Saturday 16 February 2019

How will new rules covering zero-hour contracts affect my employees and business?

Workers who consistently work longer hours than their contracts will be placed on a band Stock image
Workers who consistently work longer hours than their contracts will be placed on a band Stock image

Caroline McEnery

Q: I recently heard a passing remark about zero-hour contracts and more protections for employees in 2019. Can you give me any more information on this as it will impact on my business?

A Most likely what you heard was in reference to The Employment (Miscellaneous Provisions) Act 2018, which was signed into law by the President on Christmas Day 2018. Employment Affairs and Social Protection Minister Regina Doherty has confirmed that the Bill will come into force from the first week of March. The Government states that the objective of the Bill is to improve the security and predictability of working hours for employees on precarious contracts.

Queries in relation to part-time employment amongst clients has risen over the last 10 years. Evidence presented recently to the departmental and parliamentary consultations has highlighted the negative effect labour laws and practices have on a number of groups, including migrants, women, young people, older people, lone parents, people with caring responsibilities, and people with disabilities. The European Commission said it was concerned that the lack of specified and secure hours of work and the provision of contracts that state hours below those actually worked lead to:

  • Insecurity of income;
  •  
  • Restrict the ability to organise family life, including child care;
  •  
  • Inhibit the ability to secure loans and mortgages.

The main provisions in the Bill are amendments to two acts, the Organisation of Working Time Act 1997 and the Terms of Employment (Information) Act 1994. These amendments cover different aspects of the employment relationship. Some of the provisions seek to address a number of the problems that can be experienced by workers who do not have a full-time contract for predictable or stable hours of work.

Potential Changes

The 2018 Act outlines the 'Prohibition of zero-hours working practices in certain circumstances and minimum payment in certain circumstances'.

The Act will also bring some strong penalties for employers which fall foul of the law, including:

Amendments to the Organisation of Working Time Act which will prohibit Zero Hour contracts in most circumstances. It is intended to delete the phrase 'zero hours practice' from the title of Section 18 of the Organisation of Working Time Act 1997.

Currently, the Terms of Employment (Information) Act 1994 generally requires that a written statement containing 16 items of information on the terms of employment be provided to a new employee within two months of the start of employment.

This Act will put an onus on an employer to inform employees in writing, within five days of commencement of employment, of the following five core terms of employment: full name of the employer and employee; address of the employer; expected duration of the contract; rate or method of calculating pay; expectation of what the normal length of the employee's working day and week will be.

The two-month obligation would continue to apply to the remaining pieces of information.

The Bill provides for a new minimum payment for low-paid workers called into work but sent home again without the promised work or any meaningful compensation.

That payment will be linked to the national minimum wage or to employment regulation orders to ensure that it is focused on those most in need of stronger protections.

The Bill will ensure that workers on low-hour contracts who consistently work more hours each week than provided for in their contracts of employment, will be entitled to be placed on a band of hours that reflects the reality of the hours they work.

The eight bands of hours should provide greater certainty and a truer reflection of their hours of work and level of earnings, addressing, in particular, difficulties employees may have accessing financial credit, including mortgages.

 

Caroline McEnery, managing director of The HR Suite is also author of The Art of Asking the Right Questions, a manager's toolkit on all HR-related tips to proactively manage your team

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