Mr. Tim Fenn:

I thank the Chairman, Deputies and Senators for inviting the Irish Hotels Federation, IHF, to address the Joint Committee on Jobs, Enterprise and Innovation. The IHF which was founded in 1937 is the national representative organisation for the hotel and guesthouse sector. As a key stakeholder in Irish tourism, we work with our industry partners to ensure there are the right conditions for tourism to grow and prosper, thereby enabling it to contribute to recovery and job creation in the economy. We welcome the opportunity to contribute to the work of the committee on the Banded Hours Contract Bill 2016. I stress that the IHF is supportive of employment regulation that is balanced and proportional and that takes into account the requirements of employers and employees in an equitable manner.

We have serious concerns that the Bill would impose disproportionate and excessive restrictions on employers in the tourism and hospitality sector by limiting their ability to manage the flow of work in their businesses. The hospitality business requires a level of flexibility in order to respond effectively to varying levels of customer demand, which is seasonal in nature. Employers must be able to respond to fluctuations in staffing requirements on an ongoing basis. For example, a premises may be asked to cater for a large event on short notice. When this arises, hotels examine their staffing requirements, looking first at their full-time and part-time employees and seasonal staff, including students, and perhaps a small pool of additional staff that would be available to be called upon on a voluntary basis. This approach is mutually beneficial for both the employer and employee and provides a degree of flexibility that is required in the sector.

Before outlining our specific concerns about the Bill, I would like to comment briefly on the study carried out by the University of Limerick. This study showed little evidence of the use of zero hours contracts in Ireland. We are not aware of any of our members who operate this type of contract. The report also cites that only 2.6% of employees in Ireland are working variable hours on a part-time basis, which is very low and this includes those who are satisfied with this arrangement, as their preferred option.

The following provisions of the Bill give cause for serious concern. Section 3 poses a particular concern in that it effectively eliminates the ability of businesses to determine the number of hours they can provide to an employee. Section 3(1) in effect means that the new minimum number of hours for a given employee after six months has to be greater than the average number of hours worked during the previous six months. This would result in the employer being required to provide in an ever increasing minimum number of hours for a given employee. This would require the employer to provide more hours than the business can justify. We view the six month reference period as extremely short. It would be detrimental to tourism related businesses given the seasonal variations in the industry. In particular, the Bill does not allow for situations where the number of hours worked in a six month period is irregular or exceptional.

We also have serious concerns about the provision in section 3(4) which provides that an employer can only refuse an employee’s request for additional hours if the business is experiencing severe financial difficulties. This is excessively restrictive and entirely unsuitable for businesses that require flexible working arrangements in order to meet varying customer demand.

In response to the five specific matters identified for consideration by the committee, the first area relates to low hour and zero hours contracts. As noted earlier, zero hours contracts are not found to be prevalent and levels of variable part-time contracts are very low. As to whether zero hours contracts should be banned, we believe that a legislative response banning zero hours contracts would be excessive and disproportionate. While zero hours contracts are not prevalent in Ireland, under certain circumstances there may be a desire on the part of both employees and employers that they should remain in place, where such arrangements are mutually beneficial. Any legislative change should therefore only be implementedbased on credible evidence demonstrating a clear need which we believe does not exist.

As towhether the Bill provides sufficient flexibility in its application for small businesses, employers in the hospitality sector, including hotels and guesthouses, need to be in a position to respond to varying levels of customer demand. Examples include when events catered for by a premises arise at short notice and the seasonality of tourism levels during the year. This requires a level of flexibility that would be seriously adversely affected by the proposed Bill. The impact on a small seasonal hospitality enterprise, the backbone of Irish tourism, would be even more pronounced and would be detrimental to their ability to effectively manage their businesses. It is therefore very concerning that the Bill does not provide any flexibility in its application for small businesses and creates a new level of administrative burden.

As to whether workers should be able to request a minimum set of hours, it is our view that it would be detrimental to businesses for employees to have a statutory right to vary the terms of their contracts of employment. Such a right would have serious consequences for competitiveness and for employment in our industry.

On the question of changing the remit of the Low Pay Commission, we do not believe the remit of the commission should be extended to review proposals on banded hours contracts. The priority of Government should be to review available enforcement measures as opposed to responding by introducing additional legislation that would have substantial unintended consequences.

In carrying out scrutiny of the Bill, the Irish Hotels Federation, IHF, would urge the committee to take into account the realities employers face when managing flows of work in their businesses. In particular, we urge the committee to consider the disproportionate adverse impact the proposed restrictions would have by limiting flexibility, increasing costs and imposing an unnecessary additional legislative burden businesses.

I thank the Chair for the opportunity to address this Oireachtas Joint Committee and we look forward to addressing any matters that the members may wish to raise