Gerald Nash (Louth, Labour)
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I thank the Chairman for the opportunity to appear today to discuss the University of Limerick report, A Study on the Prevalence of Zero-Hour Contracts Among Irish Employers and their Impact on Employees, which was published in November 2015. I am anxious to hear the views of the committee because, following public consultation with stakeholder bodies, we are currently in the process of formalising proposals. This committee meeting is one of the more important engagements in order to capture the view of members on the future direction of this matter. I welcome the committee's own report, Low Pay, Decent Work and a Living Wage, compiled with the help of the rapporteur, Senator David Cullinane. I am joined today by Mr. Derek Sheridan and Mr. David Lockhart, from the Department of Jobs, Enterprise and Innovation's employment rights policy unit.

I will give some background to the issue. The University of Limerick report stems from a commitment made by Government in its statement of priorities which was published in July 2014. The commitment was to conduct a study in the prevalence of zero-hour contracts among Irish employers and their impact on employees and to make policy recommendations to Government. The study was commissioned from the University of Limerick as it was recognised, in the first instance, that there was a knowledge deficit relating to the prevalence of zero-hour contract practices on which we did not have hard data.

There is a lot of talk in Ireland, the UK and elsewhere in Europe about zero-hour work practices but there is no common European definition. In Ireland the definition of a zero-hour contract dates from the Organisation of Working Time Act 1997, which says that a zero-hour contract requires a worker to make himself or herself available for work - to be on call - but with zero or very few guaranteed hours of actual work. The 1997 Act essentially established a floor for workers under these type of contracts. Under the provision in the Act, workers are entitled to be paid at least 25% of the hours they are on call or 15 hours, whichever is less.

While we did not know it in advance of the study, we had a pretty good idea that the 1997 Act was working as intended and that zero-hour contracts would not be the main issue encountered by the researchers. For this reason, when the tender for the study to which I have referred was issued in November 2014, I asked that the key objectives for the study be broadened out to include an examination of the prevalence of both zero-hour contracts and low-hour contracts, which were defined for the purpose of the investigation as eight hours or less per week. Following a competitive tendering process, the University of Limerick was appointed to carry out the study. The terms of reference provided that the study should have a broad scope covering the public and private sectors with a particular focus on the retail, hospitality, education and health sectors. It was required that a broad range of stakeholders should also be canvassed to contribute to the study. They included trade unions, employee and employer representative organisations, trade associations and relevant Government Departments and State bodies.

The University of Limerick found that zero-hour contracts, as defined within the current Irish employment rights legislation, are not extensively used in the State. However, the study did throw up a phenomenon which is completely outside the terms of the 1997 legislation and which is not captured by that legislation. As a result of the study we have introduced a new term to describe this phenomenon. the "if and when" contract. Unlike the worker under a zero-hour contract who is on call for a shift but is not guaranteed any hours of work, the major difference for a worker under an "if and when" arrangement is that he or she does not have to be on call at all. There is simply an understanding between the employer and the worker that work may be offered and the offer may be accepted. There is no underlying obligation on either side and no mutuality of obligation whatsoever.

Given that there is no on-call obligation, the pay floor introduced in the 1997 Act in terms of zero-hour contracts does not appear to apply in arrangements like this.

We need to be clear about one question from the start. We can all agree, I think, that there is at least one issue worth debating about the fairness of an employment contract where both the amount and the timing of the hours of work are entirely variable and unpredictable, and that issue involves balancing the employer's need for flexibility with the employee's need for some level of income security and some certainty around hours worked and his or her life in general. However, what I am raising here is a prior, and perhaps more important, question that is fundamental to this whole argument. If I, as a worker, am notified that an employer may from time to time offer me work but that I am under no obligation to accept it, then it may be that in law this arrangement does not amount to an employment contract at all. That is a fairly fundamental question to answer. In other words, the preliminary question, before we embark on further investigation of this with the committee, is not whether such a term in an employment contract is unfair or exploitative. The preliminary question here is whether there is, in fact, any contract in existence at all. That is a fundamental point. This is because, as I stated, the mutuality of obligations idea is at the heart of contract law. If an employer and worker are not bound together by obligations to keep the promises they have made to each other then they are not parties to a contract of employment and simply saying, "I may offer you work but if you do you are not obliged to accept it", may be interpreted by a court as not giving rise to any contract or relationship whatsoever and, therefore, although this question has not been tested in the courts, it may be the case that employees working under these arrangements have no enduring contract with their employers.

However, it is important as well to point out that there is reasonably significant case law at Labour Court level which essentially looks under the bonnet of working arrangements to establish the actuality of those arrangements in terms of their interpretation of whether or not a contract exists, or the nature of that contract. When these individuals are employees for the duration of their shift only, for example, after each shift one could assume in some cases that they are, in effect, out of a job. That is a fundamental point. This is clearly an important issue and goes to the heart of the issues that we are seeking to examine.

Our employment protection laws have reached some workers in atypical employment. They have been extended in recent years to give protection to fixed-term and part-time workers but they have little or nothing to say about casual labour, perhaps because we, as legislators, had presumed that we had seen the end of that type of phenomenon at any appreciable level. I referred earlier to if-and-when arrangements as a new phenomenon but it might be a little more accurate to class them as a resurrection of an old phenomenon, one we had thought we had seen the back of. If these if-and-when workers have no employment contract lasting any longer than the length of their shift then we are taking a step backwards, I believe, to the era of the Dublin docks in the 1950s, or indeed, the era of the hiring fairs of the 19th century, when an employer could simply pick his daily complement of labour from those lined outside of the workplace whom one might describe as an institutional pool of casual workers who could hope for nothing more than a day's work. That is not something anybody in this day and age could stand over.

