Employment Matters. Employment Law Group Newsletter. Innovation. We send all our clients very best wishes for a happy Easter.

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1 Innovation Employment Law Group Newsletter Contents» Employee References 01» Replacement of Deferred Stock Scheme with Deferred Cash Scheme 02» Disciplinary Proceedings and Public Interest 02» Right to Cross-Examine 02» Damages for Breach of Disciplinary Procedure 02» Part-Time Employees and Art 40.1 of the Constitution 02» Bullying and Harassment 03» Fixed-Term Employees and Comparators 03» Reform of employment rights and industrial relations bodies 03» Watching Brief: forthcoming legislation 04» In Brief 04» About Us 06 This document contains a general summary of developments and is neither a complete nor definitive statement of the law. Specific legal advice should be obtained before taking action. Employment Matters We send all our clients very best wishes for a happy Easter. In Employment Matters, the Arthur Cox Employment Law Group Newsletter, we look at a range of issues across our practice area and some recent and prospective developments in law. We had hoped the Protection of Employees (Temporary Agency Work) Bill 2011 would by now be signed into law but it still has to be passed by the Seanad. The next edition of our Newsletter will contain a full analysis of the new legislation, and we are designing an employer s Toolkit which will be available to clients on request. Arthur Cox has Ireland s largest employment and industrial relations law practice, consistently top ranked in the area, with considerable experience in advising on a vast range of complex employment and industrial relations issues for a wide variety of clients at both national and global levels. The Employment Law Group provides an extensive range of legal services to clients on all aspects of national and EU employment law and industrial relations. The group also provides a skilled mediation service. See About Us and In Brief for information on who we are and what we have been up to recently. We also give details of webcasts you may listen to. Any feedback on these newsletters is welcome. We are happy to welcome Deborah Delahunt to the Group Employee References Jackson v Liverpool City Council [2011] IRLR 1009 answers an interesting question on employee references: what happens if an employee leaves, non-disciplinary allegations come to light then, and a prospective employer asks the former employer whether they would re-employ him? What does the employer's duty of care mean in such circumstances? Jackson throws further light on Spring v Guardian Assurance plc [1994] IRLR 460 HL and Bartholomew v London Borough of Hackney [1999] IRLR 246 authorities which reflect the view that in general, an employer is under no legal duty to provide a character reference for an employee or ex-employee. But if he does provide a reference, then he should take care to provide a reference which is true, accurate and fair, otherwise he may incur liability Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland tel: +353 (0) fax: +353 (o) dublin@arthurcox.com web:

2 02 Replacement of Deferred Stock Scheme with Deferred Cash Scheme Lichters and Hass v DEPFA Bank [2012] IEHC 10 concerned non-payment of deferred bonus awards. The company replaced its deferred stock scheme with a deferred cash scheme. It was no longer possible to award stock by reason of the takeover of the bank by Hypo Real Estate in The cash award under its terms would vest provided employees remained in employment for a period of 2 years from the date of the award. The changes were implemented without negotiation with employees or their representatives. The High Court found in favour of DEPFA Bank. In the circumstances prevailing in the Defendant's business, it was fair and reasonable to replace its deferred stock scheme with a deferred cash scheme. The Court adopted the test in Clark v Nomura [2000] IRLR 766 (CA), the plaintiff must prove that "no reasonable employer" would have exercised its discretion in that manner. Disciplinary Proceedings and Public Interest The public interest featured prominently in Gillen v The Commissioner of An Garda Siochana, Ireland, and the Attorney General [2012] IESC 3. The applicant garda sought and obtained leave ex parte to apply for judicial review preventing a disciplinary enquiry, submitting that the chronology of events disclosed inordinate and unreasonable delay by the respondent. The Supreme Court acknowledged that the Garda Siochána Discipline Regulations 1989 envisage that there should be no unnecessary delay in the disciplinary process by always employing the word shall. The Court summarized the two interests involved in Garda disciplinary proceedings, namely, the interest of the individual garda in having his name cleared and, the public interest that allegations of breaches of discipline on misconduct should be investigated. Balancing the public interest against the prejudice to the individual concerned, the Court found that the balance fell in favour of the public interest and in favour of the disciplinary process proceeding. The public interest is potentially relevant to many public sector employers, hence this case is highly significant. Right to cross-examine There is no absolute rule under the European Convention on Human Rights or in common law entitling a person facing disciplinary proceedings to cross-examine witnesses on whose evidence the allegations against him are based. Nor does such an entitlement arise automatically by reason of the fact that the evidence of the witness in question is the sole or decisive basis of the evidence against him. So reaffirmed the High Court of England and Wales in a judicial review application in R (on the application of Bonhoeffer) v General Medical Council [2012] IRLR 37 which provides a valuable list of propositions to be taken into account when assessing whether the right properly arises. Relevant factors include the seriousness and nature of the allegations and the gravity of the adverse consequences to the accused party in the event of the allegations being found to be true. In its comprehensive review of the case-law, the High Court cited Ireland s Supreme Court in Kiely v Minister for Social Welfare [1977] IR saying it "provides a classic statement of why it may be unfair to refuse an opportunity for cross-examination to a person whose own evidence is subject to cross-examination". It noted that in Borges v Fitness to Practise Committee of the Medical Council [2004] IR 103 the Irish Supreme Court did not lay down an absolute rule that the requirement of fairness can be satisfied only where a doctor facing serious charges of professional misconduct is afforded a right to cross-examine his accusers. There was no discussion of whether and if so, what, different principles apply in Ireland as between criminal proceedings and disciplinary proceedings. The inference from Borges appeared to be that nothing turned on any such distinction. Damages for Breach of Disciplinary Procedure Damages arising from breach of the disciplinary process before dismissal could be very large for senior executives. The UK Supreme Court in joined cases Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham v Ministry of Defence [2012] IRLR 129 held that an employee cannot recover damages at common law for their full losses where the employer is in breach of express terms in a contractually binding disciplinary procedure which results in dismissal. This is good news for employers. However, the decision is by a majority of one and the casting vote was decided on another ground. This decision is potentially relevant in Ireland where there has yet to be a full discussion of this issue. Part-Time Employees and Art 40.1 of the Constitution The High Court in Quigley and Others v City of Cork VEC and Others [2001 No 18632P] considered the position of part-time plaintiffs on successive contracts who sought relief arising out of inequality with identified comparators in respect of a period which pre-dated the Protection of Employees (Part-Time Work) Act The part-time employees relied among other things on a constitutional argument against their employer, a statutory body. The High Court provided a comprehensive analysis of Art 40.1 of the Irish Constitution showing a gradual move away from traditional approaches to the constitutional guarantee of equality. Art guarantees equality to persons as human persons. Having regard to the long line of authorities this, said the Court, prohibited the making of laws, or the implementation of laws which treated a category of persons unequally as against other persons or categories of persons by reference to their particular attributes or characteristics as human beings such as gender, race and the like. The plaintiffs had not, in the Court s view, demonstrated that they had been treated unequally or discriminated against as human persons. Interestingly, the Court rejected the defendants' contention that it was being asked in effect to conjure up out of thin

