Jurisdictional comparisons Fourth edition 2012 General Editor: Siân Keall, Travers Smith LLP - PDF

Employment & Labour Law Jurisdictional comparisons Fourth edition 2012 General Editor: Siân Keall, Travers Smith LLP General Editor Siân Keall, Travers Smith LLP Commercial Director Katie Burrington Commissioning

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Employment & Labour Law Jurisdictional comparisons Fourth edition 2012 General Editor: Siân Keall, Travers Smith LLP General Editor Siân Keall, Travers Smith LLP Commercial Director Katie Burrington Commissioning Editor Emily Kyriacou Publishing Editor Dawn McGovern Senior Editor Caroline Pearce Sub Editor Callie Leamy Published in 2012 by Sweet & Maxwell, 100 Avenue Road, London NW3 3PF part of Thomson Reuters (Professional) UK Limited (Registered in England & Wales, Company No Registered Office and address for service: Aldgate House, 33 Aldgate High Street, London EC3N 1DL) Printed and bound in the UK by CPI William Clowes, Beccles NR34 7TL A CIP catalogue record for this book is available from the British Library. ISBN: Thomson Reuters and the Thomson Reuters logo are trademarks of Thomson Reuters. Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen s Printer for Scotland. While all reasonable care has been taken to ensure the accuracy of the publication, the publishers cannot accept responsibility for any errors or omissions. This publication is protected by international copyright law. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, or stored in any retrieval system of any nature without prior written permission, except for permitted fair dealing under the Copyright, Designs and Patents Act 1988, or in accordance with the terms of a licence issued by the Copyright Licensing Agency in respect of photocopying and/or reprographic reproduction. Application for permission for other use of copyright material including permission to reproduce extracts in other published works shall be made to the publishers. Full acknowledgement of author, publisher and source must be given Thomson Reuters (Professional) UK Limited Employment & Labour Law Contents Preface Dame Janet Gaymer, DBE QC (Hon.) v Austria Thomas Angermair, Dorda Brugger Jordis 1 Belgium Chris Van Olmen, Van Olmen & Wynant 21 Canada Brian O Byrne, Fasken Martineau LLP 43 Denmark Mariann Norrbom, Norrbom Vinding 71 Finland Eva Nordman-Rajaharju, Annika Pohjolainen & Heikki Hiltunen, Roschier 89 France Joël Grangé & Claire Toumieux, Flichy Grangé Avocats 109 Germany Michael Magotsch, LL.M. (Georgetown) & Dr. Sascha Morgenroth, LL.M., DLA Piper UK LLP 131 India Sudip Mullick & Anshul Prakash, Khaitan & Co 159 Italy Franco Toffoletto, Toffoletto e Soci 173 Japan Hideki Thurgood Kano, Anderson Mori & Tomotsune 191 Luxembourg Pierre Elvinger & Caroline Lootvoet, Elvinger, Hoss & Prussen 211 The Netherlands Genna E. Wiebenga & Catherine Krepel, Bronsgeest Deur Advocaten 233 Republic of Ireland Melanie Crowley & Aoife Sweeney, Mason Hayes & Curran 257 Singapore Deborah Evaline Barker, S.C. & Ang Keng Ling, KhattarWong 279 South Africa Nicholas Robb & Claire Gaul, Webber Wentzel 299 South Korea Jeong Han Lee, Bae, Kim & Lee LLC 317 Spain Íñigo Sagardoy de Simón & Noemí Rodrígues Alonso, Sagardoy Abogados 335 Sweden Anders Elmér, Annika Elmér & Jenny Hellberg, Elmzell Advokatbyrå HB 347 Switzerland Dr Urs L. Baumgartner & Dr Matthias Oertle, Lenz & Staehelin 365 Turkey Kayra Üçer, Özgecan Tekdemir, Aysu Aliefendioglu, Hergüner Bilgen Özeke Attorney Partnership 381 United Kingdom Siân Keall, Travers Smith LLP 397 United States of America Peter A. Susser, Littler Mendelson, PC 415 Contacts 433 european lawyer reference series iii Republic of Ireland Mason Hayes & Curran Melanie Crowley & Aoife Sweeney 1. Sources of employment law 1.1 What are the principal sources of law and regulation? The sources of employment law in Ireland are European Union law, statutes, common law, equity and the Irish Constitution. Statutes are the most significant source, particularly given the considerable amount of employment legislation that is driven by Ireland s membership of the European Union. Decisions and judgments of Irish courts and, in some instances, tribunals, form precedents which are usually followed pursuant to the principle of stare decisis. Judgments of courts in the United Kingdom have persuasive authority and, in practice, are widely followed. In addition, judgments of the European Court of Justice, which are supreme over judgments of the Irish courts, are hugely influential on employment law in Ireland. The Irish Constitution (Bunreacht na héireann, 1937) is also central to the rights of employees, especially in matters of discipline and dismissal. Irish courts have held that the fundamental principles of natural justice apply to the employment relationship and that employees rights to fair procedures are enshrined in the constitution. Therefore, the impact of the constitution must also be considered when reviewing employment law matters in Ireland. 1.2 What is the order of priority of the relevant sources ie, which take precedence in the event of a conflict? European Union law is supreme in Ireland and takes precedence over other sources of law in the event of a conflict. 1.3 What are the relevant statutes and international treaties? The main employment statutes in Ireland are: the Redundancy Payments Acts ; the Protection of Employment Acts ; the Terms of Employment (Information) Acts ; the Minimum Notice and Terms of Employment Acts ; the Payment of Wages Act 1991; the Unfair Dismissals Acts ; the National Minimum Wage Act 2000; the Organisation of Working Time Act 1997; the Employment Equality Acts ; the Maternity Protection Acts ; the Adoptive Leave Acts ; european lawyer reference series 257 the Parental Leave Acts ; the Carer s Leave Act 2001; the Protection of Young Persons (Employment) Act 1996; the Protection of Employees (Part-Time Work) Act 2001; the Protection of Employees (Fixed-Term Work) Act 2003; the Data Protection Acts ; the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003; the Employees (Provision of Information and Consultation) Act 2006; the Transnational Information and Consultation of Employees Act 1996; the Employment Permit Acts 2003 and 2006; and the Safety Health and Welfare at Work Act Important international treaties include the EC Treaty, the Treaty of Amsterdam, the European Convention on Human Rights, the Convention on the Law Applicable to Contractual Obligations (Rome Convention) and the Rome I Regulation (Regulation 593/2008). 2. Principal institutions There are a number of important employment law institutions in Ireland. Some of the main institutions include the following: Labour Relations Commission (LRC) The LRC was established to promote industrial relations and works in conjunction with trade unions, joint industrial councils, joint labour committees and business associations (such as the Irish Business and Employers Confederation). Amongst the services it offers, the LRC provides a conciliation service and it also provides the Rights Commissioner service outlined below. Rights Commissioners Rights Commissioners are appointed by the Minister for Jobs, Enterprise and Innovation to deal with certain trade and employment law disputes. A complaint to a Rights Commissioner is often the first avenue of redress pursued by a complainant. Statutes under which Rights Commissioners have authority include: Industrial Relations Acts ; Adoptive Leave Acts ; Carer s Leave Act 2001; Competition Act 2002; Maternity Protection Acts ; National Minimum Wage Act 2000; Organisation of Working Time Act 1997; Parental Leave Act 1998; Payment of Wages Act 1991; Protection of Employees (Fixed-term Work) Act 2003; Protection of Employees (Parttime Work) Act 2001; Protection of Young Persons (Employment) Act 1996; Protection of Persons Reporting Child Abuse Act 1998; Safety, Health and Welfare at Work Act 2005; Terms of Employment (Information) Acts , Unfair Dismissals Acts ; European Communities (Protection of Employment) Regulations 2000 (SI 488/2000) and European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (SI 131/2003). 258 european lawyer reference series Labour Court The Labour Court has jurisdiction at first instance and on appeal in a number of employment law and industrial relations matters. Statutes under which the Labour Court has jurisdiction include: Industrial Relations Acts ; Organisation of Working Time Act 1997; Protection of Employees (Part-time Work) Act 2001; Protection of Employees (Fixed-term Work) Act 2003; Employment Equality Acts and National Minimum Wage Act Employment Appeals Tribunal (EAT) The EAT has jurisdiction to hear certain employment law disputes, both at first instance and on appeal, most notably unfair dismissal claims. Statutes under which the EAT has authority include: Minimum Notice and Terms of Employment Acts ; Payment of Wages Act 1991; Terms of Employment (Information) Act 1994 and 2001; Organisation of Working Time Act 1997; Adoptive Leave Act 1995; Maternity Protection Acts ; Protection of Young Persons (Employment) Act 1996; Unfair Dismissals Acts ; Carer s Leave Act 2001; Redundancy Payments Act ; Parental Leave Acts 1998 and 2006; Protection of Employees (Employers Insolvency) Acts and European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (SI 131/2003). Equality Tribunal The Equality Tribunal has jurisdiction over matters concerning the Employment Equality Acts Disputes can be mediated but if mediation is either rejected or is unsuccessful, then the dispute will be heard by an equality officer nominated by the Equality Tribunal. Health and Safety Authority (HSA) The HSA is responsible for monitoring compliance with occupational health and safety legislation, to include the prevention of bullying and harassment, and conducting prosecutions in the event of breaches. National Employment Rights Authority (NERA) NERA aims to increase the level of monitoring and compliance with employment rights in Ireland. Its main functions are to provide information; carry out inspections of workplaces; enforce employment rights legislation; prosecute offenders and protect young persons who are working. NERA was set up under the auspices of the Department of Jobs, Enterprise and Innovation. Its establishment was agreed as part of the social partnership agreement, Towards 2016, and the Employment Law Compliance Bill 2008 (discussed later in this chapter) is intended to place NERA on a statutory footing. 