That is what is meant by casual labour. It is workers on stand-by, available to work as required, and without any contractual hours or contractual entitlements. In law, casual labour is an employee for only some limited employment rights purposes. While he or she would be entitled to a payslip, he or she would fall outside the protections of other aspects of employment law and employment protection. For example, a casual worker would be outside the protection of unfair dismissals law, redundancy law and much more, simply because the worker would not have clocked up the necessary period of continuous service to qualify.

The University of Limerick report made a range of recommendations. The overall objectives of the recommendation are, as stated by the university, to address the key concerns of employer organisations to retain flexibility and of trade union and NGO bodies to improve the predictability and certainty of hours. The recommendations include a number of specific changes to existing employment rights legislation. The recommendations include that employees should receive a written contract on their first day of their new job. Currently, an employer has two months to issue a contract. That contract should provide a statement of working hours which are a true reflection of those required. There should be a minimum of three continuous working hours where an employee is required to report for work and if there is not, the worker should be paid for the three hours. An employer should give at least 72 hours' notice of any request to undertake work unless there are exceptional unforeseen circumstances. If a worker undertakes extra hours without the minimum notice, he or she should be compensated at 150% of the rate he or she would be paid.

The university also said that legislation should be enacted to provide for employees with no guaranteed hours of work or those on hybrid low hours and if-and-when contracts to take an average of the number of hours worked in the previous six months as the minimum to be stipulated in their contract. Periodic reviews of these hours should be put in place in order that contracts reflect the reality of working hours according to the UL report's recommendations. In addition, employer organisations and trade unions which conclude sectoral collective agreements can opt out of some of the suggested legislative provisions in circumstances where such agreements is entered into.

I emphasise that this was an independent study which was commissioned by the Government and that the conclusions drawn and the recommendations made in the report are those of UL. Therefore, the study does not represent Government policy. We are still considering the submissions made in recent weeks by a range of different stakeholders, with a view to bringing proposals forward over the next period. At its meeting on 3 November, the Government approved the publication of the UL report and my intention is to engage in a public consultation process. The UL report was published on 3 November. In view of the independent nature of the report, public consultation was considered essential by me in order to ensure that all stakeholders and interested parties with views on this matter were afforded a proper opportunity to consider and respond to the report's findings and recommendations. Following publication last November, a consultation process with a closing date of 4 January was launched. We received a total of 47 responses, which are broken down as follows: four submissions came from political interests and public representatives; six from Government Departments and bodies; seven from trade unions and employee representative groups; 23 from employers and employer representative bodies; five from NGOs; and two from the legal profession and related disciplines. In broad terms, the responses received represent what we can clearly say are two diametrically opposed viewpoints. On one hand, the majority of submissions from trade unions and NGOs are essentially in agreement with UL's findings and recommendations. On the other, the submissions from the employer and business bodies are opposed. Given the volume of responses and the closing date of 4 January, I am still considering the submissions with a view to formulating proposals.

In terms of the response to the two issues thrown up by the study, we need a two-stage approach. By all means, we must debate the pros and cons of what is contained in the report. I am very anxious to ascertain the views of members. I am here to listen to what they have to say about the recommendations and to their suggestions as to how we should move forward. For employers, for example, the main advantage of if-and-when contracts are flexibility and reduced costs, although there must be an additional administrative burden in managing a much larger workforce the members of which are all on variable hours. It may well suit some workers - for family, educational or other personal reasons - to do non-standard work for at least part of their working lives. Disadvantages for workers must include the unpredictability of hours and the uncertainty around that, difficulties in managing working life and family life, unstable income and difficulties accessing credit and, as matters currently stand, social welfare benefits under those types of arrangements. These are just a few of the issues that working people will have with these arrangements. We can consider and weigh up the pros and cons and debate the merits of intervening to redress the imbalance in this relationship where many of the risks involved seem to have been transferred to the employee.

I return to the prior question, which is fundamentally important in the context of considering how to move on in this area. We want the relationship to which I refer rebalanced in the details of proposals and we want this to be done in a way that responds to everybody's concerns. Are we willing to see this relationship grounded on contracts that turn out not to be contracts at all? Are we willing to see business reduce costs and increase profits at the expense of what might be termed an underclass of labour that does not even have the benefit of the most basic of entitlements, namely, a written employment contract? That goes to the heart of the matter. Do we, as legislators, want to turn back the clock? Do we want to accept that viewpoint and oversee the growth of a pool of casual workers who, in many cases, will be placed entirely outside of the legislative suite in the context of employment protections? Whatever else we agree - and I think we may all disagree sometimes during the next stage of the debate - we must first agree that we need to bring clarity to the issue of employment status of workers on if-and-when contracts.

We need such clarity for the purposes of our tax laws, social welfare laws and employment protection laws and we need to bring back in these workers from the cold. It very much turns on that issue of the status of an employment contract and what reforms could be introduced to strengthen that from the workers' perspective while at the same time providing flexibility to business to grow and expand in the context of a growing economy. I look forward to hearing the committee's views. I am here to listen to the members today. We will be formulating proposals very shortly to bring to Government but it is crucial that we get the committee's opinions on the next steps in terms of that process.