As new CSO figures show that Ireland’s unemployment rate has fallen to 6.3%, Taoiseach Leo Varadkar has told Ibec the Government is to prioritise new laws restricting zero hour contracts during this Dáil term.
Ibec director of employer relations Maeve McElwee said such legislation would lead to significant costs and administration for all employers.
Speaking on RTÉ’s, she said it was “disproportionate” legislation that would impact all employers. She said employers are asking for a regulatory impact assessment to be carried out before any legislation is implemented to consider the “significant” economic cost it would have on employers.
While she accepted less than 2% of employees were working in low or zero hour contracts which may be “precarious”, she said some of the workers were also working by choice on well paid, low hours contracts.
She said this included 20,000 workers across the health and education sectors.
Ms McElwee said the vast majority of employers look after their employees and treat them with dignity.
Labour Party spokesperson on employment Senator Ged Nash, who initiated the process to ban zero hour contracts, called on the Government to publish the proposed legislation in full.
“These proposals have been on the blocks for two years. There are still too many people going to bed on a Sunday night not knowing how many hours they will work that week, and therefore how much they will earn,” he said.
However, Mr Nash said that while the Government’s proposals represent a step in the right direction, the draft legislation needs to be strengthened, warning that low-hour contracts, which are more prevalent in Ireland, are just as bad for workers.
“Much is being made of the plan to end the use of zero hour contracts. This might be a catchy headline but all it really amounts to is a piece of legislative tidying-up, as UK-style zero hour arrangements are not a common feature of the Irish landscape. However, ‘if and when’ and low hours contracts are much more prevalent and just as insidious.”
The Irish Small and Medium Enterprises association described the proposed legislation as “ an overly onerous response to the (unestablished) problem of zero hour contracts”.
ISME spokesperson John Barry said: “The key point is that we are talking about a very small minority of employers abusing staff under ‘if and when contracts’. Legislation on zero-hours contracts will not stop abuse of employees with ‘if and when’ contracts, it will simply change the rules. The bad employer will always find a way around the rules.”
He added: “This is a knee-jerk reaction to a populist call by the left. Perhaps legislation recognising new working patterns would make it easier for people to get bank loans, etc. As we head to zero unemployment and people shortages, it makes no sense to introduce legislation addressing a practically non-existent problem.”
Meanwhile, Ireland’s jobless rate stood at 6.3% in August, almost three percentage points below the eurozone average of 9.1%, according to official figures released by the Central Statistics Office (CSO).
The unemployment rate for August was down from 6.4% in the previous month, and significantly less than the peak of 15.1% it hit during the financial crisis.
But the CSO figures showed that youth unemployment rose to 12.7% from 12.3% in July.
Alan McQuaid, chief economist with Merrion Stockbrokers, said Irish employment rose in 11 of the 14 economic sectors on an annual basis in the first quarter of 2017.
He forecast an average jobless rate in 2017 of 6.4% against 7.9% in 2016 and 9.4% in 2015.
Zero-hours work explained
A zero-hours contract of employment is a contract without specific working hours. Under such a contract, the employee is available for work but does not have specified hours of work. Anyone with a zero- hours contract enters into a formal arrangement that requires them to be available for a certain number of hours per week, or when required, or a combination of both.
Employees on zero hours contracts are protected currently by the Organisation of Working Time Act 1997 but this does not apply to casual employment.
Under the 1997 Act, an employee under a zero-hours contract who works less than 25% of their hours in any week should be compensated.
Last May, the Government approved legislative proposals from Jobs Minister Mary Mitchell O’Connor and Small Business Minister Pat Breen to strengthen the regulation of precarious work.
The draft proposals are aimed at low-paid workers in particular and address the issue of employees whose contracts do not reflect the reality of their hours worked.
A government statement says the plans include an amendment to the Organisation of Working Time Act which will outlaw zero-hour contracts “in most circumstances”.
“The proposals will stop situations where the stated contracted hours are zero, unless it is genuinely casual work.”