Speech by Minister Regina Doherty, TD at the second Stage Debate on the Employment (Miscellaneous Provisions) Bill, Dáil Eireann

Speech by Minister Regina Doherty, TD at the second Stage Debate on the Employment (Miscellaneous Provisions) Bill, Dáil Eireann, Wednesday, 14th February, 2018

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I move “that the Employment (Miscellaneous Provisions) Bill 2017 be now read a second time”.

I am very pleased to have the opportunity to introduce this Bill to the House. The Bill is being brought forward in response to the commitment in the Programme for a Partnership Government to address “the problems caused by the increased casualization of work and to strengthen the regulation of precarious work”. The key objective of the Bill is to improve the security and predictability of working hours for employees on insecure contracts and those working variable hours. I know many members of this House share my interest in workers’ rights and will have strong views on this Bill. I look forward to hearing those views and debating the issues of concern to colleagues.

It is fair to say that good progress has been made over the last number of years in terms of our economic recovery, in creating new job opportunities, the majority of which are full-time positions. However, we must remember those people who, not by choice, are in less secure arrangements and may not know from week to week what hours they will be working.

This makes it very difficult for people to plan their lives outside of work. The Bill we are debating today will significantly improve the employment protections for these people.

Ireland has a robust suite of employment rights, which provides broad protections to all employees. We have modern dispute resolution structures in the Workplace Relations Commission and the Labour Court which is easy to access for the employee and employer. We have the second highest national minimum wage in the EU. This Bill is intended to build on that strong foundation.

I took over responsibility for this Bill in September last when certain employment affairs functions transferred from the former Department of Jobs, Enterprise and Innovation to what is now the Department of Employment Affairs and Social Protection. It would be remiss of me not to acknowledge the work of those who came before me in this Bill’s journey.

In that respect, I want to acknowledge the work of Ministers Pat Breen and Mary Mitchell O’Connor and also Senator Ged Nash, who as Minister for Business and Employment in the previous Government commissioned the University of Limerick to conduct a study of the prevalence of zero hour contracts and low hour contracts in the Irish economy.

This Bill is some three years in the making. I think it is important for Deputies to understand the work that has gone in to the Bill including, in particular, the extensive consultations that have helped to shape and focus it. This work includes the University of Limerick study and the public consultation that followed it. It also includes detailed discussions with ICTU and IBEC over a period of many months. I would like to take this opportunity to thank the many stakeholders who contributed to the development of this Bill at different stages of the process. These consultations have helped us to ensure the proposals contained in the Bill are balanced and fair to both employees and employers.

We must remember that this Bill will apply to all employers across all sectors of the economy.

It is important, therefore, that we strike a fair balance between the respective rights and obligations of employees and employers. Our approach in this Bill is to try to ensure that where we are introducing new rights for employees or strengthening existing provisions in the law, the measures are proportionate and balanced by reasonable defences for employers, recognising the challenges faced by employers in running their business or providing their service.

The vast majority of employers are good employers who treat their employees well and who meet their responsibilities under employment law. These employers should have nothing to fear in this Bill. On the contrary the Bill is aimed at tackling exploitative employment arrangements and those unscrupulous employers who do not respect even the most basic rights of employees.

The Bill addresses the following five key issues which have been identified as being areas where current employment law should be strengthened to the benefit of employees, without imposing unnecessarily onerous burdens on employers:

• ensuring that employees are better informed about the nature of their employment arrangements and in particular their core terms at an early stage of their employment. A new offence is being created where employers fail to comply with the new information requirements
• strengthening the provisions around minimum payments to low-paid, vulnerable employees who may be called in to work for a period but not provided with that work
• prohibiting zero hour contracts, except in limited circumstances
• ensuring that employees on low hour contracts who consistently work more hours each week than provided for in their contracts, are entitled to be placed in a band of hours that better reflects the reality of the hours they have worked on a consistent basis over an extended period
• strengthening the anti-penalisation provisions for employees who invoke or try to invoke a right under these proposals

The Bill seeks to achieve its aims through appropriate amendments to the Terms of Employment (Information) Act 1994 and the Organisation of Working Time Act 1997.

I want to make a couple of important points about the Bill in response to some of the comments and media coverage that have emerged since the Bill was published. The first point is to clarify that the definition of “employee” will not change as a result of this Bill. The Terms of Employment (Information) Act 1994 and the Organisation of Working Time Act 1997, the two Acts this Bill proposes to amend, share the same definition of employees i.e. all workers on contracts of service. Therefore the Bill is intended to exclude genuinely self-employed people. Currently if an individual believes that s(he) is being denied employment rights appropriate to an employee, s(he) may pursue a case to the WRC.

This will continue to be the case if this Bill is enacted.

The second point concerns the use of “if and when” contracts. The suggestion is that the Bill does nothing for people from being exploited by employers abusing “if and when” contracts. That is not the case at all. On the contrary, each of the key measures I have outlined above, both individually and in the round, will also help people protect people from being exploited by if and when arrangements.

