Legislation Update – Hours of Work

The Government has approved draft legislative proposals to address problems caused by the increased casualisation of work and to strengthen the regulation of precarious work. This proposal addresses zero hour contracts, low hour contracts, banded hours and related matters which are targeted at low-paid workers in particular.

The proposal was initially suggested by Mary Mitchell O’Connor, the Minister for Jobs, Enterprise and Innovation and Pat Breen, the Minister for Employment and Small Business

This proposal addresses the issue of employees on low hour contracts who consistently work more than their contracted hours each week but whose contracts do not reflect the reality of their hours worked. The proposals also seek to ensure that employees are better informed about the nature of their employment arrangements and their core terms at an early stage in their employment. They include provisions aimed particularly at low-paid, more vulnerable workers. The proposals also include an amendment to the Organisation of Working Time Act which will prohibit zero hour contracts in most circumstances. This proposal was influenced by the University of Limerick study on zero hour contracts and low hour contracts as well as the extensive material and practical examples provided by respondents to the public consultation on that study conducted by the Department of Jobs, Enterprise and Innovation.

Minister Pat Breen TD, has said that “Developing policy proposals on employment rights is a complex matter. A balance needs to be found between protecting the rights of employees and avoiding unintended consequences on business, particularly small and medium sized businesses, which may negatively affect the competitiveness of the Irish economy. These proposals have been subject to broad consultation and represent a balanced response to the commitment in the Programme for Government to tackle problems caused by the increased casualization of work and to strengthen the regulation of precarious work. We have listened carefully to all sides to ensure that the proposals are workable in practice, while minimising the impact on businesses.” 

The draft legislation will now be referred to the Office of the Attorney General for priority drafting of a Bill. 

The draft proposal aims to address key issues which have been identified as being areas where current employment rights legislation can be strengthened to the benefit of employees and particularly low-paid, more vulnerable workers, without imposing unnecessarily onerous burdens on employers and businesses. The proposals are designed to ensure that workers are better informed about the nature of their employment arrangements and, in particular, their core terms at an early stage of their employment. 

It is proposed that employers must inform employees in writing, within 5 days of commencement of employment, of the following 5 core terms of employment: 
1. the full names of the employer and employee, 
2. the address of the employer, 
3. the expected duration of the contract (where the contract is temporary or fixed-term), 
4. the rate or method of calculating pay, and 
5. what the employer reasonably expects the normal length of the employee’s working day and week will be

Other required terms of employment should be provided within a 2-month period. 

The proposal also includes the creation of a new offence where an employer does not provide the proposed statement of the five core terms of employment within one month of commencement of employment.

The Proposal also seeks to strengthen the provisions around minimum payments to low-paid, vulnerable workers who may be called in to work for a period but not be provided with that work. It is intended to introduce a floor payment for low-paid workers who are called into work and then sent home in these circumstances. The UL study called for a minimum of three continuous working hours where an employee is required to report for work and if there is not, the employee should be paid for the three hours.

The proposal recommends prohibiting zero-hours contracts, except in cases of genuine casual work or emergency cover or short-term relief work for that employer. It is intended to delete the phrase ‘zero- hours practice’ from the title of Section 18 of the Organisation of Working Time Act 1997. The proposal will provide that an employer will no longer be able to engage an employee on a contract within the meaning of Section 18 (1)(a) or 18(1)(c) where the stated contracted hours are zero, unless it is genuinely casual work, emergency cover or short-term relief work for the employer. This proposal is to avoid the contagion of an increase in zero-hours practices in this jurisdiction. 

The proposal aims to ensure that workers on low hour contracts who consistently work more hours each week than provided for in their contract of employment, are entitled to be placed in a band of hours that reflects the reality of the hours they have worked over an extended period. The proposals provide for the creation of a new right for an employee, whose contract of employment does not reflect the reality of the hours worked on a consistent basis over a reference period of 18 months, to be placed in a band of hours that better reflects the actual hours worked over that reference period. This will provide greater certainty and a truer reflection of their hours of work and level of earnings, thereby addressing, in particular, difficulties employees may have accessing financial credit, including mortgages.