On 18 March 2008 the Employment Law Compliance Bill 2008 ("the Bill") was published with the stated purpose of securing better compliance with employment legislation in accordance with the commitments made by the social partners under Towards 2016.
This new employment law compliance regime places increased obligations on employers beyond those contained in existing employment legislation, and increases significantly the penalties for breaches of employment law generally.
The Bill is currently in draft form and its provisions, many of which have been the subject of much controversy, are being debated in the Houses of the Oireachtas. The final version of the Bill was scheduled to become law in July 2008 but this deadline has been extended and it is unclear as to when we might expect the final version. While specific provisions may yet be amended, employers are encouraged to use this time to ensure that they are fully compliant with current legal requirements arising out of the employment relationship in order to avoid exposure to substantial fines and penalties once the bill is enacted
The main changes proposed by the Bill include the following:-
NERA has been in existence on an interim basis since February 2007. The Bill however establishes NERA, and the Directorship position within NERA, on a statutory basis and significantly increases the organisation’s powers. The Bill seeks to ensure compliance with employment law through the powers which it assigns to NERA and to its Director which include:-
- Monitoring compliance through inspection, entry onto premises, examination
and copying of employment records, and carrying out investigations (11,499
calls/visits/investigations were completed in the first half of 2008).
- Prosecution of offences by way of summary proceedings.
- Referral to DPP where the Director has reasonable grounds for believing that an indictable offence under employment legislation has been committed. (38 cases were referred to the DPP in the first half of 2008.)
- Making arrangements with certain named bodies including the Revenue
Commissioners and the Department of Social and Family Affairs for the
disclosure of certain information.
- Entering into co-operation agreements with other agencies.
- Publishing codes of practice.
The Bill proposes 23 new criminal offences and provides for significantly increased penalties for offences arising under employment law to include, on summary conviction, a fine of up to €5,000 and/or 12 months imprisonment and on indictment, a fine of up to €250,000 and/or 3 years imprisonment.
Summary proceedings for an offence under the Bill must be prosecuted by the Director within 12 months from the date on which the offence was committed, or within 6 months from the
date that sufficient evidence to justify proceedings comes to the Director’s knowledge. No proceedings may be commenced more than 2 years after the date of the offence.
The Director may impose on the spot fines or, as it is referred to in the Bill, a “fixed payment notice”, for the non display of notices by an employer within the workplace informing employees of their rights (see below). This allows the employer 21 days to make the payment which may be between €500 and €1,000. No prosecution will be instituted once this fixed payment is paid.
The Director can also elect to seek a High Court Order in order to enforce compliance with any provision of employment legislation. If it considers it appropriate to do so having regard to the nature and extent of the breach of the provision of employment legislation concerned, the damage that has or may be suffered by any person and in the interests of justice, the High Court may grant injunctive relief pending the determination of the application to the High Court for a High Court Order.
The Director may issue Compliance Notices against employers where he is of the opinion that an employee is owed money. This requires the employer to pay the monies believed to be owing to the employee within 21 days although the employer has a right to appeal the Compliance Notice to the District Court.
It is also significant that employers found guilty of any offence (whether such an offence constitutes a minor infraction or otherwise) may be ordered by the District Court to pay the costs of the NERA inspection, which may be substantial.
Finally, the Bill contains a “name and shame” provision whereby the Director is required to compile a list of Employment Law Defaulters, though the publication of any part of the list is at the Director’s discretion.
The Bill provides that officers of a company (which includes a manager as well as a director or secretary) may be found to be guilty of an offence and liable to be proceeded against where it is proven that they consented to or approved of an offence under employment legislation being committed or the breach was attributable to any neglect on their part.
The Bill provides for a new statutory duty on employers and employees to endeavour, as far as possible, to resolve disputes or differences at workplace level, in accordance with any arrangements in place for resolution of disputes between them relating to the application of any employment legislation.
Statutory protection is provided for “whistleblowers” who report suspected breaches of employment law in good faith. This protection covers any person and not just employees who communicate with the Director of NERA, the Minister for Enterprise, Trade and Employment or a member of the Garda Síochána pertaining to a breach of employment law. A person who knowingly makes a false statement alleging an employer has breached employment law will be guilty of an offence.
Employers are required to keep a detailed list of documentation for the most recent three year employment period for each employee and this documentation must be retained by employers for a further two years after the employment relationship ends. Employers must provide the Director, if required, with such records “for the purposes of enabling the Director to establish whether or not employment legislation is being or was complied with in relation to that person. Failure to keep proper records is an offence and the onus will be on the employer or other persons concerned to prove in Court proceedings that the relevant provision of employment legislation was complied with as regards the employee concerned.
The statutory employment records required under the Bill are the records specified under the Industrial Relations Acts 1946 & 1990; the Payment of Wages Act 1991; the Terms of Employment (Information) Act 1994; the Protection of Young Persons (Employment) Act 1996, the Organisation of Working Time Act 1997, the National Minimum Wage Act 2000, the Carers Leave Act 2001, the Redundancy Payments Act 1967, the Protection of Employment Act 1977 and the Protection of Employees (Employers Insolvency) Act 1984.
All employers are required to display clearly worded notices on notice boards in workplaces advising employees of their employment law entitlements and how to seek redress for the denial of any entitlements together with how to contact the Director of NERA for further information. These notices must be in a language or more than one language that is reasonably likely to be understood by the employees concerned. Failure to display such a notice is a criminal offence for which an on the spot fine will be imposed as referred to above.
Employers are obliged to give employees a “statement of service” within 2 weeks of their departure setting out the duration and nature of the employment concerned and a general description of the work involved. A statement of service does not comment one way or another on an employee’s ability, integrity, attendance, sickness or disciplinary record etc. The employer must also, within the 2 week time period, furnish the employee with any personal documents or other property within the employer’s possession. This is the first time employers have been statutorily required to provide all employees with a form of reference and the “statement of service” must be provided regardless of whether or not the employee requests it.
All employers are obliged to retain a copy of a passport or other equivalent document from all employees for the duration of the employment relationship or, where this has ceased, for three years thereafter. In the case of an employee who is the holder of an employment permit the employer must obtain a copy of the permit and must have a record of the employment performed by the employee, the economic sector in which it is being performed and the duration of the employment. Compliance with this provision will require employers to keep strict diaries so as to ensure copies are current.
How to Foster a Compliance Culture
Where a breach of employment law has been committed it will be a defence if the employer can prove that it exercised due diligence and took reasonable precautions to avoid the commission of the offence. In order to assist employers in their task we understand from NERA that a statutory instrument is to be published in order to provide practical guidance in relation to an employer’s obligations regarding record keeping, payslips and statements of service.
While the Bill has yet to be enacted, and there could well be amendments to the Bill before it is eventually passed, we recommend that employers waste no time in at least ensuring that they fully comply with existing employment legislation including the following:-
We recommend that employers keep a weather eye out for the Bill’s progress and any further obligations it might impose when enacted.
For further information please contact Gráinne Gleeson, Solicitor, Mason Hayes & Curran on email@example.com or + 353 1 614 5525.
The content of this article is provided for information purposes only and does not constitute legal or other advice. Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.
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