Government publishes legislation to ban “zero hours” contracts and introduce “banded hours” contracts

The Minister for Employment Affairs and Social Protection, Regina Doherty TD, has published the Employment (Miscellaneous Provisions) Bill 2017. The Bill contains a number of provisions, the most notable of which are a ban on "zero hours" contracts and the introduction of "banded hours" contracts. The Bill is likely to become law in 2018, though it may be amended before it becomes law.

The "banded hours" provision will apply such that employees on low-hour contracts, who consistently work more hours each week than the hours provided for in their contracts, will be entitled to be placed in a "band"of hours that better reflects that reality. Being placed in a band will mean that an employee will have a minimum number of guaranteed hours each week, inside that band.

The Bill provides that, where an employee’s contract of employment, or statement of terms of employment, does not reflect the number of hours worked per week by an employee over an 18-month reference period, the employee will be entitled to be placed in a band of weekly working hours that reflects the employee’s average weekly working hours during the reference period.

The bands are as follows:

• Band A: 1-10 hours;
• Band B: 11-24 hours;
• Band C: 25-34 hours; and
• Band D: 35 hours and over.

The employee must request to be placed in an appropriate band and the employer must place the employee in that band within 2 months of the date of the request.

An employer may refuse to place an employee in the band requested on the following grounds:

1. Where there is no evidence to support the claim in relation to the hours worked in the reference period.
2. Where there has been significant adverse changes to the business, profession or occupation carried on by the employer during or after the reference period.
3. In unforeseen and exceptional circumstances or an emergency (including an accident or the imminent risk of an accident).
4. Where the average of the hours worked by the employee during the reference period were affected by a temporary situation that no longer exists.

The Bill provides that “an employee placed on a band of weekly working hours shall work hours the average of which shall fall within that band for a period of not less than 18 months following that placement.” This appears to suggest that a person may come out of a band after 18 months – but it appears likely that the employee could immediately insist on being placed back into that band, so it appears that placing an employee into a band will amount to an indefinite guarantee of minimum hours. 

Where an employee believes that his or her employer has failed to place the employee in the appropriate band of weekly working hours having been requested to do so, the employee may make a complaint under the Workplace Relations Act 2015.

The Bill will also prohibit "zero hours" contracts by means of requiring an employer who hires an employee to offer an employee a number of hours work each week that is greater than zero. This requirement will not apply to work done in emergency situations or “short-term relief work to cover routine absences for that employer.”

The Bill’s purposes include a strengthening of the provisions around minimum payments to low-paid employees who may be called in to work for a period but not provided with that work.  Under the Organisation of Working Time Act 1997, an employer that employs an employee on an “if and when required” basis (or similar) is obliged to make certain minimum payments to the employee even in weeks when the employee works few or no hours.  The Bill will increase the minimum payment in some cases.

For further information or advice, please contact partners, Micheal Kennedy or Loughlin Deegan,  or any member of the ByrneWallace Employment Law team.