Terms of Employment (Information) Acts 1994 to 2014
The Bill proposes that an employer must provide a written statement of employment to a newly recruited employee within 5 days of the person’s commencement in employment. The statement must be provided even in circumstances where the employee’s employment ends before the end of the period within which the statement is required to be provided. Providing a written statement for fewer than 5 days’ employment would appear to create an administrative burden on employers which is disproportionate given the short duration of the contract/placement.
Some of the provisions proposed in section 6 of the Bill are already addressed in section 3 of the Terms of Employment (Information) Act 1994 as amended including the full names of the employer and the employee, the address of the employer in the State and the rate or method of calculation of remuneration for the purposes of the National Minimum Wage Acts 2000 to 2015.
However, some of the items listed are new, including the
“number of hours which the employer reasonably expects the employee to work –
i) per normal working day, and
ii) per normal working week.”
This replaces a more general requirement to include any terms and conditions relating to hours of work.
There is a new provision which requires a statement provided under this section which contains an error or omission to be regarded as complying with the Act
“if it is shown that the error or omission was made by way of a clerical mistake or was otherwise made accidentally or in good faith.”
Failure to provide a written statement in the terms prescribed by the Acts will result in the employer being convicted of a criminal offence, unless the employer can show “reasonable cause” for failure to do so. Similarly, any employer who deliberately provides “false or misleading information” will be guilty of an offence.
Conviction of an offence under this provision attracts a penalty of up to €5,000 fine or a custodial sentence of up to 12 months. Ibec has raised concerns in the past about the criminalisation of breaches of employment rights legislation. We remain concerned about the introduction of criminal sanctions into this piece of legislation, particularly sanctions that include a possible prison sentence. Ibec believes that this is a disproportionate response to the management of the employment relationship, particularly when there are robust enforcement mechanisms already in existence. The legislation falls within the remit of the WRC inspectorate and it is also open to any employee to pursue a civil claim before the Workplace Relations Commission. There is no evidence that these enforcement mechanisms, already in place, are in any way inadequate.
An individual operating within the employer’s organisation, including a director, manager, secretary or other officer may be convicted of an offence in their personal capacity under the legislation and may, in addition to a fine or custodial sentence, be made responsible for the costs of the investigation, detection and prosecution of the offence. This is disproportionate to the impact of a potential breach under the Bill as drafted and Ibec will be making representations to the effect that civil remedies already in existence, combined with the powers available to the WRC are more than adequate to address breaches of the Acts.
The Bill includes protections for individual employees in the event of penalisation, which is stated to mean any act or omission to the employee’s detriment. This includes suspension, lay-off or dismissal, demotion or loss of opportunity for promotion, transfer of duties, change in location, change in working hours and imposition of any discipline.
While Ibec has no issue with the introduction of deterrents against penalisation, many of the acts above may arise in the normal course of the working relationship. The Bill as drafted does not appear to include any defence for employers who may have legitimate reasons, not connected with the bringing of any claim or request for a specified band of hours, for taking action which, for now, comes within the definition of “penalisation” outlined in the Bill.
Zero hours practices
Part 3 of the Bill addresses zero hours and banded hours, creating a general prohibition of so-called “zero hours working practices”. The provisions are stated to apply to an employee whose contract of employment operates to require the employee to make themselves available for work either
i. a certain number of hours
ii. as and when the employer requires
iii. both a certain number of hours and otherwise as the employer requires.
An exemption appears to be provided where the employer has engaged the employee “to do work of a casual nature” whether or not such an arrangement was such as to give rise to a reasonable expectation on the part of the employee that they would be required by an employer to do work in a given week. The term “casual nature” is not defined, which appears to be critical in this context.
While zero hours practices have, in most circumstances, been banned, it is possible to have a contract with one single guaranteed hour of work. The Bill also grants an exemption from this provision in the case of “work done in emergency circumstances” or “short-term relief work to cover routine absences” although the extent of those exemptions and their application remains to be seen.
The remaining provisions in relation to minimum payment mainly mirror those of section 18 of the Organisation of Working Time Act 1997. A new provision requires a minimum payment calculated at three times the national minimum wage or three times the minimum hourly rate of remuneration established by an employment regulation order for the time being in force to be paid on each occasion where the employee has not been required to work.
Similar exemptions as exist in the current working time legislation remain in relation to lay-off and short-time and where emergency scenarios arise, including emergency or imminent risk of accident or other unusual and unforeseeable circumstances beyond the employer’s control, or where the employee would have been unavailable for work due to illness or for another reason.
