Zero-hours contract 

Zero-hour contracts have been commonplace in many businesses in Ireland. It’s often used by students and young people looking for casual work. However, in recent years there have been changes to the law surrounding such work.

This type of employment is now only acceptable in exceptional circumstances. As an employer, you must understand the changes to working practices surrounding zero-hours contracts. Failure to get it right can lead to a claim being raised against you, which can lead to damages to pay.

In this guide, we'll discuss what a zero-hours contract is, employee rights surrounding this type of work, and what happens if you fail to provide them.

What are zero-hours contracts?

Zero-hours contracts are when an employee is available for work, but their working hours aren't included under their employment contract. This means they're not guaranteed a set number of working hours each week.

A common zero-hours working practice is employees being informed there will be work on a particular day.

All employees who are on a zero-hours contract are protected by the Organisation of Working Time Act 1997. This act sets out the statutory rights around working hours for employees in Ireland. For example, rest periods, maximum working time and holiday entitlements.

Are zero-hours contracts banned in Ireland?

Zero-hours contracts were banned in most situations following significant changes made under The Employment Miscellaneous Provisions Act 2018. This followed a campaign headed up by trade unions against the use of such contracts.

The changes to legislation gave employees working jobs of a casual nature more certainty in their roles. Such as notice periods and holiday pay.

When is a zero-hours contract allowed?

Zero-hours contracts aren't totally banned in Ireland. They ’re allowed under some exceptions.

They can be used in the following circumstances:

• For casual work.
• For work done in emergencies.
• For short-term relief to cover workplace absences.

An example of when zero-hours contracts can be used is in a school. They are commonly used where a panel of teachers are kept on stand-by to cover an absence.

You must understand what the changes to zero-hours contracts mean for employers and employees.

Employment rights for workers in Ireland

For employees on zero-hours contracts in Ireland, there are more employment rights than ever. So to ensure you're managing them correctly in your business, you need to understand what they are.

Rights to a written statement of employment terms

Workers on a zero-hours contract must now be provided with a written statement clearly explaining their terms of employment. This must be within the first five days of them being hired.

Included in the statement must be details of working hours, the rate of pay, and how it's calculated.

Rights to a minimum payment for no work

Under the new changes, employees on zero-hours contracts are entitled to be paid wages even if there is no work (this only applies if the employee has phoned in and there is no work for them).

The employee must be paid three times the national minimum wage of €10.50 or the times the minimum hourly rate in an Employment Regulation Order (ERO). Failure to pay your employee the minimum payments is against employment law.

How much you should pay them depends on whether there was work for them or not during the week.

If there's no work

If there has been no work available throughout the week, the employee should be paid as if they have worked 25% of the possible available hours. If this isn't possible, you should pay them for 15 hours, whichever is less.

For example, if an employee is available for 20 hours per week and they haven't worked, they should be paid either 15 hours or 25% of 20 hours (five hours).

If there's some work

If there has been some work available throughout the week, the employee should be paid for 25% of the possible available hours or for 15 hours (whichever is less).

For example, if an employee is available for 20 hours per week and they've worked for three, they are entitled to be paid for the extra two hours. This will bring them up to 25% of the contract hours.

Rights to guaranteed hours of work

Following the changes, employees can work different amount of hours to what’s stated in their contract. This is known as banded hours of work.

Employees are entitled to a banded contract if their current contract doesn't reflect the average hours per week they have worked.

There are eight bands covering the number of hours an employee can work each week. They range from A to H, starting from three hours and ending with 36 hours of over.

Employees are entitled to be put on weekly banded hours which accurately reflect their normal working hours. Once placed on the band, employees have the right to work those hours for twelve months.

What happens if you don't provide worker entitlements?

As an employer, you have a legal responsibility to provide your employees with their legal entitlements. Failure to do so is against employment law.

If your employees feel their legal rights aren't being protected, they may raise a claim against you to the Workplace Relations Commission (WRC). If found guilty, you may have to pay financial damages.

However, the claim must be made within six months of the dispute taking place.

Get expert advice on zero-hour contracts with Peninsula

Zero-hour contracts have been commonplace in many businesses in Ireland over the years. Often used by people looking for casual work, such as students or young people.

They’re now only acceptable in exceptional circumstances. And as an employer, you must understand the changes to working practices surrounding them. Failure to get it right can lead to a claim being raised against you, which can lead to damages to pay.

Peninsula offers 24/7 HR advice which is available 365 days a year. We take care of everything when you work with our HR experts. Want to find out more? Contact us on 0800 051 3687