What's happening in employment law in Ireland in 2023

05 January 2023

The whirlwind of workplace and employment law developments we saw in 2022 is set to continue with multiple proposals for reform in the pipeline, including requirements on employers to deal with flexible and remote work requests, the introduction of a national living wage and other reforms flowing from the EU. Here’s our annual round-up of what to expect.

Note: Since publication of this insight the Oireachtas has amended the proposed amount of paid leave for victims of domestic violence from 10 days to 5 days.

Statutory sick pay

From 1 January 2023, eligible employees are entitled to statutory sick pay (SSP), bringing Ireland in line with most other European countries. The entitlement will start at three days’ paid sick leave in 2023, rising incrementally to five days in 2024, seven days in 2025 and eventually 10 days in 2026.

To qualify for SSP an employee must have worked for their employer for at least 13 weeks and must obtain a medical certificate confirming that they are unfit to work. (This may not be in line with many corporate sick leave policies which do not require medical certificates from day one of illness). The rate of sick pay is set at 70pc of an employee’s wage, subject to a daily maximum of €110 (which may be reviewed and amended over time).

Many employers will already provide sick pay to their employees, potentially over and above the statutory entitlement. Where this is the case, they should update their contracts and policies to provide that contractual sick pay is inclusive of SSP. Employers who don’t already pay sick pay must ensure appropriate processes and systems are in place to administer payment during sick leave and to maintain records from 1 January 2023. For more details see new sick leave legislation in Ireland.

Whistleblowing

Changes were recently made to Irish whistleblowing legislation to fully implement the EU Whistleblowing Directive. These changes, which took effect from 1 January 2023, broaden and enhance the scope of existing whistleblowers’ protection.

The main changes include:

whistleblowing protections being extended to more categories of workers including shareholders, volunteers and applicants for employment;
the definition and scope of relevant wrongdoings is wider;
employers not being obliged to follow up on anonymous reporting of wrongdoing;
private sector employers being required to maintain and operate internal reporting channels and procedures;
the list of actions that could constitute prohibited penalisation against a whistleblower is wider; and
employees no longer have to link detrimental treatment with a protected disclosure. This will be assumed and the employer now has to show that there is no causal connection between the two.

Employers should familiarise themselves with the wide-ranging changes as soon as possible.

From 1 January 2023, private sector employers with over 250 employees are required to have a whistleblowing procedure in place. Employers with between 50-249 employees have an exemption until 17 December 2023 to put these measures in place but should start planning for this now. Certain employers such as public bodies are already required to have whistleblowing procedures in place regardless of the number of employees.

For more details see Wide-ranging changes to Irish whistleblowing legislation.

Gender pay gap reporting

During December 2022, relevant employers were required to publish specified information about the gender pay gap between men and women within their organisation. Gaps had to be calculated using 12 months’ data up to a snapshot date in June 2022, and then published at the latest by the end of December 2022. While the obligation initially applied to organisations with 250 or more employees, this threshold will drop to 150 employees in 2024 and 50 employees in 2025. Therefore, even if an organisation was not required to report in 2022, it is important to ensure they have the necessary internal systems in place to capture, analyse and report this information going forward, particularly if their employee population increases to over 250 in 2023.

It will be interesting for employers to observe what learnings can be made as a result of the initial publications in 2022, and what is happening reputationally to various organisations as more and more of these reports are published.

For more information see gender pay reporting in Ireland – updated guidance.

Pensions auto-enrolment

A pensions auto-enrolment system is being set up, which will require employers to automatically enrol employees who meet certain criteria into a workplace pension scheme. It is envisaged that the system will be set up in 2023 and ready to take employee enrolments in 2024. It will be gradually phased in over a decade. Contributions will be paid by employees, their employers, and the State, with contributions increasing on a phased-in basis over the first ten years.

Employers will not need to establish a separate pension scheme, procure a pensions provider or pensions administrator, or select a savings option for their employees. However, they will be required to enrol their employees in the auto-enrolment system.

