Speech by Willie Penrose TD on the Employment (Miscellaneous Provisions) Bill 2017
On behalf of the Labour Party, I welcome the opportunity to contribute on Second Stage of the Employment (Miscellaneous Provisions) Bill 2017. Like the Minister, I acknowledge the commitment, drive and focus of my colleague, Senator Gerald Nash, who, when he was Minister of State at the Department of Jobs, Enterprise and Innovation, ensured a study of the prevalence of zero-hour contracts among Irish employers and their impact on employees was conducted in a most comprehensive and laudatory fashion by the University of Limerick which produced an excellent report. I, therefore, welcome the introduction of the Bill, in so far as it goes, and most of its contents, but there are some missed opportunities to strengthen the law further in this area.
Like the ICTU and others have said and as outlined by many speakers, we, in the Labour Party, also subscribe to the view that the Bill is less than perfect. In our view, it requires refinement and amendments, some of which my colleague, Senator Gerald Nash, outlined yesterday in the doorstep interview he gave. Nevertheless, it would be churlish not to say there is a significant intention behind the Bill, which is welcome. The Bill is aimed at improving conditions for workers in precarious employment, but, as it stands, it is significantly and deeply flawed.
Some aspects of the Bill are important for workers who in their working lives are faced with insecure and precarious work. Even a cursory view of the Bill clearly highlights the fact that the prohibition on zero-hours contracts excludes casual workers. Surely all workers, casual and otherwise, should be included and treated the same. The Irish Congress of Trade Unions has noted, in particular, that the provision to pay a worker required to report for work for a minimum of three hours, whether he or she is required to work, is in line with the recommendation made in the University of Limerick report. Congress has indicated that the minimum payment for working such hours should be at the applicable hourly rate, rather than the prevailing national minimum wage or ERO rate as set out in the Bill. Likewise, the provisions relating to banded hours must clearly be revisited and reviewed. Furthermore, the Bill needs to be strengthened to ensure workers will not be penalised for invoking their rights under legislation. The hole in the bucket from my perspective of the Bill is the abject failure to deal with the concept of if-and-when contracts. It does nothing in that regard. Notwithstanding what the Minister said, as a barrister, I read the Bill inside out and cannot find anything to do with if-and-when contracts.
I am aware of the commitment in the programme for Government to tackle the problems arising from the increase in the casualisation of work. There was clear evidence of employers increasingly having resort to atypical work – short-term and short working hour contracts – especially in the hospitality, retail and health care sectors. It started in the period before the recession and continued during it. It prompted the then Minister of State, now Senator Geraldd Nash, to commission the University of Limerick report. My colleague, Deputy Brendan Ryan, who has an interest and expertise in this area was instrumental in having the report debated at our parliamentary party meetings.
I am also aware that many of the employer organisations indicated that such contracts also potentially suited some employers and employees. From an employer’s perspective, I note that they advocated that such contracts were clearly useful in providing flexibility by ensuring employees would be available when needed to meet the needs of a particular business which clearly could reduce the payroll costs of an employer. For some employees who required flexibility for the purposes of education or meeting other commitments they said zero-hour contracts might have been beneficial. Leaving aside these weak arguments, there is no doubt that zero or low-hour contracts had a significant negative impact for many individuals, including low and unpredictable working hours, clearly unsustainable levels of income, difficulties in managing their work-life balance and problems with child care arrangements and lack of notice of shifts.
What was noticeable from the findings of the University of Limerick review was that zero-hour contracts were not resorted to extensively in Ireland. A lot of speakers get mixed up between zero-hour contracts and if-and-when contracts. There is a difference. One difference is that zero-hour contracts attract some of the benefits of the corpus of employment legislation, whereas if-and-when contracts attract nothing. There is a significant difference when one goes into the Labour Court, as I did previously. That is an important point to make. There is evidence of employers resorting to if-and-when contracts, which, like zero-hour contracts, involve non-guaranteed hours of work. The fundamental difference between zero-hour and if-and-when contracts is that individuals on zero-hour contracts with an employer are contractually required to make themselves available for work, whereas those individuals on if-and-when contracts are not contractually required to make themselves available. If-and-when hours take different forms in employment contracts. In some all hours offered to an individual are on an if-and-when basis. In others there is a hybrid arrangement, whereby an employee has some guaranteed hours and additional hours are offered on an if-and-when basis. That is why I said this was a very critical issue.
The University of Limerick found that the key factors which were driving the use of if-and-when contracts included: increasing levels of work during non-standard hours; a requirement for flexibility in demand-led services; the absence of an accessible and affordable child care system; current employment legislation and the particular resourcing models for education and health services. Trade unions and others have pointed to the significant negative implications for individuals working if-and-when hours. They include: unpredictable working hours in terms of the number and scheduling of hours; unstable income and difficulties in accessing financial credit,; a lack of employee input into the scheduling of working hours; employment contracts which do not reflect the reality of the number of hours worked; insufficient notice when called to work; being sent home during a shift; and a belief among individuals that they will be penalised by their employer for not accepting work. The Minister is trying to deal with that issue. Other implications include difficulties in accessing a range of social welfare benefits which is another headache and, in some cases, poorer terms and conditions.
