NERA Annual Review for 2011

The recent publication of the National Employment Right’s Authority’s 2011 review should cause more than a few employers to sit up and take note of the comings and goings of Ireland’s employment law watchdog. As a matter of reference, NERA is an Office of the Department of Jobs, Enterprise, and Innovation which aims to secure compliance with employment rights legislation in Ireland through the five main functions of Information, Inspection, Enforcement, Prosecution and the Protection of Young Persons.

1.         Employment Regulation Orders

Firstly, the review noted and acknowledged the landmark High Court decision of Mr Justice Kevin Feeney in July 2011 when he ruled that the JLC system of setting minimum pay and conditions for workers in lower-paid sectors through Employment Regulation Orders (“EROs”) was unconstitutional. Previously, NERA had enforced the provisions of these EROs but the 2011 review recognises that this is no longer the case in view of the High Court decision and the Review notes that this decision “means that employees in those sectors formerly covered by EROs … must now rely on their contracts of employment and the provisions of primary legislation for their terms and conditions of employment. As a consequence, NERA now mainly carries out inspections for compliance under the following legislation: National Minimum Wage Act, Payment of Wages Act, Organisation of Working Time Act, Protection of Young Persons Act, Employment Permits Acts and Industrial Relations Acts in respect of REAs (Registered Employment Agreements).”

2.         Employment Rights Bodies Reform

Secondly, the Review considered recent movements in the Minister Richard Bruton’s on-going reform process in Ireland’s employment rights bodies. The reform process will result in the functions of NERA, the Labour Relations Commission, the Equality Tribunal and certain (first instance) functions of the Employment Appeals Tribunal being merged together to form a single body to deal with all complaints of first instance relating to employment. Separately, the functions of the Labour Court and the appeal functions of the EAT will be drawn together to form a single body responsible for hearing all appeals that derive from the newly merged first instance body.

This reform process, while still in its infancy, has already led to certain changes within NERA such as the management of the body now falling within the remit of Mr. Kieran Mulvey, who is also the current Chairman of the Labour Relations Commission, as of the 01^st September 2011.

In addition, throughout 2011, NERA provided administrative support to the other employment rights bodies and processed 2,204 claims for the EAT and 4,008 complaint forms for the Rights Commissioners.

3.         Volume of Calls

The Annual review has highlighted that the NERA call centre provided information to over 104,000 people during 2011 which represented a decrease of over 14% on the 2010 figure of 121,435. The majority of calls concerned redundancy, working hours, terms of employment, payment of wages and unfair dismissal and the 14% reduction was attributed to the fact that the responsibility for handling calls relating to redundancy claims transferred to the Department of Social Protection.

Interestingly, the Review shows that employees and former employees accounted for 69% of callers, while an estimated 23% were employers.

4.         Online Service

In 2011 NERA received over 1.25 million hits to its website and handled almost 14,000 queries submitted through its e-form which was equivalent to the level of demand experienced in 2010.

5.         Workplace Inspections

In 2011, NERA carried out a total of 5,591 inspection cases and in doing so dealt with and interviewed over 100,000 employees. This represents a drop of 22% on the number of inspections carried out in 2010 but the amount of unpaid wages recovered for employees increased from €1,249,755 in 2010 to €1,905,262 in 2011, an increase of 34%.

The above table is interesting in terms of the volume of money being recovered for employees by NERA and it is further confirmation for Irish employers, if any was needed, on the importance of ensuring compliance with the Irish body of employment legislation. A point worth identifying is that the Review noted that only 20% of breaches found under the National Minimum Wage Act related to pay with the remaining 80% of breaches relating to record keeping and other breaches. Thus employers must be well versed on what is expected of them under the National Minimum Wage Act and it will not be sufficient to just be able to evidence that employees received €8.65 per hour. Rather disappointingly, however, the Review did not specify any details on inspections under the Payment of Wages Act and the Organisation of Working Time Act.

6.         Employment Permits

NERA is also responsible for ensuring compliance with employment permit requirements and throughout 2011 they identified that 20% of the 441 employers inspected were in breach of employment permit requirements. The summary of breaches may be broken down as follows:

Employment permits, particularly those that pertain to Romanian and Bulgarian employees, tend to be a source of great confusion for employers with many uncertain as to what is required. As such, all employers are urged to contact the Peninsula 24 hour advice line if seeking to employee a non-national in order to identify any potential employment permit requirements.

7.         Prosecutions

A key part of the NERA function is to prosecute employers for non-compliance with their employment legislation obligations. This is a measure that is only adopted once an employer has continuously refused to voluntarily enter into compliance and the table below evidences that the vast majority of employers do resolve matters before prosecution becomes necessary:

8.         Civil Enforcement of Decisions of Employment Rights Bodies by NERA

Where an employee has received an award through a Rights Commissioner, EAT or a Labour Court hearing, and the employer has failed to pay the award, NERA may bring proceedings through the Civil Courts for enforcement of the award.

9.         Annual Budget and Staff

At the end of 2011 NERA had 102 staff by comparison with 108 in 2010 and 119 in 2009. In 2011, NERA’s running cost was €6.6 million, a reduction in €300,000 from the 2010 cost of €6.9 million and its annual budget was €7.9 million in 2009 and €9.6 million in 2008.