The Employment Law (Miscellaenous) Provisions Act 2018 came onto effect on 4th March 2019. By amending the Organisation of Working Time Act 1997, this new legislation bans Zero Hours contracts. Also a Written Statement of terms must be provided to employees within five days of commencing their employment under the new Act. This statement must set out five core terms. Employers will no longer be able to require employees to be available for work without specific set hours within a contract except in very limited circumstances. If an employer fails to require an employee to work 25% of their contracted hours, the employee is entitled to a minimum payment (equivalent to 25% of the contract hours or 15 hours whichever is the lesser and calculated at three times the national minimum wage). This does not apply to employees who are required to make themselves available for ‘on-call’.
The new Act allows employees to be placed in a specific “band” of weekly hours. This is specifically for employees where their contract does not reflect the hours that they have worked in the previous twelve months. There are certain exemptions to this obligation and it will not arise where:- I. No evidence supports the claim
II. There have been significant adverse changes to the business
III. Due to exceptional circumstances or an emergency it would not be practical for the employer to comply
IV. Where the hours worked by the employee in the previous twelve months were skewed by a temporary situation which no longer exists.
The Act provides much stronger protection to employees and there are several sanctions which can be imposed on employers for breaches. For example, if an employee is not provided with the Written Statement or if they are provided with false or misleading information, the employee may bring a claim to the Workplace Relations Commission (the WRC). If successful, the employer could find themselves facing a fine of up to €5,000 or a term of imprisonment of up to twelve months. Also where the Written Statement has not been provided, an employee with at least one month’s service can apply to the WRC and may be awarded a maximum of four weeks wages as compensation.
Further, if an employer refuses an employee’s request to be placed in a specific band of weekly hours, an employee can also take this up with the WRC. The WRC can direct that the employee be placed in the correct band. There is no scope for compensation to be awarded in this instance. However, If an employee is penalised for looking to assert these new rights and makes a successful claim of penalisation to the WRC, the adjudicating officer may award compensation of up to two years remuneration (under the amended Organisation of Working Time Act) or up to four weeks remuneration (under the amended Terms of Employment (Information) Act).
On foot of this new legislation, employers should take this opportunity to review their current practices to ensure compliance. Employers should ask themselves if they have any employees with flexible working arrangements or current zero hours contracts and take corrective action immediately, otherwise they will run the risk of having to pay up to two years remuneration by way of compensation to an employee. Employers should ensure that they have systems in place to provide new employees with Written Statements within the tight five day timeframe. Existing contracts of employment should be scrutinised and those employees who frequently work in excess of their contracted weekly hours should be identified and action taken to ensure that employees’ contractual hours match up to hours actually worked on a weekly basis. Any employees currently engaged in a zero hours basis should be regularised and such arrangements should be discontinued. Accurate records should be maintained of weekly hours worked by each employee.