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Global employment briefing: Ireland, May 2013

  • Ireland
  • Employment law - HR E-Brief

23-05-2013

There have been a number of developments in the area of Irish Employment Law over recent months:

The impact of Hernandez v Vodafone on non-compete clauses

In the case of Hernandez v Vodafone, the plaintiff successfully applied for an interlocutory injunction to prohibit his former employer, Vodafone Ireland Ltd (“Vodafone”), from restraining him in new employment with a competitor, Telefonica Ireland Ltd.

The key issue related to a non-compete clause in the plaintiff’s contract which restricted him working for a competitor company within six months of termination of employment. If the clause was enforced, the plaintiff would lose over three months' salary. The judge referred to the fact that the plaintiff had two children and he would be unable to meet his family needs for that period. The judge described Vodafone’s attempt to enforce this restriction as "utterly naïve". Arising from the plaintiff’s undertaking to be bound by his non-solicitation clause and confidentiality clause, the Judge concluded that Vodafone "should have ample protection” as a result.

This decision is a clear departure from previous decisions, where a strong case of both irreparable financial and reputational loss was required to conclude that damages would not be an adequate remedy. In this case, the judge accepted that it was of crucial importance that the plaintiff had a continuing income stream to support him and his family despite the fact that his estimated loss was less than €20,000.

Although the substantive issue of whether the non-compete clause is enforceable has yet to be tried, it appears from the fact that the High Court granted the interlocutory injunction, that an employer’s ability to rely on a non-compete clause in a contract of employment may have weakened.


Expected Legislative Changes; Workplace Relations Reform

The Minister of Jobs, Enterprise and Innovation announced over a year ago that changes were to be made to the current system governing disputes in the workplace. The Minister has said that he aims to provide a simple, independent, cost effective and workable system of redress and enforcement. A number of desirable amendments were suggested in the Minister’s Reform Blueprint published last summer. Representatives from employer and employee groups have since made suggestions and recommendations based on the Blueprint and we expect a draft Bill in the coming months. We expect that the Bill will provide for the following:

• various opportunities for early resolution of disputes;

• a single body of first instance to adjudicate on all complaints, with a single appeal route, together with common time limits for lodging complaints and appeals;

• a detailed adjudication service provided by qualified decision-makers; and

• new compliance mechanisms to encourage compliance with employment law and to deal with non-compliance in a more efficient and proportionate manner.

The suggested reforms are to be welcomed as many aspects of the current system are unworkable and inefficient for both employers and employees.


For further information, please contact:

Joanne Hyde
Partner & Head of Employment Law Unit
+35 31 66 44 25 2
joannehyde@eversheds.ie

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