New bill prohibits zero hour contracts

Dear Members,

We draw your attention to a New Bill published today which will prohibit zero hour contracts in most circumstances.

Employment and Social Protection Minister, Regina Doherty, T.D. publishes the Employment (Miscellaneous Provisions) Bill 2017. The Bill delivers on the commitment in the Programme for a partnership Government to tackle the problems caused by the increased casualisation of work and to strengthen the regulation of precarious work.

The Bill provides that employers must give employees five core terms of employment within five days of commencement of employment. Employers who have not provided this statement after one month will be open to prosecution. This is a new offence.  It will also be an offence for an employer to deliberately misrepresent the information required in the statement of five core terms.

  • Prohibiting zero hour contracts 
  • New minimum payment for employees called in to work but sent home again without work
  • Banded Hours provisions
  • Strong anti-penalisation provisions
  • Balanced and Proportionate Proposals

The Bill is the result of extensive consultations, including a public consultation following the University of Limerick (UL) study on zero hour contracts and low hour contracts and detailed discussions with Ibec and ICTU over a number of months.  Considerable effort has been made to ensure the proposals contained in the Bill are balanced and fair to both employees and employers.

The Minister said: “The vast majority of employers are good employers, who treat their employees well and who meet their responsibilities under employment law. These employers should have nothing to fear in this Bill. On the contrary, the Bill is aimed at tackling exploitative employment arrangements and those unscrupulous employers who do not respect even the most basic rights of employees.”

The Minister added: “We have taken care to ensure that, where we are introducing new rights for employees or strengthening existing provisions in the law, the measures are proportionate and balanced by reasonable defences for employers, recognising the challenges faced by employers in running their business or providing their service.”


Background to the Bill

The Bill is in response to the commitment in the Programme for a Partnership Government to tackle the problems caused by the increased casualisation of work and to strengthen the regulation of precarious employment.
It is the result of extensive consultations. It takes account of the public consultation carried out following the University of Limerick (UL) study on the prevalence of zero hour contracts and low hour contracts. Some 48 responses were received from a wide range of stakeholders. The responses to the public consultation contained extensive material and practical examples of the impacts of the specific legislative changes proposed by UL, which have informed the Bill approved by Government.
In addition, officials engaged in detailed discussions with Ibec and ICTU over a period of about six months. This process was very helpful in refining the draft proposals, in identifying unintended consequences and in focussing the proposals on low-paid employees.

Pre-legislative scrutiny
The draft legislation was referred to the Joint Oireachtas Committee (JOC) on Jobs Enterprise and Innovation in May for it to consider and determine if it wished to engage in pre-legislative scrutiny of the proposed Bill. The Minister of State for Employment and Small Business addressed the Joint Oireachtas Committee on the draft legislation during the course of his appearance before the Committee for pre-legislative scrutiny on the Banded Hours Contract Bill 2016 (Private Members Bill) in May this year. Separately, department officials briefed the JOC on the draft legislation on 20 June and the Committee subsequently decided not to undertake pre-legislative scrutiny.

Core Issues being addressed by the Bill
The Bill addresses a number of key issues which have been identified as being areas where current employment rights legislation can be strengthened to the benefit of employees, without imposing unnecessarily onerous burdens on employers. The key objective of the Bill is to improve the security and predictability of working hours for employees on insecure contracts and those working variable hours. The Bill addresses the following five issues:
Ensuring that workers are better informed about the nature of their employment arrangements and in particular their core terms at an early stage of their employment. Currently 15 terms of employment are required to be given by employers to employees within two months. Instead it is proposed that the following five key terms of employment must be provided within five days of starting work for that employer:
1. The full name of the employer and employee
2. The address of the employer
3. The expected duration of the contract (where the contract is temporary or fixed-term)
4. The rate or method of calculating pay
5. What the employer reasonably expects the normal length of the employee’s working day and week will be.
Other required terms of employment should be provided within the current two month period.
The Bill also provides for the creation of a new offence where an employer does not provide the proposed statement of the five core terms of employment within one month of commencement of employment.
Strengthening the sanction for non-compliance will help to promote better work practices and provide greater clarity around the essential elements of the employment relationship for both the employer and the employee.
Strengthening the provisions around minimum payments to low-paid employees who may be called in to work for a period but sent home without any or significantly less work and where they have not been paid. It is intended to introduce a floor payment for employees who are called into work and then sent home in these circumstances. For example, if an employer called six people into work and then decided only three were needed, the three sent home would be entitled to 25% of what they would have been paid for that shift but with a minimum payment of 3 x National Minimum Wage or 3 x Employment Regulation Order rate (where it applies).
Prohibiting zero hour contracts except in cases of genuine casual work or emergency cover or short-term relief work for that employer. This proposal is to avoid the contagion of an increase in zero hours practices in this jurisdiction. There will always be a need for some casual work. However, in this Bill an employer who deliberately misrepresents employees as ‘casual’ leaves itself open to being prosecuted by the WRC for providing false and misleading information.
Creating a new right for an employee, whose contract of employment does not reflect the reality of the hours worked on a consistent basis over a reference period of 18 months, to be placed in a band of hours that better reflects the actual hours worked over that reference period. This will provide greater certainty and a truer reflection of their hours of work and level of earnings, thereby addressing, in particular, difficulties employees may have accessing financial credit, including mortgages. The reference period of 18 months is considered sufficiently long to allow for the normal peaks and troughs of businesses, including those subject to seasonal fluctuations. An employee will be able to seek redress through the Workplace Relations Commission (WRC) but redress will be limited to being placed in an appropriate band of hours. Employers may refuse an employee’s request where
a. the facts do not support the employee’s claim
b. significant adverse changes have impacted on the business (e.g. loss of an important contract)
c. emergency circumstances (e.g. business has had to close due to flooding)
d. where the hours worked by the employee were due to a genuinely temporary situation (e.g. cover for another employee on maternity leave).

The provision will not apply to banded hours arrangements in employments where they have been agreed by collective bargaining.

Strengthen the anti-penalisation provisions for employees who invoke a right under this Bill.

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