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This section outlines the major changes to employment legislation in 2016, a busy year in the employment law sphere, and what is expected in 2017.
Protection for precarious workers
On 2 May 2017, the government approved proposals for draft legislation to increase the employment protections for casual and temporary workers. This follows a commitment in the Programme for Government to address the increased casualisation of work and to strengthen the regulation of precarious work.
The CIPD in Ireland welcomes the recognition that additional protection is needed for low paid workers in precarious employment, but is concerned about the way the proposals can increase the administrative burden and costs on employers and hence impact job creation.
The draft proposals are far-reaching and aim to legislate on employment contracts, the removal of zero hour contracts, a minimum payment for low hours work, and increase access to a contractual commitment to higher banded hours. While these changes are stated to be targeted at low-paid workers, they go beyond this and will have impact on all future employment relationships, with the need to give employment contracts within 5 days of commencing employment and prohibiting zero hours contracts.
The CIPD understands the following are the main points of the proposals.
1 Providing basic employment contracts in the first week of employment
Under the new proposals, employers would have to inform employees in writing, within five days of commencement of employment, of the following five core terms of employment:
- The full name of the employer and employee
- The address of the employer
- The expected duration of the contract (where the contract is temporary or (fixed-term)
- The rate of method of calculating pay
- What the employer reasonably expects the normal length of the employee's working day and week will be
This will cause a significant added administrative burden especially on small employers who depend on a single professional to produce such documents. An employer will still be required to give the current 15 terms of employment to employees within the current two month period. In essence, to avoid duplication of effort, it will be in the interest of both HR and employees to apply good practice and provide such details in advance of, or on the first day of the employment relationship, and hence avoid the proposed new offences.
2 Increasing minimum payments to those on minimum wage when called in to work but not provided with minimum work
It is intended to introduce a floor payment for low-paid workers who are called into work and then sent home. Under the proposals, there will be a new minimum floor payment, of three times the national minimum wage or three times the minimum rate set down in an Employment Regulation Order (ERO), to compensate workers if they are called in to work but do not receive the expected hours of work.
It is unclear what is expected to happen where individuals have agreed mutually convenient contracts for less than three continuous hours, and this needs to be clarified. CIPD research in the UK has found that there are a cohort of part time employees who opt to work low hours, and these need to be catered for.
3 Prohibiting zero hours contracts in most circumstances
It is intended to delete the phrase 'zero hours practice' from the title of Section 18 of the Organisation of Working Time Act 1997. The proposals will provide that an employer will no longer be able to engage an employee on a contract within the meaning of Section18(1)(a) or 18(1)(c) where the stated contracted hours are zero, unless it is genuinely casual work, emergency cover or short-term relief work.
4 Entitlement to move from a low hour contract to a band of hours that reflects the hours worked
The proposals provide for the creation of a new right for an employee, whose contract of employment does not reflect the reality of the hours worked on a consistent basis. After a reference period of 18 months, employees will be able to request and be placed in a band of hours that better reflects the actual hours worked over that period. This aims to provide a truer reflection of an individual’s working hours and improve the predictability of both hours of work and earnings. The reference period of 18 months is designed to allow for normal peaks and troughs, including seasonal fluctuations.
This provision will not apply to an employer who has entered into a banded hour arrangement following collective bargaining with their employees. Redress will be through the Workplace Relations Commission (WRC) but limited to being placed in an appropriate band of hours.
5 Strengthen the anti-victimisation provisions for employees who try to invoke a right under these proposals
It is intended to provide protection for employees against an employer penalising or threatening to penalise them for exercising their rights under the proposed legislation.
The proposals follow the 2015 University of Limerick report on the prevalence of zero hour and low hour contracts and their impact on employees. They have also been the subject of a dialogue process by the Department of Jobs, Enterprise and Employment with ICTU and Ibec over a number of months.
The proposals will now be referred to the Office of the Attorney General for priority drafting of a Bill.
Further information is available on the Department’s website.
