Attached is an article in this weeks Industrial Relations News - some interesting points to consider as it covers a lot of issues that people are facing at the moment.
Law will adapt to recessionary times, says senior lawyer
KYRAN FITZGERALD
The economic crisis is “much worse than the 1980s”, in that it is hitting parts of society not impacted on that occasion, according to Emer Gilvarry, managing partner of law firm, Mason Hayes & Curran.
Ms Gilvarry added that it was vital that the social partners work together to maintain industrial peace, while employers needed to stay within the law when implementing cutbacks within their organisations.
“If industrial disputes begin to happen again, it will not be good for the reputation of Ireland. Last week, we got a call (following a national strike and marches) from a company which had planned to locate seventy five jobs in Ireland, informing us that they had decided to move elsewhere.”
Ms Gilvarry, who was speaking at last week’s IRN conference, pointed out that a crisis acts as an accelerator of change. “Radical change only occurs as a result of crises.” Legislation needs to be interpreted in the light of changing circumstances. The concept of what is reasonable when change is being instituted is altered.
However, employers must be aware that while it may be reasonable to simply stand up and announce a pay cut for staff, for example, such a move is not lawful.
“It is important to stay within the law so that we do not end up trampling on peoples’ rights. Some people are taking the opportunity to vary employees’ terms and conditions, or make them redundant, without going through due process.”
Permanent job losses should be a last resort. “We should explore alternatives to redundancy.” Among these alternatives are (temporary) lay-offs and putting people on short-time. “This should be provided for by contract.”
MsGilvarry stressed that employers should engage in open and transparent consultation when reducing employees’ salaries and benefits. The Terms of the Employment Information Act, 1994-2001, requires employers to give written notice of changes.
LEAD BY EXAMPLE
Management must set an example by taking a hit. Fringe benefits should be reduced, or eliminated, including perhaps, the company car. “The relationship between employer and employee must be based on mutual trust.”
Changes in work conditions, and/or salary can be such as to constitute a fundamental breach of contract sufficient to justify an action for constructive dismissal.
Ms Gilvarry added, however, that judicial opinion on what constitutes such a fundamental breach has altered. She cited the 1984 judgment in ‘Industrial Rubber Products v Gillon’ where the Court held that a unilateral reduction in pay “even for good reason and for a relatively small amount” was a fundamental breach of the contract. “I do not believe that this (decision) would happen, now.”
While an employee “could consider resisting a pay cut, no lawyer would advise them to do so at this time.” An employee, in such circumstances, would be advised to take a payments of wages claim to a Rights Commissioner instead of resigning and claiming for constructive dismissal.
By way of summary, Ms Gilvarry advised management of “the need to stay calm, take advice, understand the partnership model and work as a partnership.”
“I do worry about the level of redundancies and the scar that is left from a societal point of view. If at all possible, one should try and keep one’s people. There are flexible ways of doing so.”