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The end of zero hour contracts?

On 5th December 2017 Regina Doherty, Minister for Employment Affairs and Social Protection published the Employment (Miscellaneous Provisions) Bill 2017 (the “Bill”). This Bill apparently seeks to provide clarity and protection to employees who are employed under ‘zero-hour’ contracts. The new provisions apply to employees who have been in continuous employment for more than a month, unless otherwise specified.

Zero-Hour Contracts
The Bill is to amend the Organisation of Working Time Act by preventing employers from engaging employees on a zero-hour contact with the exception of genuinely casual work, emergency situations or short-term relief work. However, the Bill does not address the use of ‘if-and-when contracts’ being contracts that fall outside the definition of ‘zero-hour contracts’. Employees on ‘if-and-when contracts’ differ from those on zero hour contracts as they can refuse the hours offered and are not required to be ‘on call’. These type of contracts are much more prevalent than zero-hour contracts as they do not require the employer to pay 25% of hours required to be ‘on call’ if not required to work.

Banded Hours
In addition, the Bill addresses circumstances where an employee’s contract does not reflect the number of hours he/she actually works by introducing a system of banded hours. This will provide employees with the opportunity to submit a request to their employer to review their average hours for a change of band if appropriate. The request must be justified by reference to a continued 18 month period and must not be submitted before this time period has transpired. The request must be accepted within two months and the employee will be entitled to remain in the band for a minimum of 18 months. The employer can refuse a change of bands request in circumstances where the employer can provide evidence that there has been significant adverse changes to the business during the period in question, in circumstances where the average hours was a result of a temporary working situation that no longer exists or where the employer can prove there is no evidence to accept the request.

Employer obligations
The Bill requires employers to provide all employees with a written statement containing five key terms within 1 month of engagement:

  1. the full names of the employer and employee,
  2. address of the employer,
  3. the expected duration or expiry date of their employment,
  4. the method of calculating pay and
  5. the number of hours they are reasonably expected to work per day and per week.

Ten further terms must still be provided under Section 3 of the Terms of Employment (Information) Act 1994 within the normal two months of engagement. If the employer fails to provide this five term statement within one month or gives false or misleading information to the employee, the employer shall be deemed guilty of an offence with imprisonment for a term of not exceeding 12 months or a Class A fine or both. It appears from the Bill that such a prosecution can only occur within 12 months from the date of the offence.

The Bill has also introduced a minimum- floor payment to prevent the practice of employers calling in employees to work but then not providing them with any work or compensation in lieu. This payment must be in the sum of three times the National Minimum Wage or three times the minimum rate set out in an Employment Regulation Order (currently in force), whichever is greater, and must be provided to the employee on each occasion this occurs.

The Bill provides for a token protection against penalisation and the threat of penalisation. Compensation can be awarded in situations where penalisation has occurred or has been threatened to the maximum level of 4 weeks remuneration. This level of compensation is extremely limited compared to compensation for penalisation under other pieces of employment legislation. Although an employee can take a claim under the Unfair Dismissals Act if he/she is dismissed, the employees must have 12 months service and therefore employees who fail to meet this criteria are entitled to the limited compensation of 4 weeks.

There has been a lot of media hype about the anticipation of this Bill, however the Bill, as currently drafted, is not the embargo that the politicians had campaigned. Nevertheless the Bill is likely to be processed during the early months of the New Year.
For any queries, please contact Anne O’Connell Solicitors at info@aocsolicitor.ie or +353 1 2903580

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