Employment in Financial Services

As set out in question 1, RFSPs must satisfy themselves that all CF and PCF candidates or employees comply with the F&P Standards. Due diligence must be performed, including asking the candidate to certify they will comply with the F&P Standards and notify the RFSP immediately of any change in circumstance that may mean they no longer comply.

References are required as part of the fitness and probity due diligence process performed by employers, but there is no regulator-specified reference. The only distinction between the requirements for CFs and (more senior) PCFs is that PCF candidates require Central Bank prior approval.

Absent specific legal requirements to conduct criminal background checks, medical checks and other pre-employment checks other than references and rigorous compliance with GDPR, employers are limited in terms of the scope of any such background screening in Ireland by the GDPR.

The following documents should be in place:

• written contract of employment that complies with the Terms of Employment (Information) Act 1994-2014;
• grievance and disciplinary policy;
• protected disclosures policy;
• dignity at work policy (anti-harassment and bullying prevention);
• safety statement; and
• where possible, an employee handbook that details all the statutory leave policies and other bespoke policies of the RFSP.

Evidence of due diligence for compliance with the F&P Standards and certification of compliance.

Under the new IAF and SEAR proposals, those who perform senior executive functions will also be required to have a detailed statement of responsibility and contracts of employment will need to be updated to reflect the changes.

Yes, under the minimum competency regime (see question 1), employees who wish to perform certain prescribed functions and roles must have certain competencies and qualifications.

There are also CPD requirements for some roles. CFs must certify compliance with the F&P Standards.

No. The Irish regulatory regime does not apply enhanced responsibilities to any specific role at this time. The responsibilities will be set out as a matter of contract between the employer and the employee. When the IAF and SEAR are introduced in 2023, those performing senior executive functions will be required to have detailed statements of responsibility setting out the scope of their role. Business Standards, Common Conduct Standards, and Additional Conduct Standards will be introduced and will need to be reflected in employee contractual documents.

No.

There are prescriptive, sector-specific requirements, which apply to the remuneration of specified categories of employees or directors, and which apply in the asset management, investment services, banking and insurance sectors.

Employers in these sectors are tasked with ensuring that the remuneration paid to material risk takers (individuals whose professional activities have a material impact on an RFSP's risk profile) or identified staff align with an RFSP risk profile.

There are detailed rules with technical guidance (emanating from EU law) specific to each sector, but at a high level they (to varying degrees) set out rules on variable remuneration composition, ratios or other metrics to compare variable to fixed remuneration to ensure it is appropriate; malus requirements, which would allow the RFSP to cancel or reduce the employee's variable remuneration before it is paid out; and clawback provisions which allow RFSPs to recover variable remuneration after it has been awarded.

The Central Bank's 2014 Guidelines on Variable Remuneration Arrangements for Sales Staff also emphasise the importance of remuneration structures to have sufficient deterrents built into them (such as malus and clawback mechanisms) to avoid undesired behaviour from sales staff in the banking, insurance and investment services sectors.

Yes. A CF employee, subject to the minimum competency regime, will be required to complete CPD training. Evidence of meeting that CPD requirement is also a factor in determining a person's fitness and probity. RFSPs must maintain records of CPD training provided to CFs to demonstrate compliance with the minimum competency regime.

Employers within the scope of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 - 2021 (including RFSPs) are required to provide annual training to relevant staff and directors on its requirements and the RFSP must have procedures in place to comply with that legislation and associated guidance.

Depending on the RFSP's business, additional mandatory training may be needed annually, for example, on topics such as market abuse.

The designated person for responding to protected disclosures should be trained and competent in the identification and handling of protected disclosures.

Yes there are. They are:

• the fitness and probity regime;
• the minimum competency regime; and
• with effect from next year, the new IAF (see question 1).

There are also sector-specific conduct of business requirements in legislation and codes, including the Consumer Protection Code 2012, the MiFID II regime, and other regulatory requirements applicable to RFSPs based on their industry sector that apply and deal with matters such as:

• error handling,
• disclosures to customers,
• acting in the best interests of customers; and
• complaints handling.

The Central Bank expects RFSPs to be open and transparent in their engagement, including concerning the fitness and probity regime. The F&P Guidance provides that, where an RFSP develops concerns regarding the fitness and probity of a person performing a CF role, the Central Bank should be notified of such concerns without delay. A Dear CEO Letter to RFSPs on 8 April 2019 goes further and provides a non-exhaustive list of actions that must be notified to the Central Bank, which include: issuing a formal written warning; suspension; dismissal; or a reduction of remuneration of a CF or PCF.

Yes. Concerning the prevention of wrongdoing, RFSPs should implement a written protected disclosures policy that explains the secure and confidential internal and external reporting channels available to workers who wish to report relevant wrongdoings. The anti-retaliation protection should be explained and workers should understand from the policy how a report of relevant wrongdoing will be dealt with by the RFSP.

RFSPs should ensure that they have clear, up-to-date and fully compliant policies governing:

• dignity at work (including anti-harassment and anti-bullying measures); and
• grievance and disciplinary policies.

Where possible it is important to try to resolve any outstanding issues that a PCF has or may have before the PCF's contract is terminated. An RFSP is required to give details of the circumstances of a PCF's termination of employment and to confirm whether or not there are outstanding issues regarding the PCF.

It is important to ensure that there are adequate provisions to govern the following in any settlement agreement or termination arrangements:

• adequate handover of operational responsibility;
• continued co-operation on operational matters within the employee's knowledge or in relation to matters that may subsequently be investigated by the Central Bank;
• secure return of all company property including any personal data; and
• post-termination confidentiality obligations and any other necessary post-termination restrictions.

No there are no bespoke rules that apply. Post termination restrictions in Ireland are void as being in restraint of trade unless it can be shown that the restrictions are necessary to protect an employer's legitimate proprietary interest and they are proportionate and reasonable in their scope and duration to achieve that protection[i].