Banded Hours Bill
If passed, the Banded Hours Contract Bill 2016 will give workers on banded hours contracts the right to request increased hours which can only be refused on objectively justified grounds. It would also oblige employers to provide information to workers on the overall availability of working hours.
Though this is a Private Members Bill, the current Dail configuration enables such Bills to make progress in the Houses of the Oireachtas.
The CIPD has the following concerns about some possible unintended consequences of the Bill:
- The flexibility of Ireland’s labour market and ways of working is central to Ireland’s economic competitiveness, and jobs growth, and we need to be sure that this legislation does not damage our capacity to be flexible.
- The entitlement to request a move to an increased weekly band of hours is positioned as an automatic right for all, whereas it should aim to support those in part-time roles who have been working increased hours for a reasonable duration, and wish to have that reflected in their contract of employment.
- The Bill could have an adverse effect on workplace relations as employees may end up in conflict with each other, where they vie for increased hours and there is insufficient work available, and there is a risk of redundancy.
- The Bill in its current form risks restricting employment growth if employers are unwilling to offer low hours contracts of employment when they can no longer control working hours and payroll costs. Those who seek part-time work will lose out as fewer employers may be willing to offer such contracts.
- The requirement that an employer may only refuse a request if the business is experiencing severe financial difficulty is inappropriate. Even when facing such difficulties, employers need to maintain confidence to stay in business, and so are not in a position to acknowledge their difficulties.
- Administrative obligations, for example display of working hours, can have the effect of reducing flexibility, especially in our 2/7 world. It risks reducing the flexibility many employees like and underpins the market responsiveness of companies.
The Employment Permit Regulations 2017 consolidate a number of individual Regulations into a one set to make them easier to understand and easier to use. They prescribe specific criteria for the granting and renewal of employment permits including documentation requirements, remuneration levels, registration requirements, and lists of highly skilled and ineligible employments.
Key changes to the lists are:
- Level 10 (PhD) academics in designated Universities and Institutes of Technologies are added to the highly skilled list.
- HGV drivers with CE or C1E driving licences are removed from the ineligible list on a temporary basis and subject to a maximum quota of 120 permits.
- Meat deboners remain off the ineligible list subject to a further maximum quota of 160 General Employment Permits, bringing the total to 360.
For more info, see the DBEI's press release on the Regulations.
The Low Pay Commission was set up to examine the rate of the national minimum wage (NMW) on an annual basis.
Its first report in 2015 recommended increasing the NMW to €9.15 per hour.
Following the 2017 recommendation of the Low Pay Commission, the NMW increases from €9.25 per hour to €9.55 per hour with effect from 1 January 2018.Research report: A study of minimum wage employment in Ireland: the role of worker, household and job characteristics November 2017, ESRI.
The ESRI published a study, funded by the Low Pay Commission, on the characteristics of workers earning the NMW in Ireland. According to the ESRI, the research found that 4.9% of employees were in receipt of the minimum wage in 2014. However, the percentage was substantially higher among particular sub-groups of workers. Specifically:
- 9% of female employees were in receipt of the NMW, compared to 2.7% of male employees. Females on the NMW were more likely to work in part-time jobs, in smaller firms or in sectors such as accommodation and food. Jobs with these characteristics raise the likelihood of minimum wage employment.
- At 9%, the incidence of minimum wage pay among non-Irish nationals was over twice that of Irish employees (4.2%). Non-nationals were found to experience a higher incidence of NMW, up to 3 percentage points relative to Irish employees even after job characteristics were controlled for.
- Young people aged 18–29 are more likely than people in other age groups to be on the minimum wage (13.9%). The greater likelihood of being on the NMW among young workers disappeared when job tenure, job type, occupation and sector is taken into account.
- In relation to households, economically disadvantaged people make up a minority of minimum wage employees. With 28% of employees on the minimum wage in 2014 coming from deprived households, the remaining 72% came from households not classified as being deprived. Therefore, minimum wage increases do not specifically benefit those from economically disadvantaged or deprived households.
