Zero hour contracts have received a great deal of media attention in both the UK and Ireland recently, and rightly so. While unemployment statistics are often cited and analysed, there is an increasing understanding of the need to look into exactly how people are employed rather than simply whether or not they have a job. It is essential to shed light on different types of contracts that are being issued to employees, not least to ensure that their rights are protected. So, what exactly is a zero hour contract?
In a nutshell, zero hour contracts are working arrangements wherein an employee must be available to work for a certain number of hours each week, yet employers do not have any obligation to give any hours to the employee. Employers, particularly those in businesses that experience seasonal highs and lows, tend to use zero hour contracts to increase flexibility and limit their commitment to employees.
While there are fewer employees on zero hour contracts in Ireland, it is estimated that a massive 1.4 million people are working on these contracts in the UK. Many employers have been criticised for taking advantage of employees by using zero hour contracts, as they offer next to no financial security for workers and can make achieving a comfortable work-life balance very difficult. In light of this, the Irish government is proposing a number of changes to the current legislation in Ireland that could impact both employees and employers. In this post I will discuss the current situation regarding zero hour contracts in Ireland, outline the Government’s proposed changes and detail their possible effects on Irish businesses.
The Current Legislation
Unlike in the UK, employees in Ireland who are on zero hour contracts are protected by the Organisation of the Working Time Act 1997. There is little more frustrating for an employee than being contractually obliged to work, yet not being given any hours. In order to protect employees on zero hour contracts falling victim to this, Section 18 of the Organisation of the Working Time Act states that an employee in this situation is entitled to be paid for 25% of the hours which they were required to be available for, or 15 hours pay – whichever one is less.
This at least ensures that employees on zero hour contracts are guaranteed a pay cheque, regardless of what hours their employer gives, or doesn’t give, them. It is important to note that Section 18 of this act does not cover ‘casual’ workers who are not contractually obliged to accept work from their employer.
What Changes Are Being Proposed?
In order to further strengthen protection for zero hour contract workers and boost their entitlements, the Irish government plans to make it illegal to hire an employee on a zero hour contract and give them no hours at all. Furthermore, in the event that a worker is called into work and does not receive the hours expected, they will get a minimum payment of three times the minimum wage or three times the rate stipulated in an Employment Regulation Order.
Finally, under the new proposals, employers will have to be much clearer about the terms of employment given to an employee. In fact, employers will be required to provide, in writing, five core terms of employment. This will include outlining how many hours the employer expects an employee to work in a given week.
How Will Employees and Employers Be Affected?
Clearly, these proposed changes are positive for employees, giving them increased financial security and more entitlements under zero hour contracts. However, employers must understand that the proposals could mean much more bureaucracy and a greater need for due diligence when it comes to employee management and drawing up contracts. Failure to properly understand and comply with any legislative changes that come into place could put employers at risk of criminal prosecution – all the more reason to keep a close eye on the status of the proposals and react accordingly.
Importantly, zero hour contracts suit certain employees and employers, especially due to their flexible nature. That being said, it is vital that businesses are transparent about the work contracts they are providing and that those contracts meet all legislative requirements. Keeping on top of changes in employment law is part and parcel of running a good, ethical business.
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In a nutshell, zero hour contracts are working arrangements wherein an employee must be available to work for a certain number of hours each week, yet employers do not have any obligation to give any hours to the employee. Employers, particularly those in businesses that experience seasonal highs and lows, tend to use zero hour contracts to increase flexibility and limit their commitment to employees.
While there are fewer employees on zero hour contracts in Ireland, it is estimated that a massive 1.4 million people are working on these contracts in the UK. Many employers have been criticised for taking advantage of employees by using zero hour contracts, as they offer next to no financial security for workers and can make achieving a comfortable work-life balance very difficult. In light of this, the Irish government is proposing a number of changes to the current legislation in Ireland that could impact both employees and employers. In this post I will discuss the current situation regarding zero hour contracts in Ireland, outline the Government’s proposed changes and detail their possible effects on Irish businesses.
The Current Legislation
Unlike in the UK, employees in Ireland who are on zero hour contracts are protected by the Organisation of the Working Time Act 1997. There is little more frustrating for an employee than being contractually obliged to work, yet not being given any hours. In order to protect employees on zero hour contracts falling victim to this, Section 18 of the Organisation of the Working Time Act states that an employee in this situation is entitled to be paid for 25% of the hours which they were required to be available for, or 15 hours pay – whichever one is less.
This at least ensures that employees on zero hour contracts are guaranteed a pay cheque, regardless of what hours their employer gives, or doesn’t give, them. It is important to note that Section 18 of this act does not cover ‘casual’ workers who are not contractually obliged to accept work from their employer.
What Changes Are Being Proposed?
In order to further strengthen protection for zero hour contract workers and boost their entitlements, the Irish government plans to make it illegal to hire an employee on a zero hour contract and give them no hours at all. Furthermore, in the event that a worker is called into work and does not receive the hours expected, they will get a minimum payment of three times the minimum wage or three times the rate stipulated in an Employment Regulation Order.
Finally, under the new proposals, employers will have to be much clearer about the terms of employment given to an employee. In fact, employers will be required to provide, in writing, five core terms of employment. This will include outlining how many hours the employer expects an employee to work in a given week.
How Will Employees and Employers Be Affected?
Clearly, these proposed changes are positive for employees, giving them increased financial security and more entitlements under zero hour contracts. However, employers must understand that the proposals could mean much more bureaucracy and a greater need for due diligence when it comes to employee management and drawing up contracts. Failure to properly understand and comply with any legislative changes that come into place could put employers at risk of criminal prosecution – all the more reason to keep a close eye on the status of the proposals and react accordingly.
Importantly, zero hour contracts suit certain employees and employers, especially due to their flexible nature. That being said, it is vital that businesses are transparent about the work contracts they are providing and that those contracts meet all legislative requirements. Keeping on top of changes in employment law is part and parcel of running a good, ethical business.
For more helpful HR tips and advice, CLICK HERE to sign up to our newsletter.
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