The Employment Equality Act, 1998 will come into force in December of this year. This new Act replaces the Anti-Discrimination (Pay) Act, 1974 and the Employment Equality Act, 1977. Generally speaking, those statutes prohibited discrimination on grounds of sex or marital status in relation to pay and terms and conditions of employment. The new Act is much broader in its scope and outlaws discrimination on nine distinct grounds: gender, marital status, family status, sexual orientation, religious belief, age, disability, race and membership of the travelling community.

Discrimination is taken to occur when one person is treated less favourably than another on any of these grounds. Discrimination may be in the form of direct discrimination or indirect discrimination. Direct discrimination occurs where, for example, a disabled person is treated less favourably than another who is either not disabled or has a different disability. Indirect discrimination relates to conditions or practices which are neutral in their form but discriminatory in practice. For example, if an employer decides only to employ persons over 5ft 7", this would have a greater adverse impact on women than on men.

Once it is established that direct discrimination has occurred, it is unlawful. However, indirect discrimination is not unlawful if it can be objectively justified. Employers will have to ensure that they do not have practices in place which could be perceived as discriminatory. One of the major implications of the Act is that protection is not only afforded to existing staff but also to those seeking employment, so employers must ensure that in recruiting and selecting staff they do not discriminate against prospective employees. When selecting prospective members of staff, employers should note the following guidelines.

• JOB DESCRIPTION AND REQUIREMENTS: It is recommended that the job description should accurately reflect the specific duties of the job and that it does not contain unnecessary and unjustifiable conditions or requirements (for example, conditions about age).
• ADVERTISING: All advertisements should be clear and should avoid discriminatory phrases such as 'single applicants only' or 'are you free to work nights? Join our sales force'.
• APPLICATION FORMS: It is advisable that application forms should always be used when recruiting, but only those questions that are relevant and job-related should be included. No questions relating to the personal circumstances of the prospective employee should be asked, and age should not be considered unless there is a justifiable reason. All documentation received should be retained for a 12-month period.
• SHORT-LISTING: Short-listing should be organised in a systematic and consistent fashion, applying criteria that are strictly job-related and rigorously applied. There should be a standard method of recording short-listing decisions and all documentation should be retained for a 12-month period.
• REFERENCES: Specific questions in relation to the abilities and skill levels should be asked only and no comments should be required of a personal nature.
• INTERVIEWS: Interviews should be carried out in a fair, consistent and structured manner. The interview panel should have male and female members, and the areas to be covered must be determined beforehand. The questions should be objective and relevant to the job requirements and no questions of a personal nature (such as religious or political views) should be asked. Again, the documentation should be retained for a 12-month period.
• MEDICALS: If medicals are required, the questions asked should be of a neutral nature and not overly intrusive or they may be treated as discriminatory.

Treating a disabled person less favourably than a person with no disability or a different disability is one of the new discriminatory grounds listed in the Act. The word 'disability' is very comprehensively defined and it would seem to include almost any physical or psychological illness by which a person may be affected. However, it is worth noting that it does not constitute discrimination if an employer refuses to hire a disabled individual where this would give rise to costs of more than a nominal nature.

The importance of complying rigorously with the above procedures is highlighted by the powers granted to the new equality authority and to aggrieved individuals under the Act. A person who considers that he or she may have been the subject of discrimination will have the right to bring a claim for discrimination for up to six months after the alleged discrimination occurred, and this may be extended in exceptional circumstances. The aggrieved individual may also approach the employer for non-confidential information to help them bring their claim. If the employer fails to provide the information, the authorities may draw inferences from this as they deem appropriate.

The new office of Director of Equality Investigations established under the Act will operate as the main locus for redress and the investigatory powers of the director extend to entering premises in pursuit of information, interviewing people with relevant information, and securing documentary evidence. The High Court or the Circuit Court may, on the motion of the authority, grant an injunction to prevent a position being filled where the advertisement appears to be discriminatory.

Although an employer is still entitled to employ the most suitable candidate, it is clearly necessary to consider the reasons why other candidates are not being offered the position - especially if those reasons may be perceived as discriminating directly or indirectly.

For more information please contact Jennifer O'Neill.

The recent explosion of claims against auditors has brought into sharp focus the precise role of the auditor and the ways in which the exposure of auditors to potential claimants may be reduced.

