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2 February 2018

Ireland: disputed Bill should put an end to zero-hours contracts

The government has presented a draft Bill that is intended to regulate small part-time jobs and other forms of precarious labour. The draft includes a ban on zero-hour contracts. The employers have reacted furiously, whilst the trade union movement sees the need for improvements.

After a long process of consultation and assessment, the government published a draft Bill that should significantly improve the employment protections for workers in less secure arrangements. According to the responsible Minister for Employment and Social Protection, the Bill is aimed at tackling exploitative employment arrangements and those unscrupulous employers who do not respect even the most basic rights of employees.

Under the current legislation (Organisation of Working Time Act 1997) a zero-hours contract is a type of employment contract where the employee is available for work but does not have specified hours of work. A zero-hours contract means there is a formal arrangement that requires the employee to be available for a certain number of hours per week, or when required, or a combination of both. The 1997 Act stipulates that an employee under a zero-hours contract who works less than 25% of their hours in any week should be compensated. The level of compensation depends on whether the employee got any work or none at all. If the employee got no work, then the compensation should be either for 25% of the possible available hours or for 15 hours, whichever is less. The 1997 Act does not apply to casual employment.

A 2015 study on the ‘Prevalence of Zero Hours Contracts’, which includes a series of recommendations, has been an important reference during the preparations of the draft legislation. The new Bill prohibits zero-hours contracts in most circumstances and requires employers to give employees five core terms of employment (for example, the name and address of the employer, their pay and their working hours) within five days of commencement of employment. Employers who have not provided this statement after one month will be subject to prosecution. This is a new offence. It will also be an offence for an employer to deliberately misrepresent the required information. The Bill prohibits zero-hours contracts except in situations of genuine casual employment and where they are essential to allow employers to provide cover in emergency situations or to cover short-term absence. All employees, including people on 'if and when' contracts will benefit from the balance of measures proposed in the Bill.

The consultation of social partners led to serious controversies. Employers’ organisations opposed the formulated proposals and called the reform ‘crude and disproportionate’ in an open letter to the government. According to employers’ organisation IBEC, the Bill would have significant adverse consequences which very few people would want. It would deprive employees and employers of the ability to make their own flexible working arrangements and to adapt to change collaboratively. This position was repeated as the final draft was published. Other industry lobbyists like Chambers Ireland came up with similar criticisms and talked about disproportionate legislation that will have significant consequences for small and seasonal businesses in particular.  

The position of the trade unions was more balanced. The Irish Congress of Trade Unions called the Bill by no means perfect, stating that it certainly required amendments. On the other hand, the ITUC saw that it represented progress, given the urgent necessity for government to address the problem of precarious work. The ITUC is less positive about the fact that the prohibition of zero-hours contracts excludes casual workers. Based on its own research, the ITUC stated that all workers should be covered by the prohibition.

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