The effect of these provisions will likely result in the continuation of the practice in Ireland that zero hours or “as and when” required contracts are rarely used. This experience was supported by the findings of the University of Limerick study “A Study on the Prevalence of Zero Hours Contracts among Irish Employers and their Impact on Employees”.
The Bill introduces a new section 18A into the Organisation of Working Time Act 1997 which provides that where an employee’s contract of employment
“does not reflect the number of hours worked per week by an employee over a reference period, the employee shall be entitled to be placed in a band of weekly working hours specified”
The relevant bands of hours are set out in a Table appended to the section (replicated below). An employee may inform their employer that they are entitled to be placed on a specific band as provided for in the Table. The employer must then, within a period of two months from the date of the request, place the employee on that band of hours. The band of weekly working hours must be determined by taking an average of the number of hours worked per week over the reference period (being a period of 18 months after the commencement of employment with the employer and immediately before the employee makes a relevant request). The description of reference period included in the draft Bill raises questions as to whether the legislation is intended to operate retrospectively.
BANDS OF WEEKLY WORKING HOURS
|A||1 hour||10 hours|
|B||11 hours||24 hours|
|C||25 hours||34 hours|
|D||35 hours and over|
The employer may refuse to place an employee on a requested band where there is no evidence to support the claim, or there have been “significant adverse changes” to the business or in the event of exceptional circumstances within the meaning of section 5 of the Organisation of Working Time Act 1997.
There is a reference in the new section 18A to exclusions for agreements which have been entered into by agreement following collective bargaining which is defined as outlined in the Industrial Relations (Amendment) Act 2015:
“… ‘collective bargaining’ comprises voluntary engagements or negotiations between any employer or employers’ organisation on the one hand and a trade union of workers or excepted body to which this Act applies on the other, with the object of reaching agreement regarding working conditions or terms of employment, or non-employment, of workers”.
Ibec is keen to ensure that Ireland’s voluntarist approach to collective bargaining is fully respected in this instance, and that companies operating a direct engagement model are similarly entitled to reach agreement with employees in relation to the matters addressed by the Bill and thus secure an exemption.
An employee who has been placed on a band from the Table provided in the Bill must work hours the average of which fall within that band for a minimum period of 18 months following that placement. That provision, outlined in section 18A(7) does not appear to provide any exemption or defence where circumstances change for the employer within that timeframe.
Where an employee believes that their employer has failed to place them on a band of hours as requested under the provisions of the legislation, they may bring a claim under the Workplace Relations Act 2015. Failure to have complied with the provisions of the legislation may result in a declaration that the complaint was well founded and the employee being placed on the relevant band. In this instance, a decision shall not order an employer to pay compensation to an employee for the employer’s failure to comply with the section. It has become the practice in other employment rights legislation to introduce compensation of up to two years’ remuneration for a breach and Ibec is pleased to note that option has not been utilised here. It would have been inappropriate and disproportionate to do so. A decision under the legislation may be appealed to the Labour Court.
Observation on exemptions
A further exemption is included at section 18A(13) which provides that
“…nothing in this section requires an employer to offer hours of work in a week where the employee was not expected to work, or require an employer to offer hours of work in a week where the employer’s regular occupation profession or trade is not being carried out.”
It remains to be seen what precisely is meant by the term “where the employee was not expected to work”.
Ibec remains very concerned at the blunt approach adopted in the draft Bill to address some nuanced issues relating to variable working hours. Based on the findings of the study published by UL in 2015 and referred to above, there is a very small proportion of the Irish workforce on variable hours contracts, and the study suggests that these arrangements are utilised only in circumstances such as healthcare, education, retail and hospitality where variations in hours are a feature of the business.
As a result of the proposals in the Bill as drafted, employers are likely to think twice before offering individuals additional hours of work for any significant duration for fear of being captured by these rigidly applied bands. It is a disincentive to provide any flexibility. Of concern too, is the fact that only an employee may make a request for assignment to a particular band of hours. No provision is included which would allow employers, on identifying that someone is in fact working fewer hours than their contract once would have required, to request that the employee be placed on a band with fewer hours. This one-sided approach to flexibility is disappointing and is becoming a feature of employment rights legislation which needs to be addressed.
Ibec will continue to make representations on the issues addressed by the draft Bill in the coming weeks. We encourage any member affected by the proposed changes to contact us with their views on how the proposals might impact their business. In the meantime, we will continue to keep members briefed on the development of the Bill.
Head of Employment Law Services, Ibec
Wednesday, 13 December 2017