Employment law update: What employers in Ireland need to prepare for now | Walkers

The Modern Era of Workplace Transparency: Navigating Ireland’s Employment Law Shift

The landscape of Irish employment law is undergoing a fundamental transformation. For employers, the shift is moving away from reactive management and toward a culture of proactive compliance. With new obligations surrounding pay, pensions, and equality, the risk of litigation is increasing, making strategic preparation essential.

Breaking the Silence: The EU Pay Transparency Directive

The implementation of the EU Pay Transparency Directive (EU) 2023/970 into Irish law represents a major compliance shift. The core objective is to strengthen the principle of equal pay for equal work and work of equal value.

Recruitment is where the change is most visible. Employers will soon be required to disclose initial pay or pay ranges directly in job advertisements. Recruitment processes and job titles must be gender-neutral, and the practice of asking candidates about their current remuneration or pay history will be prohibited.

One of the most significant cultural shifts is the ban on contractual pay secrecy clauses. Employees are gaining extensive new information rights, including the ability to request average pay levels by gender for comparable roles. Employers must respond to these requests within two months and provide annual notifications to staff regarding these rights.

Managing the Risk of Equal Pay Litigation

The legal burden is shifting. In equal pay claims, the burden of proof will now reside with the employer, who must demonstrate that any pay differences are objectively justified.

This shift, combined with the possibility of compensation claims including back pay without a time limit, significantly increases financial exposure. Gender pay gap reporting is expanding. Employers will need to report gaps by worker category, broken down by basic and variable pay.

The Rollout of MyFutureFund: Auto-Enrolment Pensions

A mandatory workplace retirement savings framework is now in effect via the MyFutureFund scheme. This system ensures that employees who are not already in a qualifying pension arrangement are automatically enrolled.

Who is automatically enrolled?

• Employees aged between 23 and 60.
• Those earning €20,000 or more per year across all employments (or more than €5,000 over a 13-week period).
• Those not already paying into a pension through payroll.

For those who don’t meet these specific criteria but are aged 18 to 66, the option to opt-in remains available. Employers face strict obligations to participate; failure to meet these, such as neglecting contributions, can lead to fines and prosecution.

Evolving Case Law: Compensation and Equality Trends

Recent court decisions are refining how compensation is calculated and who can claim discrimination. Employers should grab note of these evolving trends to manage their litigation risks.

In Michael Kiely v Hyph Ireland Limited, the Labour Court ruled that an employee should not be penalised for complying with a contractual non-compete clause when attempting to mitigate their loss, leading to an increased award.

Conversely, the Gary Rooney v Twitter International Unlimited Company cases show that courts are closely scrutinising how equity incentives and bonuses are treated, which in some instances has significantly reduced compensation totals.

the High Court decision in XTX Markets Technologies Limited v Aviva Investors Liquidity Fund PLC confirmed that a corporate legal person can bring a discrimination claim under the Equal Status Act, broadening the potential exposure for service providers.

Future Outlook: DEI and Flexible Work

Looking ahead, the regulatory burden on Irish employers is expected to grow. Key emerging trends include a heightened focus on Diversity, Equity, and Inclusion (DEI), the continued integration of remote and flexible working models, and potential workforce restructuring.

The recurring theme across all these changes is the demand for objective decision-making and robust documentation. Employers who prioritise transparency and early review will be best positioned to navigate these changes.

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