Employment Contracts – Your Employer obligations.

Employers are legally obliged to provide workers with a written statement of the employment agreement (the Contract) within 5 days of the employee’s commencement date. If the full contract of employment is not finalised and ready to be issued in this period, Employers can instead issue a Day-5 Statement within the first 5 days of employment. The Day-5 statement outlines the 5 core terms of the employee’s contract;

The statement of terms must indicate the reference period being used by the Employer for the purposes of the calculation of the employee’s entitlements under the Minimum Wage Act, 2000. (Under that Act the employer may calculate the employee’s minimum wage entitlement over a reference period that is no less than one week and no greater than one month).

The statement of terms must also inform the employee that he/she has the right to ask the Employer for a written statement of his/her average hourly rate of pay for any reference period (except the current reference period) in the 12 months prior to the date of the employee’s request.

Having Contract of Employment in place can offer protection to the Company in the event of a dispute or issue arising. This document can help to safeguard the Company in the event of employee litigation or Labour Court hearings.

Reasons why you, as an Employer, need to issue a Contract of Employment:

  • It outlines the requirements of the position and the conditions the person is meant to work against.

  • It addresses the legal requirements against which all employees are protected today.

    In the event of poor performance, the Employer can refer to the contract clause and all conditions contained therein and manage the employee against such conditions.

  • The use of probationary periods is fundamental for all new employees. An example of what an employee’s rights are in the event of not having a contract in place: If the employer fails to give written details of the terms of employment, the employee can bring a complaint to a Rights Commissioner. The employee must make the complaint when in employment or within 6 months of leaving employment.

Legal Requirements

Once this has been issued, the Employer then has two months to issue the employee with their full contract of employment. This is a requirement under the Terms of Employment (Information) Act 1994 and 2001. The full statement of terms must include the following information:

Full Name

(a) the full name of employer and employee

(b) the address of the employer

(c) the place of work

(d) the title of job or nature of work

(e) the date of commencement of employment

(f) in the case of a temporary contract of employment, the expected duration of the contract or, if the contract of employment is for a fixed term, the date on which the contract expires

(g) the rate of pay or method of calculation of pay and the pay reference period for the purposes of the National Minium Wage Act, 2000

(h) that the employee may, under section 23 of the National Minimum Wage Act, 2000, request from the employer a written statement of the employee’s average hourly rate of pay for any pay reference period as provided in that section.

(i) pay intervals

(j) the terms of conditions relating to hours of work (including information on overtime and entitlements to rest breaks and rest periods as per the Organisation of Working Time Act)

(k) terms or conditions relating to paid leave (other than sick leave)

(l) terms and conditions relating to sick/injury leave and sick pay and pensions and pension schemes

(m) notice which the employee is entitled to receive and obliged to give

(n) reference to any collective agreements which directly affect the terms and conditions of the employee’s employment.

Employees Working Abroad

An Employee Working Abroad is also entitled to details of the following:

  • The period of employment outside the State

  • The currency in which they will be paid

  • Any other benefits-in-kind or cash that will be provided

  • The terms and conditions applicable on the employee’s return home

WRC Inspections

The Workplace Relations Commission (WRC) delivers unprejudiced information on employment rights legislation to employers and employees in Ireland. The WRC is charged with monitoring the employment rights of employees within the country. WRC inspectors perform various checks around the country and investigate suspected breaches of employment rights – it is important to bear in mind that a significant number of these inspection are unannounced. If the WRC finds that an employer is not complying with employment rights legislation inspectors will seek reparation from the employer on behalf of the employee. In certain circumstances prosecutions against the employer may result.

The WRC has the power to chase awards made by the Labour Court and the Rights Commissioner. In order to pass a WRC inspection; Employers must provide their employees with a contract of employment.

Here are examples of some further terms and conditions of employment that are not required by law but are highly recommended:

  • Probationary Period and Probation Policy
  • Performance related bonuses
  • Absence Management
  • Medical examination
  • Holidays, public holidays, all other forms of leave
  • Grievance and Disciplinary Procedures
  • Right to Inspect / Search
  • Retirement Age
  • Company Rules and Regulations
  • Use of Company Vehicles
  • Suspension without pay
  • Return of Company property

At The HR Company, we draft customised contracts of employment and handbooks to suit your business needs. Begin 2021 fully HR compliant. Book a Free Consultation today