Down to zero

Down to zero

New law has far greater protections for ‘casual workers’

Melanie Crowley and Orla O’Leary



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In 2015, the University of Limerick delivered its Study on the Prevalence of Zero Hours Contracts Among Irish Employers and their Impact on Employees.

The report raised concerns that these forms of contracts provide little, if any, security for workers. In particular, they offer no guarantee of working hours, and reduce the ability of employees to secure loans or to plan for family life.

The Employment (Miscellaneous Provisions) Act 2018 seeks to “improve the security and predictability of working hours for employees on insecure contracts and those working variable hours”.

Down to zero

Down to zero

The new act was signed into law at the end of December 2018 and is due to come into force in March 2019.

Until now, casual working was not an area that received much attention from legislators in Ireland. There was no statutory definition of casual employment, and there were very few references to casual work in Irish employment legislation.

‘Casual worker’ was an all-encompassing colloquialism that applied to a range of atypical working-hour arrangements. The term included:

  • Those required to work without fixed hours,
  • The address of the employer in the State, or the address of the employer’s principal place of business in the State,
  • In the case of a temporary contract, the expected duration of the contract,
  • The rate/method of calculating pay, and the pay-reference period, and
  • The number of hours the employer reasonably expects the employee to work per day and per week.
  • Employers failing to comply with this obligation within one month of commencement of employment, or deliberately providing false or misleading information, are liable to a fine of up to €5,000 and/or 12 months’ imprisonment.

 

This new obligation is in addition to an employer’s existing obligation to provide employees with details of certain terms and conditions of employment, in writing, within two months of the commencement of their employment.

Zero-hour demise

Employers will no longer be allowed to provide zero-hour contracts to employees, except in cases of emergency cover or short-term relief work. However, in cases of emergency cover or short-term relief work, the requirement to furnish the core terms of employment, as outlined, still apply.

Where an employer requires an employee to remain available to work, but then does not actually require the employee to work, the employee is entitled to be paid for at least 25% of their contracted work, or 15 hours, whichever is the lesser (the guaranteed hours). This is not a new requirement, although it is restated in the 2018 act.

What has changed is that there is now a minimum payment payable to employees. There is some confusion among practitioners as to whether the minimum payment is:

(a)    The normal hourly rate for pay for each of the guaranteed hours, subject to a minimum payment of three hours (that is, a minimum payment of €29.40 – three hours x €9.80, which is the current minimum wage), or

(b)    Whether the guaranteed hours are calculated using an hourly rate of three times the national minimum wage, which for an employee entitled to 15 hours would equate to a payment of €441.00 for the week (that is, 15 x [€9.80 x 3]).

Only time will tell as to how the Workplace Relations Commission and civil courts will interpret the 2018 act. If the former interpretation is correct, then, in reality, the minimum payment will only benefit employees whose contracts of employment or comparators work less than 12 hours per week, as otherwise the 25% rule would prevail. However, if the latter interpretation is correct, then it means that employers will be required to pay at least €29.40 per guaranteed hour.

Once the 2018 act comes into force, workers on low-hour contracts who consistently work more hours than provided for in their employment contracts will be able to ask to be placed in a ‘band of hours’ that reflects the reality of the hours they have worked over the previous 12 months. 

Re-branding

Employers may refuse this re-banding in certain circumstances. These circumstances may include:

Where there have been, or will be, significant adverse changes to the business,

In emergency or unforeseeable circumstances, or

Where the hours were due to a temporary situation that no longer exists.

This new provision is entirely independent to the provision on zero-hour workers and, in reality, will affect any organisation that employs part-time workers.

Finally, the 2018 act provides for protection from penalisation for an employee who exercises their rights under the legislation.

Interns and work-experience students

One area of casual work not captured by the 2018 act, and which is still untouched in terms of regulating legislation, is that of internships and periods of ‘work experience’. As with casual work generally, there is no legal definition of an intern or work-experience candidate.

An intern or work-experience candidate will only be covered by the 2018 act to the extent that an employment relationship is created.

Usually, irrespective of the title or label attributed to an individual, an intern or an individual on work experience will be deemed to be an employee if he/she is performing work that is of value to an organisation.

Where an intern or individual on work experience is effectively shadowing another employee, and the internship or work experience is predominantly educational in nature, the intern or individual on work experience is less likely to be deemed an employee.

Contractors and self-employment

Sometimes, casual employment relationships are set-up in an attempt (usually misguided) to avoid the laws that govern the traditional employer/employee relationship. Other times, businesses seeking to keep casual workers at arm’s length, engage them as self-employed contractors.

The Workplace Relations Commission, the civil courts, the Office of the Revenue Commissioner, and the Department of Employment Affairs and Social Protection have all been very clear in their approach to attempts to mis-categorise employees as self-employed contractors.

There are a range of tests that can be applied in arriving at a determination as to the nature of a relationship. While the label attaching to a relationship will be taken into account, it is only one of several factors that will be considered in determining whether someone is an employee, or a de facto self-employed contractor.

Interestingly, one of the earlier drafts of the 2018 act included a provision to the effect that an incorrect designation of an employee as a self-employed contractor would amount to a criminal offence. The draft section contained a detailed assessment on how proper self-employment would be determined.

Ultimately, the section was removed from the bill at Seanad Committee stage, shortly before the final text of the bill was passed by both houses of the Oireachtas. The reason given for this late withdrawal was that the bill was not the appropriate place to deal with the issue of designation – so watch this space.

Developments in Britain

Although Britain has not legislated for casual working in the same way as Ireland has, there exists far more case law there dealing with the area.

Given that a great deal will depend on how the Workplace Relations Commission and the Irish civil courts interpret and enforce the 2018 act, analysing how Britain’s courts have dealt with casual working would be a useful exercise.

One of the most fundamental of these cases was Britain’s Employment Appeals Tribunal (EAT) decision in Drake v IPSOS Mori UK Ltd.

This case concerned a telephone interviewer engaged on a casual basis who sought to bring an unfair dismissal case as an employee, even though IPSOS denied that he was an employee at all.

At the outset of the relationship, he was not given any contractual documentation, he was told there was no obligation on him to accept work, and no obligation in favour of him to be provided with work. He was explicitly told he was “a worker” rather than an employee.

This is significant because Britain has certain employment law protections for ‘workers’, for which there is no Irish equivalent.

He was also told that, once he accepted an assignment, there was no obligation on him to complete the assignment. However, the EAT found that, on each occasion that Mr Drake accepted an assignment, he was effectively entering into a separate contract of employment, and there was sufficient mutuality of obligation between the parties.

On this basis, the EAT found that Drake could be considered an employee.

While the regulation of casual working will make things difficult for employers already engaging these types of workers, the 2018 act brings certainty to casual working and will provide necessary protection to workers in precarious situations.

'Employers will no longer be allowed to provide zero-hour contracts to employees, except in cases of emergency cover or short-term relief work

A potential result, too, is the possibility that casual working will become more attractive to a wider pool, given the increased regulation and more worker-friendly environment.

 

Look it up

Cases:

Legislation:

Literature:

Employment (Miscellaneous Provisions) Act 2018

>     The Employment (Miscellaneous Provisions) Act 2018 is due to come into force in March 2019

>     The act affects all employees, including casual, ‘as-and-when’ required, and low-hours employees

>     Once the ‘casual worker’ has agreed to work, the obligations under the 2018 act are triggered

>     Employees who exercise their rights under the 2018 act cannot be penalised

 

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