The Government recently announced its commitment to priority drafting of legislation to enhance protection for those on precarious working arrangements. In particular, it is designed to address those on low hours and insecure contracts. Such contracts are often used by employers to deal with seasonality in their business. Whilst they are an attractive proposition for some workers, for the vast majority they result in financial insecurity and uncertainty. The new proposals are designed to ensure that the law is fit for the modern workplace. It also aims to alleviate some of the hardship posed by these contracts.
In 2015 the Government commissioned the University of Limerick (UL) to conduct a report on the prevalence of zero hours, low hours contracts and their effect on employees. Following this report, the Government sought submissions from a wide range of interested stakeholders by way of a public consultation process. The responses to the public consultation process have informed the draft proposals which have now been approved by Government.
- The creation of a new right for an employee whose contract of employment does not reflect the reality of the hours worked on a regular basis over a reference period of eighteen months to request to be placed in a band of hours that reflects the actual hours worked over that reference period. An employee will be able to seek redress through the Workplace Relations Commission (the WRC) but the redress will be limited to being placed in the appropriate band of hours.
- The proposals will include reasonable defences for an employer to refuse an employee's request where:-
- The facts do not support the employees claim;
- Significant adverse changes have impacted on the business (for example the loss of an important contract);
- Emergency circumstances (for example the business has had to close due to flooding);
- Where the hours worked by the employee were due to a genuinely temporary situation (for example cover for another employee on maternity leave).
- The provisions will not apply to an employer who has entered into a banded hour arrangement through an agreement by collective bargaining with their employees.
- A prohibition on zero hours contracts except in cases of genuine casual work, or emergency cover or short term relief work.
- There will be enhanced provisions around minimum payment to be paid to low paid employees who may be called into work for a period but are not provided with work and then sent home. The proposal is to introduce a floor payment for such employees under certain circumstances. The Minister's proposals include the introduction of a new minimum floor payment of three times the national minimum wage or three times the minimum rates set down in an Employment Regulation Order (ERO) to compensate employees if they are called into work but do not receive the expected hours of work.
- The proposals also include ensuring that employees are better informed about the nature of their employment arrangements in particular their core terms at an earlier stage of the employment relationship. Currently fifteen terms of employment are required to be given by employers to employees within two months of commencement of employment. It is now proposed that employers must inform employees in writing, within five days of commencement of employment, of the following five core terms of employment.
- The full name of the employer and employee
- The address of the employer
- The expected duration of the contract (whether the contract is temporary or fixed term)
- The rate or method of calculating pay
- What the employer reasonably expects the normal length of the employee's working day and week will be
The other required terms must be given within two months of commencement of employment.
It is likely that the proposals will see further changes before they are finalised. We will monitor the progress of the Bill and will keep you updated. Employers need to be alive to the proposed changes and the more onerous obligations and restrictions that are coming down the tracks.