There have been several developments in Irish employment law in recent months. These developments include requirements for gender pay gap reporting, expanded protections for whistleblowers, family leave and flexible work arrangements provisions, a recent court decision relevant to the gig economy, and the European Commission’s infringement notice against Ireland for its failure to comply with the European Union’s Directive on European Works Councils. Employers should examine their policies and procedures to ensure that they are complying with these new measures.
Gender Pay Gap Reporting
Last year, Ireland enacted the Gender Pay Gap Information Act (the “Act”), which requires organizations to report their gender pay gap metrics. Regulations under the Act went into effect May 31, 2022 and require organizations with more than 250 employees to report their gender pay gap information in 2022.
To comply with the Act, an employer must publish the following information:
- The mean and median hourly remuneration for male and female employees;
- The mean and median hourly remuneration of part-time and temporary male and female employees;
- The mean and median bonus remuneration of male and female employees;
- The percentage of male and female employees who received bonus remuneration;
- The percentage of male and female employees who received benefits in kind;
- The proportion of male and female employees who fall within the lower, lower-middle, upper-middle, and upper quartile pay bands; and
- The employer’s statement explaining the reasons for the differences relating to remuneration that are due to gender and the proposed or implemented measures to eliminate or reduce such differences.
Guidance from the Department of Children, Equality, Disability, Integration and Youth explains that in instances where employees do not identify as male or female, an employer may omit the individual from the gender pay gap calculations.
Employers must choose a date in June 2022 (the “snapshot date”) and calculate the gender pay gap information for the individuals employed by the employers on that snapshot date. The calculations are based on those employees’ remuneration for the 12-month period preceding the snapshot date. The employers then must publish the data within 6 months of their snapshot date. For example, if an employer chooses June 1, 2022 as its snapshot date, its reporting date is December 1, 2022 and its reporting period is June 2, 2021 to June 1, 2022.
Employers with more than 150 employees will be required to begin reporting in 2024 and employers with more than 50 employees will be required to begin reporting in 2025.
Expanded Protections for Whistleblowers
On July 21, 2022, President Higgins signed the Protected Disclosures (Amendment) Bill 2022 (the “Law”) which requires private employers with 50 or more employees to establish internal channels and procedures for employees to make protected disclosures and for employers to respond. The Law requires employers to acknowledge receipt of protected disclosures within seven days and to diligently follow up on such disclosures. Employers must designate an impartial person or persons to carry out an initial assessment to determine whether there is evidence that a relevant wrongdoing may have occurred. If no evidence exists, the impartial person must alert the reporting person in writing. But if there is evidence of wrongdoing, appropriate action must be taken to address the wrongdoing. The reporting person is entitled to feedback within three months of the report and may request ongoing feedback.
In addition to requiring employers to establish internal channels and procedures, the Law also expands whistleblower protections. Whistleblowers are protected against penalization, which the law defines as including negative performance assessment, failure to convert a temporary employment contract to a permanent one, and withholding of training. It also reverses the burden of proof so that employers are required to prove that any alleged penalization was not a direct result of an employee making a protected disclosure. In addition, the Law expands protection beyond employees to volunteers, shareholders, board members, and applicants.
Although the Law provides additional protections for whistleblowers, it also states that employers do not have to accept and follow up on anonymous reports. Furthermore, it clarifies that while reports of breaches of European Union law are considered protected disclosures, reports of interpersonal grievances or conflicts are not.
Finally, the Law establishes a new Office of the Protected Disclosure Commissioner. Individuals may make protected disclosures to the Commissioner, who is responsible for ensuring that external reporting channels and procedures maintain the integrity and confidentiality of the information and that appropriate follow-up action is taken.
Family Leave and Flexible Work Arrangements
Ireland is enacting the Work Life Balance and Miscellaneous Provisions Bill 2022 (the “Bill”) to transpose the European Union’s Work-Life Balance Directive by the August, 2, 2022 deadline. The Bill provides employees with up to five days of unpaid leave annually to care for a sick child, relative or cohabitant. It also allows parents to request flexible work arrangements. The Directive explains that this right must be available to parents of children up to a specified age, which must be at least eight years. Employers must respond to requests for flexible work arrangements within four weeks. Decisions to refuse or postpone such arrangements must provide justification. An employer may refuse a request if it would have a substantial adverse effect on the operation of the business for reasons including seasonal variations in volume of work, unavailability of someone to carry out the employee’s duties, the nature of the employee’s duties, and the number of employees on flexible work arrangements.
In addition to providing for family leave and flexible work arrangements, the Bill extends the amount of time during which employees who are breastfeeding can take time off work or have reduced working hours for breastfeeding purposes from 26 weeks to 104 weeks.
Finally, the Bill amends Irish parental and maternity leave laws to ensure transgender men who have obtained a gender recognition certificate and subsequently become pregnant fall within the scope of the laws, including the right to take time off work or have reduced working hours for breastfeeding purposes discussed above.
Extension of Parental Leave
The Minister for Children, Equality, Disability, Integration and Youth issued an order extending parental leave under the Parent’s Leave and Benefit Act from five weeks to seven weeks. The order went into effect July 1, 2022. The Parent’s Leave and Benefit Act, as amended by the Family Leave and Miscellaneous Provisions Act 2021, allows parents to take leave from work to care for a child in the first two years of the child’s life.
Irish Court of Appeal Gig Economy Decision
Countries continue to grapple with the growing gig economy as it raises questions about whether workers are properly classified as employees or independent contractors. The Irish Court of Appeal’s recent decision in Karshan (Midlands Limited) Trading as Domino’s Pizza v. Revenue Commissioners provides insight into how the court analyzes agreements with delivery drivers when determining whether they are employees or contractors.
In Karshan, the court considered whether delivery drivers for Domino’s Pizza were independent contractors. The agreements with the delivery drivers described the drivers as independent contractors, did not guarantee a minimum number of deliveries, paid the drivers to wear fully branded company-supplied clothing and place the company logo temporarily on their vehicles, and permitted the drivers to engage a substitute delivery driver if they were unavailable.
To determine whether the drivers were employees or independent contractors, the court first considered whether the contract created the mutuality of obligation—meaning that the company was required to provide work for the driver and the driver was required to perform work for the company. The court concluded there was no mutuality of obligation because the originally assigned driver was free not to turn up to work and could engage a substitute driver. Therefore, the court reasoned, there was no obligation to perform work on the part of the driver. Because the court determined there was no mutuality of obligation, it did not consider additional evidence of a contract of employment, such as the degree of control over the worker, the level of integration of the work undertaken, or the drivers’ ability to make profit on their own.
This case is an important reminder that independent contractor agreements should be robust and updated regularly. In addition, companies should keep in mind that an obligation to perform work weighs in favor of employment status.
European Works Councils in Ireland
In May 2022, the European Commission issued Ireland an infringement notice, calling for it to amend its legislation to comply with the European Union’s Directive on European Works Councils. As background, a European Works Council represents European employees of a company. European Union member states are required to provide for the right to establish a European Works Council in companies or groups of companies with at least 1,000 employees in the European Union and the other countries of the European Economic Area, when there are at least 150 employees in each of two member states. According to the European Commission, the Irish government failed to properly transpose the European Union’s Directive on European Works Councils. Accordingly, companies may be encouraged to move their legal bases to Ireland to avoid meeting their obligations under European Union law. The Irish government has two months to respond to the infringement notice.