Elsewhere in Europe working hours are regulated by legislation and collective agreements. We have some collective agreements and want to ensure they will continue to work with trade union input. There are no zero-hours contracts in a number of countries. Where zero-hours-type practices are regulated, some countries have placed limitations on their use such as time limits. We must acknowledge that many of the recent and current employment and labour regulations have been introduced in response to EU directives. The reason we must be very careful is, from a legal perspective, a critical element for an individual is the analysis of the type of contract on which he or she is engaged and what the classification will be. That is crucial because contracts of the if-and-when variety are not likely to attract the protections offered in the corpus of employment legislation which are exceedingly important in vindicating and advancing workers’ rights. Thus, in summary, establishing the employment status of an individual is key. In Ireland the courts have adopted from UK law and advanced the centrality of the concept of mutuality of obligation. That was evident in the case of Barry and Others v. The Minister for Agriculture and Food in 2008. The case clearly established that mutuality of obligation was the first essential test of the existence of a contract of employment.. That is absolutely crucial.
The Bill, as it stands, is flawed. I say that because it fails to offer any protection or relief to a growing cohort in the workforce which is effectively debarred not just from the remit of the Bill but also from the entirety of employment protection law. I refer to those workers who are being required in growing numbers to sign dodgy if-and-when contracts.
The vast bulk of employers are honourable decent people who want to do the best by their employees. Of course, employment is a two-way relationship and there is mutual recognition of one another’s rights, obligations and responsibilities. Such relationships establish a good workforce and everyone wins. They produce a win-win. The problem is the dodgy employer is always on the look-out or on the make and this is the type of thing we want to stamp out. My late uncle used to say a builder never got rich on the materials that went into the building but rather on the back of the people working on the building. He had strong socialist beliefs and he made that point from the time I was on his knee talking to him.
As matters stand, the concepts of casual employment and continuous employment are mutually exclusive. The difference is an important one. A casual employee will never accumulate the necessary minimum period of continuous employment that ensures statutory protection under our employment law framework, including the provisions in this Bill. That is the point – they will not gain anything.
I have studied this carefully from the perspective of trying to determine the legal rights. This gap creates a loophole that can be can be exploited by employers. If employers can impose terms and conditions that, in effect, casualise the workforce, then workers fall outside the protection of employment law. They are put at risk of job insecurity, limited integration in the business, low motivation, low job satisfaction and entrapment in a succession of short-term low-quality jobs with little or no social protection. We must end this exploitative practice but this Bill fails to do so.
The Bill is being debated in the context of the decline of standard employment relationships and increasing atypical work. Some changes are inevitable. We accept some changes. Some may be positive or welcome. However, we have to be careful of where non-standard terms and conditions can be imposed on vulnerable and low paid workers and those with little protection. That is where we have to focus. Conditions of flexibility can become conditions of insecurity and can become permanent. That is the significant issue.
Women are over-represented in non-standard employment sectors that are poorly-paid, insecure or outside or at the edge of our employment protection laws. Employment policy has to strike the right balance between the need for flexibility and adaptability by enterprise and the rights of workers to job security – in other words, the right to a basic level of predictability in the terms and conditions of work.
Section 18 of the Organisation of Working Time Act 1997, referred to by the Minister, deals with workers who have a contract requiring them to make themselves available for work. The section sets out a floor of minimum pay entitlements for someone whose actual hours in a given week do not match up to his or her hours on-call.
Compensation and various other measures are provided for, including the 25% of 15 hours provision and the usual arrangements. However, the Act does not deal with a contract with few or no guaranteed hours of work or with no requirement, on paper at least, for employees to make themselves available on-call outside of any guaranteed contractual hours. Many workers are now encountering terms and conditions under which the company is under no obligation to provide work to the worker at any time and the worker is under no obligation to accept any work offered by the company at any time. The Minister may suggest that is rare, but I have in my hand a copy of a contract. The contract is from a significant multinational catering firm. The firm used to do contracts with State bodies and organisations and may well still do so. The firm imposes on workers certain conditions. Under the conditions for hours of work, the hours of work of the worker will be determined by mutual agreement. The company will give the worker seven days’ notice of hours of work which are available to him. The worker has the right to refuse or accept these hours. The refusal of hours on the worker’s behalf will have no negative consequences on hours offered to him in future. The firm gives no guarantee that hours will be offered to him on a weekly basis. The reality is that the company expects its workers to be available whenever it calls on them. The contract is written in terms that exclude any obligation on either party. When there is no mutuality of obligation, as proved in the case of the Minister for Agriculture and Food v. Barry, the floor is gone, the show is over and they are gone out the door – the worker has no employment protections.
