The Brief

01.12.2008

The Employment Law Compliance Bill 2008

All employers are well aware of the huge volume of legislation affecting employees in the work place. Employers may also have come across NERA, the National Employment Rights Authority www.nera.ie

What employers may not be aware of is in fact NERA is about to become a very powerful force in employment compliance.
 
The government has introduced a major new piece of legislation – the Employment Law Compliance Bill 2008. This was published on 18th March and, while it was intended that the bill would become law as early as July, it has not yet progressed through the various stages of the Dail.
 
NERA
 
NERA was set up on an interim basis in 2007. Its website provides employment information. This new Employment Law Compliance Bill puts NERA on a proper statutory footing. It also establishes the office of the Director of National Employment Rights Authority and an advisory board.
 
NERA will now operate as an authority to promote, encourage and secure compliance with employment legislation. 
 
To date NERA has been successful in recovering substantial arrears due to employees in the construction industry, hotel and catering industry and is particularly focussing on employment of young persons.
 
The Director
 
The Director is charged with the running of NERA. He has substantial powers. He is obliged to co-operate with other relevant agencies. The Director also has the right to disclose information to and share information with the Garda Siochana, the Revenue Commissioners, the Director of Corporate Enforcement, the Competition Authority or any other person charged with the detection, investigation or prosecution of offences.
 
The Advisory Board
 
The advisory board is intended to be made up of representatives of employers and employees and has the purpose of advising the Director on matters relating to compliance and enforcement, the strategy of the director and its work programme. The members of the advisory board have recently been announced.
 
What does the new bill mean for employers.
 
The new bill essentially means more regulated compliance with more onerous administrative obligations and duties. Failure to comply will result in compliance notices and enforcement orders being served with prosecution where on the spot fines of €500.00, fines on indictment of €250,000 and terms of imprisonment from twelve months to three years for breaches can be imposed.  Directors of companies can be personally prosecuted. The Bill introduces 23 new criminal offences.
 
The first most significant change is that employers are obliged to display certain notices in a prominent place in the work place. These must be easily read and understood and in different languages if necessary.
 
Employers are obliged to keep detailed records for each employee for the previous three years and for two years after employee leaves.
 
NERA and its officers have extensive powers of investigation including powers to enter your premises inspect and examine your records including records held on electronic devices. NERA is carrying out inspections currently.
 
The bill also introduces “whistle blowing”. Your employees can alert NERA to suspected contraventions of employment legislation. There is built in protection against penalisation of employees who make claims or who in good faith report breaches of employment law.
 
The Director may require employers and their managers to produce documents or give evidence.
 
The Director has power to serve a compliance notice on an employer where he is of the opinion that money is due to an employee.   The compliance notice will set out the breach and require remedial action. An employer has the right to submit an objection to the notice but must do so within fourteen days from when the notice is served on him. Employers need to be careful as notices will be served on the registered address of companies which may not be the trading address. Thereafter a decision will be made by the Director from which the employer has a right to appeal to the District Court.
 
The Director also has power to apply to the High Court to make an order requiring a person to comply with provisions of employment legislation. These are new and extensive powers not previously existing in employment law.
 
What should an employer do.
 
It is absolutely imperative, given the seriousness of the penalties and particularly the fact that prosecutions can be taken against Directors of companies personally, that employers become fully aware of the provisions of the Employment Law Compliance Bill.
 
Employers should carry out a full legal audit of their work procedures, record taking and contracts of employment to ensure full compliance with the huge volume of employment law now applicable.
 
Employers should take advice as to the content and the nature of notices required.
 
Employers should put in place procedures for dealing with complaints from employees and more particularly compliance notices and enforcement notices.
 
Employers should ensure that all relevant levels of management are fully aware of the new legislation and in particular the protection for whistle blowers.
For Further Information contact Catherine ’Connor coconnor@mjoc.ie, Sean Nolan snolan@mjoc.ieor or Fiona Ormond formond@mjoc.ie

 

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