Why you should review your employment contracts now

First published: January 10th 2023
Last updated: January 10th 2023

As January is a quiet time for many business owners, it can be a good time to do some HR jobs that have been put on the long finger.

And as 2022 was a particularly busy year in terms of employment law developments, 2023 is a good year to review the contents of your template employment contract.

The need to conduct a review is particularly acute this year as the Government quietly passed the European Union (Transparent and Predictable Working Conditions) Regulations 2022 (the Regulations) just before the end of the year.  

These Regulations put the EU Directive on Transparent and Predictable Working Conditions into Irish law and include important changes for employers to consider in the context of a review of template employment contracts.

Day 5 Statement

The Day 5 statement was introduced by the Employment (Miscellaneous Provisions) Act 2018 and requires employers to provide staff with the following five terms in writing no later than 5 days after their start date:

1.    The full names of the employer and employee

2.    The address of the employer

3.    The expected duration of the contract (if the contract is temporary or fixed-term)

4.    The rate or method of calculating pay, and the ‘pay reference period’ (i.e. weekly, fortnightly or monthly)

5.    What the employer reasonably expects the normal length of an employee’s working day and week to be (for example, 8 hours a day, 5 days a week).

Under the Regulations, the Day 5 statement must now include additional information relating to the duration and conditions of any probationary period that applies.

The following information that was previously provided in the written statement of main terms (to be provided within two months of commencing employment) must now be provided as part of the Day 5 statement:

6.    The place of work or, where there is no fixed or main place of work, a statement specifying that the employee is employed at various places or is free to determine his or her place of work or to work at various places;

7.    The title, grade, nature or category of work for which the employee is employed or a brief description of the work;

8.    The date of commencement of contract of employment;

9.    Any terms and conditions relating to hours of work (including overtime).

Written Statement of Main Terms – one month, not two

All other written terms of employment required to be given to the employee under the Terms of Employment (Information) Act 1994 must now be provided within one month of employment commencing.

This written statement must also now include the following additional terms:

1.    The training, if any, to be provided by the employer;

2.    In the case of a temporary contract of employment, the identity of the user undertakings i.e., the person or firm hiring the agency worker

3.    If the work pattern of the employee is predictable, the principle that the work schedule is variable, the number of guaranteed paid hours and the remuneration for work performed in addition to those guaranteed hours, the reference hours and days within which the employee may be required to work and the minimum notice period the employee is entitled to before the start of a work assignment;

4.    The identity of the social security institutions receiving the social insurance contributions attached to the contract of employment and any protection relating to social security provided by the employer.

Probationary periods must not exceed six months

Up to now, probationary periods in Ireland have been a matter for employment contracts and not regulated by law. So how long can you extend a probationary period?

With effect from 1 August 2022, if an employee is subject to a probationary period, it cannot exceed 6 months (except in special circumstances).

Even in those exceptional circumstances, the maximum probation period possible is twelve months. 

Exclusivity of service clauses to be restricted

Under the Regulations, an employee's exclusivity clause in service agreements may change. Employers must not prohibit employees from taking up employment with another employer so long as any such parallel employment doesn’t conflict with the work schedule established by the first named employer.

In addition, employees should not be subject to any adverse treatment for taking up parallel employment.  

You may restrict an employee from taking up parallel employment if there are objective grounds for doing so. Examples of such objective grounds may be:

·      Health and safety,

·      Protection of business confidentiality,

·      Integrity of public service,

·      Avoidance of conflicts of interest.

Details of any restriction on taking up parallel employment, including the objective grounds on which the restriction is based, must be included in the contract of employment or in a written statement provided to the employee.

Changes to the Organisation of Working Time Act 1997 - Minimum Predictability of Work

The Organisation of Working Time Act requires employers to provide staff with at least 24 hours’ notice of their working hours. Now as well as this minimum notice period, work assignments must also take place during the reference hours and days set out in the employee’s written terms of employment.

If employees don’t receive the statutory notice in advance of the work assignment, or, the work assignment takes place outside the reference hours provided, the employee will be entitled to refuse the work assignment without adverse consequences.

Need help updating your employment contracts?

As you can see, the Regulations include a lot of new obligations for employers, from probationary periods to core terms of employment.

Some fundamental changes may be required to ensure your employment documentation complies with the law.

We recommend that you review your contracts of employment as soon as possible to ensure all the necessary changes have been caught.

Our experts are here to provide Employment Law and HR advice for businesses just like yours. Call 1800 719 216.