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The Employment Contract

Important Lessons from High Court Fixed Term Contract Case

A recent High Court case involving a teacher and a school board of management in an employment dispute is worth looking at. The case is The Board of Management of Malahide Community School v Conaty [2019] IEHC 486 and you can read the full decision of the High Court here.

The High Court decided that the fixed term contract that the school gave to Ms Conaty was void because it had the effect of depriving her or protections she had already acquired under statute, particularly the Unfair Dismissals Act 1977.

The focus of this piece, however, is not Ms Conaty’s case per se but what wider lessons we can learn from the decision.

Protection for employee waiving her employment rights

Section 2(2) (b) of the Unfair Dismissals Act 1977 is described in the act as an exclusion. The High Court has decided that it is, in fact, a waiver.
Section 2(2) (b) states,

(b) dismissal where the employment was under a contract of employment for a fixed term or for a specified purpose (being a purpose of such a kind that the duration of the contract was limited but was, at the time of its making, incapable of precise ascertainment) and the dismissal consisted only of the expiry of the term without its being renewed under the said contract or the cesser of the purpose and the contract is in writing, was signed by or on behalf of the employer and by the employee and provides that this Act shall not apply to a dismissal consisting only of the expiry or cesser aforesaid.

The Judge in this case held that if the employee is to sign a contract containing this waiver their consent needs to be given at the commencement of the employment and the consent must be informed.

The Court referred to section 13 of the Unfair Dismissals Act 1977 which states

 13.—A provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of this Act) shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with, any provision of this Act.

The High Court recognised that Freedom of contract is severely restricted by section 13 of the Act. Any provision in an agreement which purports to exclude or limit the application of, or is inconsistent with, any provision of the Act is void.

But how is this restriction on an employee ever contracting out of their rights allowed in, for example, settlement agreements?

The High Court recognised that However, there is case law which suggests that—at least in the context of settlement agreements—an employee may be entitled to waive their rights on the basis of informed consent.

Therefore, if an employee is to enter into an agreement, whether a contract of employment or settlement agreement, his/her informed consent must be obtained in advance, not retrospectively. This is an important lesson for employers to take from this case and it has wider application to employment settlement agreements.

Fixed term contract

For a contract to be classified as a ‘fixed term contract’ as envisaged by section 2(2)(b) the term of the contract must be fixed-that is, the termination date must be ascertainable at the outset.

And not reliant on variables or contingencies such as teaching hours continuing to be available and/or demand for the subjects continuing.

In this case the contract contained this clause,

“The temporary contract will commence on 30 August 2015* 8th October 2015 and will terminate of 31 August 2016 subject to satisfactory service during the probationary period. The temporary contract may be renewed for a continued period in the event that the allocated hours as specified above continue to be available and the demand for these subjects continues.”

The Judge decided that the contingencies set out in this clause meant that it was not a fixed term contract as the termination date was not ascertainable.

Conclusion

The lessons to be extracted from this case are important and of potentially wider application, especially regarding an signing a waiver of their rights and the possibility of employees claiming that they are not, in fact, on fixed term contracts by reason of the contingencies in their contract of employment.

Read the full decision in

The Board of Management of Malahide Community School v Conaty
[2019] IEHC 486

Categories
The Employment Contract

Counter-offers in the Formation of Binding Contracts-What You Should Know

counter-offer

I am occasionally contacted by employees who have attempted to negotiate a contract of employment but difficulties have arisen and they want to sue for breach of contract.

The first thing that needs to be addressed, however, is whether a binding, enforceable contract has been entered into between the employee and the employer with whom he is negotiating.

It is not always crystal clear.

Let’s take a look at how binding contracts come into existence, shall we?

In order to form a binding contract you need three things:

  1. Agreement
  2. Consideration
  3. Intention to form legal relations

In assessing whether agreement has been reached between the parties the role of counter-offers is an important one..

Offer

For agreement to be reached an offer must be made and the offer should be clear and unambiguous as to the terms on which the offeror is willing to contract.

If statements are made in negotiations but are not intended to conclude in a contract these statements are called ‘an invitation to treat’.

Acceptance

Acceptance is a final and unequivocal expression of agreement to the terms offered.If the offeree intentds acceptance of the offer he must communicate this acceptance to the offeror.

Counter-offers

Counter-offers can muddy the waters, however, because if the response by the offeree is not a clear and unconditional acceptance of the offer the response may be considered a counter-offer which in turn may be accepted or ignored by the offeror.

If an offer is met with a counter-offer this has the effect of rejecting the original offer. And if the counter-offer is refused the initial offer cannot now be accepted.

Conclusion

You need to be careful in any negotiations you enter into, whether in negotiating a contract of employment or any other contract, and be clear as to whether you are making a counter-offer or merely seeking further information or clarification about the terms of the offer.

You can learn more about contract law in Ireland here.

Categories
The Employment Contract

Probation in the Irish Workplace-the Essentials

Most employees are put ‘on probation’ in a new employment before their position is confirmed.