3. Role of the national courts In addition to the institutions noted above, the civil courts of Ireland have european lawyer reference series 259 jurisdiction in employment matters. They hear common law actions, such as claims for wrongful dismissal and breach of contract and can provide redress in equity such as injunctive relief. The courts often have jurisdiction under statute to hear appeals from the above-mentioned institutions, usually on a point of law. The Circuit and High Courts are the most common forum for employment law disputes, though the District Court may hear enforcement proceedings (such as under section 20, Protection of Young Persons (Employment) Act 1996) and the Supreme Court retains its jurisdiction as the national court of final instance. 4. Employment status and categories of worker 4.1 What defines employment status (ie, whether an individual is employed or self employed)? There is a distinction in law between employees and independent contractors. This distinction is very important as only employees are protected by employment law. An employee works under a contract of service for an employer, under which he or she contracts to provide his or her own labour, skill and services in return for remuneration. An independent contractor, meanwhile, works under a contract for services, and provides his or her labour on a self-employed basis in return for remuneration. 4.2 What is the relevance of the distinction? The classification of a contract as one of service or for services is not always clear. It is a question of substance which is not decided by the labels used by the parties to describe the relationship (See Henry Denny & Sons (Ireland) Limited v Minister for Social Welfare [1998] ELR 36). Some principal features of the employer/employee relationship as found by the courts are the following: the employer exercises a sufficient degree of control over the worker; the worker must perform the contract personally and cannot delegate to another; the worker is an integral part of the workforce; and income tax (PAYE) and Pay Related Social Insurance (PRSI) are deducted from the worker s remuneration by the employer. In contrast, factors which suggest that the worker is an independent contractor include: the worker is in business on his or her own account and the profits are determined by the manner in which he or she carries out the work; the worker is not subject to PAYE/PRSI and is responsible for his or her own taxes; the worker is not under the direct control of the other party to the contract; and the worker has no fixed working hours. The distinction is also relevant for taxation. Different rates of PRSI apply to employees and contractors and there is different tax treatment for both. Employees are taxed by the Pay As You Earn (PAYE) system in accordance with Schedule E of the Taxes Consolidation Act Self-employed workers 260 european lawyer reference series are taxed under Schedule D and are responsible under the self-assessment system for accounting for their taxes. Furthermore, contractors may be required to charge VAT for services rendered. 4.3 What are the main categories of worker? The majority of employees in Ireland are employed pursuant to full-time employment contracts of indefinite duration. There are, however, certain other categories of employees that require special consideration. These include the following: Fixed-term and specified purpose employees A contract may be for a fixed term or specified purpose (eg, to cover maternity leave). The provisions of the Protection of Employees (Fixed-Term Work) Act 2003, which implemented Directive 99/70/EC concerning the framework agreement on fixed-term work, provide that fixed-term/specified-purpose workers shall not be treated less favourably than comparable permanent workers solely because they have a fixed-term or specified purpose contract, unless different treatment is justified on objective grounds. The 2003 Act also seeks to prevent abuse arising from the use of successive fixed term employment contracts by providing for a maximum of four years employment under two or more fixed-term contracts without the employee being made permanent, unless objective reasons are given for a longer period. Part-time employees Employment may be on a full-time or part-time basis. The employment of part-time employees is governed by the Protection of Employees (Part-Time Work) Act This Act essentially provides that part-time employees shall not be treated in a less favourable manner than a comparable full-time employee