The area of EROs and REAs has been quite contentious in Ireland in the last number of years with both being rendered unconstitutional in July 2011 and May 2013 respectively. Importantly, it was only those EROs and REAs that were drafted in accordance with the Industrial Relations Act 1946 that were rendered unconstitutional which means that any ERO or REA introduced under the recent Industrial Relations Act 2012 will be valid and will bind all employers within those industries. Draft Security JLC/ERO In an important development, the Security Industry, through its Joint Labour Committee, is the first industry to put forward a new draft Employment Regulation Order (ERO) under the new system outlined in the 2012 Act. The new draft ERO has been published on the Workplace Relations website and may be accessed through the following link: http://goo.gl/BQD3zs The new ERO has been greatly amended with most policies being changed in some shape or form from those that were in place as of July 2011. The key changes to the draft ERO are as follows:
- All employees will be entitled to receive minimum remuneration of €10.75 per hour. This is a significant development given that you required 3 years’ verifiable service under the old ERO to attract such a rate.
- Overtime rates will be paid at time and a half but under these ERO proposals the overtime rate will only be apply where the employee has worked in excess of 48 hours. Employers will need to be mindful of maximum weekly working hour obligations in respect of employees and if they notice that employees are regularly receiving this overtime rate then it will be a good indicator that the employee is working too many hours.
- Annual leave entitlements remain unchanged and are as per the old ERO.
- Public holidays have been greatly changed however. Under the old ERO, employees would attract double time plus 8 hours for time worked on a public holiday. However, the new ERO proposes that public holidays will be payable in line with the Organisation of Working Time act 1997 which will no doubt generate a great saving for employers and offset the increased hourly rate of pay of €10.75.
- Employers will be generally required to provide all employees with 3 days’ notice of any working roster. Whilst there is a bit of flexibility proposed in the ERO on this point, it is suggested that this may cause a lot of employers a number of headaches in trying to generate rosters this far in advance.
- The Facilities clause remains unchanged on the whole but does have an additional element requiring employers to make available a copy of the Health and Safety Risk Assessment at each site.
- The Death in Service Benefit remains unchanged in general but for the fact that it now applies to all employees up to the age the State pension becomes payable to the employee, whereas previously it was only payable up to the point that the employee turned 65.
- Like the Death in Service Benefit, the Personal Attack Benefit has also removed the 65 year age limit. Furthermore, the Personal Attack Benefit provides that “an employer shall ensure that appropriate physical and psychological support is available, on request, to any employee who has been subjected to violence as a result of carrying out his/her duties”. It is advisable that all employers seek to implement an Employee Assistance Programme within their operation to assist with obligations in this respect.
- The Sick Pay Scheme remains largely unchanged but for the fact that it now states that it is payable to full-time workers “based on a 39 hour week” and then to all part-time employees on a pro rata basis. It is suggested that the “39 hour week” figure is a bit arbitrary as it presupposes that all full-time workers will work a 39 hour week, which is not the case as some companies may have their full-time staff working less weekly hours. As such, it is suggested that greater clarity for employers would be provided if this wording was revised along the following lines: “the Scheme will apply to all employees based on a pro rata basis up to a maximum of 39 hours per week.”
- The new ERO proposes the inclusion of a specific Grievance and Disciplinary Procedure policy which should go a long way towards providing employers with a point of reference for such matters.
- It is outlined that the ERO will last for 18 months form the moment it enters into law.
Additional Observations on the Draft Security JLC/ERO In addition to the comments made above regarding Sick Pay, working rosters, and the Employee Assistance Programme, Peninsula have noted the following in respect of the proposed ERO:
- Section 1(i) of the proposed ERO refers to employers paying their employees a “composite rate of pay”. It can only be concluded that this refers to the practice whereby employers roll-up an employee’s annual public holiday and annual leave payment entitlement and discharges the same as part of an employee’s normal rate of pay. This is deemed to be a curious addition to the ERO given that the Labour Court has previously ruled that composite rates are not permitted by the Organisation of Working Time Act. As such, employers will need to thread carefully as whilst the ERO refers to this practice it does not mean that such a practice would be deemed lawful if challenged by an employee.
- Given that the ERO continues to exclude security employers/employees from the rest period provisions outlined in sections 11, 12 and 13 of the OWTA, it is suggested that the new ERO could refer to the Compensatory Rest Code of Practice in the ERO so that employers may have a reference point to turn to in respect of providing rest breaks that are “equivalent to those provided for in sections 11, 12 and 13 of the Act.”
- The addition of the Grievance and Disciplinary Procedure policy is welcomed. However, it is suggested that the ERO could also make reference to Workplace Bullying (S.I. No. 17/2002) and Harassment (S.I. No. 208 of 2012) codes of practice to reduce the likelihood of an employer incorrectly applying the Grievance code to a bullying or harassment issue.
- Given that the ERO is now proposing a higher basic rate of pay, it is suggested that they should also expressly make reference to section 14 of the Industrial Relations Act 2012 which outlines how to go about obtaining an exemption from the obligation to pay this basic rate of pay.
- Given that the ERO is proposed to last for 18 months, it is suggested that the ERO should expressly outline the steps to be taken in abolishing the agreement as by stating that it lasts for 18 months does not guarantee employers or employees that it will actually end at the 18 month date.
New Legislation to Replace REAs The Minister for Business and Employment, Gerald Nash TD, announced this week that good progress is being made on the drafting new legislation to replace the Registered Employment Agreement system (REAs). This may be met with apprehension by employers as many were glad to see the back of such agreements when they were abolished in May 2013. The REAs had a massive impact on employers during the recession by setting minimum wage levels for staff, which were seen by some as being far too high and unfeasible for an employer to sustain during such tough times. The new legislation will ensure that an order will only come into place once the Minister has approved a recommendation made by the Labour Court who will follow the guidelines set out in the new legislation. It will also allow firms in financial difficulties to apply for a temporary derogation from the obligations set out in an order and enforcement and compliance measures will be put in place consistent with the new Workplace Relations Bill. Hopefully these new provisions will put employers’ minds at ease as well as implementing a fair and transparent system for all parties. For now we will await the legislation but when it comes into play, to ensure compliance the required industries must ensure that their employment documentation is updated to reflect the mandatory terms and conditions employers will be obliged to adhere to.
