act is passed an employer can negotiate an information provision and consultation agreement. In default of an employer having a pre-existing agreement in place or having negotiated an information and consultation agreement, a set of Standard Rules outlined in the legislation will apply.

Employers can refuse to disclose information where it could be perceived as having a detrimental effect on the organisation. In addition, employees and representatives can be prevented from disclosing confidential information provided by the employer to them.

"It will be difficult to see how the confidentially provisions will work in practice and may lead to contentious issues. Employers can only withhold information if it is genuinely prejudicial and situations may arise whereby employers and employees may have different views about what is prejudicial to the organisation. However, the "opt in" provision means that employers do not have to introduce a system of consultation unless it is at the written request of their employees" concluded Ms Ryan.