Contract of Employment in Ireland

06 October 2020

It’s a legal requirement for you, as an employer, to provide staff with a written statement of main terms of employment. Most employers cover this off by having staff sign a contract of employment.

However, it can prove a difficult employment law topic to get right, as you must address your business policies clearly.

So, how can you go about putting together contracts that work for you and your employees? We explain the essential details in this guide.

What is a contract of employment?

It’s a contract under Irish labour law that sets out the rights and responsibilities your business and employees have.

So, why is a contract of employment important? It explains to your employee what’s required of them. And protects your business from a legal perspective—especially in the event of any staff disputes.

Under the Employment (Miscellaneous Provisions) Act 2018, you also must provide staff with a written statement of five core terms of employment within five days of their first day on the job. Including these core terms in your contract of employment allows you to comply with your duty under the 2018 legislation.

Your contract of employment can also refer to your various policies, such as sick leave, absenteeism, flexible working, and annual leave. So, this means staff can understand what they need to do if, for example, they have to call in sick. They’ll need to follow your business’ policy.

Once signed, the employment contract creates legal obligations between you and your employee.

However, does a contract of employment have to be signed? The short answer is no. Once an employee performs their duties under the contract of employment over a period of time without raising any complaints, it can be taken that there is a legally binding contract in place even if the employee hasn’t signed the contract.  

So the importance of signing a contract is that it provides confirmation that the employee has been made aware of their terms and conditions of employment.  

Is it law to have a contract of employment?

Employers must provide employees with a written statement of main terms and conditions of employment no later than two months after their first day on the job. You must also provide a statement of core terms under the Employment (Miscellaneous Provisions) Act 2018 as mentioned above within five days of the start date. These are the only written documents you are legally required to provide to employees.

But is it illegal to work without a contract of employment? You will only be breaching employment law if you fail to provide the written statement of main terms or the five-day statement. There is no legal requirement to issue a contract of employment.

Ultimately, it’s good business practice to provide staff with a full contract of employment they can sign and refer to whenever necessary.

So, when should a contract of employment be issued? Best practice is to issue the contract of employment either before the employee begins their role or on day one of their employment with you. Provided the contract includes the five core terms and the main terms of employment required by law, you will also have met your obligations to provide these documents within five days and two months of the employee’s start date.

What is contained in a basic contract of employment?

The minimum amount of information to be provided to employees in writing is set out in the Terms of Employment (Information) Acts 1994-2014.

Similarly, staff must receive their written five-day statement under the Employment (Miscellaneous Provisions) Act 2018 within five days of starting their role.

Other terms that could be included in a contract of employment:

  • Probation periods.
  • The employee’s duties.
  • Annual leave, paternity leave, maternity leave.
  • Notice periods.
  • Absence through illness.
  • Any collective agreements your business has negotiated with trade unions.

How to write an employment contract

It’s important to cover the minimum written terms set out in the legislation—it’s your legal obligation to provide these details.

There are terms and conditions you need to make clear. You should first cover off the core terms under the Employment (Miscellaneous Provisions) Act 2018. These are:

  • The full names of the employer and employee.
  • The address of the employer.
  • The expected duration of the contract (where the contract is temporary or fixed term).
  • The rate of pay and the pay reference period for the purposes of the National Minimum Wage Act 2000 (for example, a week, a fortnight or a month).
  • What you reasonably expect the normal length of the employee’s working day and week to be, in a normal working day and in a normal working week.

Under the Terms of Employment (Information) Acts 1994-2014, you should make sure to cover the following terms:

  • The place of work.
  • The title of the job or the nature of the work.
  • The date the employment started.
  • Pay intervals (for example, weekly or monthly).
  • Any terms or conditions relating to hours of work (including overtime).
  • Paid leave (other than sick leave), including annual leave and public holiday entitlement.
  • Sick pay.
  • Pension and pension schemes.
  • Period of notice to be given by employer or employee.
  • Details of any collective agreements that may affect your terms of employment.

Once you have covered off the minimum written terms required by law, it’s about detailing the employee’s role alongside your business’ daily functioning. Including the nature of your policies and procedures.

Should you need any support writing your contracts of employment, you can refer to our 24/7 HR services for support.

We provide assistance with contracts, company handbooks, and documentation including:

  • Recruitment forms.
  • Absence reports.
  • Staff appraisal forms.
  • Annual leave request forms.

And, of course, help with structuring your contracts of employment. It takes the stress out of missing anything, so you can go about your tasks with peace of mind.

How long does an employment contract last?

Until it’s terminated—either by you, or if the employee hands in their notice. If it’s the latter, then they’ll work their notice period. At the end of which the contract will end.

Most contracts of employment are open-ended, meaning, they’ll run until one of the parties decides to end it.

However, there are fixed-term and specified-purpose contracts—these are different as they have a date on which an individual’s employment will end.

Employment contract benefits

Its main purpose is to make sure you and your staff have a strong understanding of the duties they must perform while at work.

Employees are also able to determine their rights under your contract and employment law.

From your perspective as an employer, you explain what you expect of your staff. And if there are future disputes over these requirements, you have a contract the employee has signed.

Your contract is simply an essential requirement for legally defining your relationship with your employee.

And stands as a way to protect your business’ interests and those of your staff members.

The different types of contract terms

There are express and implied terms in a contract of employment. Express terms are agreed between both parties and generally written into the contract. Implied terms in employment contracts can arise through custom and practice, by way of employment legislation or sometimes they are implied from what is written in the contract.

Below we explain what the different types of contracts you may use are so you can gain a better understanding.

What is a permanent contract of employment?

It applies to staff who work regular hours with a salary. Contractual terms will continue until either party ends it.

What is temporary contract of employment?

This is something you can offer an employee if the role isn’t set to be permanent. You can extend this type if the need suits your business (and the employee agrees).

What is a fixed-term contract of employment?

They have a set end date. As an example, it may be for six months only to cover maternity leave.

You can extend the contractual terms if you reach an agreement with an employee.

What is a casual contract of employment?

An employee who works irregular hours for you, which are flexible and the work involves no reciprocal obligations on either party is generally referred to as a casual worker.

The general expectation here is for hours to vary and fluctuate, which is essential for businesses with rapidly changing work requirements.

What is a rolling contract of employment?

If a business isn’t sure how long the position will be available, they sometimes offer a rolling contract which might renew every three months for instance until the work is complete.  

How to end an employment contract

There are common reasons for this, including:

However, if you want to terminate the staff member’s contract then you must make sure you have a genuine reason to do so.

If you don’t follow fair procedures, and go ahead anyway, you may face a claim for unfair dismissal. This can result in a costly Workplace Relations Commission claim.

From an employee perspective, they can hand in their notice. You can’t reject this, although you can talk to them to see if they’ll reconsider.

Get expert advice on contracts of employment in Ireland?

At Peninsula, our HR and employment law experts know that organising employment contracts can be stressful - and we're here to help. Speak to us today on 1800 719 216.

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