The Employment (Miscellaneous Provisions) Act 2018 (the 2018 Act) will introduce significant legal and practical changes that employers should be aware of.
The 2018 Act will come into force in late March 2019, unless the Government designates an earlier date, so there are only weeks for employers to prepare for the changes. This article analyses three of the main changes being introduced and suggests practical steps that employers can take to ensure that they are in compliance with the new legislation.
Core terms and conditions
Employers are required to provide employees with a statement of core terms and conditions of employment within five days of commencing employment.
The core terms and conditions are as listed below.
Employers who do not provide the required statement of core terms and conditions will be guilty of an offence and will be liable to a fine of up to €5,000 or a term of imprisonment not exceeding twelve months. A director, manager, secretary or officer can also be found guilty of an offence if they have acted with the consent or connivance of the employer.
In addition, employees who have at least one month's service, are entitled to take a claim to the Workplace Relations Commission (WRC) and may be awarded up to a maximum of four weeks’ remuneration as compensation, if they have not been provided with the statement of core terms and conditions. The 2018 Act also introduces anti-penalisation provisions for employees who invoke their rights to seek these core terms and conditions under the Terms of Employment (Information) Act1994 (1994 Act) with the maximum compensation being up to four weeks remuneration also.
Steps for employers:
Prohibition on zero hours contracts
The 2018 Act prohibits zero hours contracts in most circumstances, with limited exceptions being made for genuine casual work or for cover in emergency situations.
Zero hours contracts refers to the practice where an employee is required, without the guarantee of work, to make themselves available for work in the following circumstances:
The 2018 Act has retained the same compensation mechanism as is currently included in Section 18 of the Organisation of Working Time Act 1997, i.e. where an employee in any one week is required to work less than 25% of the “contract hours” or work available (if engaged on an “if and when” basis), then they are entitled to receive compensation which is calculated as the lesser of 25% of the contract/available hours or fifteen hours.
However, the severity of the potential penalty has been increased by the 2018 Act in that it will now be calculated as three times the national minimum hourly rate of pay, or three times the minimum hourly rate of remuneration provided for by an applicable employment regulation order, rather than an employee’s normal rate of pay.
Steps for employers:
Introduction of banded hours concept into Organisation of Working Time Act 1997
If an employee’s contract of employment or statement of employment does not reflect the average number of hours worked per week by an employee over a reference period, then the employee is entitled to be placed in an appropriate band of weekly working hours.
The 2018 Act sets out the reference period to be used when calculating the number of hours being worked as twelve months. An employee must request that the employer moves them into one of the eight bands which are set out in the 2018 Act and if this request is refused then the employee can refer the matter to the WRC who may require the employer to place the employee on the appropriate band of hours.
Employers should review their existing contracts and working time records to ensure that the specified contract hours actually reflect the hours being worked on average.
The 2018 Act also introduces anti-penalisation provisions for employees who invoke their rights under the Organisation of Working Time Act 1997 with the maximum potential compensation being up to two years remuneration.
As set out above, the introduction of the 2018 Act raises a number of practical issues for employers which must be dealt with to reduce the risk of challenges and liabilities.
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