Gov­ern­ment must strike right bal­ance in nav­i­gat­ing the zero-hours mine­field

Irish Independent - - COMMENT - Ja­son O’Sul­li­van Ja­son O’ Sul­li­van is a so­lic­i­tor and pub­lic af­fairs con­sul­tant at JOS So­lic­i­tors

T HE con­tentious is­sue of zero-hour con­tracts has en­tered the me­dia spot­light this week fol­low­ing the Gov­ern­ment’s ap­proval of draft leg­isla­tive pro­pos­als from Jobs, En­ter­prise and In­no­va­tion Min­is­ter Mary Mitchell O’Con­nor, and Em­ploy­ment and Small Busi­ness Min­is­ter Pat Breen.

Such ap­proval by the Cabi­net paves the way for the in­tro­duc­tion of leg­is­la­tion that will at­tempt to en­hance em­ploy­ment pro­tec­tion for low-paid work­ers and those op­er­at­ing un­der con­tracts which pro­vide little guar­an­teed work­ing hours or cer­tainty of in­come.

Labour’s Ged Nash, for­mer busi­ness and em­ploy­ment min­is­ter, pub­lished a re­port en­ti­tled ‘A Study on the Preva­lence of Zero Hours Con­tracts among Ir­ish Em­ploy­ers and their Im­pact on Em­ploy­ees’ in Novem­ber 2015.

The re­port was com­piled by the Univer­sity of Lim­er­ick and has been fac­tored into the most re­cent leg­isla­tive pro­pos­als as ap­proved this week. It found that zero-hour con­tracts were not ex­ten­sively used in Ire­land, but of con­cern was the emer­gence of ‘if and when’ con­tracts, where work­ers were not con­trac­tu­ally re­quired to make them­selves avail­able for work.

That re­port also found that when such con­tracts were used in­ap­pro­pri­ately, it greatly un­der­mined ex­ist­ing leg­isla­tive pro­tec­tions.

When try­ing to de­fine zero-hour con­tracts per se, it’s quite dif­fi­cult to pro­vide a de­fin­i­tive answer as there is no har­monised def­i­ni­tion of zero-hour con­tracts from a Euro­pean per­spec­tive.

A zero-hour con­tract, in its sim­plest form, is an agree­ment be­tween an em­ployer and em­ployee, where there is zero obli­ga­tion on ei­ther party, so in ef­fect there is no obli­ga­tion on the em­ployer to pro­vide work nor the em­ployee to ac­cept work. Such con­tracts or ar­range­ments are also of­ten re­ferred to as “ca­sual con­tracts”. It is, how­ever, more com­mon in prac­tice, and par­tic­u­larly in Ire­land, for em­ploy­ers to guar­an­tee at least a cer­tain num­ber of min­i­mum hours per week to staff as op­posed to guar­an­tee­ing none.

Tech­ni­cally, em­ploy­ees work­ing un­der zero-hour type agree­ments are gen­er­ally deemed to have the same em­ploy­ment law rights as per­ma­nent em­ploy­ees. In re­al­ity, though, the un­favourable terms and con­di­tions of such con­tracts can be ar­guably con­strued as un­fair, due to their ad hoc na­ture, whereby em­ploy­ees face real un­cer­tainty as re­gards hours of work and in­come se­cu­rity. This can have a sti­fling ef­fect on work­ers and their fam­i­lies from eco­nomic, so­ci­etal and psy­cho­log­i­cal per­spec­tives.

Another com­mon prob­lem is that even when cer­tain pro­tec­tions are in place, many em­ploy­ers can use ex­ist­ing loop­holes en­shrined in cur­rent leg­is­la­tion to by­pass such em­ployee-rights safe­guards.

For in­stance, in the Ir­ish con­text, zero-hour con­tracts stem largely from the Or­gan­i­sa­tion of Work­ing Time Act, in which Sec­tion 18 states that em­ploy­ees op­er­at­ing un­der such con­tracts must make them­selves avail­able for work – in other words to be on standby for the hours they are con­tracted for, de­spite no guar­an­tees of get­ting ac­tual work for those con­tracted hours.

Sec­tion 18 of the act does af­ford pro­tec­tion in the form of en­ti­tle­ments to some re­mu­ner­a­tion, even if the em­ployee does not ac­quire the hours they are con­tracted for. This re­mu­ner­a­tion is based on ei­ther 25pc of their con­tracted hours or 15 hours, which­ever is less.

