The Employment (Miscellaneous Provisions) Act 2018 (the ‘Act’) is not due to come into force until the first week of March. This gives employers some time to consider the changes the Act will implement, time to update working practices, policies and contracts, and time to ‘jump on the bandwagon’ (pun intended: see below).
The Act will make various changes to existing employment legislation, including the Terms of Employment (Information) Act 1994 (the ‘1994 Act’), the Organisation of Working Time Act 1997 (the ‘OWTA’), the Unfair Dismissals Act 1977 (the ‘UD Act’), the Workplace Relations Act 2015 and the National Minimum Wage Act 2000. The Act’s stated aim is to stabilise working conditions by improving the ‘security and predictability of working hours for employees on insecure contracts and those working variable hours’. The key measures included in the Act to achieve this are summarised below.
Changes to the Organisation of Working Time Act
The Act makes two significant amendments to the OWTA that will have a big impact on employers, especially those who offer flexible hours and/or zero-hour contracts. These will affect, in particular, the roster work practices operated in industries such as retail, healthcare, tourism, hospitality, education and fast food.
Prohibition of zero-hour contracts and introduction of minimum payments
Zero-hour contracts will be prohibited, except for genuine casual work, emergency cover or short-term relief absence. It remains to be seen what will be deemed as genuinely ‘casual’ for these purposes, and it is likely this will be tested through case law.
Zero-hour contracts should be distinguished from ‘if and when’ arrangements popular in the gig economy where there is only an expectation (rather than an obligation) to be available to work. These provisions will also not apply to employees who are required to make themselves available on an ‘on-call’ basis and are compensated through an on-call premium.
Employers will have to pay minimum payments to employees where they are expected to be available during a particular period and are not provided with work, or where they are called into work and sent home without completing the full period they were expected to be available. If an employer fails to provide an employee with work that amounts to at least 25% of their ordinarily required working time, the employee will be entitled to the lesser of either 25% of their hours or 15 hours. Importantly, in these instances, the minimum payment is calculated at three times the national minimum hourly rate (currently EUR 9.80).
Banded-hour contracts will now be available to employees whose actual hours do not reflect their contracted hours. This is assessed over a 12-month reference period between the date of commencement of employment and the date the individual requests to be put in a band of hours. Employees will be able to make a written request to be placed in a band of weekly working hours, based on their average number of hours worked per week. The employer must then place the employee in an appropriate band not later than four weeks from the date of request.
The bands are:
A – from three hours or more to less than six hours
B – from six 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 – 36 hours or more.
An employee placed on a band of weekly working hours will then work hours, the average of which will fall within that band, for a period of 12 months following the placement.
If an employee considers their employer has failed to place them into the correct band following a request, or that the employer has unreasonably refused their request, they can bring a complaint to the Workplace Relations Commission (‘WRC’). An adjudication officer of the WRC can order that the employee be placed in the correct band, but there is no award of compensation.
An employer may refuse to place an employee into the band requested in the following circumstances:
The Act includes anti-penalisation provisions for employees who invoke their rights under the legislation. An employee who claims to have been penalised for invoking rights under these new provisions of the OWTA can bring a claim to the WRC and be awarded compensation of up to two years’ remuneration.
Changes to Terms of Employment Act
Five core terms
Employers will be obliged to provide five core terms of employment to employees within five days of commencing employment:
This new obligation does not remove all the previous information requirements under the 1994 Act, many of which will still need to be incorporated into employment contracts and provided within two months of commencement. A practical way for employers to comply with the new obligation is to review their current offer letter and ensure the five core terms are included when issuing it to candidates. Alternatively, contracts of employment incorporating the existing information requirements under the 1994 Act and the new requirements could be issued before commencement of employment or within five days afterwards.
Employees can bring a claim to the WRC for up to four weeks’ remuneration if an employer fails to provide these core terms within five days. Failure to do so within one month is a criminal offence punishable by up to a year’s imprisonment and/or a fine of up to EUR 5,000. Where an offence is committed under the 1994 Act, liability does not stop with the employer. A director, manager, secretary or officer of the company can also face liability where they have acted with the employer’s consent or connivance.
The Act introduces anti-penalisation provisions for employees who invoke their rights under the 1994 Act. An employee who is penalised for doing so can bring a claim to the WRC and be awarded compensation of up to two years’ remuneration.
Power to subpoena
Another reform under the Act is an amendment to the UD Act to create a new power for WRC adjudication officers. They will be able, upon notice, to require a person to attend the WRC to give evidence in proceedings and to produce any document in their possession, custody or control that relates to any matter to which the proceedings relate. Such witnesses will have the same immunities and privileges as witnesses in proceedings before the High Court. If a witness fails or refuses to comply with the notice, they will commit an offence and be liable to summary conviction and a fine of up to EUR 500.
This is an interesting addition to WRC practice and procedure for two main reasons:
Any move towards greater procedural clarity, however small, is therefore welcome.
Criticism of the Act
One aspect of the Act that the Irish Business and Employers Confederation (‘IBEC’) has criticised is its over-reliance on criminal prosecution as a means of enforcing Irish employment law – a cause of considerable concern for employers, who are providing employment yet potentially exposed to the risk of custodial sentences.
This is especially unpalatable bearing in mind that many of the Act’s reforms will impact the retail and hospitality sectors. The retail sector accounts for 14% of the Irish workforce and is already struggling on the high street with competition from online shopping retailers. The hospitality sector has recently seen an increase of their VAT rate from 9% to 13.5%. Both sectors are affected by minimum wage increases and will not welcome the increased costs of wages for employees who were not required to attend work. Moreover, due to the seasonal requirements of these sectors, neither will welcome the restrictions on employers’ ability to use flexible working arrangements where to do so could attract significant payments to employees who are not ultimately required to work.
Tips for employers jumping on the bandwagon
In the time remaining before the Act commences, employers should consider the following: