International Newsletter

Ireland: Restrictions on Zero-Hour Contracts Amongst Areas Addressed by New Legislation

May 24, 2019
Ireland

The Employment (Miscellaneous Provisions) Act 2018 went into effect on March 4, 2019, having been the subject of considerable publicity by the Irish government.

The act requires employers to provide employees with a written statement of basic terms and conditions of employment within five days of starting employment and provides employees with a right to minimum payment where an employee is obligated to be available for work but is not asked to come in to work. In addition, the act prohibits the use of zero-hour contracts, save in limited circumstances, and introduces banded working hours on a statutory basis.

  1. Written Statement of Core Terms

In addition to the existing requirement to provide terms of employment within two months of an employee’s start date (normally done by issuing a contract of employment for agreement and signature), the act introduces a new requirement for an employer to provide the following basic terms in a written statement to an employee within five days of commencing employment:

  1. Full names of the employer and employee;
  2. The Address of the employer and the principle place of business or registered office;
  3. Where the contract is temporary, the duration of the contract, or if it is for a fixed term, the date on which the contract expires;
  4. The rate or method of calculation of the employee’s remuneration and pay reference period; and
  5. The number of hours per day and per week that the employer reasonably expects the employee to work.

A statement of core terms must be provided to an employee who is required to work outside Ireland for at least one month prior to his or her departure. An employer must also notify an employee of any change to these core terms within one month from the date the change takes effect.

An existing employee may request a statement of core terms from his or her employer. The employer must provide the statement of core terms within two months of the request.

  1. Zero-Hour Contracts

Zero-hour contracts require employees to be available for a certain amount of hours in a week. However, an employer is not required to provide them with any work — hence “zero hours” being guaranteed by the employer.

The act prohibits the use of zero-hour contracts, save where either the work involved is casual in nature or the employee is essential for providing coverage in emergency situations or for short-term absences.

Where zero-hour contracts are used, the employer is essentially required to guarantee at least 25 percent of the potential hours will be paid, even if not worked. This is because if an employer does not provide an employee with at least 25 percent of the working hours outlined in his or her zero-hour contract of employment, the employee is entitled to a payment for the lesser of 25 percent of his or her contracted hours or 15 hours of work. In either case, the minimum payment that an employee receives must be three times the national minimum wage, which is currently €9.80.

An employee shall not be entitled to such a payment where the reason for the reduced working hours is because of:

  1. The employee being laid-off or on short-time;
  2. Exceptional or emergency circumstances outside the employer’s control; or
  3. The employee being unavailable to work due to illness or some other reason.
  1. Banded Hours

Employees will be entitled, under the act, to make a written request to their employer to be placed on a particular band of weekly working hours in cases where their employment contract does not reflect their weekly working hours. The reference period that employers must consider is the 12 months immediately preceding the date of request.

Employers may only refuse to place an employee on a band in four prescribed circumstances, where:

  1. There is no evidence to support the request;
  2. There have been significant adverse changes to the business, profession or occupation during or after the reference period;
  3. The average hours calculated during the reference period were affected by a temporary situation that no longer exists; or
  4. The employer is unable to comply due to exceptional circumstances or an emergency, the consequences of which the employer could not avoid, or the occurrence of unusual or unforeseeable circumstances outside the employer’s control.

Employers are not required to offer hours of work to an employee during a week when the employee is not expected to work or where the employer’s regular occupation, profession or trade is not being carried out.

Once an employee is placed on a band, his or her employer must, for the following 12 months, provide that employee with working hours that on average fall within that band.

  1. Penalties and Redress

An employee may bring a complaint to the Workplace Relations Commission (WRC) in cases where his or her employer breaches any of the obligations in respect to a statement of core terms as outlined above. However, an employee must have one month’s continuous service before he or she may bring any such complaint. Employees may be awarded up to four weeks’ remuneration where a complaint is upheld.

Criminal offences have also been introduced where employers:

  1. Fail without reasonable cause to provide an employee with his or her statement of core terms within one month of his or her start date; or
  2. Deliberately or recklessly provide an employee with a false or misleading statement of core terms.

Employers may be liable for a Class A fine of €5,000 or imprisonment for a term of up 12 months or both. Personal liability is also provided for company officers in certain circumstances.

Where an employee believes his or her employer has failed to place the employee on a band within four weeks from the date of request, or has unreasonably refused to place the employee on a Band, he or she may bring a complaint to the WRC.

While an Adjudication Officer of the WRC (AO) can require the employer to place the employee in the relevant band of working hours should the AO believe that a complaint is well founded, the AO may not award compensation to the employee.

Written by Aoife Gallagher-Watson and Richard Smith William Fry LLC and Roger James of Ogletree Deakins

© 2019 William Fry and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.