The Death Knell tolls for Zero-Hours Contracts

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Created: Thursday, July 19 2018 13:19

The Employment (Miscellaneous Provisions) Bill 2017 contains a number of proposed legislative changes, that have received diametrically opposed responses from employers and trade unions.

by Shane MacSweeney

On the one hand, trade unions herald what they see as significant improvements in workers’ rights – whereas employers groups bemoan increasing regulation and complexity in the area of casual work and warn against the unintended consequences of such changes.

The Bill is intended to provide greater certainty of working conditions for employees and will likely impact significantly on employers who use flexible or zero hours working (predominantly those in the catering, education, retail, health-care and tourism/hospitality sectors).

The provisions include:

• employers will be obliged to provide written details of core terms of employment within 5 days (a significant change from the current 2 month requirement);
• employers will be obliged to pay minimum payments where employees are called into work and sent home early (this may be as much as 3 times the minimum hourly rate that they normally receive);
• zero hours contracts will be prohibited, except for genuine casual work, emergencies or short-term relief absence;
• banded hours contracts will be available, to assist employees whose actual hours do not reflect their contracted hours.

The current proposed bands are:

A:         From 3 hours or more to less than 6 hours;

B:         From 6 hours or more to less than 11 hours;

C:         From 11 hours or more to less than 16 hours;

D:         From 16 hours or more to less than 21 hours;

E:         From 21 hours or more to less than 26 hours;

F:         From 26 hours or more to less than 31 hours

G:         From 31 hours or more to less than 36 hours;

H:         From 36 hours or more.

Employees will be entitled to request a “banded hours” contract from their employers, to be determined by reference to their average hours over a specific reference period (likely to be between 6 and 12 months). 

A highly contentious proposal is that employers will be obliged to offer available hours in the first instance, to their part-time employees.  Such a provision would place a very significant regulatory burden on employers and employers groups are resisting it strongly.

The Bill makes provision for heavy penalties for employers who fail to comply with its provisions, which include:

• Awards to employees who are not issued with core employment terms in writing, within 5 days of starting employment;
• Fines of up to €5,000;
• Anti-penalisation awards of up to two years’ salary;
• Fixed penalty notices;
• Criminal prosecution;
• Potential for personal liability for senior employees and directors, where they have consented or connived in non-compliance in respect of certain offences.

In a move that is likely to have implications to what is colloquially know as “the gig economy”, a further significant amendment to the Bill has been suggested by Fianna Fail, which would make it a criminal offence for an employer to incorrectly designate an “employee” as “self-employed” (with the resultant loss of normal employee protections such as right to minimum wage, minimum holiday/working hours entitlements etc).  

The proposed amendment would enshrine in law the relevant factors to be considered when determining whether a person is genuinely “self-employed” or an “employee”.  This could have significant implications for many modern businesses that rely on flexible working structures, from fast-food delivery drivers to taxi drivers and salesmen.  It is likely to be the subject of some hot debate (and further amendment), before the Bill becomes law. 

It is worth remembering that the Bill has not yet been passed and will continue to be debated by the Dáil, prior to the summer recess.  It is intended that its provisions will become law before the end of 2018.