Employment Law Developments
Ireland’s employment law landscape lately has been primarily driven by the need to assist employers and employees steer a course through the pandemic.
Novel measures including wage supports and subsidies, the curtailment of the ability to seek redundancy during periods of lay-off and regularly updated Work Safely Protocols aimed to facilitate an efficient return to the physical workplace in line with public health guidance.
Following the January publication of the Transitional Protocol, coupled with the relaxation of the requirement for staff to work from home unless absolutely essential, the employment law outlook for 2022 is set to focus on the theme of “balance” and the implementation of measures, such as the right to disconnect and request remote working, to support the new hybrid/remote working environment envisaged by the Government’s Making Remote Work Strategy.
Other significant developments on the horizon include regulations to implement the Gender Pay Gap Information Act 2021; important updates to employee leave as well as changes to Ireland’s whistleblowing regime.
Key Themes in Employment Law
The General Scheme of the Right to Request Remote Working Bill was published in January but is undergoing pre-legislative scrutiny before enactment.
Significantly, it does not confer an automatic entitlement to work remotely. Rather this draft legislation outlines the technical procedure to be taken when making and assessing a request to work remotely.
On balance, as currently drafted, employers are afforded broad discretion to refuse such requests on the basis of subjective business concerns. A non-exhaustive list of thirteen such grounds of refusal is included in the draft. However, it is anticipated that the extent to which such reasons will be immune from scrutiny may be called into question given the reality that many employees have been successfully working remotely during the pandemic.
As currently drafted there is no facility under which an employee can interrogate the merits of a refusal to such a request. There is no scope for an employer’s assessment and final decision to be challenged or overturned by the Workplace Relations Commission (the “WRC”). Rather the WRC may only direct compliance with the employer’s procedural obligations e.g. to respond to such a request within 12 weeks of its submission.
Given that the majority of employees are now seeking some form of remote or hybrid working as the norm rather than the exception, employers must be mindful of the need to balance business needs with employee requests to ensure the recruitment and retention of staff. It is expected that a forthcoming Code of Practice will provide greater guidance to employers when assessing remote working requests.
After a number of false starts, the long awaited Gender Pay Gap Information Act was enacted in July 2021. However, regulations to provide more granular detail on the precise content and effect of these mandatory reporting obligations remains outstanding. We expect these regulations to be published in the first half of 2022.
In March 2022 the Minister for Children, Equality, Disability, Integration and Youth announced that these regulations will issue “in the coming weeks”. The Minister has advised in scope employers that they will be required to designate a specified “snapshot” date in June 2022 and report the requisite pay and bonus information by December 2022.
Briefly, employers with 250+ employees will be required to publish details of their employees’ pay and bonus to illustrate their gender pay hap. This threshold is expected to reduce to 150+ employees within 2 years of the regulations and reduce to 50+ employees within the first 3 years.
Although there is no provision within the Act for fines or compensation in connection with an employer’s disregard of the reporting obligations, the scope for adverse publicity and the potential impact on an employer’s ability to recruit and retain key talent will be key drivers to support compliance. Further, as this will be an ongoing requirement, the first year’s figures will serve as a yardstick against which an employer will effectively be benchmarked in subsequent years. Now that the government has given the outstanding regulations the “green light”, prudent employers are advised to take the above steps to prepare, in particular against the backdrop of the short lead-in time for the first year of reporting.
The Family Leave and Miscellaneous Provisions Act 2021, which came into force in April 2021, increased employees’ entitlement to parent’s leave from two to five weeks’ non-transferable leave in respect of babies born or children adopted after 1 November 2019 to be taken in the first two years after the birth or adoptive placement.
Further, adoptive parents will have greater flexibility to decide which parent will avail of adoptive leave and benefit, with paternity leave and benefit available to the parent not availing of adoptive leave.
The Protected Disclosures (Amendment) Bill 2022 was published in February and is set to finally transpose the EU's Whistleblower Protection Directive by amending the Protected Disclosures Act of 2014, albeit the transposition date has now long since passed.
- widen the scope of the categories of workers that are protected under the regime;
- expand the definition of penalisation to cover more covert acts, such as negative performance appraisals or withholding promotions;
- expand the breaches that employees may make protected disclosures in respect of; and
- create additional offences under the regime.
“This new law will give employers and workers legal clarity on remote working, which became the default for many during the pandemic"
Leo Varadkar TD, Tánaiste and Minister for Enterprise, Trade and Employment introducing the Right to Request Remote Working Bill 2021
What Drives the Gender Pay Gap? Lessons from the Uber Study
As detailed in our recent article, gender pay gap ("GPG") reporting requirements for employers with 250+ employees will finally become a reality in 2022. While the regulations to the Gender Pay Gap Information Act 2021 remain outstanding, despite the imminent "snapshot" date of June 2022 and subsequent "reporting" date of December 2022, earlier this month the Department of Children, Equality, Disability, Integration and Youth published guidance for employers. Although these publications set out the suggested approach for employers when getting to grips with the GPG metrics and outline some useful FAQs, the guidelines are only intended to provide guidance and we await the final regulations to provide the legal basis for reporting.
