Five Key Updates for Irish Employers

Recent changes in Irish employment law have introduced extended parent’s leave, stricter collective redundancy rules, automatic pension enrolment and expanded gender pay gap reporting. Most employers will be impacted by one or more of these changes. Our Employment & Benefits team summarises the key updates that Irish employers should be aware of and the actions they should take to remain compliant with Irish law.

There have been some notable developments across the Irish employment law landscape recently. These include changes in the legislation impacting parent’s leave, redundancy, pensions, gender pay gap reporting and employment permits.

Employers are advised to familiarise themselves with these developments and to understand any changes that may affect them and their workforce.

We have set out below a round-up of the key changes and the actions that employers may now need to take.

1. Parent’s Leave extended

Employees’ entitlement to parent’s leave will increase from seven to nine weeks from 1 August 2024. This change has been made by a recent amendment to the Parent’s Leave and Benefit Act 2019 which was signed into law at the end of June.

Parent’s leave can be taken by a qualifying employee during the first two years of a child’s life, or, in the case of adoption, within two years of the placement of a child with their family. Parent’s leave is unpaid. However, depending on their PRSI contributions, employees who qualify for parent’s leave may now claim parent’s benefit from the Department of Social Protection for nine weeks. Parent’s benefit is currently paid at a rate of €274 per week.

Some employers may already choose to provide employees with parent’s leave entitlement that is above their statutory entitlement. Employers should ensure that they are familiar with each of the various types of family leave that exist under Irish legislation and that their practices and policies reflect any changes in the legislation.

2. Changes to Irish collective redundancy legislation

A new act has been introduced which will amend existing Irish redundancy legislation and provide greater protection for employees in collective redundancy situations arising from their employer’s insolvency. The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 was commenced on 1 July 2024 and has amended the existing rules set out in the Protection of Employment Act 1977.

A key change is that the obligation on employers not to effect collective redundancies until at least 30 days after notifying the Minister for Enterprise, Trade and Employment of those proposed collective redundancies will now apply in all collective redundancy situations. Previously, this obligation did not apply to collective redundancies arising from the insolvency of an employer. This exemption has now been removed.

The Act also provides that notification to the Minister of proposed collective redundancies can now take place by email as well as by registered post. The information that employers must provide when notifying the Minister of proposed collective redundancies has also been updated with a new template form that employers can use in making such notifications.

Other key changes introduced include:

• A new entitlement for employees to bring a claim to the Workplace Relations Commission seeking redress of up to four weeks’ salary where their employer makes them redundant before the expiry of the 30-day period following the notification to the Minister. This adds to an employee’s existing entitlement to bring a claim where their employer has not complied with their statutory consultation, information and notification obligations.
  
• New obligations for a liquidator or other person appointed in an insolvency situation to comply with the consultation, information and notification obligations previously imposed only on employers. Failure to comply with these obligations may result in criminal responsibility and fines being imposed on a liquidator or other appointed person.
• Amendments to the Companies Act 2014 which will:
  • Require company directors to notify employees and employee representatives of any winding-up petitions when the petition is presented, or as soon as reasonably practicable afterwards.
  • Require liquidators appointed on a provisional basis following the presentation of a winding-up petition to inform employees and employee representatives of their appointment and to provide them with certain information on the liquidation process.
  • Amend the statutory provisions relating to liability for reckless trading to increase the prospect of company directors being found liable.
• The establishment of a new statutory Employment Law Review Group which will advise the Minister on aspects of Irish employment and redundancy law.

Employers, and indeed insolvency practitioners, who are faced with a collective redundancy situation should seek appropriate legal advice on their obligations under Irish legislation.

3. Automatic enrolment legislation signed into law

The Automatic Enrolment Retirement Savings System Act 2024 was signed into law on 9 July 2024. This legislation will provide for a new retirement savings scheme for employees aged between 23 and 60 earning €20,000 or more per year, who are not already members of an occupational pension scheme. The scheme will provide for set contributions by employers, employees and the Government, with an opt-out option for employees after six months.

The Act is expected to come into effect some time in 2025, but the exact date is still unclear. Employers should ensure that they understand their obligations under the new legislation and that they can advise employees on how the scheme will operate, including details on eligibility, rates and increases.

For further information on the Act, please see our previous briefing insight.

4. Extension of gender pay gap reporting obligations

New regulations have come into effect which now extends gender pay gap (GPG) reporting obligations to employers with 150 or more employees. Previously, this obligation applied only to employers with 250 or more employees. Following the introduction of the Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) (Amendment) Regulations 2024 on 31 May 2024, employers with 150 or more employees are now required to produce a gender pay gap information report by a date in December 2024. The reporting date is six months from a snapshot date in June 2024 chosen by the employer.

The gender pay gap is the difference in the average hourly wage of men and women across a workforce. Organisations are required to report on their hourly gender pay gap across a range of metrics.

Employers that were not previously required to report on their gender pay gap should now take steps to ensure that they have the necessary internal systems in place to comply with their reporting obligations.

The 2024 GPG Regulations also made a number of amendments to the previous GPG regulations, including introducing a new definition of “basic pay”, and defining share options and interest in shares as a “Benefit in Kind” instead of a form of “bonus remuneration”. There has also been a slight update to the formula used to calculate the total number of working hours for certain categories of employees.

For further information on gender pay gap reporting obligations and the impact of the amendments introduced by the 2024 GPG Regulations, please contact a member of our Employment & Benefits team.

5. Amendment of employment permit legislation

The Employment Permits Act 2024 was signed into law on 25 June 2024, however, it has not yet been commenced. It is expected to come into force in the coming months and aims to modernise existing Irish employment permit legislation through:

• The introduction of a seasonal employment permit for employers who register as approved seasonal employers.
• The revision of the ‘Labour Market Needs Test’ so that advertising in newspapers will no longer be required. Instead, advertisements will need to be placed on approved online platforms.
• The easing of rules for employment permit holders’ ability to change employers.

Conclusion

To discuss any of these changes in further detail and for expert guidance around ensuring full compliance with Irish employment legislation, please contact a member of our Employment & Benefits, Pensions or Business Immigration teams.

The content of this article is provided for information purposes only and does not constitute legal or other advice.