‘Low Hour’ & ‘Zero Hour’ Contracts

Changes Regarding These Types of Contracts

The Employment (Miscellaneous Provisions) Bill 2017 (“the Bill”) is expected to be introduced into legislation later this year, the Bill is currently at the Committee Stage. If the Bill is introduced, it will have a broad range of effects for employers, specifically in relation to “Low Hour” or “Zero Hour” contracts.

Below, we examine a number of the more topical aspects of the Bill which we expect to be of interest to employers:

1. Terms of employment

If enacted, it will be a obligation for employers to provide employees with a written statement within five days of commencement of their employment confirming the following:

  • The full names of the employer and employee;
  • The address of the employer;
  • The duration of the contract;
  • The method of calculating remuneration;
  • The hours the employee is to be expected to work per week.

From a practical point of view and in an effort to avoid the penalties under the Bill, it is recommended that all employers, in an offer letter being issued to a new employee should include the prior information. A contract of employment can then be issued within the 8-week period as provided for in the Terms of Employment (Information) Act 1994.

In the Bill’s current format, if an employer is convicted for failure to obey with the contents of the bill, they may be liable on summary conviction to a Class A (i.e. up to €5,000) fine and or a term of imprisonment not exceeding 12 months.

“Where an employer is convicted for failure to comply with the foregoing, they may be liable on summary conviction to a Class A (ie up to €5,000) fine and or a term of imprisonment not exceeding 12 months.”

2. Banded hours of work

In circumstances where the average hours that an employee is working is greater than the contracted hours per week, then in such scenarios the employee is able to, upon request move onto a higher band of hours. 12 months is the proposed reference period to be taken into account and the bands are as shown in the table.

The above is of concern to employers and is expected to have a detrimental effect on businesses. In truth it is expected that this new provision will force employers to close through quieter periods in an attempt to avoid employees gaining rights under this new provision.

The worry is that if employees gain the right to move up into a higher band then the employer may not have the financial means to meet the increased wages over the longer term. The Bill is silent on the reduction of hours when/if the hours are not available to the employee at a later date.

Band From
A 3 to 6 hours
B 6 to 11 hours
C 11 to 16 hours
D 16 to 21 hours
E 21 to 26 hours
F 26 to 31 hours
G 31 to 36 hours
H 36 hours plus

3. Employers to offer hours to part time staff

This Bill imposes a requirement on employers to offer additional hours that become available to existing part time staff. The provision in its current format in essence prevents an employer from offering such additional work to individuals who work full time. This measure clearly has a burdensome effect on how an employer can run their business. The provision is wide and also fails to address issues such as skills and training and puts unreasonable expectation on employers to provide such additional hours to staff that simply may not be trained or qualified to carry out such work. Furthermore, it is most likely that the provision will have a large impact on custom and practice within organisations. For example, in situations where it is customary that overtime is regularly worked by only full time staff, it will not be within the gift of an employer to allow full time staff to continue in this form. It will be set out in legislation that any such available hours will have to be given to part time workers where there are part time workers employed.

4. Prohibition on zero-hour contracts

The Bill imposes a strict prohibition on zero-hour contracts. If passed zero-hour contracts will only be allowed in certain circumstances which are genuinely casual in nature and in emergency cover situations. Again, the restriction is overly restrictive and may well result in employers not being able to fill casual or part time roles for fear of falling foul of the proposed legislation.

5. Conclusion

It is clear that if passed the Bill will have far reaching implications for all employers. Given the overly onerous provisions in the Bill, it is regrettable that there does not appear to have been prior discussions with employers. In the circumstances you may consider it appropriate to raise the issue with your elected representatives.

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