by Gráinne Carville, Solicitor in the Employment Law team at Hayes solicitors LLP
ESG has become a common part of workplace vocabulary. It is a framework that speaks to the various factors that should be considered by an organisation in decision-making processes and to ensure compliance with regulatory obligations. An ESG framework concerns environmental (E), social (S) and governance (G) factors and the impact an organisation can have on them.
An organisation’s approach to the various ESG factors is becoming more relevant to the employment relationship. Employees are giving more consideration to these and some are actively seeking to work within an organisation whose ESG culture aligns with their personal values.
What does ESG look like for an organisation from an employment perspective?
An organisation’s approach to ESG should correspond to its goals or strategy. Larger organisation’s often have defined ESG plans and ESG teams to implement the organisation’s goals or strategy. There are already certain legal obligations on particular companies, that can often touch upon the various ESG pillars.
Through the employment lens, however, it largely involves incorporating policies that capture each of the ESG pillars, which might include policies that correspond to the following:
European Union (Corporate Sustainability Reporting) Regulations 2024 (SI 336 of 2024)
The European Union (Corporate Sustainability Reporting) Regulations 2024 (the “Regulations”) transpose the Corporate Sustainability Reporting Directive (CSRD) into national law. Certain companies will be required to report on ESG matters in accordance with the European Sustainability Reporting Standards, noting the impact that they may have on climate and society. The Regulations came into effect on 6 July 2024, but they commence on a phased basis, depending on the nature and size of the relevant entity.
Equality / Diversity and Inclusion
The Employment Equality Acts provide that an employer cannot discriminate against an employee, i.e. treat them less favourably, based on the nine protected grounds: gender, civil status, family status, age, disability, sexual orientation, race, religion, and membership of the Traveller community. The Employment Equality Acts also provide that an employer must provide reasonable accommodations to employees with disabilities to assist the employee in the performance of their role.
Many employers now have a neuroinclusion policy to assist employees who identify as neurodivergent, which may include those with autism, ADHD, dyslexia or dyspraxia. Such policies may require carrying out workplace assessments to ascertain what measures the employer may take to support the employee in carrying out their role or facilitating training for all employees to understand neurodiversity.
Leave entitlements
Since the introduction of the Work Life Balance and Miscellaneous Provisions Act 2023, there are new leave entitlements, including leave for medical care purposes and domestic violence leave, that may be open to employees to take.
Working arrangements
Employees now have the right to request remote or flexible working arrangements. Employers have duties regarding their response to such requests that should be adhered to.
Gender Pay Gap Reporting & EU Pay Transparency Directive
In 2022, the Gender Pay Gap Reporting Information Act 2021 began to have practical effect in Ireland. The Gender Pay Gap Reporting Information Act 2021 largely adheres to the requirements of the EU Pay Transparency Directive. Currently, organisations with over 150 employees are requested to report their gender pay gap information.
The EU Pay Transparency Directive came into effect on 6 June 2023, with a three-year transposition period. The reporting requirements for employers, pursuant to the Directive, begin in June 2027, but the employee headcount will determine whether a particular company is required to report by this date. The frequency of the reporting will also depend on the number of employees within the company. The EU Pay Transparency Directive prescribes the information required in the report.
Speak up / whistleblowing policies and procedures
Employers have certain obligations to their workers, pursuant to the Protected Disclosures Act 2014, and the Protected Disclosures (Amendment) Act 2022. Depending on the size and nature of the company, there may be obligations to establish and maintain an internal or external reporting mechanism to facilitate workers making protected disclosures or ‘whistleblowing’. The definition of ‘worker’ is broad and includes, but is not limited to, employees, contractors, individuals on work experience, and volunteers.
Collective bargaining
The EU Adequate Minimum Wages Directive was published on 19 October 2022. Ireland has until 15 November 2024 to transpose it into Irish law. The EU Adequate Minimum Wages Directive aims to establish a framework for the adequacy of statutory minimum wages, and it acknowledges “the right of all workers and employers to organise in local, national, and international organisations for the protection of their economic and social interests and the right to bargain collectively“, with particular emphasis on wage-setting. The EU Adequate Minimum Wages Directive imposes an obligation on Member States to promote and strengthen the capacity of the social partners to engage in collective bargaining on wage-setting, and to take appropriate measures to protect the exercise of the right to collectively bargain on wage-setting. We await the statutory instrument that transposes this into Irish law, which, when published, may include obligations on employers in relation to collective bargaining.
Wellness initiatives
Some employers are going beyond the statutory requirements and are implementing various wellness initiatives within an organisation to better aid their employees and their families. Such initiatives include offering a contribution towards private health insurance on behalf of the employee, an option to buy more annual leave, extended paid paternity leave, paid sick leave for menopause-related illnesses, and information sessions on maintaining financial health. To alleviate an employee’s stress, many employers facilitate an Employee Assistance Programme, which may include free confidential counselling for the employee.
Key takeaways
- Employers should review the organisation through an ESG lens and in the first place establish whether there are any obligations that are imposed on them due to the company’s nature or size.
- Employers can then look to introduce wellbeing policies, or neuroinclusion policies, to better facilitate their employees in the workplace, and to make the workplace more inclusive.
- As best practice ESG factors should be given due consideration by employers when reviewing their policies and workplace practices.
About the author
Gráinne Carville is a newly qualified solicitor in the Employment Law team at Hayes solicitors LLP. Since qualification, Gráinne has advised public and private clients in transactional, advisory and litigation contexts.