Sec­tion 18 will not ap­ply such pro­tec­tions where an em­ployee has no hours guar­an­teed, as no obli­ga­tion to ac­cept work ex­ists. For in­stance, a likely sce­nario could be where an em­ployee is of­fered 15 hours’ work one week, but only seven hours the fol­low­ing week.

De­spite such loop­holes, Ire­land is still bet­ter off than most of its Euro­pean coun­ter­parts as re­gards the pro­tec­tions af­forded to work­ers op­er­at­ing un­der such con­tracts. The UK has seen a rapid rise in these types of em­ploy­ment ar­range­ments in re­cent years, which in turn has stirred much po­lit­i­cal de­bate .In Au­gust 2016, re­search showed that the num­ber of UK work­ers on zero-hours con­tracts had leapt 20pc in a year to more than 900,000 – or 2.9pc of the work­ing pop­u­la­tion.

It has been in­di­cated by the Gov­ern­ment that the new draft pro­pos­als will in­clude an amend­ment to the Or­gan­i­sa­tion of Work­ing Time Act which will out­law zero-hour con­tracts “in most cir­cum­stances” un­less such work is gen­uinely ca­sual work, emer­gency cover or short-term re­lief work for the em­ployer.

It also worth not­ing that New Zealand gained much me­dia at­ten­tion last year when its Gov­ern­ment passed leg­is­la­tion that banned zero-hour con­tracts, a move her­alded as a first of its kind in the de­vel­oped world.

New Zealand’s Em­ploy­ment Stan­dards Leg­is­la­tion Bill came into force in April 2016. The ra­tio­nale for that pi­o­neer­ing change was based on the over­rid­ing as­sump­tion that such agree­ments were ex­ploita­tive in na­ture to­wards work­ers and their rights.

As ex­pected, the var­i­ous re­ac­tions to the new leg­isla­tive pro­pos­als in Ire­land have been di­vi­sive. The busi­ness com­mu­nity, through ad­vo­cates such as Ibec, has far dif­fer­ent views from trade unions when ar­gu­ing in favour of such con­tracts or hy­brids thereof.

Many busi­nesses ar­gue that such con­tracts, although not ideal, do serve an eco­nomic ne­ces­sity – par­tic­u­larly in sec­tors where sea­sonal work­ers are prom­i­nent, or for new start-ups where flex­i­ble work­ing hours for staff can be an in­valu­able as­set in get­ting a busi­ness off the ground.

Union rep­re­sen­ta­tives, how­ever, have largely wel­comed the new pro­pos­als. Many trade unions deem such le­gal in­stru­ments as in­her­ently un­fair and ex­ploita­tive in na­ture and have pre­vi­ously called for cur­rent loop­holes to be closed and for more pro­tec­tive mea­sures to be in­tro­duced. For ex­am­ple, mea­sures that limit the length of time a po­si­tion can be filled us­ing such con­tracts or rules re­quir­ing em­ploy­ers to pro­vide for longer no­tice pe­ri­ods to those on standby.

The de­bate on zero-hour con­tracts is not likely to go away any time soon. We will need to wait and see how ur­gently this draft leg­is­la­tion is pro­gressed. The pre­dom­i­nant fac­tor for this

Such con­tracts can have a sti­fling ef­fect on work­ers and their fam­i­lies from eco­nomic, so­ci­etal and psy­cho­log­i­cal per­spec­tives

Gov­ern­ment or suc­ces­sive gov­ern­ments will be to try to strike a fair bal­ance be­tween the age-old dilemma of com­pet­ing eco­nomic in­ter­ests of em­ploy­ers and the safe­guard­ing of work­ers’ em­ploy­ment rights.

It is ap­par­ent from re­cent stud­ies that Ire­land is far from the bot­tom of the class in this re­gard, when com­pared with other de­vel­oped coun­tries, which is a pos­i­tive po­si­tion. How­ever, it will be key for the Gov­ern­ment to quickly stem the growth of the emerg­ing ‘if and when’ con­tract which re­sem­bles a pure zero-hour con­tract in its most ex­ploita­tive form, while demon­strat­ing the nec­es­sary po­lit­i­cal ap­petite and skilled ma­noeu­vrings in which to ne­go­ti­ate through the le­gal and pol­icy wran­glings of vested in­ter­ested groups, in or­der to achieve this zero tol­er­ance ap­proach to zero-hour con­tracts.

Jobs,En­ter­prise and In­no­va­tion Min­is­ter Mary Mitchell O’Con­nor at Le­in­ster House. Photo: Tom Burke

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