NEW ZEALAND HAS made headlines in recent weeks for passing new legislation to ban zero-hour contracts, a move heralded as the first of its kind in the developed world. Campaigners have long called for the practice to be abolished, saying such contracts exploit workers, but are we likely to see a change in legislation here?
Just under 90% of respondents to a poll on this site last month agreed that Ireland should follow New Zealand’s lead, with 7% disagreeing and 2% having no opinion. Although such polls are open to scrutiny on their accuracy and representative qualities, the findings do highlight the clear dislike and contempt towards zero-hour contracts held by many.
Is it time for Ireland to follow suit and scrap such contracts? Let’s take a look at the situation facing workers in Ireland.
What are zero-hour contracts?
This is quite a difficult question to provide a definitive answer, as there is no harmonised definition of zero-hour contracts from a European perspective. Most member states have their own wording that aligns with their domestic understanding and use of such legal agreements in their own respective countries.
This in itself is a major problem, as such lack of clarity on the intricacies of these complex agreements can provoke immediate consternation against their use, simply by mentioning the term “zero-hour contract”.
In a general sense, a true type of zero-hour contract, in its simplest form, is an agreement between an employer and employee, where there is zero obligation on either party, meaning there is in effect 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 workers as opposed to guaranteeing none.
What rights do employees have?
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 arguably be construed as unfair, due to their ad hoc nature leaving employees with little certainty regarding their hours of work and income security. This can have a stiffling effect on workers and their families from an economic, societal and psychological perspective.
Another common problem is that, even when certain protections are in place, many employers can utilise existing loopholes enshrined in current legislation to bypass worker safeguards.
For instance, in the Irish context, zero-hour contracts stem largely from the Organisation of Working Time Act, 1997-2012, section 18 of which states that employees operating under such contracts must make themselves available for work – in other words, they need to be on standby for the hours they are contracted for, despite no guarantees of getting actual work for those contracted hours.
Section 18 does afford some 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 25% of their contracted hours or 15 hours, whichever is less.
Section 18 will not, however, apply such protections where an employee has no hours guaranteed, as no obligation to accept work exists. For instance, a likely scenario could be an employee is offered 15 hours of work one week but only a mere seven hours the following week.
Despite such loopholes, Ireland still fares far better than most of its European counterparts as regards the protections afforded to workers operating under such contracts, particularly in the UK, which has seen a rapid proliferation of these type of employment arrangements.
Are zero-hour contracts justified?
Zero-hour contracts are equally as divisive in Ireland as in the UK when the issue of merit or justification is raised.
The business community has understandably far different views from the trade unions on this issue in general. For instance, many businesses argue from an overriding economic perspective that such contracts, albeit “not ideal”, do serve an economic necessity.
This is a particularly common argument 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 and saving on wasted capital.
Union representatives, however, argue more so from the societal standpoint, based on the alleged infringement of worker rights. Many trade unions deem such legal instruments as inherently unfair and exploitative in nature.
As is evident from recent collective bargaining talks, trade union representatives have also called for current loopholes to be closed and the introduction of more protective measures – limiting the length of time a position can be filled using such contracts or requiring employers to provide for longer notice periods to those on standby, for example.
What does the future hold for precarious workers?
A report published by former Minister for Business and Employment, Labour’s Ged Nash, in November 2015 expressed concern about the emergence of “if and when” contracts, where workers are not contractually required to make themselves available for work.
The report found that, while zero-hour contracts are not extensively used in Ireland, this other type of working arrangement, when used inappropriately, greatly undermines existing legislative protections and in particular remuneration entitlements as contained in Section 18.
A consultation was considered following this report with various stakeholders, such as employer and union representatives, to obtain feedback on its findings and recommendations.
However, given the fact former Minister Nash did not retain his Dáil seat at the recent general election, coupled with the uncertainty regarding the makeup of the next government, it is unclear when this consultation will now take place and whether policy in this area will change in the coming years.
The debate on zero-hour contracts will likely continue into the lifetime of the next government, whenever it is formed. The main challenge presented is to try and strike a fair balance between the 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 positive. However, it will be key for the incoming government to quickly stem the growth of “if and when” contracts.
It remains unlikely that Ireland will follow New Zealand’s lead and be the first EU member state to ban zero-hour contracts, regardless of general public opinion, though. To do so would require the necessary political appetite to negotiate through the legal and policy wranglings of vested interest groups.
Jason O’ Sullivan is a solicitor and public affairs consultant at J.O.S Solicitors.
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