I now propose to outline the main provisions of the Bill. The Bill consists of 4 Parts and 17 Sections. For the convenience of Deputies, an explanatory memorandum has been published and it provides a summary of the provisions.

PART 1 of the Bill contains the short title, commencement provisions, interpretation and repeals.

PART 2 amends the Terms of Employment (Information) Act 1994 and introduces a requirement that an employer must provide employees with a written statement containing five core terms of employment within five days of the commencement of employment. This Part of the Bill also provides for offences and anti-penalisation measures.

Section 5 removes the exclusion of employees that normally work less than eight hours per week so that such employees will be entitled to receive the written statements of their terms of employment that will be required under the amended 1994 Act. This is to protect employees on contracts of employment with low hours.

Section 6 amends section 3 of the 1994 Act to require that an employer must provide employees with a written statement containing the following five core terms of employment within five days of the commencement of employment:

• the full names of the employer and the employee
• the address of the employer
• the duration of the contract (where temporary or fixed-term)
• the rate or method of calculation of the employee’s pay, and
• the number of hours the employer reasonably expects the employee to work in a normal working day and a normal working week

This provision is a key element of the Bill and is designed to ensure that employees are much better informed of their core terms of employment at a much earlier stage. Currently, employers are required to provide terms of employment within two months of commencement of employment. Furthermore, the amended section includes a new requirement that the written statement must include the number of hours which the employer reasonably expects the employee to work in a normal working day and in a normal working week. This is a significant change which is designed to ensure that employees have much greater clarity and predictability about their daily and weekly hours of work. The remainder of the required terms of employment will continue to be provided within the current two month period.

Section 7 deals with posted workers. It amends section 4 of the 1994 Act to require that an employer must provide employees who are required to work outside the state for a period of not less than one month, with the written statement containing the aforementioned five core terms of employment required prior to their departure.

Section 8 sets out matters in relation to existing contracts of employment. The section amends section 6 of the 1994 Act to provide that where an existing employee requests an employer to provide the written statement containing the five core terms of employment the employer must do so within two months.

Section 9 introduces an offence for an employer who fails to provide the written statement of core terms of employment required within one month of commencement of employment. This section also makes it an offence for an employer who deliberately provides false or misleading information to an employee as part of the statement of core terms of employment. This section also provides for appropriate defences for employers.

Creating an offence provision is to act as a deterrent against employers who fail to respect the most basic rights of employees. Where the WRC inspectorate pursues a prosecution under this section, it is proposed that the Director General of the WRC will not be permitted to progress a complaint with the same facts by referring it to an Adjudication Officer.

This is to avoid the same matter being pursued through two separate arms of the WRC at the same time and is consistent with the approach taken under section 34 of the National Minimum Wage Act 2000.

The ultimate sanction for employers who fail to provide a written statement of core terms of employment or who deliberately misrepresent what is on this ‘Day 5’ statement is a Class A fine (currently €5,000) or imprisonment not exceeding 12 months or both.

However, the Bill also provides, at Section 17, that a Workplace Relations Commission inspector may issue a fixed payment notice in lieu of prosecution for less egregious offences under this section of the Bill.

Section 10 introduces an anti-penalisation provision into the 1994 Act. Penalisation is broadly defined in the section and includes threats of penalisation. It is important that employees believe they can exercise their rights under the Act without any repercussions.

This is a new measure -currently there is no penalisation provision under this Act.

If an employee believes that s(he) has been penalised for asking for a written statement of terms of employment or invoking any right under this Act, s(he) may pursue a case to the Adjudication Division of the WRC.

Section 11 provides that an employee cannot seek redress unless the employee has been in continuous service of the employer for more than one month, and provided that the employer has not been prosecuted for an offence under the 1994 Act in relation to the same matter. This is to avoid frivolous and vexatious complaints.

PART 3 amends the Organisation of Working Time Act 1997.

Section 12 amends the 1997 Act to provide for the insertion of a number of relevant definitions, namely, ‘adjudication officer’, ‘collective bargaining’ and ‘employment regulation order’.

Section 13 amends section 5 of the 1997 Act so as to relieve an employer from complying with the new ‘banded hours’ provisions in exceptional circumstances – for example emergency or unusual and unforeseeable situations beyond the employer’s control.

Section 14 replaces the existing section 18 in the Organisation of Working Time Act with a new section 18, which further provides as follows:

• it prohibits zero hours practices in most circumstances. It provides that zero hour practices are allowed in the following limited circumstances; in cases of genuine casual work, emergencies or short-term relief work to cover routine absences
• in situations where employees are called into work but sent home without work, there will be a new minimum payment of three times the National Minimum Wage (hourly rate) or three times the minimum hourly rate in an Employment Regulation Order. Employment Regulation Orders currently apply in the security and contract cleaning sectors. Employees that are ‘on call’ will continue to be excluded from this minimum payment

The focus here is on low-paid employees. I want to ensure that where low-paid employees are called in to work but sent home again without work, they get a reasonable compensation payment.

