That Dáil Éireann shall consider the Report of the Joint Committee on Jobs, Enterprise and Innovation entitled ‘Scrutiny of Banded Hours Contract Bill 2016’, copies of which were laid before Dáil Éireann on 30 June 2017.
As Chairman of the Joint Committee on Business, Enterprise and Innovation, I am delighted to have the opportunity to speak on what I believe is a very comprehensive report on the Banded Hours Contract Bill 2016 produced by the then Joint Committee on Jobs, Enterprise and Innovation. I will speak to the Bill as an impartial Chairman, speaking about exactly what we heard and what we decided on as a committee.
A Second Stage deferral motion in respect of the Banded Hours Contract Bill 2016, introduced by Deputy David Cullinane, was agreed by the Dáil on 7 July 2016. This was to allow the then Joint Committee on Jobs, Enterprise and Innovation to carry out detailed scrutiny of the Bill and a range of additional issues raised in the reasoned amendment to the second reading motion tabled by Fianna Fáil. At a subsequent meeting of the joint committee, it was agreed that scrutiny of the Bill would be a priority for the committee. From the outset there was unanimous agreement in the committee that the issues of low pay and variable hours and the increased casualisation of work needed to be addressed. Members were totally supportive of the right of employees to have the hours they habitually work over a defined reference period reflected in their contracts of employment.
The joint committee commenced hearings on the Bill on 31 January 2017. Six meetings were held, concluding on 23 May. This extensive engagement allowed the committee to hear the views of a broad range of stakeholders, including employer organisations, trade unions and employment law experts. The sponsor of the Bill, Deputy David Cullinane, also came before the committee twice, at the outset to discuss the principles of the Bill and, subsequently, to respond to what the committee had heard over the course of its meetings. Over the course of its engagement with stakeholders, the committee developed a deep understanding of the very important issues faced by workers on insecure contracts in a number of sectors. I will now refer to some of the recommendations of the committee.
First, the committee recommended that the Central Statistics Office, CSO, engage with the Department of Jobs, Enterprise and Innovation, the Low Pay Commission, employer groups, such as IBEC, and employee groups, such as ICTU, to develop statistical measures that will better inform the debate on low pay and low or variable hour work.
The committee heard from a variety of witnesses that there is a lack of relevant statistics in this area. The CSO statistics, while useful, do not provide a detailed breakdown of the number of people working zero-hour, if-and-when or hybrid contracts. The University of Limerick study states that 2.6% of employees are on variable hour, part-time contracts. With approximately 2 million people at work, this equates to approximately 50,000 employees. It is important to note that this does not give an indication if the employees concerned are on low pay or if the hours are at their request. Various witnesses have provided data. However, it seems that many surveys carried out are more qualitative in nature. The committee believes that there needs to be an increase in the collection and publication of data in this area by both State bodies and other organisations such as trade unions and employer groups.
The committee's second recommendation is that the Bill requires further amendment to ensure that it is constitutionally sound. A number of legal experts who appeared before the committee expressed concerns about the constitutionality of this test, considering it to be onerous for the employer. The requirement to prove that the business is in severe financial difficulties was highlighted as being particularly onerous. In particular, Ms Marguerite Bolger, SC, and Dr. Des Ryan, BL, refer to the Employment Equality Bill 1996, which was found to be unconstitutional because it required employers to disclose the financial status of their businesses to third parties. The employer groups before the committee also contested this test, stating that businesses would not want to publicly advertise their financial difficulties to their customers and competitors. The committee also heard that an objective justification test, which is referred to in the Long Title of the Bill but not in the subsequent sections, would provide a more robust test for employers to refuse a move in bands.
The committee's third recommendation is that the severe financial difficulties test in the Bill be replaced with a test of objective justification as already exists in employment legislation. We decided on this because concerns were raised with the committee that the Bill placed a disproportionate burden on employers. Employers will be obliged to offer increased hours but there appears to be a lack of mutuality of obligation because employees are not obliged to accept the hours offered. Mutuality of obligation is a cornerstone of the contract of employment. It is not clear if the intention is to create a contractual obligation on the employee to fulfil the hours in the band. If not, there is a concern that an employee's refusal to take up the hours could lead to another employee acquiring the right to move to an increased band, resulting in the employer having two people on increased bands despite the hours not having been available previously. It would therefore appear necessary for an employee to be obliged to accept work offered at his or her current band or to allow the employer to move the employee to a lower band if the employee refuses hours offered in the current band.
The committee's fourth recommendation is that an obligation on the employee to work the minimum hours of the band be inserted in the Bill. This will create the mutuality of obligation necessary for the contract of employment.
The committee recommends that the definitions being used be imported from the same Act or that new definitions be inserted into the Bill. The committee was advised that it may be preferable to seek to convert the Bill from stand-alone legislation into an amendment to existing legislation, notably the Organisation of Working Time Act 1997. This would allow the Bill to fit into existing legislation, thus not creating an additional Act covering employment. It would also guard against there being inconsistencies between the Bill and the existing body of legislation.
The committee recommends that provisions to protect employees from penalisation be included in the Bill. The committee felt that the Bill did not contain any provisions to protect employees from experiencing punishment or even dismissal for seeking to assert their rights. This is an important protection for employees, since it guarantees that their working conditions cannot change dramatically if they attempt to get their employer to comply with the legislation.
The committee recommends that provisions for additional remedy be included in the Bill, beyond the simple conferring of hours. Ms Bolger stated that for a right to be real and effective, it must have real and effective remedy. However, the Bill does not provide for any remedy for the employee other than being moved on to the new band. Ms Bolger and Ms Cathy Maguire highlighted that this would not be of use to an employee who left his or her employment due to unreasonable refusal to move him or her to a higher band. Ms Bolger therefore recommended that the committee consider expanding the remedies beyond simply conferring the hours by addressing issues such as compensation and unfair dismissal.
The committee recommends that avenues be explored to reduce the recourse to casual work practices.
The committee also recommends that consideration be given to using new, specific definitions in the Bill, where the term worker refers to employees who do not have fixed or regular hours of work outlined in their contracts. The committee notes that these definitions will require very precise drafting in consultation with a range of experts including the Office of the Parliamentary Legal Advisor. The witnesses from the University of Limerick were of the opinion that the Bill needs to set out clearly who it protects. They highlighted that the UK attempted to create an intermediate category of worker. However, it has complicated matters and there have been a number of cases to determine who was covered by the definition. As a result, it is imperative that the Bill be clear and precise in this regard.
The committee's tenth recommendation is that the period be extended to 12 months. This will take into account the seasonal nature of the business. It is also in line with the timeframe for unfair dismissals. The committee spent a long time discussing what the correct amount of time would be. The Bill provides for the employee to request a move to a band of hours. However, the committee has some concerns about the drafting of this section. The Bill initially set this at six months. The committee has heard from many witnesses that this is too short. The employer group was particularly strong in highlighting that it was not a sufficient period to cover the seasonal nature of such employment. As it is up to employees to make the request, the timing of the request could lead to a significant difference in the hours worked. For the Christmas period, employees' hours are likely to be considerably higher than if the request had been made three months previously. The committee also heard from a number of witnesses that the 12 month period for unfair dismissals causes some concern. Other witnesses including Ms Patricia King of ICTU and the Minister of State, Deputy Pat Breen, indicated their preference for an 18-month period. The committee also notes that Deputy Cullinane, on his second visit to the committee, accepted that there was room to compromise on the period, suggesting nine months. In the end, the committee settled on 12 months, stating that it should be the maximum period considered.
The committee's 11th recommendation is that the word "exceeds" in section 3(1) be replaced with "reflects" or another form of wording to that effect. The committee notes that the Bill's sponsor, Deputy Cullinane, agreed with this.
The committee recommends that section 3(4) be deleted and replaced with a test of objective justification. The committee notes that the Bill's sponsor, Deputy Cullinane, was supportive of this change.
The committee further recommends that section 4(2) of the Bill be amended by replacing "the next band" with "the relevant band".
The committee's 14th recommendation is that the possibility of mediation at the Workplace Relations Commission, as per the Workplace Relations Act 2015, be considered for inclusion in the Bill. The representatives from the University of Limerick stated that the Bill does not seem to provide for the option of mediation in the Workplace Relations Commission following a complaint as per the Workplace Relations Act 2015. They were concerned about that. The committee has not heard sufficient information on this point and believes that it merits further consideration.
The committee's 15th recommendation is that section 4(2) be amended to delete "section 2" and replace with "section 3(2)", which is only a technicality.
The committee's 16th recommendation is that section 5 of the Bill be deleted and replaced with a provision that requires employers to provide employees with regular updates on the average hours worked and the bands in which they fall.
In recommendation No. 17 the committee suggests that further consideration be given to the merit of specifying the language of the notice.
Recommendation No. 18 proposes that consideration be given to amending section 17 of the Organisation of Working Time Act 1997 to address issues such as the location of the notice and that it be easily understandable for employees, as opposed to introducing new provisions legislation which may be contradictory to existing legislation.
The last three recommendations, Nos. 19, 20 and 21, relate to the bands. The committee recommends that the starting point at which the bands commence should be reduced through the inclusion of an additional band or bands to cover hours below 11.5 hours. The committee also recommends that the bands provided for be amended to remove the overlap between bands. The committee recommends that band F be amended due to the short timeframe in the band. The committee believes that 36 hours or more should be considered as the final band, not 41 hours.
On behalf of the Joint Oireachtas Committee on Business, Enterprise and Innovation I express my gratitude to the committee members for their input. We work very well together as a committee. We have always managed to put forward a document on which we got total agreement. We did not have to push to any votes and were able to reach agreement. I reiterate what I said at the start, there was unanimous agreement in the committee that the issue of low pay and variable hours, and the increased casualisation of work, needs to be addressed. Members of the committee were totally supportive of the right of employees to have the hours they work over a defined reference period reflected in their contracts of employment.
I also thank the committee secretariat and the staff of the Library and Research Service for their work in producing this report. I especially thank the organisations and individuals who appeared before and made submissions to the joint committee. The committee gained valuable insights from all those who had an input into the preparation of this report.
I speak with regard to the Bill today as an impartial chairman, and I hope that I have reflected exactly what was put before the committee and what the committee reflected in its document.