New Year, new law: Ireland implements the EU Directive on Transparent and Predictable Working Conditions

On 16 December 2022, EU Directive 2019/1152 on Transparent and Predictable Working Conditions (the Directive) was transposed into Irish law by the European Union (Transparent and Predictable Working Conditions) Regulations 2022 (the Regulations).

The Directive aims to improve working conditions by promoting more transparent and predictable employment while ensuring labour market adaptability. In Ireland, many of the provisions of the Directive were already a part of the existing employment law framework. However, there are some important changes introduced by the Regulations which all employers should be aware of, as changes to their standard contracts of employment will likely be required on foot of these changes.

Information requirements

Under the Employment (Miscellaneous Provisions) Act 2018 employers are already required to provide their employees with a written statement of terms and conditions of employment within 5 days of commencement (the Day 5 Statement). This statement must contain the following terms:

• The full name of the employer and the employee
• Address of the employer
• Duration of the contract (if the contract is temporary or fixed-term)
• Details of remuneration and the pay reference period; and
• Working hours per normal working day and per normal working week

The Regulations have expanded the information to be provided in the Day 5 Statement. The Day 5 Statement must now contain the following information (which is in addition to the information already specified under the Employment (Miscellaneous Provisions) Act 2018):

• Where a probationary period applies, its duration and conditions
• The place of work or, where there is no fixed or main place of work, a statement specifying that the employee is employed at various places or is free to determine his or her place of work or to work at various places
• The title, grade, nature or category of work for which the employee is employed or a brief description of the work
• The date of commencement of the contract of employment
• Any terms and conditions relating to hours of work (including overtime)

Separately, all other terms of employment required to be given to the employee under the Terms of Employment (Information) Act 1994 must now be provided to the employee within one month (as opposed to two months as was previously the case), including:

• A reference to any registered employment agreement or order which applies to the employee and where the employee may obtain a copy of such agreement or order
• Intervals at which remuneration is paid e.g. weekly or monthly
• Terms and conditions in relation to paid leave including paid sick leave as well as the terms and conditions relating to incapacity to work due to sickness
• Terms and conditions relating to pensions and pension schemes
• The notice period the employee is entitled to give and receive and
• Collective agreements which directly affect the employee

In addition to these terms, the following terms must be included:

• Details of the training (if any) provided by the employer
• In the case of a temporary agency worker, the identity of the end-user
• If the working pattern of the employee is completely (or mostly) unpredictable, a reference to the work schedule being variable, the number of guaranteed paid hours and the remuneration for any work performed in addition to those guaranteed hours. There also needs to be detail on the reference hours and days within which the employee may be required to work and the minimum notice period the employee is entitled to before the start of a work assignment and
• The identity of the social security institutions receiving the social insurance contributions paid by the employer

Where there is any change to an employee's terms, the employer must notify the employee in writing of the change no later than the day on which the change takes effect (as opposed to within one month as was previously the case).

An employer who fails to provide the required Day 5 Statement is guilty of an offence and could be held liable on summary conviction. There would also be the potential for an award of up to four weeks remuneration under the Terms of Employment (Information) Act 1994 if employers failed to provide the terms of employment required to be given to the employee under this Act (or indeed if there was a failure to properly notify employee of changes to terms).

Probationary periods

One of the key changes is the introduction of a statutory limit on probationary periods. Probationary periods must, as a general rule, now be limited to 6 months duration. In exceptional circumstances probationary periods can be extended beyond this period up to a maximum of 12 months if it is in the interest of the employee to have a longer probationary period. It is also possible to extend the probationary period beyond 6 months if the employee was absent from work on certain grounds (e.g. sick leave, maternity leave etc.) during the probationary period.

The Regulations provide that where an employee is currently subject to a probationary period which exceeds 6 months and the employee has completed at least 6 months' service, the probationary period will expire on the earlier of:

• 1 February 2023 or
• the day on which the probationary period was due to expire

Employers with employees on probation impacted by this legislative development would be well advised to engage with those employees as soon as possible and explain the impact of this on their probationary period and the employer's associated decision making process.