3 EMPLOYMENT MATTERS 03 air a parallel equality jurisdiction of uncertain, sweeping ambit, enforceable by action without any limitations or protections found in the statutory regimes which are in place governing employment law. The Constitution takes precedence over all other forms of law in Ireland. So, the question is, what other constitutional cases may employers, particularly public sector employers, expect in future. Bullying and Harassment The plaintiff in Margaret Kelly v Bon Secours Health System Limited [2012] IEHC 21 commenced proceedings by personal injury summons claiming damages for injury, loss and damage caused by an accident at work, and also alleging harassment, bullying, abuse, intimidation and discrimination in the course of her employment with the defendants. The High Court found she was entitled to succeed in relation to the first aspect of her case; the decision is notable for what the Court said about the claim of bullying and harassment which it acknowledged was part of the employer s duty of care. The defendant s conduct was strongly criticised by the Court on a number of matters such as the alteration of normal work practices to open a permanent position to outside candidates to the detriment of the plaintiff, and the interference with the mediation procedures by the defendant. The High Court accepted that the plaintiff s view was coloured by her personality and that she was clearly a person subject to stress but the defendants were or ought to have been aware of this fact from a very early stage as they knew her history with a previous employer, and also her marital background. Accordingly the defendants were found to be prima facie liable for the alleged bullying and harassment of the plaintiff insofar as she had suffered an actionable injury as a result. The Court rejected the employer s defences inter alia of contributory negligence against the plaintiff and in particular that she failed to involve herself in its grievance procedure and to engage with them. It also rejected the contention that the plaintiff could not proceed with a number of her grievances due to findings by the Labour Relations Commission and others. On damages, the Court said that although any assessment of the plaintiff must conclude that she had come to the view, wrongly, that all the actions of the defendants were motivated by some malice against her, it was clear that at management level they were motivated by hostility to her stemming initially from the time of her accident. As the trust between the plaintiff and the defendants had irretrievably broken down, and the plaintiff would not be likely to return to work, the court ordered a decree totalling 90,000. This case is full of bullet points and guidelines for an employer. Fixed Term Employees and Comparators The Protection of Employees (Fixed-Term Work) Act 2003 provides that fixed-term employees may not be treated less favourably than comparable permanent employees unless the employer can objectively justify the different treatment. In University College Cork v Dr Naomi Bushin [2011 No248MCA the Complainant fixed term employee alleged that she was treated less favourably than a comparable permanent employee when she was paid statutory redundancy payments instead of the more enhanced severance terms which applied to those persons chosen as her comparators contrary to the 2003 Act. The Rights Commissioner and the Labour Court each found in her favour and decided that she should be paid severance terms in the amount of six week s pay per year of service inclusive of the statutory redundancy entitlement. The Labour Court identified, as an appropriate comparable permanent employee, an employee within the sector of third level education rather than an employee of UCC itself (applying s 5(c) of the 2003 Act). The appellant challenged the decision of the Labour Court before the High Court. Kearns P dismissed the appeal stating "given that no permanent employees employed by UCC had been made redundant, I cannot see how any such permanent employee would be an appropriate comparator, either for the purposes of the statute or the Council Directive". Kearns P stated that there was an inherent artificiality in arguing that no issue of discrimination can arise because no permanent employees employed by UCC have been made redundant. Reform of employment rights and industrial relations bodies On 8 March 2012 the Minister for Jobs, Enterprise and Innovation announced that he will publish and enact the Workplace Relations (Law Reform) Bill in Q The legislation will establish new institutional employment rights and industrial relations structures. A Workplace Relations Commission will bring together the existing services of the Equality Tribunal, the National Employment Rights Authority, the Labour Relations Commission, and the first instance functions of the Employment Appeals Tribunal, while all appeals will be heard by a single appeals body formed by integrating the appellate functions of the Employment Appeals Tribunal into the Labour Court. Significant progress has already been made to date: All first instance complaints are now acknowledged and the employer is notified within 48 hours of the complaint being lodged. Prior to the introduction of the Workplace Relations Customer Service in January 2012 this process was taking up to eight months in some cases. The backlog for Rights Commissioner hearings has been reduced (it took an average of 142 days to schedule a hearing in Hearings are now scheduled by the LRC within a matter of weeks). A Single Complaint Form replaced 30 existing complaint forms that currently accommodate over 80 specific complaint types across five institutions. 70% of all complainants in February 2012 used the new form.

4 04 Watching Brief Bills planned for the current session include: The Competition (Penalties and Sanctions) Bill, to strengthen the effective enforcement of competition law in Ireland; The Industrial Relations (Amendment) Bill, to give effect to the Government's reform proposals concerning statutory wage-setting mechanisms and to address issues arising out of the recent High Court challenge to the JLC system; The Protection of Employees (Temporary Agency Work) Bill 2011 to give effect to the Temporary Agency Work Directive. The Bill was published in December 2011 and when passed will be effective from 5 December As of the date of this Newsletter, the legislation has not passed all stages. The Human Rights and Equality Commission Bill, to replace the existing Equality Authority and Human Rights Commission with a new amalgamated structure. Workplace Relations (Law Reform) Bill 2012, to implement the planned reforms in employment rights and industrial relations bodies, see above. Whistleblowing legislation Heads of a Bill were published in late February 2012 which highlight the responsibility of employers to put effective internal mechanisms in place to investigate whistleblowing complaints and to develop an organisational culture that supports whistleblowing as a key element of corporate risk management overall, to identify potential wrongdoing and take appropriate corrective action at the earliest possible stage. The Bill offers protected disclosure to agency workers and contract employees to ensure they do not suffer reprisals from their temporary employers after exposing wrongdoing. In Brief In this section, we let you in on what we have been up to in the past few months. If you would like further information about any of the items below, please contact any member of the Employment Law Group. Arthur Cox Employment Law Yearbook 2011 The Arthur Cox Employment Law Yearbook 2011 is now available. It appeared on the shelves at the end of March Published by Bloomsbury Professional, it is the first of an annual publication compiled by lawyers from Arthur Cox for practitioners and professionals in the field. It contains selected cases and materials for 2011 relevant to Employment Law including relevent cases and developments in the areas of Data Protection, Taxation, Pensions, and Employee Benefits. It covers Irish law: decisions of the superior courts, Labour Court, Equality Tribunal, Employment Appeals Tribunal; Irish legislation and statutory instruments; English law: relevant common law decisions; EU law: decisions of the Court of Justice of the European Communities, relevant Directives/ Regulations, as well as decisions of the European Court of Human Rights. An added feature is the inclusion of five articles on current topics by acknowledged experts in HR. Purchasers of the text receive a voucher granting online access and the facility to print all of the selected material in full. Copies can be purchased from the publisher. To place an order by phone +44(0) To place an order by fax: +44(0) For enquiries, please send to: customerservices@bloomsburyprofessional.com We promised in our Christmas Newsletter that the first 50 clients who contacted us at Niamh.Hanratty@arthurcox.com would receive a free copy of the Arthur Cox Employment Law Yearbook Your copy will be with you soon.