In summary, the principal statutory duty imposed on auditors by the Companies Acts is to make an independent report to the shareholders of a company on the accounts prepared by the directors. This statement of the auditor's duty has been expanded by decided case law to include: forming and stating an opinion as to the financial position of the company; the detection of errors; and the detection of fraud.

The precise content of the audit task may be regulated to some extent by the contractual terms of engagement, express or implied, between the auditor and the client. Other aspects of the audit function are prescribed by the Companies Acts, and the fiduciary nature of the function may be determined by reference to decided case law.

While some protection can be afforded by putting in place letters of engagement between auditors and their clients, auditors are potentially exposed to enormous claims from their clients and third parties for negligent performance. For a number of years, the courts attempted to develop a general test for determining liability in negligence based on the proximity of the relationship between the parties and the foreseeability of damage.

The range and number of persons who may, on such an analysis, suffer loss as a result of the negligent performance of certain engagements by auditors is potentially very large. In the case of a negligent report on a company's accounts by its auditors, the range of potential claimants may include shareholders, prospective investors, banks and trade creditors who relied on the report.

More recently, the UK courts, motivated perhaps by the wish to cut down on the potential for open-ended liability, have tended to steer away from a general test for negligence applicable to all cases towards separate duties of care applicable to particular situations. In particular, in Caparo v Dickman (1991), the House of Lords rejected the imposition of a duty of care arising out of the auditing provisions of the UK Companies Act 1985, observing that the purpose of the auditor's report is to equip shareholders with sufficient knowledge to enable them to monitor the financial affairs of the company and did not extend to the provision of information to assist shareholders and others in the making of decisions concerning future investment in the company.

There have been some subsequent cases where the UK courts have admitted claims by third-party investors on foot of allegedly negligently-prepared accounts. In these cases, the factual situation has been fairly compelling insofar as the third party relied on the accounts and the auditors had clearly been aware of the element of reliance. There has been no definitive judicial consideration of an auditor's liability in negligence by the Irish courts, and it is not absolutely certain that they would follow the line adopted by the House of Lords in Caparo v Dickman.

In the last few years, the auditing profession has highlighted the peculiarly vulnerable position of auditors. In particular, they have focused on the inability of auditors to negotiate agreed liability limits or to obtain indemnities from client companies due to the position of the auditor as an officer of the company. They have also highlighted the perceived inequity of joint and several liability being imposed on auditors as co-defendants with company directors and the absence of an obligation on company directors to take out insurance in that regard. There have been calls for legislative intervention in this area, but this is unlikely in the short term.

For further information please contact Emmet Scully.

Following confirmation of Ireland's status among those member states which will proceed to introduce the euro on 1 January 1999, the Economic and Monetary Union Act, 1998 ('the Act') was enacted on 13 July 1998. The Act complements and builds on the provisions of EC Council Regulations 1103/97 and 974/98 and together this body of law will govern the process of transition from an Irish punt-based economy to a euro-based economy.

One aspect of the switch to the euro that is of particular importance is the impact that the changeover will have on company share capital. During the transition phase, which runs from 1 January 1999 to 31 December 2001, share capital may continue to be denominated in Irish pounds and pence. There is no obligation to state share capital in euros, but it is widely expected that most companies will voluntarily redenominate share capital during the transition phase rather than experience automatic conversion in 2002. The Act sets out the mechanics for the redenomination procedure.

Section 25 provides that during the transition phase the shareholders may, by ordinary resolution, determine that the authorised or issued share capital of a company which is denominated in Irish pounds be redenominated in euros, according to a fixed conversion rate. The share par value in euros shall be calculated by dividing the total redenominated amount by the total number of shares authorised or issued (as appropriate); the par values will be expressed in euro amounts which are not rounded up.

Where share capital is redenominated, the share capital and the nominal par value of shares may be further adjusted to achieve more convenient and workable values. This is known as renominalisation and under section 26 of the Act it will be possible until 30 June 2003. An ordinary resolution must be passed to authorise renominalisation, unless a decrease in share capital results, in which case a special resolution will be necessary.

For more information please contact Emmet Scully.

Over 100 Irish workers are killed each year and 3,000 seriously injured as a result of accidents at work. Indeed, it has been estimated that 11 times more production time is lost as a result of accidents than as a result of industrial action. When you add the medical costs, the rise in insurance premia, and the physical and emotional suffering it causes, you can see why health and safety at work is such an important issue.