In the meantime, we have shifted gears and taken a closer look at a Stanford University case-study analysing the GPG among male and female Uber drivers. Studies such as this one have demonstrated that understanding the structural and inherent causes of a GPG within a particular organisation is essential to enable that employer to take the requisite and, crucially, tailored steps to remedy the gap.
Such an understanding will help identify those elements that are simply beyond even the most proactive employer’s control when actively seeking to address the gap. Getting to grips with the drivers of an individual organisation's GPG will be integral to completing the explanatory statement required to accompany the GPG figures. This detailed narrative will be vital in contextualising the existence of the GPG and necessarily inform key elements of an organisation's roadmap going forward to narrow the gap.
The Uber case study
While understanding the root causes of an employer's GPG is a "must have", as detailed in the case study below, often the true reasons for the existence of a GPG may not be particularly obvious from the outset.
A 2018 Stanford University study1 led by economists into the GPG in the gig economy produced some surprising results. The study analysed data from more than 1.8 million drivers and 740 million Uber trips in the USA. It was assumed that because the Uber app's algorithm is gender neutral, in so far as nobody actually requests a male or female driver, there shouldn't be any GPG between male and female drivers in the Uber data pool. Male and female drivers are paid the same rate regardless of tenure, seniority or gender. However, when they ran the numbers, the gap was 7%. On further scrutiny of the data, economists discovered that a number of gender related features, which were beyond the employer’s control, were driving this.
The economists identified three explanations for the existence of Uber's GPG:
- Driving locations: On average, male drivers in the data pool chose to drive in locations with a higher surge and lower wait times, and would drive in areas with higher crime rates more frequently than their female counterparts. In short, male drivers were proactively seeking out the locations where they could earn more per hour;
- Experience: Within the relevant data pool, male drivers would generally accumulate more experience by working more hours each week and were less likely to stop driving with Uber after a period of six months. As a consequence, it was taking male drivers less time to work out where and at what time the more lucrative calls are received, so, in turn, how to earn more per hour; and
- Trip completion times: Within the data pool assessed, it was determined that male drivers were completing journeys faster than their female counterparts. As a result, they were effectively more productive, could complete more journeys each day and were therefore able to collect more fares.
There were other factors relating to childcare, the hours that female drivers in the data pool were prepared to work or could work which also impacted on the existence of the GPG, but the case study publicised the conclusion that there are external factors at play.
What can employers learn from this?
A key learning point from the study is that the causes of a GPG in an organisation may not be automatically apparent. This study found that a GPG can still arise in connection with work where pay is not based on factors which have traditionally explained the gap (e.g. preferences for specific or part-time hours or direct/indirect gender discrimination). Here, the male and female drivers performed the same work, through the same platform and under non-negotiable rates, but this apparently gender neutral set up still resulted in a significant GPG.
By identifying the existence of a gap and, more importantly, understanding the drivers of that gap, employers will be significantly better equipped to take steps to address the gap going forward.
What information will be published?
Under the Irish legislation, employers will be required to publish:
- the difference between the mean and median hourly pay of male and female employees;
- the difference between the mean and median bonus pay of male and female employees;
- the difference between the mean and median hourly pay of part-time and temporary male and female employees;
- the percentage of male and female employees who received bonus pay or benefits in kind; and
- the proportions of male and female employees in the lower, lower-middle, upper-middle and upper quartile pay bands.
Unlike the reporting obligations in other jurisdictions such as the United Kingdom, in Ireland in scope employers will be obliged to publish an explanatory statement detailing, in the employer's own opinion, the reasons for the differences in gender pay/bonus. This statement will provide an invaluable opportunity for employers to contextualise the existence of the GPG and to set out their roadmap for shrinking the gap. As evidenced by the output of the Uber case study, to fully inform the content of this narrative, it will be essential for employers to drill down into the drivers of their particular GPG.
What can employers do?
The existence of a GPG is not automatically discriminatory but there is no quick fix solution. Proactive employers are advised to start looking "under the hood" within their business to fully comprehend the drivers of their respective GPG figures.
For example, employers should consider whether the identified gaps are a result of internal or external factors. As seen in the Uber study, the GPG resulted from external factors outside of the organisation's control. Identifying and fully understanding these external factors early on will be a big part of how employers communicate and objectively explain their gap, especially in cases where the gap is beyond the employer’s control and so is likely to persist over subsequent years.
It is only by understanding the root causes of an individual organisation's GPG will an employer be well placed to implement meaningful measures to address and narrow the gap as required by the reporting regulations.
This article was authored by Employment Partner Ailbhe Dennehy and Trina Dzidonu, Employment Solicitor. Please get in touch with Ailbhe or Trina, or your usual Matheson contact should you require further information in relation to the material referred to in this update. Visit our Employment, Pensions and Benefits page to stay up to date with the latest updates, articles and briefing notes.
1 “Gender Earnings Gap in the Gig Economy: Evidence From Over a Million Rideshare Drivers,” Cody Cook, Rebecca Diamond, Jonathan Hall, John A. List, Paul Oyer, January 2018, Working Paper No. 3637. Available online here.