Proposal to ban zero hour contracts

Wednesday saw the approval of draft legislative proposals to ban the use of zero hour contracts. The proposal sees the ban on zero hour contracts in most circumstances and huge fines for employers for the misuse of them. The proposal brought to the cabinet by Minister for Jobs, Enterprise and Innovation Mary Mitchell O’Connor and Minister of State for Employment and Small Business Pat Breen, aims to stop the exploitation of, particularly low-paid and vulnerable workers.

The new proposal is a result of research conducted by the University of Limerick, in which they found that the use of zero-hour contracts has significantly increased in recent years. The research found that zero-hour contracts do cause issues for employees, namely uncertainty of earnings week to week. This can have a number of knock-on effects for the employee, including their ability to apply for a mortgage or their entitlement to sick pay or holiday pay.

In an effort to address these issues the draft legislation proposes a number of changes including:

•  If an employee comes to work and is sent home, they will be compensated for three hours pay at three times the national minimum wage.
• Employers will be required to provide employees with clearer information about the nature and core terms of their employment arrangements within five days of commencing a job. This will include the expected duration of the contract and what the employer reasonably expects the normal length of the employee's working day and week will be.

Zero-hour contracts or if and when contracts, can offer some businesses the flexibility to manage their workforce, particularly where work demands fluctuate. The concern for small employers now is that this flexibility may be taken away from them and that they may endure significant costs if work is not available.

Although the changes may take some time to come into effect when they do they will be the most significant changes to modern employment legislation.

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