5 EMPLOYMENT MATTERS 05 Client Seminars: The Employment Law group hosted a series of free, client seminars over the last three months, covering the following topics: January Elaine Mettler,, Arthur Cox: Temporary Agency Workers - the Directive transposed February Cían Beecher, Partner, Arthur Cox and Michael Stirling, HR Consultant: Employee Engagement March Séamus Given, Partner, Arthur Cox and Michel Van Beek, Legal Services, European Commission: Fixed Term Work, Irish and European perspectives The following seminar will take place in April, please let us know if you have not already booked a place April Gill Woods,, Arthur Cox and Margaret Considine, Equita: Top Tips for Employers on Bullying & Harassment Claims We have an excellent line-up of external speakers for our breakfast seminars during the rest of the year, including Niall Saul, Brian McIvor and John Guinan, dealing with important topics such as performance management, careers, and teamwork. You will receive an invitation in due course. Cian Beecher, Elaine Mettler, Gill Woods and Barry Reynolds attended the Legal Island HR Symposium on 29th February 2012 and acted as facilitators for the various workshops throughout the day. Michael Doyle attended the American Chamber of Commerce Employment Law Group meeting on 27th January Dr Mary Redmond was invited to participate as a change nation leader at Ashoka s Change Nation weekend in Dublin Castle on 23 March The event involved 50 global social entrepreneurs keen to spread their work to Ireland. Dr Redmond was asked to assist organizations promoting prison reform, reform of juvenile offenders, and homelessness. CIPD Leadership and Innovation Awards 2012 Arthur Cox was delighted once again to be the exclusive law firm sponsor of the prestigious CIPD Awards in 2012 on Leadership and Innovation. Séamus Given presented awards to two of the winners on March at the Awards Dinner, and Dr Mary Redmond was again one of the judges for the Awards. Our congratulations to all the winners. Talk by the Right Honorable Lord Justice Elias On February Séamus Given, head of the Employment Law Group, was delighted to welcome the Right Honorable Lord Justice Elias, Judge of the Court of Appeal of England and Wales, who spoke on Extraterritorial Aspects of Labour Legislation in Arthur Cox, at an event of the Employment Law Association of Ireland. Mr Justice Frank Clark of the Irish High Court (and now Supreme Court) was invited to respond to the talk which he did with incisiveness and wit. Sir Patrick delivered a brilliant lecture, hopefully it will appear in print before the end of the year.

6 06 About Us If you have any queries about the topics in this publication or would like us to cover a particular subject in a future issue, or if you have any queries of an employment law nature, please contact: Séamus Given Partner +353 (0) seamus.given@arthurcox.com Kevin Langford Partner +353 (0) kevin.langford@arthurcox.com Cían Beecher Partner +353 (0) cian.beecher@arthurcox.com John O'Dwyer Consultant +353 (0) john.odwyer@arthurcox.com Dr Mary Redmond Consultant +353 (0) mary.redmond@arthurcox.com Elaine Mettler +353 (0) elaine.mettler@arthurcox.com Barry Reynolds +353 (0) barry.reynolds@arthurcox.com

7 EMPLOYMENT MATTERS 07 Gill Woods +353 (0) Michael Doyle +353 (0) Louise O'Byrne +353 (0) Sarah Grace +353 (0) Jacqueline Ho +353 (0) Deborah Delahunt +353 (0)

8 EMPLOYMENT MATTERS 08 Dublin Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland tel: +353 (0) fax: +353 (o) Belfast Capital House, 3 Upper Queen Street, Belfast BT1 6PU, Northern Ireland tel: +44 (0) fax: +44 (0) belfast@arthurcox.com London 12 Gough Square, London EC4A 3DW, England tel: +44 (0) fax: +44 (0) london@arthurcox.com New York One Rockefeller Plaza, 15th Floor, New York NY 10020, USA tel: +1 (1) fax: +1 (1) newyork@arthurcox.com