As the end of a good year for Ireland Inc. draws in, there may be some choppy business and employment waters for SME’s to navigate in the year ahead. In this article, we summarise 10 of the most significant employment and HR issues to look out for in 2019.
- Brexit
The nature of Ireland’s future trading relationship with the UK post-Brexit remains unclear. Business groups north and south of the Irish border have signalled their support for the Draft UK Withdrawal Agreement which presumably they feel is adequate to establish future trade arrangements between the UK and Ireland. As the British PM is still battling to secure enough support for her agreement, the threat of a “no-deal Brexit” and an uncertain trading relationship with the UK still looms. Employers across the island of Ireland will be hoping for a smooth transition period with minimal disruption and uncertainty to protect both business and employment. If there is a Brexit-related downturn in business, employment law risks surrounding termination of employment are likely to increase.
- PAYE modernisation
From January 1st, 2019 employers will have to engage in real-time reporting of PAYE which means employee pay and deductions need to be calculated and reported as they are paid. PAYE modernisation may represent a particular challenge for rural employers with limited broadband. Revenue expects to increase its tax take by up to €50 million through PAYE modernisation. Accountancy body ACCA has called for the extra revenue to be distributed to SME employers to help with software and training costs.
- Industrial unrest
Ryanair spent much of 2018 handling industrial conflict with pilots and other staff seeking better working conditions. A three week strike by Bus Éireann workers also caused considerable transport disruption across the country. Luas operator Transdev issued cooler bags to drivers who threatened industrial action to resolve a row over packed lunches. Primary school teachers are also seeking pay equality for their junior colleagues. With a persistently high level of industrial unrest across both public and private sector employers, more disruption to key services looks likely in 2019.
- Harassment in the workplace/#MeToo
Employees in Google’s Dublin office joined their colleagues around the world recently by participating in a walkout to protest against how allegations of harassment have been dealt with by the tech giant. The walkout by Google employees reflects how movements such as #MeToo and #TimesUp together with a greater awareness of the gender pay gap are combining to put pressure on employers to adhere to their stated values. Pay inequality and discrimination are simply no longer tolerated in the contemporary workplace. Modern employees, particularly in times of low unemployment, demand a commitment from their employers to adhere to any stated values which the organisation professes to hold. This trend may represent an opportunity for employers with a strong commitment to social and environmental values to differentiate themselves in an increasingly complicated employment market.
- Employment (Miscellaneous Provisions) Bill
The Employment (Miscellaneous Provisions) Bill 2017 (the Bill) cleared all stages in both houses of the Oireachtas prior to Christmas. The new law, particularly the requirement to provide employees with 5 core terms in writing within 5 days of starting work, will have a significant impact on every employer in Ireland. The Bill is scheduled to commence on 4th March 2019 and will require employers to:
- Provide employees with 5 core terms of employment within 5 days of employment commencing. Failure to provide the written statement of core terms within one month of employment commencing will be a criminal offence.
- Stop using ‘zero hour’ contracts. This will particularly impact industries like tourism, healthcare, hospitality, etc.
- Allow employees to request to be put in a ‘band of hours’ that reflects the actual hours worked rather than the contracted hours. This will impact any employer who employs part-time or variable hours employees.
- Provide a new minimum payment to be paid to employees who are not required to work on a certain week or who work less than 25% of their weekly contractual hours in a particular week.
The introduction of criminal liability will undoubtedly concern many employers. Employers will need to review their employment practices in detail to assess the impact of the Bill on their businesses. Employers should immediately begin reviewing their employment documentation, workforce planning practices and the financial impact of new minimum payments which will need to include the minimum wage increases which came into effect on January 1st.
- Mandatory gender pay gap reporting
While it is not yet clear how exactly mandatory gender pay gap reporting will operate, it is clear that the government will take action in this area next year. As recent figures published indicate that women in Ireland are earning 13.9% less than men, employers in larger organisations should begin exploring the potential impact (if any) of mandatory gender pay gap reporting. If a large gender pay gap is revealed, it will likely attract unwanted negative publicity and/or equal pay claims.
- Family friendly progress
It was announced in the Budget that two weeks’ paid parental leave will be introduced in November 2019. An incremental increase of up to 7 weeks’ paid leave for every parent of a child under one year of age will be introduced by 2021. With a year before the introduction of this new benefit, employers should have sufficient time to make preparations. The expansion of the Affordable Childcare Scheme is also intended to allow more workers to access childcare and to encourage more people to return to work. High childcare costs and the existing structure of maternity leave which gives a far greater entitlement to mothers of new babies, reinforces the notion that women should take responsibility for childcare duties. It is only by tackling childcare costs and introducing measures like paid parental leave that men will be encouraged to share the burden of parenting young children. Interestingly, these family friendly measures may prove more effective in narrowing the gender pay gap than mandatory gender pay gap reporting.
- Mental health in the workplace
European research has found that 22 per cent of Irish workers experience stress at work either “always” or “most of the time”. Domestic research has also demonstrated that anxiety, stress and depression are the second highest causes of work-related illness in Ireland. With Ireland nearing full employment, employer organisations can differentiate themselves by offering employees an opportunity to maintain their mental and physical well-being. Employers who take the initiative and find ways to keep their workforce healthy and engaged have also been found to experience an improvement in their bottom line.
- Full employment/recruitment from abroad
Along with Brexit, Ireland’s advance towards full employment represents a second threat to the business sector. While full employment is a welcome by-product of the economic rebound, it perversely represents a risk to business as recruitment processes become drawn-out, employee turnover increases and wage inflation takes hold. Many employers are required to attract talent from abroad which presents its own difficulties, particularly for Dublin-based employers as pressures on securing accommodation show no signs of easing.
- Flexible working
As Ireland continues to develop its modern knowledge economy, it may be surprising that Irish law does not currently provide employees with the right to seek flexible work arrangements. A number of factors are combining to make employee demands for flexible work more and more inescapable. As advances in modern technology allow many workplaces to facilitate remote working, employees with young children also need the flexibility to strike a balance between work and family life. While flexible work remains at the discretion of the employer, employers can expect to receive a growing number of requests for flexible work in the short term. Putting a policy in place which sets parameters around flexible working will clarify expectations on both sides and allow employers to stand out in their efforts to attract and retain the best talent. Need advice on how to prepare your workplace for the challenges ahead in 2019? Get started by calling the Peninsula 24-hour advice line on 0818 923 923.
