Congress has been highlighting the issue of low hour contracts for the past number of yearsand arising from our campaign then Minister Ged Nash commissioned a study on the prevalence of low hour and zero hour contracts in Irish workplaces.
The study was carried out by the University of Limerick (UL) found that there was considerable evidence of low hour contracts in some sectors of the Irish economy. It proposed a number of changes to legislation to give workers more certainty about their hours of work.
Congress supports the recommendations in the University of Limerick Study and therefore engaged extensively with officials from the Department of Jobs and Innovation over the course of 2016 and early 2017 to maximise our influence on the substance of the proposed legislation to implement the UL recommendations.
Congress and affiliated unions pointed out that there are significant negative implications for individuals on low hour contracts.
Workers who are employed on low hour contracts have little predictability about the scheduling or number of hours they will be required to work in any given week.
They have unstable income, which has consequences for their capacity to access financial credit.
They have difficulty in managing work and family life and generally have poorer terms and conditions than those who work fulltime hours.
The most extreme form of low hours contracts are those that do not specify any guaranteed working hours, so called zero hour contracts.
Congress is strongly of the view that there should be a legal prohibition on such contracts. We believe that this was the intention behind some of the provisions of the Organisation of Working Time Act (1997) but, in reality, the passing of this legislation has not prevented employers using zero hour contracts. We strongly believe that workers should have a legal right to a guaranteed number of working hours.
Congress is therefore seeking changes to legislation that would provide for the following:
- A right in law to a guaranteed minimum number of working hours and a legal prohibition on zero hour contracts;
- A right to be paid compensation if no work is made available;
- An amendment to the Terms of Information Employment Act to require an employer to provide a written statement of terms and conditions of employment, including working hours, from day one of employment;
- The right to claim an alteration to the contract of employment in respect of working hours if, over a specified reference period, their actual working hours were in excess of their contracted hours, as provided for in the Banded Hours Bill 2016.
Bogus Self Employment
There is increasing diversity in the Irish labour market, away from the traditional direct employee/employer relationships and towards a more complex range of employment relationships.
Practices such as outsourcing, contracting-out and zero-hour contracts – the so called "gig economy" - have blurred the lines between direct employment and self-employment.
Two main categories:
a) In Construction, Forestry and Meat Processing, the Finance Act of 2007/2012 placed a statutory obligation on "Principal Contractors" to submit to Revenue under electronic relevant contracts tax (RCT).
Congress has been very critical of the operation of this tax system particularly relating to the construction industry. Many sub-contractors nominated by the "Principal Contractors" have little choice but to accept self-employment as a tax designation or risk not being in employment.
They also relinquish all employment rights entitlements and are therefore placed in very insecure and precarious employment. Workers are classified as self-employed even though they do not possess the characteristics or features of self-employment.
In 2015 Congress published a report that highlighted the growth of this practice in the construction sector, plus the consequent loss of revenue to the state and the losses to workers.
b) The use of intermediary- type structures is becoming more prevalent as a means of supplying labour. Essentially a worker who might otherwise be engaged as an employee by the employer who uses his or her services (end user) and provides the services through an intermediary.
Intermediaries generally take the form of:
a) A Personal Service Company (one person composed) of which the worker is a Director/employee.
b) A Management Service Company of which the worker is one of a number of Directors, unknown to one another.
One consequence of these types of employment arrangements is that the application of the PAYE System becomes the responsibility of the worker.
In a majority of these cases workers are being classified as self-employed even though they do not possess the characteristics or features of self-employment. While they may not have a contract of service, in all other cases they are treated in the same manner as an employee.
In some cases gaining employment is conditional on setting up an intermediary arrangement.
Revenue research suggests that these structures are most common in Pharmachem, IT and Airline Industries. They also feature in sectors such as Media, Entertainment, Construction, Financial, Legal and Professional Services.
In discussions directly with Revenue Commissioners and the Department of Finance on this problem, the Irish Congress of Trade Unions has argued that:
- The establishment of these forms of self-employment arrangements result in a significant reduction in PRSI Contributions to the Social Insurance Fund.
- Such arrangements lead to a loss of Tax Revenue to the Exchequer.
- "Workers" engaged through such structures are denied basic employment rights and such employment can be classified as casual, and precarious and insecure.
On foot of Congress representations, the Ministers for Finance and Social Protection jointly established a public consultation on the use of such employment structures with a closing date for submissions of March 31, 2016. We have established that 23 submissions were received to the group and that a report has been prepared. We await its publication.