Employers should review their own pension scheme arrangements and what (if any) contributions they and employees make to the pensions scheme or any Personal Retirement Savings Accounts. Once the draft legislation has been issued (which is anticipated to happen early this year), employers will be in a better place to start making arrangements for the auto-enrolment system.

The issue of retirement ages generally continues to be something that creates challenges for many employers in terms of mandatory retirement age, what constitutes objective justification, how employers can best address the gap between mandatory retirement ages and the increasing State pension age, and best practice for allowing employees to continue working beyond retirement age. The Government has indicated that it will move towards the abolition of mandatory retirement ages altogether (as is already the case in the many other European countries and in the UK). With the increasing State pension age and the introduction of the proposed auto-enrolment pension system, it will be interesting to see how this develops.

For more information see our insight on how Ireland’s proposed auto-enrolment pension scheme is likely to work.

Terms and conditions

The European Union (Transparent and Predictable Working Conditions) Regulations 2022 (the “2022 Regulations”) finally became law on 16 December 2022. They transpose EU Directive 2019/1152 of the European Parliament and of the Council of 20 June 2019 on Transparent and Predictable Working Conditions in the European Union.

The aim of the Directive is to improve employees’ working conditions by promoting more transparent and predictable employment. While the Directive has largely been introduced to provide more protection for gig economy workers, its remit extends to all employees and so employers should familiarise themselves with their obligations arising under the Regulations.

A new set of minimum requirements introduced by the Directive, and reflected in the new Regulations, include:

a six-month limit on the maximum duration of a probationary period (with some exceptions);
a general rule that a worker cannot be prevented from taking up work with another employer outside the work schedule (except where such restriction is proportionate and is based on objective grounds);
rights to greater predictability of working time and reasonable advance notice for those on variable work schedules;
limitations on the use and duration of on-demand or similar employment contracts (which are already very restricted in Ireland);
written notification of particular terms now being provided to employees within two specified timeframes (with certain information to be provided after 5 days and other information within one month of commencement of employment);
a possibility for a worker with at least 26 weeks’ service to request a transition to a more predictable and secure form of employment; and
a right to mandatory training without cost.

While many of the requirements set out in the Regulations already exist under Irish law, employers should review template contracts to assess the changes that may need to be made on foot of the new Regulations, particularly with respect to the timing of information being provided to employees, the length of probationary periods and the use of exclusive service provisions.

For more information see our recent insight on the new Regulations on Transparent and Predictable Working Conditions – what employers need to know here.

Extra holiday

From this year, there will be an extra public holiday at the start of February to mark Imbolc/St Brigid’s day. It will be observed on the first Monday of February (this year, on 6 February) except where 1 February falls on a Friday in which case it will be observed on that day. Employers should amend HR systems, contracts and policies where they include a list of the specific public holidays in Ireland.

National minimum wage

Minimum rates of pay increased from 1 January 2023. The new rates employers need to pay are as follows:

Aged 20 and over €11.30

Aged 19 €10.17

Aged 18 €9.04

Aged under 18 €7.91

Other 2023 developments in the pipeline

As mentioned above, there are multiple proposals for reform in the pipeline, which employers should keep an eye out for. Many of the proposals are included in Private Member’s Bills, which are not sponsored by government, but some are gaining traction and support of all parties. Employers should continue to monitor these developments and review current practices and policies to ensure they comply with the upcoming changes. Further information on some of the expected developments is covered below.

Flexible and remote work

Draft legislation is in place to allow eligible employees with children up to the age of 12 (or 16 if the child has a disability or long-term illness) and employees with caring responsibilities to request flexible working arrangements for a set period of time for caring purposes. Employers will need to carefully consider and deal with these requests. Employers should also prepare for employees making remote working requests. While remote working will not be feasible for all employees, employers will still have to consider their own needs and the needs of their employees when considering a request. Draft remote working legislation has been included in the same legislation as the right to request flexible working arrangements. This was expected to become law imminently but it now looks like it may not be brought into force until the summer.

Steps towards a potential four-day working week are gaining momentum with some employers trialling the effectiveness of, or implementing, a four-day week for their organisations. This follows the Code of Practice on the Right to Disconnect that was introduced in April 2021, confirming employees’ rights not to habitually work outside their normal working hours, and to “switch off” from work. While this may not be relevant to a lot of categories of staff, it’s a trend employers should keep an eye on.

