Maternity Leave and Equality law

New legislation, in the form of the Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024, was passed in October 2024 and introduces some important changes which came into effect on 20 November 2024. The Act amends existing maternity leave rights by providing for the postponement of maternity leave for a period of between 5 and 52 weeks for those who require treatment for a serious medical reason. 

Of greater interest and potentially wider application, it also amends the Employment Equality Acts by introducing a new measure to limit the use of non-disclosure agreements (including the non-disclosure provisions in any severance agreement) (NDAs) where an employee has alleged discrimination, harassment, sexual harassment or victimisation. We wrote about this and what employers need to consider here.  Employers will need to bear these developments in mind when contemplating the use of settlement agreements in 2025. Employers who regularly use severance agreements and/or have templates should ensure that they amend their templates to include these provisions where required.

Pensions Auto-Enrolment

After much waiting, the legislation underpinning Ireland’s new auto-enrolment system was finally passed in July 2024. The Irish Government announced that the new scheme is expected to commence on 30 September 2025 and will then gradually be phased in over a decade. 

This will undoubtedly have a significant impact on employers and employees alike when it commences later this year and planning for this now is key. Under the new scheme, employees who meet the eligibility criteria (those aged between 23 and 60 and earning more than €20,000 annually), and who are not already enrolled in a workplace pension scheme, will be automatically enrolled in the new scheme. Contributions will start at 1.5% of employee gross salary and increase by 1.5% every three years to a maximum of 6% from year 10 onwards. Employers will match contributions made by employees, which are further topped up by the State. Employees can choose to opt out or suspend contributions after six months of service. The scheme will be administered by the National Automatic Enrolment Retirement Savings Authority (NAERSA) rather than by the employer. 

Even though NAERSA will be administering the scheme, it will still result in a certain level of increased administration for employers. Employers will need to assess which workers it must enrol and what (if any) contributions they and employees make to any existing occupational pensions scheme or Personal Retirement Savings Accounts. 

Many employers will inevitably see pension costs increase, either because they must raise contributions to match the minimum levels (which will continue to increase gradually over the 10-year phase in period) or because they need to enrol more workers. They will also have to facilitate payroll deductions, ensuring their payroll software, when updated, can take instruction for enrolment, calculate and pay employee and employer contributions to NAERSA.  

Some employers will also face the dilemma of potentially having two sets of employees in different pension schemes (those already members of an occupational scheme and those who are not and who will therefore be automatically enrolled in the new scheme).  To address this, employers may, for example, need to actively encourage all their employees to join their occupational pension scheme. 

Employment contracts are likely to need updating also to reflect the new arrangements. The Department of Social Protection issued a “Guide to auto-enrolment retirement savings system for employers” on their website which is a useful reference for employers on how the new scheme will operate. 

Pension Reform 

We saw some major pension reform over the course of 2024, with more expected in 2025. While the State pension age remains at 66 years of age, a new flexible pension age model was introduced from 1 January 2024, with certain employees now having the option to continue working up until the age of 70 in return for a higher pension. There is no corresponding obligation on employers to allow employees to continue working up to the age of 70. However, we expect that the option to defer State pension will inevitably lead to an increase in the number of requests from employees to do so. Many employers, particularly those who still have a mandatory retirement age, may find this challenging. 

The Irish Government also announced plans in March 2024 to introduce legislation, the Employment (Restriction on Certain Mandatory Retirement Ages) Bill 2024, which will allow employees to stay in employment until State pension age. It provides that, in general, an employer cannot set a compulsory retirement age below the State pension age if the employee does not consent to retire. This element of consent reflects the fact that many employees may still want to retire at the contractual retirement age. While only at heads of bill stage, this is one for employers to look out for this year as those that have a mandatory contractual retirement age will need to review these and existing retirement policies when it is eventually enacted.

Retirement Ages and Age Discrimination 

We wrote previously about the Supreme Court decision in Mallon v Minister for Justice, Ireland and the Attorney General, delivered in early 2024. In that insight, we highlighted how this decision provides some welcome clarity for employers on how the legality of blanket mandatory retirement ages is to be assessed. Importantly, the decision clarifies that such mandatory limits can be set in relation to defined groups based on general probabilities of age, health and competence and that an employer is not, in fact, required to justify the application of a general retirement age to an individual employee on a “case by case or role by role assessment”. This marks a significant shift from the approach taken by the WRC previously where it had frequently emphasised the importance of considering mandatory retirement on an individual basis in determining whether the imposition of the mandatory retirement age was proportionate.

We have since seen Mallon being applied by the WRC in Tony Farrell v Mondelez Ireland Production Limited. The Adjudicator held that the respondent’s failure to provide a second fixed term contract to the complainant enabling him to continue working until age 67 was objectively and reasonable justified by the legitimate aim of an age-balanced workforce. The Adjudicator followed Mallon in finding that, where a mandatory retirement age is found to be objectively justified, there is no requirement to justify it to an individual employee.

