Employment and Benefits Update: Significant Changes for the Use of Flexible Staff in the Hospitality Sector from March 2019
15 February 2019
The Employment (Miscellaneous Provisions) Act 2018 (“the 2018 Act”) was heralded as delivering on the Irish Government’s commitment to strengthen rights for vulnerable workers and to increase the protection of those in precarious employment. The 2018 Act comes into force in early March 2019 and introduces five key changes to an employer’s use of flexible staff.
What is “flexible” staff?
This includes staff in casual, as and when required, and low hours, categories. Many employers in the hospitality sector misdescribe the staff they engage on a “casual” basis. A truly casual worker has no right to be given working hours, but equally, they are under no obligation to work hours, if requested. However, staff who have no right to be given hours, but are required to be available (either for a number of hours per week, or as and when required) are not casual – they are on zero hour contracts. This is a common, and important, misunderstanding. Staff on these contracts, who are entitled to zero hours, but required to be available, have a right to a minimum payment for being required to be available.
The five key changes under the 2018 Act which affect flexible staff:
New rules on terms of employment
Zero hour contracts now prohibited
Minimum payment for zero hour contracts
New rights to move on to banded hours, and
New penalisation provisions
1) New rules on terms of employment
Employers must inform all new staff, including those engaged on a flexible basis, in writing within five days of commencing employment, of the following core terms of employment:
The full name of the employer and employee
The employer’s address
The expected duration of the contract
The rate/method of calculating pay
What the employer reasonably expects the normal length of the employee’s working day and week will be
The reality is that the employer may not be able to say what hours they reasonably expect flexible staff to work. So this will require attention – particularly as employers who fail to comply within one month, or who deliberately provide false or misleading information, are liable to a fine of up to €5,000 and/or 12 months’ imprisonment.
2) Zero hour contracts now prohibited
The 2018 Act introduces a ban on zero-hour contracts, except in cases of emergency cover or short-term relief work. In the hospitality sector, this is often the very reason why staff is needed to be available to provide cover. But staff needed to be available for other reasons, must no longer be given “zero hours”.
3) Minimum payment for zero hour contracts
Workers on zero hour contracts who are required to be available a certain number of hours, or as and when needed, are entitled to be paid 25% of the hours required to be available OR 25% of the hours done by another employee of that type of work in the week, up to a maximum of 15 hours. Note: this is not new! The key change is that staff on these zero hours contracts will now be entitled to a minimum payment of at least three times the national minimum wage.
4) New rights to move on to banded hours
Workers on low-hour contracts, who consistently work more hours than provided for in their employment contracts, will have a legal right to apply to be placed in a band of hours that reflects the reality of the hours worked over the last 12 months. However, the 2018 Act allows employers to refuse to this request in various certain circumstances, including where:
There have been significant adverse changes to the business during, or after, the 12 months; or
There have been emergency or exceptional circumstances; or
The extra hours were due to a temporary situation, which no longer exists
5) New penalisation provisions
Finally, the 2018 Act introduces robust safeguards against penalisation (adverse treatment) for employees who try to invoke their new rights as described above.
The 2018 Act will have significant implications for employers in the hospitality sector, who may now face increased employment costs, restrictions on their ability to use flexible working arrangements and potential criminal prosecution for non-compliance with the new requirements.
Employers who engage workers on a flexible basis need to look at, and amend as necessary, their practices to ensure they are in compliance with the relevant amended employment legislation. It is likely that this important distinction between casual workers and those on zero hour contracts, and its associated cost, will come into sharp focus over the coming weeks.
If you would like to discuss any aspect of these developments and the potential impact on your business, please contact a member of our Employment Law & Benefits team.
The content of this article is provided for information purposes only and does not constitute legal or other advice