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Employment law and the programme for government

Friday, May 13, 2016

Now that we finally have a government in place all eyes are turning to the agreed Programme for Government which is in many ways an ambitious document. It will be interesting to see how many of its aspirations become reality.

The Programme is by no means silent on the subject of employment law, which isn’t surprising. In the run up to the general election, practically all of the political parties and alliances included proposals in their manifestos. Two areas got particular attention:

  • Every political party evinced a desire to take action in relation to so-called “Zero Hours” Contracts. Their effect is to create a situation where an employee is constantly on call, but the employer doesn’t actually have to provide work to them. Most significantly, the employer does not have to pay them for being on call. “If and When” contracts were also mentioned – essentially the same model, but the employee can decline to work if they want.
  • These contracts have a chequered history and it’s been argued that they are exploitative. Among other things, workers do not know when precisely they will be called to work, making it more difficult to factor in other commitments. In addition, not knowing the size of your pay packet at the end of the week makes it difficult to budget.
  • Most of the parties also addressed the issue of low pay and much reference was made in manifestos to the ideal of a “Living Wage”. Fianna Fáil, for example, suggested that “living wage” at the level of €11.50 per hour would become mandatory in Government Departments, with the intention that this would serve as a role model for all employers.

The Programme for Government addresses both of these points. It’s intended that there will be an increase in the minimum to €10.50 per hour over the next five years, taking us up to 2021.
That would be fairly significant development. It’s worth noting that at present, with a minium wage of €9.15 an hour, Ireland is definitely in the upper echelon of minimum wages in Europe – we’re surpassed only by Germany, France, the UK and Luxembourg. Perhaps unsurprisingly, Southern and eastern Europe, as well as the Baltic States, have a considerably lower minimum wage rate.

The Programme’s proposals in relation to the minimum wage are pretty concrete. However, the document is less specific when it comes to “Zero Hours”/”If and When” contracts. The Programme merely states that the new administration “will tackle the problems caused by the increased casualisation of work that prevents workers from being able to save or have any job security”. It also states that the Government “will strengthen regulation on precarious work”.
Both are clearly references to the “Zero Hours”/”If and When” models, but there’s little guidance as to how these problems might actually be tackled in practice.

In fairness, it’s not necessarily a straightforward problem to address. The generality of the commitment in relation to “casualisation of work” and “precarious work” reflects a more cautious tone adopted in the Fine Gael manifesto. That noted that the party intended to address the potential unfairness of these contracts, but did not specify how they would do this.
Potential solutions include amending our Working Time legislation. Unlike the position in the UK, that legislation already makes it mandatory to pay a certain (albeit limited) level of compensation to employees on “Zero Hours” contracts. One way to tackle the problem might be to increase the % payable to employees.

The more drastic option – championed by Fianna Fáil, for example – is to ban these contract models entirely. That may be a step too far. “Zero Hours” contracts may actually be a benefit to certain classes of employees – students are the obvious example but there are other categories, such as individuals who cannot or do not want to commit to a full fixed working day. It is also quite likely that there would be complex issues involved in defining “Zero Hours” contracts precisely.

One interesting omission from the Programme is any reference to paid paternity leave. In the run-up to the election, there were extremely strong signals that this would be introduced in September this year – in his 2015 budget announcement, Minister Noonan announced that paternity leave would become law in 2016. Presumably the omission of any reference to it in the Programme for Government does not mean that the plan has been abandoned.

All in all, interesting times lie ahead. The past Government’s record on employment law was reasonably positive – revamping the State’s employment tribunals was a long overdue improvement and there are clear signs that the new Workplace Relations Commission is already beginning to eliminate the year-long delays in processing cases that were an unfortunate feature of its predecessor bodies. Hopefully the new Government will continue in the same vein.


Patrick Walshe