By way of contrast, in the more recent WRC decision of Tom Ronan v An Garda Siochana, the Adjudicator also considered Mallon, but found that the complainant had been discriminatorily dismissed. Although the Adjudicator was satisfied that the State had a "legitimate objective" in pursuing a mandatory retirement age of 70, he was not satisfied that it was reasonable or proportionate. In determining that it was not proportionate, significant emphasis was placed on the “financial hardship” the complainant would face. The Adjudicator ordered re-engagement for a period of three years. 

In all cases, employers should be live to the fact that engaging on a 1:1 basis with employees who are approaching retirement will still be required, in accordance with the WRC’s Code of Practice on Longer Working. We expect this topic will continue to be challenging for employers in 2025. 

Gender pay gap reporting and the EU Pay Transparency Directive 

The topic of gender pay gap reporting remained high on the agenda for employers in 2024 and will continue to do so in 2025 as employers prepare for the introduction of the EU Pay Transparency Directive. 

The threshold for reporting gender pay gaps under the Irish gender pay gap Regulations drops this year to organisations with just 50 employees, making it relevant to significantly more employers than before.  Many employers are already familiar with this process and have already been reporting for a few cycles since the requirement was first introduced in 2022. The challenge for many organisations now is identifying and eliminating, or at least reducing, any gender pay gaps found. Employers may also be required to set up or review current initiatives in a bid to tackle any gap. This may then have a knock-on effect on costs which employers need to plan for.  

Looking ahead, the EU Pay Transparency Directive, which must be implemented by Ireland and other EU member states by June 2026, imposes more onerous obligations on employers to report on wider data when reporting their gender pay gap. The Directive also introduces important new individual rights on pay transparency including that employees will have the a right to know the initial pay or pay range for the job before applying, they cannot be asked by a prospective employer about current pay or pay history, they can ask to know what comparable employees are paid on average, broken down by sex and there will be a ban on pay secrecy clauses or practices. These new rights will apply to all organisations, regardless of their size. 

As the Directive will expose pay to greater analysis, and possibly more equal pay claims given that employees will be entitled to more information about their pay, this will certainly become an increasingly hot topic as employers prepare for its introduction. We have written extensively on this topic in previous articles here: 

• Lewis Silkin - Pay Transparency Directive: What is a Joint Pay Assessment?
• Lewis Silkin - Pay Transparency Directive: how will gender pay gap reporting in Ireland need to change?
• Lewis Silkin - Pay Transparency Directive new employee rights to pay information

Remote and flexible working  

The trend of remote and flexible working was very much in the spotlight in 2024  since the introduction of the statutory right of employees to request remote or flexible working arrangements in March of last year, which we wrote about previously here. It continues to be a highly contentious issue for employers in Ireland.

We saw the first reported cases come before the WRC in 2024 where the employers refused remote work requests. In those cases, because the employers could demonstrate they had followed a proper and thorough process, the employees’ complaints were not upheld. These are helpful decisions from the employer’s perspective as they show there is no scope for an employee to challenge an employer’s reasons for a refusal to grant a remote working arrangement or a decision to terminate the arrangement, only the process followed by the employer. However, they emphasise the importance of employers giving full and proper consideration to the requests being made by the employee in accordance with the requirements of the legislation and Code of Practice. A failure by an employer to properly manage requests for remote working can result in a potential award of up to four weeks' remuneration and, in the case of flexible working, up to 20 weeks’ remuneration. We expect employers will continue to be met with such requests from employees in 2025 and so having a proper process in place for considering these will be key. 

Determining Employment Status 

Since the decision of the Supreme Court in The Revenue Commissioners v Karshan Midlands Limited t/a Domino's Pizza in late 2023, we have seen how the new five-step test formulated by the Supreme Court in that case has been applied in some decisions by the WRC in 2024. For more detail on those decisions, see link to previous insight here.

The much-awaited updated Code of Practice on Determining Employment Status (the “Code”) was also published in late 2024, following a review conducted by the Department of Social Protection, Revenue and the Workplace Relations Commission, to reflect the judgment. This is in addition to the new Guidelines for Determining Employment Status for Taxation Purposes which were published by Revenue earlier last year. 

These developments, coupled with the passing of the EU Platform Workers Directive in October 2024, emphasises the importance of this issue for organisations. While the Directive, which is aimed at enhancing employment law protections for platform workers across the EU, is to be implemented in Ireland by 2026, organisations should be carefully reviewing their business models now with an emphasis on the question of how workers are classified both for employment law and tax purposes. 

Employment permits

The Employment Permits Act 2024 was enacted in 2024, with some of the changes under this coming into effect since 2 September 2024. We wrote about this in more detail here.

