Only three weeks to go! Sweeping employment law reforms to commence in March

Only three weeks to go! Sweeping employment law reforms to commence in March – Advice by Alan Hickey, Associate Director of Advisory at Peninsula Ireland

The Employment (Miscellaneous Provisions) Act 2018, (the Act) cleared all stages in both houses of the Oireachtas in December 2018 and has been signed into law by the President. The new law is described as one of the most significant pieces of employment legislation in a generation. The government’s key objective in drafting the Act was to improve the security and predictability of working hours for employees on insecure contracts and those working variable hours. The Act aims to achieve this objective by granting more rights and protections to employees who find themselves in less secure working arrangements.

Summary of main provisions

The Act will come into effect on the first week of March and employers should use the time between now and then to assess the impact of the new law on their work practices.

In summary, the Act will require employers to:

–    Provide employees with 5 core terms of employment within 5 days of employment commencing. Failure to provide the written statement of core terms within one month of employment commencing will be a criminal offence.

–    Stop using ‘zero hour’ contracts (unless there is a genuine requirement for a short-term relief/casual employee). This will particularly impact industries like tourism, healthcare, hospitality, etc.

–    Allow employees to request to be put in a ‘band of hours’ that reflects the actual hours worked rather than the contracted hours. This will particularly impact any employer who employs part-time or variable hours employees.

–    Provide a new minimum payment to be paid to employees who are not required to work on a certain week or who work less than 25% of their weekly contractual hours in a particular week.

Criminal liability and personal liability of directors

Employers that fail to provide the five core terms of employment within one month of employment commencing may be guilty of a criminal offence. If convicted, employers could face fines of up to €5,000 or up to 12 months’ imprisonment or both. In addition, directors, secretaries, senior managers and other officers of a corporate employer may be made individually liable for offences under the Act.

What should employers do to prepare?

Described by the Minister for Employment Affairs as a “significant once in a generation reform of our labour market”, the Act is intended to strike a “fair balance between the respective rights of employees and employers”. From the employer perspective, there is a real concern that small to medium-sized enterprises will find the increased compliance requirements difficult to comply with. The threat of criminal liability is also unlikely to incentivise start-up businesses to ramp up their employment levels. While the Act will affect all Irish-based employers, employers that rely on part-time or variable hours’ employees will be most impacted and should use the time between now and commencement of the Act to review their employment practices. Advice should be sought to query whether existing work practices comply with the new statutory requirements. If potential breaches are identified, these should be rectified before the Act comes into effect in early March.