The Employment (Miscellaneous Provisions) Bill will be enacted in March 2019. It will impact businesses in three areas:
- Employers will have to give employees the 5 core terms of employment in writing within 5 days of the employee commencing employment
- It will abolish zero hour contracts in most cases
- It will introduce banded hours
Written basic terms of employment – what should businesses do?
The Act requires that business must give an employee five core terms of employment in writing within five days of the employee commencing employment.
What this means in practice is that if an employee starts work on Monday, they must receive the written basic terms of employment by Friday or if they start work on Thursday they must receive it by the following Tuesday.
The five core terms for the written basic terms of employment are:
- Full name of the employer and employee
- Address or principal place of business of the employer in the State
- For temporary contracts (fixed term / specified purpose), the expected duration / expiry date
- The rate or method of calculating the employee’s remuneration and pay reference (e.g.: weekly/ monthly) for the purpose of the National Minimum Wage Act 2000
- Number of hours which the employer reasonably expects the employee to work 1) per normal working day and 2) per normal working week
It is essential that the written basic terms of employment is issued for all employment types including part time, casual, seasonal and other types of working arrangements.
The consequence of not providing the written basic terms of employment or providing a misleading contract could incur a fine of up to €5,000, a fixed payment notice and/or a custodial sentence of up to 12 months in prison. The scope of the act includes not just the business but also includes a director, manager, secretary or other officer of the company. It also refers to any person acting on behalf of the company who has the authority to issue out the written basic terms of employment. In other words, both the company and individuals acting on behalf of the company could incur one of the above penalties.
The SFA recommend you carry out the following in advance of March to ensure you meet your contractual obligations:
- Have a template contract of employment ready – SFA have sample contracts that you can avail of for permanent, temporary and casual working arrangements
- On day 1 issue the employee the contract of employment even if they are hired on a casual temporary arrangement. The act also requires employers to issue the written basic terms of employment even if an employee leaves their employment before the fifth day
- Issue contracts of employment to all employees who do not have one currently
- Where required update existing contracts of employment to ensure that the normal working day and normal working week is clearly stated in all contracts of employment
- Ensure your managers or those responsible for issuing contracts are made aware of the risks if they fail to issue out or provide misleading written basic terms of employments.
Zero hour contracts
The Employment (Miscellaneous Provisions) Bill prohibits the use of zero hour contracts and it requires that the number of weekly working hours in a contract of employment is greater than zero. Employers will not be able to use zero hour working arrangements unless:
- The work is of a casual nature
- The work is done in an emergency circumstance
- It provides short-term relief work to cover routine absences
The bill has not defined the above terms and we await to hear how these exemptions will operate in practice.
Zero hour contracts are rarely used in Ireland and this aspect of the bill may not impact many businesses. Once the bill is enacted, for those businesses that use zero hour working practices for the above reasons, will need to be aware that if an employee is called in or rostered to work but is sent home due to no available work, that business will have to give the employee a minimum payment of 3 times the national minimum wage or minimum rate set out in any applicable Employment Regulation Order.
Casual or what is commonly known as ‘if and only’ contracts are still allowed under the Employment (Miscellaneous Provisions) Bill. This type of working arrangement is where the hours of work are offered to the employee and they can accept or refuse those hours. They are not required to be available for X number of hours of work. In addition, the minimum payment requirement does not apply to casual or ‘if and only’ working arrangements. It may be more beneficial to businesses to adopt this type of working arrangement rather than be tied to a zero hour working arrangement.
It is important to note that on call arrangements do not come under the scope of the minimum payment requirement.
The Bill will allow an employee to trigger a request to be placed on a band of hours that reflects their average working hours in the previous 12 months. Employers are required to respond to these requests within 4 weeks of receiving it. The bands of weekly working hours are as follows:
Band From To
A 3 hours 6 hours
B 6 hours 11 hours
C 11 hours 16 hours
D 16 hours 21 hours
E 21 hours 26 hours
F 26 hours 31 hours
G 31 hours 36 hours
H 36 hours and over
An employer can refuse the request for banded hours where:
- There is no evidence to the support the claim
- Exceptional, unusual or unforeseeable circumstances arise
- There has been a significant impact to the business either during or after the reference period
- The average hours worked during the reference period by the employee was due to a temporary arrangement that no longer exists.
As this will have a significant impact on small businesses, the SFA will be rolling out more articles and webinars on this issue.
In the meantime if you have any specific concerns of questions please contact Helen on 01 605 1668 or at email@example.com or visit the advice section on our website.