One such change is to the Labour Market Needs Test – employers are no longer required to place adverts for roles in a national newspaper (an unfamiliar exercise for a modern workforce) – making the overall recruitment process less burdensome for employers. 

The Act also expands access to the employment permit system to employment agencies and subcontractors and introduces various measures to improve efficiency in the employment permit system. Such measures include reducing the period before a permit holder can change employer from 12 to nine months, removing the requirement to apply for a new employment permit in certain cases (for example, if the employment permit holder is promoted, receives an uplift in salary or is subject to an internal transfer within the employing company) and introducing a new six-month rule for permit holders to commence employment. 

The much-anticipated new seasonal employment permit is expected to be introduced this year, with a pilot scheme for this new permit to be launched initially.  We await further information on this once the detail of the new scheme is published. 

AI in the workplace

AI remains high on the agenda for many employers in 2025, particularly since the EU AI Act came into force in August last year, with obligations under it taking effect in several stages over the next two years. Most of the rules in the Act will start applying on 2 August 2026. 

Employers will need to audit their business’ current and potential uses of AI that would be in scope of the Act and consider which roles will fulfil the human oversight requirements and what training and resources they may require to do so competently.  Establishing good practice now, putting an AI policy in place and keeping it under regular review will be an integral part of an organisation’s employment toolkit for managing the risks posed by AI in the workplace. 

Statutory sick pay

Employees are currently entitled to five days statutory sick pay. This was expected to increase to seven days in 2025 (and 10 days in 2026) but the expansion of the scheme was paused by the Government last year when it announced it was reviewing research on its impact before making any decision on increasing payments in the future. We will wait to see whether the newly formed Government will make any further decisions on this this year. 

In the meantime, we are seeing more interesting cases coming before the WRC in relation to sick pay, particularly where SSP is refused on the basis that the employer operates a sick leave scheme that confers benefits which are, as a whole, more favourable to the employee than statutory sick leave.  

Another important decision last year relating to sick leave was A Worker v A Service Provider to Financial Services. While this was a complaint made under the Industrial Relations Acts, the Adjudicator accepted from the complaint form that it was in fact about the Sick Leave Act 2022 and dealt with it accordingly (thereby turning a potentially non-binding recommendation into a binding determination on a statutory right). This decision highlights the importance of employers ensuring they do not penalise workers for availing of statutory sick leave. 

The respondent company had an attendance policy which provided for absences to be managed on a 6-month rolling basis. The complainant was issued with a verbal warning in September 2023 for various planned and unplanned absences in the previous six-month period. He was then absent again in October 2023, for which he produced a medical certificate and claimed statutory sick pay in accordance with the Sick Leave Act 2022.  Due to the fact that he was already on a verbal warning in regard to absence, the complainant was given a first written warning for the October 2023 absence. 

The Adjudicator accepted that the company had followed its attendance and disciplinary policy. However, as the written warning imposed took into account a period of certified statutory sick leave, it was in breach of Section 11 of the 2022 Act which provides that an employee shall, “during a period of absence from work by the employee while on statutory sick leave, be treated as if he or she had not been so absent” and he awarded the complainant three weeks' pay.

Collective redundancies 

Some changes to the collective redundancy process were introduced in July 2024. We may expect to see claims under the new cause of action introduced by the 2024 Act whereby employees can now bring a claim to the WRC if an employer/responsible person effects collective redundancies prior to the expiry of the period of 30 days beginning on the date of the notification to the Minister. The WRC can award up to 4 weeks remuneration for each such breach. There have also been some changes to the information required to be notified to the Minister, and a new online form is available. We wrote in more detail on those changes, and considered a recent Labour Court decision which brought clarity on employers’ consultation obligations in a collective redundancy process, here.

Parents leave

Since 1 August 2024, parent’s leave and parent's benefit was extended from seven weeks to nine weeks. This leave is to be taken during the first two years of a child's life or in the case of adoption, within two years of placement. Employers may need to review and update any family leave policies to reflect the increased leave. 

Decisions of note

Throughout 2024, we have seen several high award decisions issued by the WRC, highlighting an increased focus on the need to maintain careful disciplinary processes, taking account of fair procedures and the principles of natural justice. They also serve as a reminder to employers of the importance of adhering to the Code of Practice on Grievance and Disciplinary Procedures which, although not legally binding, the WRC continue to place significant weight on. We will see if this trend of high awards continues in 2025. 

Also, the High Court decision in Nolan v Science Foundation of Ireland, which we wrote about in more detail here, serves as a somewhat welcome clarification for employers on the law surrounding “no fault” dismissals and the threshold for employees to reach in seeking the intervention of the courts in the form of injunctions in such cases which, it is clear from this decision, is very high.

Conclusion

There is plenty for employers to consider in terms of employment law developments last year, and with further developments at both an EU and local level this year and beyond, employers will need to continue to review current policies and practices and adapt accordingly to stay ahead.