Ireland Moves to Regulate Zero-Hours Contracts

Ireland Moves to Regulate Zero-Hours Contracts

The Irish government’s Department of Jobs has drafted legislation that would strictly regulate the use of zero-hour contracts, in which employers are not obliged to guarantee employees any work in a given pay period, and has referred the legislation to the Attorney General for priority drafting, Patrick Walshe, an attorney with Philip Lee in Dublin, wrote at SHRM last week. While the proposed legislation has not yet been published, Walshe points to several changes it is likely to make:

  • Employers would be obliged to provide certain information to new employees, including the expected contract duration, the manner in which pay will be calculated and what the employer reasonably expects the normal extent of the working day/week to be. It would be an offense if the employer fails to comply. Obviously, the requirement to provide information in relation to the normal extent of the work is to give an employee key information early on.
  • The legislation would propose a new minimum floor payment of three times the national minimum wage when an employee is called into work but is not actually provided with the hours expected. This is clearly designed to discourage employers from summoning employees to work for short periods.
  • Perhaps most fundamental of all, the legislation would create a new cause of action where employees could argue that their actual hours worked are not accurately reflected in their contracted hours. If there is a difference between what the contract says and what happens in practice, the employee could seek to be placed in a band of hours that is closer to the hours they actually worked.

The intention of the legislation, Walshe speculates, may be to eliminate zero-hour contracts entirely, or with very few exceptions.

These contracts have also come under close government scrutiny in the UK in the past year, in the wake of a high-profile scandal involving the major retailer Sports Direct and a government report revealing that over 900,000 Britons were working on zero hours. The Independent Review of Employment Practices in the Modern Economy, a UK government initiative led by Matthew Taylor, recommended in its report issued in July that zero-hour employees be entitled to request guaranteed hours after working for their employer for 12 months, and that the government institute a higher minimum wage for non-guaranteed hours.

Similar flexible scheduling practices are also facing increasing government scrutiny in the US: Seattle and New York have passed local “secure scheduling” laws entitling retail and fast food employees to two weeks’ advance notice of their schedules and extra pay for last-minute shift changes. This month, Oregon became the first state to pass such a law at the state level, while similar legislation is being considered in Connecticut, Minnesota, North Carolina, New Jersey, New York, and Texas.