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Where Irish and British employment law differs


Tuesday, June 4, 2019

As published in the Sunday Business Post on June 2nd 2019: Brexit continues to dominate the headlines, and is likely to do so for the foreseeable future.

It is significant for many facets of Irish society, but one interesting question arises in relation to Irish employment law. While exact statistics are obviously unavailable, it definitely appears that increasing numbers of UK businesses are moving operations to Ireland.  There may not – yet – be wholesale movement of individual workers, but there’s enough of a trend to justify English employers enquiring further about Irish employment law – and, in particular, the differences with English law.

Many aspects of employment law both here and in the UK have their roots in EU legislation – one need look no further than our body of equality law and the rules governing working hours and holidays.

As well as that, the basic structure of the employer–employee relationship is very similar in both countries.  At its core, the relationship is typically governed by a written contract of employment into which numerous statutory employment law rights are implied.  In both countries, there is a dedicated workplace tribunal established to deal with employment disputes (and, to an extent, act as a body responsible for enforcing employment law).  Lastly, for historic reasons, Ireland and the UK have very similar legal systems.

All of this means that a UK employer entering the Irish market will see a lot that they recognise.  That said, there are enough distinctions between Irish and British employment law to mean that an employer should not assume that everything is the same.

One of the most fundamental and significant provisions of employment law in this country relates to unfair dismissal.  Employees enjoy very powerful protection in that once they have 52 weeks of continuous employment their dismissal is automatically deemed unfair by law.

The same basic rule applies in the UK – with one critical difference; the qualification period is 104 weeks, or two years. That obviously means that an employer in the UK has twice as much latitude to rid themselves of an employee before that employee acquires their statutory rights – a significant difference.

On top of that, there is the fact that when it comes to compensation, the positions are reversed.  An Irish employee can obtain compensation in the Workplace Relations Commission of up to 2 years’ remuneration.  In Britain it is capped at STG£83,682 or one year’s salary, whichever is less.

When it comes to the area of pensions, we also see a fairly significant difference.  In the UK, there is an obligation on employers to automatically enrolled eligible workers into a pension scheme to which the employer is also obliged to contribute.

No such provision exists in Ireland – while there is nothing to prevent an employer from establishing and/or funding a pension scheme, they can’t be forced to do so.  The height of an employer’s obligations are to facilitate access to a PRSA, which doesn’t involve the employer actually making contributions itself

Another very important distinction between the two jurisdictions relates to working time. In 1997, the EU significantly overhauled working time rules – and consolidated them in the Working Time Directive.

In Ireland, the rules are sacrosanct; an employer has no choice but to follow them (with very limited exceptions applying primarily to senior members of staff).  Perhaps the most significant rule in Ireland is that an employee can’t be forced to work more than a 48-hour working week.

In Britain, on the other hand, an employee can choose to opt out of the statutory maximum working week 48 hours by signing an agreement.  Irish employees cannot be forced to do this – the circumstances in which employees can voluntarily waive their rights are tightly controlled by the law.

Another example relates to sick pay.  Irish employers are under no obligation to pay employees during periods of sick leave where the employee is not available to work.  An employee may, depending upon social insurance contributions, be able to claim a payment from the state – but that is a stand-alone obligation in which the employer is not involved.

By way of contrast, in the UK there is a statutory obligation on employers to pay sick leave for up to 28 weeks to employees who have been off work sick for four more days in a row.

These are just some examples of the differences between UK and Irish employment law.  A British employer setting up shop in Ireland can take some comfort from the fact that the employment regime will be familiar to them – but as always, the devil is in the details.


Author

Patrick Walshe

PARTNER


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