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Zero-hour contracts are not as prevalent in Ireland

In May of this year, the Cabinet approved draft legislative proposals aimed at tackling casualisation, precarious work and low-hour contracts. The legislation is aimed at increasing the protection afforded to low-paid, vulnerable workers following a consultation process with the employee and employer representatives.

Significant progression on this issue emerged last week when the publishing of the Government’s legislative programme for autumn 2017 which stated that an Employment (Miscellaneous Provisions) Bill to address zero-hour contracts, low hour contracts, and banded hours will be included in the priority legislation in the coming months.

The proposals are mainly focused on low-paid workers and include a ban on so-called zero-hour contracts. These contracts are regarded as enabling employers to exploit employees even though minimum payments for zero-hour workers are guaranteed.

Zero-hour contracts are not as prevalent in Ireland as they are in the UK however, they did garner some publicity in 2015 when numerous Dunnes Stores workers went on strike asserting the aforementioned contracts as one of their concerns.
The European Union have also expressed concern regarding the use of such contracts calling for improved social protections in the UK for those employed under zero-hour contracts. However, in the UK the employees on zero-hour contracts have no guaranteed minimum payments which Irish employees benefit from.

New Zealand has completely banned the use of these controversial contracts in 2016. This decision seems to be carving the way for Ireland to do the same. The lack of financial stability for those employed under zero-hour contracts is the issue at the forefront of debate regarding the use of these contracts as they leave employees unsure of their income on a weekly and monthly basis. This financial instability has made it more difficult for such employees to secure loans and mortgages.

There are some minimum payments for zero-hour workers guaranteed under Section 18 of the Organisation of Working Time Act 1997, however, the guarantee is minimal. The worker is contractually obliged to make themselves available for work if their employer has hours for them. However, in the event that employer does not have any hours to give the employee, they are then only obliged to pay the employee the lesser of either 25% of the hours which the employee was to be available for or 15 hours of pay.

Speaking earlier this month at an IBEC gathering Minister Leo Varadkar stated that the Government would outlaw zero-hour contracts and prioritise the legislation to do so during this Dáil term. The text of the legislation is yet to be released by the Government but proposals include an amendment to the Organisation of Working Time Act 1997 which will prevent employers from recruiting employees on contracts where they have no entitlement to work any hours. Some exceptions will still exist in cases of genuinely casual work and emergency cover.

The proposed legislation will also benefit employees whose contract of employment does not reflect the reality of the hours worked on a consistent basis over an 18-month period as they will have the opportunity to request to be placed in an appropriate band of hours if they can show evidence of said.

The EU has also recently revealed plans to review social protection and security for flexible workers which will include those on part-time and zero-hour contracts. The prioritisation of such protection has been the result of accusations that Brussels have pursued extremely liberal policies which have been to the detriment of many workers. The European Commission’s consultation document includes proposals to review EU’s social rights and reduce growing insecurity that has been a result of new types of jobs offered by firms such as Deliveroo and Uber Impact.

The impact of the enactment of such legislation on employers will no doubt increase the regulatory burdens they already face, with employer representatives calling the proposals ‘crude’. Meave McElwee, the Director of Employer Relations in IBEC, concurs as she recently commented that such legislation would lead to significant costs and administration for employers and also called the legislation “disproportionate” as it would impact all employers. It will be interesting to see whether the legislation also bans flexible hour contracts which do not fall within the definition of zero hour contracts, in that the employee does not have to make himself available and has the choice to accept the work or reject the work offered. If this arrangement is also banned, it is likely that employers will have to revert back to engaging contractors rather than employees. It has also been suggested that the proposals may act as a deterrent to employers in allowing employees to work additional hours. This may have indirect repercussions on the employee. It is evident that reform in this area is inevitable and so employers availing of zero hour working practices should closely follow the progress of this proposed legislation.

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