The Safety, Health and Welfare at Work Act, 1989 ('the 1989 Act') took a radical approach to the subject, differing from previous legislation in a number of key respects. For example, the 1989 Act applies to people not premises, so there is no need to consider the definition of terms such as 'factory', 'shop' or 'office'. Furthermore, where previous legislation was limited in its application, the 1989 Act applies to all employers and employees.

The 1989 Act requires the employer to ensure, so far as is reasonably practicable, the health and safety at work of his employees and others who may be affected by his work activities (including casual workers, part-time employees, trainees and sub-contractors, and the public).

In order to protect the safety, health and welfare of employees, the employer is obliged to provide safe access to and egress from work, an emergency plan, safe plant and equipment, a safe system of work, relevant safety information, such training and supervision as is required by employees to ensure their safety, such suitable protective clothing as is required, and the use of safe articles and substances.

Perhaps one of the key elements of the 1989 Act is the obligation to formulate a safety statement. Employers (including the self-employed) are obliged to prepare a written safety statement specifying the manner in which the health, safety and welfare of all employees is to be managed. The statement must be based on an identification of hazards and an assessment of the risk to health and safety on the premises to which the statement relates.

Civil Action for Damages

In the preparation of a safety statement, it should also be borne in mind that it will be admissible in the event that an employee brings a civil action for damages for injury sustained at work. As a result, great care should be taken when preparing the safety statement, bringing it up-to-date and ensuring compliance with its terms. Employees are obliged to take reasonable care for their own safety and that of any other person who may be affected by their actions. In addition, they have duties to report to their immediate supervisor any defects which come to their attention in the place of work (which could be a risk to health and safety), to co-operate so that all relevant legal provisions are complied with within the workplace, to use all equipment provided in a safe manner, and to wear protective clothing provided by the employer.

Employees are entitled to select and appoint one of their number to act as a Safety Representative. The Safety Representative has a wide range of powers, including the power to consult with and make representations to the employer, to consult a Health and Safety Inspector on any aspect of health, safety and welfare at work and to receive advice and information from the inspector in relation to such matters.

The 1989 Act also established the Health and Safety Authority, which has overall responsibility for the administration and enforcement of health and safety at work. The authority manages a team of inspectors who have considerable powers of enforcement (for example, they may enter the premises and inspect both documents and the actual workplace). They may issue improvement notices where they are 'of the opinion' that there has been a breach of the relevant statutory provisions. They may also issue prohibition notices. It is an offence to fail to comply with an improvement or prohibition notice.

For further information contact Hugh Garvey.

Given the recent extensive publicity afforded to the Year 2000 ('Y2K') computer problem, everyone in your organisation should now be aware of the problems and risks associated with certain date changes in the months ahead. If they are not, you should take immediate steps to assess what impact Y2K will have on the business and take preventative action.

In general, Y2K compliance programs should entail a full technical audit of all date-affected equipment and an assessment of the remedial work that needs to be carried out. Whether this work should be carried out by and/or paid for by the organisation itself (or hired third-party solution providers) or by the suppliers of the equipment will depend on the contractual terms governing the supply.

You should look at the relevant documentation carefully and at the representations which were made during negotiations or as part of the sales pitch. Express terms, conditions and warranties will (subject to time, financial and other limitations) carry their due weight - but so too will certain terms implied by law into the contractual relationship, and these must be borne in mind also.

Y2K compliance will be essential for the very functioning of an organisation in the months and years ahead. This will not only be a consideration for the organisation itself, but also for third parties who do business with it:

• Trading partners will be anxious to know that your organisation is not going to suffer logistical difficulties because of equipment failure, and they may need assurances about this.
• Acquiring companies will also be seeking to understand fully the implications that Y2K will have for target businesses (due diligence carried out on a target can now be expected to involve an assessment of the Y2K position). They are likely to seek appropriate warranty protection and disclosures may have to be made.
• Auditors are also likely to ask questions about the degree of risk that Y2K presents for your organisation. They will have to assess the reliability of information supporting the directors' view of the impact that Y2K will have on the financial statements and business plans. Failure to satisfy an auditor's concerns could lead to the accounts being qualified.

The wide range of issues surrounding the Year 2000 problem could have serious implications for your organisation. Many businesses are going to have to undertake a very comprehensive compliance programme just to survive - and third parties dealing with them could also get their fingers burnt if adequate safeguards are not sought.

For further information please contact Eoin Cunneen.