Employment Regulation Orders
The government published an Order establishing statutory minimum rates of remuneration and conditions of employment for the contract cleaning industry on 1 June 2017. See the Workplace Relations Commission (WRC) Notice on the order.
The government published an Order establishing statutory minimum rates of remuneration and conditions of employment for the contract cleaning industry on 27 October 2016. See the Workplace Relations Commission (WRC) Notice on the order.
Information on Employment Regulation Orders can be found on the WRC website.
In May 2017, the Government published the General Scheme of the Social Welfare and Pensions Bill 2017. This sets out to increase protection for members of defined benefit occupational pension schemes, to improve access to pensions for same-sex couples and to make it easier for people with disabilities to take up work.
Defined benefit pensions
The number of defined benefit (DB) schemes open to new entrants has reduced in recent years. The Bill increases the controls on the way employers ceasing contributions to DB funds and pension funds in deficit will be handled. These measures reflect ongoing funding difficulties in many DB schemes. The Bill:
- Requires employers who sponsor DB schemes, whether those schemes are in deficit or not, to give 12 months’ notice of their intention to cease contributions. For a scheme in deficit, the employers and trustees are required to enter into discussions to agree a funding proposal before the 12 month period expires.
- Introduces a time limit of six months, from the date of the actuarial funding certificate, for trustees of a DB scheme which is in deficit, to submit a funding proposal to the Pensions Authority.
- Provides powers to the Pensions Authority to determine a schedule of contributions that will restore DB pension schemes which do not satisfy the funding standard or funding standard reserve, to an adequate funding position, in circumstances where a funding proposal has not been agreed.
Provisions for same sex couples
The Bill aims to ensure that same sex spouses and civil partners of members of occupational pension schemes will be able to obtain, in certain circumstances, a spouse’s pension. This equal treatment proposal aims to provide that same-sex couples have the same rights and entitlements as married couples.
Relaxing rules to work for people with disabilities
The Bill seeks to remove a barrier to employment for people on Disability Allowance and the Blind Pension. It will allow them to keep some or all of their weekly welfare payment if they take up work, which will no longer have to be of a strictly rehabilitative nature. This will open more jobs to this group of people and enable employers be more supportive.
The European Union (Posting of Workers) Regulations 2016 set out a number of new measures to strengthen the enforcement of employment rights for posted workers and ensure that foreign service providers respect labour standards applicable in Ireland. The Regulations came into force on 27 July 2016. See the Workplace Relations Commission Notice on the Regulations for more information.
The Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016 fundamentally changes what employees have to reveal about themselves to employers.
An individual is not obliged to disclose certain criminal convictions which date back seven years or more to a future or current employer. The Act ensures that only certain convictions arising from minor offences can become 'spent'.
The following offences will never become 'spent':
- a conviction for a sexual offence
- an offence tried in the Central Criminal Court
- an offence resulting in a prison sentence of greater than 12 months
The National Vetting Bureau (Children and Vulnerable Adults) Act 2012 also makes it mandatory for people working with children or vulnerable adults to be vetted by the National Vetting Bureau.
Combined these two pieces of legislation will affect how employers screen employees. It is commonplace for employers to have self declaration forms as part of their recruitment policies. These Acts now significantly limit the usefulness of these forms as employees will not have to disclose a spent conviction. Employees cannot be penalised for not doing so.
Employers may have to consider other ways of assessing potential hires through their recruitment policies.
Retirement ages continue to be big news.
The Equality (Miscellaneous Provisions) Act 2015, which commenced on 1 January 2016, still permits employers to set compulsory retirement ages. However, they must now be objectively justified by a legitimate aim and the means of achieving that aim must be proportionate and necessary.
Employers need to examine the reason for the specific retirement age for their business and ensure that it is objective and proportionate. Legitimate reasons may include:
- succession planning
- health and safety reasons
- intergenerational fairness
However, each situation will have to be determined on its merits.
The Act brings the Irish legislature in line with the grounding EU Directive and case law on the point.
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