For more information see Is working less the way ahead? 4-day working week trials in the UK and Ireland.

Family rights

Draft legislation is in place to allow a better work-life balance for parents and carers. The proposals include five days’ unpaid leave for medical care purposes, an extension of the period during which time can be taken out from work to breastfeed, the extension of maternity leave entitlements to transgender men and 5 days’ paid leave for victims of domestic violence. Employers should review existing processes with a view to preparing for and ultimately implementing these changes.

An additional proposal is to allow the bereaved parent of a child who has died to take bereavement leave. In relation to miscarriage, while paid maternity and paternity leave upon stillbirth or miscarriage is currently only available after the 24th week of pregnancy, there are proposals to make provision for paid leave if miscarriage or stillbirth occurred before the 24th week. The proposals also provide for paid leave for the purposes of availing of reproductive healthcare such as IVF.

Diversity and discrimination

Proposals are currently in place regarding the regulation of gender balance on the boards and governing councils of corporate bodies and related matters, which reflects developments at EU level. The proposal is for a 40% female representation quota. While there is still some way to go towards achieving full gender equality on boards, reports published towards the end of 2022 from Balance for Better Business and the Department of Public Expenditure and Reform demonstrate the trend to achieving this has accelerated in recent years, with EU targets for board gender diversity being met and, in some cases, exceeded.

There are also proposals in place regarding the requirements to be met for a non-disclosure agreement (NDA) concerning sexual harassment allegations or unlawful discrimination to be valid. The most notable are that:

the employee should be offered independent legal advice, in writing, provided at the expense of the employer;
the NDA should include an opportunity for the relevant employee to decide to waive their own confidentiality in the future; and
the NDA is of a set and limited duration.

While these changes are not yet law, employers may want to bear these proposals in mind, including when entering into a settlement agreement with an employee.

For more information see our article on the use of non-disclosure agreements in discrimination and sexual harassment disputes.

Employment permits

Draft legislation is in place to streamline, improve and modernise the employment permit system and increase its responsiveness to Ireland’s evolving labour market. The proposals include a new type of employment permit for seasonal workers, allowing subcontractors to make use of the employment permit system and additional eligibility conditions for certain employment permits to be specified. Some of these potential changes could be helpful for employers so watch this space.

Wage changes

Several pieces of legislation are being debated around minimum wages for interns and young people. A national "living” wage (the wage people need to take part in Irish society) is also to be introduced over a four-year period, to be in place by 2026, when it will replace the national minimum wage. The first step towards reaching the living wage is the 2023 increase to the national minimum wage covered above. A number of large employers in Ireland have already announced increased wages for their employees in anticipation of the proposed living wage.

Collective Bargaining

A report by the LEEF Working Group on Collective Bargaining was published in 2022 which essentially provides that there should be an obligation on employers to engage in good faith with trade unions, even where employers don’t typically recognise trade unions. The report provides that the minimum threshold for collective bargaining is 10% of the workforce with no minimum limit on the number of employees. While nothing immediate has changed in terms of the traditional voluntarist nature of collective bargaining in Ireland, this is definitely an area for employers to watch, particularly where there is an EU Directive in the background, which could result in some form of legislation and/or codes of practice being produced to reflect the recommendations of the report.

Other trends and policy areas to watch

Many employers may be considering embarking on redundancy or restructuring programmes during 2023. We may also see industrial relations issues rising, if not to the same level as in the UK. However, alongside the economic downturn and the continuing cost-of-living crisis, there is an ongoing skills shortage and battle to attract good people, which James Davies, Partner at Lewis Silkin, referred to in his “Eight drivers of change – 2022 and beyond report”. We can therefore expect to see ongoing efforts to do the right thing and create the right culture, with menopause policies becoming mainstream, fertility policies gaining traction, increased focus on managing mental health in the workplace and employers under continuing pressure to embrace flexible and remote working including remote working from overseas locations. Will climate and sustainability feature more highly on the employer agenda? We hope so.