in respect of their conditions of employment. Zero-hours contracts A zero-hours contract is one under which the employee works as and when required by the employer without a guarantee of any work being available. In the event that an employee is not required to work at least 25 per cent of his or her contract hours or 25 per cent of the time for which he or she must be available to work, the zero hours provisions of the Organisation of Working Time Act 1997 ensure that the employee is compensated for the lesser of either: (i) 25 per cent of the time which he or she is required to be available; or (ii) 15 hours. Agency workers Agency workers are contracted by employment agencies to perform work for a third-party client. Under most Irish employment legislation, agency workers are considered as being employed by that entity which pays their remuneration (ie, the agency), but for the purposes of the Unfair Dismissals Acts the employer is considered to be the end user of the labour (ie, the client). There is, however, some case law which creates confusion european lawyer reference series 261 over who should be considered the employer for the purpose of employment legislation. The recently enacted Directive 2008/104/EC on temporary agency work aims to provide further protection to agency workers once it is transposed into Irish law and will hopefully also clarify certain issues relating to agency workers. Young persons The employment of young persons is governed by the Protection of Young Persons (Employment) Act 1996, which implements Directive 94/33/EC on the protection of young people at work (other than Articles 6 and 7). The 1996 Act defines young persons as persons who have reached the age of 16 years, but have not reached the age of 18 years and aims to protect the health and education of young workers by setting out maximum working hours, rest intervals, age limits for employment and record-keeping requirements for employers of young persons. Non-nationals Non-EEA or Swiss nationals require permission to work in Ireland. The Employment Permits Acts make it an offence to employ or be employed in the jurisdiction in the absence of such permission. 4.4 What is the position of directors? Directors who are also company employees are known as executive directors. Employment law applies to executive directors only and not to non-executive directors. 5. Contract 5.1 What constitutes an employment contract? An employment contract sets out the terms under which an employee is employed. It can be written or oral and it can be made up of express and implied terms. 5.2 What formal requirements are there in relation to the formation of an individual employment contract? The formal requirements for the formation of employment contracts are the same as for all contracts: ie, offer, acceptance, consideration and an intention to create legal relations. Employment contracts may be express or implied, oral or written. Parties to employment contracts, however, do not have the same freedom to agree their terms and conditions as parties to other agreements may have. Certain terms may be implied into employment contracts in addition to those expressly agreed between the parties, usually with a view to protecting the employee. Terms may be implied by the following mechanisms: Statute There are a number of statutes which imply terms into employment contracts. Examples include wages, minimum holiday entitlements, 262 european lawyer reference series minimum rest periods, acceptable forms of payment of wages and the right to payment on redundancy. Collective agreements The terms of any collective agreement in place between an employer and a trade union may be incorporated into individual employment contracts. Custom and practice Terms may be implied into a contract by custom and practice. For this to happen, terms must be equitable, necessary, clear and obvious and must not contradict the express terms of the contract (see DP Refinery (Westernport) Pty Ltd v Shire Hastings (1978) 52 AJLR 43). A court may be more willing to imply such terms to a contract if necessary for business efficacy. 5.3 Where do the terms come from? Terms come from all sources of law, including European Union law, the constitution, statute and common law. 6. Terms and conditions 6.1 What terms, if any, must be included in a contract? Although there is no legal requirement to provide employees with a written contract of employment, the Terms of Employment (Information) Acts requires employers to provide employees with the following minimum terms and conditions in writing within two months of the commencement of their employment: full names of employer and employee; address of employer/principal place of business or registered office; place of work; job title and nature of work; date of commencement of contract; expected duration of temporary contract or date on which a fixed-term contract will expire; rate or method of calculation of remuneration; pay inter
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