Just when you thought it was safe to sign a zero-hours contract

New legislation provides some welcome rights for “low hours” employees. But for zero-hours workers, the provisions of the Employment (Miscellaneous Provisions) Act 2018, enacted in December, are a cause for concern – despite the act purporting to outlaw zero-hours type work in all but a few exceptions.

Zero-hours employment occurs where an employer offers the potential for work but is not obliged to provide minimum or specific hours. An employee typically signs an agreement to be available for work "if and when required". It is a feature of employment in sectors such as hospitality, agriculture, construction, the gig economy, and in health, education and care services.

The new Act has been hailed by the Government as “one of the most significant changes to working conditions in a generation”, which “will improve the security and predictability of working hours for employees on insecure contracts and those working variable hours”.

Where zero-hours employees are called upon to work, but the work does not happen, the Act says they will be entitled to compensation of 15 hours’ pay or 25 per cent of the hours they had expected to work, whichever is less. This provision was available under the existing Organisation of Working Time Act 1997, but the 2018 Act increases the rate of compensation to three times the relevant minimum wage.

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This advance may turn out to be a false dawn. Previous legislation proved toothless for zero-hours workers and this new Act looks set to change precisely nothing.

Exclusion

A 2015 University of Limerick study found that legislation at that time applies to a group of people who largely don't exist – zero-hours "employees". There are, however, a swathe of people doing zero-hours work. This cohort has been termed "if and when" workers rather than employees, and they were (somewhat ironically) excluded from the zero-hours provisions of the previous legislation. The wording of the new Act either deliberately or inadvertently looks set to perpetuate this exclusion.

Who is and who is not a zero-hours worker is not always straightforward but it is critical. Employment “status” is the fulcrum

on which many employment rights hinge.

To be protected by legal rights, a person has to be deemed an “employee” with a contract of service. Otherwise they are excluded from a whole set of rights, including those in the 2018 Act.

Ireland has two variants of zero-hours worker. There are those who are given a contract of employment and thus enjoy “employee status”. These are covered by the protections conferred through the 2018 Act.

The second group are those who sign agreements that are much more “casual”. These arrangements typically include a clause stating that the employer is under no obligation to provide hours and the worker is under no obligation to accept them. An example of such a clause is as follows:

“Your working hours will normally be between 7am and 12am Monday to Sunday. These may vary subject to the needs of the business. The work is expected to be regular but you are not guaranteed hours. You have the right to refuse or accept hours of work offered to you.”

Research shows the insertion of such “non-mutuality clauses” has been instrumental in rendering workers non-employees – that is, without employee status and so unprotected.

Research in Ireland and Britain shows many of these workers are not aware of the implications of signing such agreements; or, if they are aware, they are reluctant to question them.

Unilateral reduction

These “if and when” workers often do regular hours for the same employer over a long period of time. It is only when issues arise – such as a unilateral reduction of hours, redundancy or dismissal – that they find they have none of the rights enjoyed by those with employee status.

Workers can challenge their situation through the courts if they deem it unfair, but the reality is that such challenges can be costly and lengthy, and thus prohibitive for workers. As such work is highly precarious in any case, any effective challenge becomes less likely.

The 2018 Act specifically excludes from its protection those zero-hours workers whose job tasks are classified as “casual”. Employers’ representatives affirmed in the University of Limerick research the practice of having a panel of people on zero-hours casual contracts, rather than providing zero-hours contracts of employment.

The legislation as a result can have a perverse paradoxical effect by incentivising employers to downgrade people’s rights through the use of contracts with non-mutuality clauses. This embeds insecurity for those the new 2018 Act may have been intended to protect.

Positive spin Despite the positive spin,

it looks like the 2018 Act may turn out to be another missed opportunity for government to close a regulatory rights gap for many disenfranchised workers. Employers are unlikely to choose freely to offer employee status when they can continue to avoid the provisions of the legislation by engaging workers on a casual basis.

There is a plethora of research available that establishes negative outcomes for precarious workers, such as poverty, social exclusion and inability to participate as full citizens.

For zero hours workers, it appears that nothing has changed. They remain trapped in a vulnerable and precarious position. The issue for the Government is the extent to which it is facilitating employer demands for flexibility at the expense of longer-term social and economic goals.