For fixed-term contracts, probationary periods must be proportionate to the length and the nature of the contract. When renewing a fixed term contract for the same function, probationary periods cannot be included again in the terms of the contract.

Exclusivity of service

The Regulations provide that employers must not prohibit employees from taking up additional employment outside of their work for that employer. Employees are also now protected from being subjected to adverse treatment for doing so.

However, an employer can restrict an employee from taking up additional employment if the restriction is proportionate and based on objective grounds. The Regulations contain a non-exhaustive list of objective grounds which include:

• Health and safety
• Protection of business confidentiality
• Avoidance of conflicts of interest and
• Compliance with applicable statutory or regulatory obligations and professional standards

Where an employer does seek to restrict an employee from taking up additional employment, then one of the following requirements must be met:

• details of the restriction (including details of the objective grounds being relied upon) must be included in the contract, or
• a statement in writing setting out the restriction (including details of the objective grounds being relied upon) must be furnished to employee. 

Mandatory training

If an employer is required by law or collective agreement to provide training to employees to enable them to carry out the work they are employed to do, this training must be provided to the employee free of charge, during working hours (if possible) and counted as working time (i.e. paid).

Minimum predictability of work

The Organisation of Working Time Act 1997 has been amended by the Regulations with the intention of strengthening the predictability of working hours. In particular, the provision of the Act that requires employers to notify employees at least 24 hours in advance of their working hours, subject to unforeseen circumstances, has been amended. Employers are now required to ensure a work assignment takes place within the reference hours and days notified to the employee as part of their written terms. If the notice of a work assignment is not within the minimum notice period of 24 hours or the work assignment takes place outside the reference hours and days, the employee may refuse the work assignment and should not be subjected to adverse treatment for doing so.

Employment outside the State and posted workers

Where an employee is a posted worker within the meaning of the European Union (Posting of Workers) Regulations 2016, the following additional information must now be provided:

• the remuneration to which the employee is entitled in accordance with the applicable law of the host Member State
• where applicable, any allowances specific to posting and any arrangements for reimbursing expenditure on travel, board and lodging, and
• the link to the single official national website (Internal Market Information System) developed by the host Member State pursuant to Regulation (Regulation (EU) No 1024/2012)

The written statement to be provided to employees who are required to work outside the State for one month or more must contain details of: the anticipated period of employment, the currency of the employee's remuneration, any benefits in cash or kind attendant on the employment outside the State and, if applicable, the terms and conditions governing the employee's repatriation. In addition, this written statement must now include details of the country or countries in which the work outside the State is to be performed.

Collective agreements

The Regulations include a carve-out for certain collective agreements. Many of the provisions of the Regulations do not apply where the employment in question is governed by a collective agreement approved of by the Labour Court or a Registered Employment Agreement and the agreement covers that provision.

Main actions for employers

• Review and update template employment contracts. It is important to ensure that all of the relevant terms of employment required to be given under Terms of Employment (Information) Act 1994 and the Regulations are included
• Review and, if necessary, update existing probationary clauses and policies
• Consider the impact which the Regulations may have upon employees who are currently subject to probationary periods
• Review mandatory training requirements.

Conclusion

Given the time of year at which the Regulations were introduced, many employers may not yet be aware of them and of the actions they now need to take to ensure compliance with the new legislative requirements, in particular as they relate to what now needs to be included in an employee's contract of employment.

The impact of the Regulations will most likely be felt by employers when it comes to the management of employees on probation, with the clear statutory expectation being that the default maximum probationary period will be six months. This will require many employers to change their contracts and probationary policies but, perhaps more fundamentally, accelerate their decision making in relation to whether or not an employee has performed satisfactorily to pass probation. In the immediate term, employers with employees on probation for longer than six months do need to consider the impact of the Regulations on each individual on probation and to do so in the next two weeks.

For further information in relation to this topic please contact Éinde O'Donnell, Senior Associate, or any member of ALG's Employment Team.