The government is proposing to introduce legislation in response to a University of Limerick report on zero and low hours working. Ibec believes this proposed legislation is disproportionate in its impact and cost on Irish businesses.
The University of Limerick report acknowledged that there is little evidence of zero hours contracts being used in this jurisdiction and in fact, only about 2.6% of the total labour market is actually working on a constantly variable part-time basis. The report provides no breakdown indicating what percentage of these workers are happy with their current arrangements and those who would elect to work more hours/regular hours if they were available.
There are five core legislative proposals as follows:
- A requirement to give five core terms of employment on or by the fifth day of employment
- Potential criminal conviction for failure to provide the core terms
- Proposal to create a minimum floor payment and to limit the use of zero hours contracts in certain circumstances
- Create a new provision legislating for bands of hours
- Expands the prohibition on penalisation clause in the Working Time Act, 1997
Normal length of working day and week
The proposed legislation requires that the employee must be notified by the fifth day, of what the employer reasonably expects will be the length of the normal working day and the normal working week. This will prove extremely difficult if not impossible for many employers. In education, for example, while efforts are made to finalise timetables well in advance of the academic year, late CAO offers in September often present a practical challenge in setting hours with any degree of certainty. Likewise, in retail, hospitality and healthcare, given the nature of the work and the unpredictability of consumer and service user demand, employers will often not be in a position to know the length of an employee’s ‘normal’ working day and week.
Compounding the very real issues that can arise in giving that information, is the proposal to make it a criminal offence for an employer, without reasonable cause, to fail to provide the core terms, or deliberately misrepresent the information required, within one month of commencement of employment.
It is also proposed to introduce a number of ‘bands of hours’ into which all employees may be placed reflecting their average weekly working hours. These bands may apply to every employee whether full or part time, hourly paid or salaried workers. Every employer in the State may be under an obligation to determine into which band of hours an employee should be assigned and thereafter to monitor their working hours to ensure accurate records are kept for each relevant period.
An employee whose contract does not reflect the number of hours normally worked in a week, shall after the reference period of 18 months be entitled to be moved to the next higher band of hours. There are grounds for an employer to refuse a request to move to a higher band but they are limited and ultimately depend on the ability to accurately demonstrate hours worked. As any employee is entitled to request a review of their band of hours within each reference period and the employer must respond within 2 months, it is clear that the administration cost alone will be extremely burdensome for many businesses.
The proposed legislation provides for an increased minimum floor payment for each occasion a worker is called into work and then sent home. That payment will be at three times the national minimum wage - €27.75. It is further proposed to prohibit zero hours contracts, except in cases of genuine casual work or emergency cover or short-term relief for that employer. This will have serious adverse implications not just for employers in the most vulnerable sectors of society but service users, including the intellectual disability and care in the community sectors.
Overall, this is a crude piece of legislation, imposing significant cost and regulatory burden on all employers to address a problem that while very real, is also very small in the overall scale of the labour market. Ibec continues to press for a full and robust regulatory impact assessment as we believe this response is disproportionate, will undermine competitiveness, will have significant adverse consequences for employees and will deter investment and employment growth. We need to rethink an approach that penalises every employer for the poor practice of a small minority.