It is clear if-and-when contracts are not caught by the 1997 legislation nor will they be caught by the Minister’s Bill. The Minister disagreed with that point, but doctors differ and the patient suffers. There is only one set of patients, that is, the workers caught with precarious and unstable hours. In fact, these workers may be outside the entire system of employment protection law. That is my view. The reason is that under the arrangements there is no obligation on the employer to provide work and no obligation on the worker to do any work offered. The law requires mutuality of obligation for a contract to be in place. If there are no enduring mutual obligations, there is no enduring contract. This issue has not been to the higher courts yet, but the law may well be decided if people working under such arrangements are told that they are in effect casual day workers.
We do not insist that genuine casual work must be deemed to be permanent and pensionable. No one is insisting on this. We all know about students and how people have availed of such work over the years – we have all done it. In fact, the trade unions have recognised and accepted the concept of genuine casual work in collective agreements negotiated with the hospitality sector. We do not live in cocoons or ivory towers. However, if someone is, on paper, simply working from shift to shift, but the circumstances give rise to a reasonable expectation that the employee will be re-engaged to do that work and if it turns out that the employee is, in fact, subsequently employed to do that work, we need to look at the set of facts, rather than what has been written on the paper.
I urge the Minister to look at the Australian rules on this issue. Under Australian law, service as a casual employee must be included in any calculation of continuous employment if the employee was employed as a casual employee on a regular and systematic basis and during the period of service the employee had a reasonable expectation of ongoing employment by the employer on a regular and systematic basis. Under the rules in Australia, account must be taken of whether the employee was offered work regularly, whether the employee generally accepted work when it was offered and whether, although the amount of work offered might vary, there was a patter or system to the work that the employee was offered each week. Unless the Minister accepts amendments to the Bill to introduce provisions such as the Australian rules, we will be stuck with what are perverse arrangements that will subsequently lead to the downgrading of the status of employment.
I hope we can all agree that imposing such terms and conditions on the vulnerable, the low-paid and those with little social protection is unacceptable. If we are agreed on that, we should now take agreed and effective action to stop it. Like my colleagues, I am happy to play a role in that regard. The Labour Party intends to bring forward proposals to amend the Bill to include casual employment carried out on a regular and systematic basis and where the worker has a reasonable expectation of an ongoing, regular and consistent pattern of employment by the same employer.
The Labour Party notes the proposal to provide for the rights of employees to be placed in a band that reflects actual working hours. The Bill provides for four bands ranging from periods between one and 35 hours, one and ten hours, 11 and 24 hours and 25 and 34 hours and beyond. Most employee representatives, including the Irish Congress of Trade Unions, and the Labour Party are of the view that the bands proposed in the Bill is simply too broad. They need to be narrowed substantially. There should be six or seven bands in which workers could be placed under the legislation.
The reference period for the look-back or review of 18 months is far too long and should be reduced. We should allow a 12-month period for the unfair dismissal applications. Then we can get in after 13 months. I imagine we could all agree on that. We should try to get the period back to 13 months. That is one suggestion of which we are strongly supportive. Under the Bill, an employee could be placed on a lower number of hours after 18 months. While a further review is under way, the 13-month look-back period would help to deal with the scenario. In that way, the Minister would not be allowing that to slip through.
The Irish Human Rights and Equality Commission has noted concerns in respect of the banded hours proposal and the banding provisions. The commission has suggested a contract arrangement that seeks to accurately reflect the hours worked may provide workers with some robust protection from significant reductions in income.
We can all work together in several areas to try to find solutions. No one is suggesting he or she alone has divine right to insight or that he or she has the only proposals to deal with the situation. This is a major opportunity for us to deal with issues. I agree that it is time to call a halt to bogus self-employment and people being classified in that way. I was disappointed with the study referenced by the Minister also. I indicated my surprise to her in respect of it. This is something on which the Labour Party has been focused for several years.
People are turning up for work on a Monday morning only to be told they are self-employed, which means that they no longer have rights and must pay their own tax, insurance and so on. This is a disguised form of employment because they are still effectively employees. We must tackle this issue, if not in the Bill, in other legislation, because otherwise it will be left to fester for a long time. The Labour Party has drafted a Bill to address this issue.
I acknowledge that the Minister has made a start with the Bill. In fairness to her, she has been willing to take on some of the old chestnuts some of her colleagues were not eager to address. I am sure the cohort of the working population affected by if-and-when and similar contracts will be grateful that a good start has been made. We can improve the Bill by working together in a collegiate manner to strengthen certain of its elements, while respecting the rights, responsibilities and obligations of employees and employers. There are risk-takers and people who assist in that regard, but progress will not be made without good employees who are treated properly in the workplace. It will benefit all concerned to advance legislation that reflects our desires and objectives in that regard.