Minister Nash publishes Government commissioned report on Zero Hour Contracts by University of Limerick

Study finds zero hours contracts are not extensively used in Ireland – however, emergence of “if and when” contracts identified

The Minister for Business and Employment Ged Nash TD has published a new report, “A Study on the Prevalence of Zero Hours Contracts among Irish Employers and their Impact on Employees” by the University of Limerick.  

The independent study commissioned by Minister Nash and carried out by Dr Michelle O’Sullivan and a team from UL’s Kemmy Business School follows a commitment to undertake such an examination in the Government’s Statement of Priorities in July 2014.  

Following a competitive tender, researchers from UL were asked to establish the extent to which zero hour and low hour contracts exist in the Irish economy, how such contracts operate in practice and how they impact on employees.  Minister Nash received Cabinet approval to publish the report today (Tues 3rd November).

The key findings of the report include:

·        Zero hour contracts as defined within current Irish employment rights legislation are not extensively used in Ireland.  

·        There is, however, evidence of so-called “if and when” contracts.  While both involve non-guaranteed hours of work, the main difference is that workers on zero hours contracts are obliged to make themselves available for work while those on “if and when” contracts are not contractually required to make themselves available for work.

·        UL’s view that there is a lack of clarity around the employment status of those who work only if and when hours which may raise questions over the extent such workers are protected by employment legislation.  

·        The key factors driving “if and when contracts are:

–        Increasing levels of work during non-standard hours,

–        A requirement for flexibility in demand-led services

–        The absence of affordable, accessible childcare

–        Some employers working around current employment legislation protections and

–        The resourcing models of education and health services

·        In the four sectors studied by UL, retail, hospitality, education and health, if and when hours and low working hours are prevalent in the accommodation/food and retail sectors and in certain occupations in education and health such as community care work, general practice nursing, third level lecturing and school substitution.  

·        Low working hours can arise in different forms in employment contracts, such as regular part-time contracts with fixed hours or a contract with “If and when” hours only or a hybrid of the two.

·        In terms of variable hours, the CSO estimates that 5.3% of employees in Ireland have constantly variable hours (people on constantly variable hours can be full-time or part-time) with the highest proportion working in wholesale/retail, accommodation/food and health and social work sectors.  

·        CSO also shows that 2% of employees regularly work 1-8 hours per week, 6% work 9-18 hours per week, 24% work 19-35 hours per week.  

·        For employers, the main advantages of “if and when” contracts are flexibility and reduced cost.

·        Trade unions and NGOs argue there are significant negative impacts for workers on “if and when” hours including:

–        Unpredictability of hours

–        Difficulties in managing work and family life

–        Unstable income and difficulties accessing financial credit

–        Contracts that do not reflect the reality of number of hours worked

–        Insufficient notice when called to work

–        A belief that employees will be penalised for not accepting work offered

–        Difficulties in accessing social welfare benefits.

Recommendations suggested by UL include:

·        Employees should receive a written contract on the first day of their new job.  Currently an employer has two months to issue a contract.

·        That contract should provide a statement of working hours which are a true reflection of those required.

·        There should be a minimum of 3 continuous working hours where an employee is required to report for work; if there is not, the worker should be paid for the 3 hours.

·        An employer should give at least 72 hours’ notice of any request to undertake work, unless there are exceptional and unforeseen circumstances.  If a worker undertakes extra hours without the minimum notice, they should be compensated at 150% of the rate they would be paid.  

·        Employers should give a minimum of 72 hours’ notice of cancellation of hours.  If workers do not get the minimum notice, they should be paid at their normal rate for the hours which were scheduled.  

·        Legislation should be enacted to provide for employees with no guaranteed hours of work or those on hybrid low hours and if and when contracts to take an average of the number of hours worked in the previous six months as the minimum to be stipulated in their contract.

·        Periodic reviews of these hours should be put in place so a contract reflects the reality of working hours.

·        Employer organisations and trade unions which conclude a sectoral collective agreement can opt out of some of the suggested legislative provisions above.

·        The CSO include a section in the Quarterly National Household Survey which deals specifically with non-guaranteed working hours.

Publishing the report today, Minister Nash said, “The independent study by UL has found that zero hour contracts are not extensively used in Ireland.  However, it is worrying that the UL study suggests increasing use of “if and when” contracts that, when used inappropriately, drive precarious working conditions.   These contracts can have the effect of undermining the protections afforded to workers on zero hour contracts, where they must be compensated for 25% or 15 hours of the time they had to make themselves available.”

“I am now going to undertake a short consultation process with employers, trade unions and other interested parties on the findings and recommendations of this report.  My Department will issue a consultation document to assist those who wish to respond and I would encourage anyone who is interested in doing so to make a submission.”

“I then intend to consider those submissions, in conjunction with this comprehensive study by UL and bring my own recommendations to Cabinet early in the New Year on how we should tackle this type of precarious work, while at the same time recognising the need for some levels of flexibility for employers and employees.”

“As part of my dignity of work agenda, I am determined to ensure that workers’ rights continue to be protected and upheld.  If, as this study suggests, the law has not kept up with the modern day labour market then I will be recommending changes to Government.”

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