Attempts to tackle Zero Hours Contracts must not lead to unnecessary and restrictive changes to employment legislation

Jan 7, 2016

Earlier this week, Chambers Ireland contributed to the public consultation by Department of Jobs, Enterprise and Innovation on the recommendations in the UL report on Zero Hours Contracts (ZHCs)[i]. Media speculation on the morning of the deadline for submissions suggested that the Minister has already made the decision to bring certain recommendations to cabinet prior to assessing the input provided during the public consultation process.The recommendations in the UL report seem to conclude that there is no issue with ZHCs in Ireland but somewhat bizarrely the authors decided to widen their own terms of reference and propose legislative changes that would affect not just those on Zero Hours or ‘If and When’ contracts but would create new employment regulations potentially applicable to all employment contracts. The findings of the report make broad assertions about the impact low hour contracts have on employees. 

Post hoc, a sense of moral outrage seems to have been imposed by unions over practices that hadn’t been highlighted as an issue by anybody in the first place.

While the findings do recognise that flexibility is an advantage for many employees as well as employers, it does not recognise that for many businesses or industries, it is not simply an advantage but a necessity.

The recommendations in the report go much further than analysing the prevalence of ZHCs, instead proposing legislative changes that would render impossible many flexible working arrangements. The report recommends that an employer gives 72 hours notice to an employee of any request to undertake any work outside of regular hours and even if an employee is willing to accept work at less than the minimum notice, the employer must pay them 150% of their standard rate. This recommendation would impact far beyond those on ‘If and When’ contracts, as it will affect those in full employment being requested to undertake overtime. Therefore, we would fear that this proposal could undermine existing contracts where overtime is expected as part of the role and is already agreed contractually.

In a further erosion of flexibility, the recommendation to introduce a minimum of 3 continuous working hours does not take into account the practicalities and realities that some sectors rely on part time work or cover work, particularly where there are times of peak and off peak demands. Short periods of working hours are common in a wide variety of roles, from home carers to university lecturers and frequently suit both parties. Establishing minimum periods for which employees must be paid regardless of whether or not they have actually worked during the period in question erodes flexibility to both employee and employer and generates significant additional costs to an employer. All these points will trickle their way into increased costs for consumers too.

We expect that the Minister will take the time to review all inputs to this public consultation before bringing his recommendations to cabinet and it is also hoped that the excessive burden that these recommendations would place on businesses will be properly assessed before any legislative changes are considered. There is a reality that many businesses, particularly small businesses, rely on flexible work patterns due to the nature of the modern economy. If an employer is unable to provide a contract with fixed hours of employment for their employees, it is generally not because they are unwilling to do so, but because of the exigencies of their industry or sector. It is most often the nature of the market within which a business is operating that determines its labour force requirements. Exchequer figures and unemployment figures released this week are extremely positive showing a strong economic recovery in Ireland, but businesses with potential to grow and hire in 2016 need certainty from Government that restrictive employment legislation will not be a barrier to future job creation.

What would have been wrong with the authors simply concluding on their terms of reference that “there’s nothing to see here” and reporting such to the Minister?

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[i] The report defines a Zero Hours Contract in the Irish context as a contract of employment which requires the employee to make themself available to work in a week: a. A certain number of hours (“the contract hours”), b. As and when the employer requires him or her to do so, c. Both a certain number of hours and otherwise as and when the employer requires him or her to do so. Section 18 of the Organisation of Working Time Act 1997, such employers are entitled to compensation of 25% of the time they were required to work or 15 hours pay, whichever is the lesser. 

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