Mr. Adrian Cummins:

I thank the Chair and members of the committee for the invitation to attend today's meeting.

The Restaurants Association of Ireland is the representative body for restaurants throughout Ireland, with over 2,500 members and business owners nationally. The restaurant sector employs 72,000 and contributes €2 billion annually to the economy.

I do not intend to go through our detailed submission which I circulated already to members but I will outline our reasons as to why the Bill is not fit for purpose. At the outset, I believe it is important to note that the Restaurants Association of Ireland is supportive of employment legislation that works for both the employer and the employee. The restaurant sector is a key part of Ireland's tourism product and has been an important contributor to the improvement in Ireland's tourism performance over the past couple of years.

It is essential that the policy environment for the sector is conducive to the survival, growth and maintenance of a high-quality competitive offering. The restaurant sector has a wide geographical spread and supports rural as well as urban economic activity and employment. The sector has a broad geographical footprint and provides valuable full-time and part-time employment in every county around the country.

For most restaurants, labour costs account from close to 40% of total operating costs with profit margins on average between 2% and 5%. Hence, the sector is sensitive to increases in rates of pay. It is a seven-day-a-week business but restaurants' busiest part of the week would be Thursday through to Sunday.

To be a successful restaurant business, one must operate with a large amount of flexibility. Restaurants take bookings for lunch and dinner in good faith. While some operators take deposits, many customers are unwilling to pay deposits for the dinner. No shows for bookings are widespread in the sector and have a negative impact on our daily labour and food costs.

The association is of the view that the Bill, in its current format, does not take into consideration the workings of the restaurant and hospitality business and the realities within which establishments work on a day-to-day basis. If the Bill were to be enacted in its current form, it would have substantial negative consequences for employers and employees. The Bill does not take into account the need for businesses to operate with flexibility.

Under the Bill, it does not appear to matter if the employer does not have work to offer. Given the nature of the restaurant industry, this would be impossible. Many of our member restaurants operate in seasonal areas where they would only be operational between mid-April and mid-October. These businesses are dependent on large numbers of tourists visiting their localities, villages and towns. They provide local employment but if they had to be provide guaranteed hours in the off-season, they would have to close their doors. The Bill does not contain a provision for employers to move employees back to a lower band where necessary, for example, when the season comes to an end or business deteriorates.

The RAI is concerned about section 3, under which employers would be obliged to demonstrate that they cannot provide more hours because they are in severe financial difficulties. No restaurant owners would want to publicise or state that they were in financial difficulty. The restaurant industry operates on tight margins and having to publicise to their local community and competitors that they are in financial difficulty could result in them losing even more business and having to close.

I refer to the study on the prevalence of zero-hour contracts among Irish employers and their impact on employees carried out by the University of Limerick. As pointed out in our submission to the Department of Jobs, Enterprise and Innovation on the UL report, the study which the university was commissioned to undertake was on zero-hour contracts and not on "if and when" contracts. The study found that zero-hour contracts are not extensive in Ireland. The report also states that the Central Statistics Office found that only 5.3% of those working in Ireland are on "if and when" contracts. It also found that of the 57,100 jobs created in 2015, 56,800 of them were full time. Part-time contracts are used in the restaurant, hospitality and tourism sector where there are seasonal fluctuations in work, where it is difficult to predict the minimum level of staff required or where the need for urgent cover can arise. Restaurants increase their workforce as needed during business peaks on Thursdays, Fridays and Saturdays.

The Bill offers zero flexibility for employers whose trade depends on those with disposable income and tourism. It would only increase costs and the administrative burden on restaurants. Banded hours contracts are more likely to have the effect of reducing the total number of employees rather than increasing the total number of hours per employee. We thank the committee for its time and the invitation to attend. We are happy to engage with all stakeholders on the issues raised. I reiterate that were the Bill to proceed in its current form, it would have serious ramifications for the restaurant industry, increasing costs as well as affecting the ability of restaurants to expand and create new jobs.