Frequently Asked Questions - MPA
In Ireland, the Employment (Miscellaneous Provisions) Act 2018 (the Act) is scheduled to come into effect from the very first week of March 2019.
And as a business owner, you’ll no doubt have questions about what it means for you.
To help you understand what’s going to happen, we’ve compiled frequently asked questions about the topic to help you understand its implications.
What is the Employment (Miscellaneous Provisions) Act 2018?
It’s a landmark piece of employment legalisation—a game changer for employers operating flexible work practices.
You must be fully aware of the new statutory obligations and ensure they’re prepared, otherwise you could face significant penalties including a prison sentence.
When will it come into effect?
The Act is scheduled to commence the first week in March. The Act provides that the new laws must come into effect no later than 25th March 2019.
What’s the purpose of its introduction?
The government’s main objective in drafting the Act is to improve the security and predictability of working hours for employees on insecure contracts (as well as staff members on variable hours).
It’ll also impose a wide range of new employment law compliance requirements affecting the SME sector.
Which industries will be affected?
Businesses with flexible working arrangements are set to be hit the most. Restaurants, retail, and tourism sectors will need to audit their business practices for the Act.
What happens if you don’t comply with the Act?
It’s a legal requirement for you to do so—if your business isn’t ready for these new laws, then you can face penalties.
These can include major fines and criminal sanctions—including potential time in prison.
What are the steps my business can take for compliance?
If you rely on part-time or variable hours’ employees, you should review your employment practices to see if the ban on zero hour contracts will affect your business.
You will also need to familiarise yourself with the requirement to provide all employees with a statement of five core terms, the introduction of banded hours’ entitlements, and the financial impact of a requirement to provide minimum payments to employees not required to work on a certain week.
What’s the Statement of Core Terms?
You’ll need to provide all your employees with a statement of five core terms of employment in writing.
Consider developing your business’ template document that sets out the five core terms. You can then hand these to your staff members.
What will the introduction of banded hours mean for my business?
Employees enjoy a new right to be placed in a band of hours that more accurately reflects the hours they work over a 12-month reference period, as against their contractual hours.
Employees who demonstrate their average weekly hours (over the previous 12 months of employment) fall into a particular band can claim payment for the minimum number of hours in that band of hours.
Will my employees face contractual changes?
Yes. Your employment contracts will need to be updated to ensure that they contain the five core terms of employment.
You may also need to provide employees with a banded hours contract if they make a successful request to be put in a relevant band of hours.
Does this mean my employees have new rights?
Yes. The changes under the Act mean your staff members enjoy a new right to be provided with a statement of core terms in writing within five days of starting their position.
Once the Act comes into effect, your employees also enjoy the right to be placed in a band of hours that accurately reflects the hours they worked over a 12 month reference period.
Employees will also enjoy the right to receive a new minimum payment of three x NMW hourly rate/ERO rate if they’re not required to work on a certain week or are required to work less than 25% of their weekly contractual hours in a particular week.
What are the changes to zero hour contracts?
The Act introduces a ban on zero hour contracts. But there are a few exceptions where you can still use them. The ban on zero hour contracts does not apply to:
- Work done in emergency circumstances.
- Short-term relief work to cover routine absences for your business.
But you should include in your documentation details on the hours of work you expect from your staff members, on a per day and per week basis.
What about as and when contracts?
They’re still legal under the Act. This is because under an “as and when” arrangement there’s no obligation for you to provide a certain number of hours. And the employee also doesn’t have to accept any hours you offer them.
Without mutuality of obligation, no contract of employment exists and this type of work arrangement is not currently regulated by Irish employment laws.
Is there a minimum payment?
The Act retains the same payment mechanism as the existing zero hour contracts legislation.
But one of the most significant changes is the introduction of a minimum payment of three times the national minimum wage hourly rate—or the rate as set out in any employment regulation orders that affect your business.
What about anti-penalisation?
The Act provides strong anti-penalisation provisions for employees who invoke their rights under the new legislation. These include awards of up to two years’ salary.
If you fail to issue your employees with the core employment terms in writing within one month of starting work with you, you can be found criminally liable and face up to 12 months in prison.
How can we help?
Peninsula IE is a business consultant with over 30 years’ experience in HR and employment law. If you need assistance before the Act comes into effect, our employment law experts will provide guidance that ensures your business is compliant.
You can call us today for immediate advice on: 0818 923 923.