New Bill to tackle uncertain working conditions – an end to zero hours?
On 7 December 2017 the Government published the long awaited Employment (Miscellaneous Provisions) Bill 2017. The Bill is designed to tackle some of the difficulties caused by the increasing casualisation of work and use of zero hours' contracts. It also aims to provide greater certainty to employees with precarious working conditions. The key measures include:
- Five core terms of employment to be provided within five days of commencement of the employment relationship.
- Prohibition of zero hours except in certain limited circumstances such as emergency situations.
- Minimum floor payment to prevent the practice of calling employees in to work but not providing them with work.
- Introduction of a banded hours' provision.
- Enhanced anti-penalisation protections for employees.
No pre – legislative scrutiny was undertaken and the Bill was given priority drafting status. It is expected to be debated in the Dáil early in the New Year and we anticipate that it will progress quickly towards enactment.
The Bill arose out of a Government commissioned report from the University of Limerick on prevalence of low hours and insecure contracts in Ireland. Following the publication of the report, the Government engaged in extensive consultation with various stakeholders such as IBEC and Unions to ensure that any legislative response represented a proportionate balance between new rights created for employees with corresponding reasonable defences for employers.
A statement of core terms
Employers will be required to provide employees with a statement of their five core terms of employment within five days of commencement of employment. These terms include:
- The names of the employer and employee
- The address or principal place of business of the employer
- For temporary contracts, the expected length of it and fixed term contracts the date of expiration of it
- Their pay (including the rate or method of calculating it)
- Hours of work ( per normal working day and per normal working week
It will be an offence not to provide this information within one month. It will also be an offence if an employer provides false or misleading information in relation to the core terms. An employer found guilty of an offence shall be liable on summary conviction to a fine not exceeding €5,000 and /or imprisonment for up to twelve months. The Workplace Relations Commission (the WRC) can also issue a fixed payment notice where an inspector has reasonable grounds to believe the employer has committed an offence under this section. An employee must have one month's service to pursue a claim to the WRC for an alleged breach of this section. If an employee is successful in relation to an alleged breach of their rights, the WRC can order the employer to pay to the employee compensation as they believe is just and equitable in the circumstances but not exceeding four weeks' remuneration. There are also new anti-penalisation measures providing protection for employees who invoke their rights under this section.
Zero hours and minimum floor payment
Zero hours contracts will be prohibited except in certain limited circumstances such as where they are necessary for work done in emergency circumstances or for short term relief work to cover routine absences. Work done of a "casual nature" is also excluded from the zero hour's prohibition however this is not defined in the Bill. It is likely that clarification of what is meant by casual work will be required in the next legislative steps. A new minimum payment will be introduced for low paid workers who are called into work but subsequently sent home again without the promised work or any real compensation. If the employee has not worked at all in a particular week or has worked less than 25% of their normal contract hours they will be entitled to a minimum payment. The new minimum payment is linked to the national minimum wage. It must be three times the national minimum wage or that set down in an Employment Regulation Order (ERO) in place at a particular time. It must be provided each time it happens. Employers have a defence if the practice was unavoidable due to exceptional or emergency circumstances. "On call" employees are excluded from this payment.
There is a new right for employees whose working hours do not reflect the reality of the hours worked over a particular reference period (eighteen months) to request to be placed in a band of working hours that are a more accurate reflection of hours worked. An employer can refuse this request where it can show that:
- There is no evidence to support the claim
- There has been significant adverse changes to the business
- Where the average hours were due to a temporary working situation that no longer exists
If an employee believes that an employer has failed to put an employee in an appropriate band of hours they may bring a complaint to the WRC. The WRC can declare the complaint well founded or not depending on the case. If it is well founded, it can direct the employer to comply with this section and place the employee in an appropriate band of hours. There is no scope for the WRC to direct the employer to pay compensation for failing to comply with this section.
Enhanced anti-penalisation provisions
Stronger anti- penalisation rights for employees underpins the entire Bill. Lower paid employees are often more apprehensive about asserting their rights. The broadly drafted and enhanced anti-penalisation provisions aims to empower these employees to exercise their rights without fear of being penalised for doing so.
While the Bill is a welcome development to protect lower paid employees on precarious terms, it also imposes significant additional burdens and obligations on employers. Employers need to be aware of their increased obligations and take the necessary steps to prepare for this.
Action points for employers
- Appropriate procedures and checklists will need to be put in place to ensure that the core terms of employment are furnished within five days with the balance following within two months. Failure to comply with this requirement can expose the employer to criminal liability.
- Employers need to audit their employees and identify that if zero hours contracts are being used that it is only in the case of emergency cover or short term relief work.
- Employers should also audit those on banded hours to ensure they reflect the reality of the hours being worked to avoid the possibility of a claim before the WRC.
- Employers need to familiarise themselves with the broad scope of the anti-penalisation provisions in the Bill so as to ensure that they do not inadvertently penalise or threaten penalisation of an employee for asserting their rights.
We will provide further updates and details of the Bill as it continues its legislative passage through the Houses of the Oireachtas.
For more information please contact your usual contact on the A&L Goodbody Employment team.
Date published: 12 December 2017