For example, if an employer calls in an employee into work but then decides they are not needed, that employee would be entitled to three times the minimum wage (€28.65 (3 x €9.55)) every time that occurs. This is to discourage the unscrupulous practice of calling employees into work and then sending them home without work or more meaningful compensation.

Section 15 inserts a newsection 18A in the Organisation of Working Time Act 1997. The new section deals with banded hours. It introduces a new right for employees, who habitually work more hours each week than is provided for in their contract of employment, to request to be placed in a band of weekly working hours that better reflects the reality of the hours they have worked over an extended period. It also acts as a protection for employees from unscrupulous employers who flex up and down hours in an unfair way as a means of exercising control over employees.

A reference period of 18 months is provided for the purpose of the section. While there was a range of views amongst stakeholders as to how long this reference period should be, a period of 18 months is sufficiently long to allow for the normal peaks and troughs of businesses, including those subject to seasonal fluctuations.

The section provides reasonable defences for employers to refuse an employee’s request where

• the facts do not support the employee’s claim
• significant adverse changes have impacted on the business (e.g. loss of an important contract)
• emergency circumstances (e.g. business has had to close due to flooding)
• where the hours worked by the employee were due to a genuinely temporary situation (e.g. cover for another employee on maternity leave)

Where the claim is disputed or refused the employee can refer it to the Workplace Relations Commission (WRC) for adjudication and where the Adjudication Officer finds in the employee’s favour the redress will be that they are placed in the appropriate band of hours. There is no provision for any other compensation. I believe this will avoid any vexatious or frivolous claims in relation to this new provision. An appeal against an Adjudication Officer’s decision will be to the Labour Court as applies in other employment rights cases. Enforcement of a WRC or Labour Court decision will be by way of a District Court Order.

The section will not apply to an employer who has entered into a banded hour arrangement through an agreement by collective bargaining with their employees.

I recognise that in some sectors, the retail sector in particular, banded hours arrangements have been agreed between the employer and employees and have been working well. I am sure Deputies will agree that we should not interfere with these arrangements.

Section 16 replaces the existing section 26 of the Organisation of Working Time Act 1997 to strengthen the protection against penalisation of employees who wish to invoke their rights under that Act. It updates the current penalisation provision to extend the range of circumstances where an employee can claim adverse treatment. If an Adjudication Officer finds that an employee has been penalised under the Act, s(he) may award up to two years of salary (gross).

PART 4 amends the Workplace Relations Act 2015

Section 17 allows an inspector of the WRC to issue a fixed payment notice where the inspector has reasonable grounds for believing that a person has committed an offence, that is by not providing the written statement of core terms of employment within the prescribed time or by deliberately providing false or misleading information as part of the statement.

The WRC already issue such fixed payment notices in respect of certain other employment law offences.

These notices are an effective way of securing compliance with the relevant provisions and an efficient alternative to prosecution.

I take this opportunity to advise the House that I propose to bring forward at Committee Stage an amendment to the Minimum Wage Act 2000. I have recently received recommendations from the Low Pay Commission in relation to the sub-minima rates of the National Minimum Wage, and I am pleased to say that the Government (earlier today) has agreed my proposal to accept these recommendations.

The recommendations are to abolish the existing training rates (which are used rarely) and to simplify the existing age and experience-based sub-minima rates. This will make it administratively easier for employers to use the sub-minima rates. It will also limit the application of sub-minima rates for employees, which is a positive outcome for all parties.

I trust that this amendment, as recommended by the Low Pay Commission, will be supported by all sides of the House, as it seeks to improve the situation of low-paid workers, as well as reducing the administrative burden for employers.

I am also taking the opportunity in this Bill to bring forward an amendment to Section 8 of the Unfair Dismissals Act 1977 to allow for stronger enforcement of this legislation by the Workplace Relations Commission. At present, Adjudication Officers of the WRC do not have powers to compel witnesses to attend a hearing to give evidence in relation to cases taken under the Unfair Dismissals Act 1977. The WRC has similar powers of witness compellability under other employment rights legislation and it is my intention to remedy this situation and to put Unfair Dismissals legislation on the same footing as that which applies under other employment rights legislation.

To conclude, Ceann Comhairle, I want to remind Deputies that the Bill is the culmination of three years of work and I think all reasonable commentators and stakeholders will recognise it as a genuine attempt to improve the law in this area.

I hope they would also appreciate the difficulties inherent in trying to strike what is at times a delicate balance between the respective rights and obligations of employees and employers. Most importantly, I believe the balance struck in the Bill is a fair one for all concerned. I look forward to hearing your views and working with you to progress this important legislation as quickly as possible. I am proud to commend the Bill to this House.

Thank you.