Ms Rhona Murphy:

We are grateful to be invited to make submissions to the committee this morning. We will confine the submission to the matters referred to in the invitation from the committee to IBEC. They do not relate to all of IBEC's concerns on the operation of the employment rights bodies. We are feeding into the Department of Jobs, Enterprise and Innovation separately on those matters.

We have been provided by the committee with a summary of the petitioner's complaints and suggestions on the EAT. Unfortunately, it appears that the petitioner is under several misapprehensions regarding the EAT and its operation. Several of his assertions furnished to us appear to be factually incorrect and several of his suggestions for change would lead to what we perceive as a significant injustice for employers who are already struggling in the current climate. We deal with the complaints in the sequence provided in the letter we received.

In response to assertion No. 1, that the cost of bringing a complaint to the tribunal has to be paid by the complainant, that is not correct. There is no cost to bringing a complaint to the tribunal. It is free. It is also free to bring a complaint to a rights commissioner, the Labour Relations Commission, the Labour Court and the Equality Tribunal. That causes a significant problem for employers and a large waste of money for the State because many employees take frivolous and vexatious claims against their employers and then do not bother to show up to the hearing. I do not refer to the case presented by Mr. O'Sullivan but it is our general experience. It happens hundreds of times each year, especially at the rights commissioner hearings, causing enormous waste of taxpayers' money.

The jurisdiction of the EAT in unfair dismissal cases is two years' worth of the claimant's salary. In most cases, that greatly exceeds €38,000, which is the jurisdiction of the High Court. If a person wants to bring proceedings in the High Court, they must pay a fee of €138. If they want to bring proceedings in the Circuit Court, they must pay stamp duty of €68. If they want to bring proceedings to the Small Claims Court, they must pay €25. In the latter court the cap on awards is in the region of €1,000.

IBEC has consistently submitted that it should cost the same, at a minimum, to bring a claim to the EAT that it costs to bring one to the Small Claims Court. We have made representations to that effect as part of the employment rights bodies' reform consultation process initiated by the Department of Jobs, Enterprise and Innovation. The introduction of this measure would raise a small amount of money for the State and would reduce the number of frivolous claims by people who have no intention of attending a hearing. Ireland is an outlier in this regard compared with other countries. In the UK there is a proposal to introduce staggering of fees to have a hearing before the employment tribunal. To have a claim heard before the tribunal will cost £1,200 and there will be an issuing fee of £400. The fee we propose is modest but it would go some way towards reducing what we have experienced as a number of frivolous and vexatious claims, which cause an inordinate amount of trouble for an employer who still has to prepare the case, bring witnesses out of the workplace and defend the proceedings.

Assertion No. 2 is that the employer is under no obligation to pay the award. That is not the case. An employer has a legal obligation to pay an award ordered by the EAT. That obligation can be enforced through the Circuit Court, which can require interest to be paid on the award. It is similar to any other legal rights that are exercised in the courts. That is the process that is universally applied. Only a tiny number of enforcement proceedings are brought each year, because the great majority of employers comply promptly with EAT awards. The kind of case which we heard about today is very much in the minority. It is relatively rare that employees are forced to proceed to enforcement proceedings or to recover from the insolvency fund.

Assertion No. 3 is that the claimant must then pursue the employer through the courts for payment. An award by the EAT is the equivalent of a debt which the employer owes to the claimant. The only appropriate way to pursue unpaid debts is through the courts. It is the same for a contract debt or any other kind of debt.

On assertion No. 4, the need for engagement of a legal team by the claimant, neither claimants nor employers need to engage legal teams in the EAT. From my experience of it I find that where a party appears unrepresented the tribunal makes every effort to facilitate him or her in the running of the case. The EAT was designed to be "lawyer free" but many claimants and employers choose to represent themselves in proceedings. The EAT is very supportive of unrepresented parties. The procedures of the EAT are flexible, and particular flexibility is shown to unrepresented parties. From our observations based on looking at the previous annual report of the Employment Appeals Tribunal it would appear to us that legal representation is used in approximately 50% of cases. The use of legal representation is approximately the same split between employers and employees, or at least the differentiation is negligible.

The EAT also facilitates representation of claimants by trade unions, and of employers by employer organisations such as IBEC. The quality of representation is excellent and such parties do not have to pay for such representation, as it is included as part of their membership subscription. Some parties choose to retain their own legal representation at the EAT. That is their absolute right, but if they want such representation, they have to pay for it themselves.

On assertion No. 5, that there is a lack of power on the part of the tribunal to enforce its judgments, as I mentioned previously, an award by the EAT is the equivalent of a debt which the employer owes to the claimant and the only way to recover that is through the courts. In terms of the suggestion that an employer should be required to lodge a bond as security, we would fear that would be a charter for employees to bankrupt employers by lodging unlimited numbers of spurious claims. It would penalise employers before any award had been made against them. It would be completely unjust and entirely unconstitutional. Such an approach would render their work almost impossible, in particular in the difficult trading circumstances in which most employers operate at the moment.

The procedure at the EAT, Employment Appeals Tribunal, is already weighted against employers. Unlike most civil proceedings where the burden is on the plaintiff to prove his or her case, the EAT operates under a statutory requirement that employers are considered guilty until proven innocent. This arises from section 6 of the Unfair Dismissals Act 1977, which requires employer to prove that they did not unfairly dismiss the claimant.

In any case, there is already legislation in place for some time in the form of the Protection of Employees (Employers’ Insolvency) Act 1984 which protects employees in the event of the insolvency of their employer. The legislation requires that a fund be retained which guarantees payments of outstanding claims of employees in the event of insolvency. The fund, referred to as the Social Insurance Fund, is financed by employers’ and employees’ PRSI. Employees are entitled to access the fund where there is a debt owed to them arising from one or more of a range of claims specified in the Acts, including those pursued under the Unfair Dismissals Act, the Redundancy Payments Act, the Employment Equality Act, the Payment of Wages Act, the National Minimum Wage Act, the Maternity Protection Act and the Parental Leave Act.

Based on the Dáil debates at the time of the passing of the Act, the definition of insolvency was deliberately broad so as to ensure no worker would be excluded from the protection of the legislation. IBEC respectfully submits the scheme underpinned by the employers insolvency legislation provides a reliable redress mechanism to employees who find that they are otherwise unable to recover the moneys owed by their employer.

We have no opinion on the appointment of liquidators and their qualifications.