“We have an employee who has worked with us for the last five years on a casual basis – they come into work whenever we need them.  He works, on average, about ten hours during the winter months and would then generally work full-time for June, July and August, when our business is at its busiest. He is paid the minimum rate of pay for his hourly work.

We are aware of the Employment (Miscellaneous Provisions) Act, 2019, but do not believe it applies given the very casual nature of our relationship with him.  He is fully free to say no to us if we call him and offer him hours of work.

The employee has now written to us and has asked to be placed on a “banded hours” contract at the maximum band (36+ hours per week).  How do we handle this?”

This raises many questions in relation to the application of the Employment (Miscellaneous Provisions) Act (“the Act”) and how difficult it has been for employers to interpret and apply the new rules around zero hours contracts, as well as applying the entirely new concept of banded hours entitlements.

Casual employee?

The prohibition on zero hour contracts does not apply in some limited circumstances, one of which is if the employee is working on a “casual” basis. The Act contains no definition of what “casual” means.

The Part Time Workers Act is the only piece of legislation in Ireland that defines “casual” employees.  That Act references a casual employee as somebody who has been in continuous service of an employer for less than 13 weeks, and the period of service is not one that could be regarded as regular or seasonal employment.

Practitioners have adopted a wide and broad interpretation of the term “casual”.  One such interpretation is as follows:

Employees are considered to be casual if they have no right to be offered hours of work, but if they are offered work, they are free to refuse those hours of work, without penalty. 

Based on the query above, it is hard to accept that an employee with five years’ service, working in the way outlined, could truly be regarded as “casual”.  The employee will surely be able to argue that there is an expectation that they will work shorter hours during the winter months, moving to full-time work every summer, as they have for the last five years. Proceed with caution in assuming that the employee is a casual employee in such circumstances.

Zero hours contracts – guaranteed payments

Using the starting point that the above employee is not excluded from the rules around the prohibition on zero hour contracts, the employer must then ensure that it meets its obligations under the new rules within the Act.

In the event that this employee holds a “zero hour contract” or an “as and when required contract” (or a combination of these two contracts), which appears to be what this employee holds, it is important to ensure that the employee receives their guaranteed minimum payment each week.

Example:

If an employee holds the above type of contract, and finds themselves called into work for 2 hours one week, but does not receive any more hours that week, and has not reached the minimum threshold in the Act of 15 hours, they are entitled to be paid on the following basis:

• 25% of the hours worked by someone else, doing the same work (for example, a full-time employee may have worked 40 hours)

In this scenario, the employee would qualify for 10 hours’ pay, even though they have only worked for 2 hours during that week.

Be warned, the employee’s entitlement does not stop there – the employer must also ensure that they have met the minimum payment threshold. The employee is entitled to three times the national minimum wage as a guaranteed minimum value of their payment. In this example, that threshold will already be met, as the employee qualifies for 10 hours’ pay.

Banded hours

Finally, the employee has exercised his entitlement under the Act to seek to be placed on a band of hours (eight different bands exist) to reflect his actual hours of work, rather than the hours set out in his contract. This employee has requested to be placed on a band at “36 + hours”.

What happens next?

• The employer makes the decision as to whether the employee qualifies for a band of hours, based on the employee’s average hours of work over the previous 12 months.

• The employer has four weeks within which to reply to that request.

• The employer determines the appropriate band on which the employee is placed.

• Once the band is determined, the employee is guaranteed those average working hours for at least 12 months.

This employee has quite a seasonal role, and so their average hours will not reach “36 +” over the immediate 12 months preceding the request.

In practice, employers often ask if the employees are entitled to the average hours of work “every week” within the band that the employee is placed. This is not practical for the above employment relationship, and the chances are that the employee is a student, who might not have the ability to work on the higher band of hours every week during the winter months.

As an employer, the requirement to ensure that the employee receives the average hours for the next 12 months can be calculated, in our view, over the next 12 months. In other words, the 10-hour winter contract, and 40-hour summer contract hours can continue, once the average annual hours come within the correct band on which the employee is placed.

Take away tips

1. Proceed with caution in assuming that a contract is “casual” when it may not be.
2. Ensure that all contracts of employment are regularised to include a review of the real hours worked by each employee, rather than the hours in their contracts of employment over the last 12 months.
3. Ensure that employees who are on a, “as and when required”, or a zero hours contract/contract for a certain number of hours are achieving the guaranteed minimum payment to which they are entitled.
4. Be proactive in terms of engaging with employees around regularising the relationship.