Key Trends in Labour Inspection, Enforcement and Employment Dispute Resolution in Ireland
01 May 2019
The Workplace Relations Commission ("WRC") has published its Annual Report for 2018. We highlight the key trends and updates for employers as revealed in the Report. We review how the WRC is using its significant inspection and enforcement powers to drive compliance with Irish employment law. We look at some of the trends in employment dispute handling. We also take a brief look at some challenges for the WRC in the future which could drive structural change to the current system.
Update on Inspection and Enforcement
Workplace inspections are a key feature of the WRC's commitment to securing compliance by employers with employment protection legislation. The WRC's focus in this regard features significantly in the Report.
To recap briefly, the WRC has substantial statutory inspection and enforcement powers including:
- To conduct unannounced inspections of workplaces.
- To demand the production of records and information to demonstrate compliance with a wide range of employment statutes.
- To require any person at a work place to provide information and assistance to the WRC inspectors.
- Where serious breaches of employment law are identified, to issue Fixed Payment Notices and Compliance Notices.
A failure to co-operate with the inspectors or any conduct which amounts to obstruction of the inspectors can result in individual criminal liability.
The WRC has published non-binding guidance for employers who are preparing for an announced inspection. The guidance is helpful and it is recommended reading for all employers, even if an inspection has not been scheduled.
The WRC further reports that it is developing technology in collaboration with other public agencies to better target and risk profile non-compliant employers. This boosts its ability to give effect to its statutory powers to share information with other public agencies and to arrange joint inspections with those agencies where appropriate. In December 2018, the WRC reported that it launched the Inspection Enforcement Application to improve the efficiency of the inspection and enforcement process. This is a data base of real time information on the progress of inspection and enforcement campaigns accessible to the WRC inspectors and in time to other agencies. This will facilitate swifter interaction and information sharing with relevant bodies such as the Department of Social Protection in relation to false self-employment cases and the Revenue Commissioners.
At a glance here are some of the key statistics for inspections and enforcement exercises conducted in 2018:
- 5,733 workplace inspections were conducted in 2018 of which 3,570 were unannounced representing an increase of 20% on 2017.
- Inspectors focussed on over 17 sectors of the labour market including professional services, manufacturing, hotel, food & drink, construction, transport and retail.
- There are approximately 134,000 employees work in the sectors selected for inspection.
- 44% of cases investigated revealed a breach of employment legislation by employers.
- Direction to pay over €3 million in wages to employees in respect of pay breaches.
Update on Equality and Discrimination Cases
The Report reveals a 343% increase in the number of age related disability claims compared to 2017 with the volume of claims increasing from 161 in 2017 to 714 in 2018.
This will not come as a surprise to many employers who are responding to a growing demand from workers to remain working even where the employer has set a mandatory retirement age. While it is not clear from the Report that these types of cases are in fact driving the increase, it is a tangible trend in the labour market in recent years.
Workers are not eligible for the State Pension until age 66. In 2021, that will rise to 67 and to 68 in 2028. The traditional mandatory retirement age of 65 is no longer aligned with the retirement plans and means of many workers. As employers are aware, the law on mandatory retirement ages has evolved significantly in recent years at European and national level. In short, a contractual retirement age can no longer be relied on automatically without the employer evidencing that its use is objectively justifiable and that its use is a necessary and proportionate means of achieving a legitimate aim of the employer.
Employers are increasingly seeking guidance and flexible, practical solutions to accommodate employees remaining on and contributing in the workplace after retirement age has passed. This is achieved typically by using a fixed term contract, transitioning to consultancy arrangements for project work, part-time working or simply maintaining the status quo and continuing to work under the same contractual arrangements as before.
The WRC published guidance for employers in this area in early 2018 in the form of a non-binding Code of Practice on Longer Working. The Code assists employers and employees to plan for retirement and ways of working beyond the retirement date and is recommended reading for any employer preparing to agree new arrangements with impacted workers.
Has the Time Come For Class Actions in Employment Disputes?
Probably not. The WRC (and the legislation underpinning it) did not create a bespoke class action or multi-party action framework. Unlike other jurisdictions, the Irish legal system is not set up to facilitate multi-plaintiff actions except in limited circumstances in the civil courts. Labour disputes involving multiple claimants must be filed as individual claims.
The WRC, in the Report, expressed concern about the trend of class action style complaints and the impact of those on its ability to provide its service to its users. It reported that in 2018,
a trend emerged of submitting multiple (several hundred) identical rights based claims against single employers. The WRC observed that its services can be adversely impacted by these claims. Representatives are encouraged, in such situations, to use the voluntary dispute resolution services of the WRC rather than filing class action type suits as a means of alleviating pressure on WRC resources. That said while the WRC expressed mild criticism of this practice, there is no statutory or other bar to representatives filing multiple claims on behalf of claimants and whether this trend continues, remains to be seen. If it does, then it may be necessary to adapt the WRC framework in due course to the reality of multi claimant complaints.
The Dispute Journey – Are We There Yet?
- Six to nine months is the current average gestation period from date of filing of a claim to the hearing of the claim by an Adjudication Officer (AO). A trend of late stage postponement applications (within 20 days of the hearing date) are creating scheduling challenges, according to the Report, and the WRC plans to continue to tackle this in 2019.
- At the moment, 75% of postponement applications are successful although given the WRC's commitment to drive down waiting times, it is possible that less leniency may be shown to parties who seek late postponements.
- It is strongly recommended that employers plan their response to complaints as early as possible. This allows employers to avoid the need to seek postponements at a late stage or at all where they identify their witnesses at an early stage and can promptly advise the WRC of any availability issues.
In brief – other updates
- 95% of decisions made by the AOs were either upheld on appeal or accepted by the parties.
- The most common breach recorded by the WRC inspectorate was failure to keep adequate records demonstrating compliance with employment legislation.
- No 'employee Involvement' claims were filed at all in 2018.
- Only four claims were filed relating to breaches of laws protecting young workers.
- The WRC is reviewing the Codes of Practice on Bullying and Harassment with the Health and Safety Authority and will report on its findings this year. We may expect to see an updated Code of Practice issuing in 2019.
So what else is on the horizon for the WRC?
The Report deals with matters in 2018 and therefore does not deal with a couple of recent and significant developments for the WRC. In the case of Zalewski v Adjudication Officer, the Irish Supreme Court overruled an Irish High Court decision which now paves the way for the claimant, Mr. Zalewski, to judicially review the Workplace Relations Act, 2015. In other words, the legal bedrock on which the WRC rests is under challenge on a number of fronts.
In brief, Mr. Zalewski's challenge focusses on four perceived deficiencies with the current WRC system that:
- A claimant must bring their claim before the WRC (and cannot elect to go directly to the civil courts).
- The AO who hears the claim at first instance does not have to be legally qualified.
- Hearings are in private.
- AO’s have no power to take evidence on oath, and consequently there is no sanction for an untruthful witness,
It is not expected that this matter will be resolved this year as it now needs to go back to the High Court. It may also be the subject of further appeal in due course.
The recent decision in Minister for Justice and Equality and another v Workplace Relations Commission also brings further scrutiny and pressure to the WRC framework. In that decision, the CJEU emphasised that the WRC as an organ of the State, has a duty to tackle potentially complex legal issues and dis-apply national law where that law is incompatible with European law. It remains to be seen how the WRC tackles these serious challenges given its commitment to developing an accessible and swift dispute resolution system. The WRC may not be able to maintain its current architecture if these challenges are successful in whole or in part.
T: +353 1 619 2037