Most employment contracts will state that the position will only be confirmed on satisfactory completion of the probationary period.

A typical clause in an employment contract will read ‘Subject to satisfactory completion of the probationary period specified below, you will be employed on a full time permanent basis until your employment is terminated by either party giving to the other the notice period specified in the notice clause’, or words to that effect.

Employee suitability

During the probationary period the employee’s suitability for the role will be assessed and it also allows the employee become integrated into the organisation and learn the ethos of the employer’s business.

The duration of a probationary period can range from 3 months to 11 months but should not exceed 12 months, regardless.

Also, even if a probationary period is for 6 months there will almost certainly be a provision in the contract for the extension of the period up to the maximum 11/12 months.

Review meetings

Regular review meetings should be held during probation and feedback given to the employee as to how she is doing with a final meeting just before the end of the probationary period. If the employee is underperforming, she should be advised of this as soon as possible.

At the end of the probationary period the employee should be told whether they have passed, failed, or the period is to be extended.

If the final decision is termination the likelihood is the contract will provide for only 1 week’s notice from the employer during the probation period. The employee may have the right to appeal this decision but the full panoply of policies and procedures-such as disciplinary and/or grievance and/or dignity at work-will not be open to the probationary employee.

However, there will be some method by which a formal grievance or complaint may be made by the employee and there will be a disciplinary procedure, albeit a truncated or amended version of the full procedure.

Probation dismissal

As an employee who is dismissed on or at the end of probation he will not have the necessary 12 months’ service to avail of the reliefs provided by the Unfair Dismissals Act 1977.

There are some limited remedies open to the employee, however, which do not require 12 months’ service. Such claims would be founded on a discriminatory ground or perhaps for having made a protected disclosure.

Further reading

Options open to probationary employees

Advice for employees on probation

Categories
The Employment Contract

The 5 Day Statement of Core Terms When Commencing Employment

Are you an employer?

Did you know that since 4th March 2019 you are obliged to give a statement of ‘core terms’ to the employee within 5 days of her commencing employment?

This is known as the ‘5 day statement’ and is pursuant to section 7 of the Employment (Miscellaneous Provisions) Act 2018 and the Terms of Employment (Information) act ,1994 and 2001.

The statement must contain the following particulars:

  • The names of the employer and employee
  • The address of the employer
  • The duration of the contract
  • The rate or method of calculation of pay/remuneration and the pay reference period for the purposes of the National Minimum Wage Act 2000
  • The number of hours the employee will be expected to work per normal day and per week
  • Any applicable employment regulation order or sectoral employment order

You can download a template statement from the Workplace Relations Commission website here.

Categories
The Employment Contract

New Employment Law Provisions in 2019: Zero Hours Contracts, Banded Hours Contracts, Criminal Penalties for Employers

zero hours contracts

The Employment (Miscellaneous Provisions) Bill, 2017, when passed into law in Ireland-expected to commence in March 2019-will bring about some significant changes for Irish employers and employees. In fact, it makes certain breaches of the act a criminal offence: if the employer incorrectly designates an employee as ‘self-employed’, for example.

(This bill became law on 4th March, 2019: Employment (Miscellaneous Provisions) act 2018.)

Purpose of the bill

The main thrust of this new law is to deal with ‘precarious work’, zero hours contracts, and uncertain working conditions for employees in industries which would have relied on a great deal of flexibility in the employment contract; service industries such as retail, hospitality, and tourism for example.

Most employers in these industries have made ample use of flexible working arrangements to meet the needs of their business, especially long working hours and seasonable peaks and troughs in trade and the demand for staff.

Main elements

The significant elements of this bill are

  1. The employer must give a written statement of 5 core terms of employment within 5 days of starting employment.

    These 5 terms are
    a) the full name of employer and employee
    b) the address of the employer
    c) the expected duration of the employment contract
    d) the method of calculating or rate of pay
    e) the expected normal working day and week

    Failure to provide this statement can lead to the criminal prosecution of the employer.

  2. Banded hours provisions

    The employee has a statutory entitlement to a banded hours contract where their contractual working hours over the previous 12 months do not reflect their actual working hours. If the employee requests such a contract he must be given the banded hours contract unless

    i) the employee’s claim is not supported by evidence
    ii) there have been significant adverse changes to the employer’s business in the previous 12 months
    iii) the hours worked in the previous 12 months were brought about by a temporary situation which no longer exists

    There are 8 different bands as follows:
    Band              From                     To
    A                     3 hours                 6 hours
    B                     6 hours                 11 hours
    C                     11 hours              16 hours
    D                     16 hours              21 hours
    E                      21 hours              26 hours
    F                      26 hours              31 hours
    G                     31 hours              36 hours
    H                     36 hours and over           

    Once an employee is placed on a particular band she is entitled to work an average of those hours for the following 12 months.

  3. Designation of employees

    An employer can be held criminally liable if she incorrectly designates and employee as ‘self employed’. Imprisonment of up to 12 months and fines of up to €5,000 are the maximum penalties.
    The employer has a defence, however, if he can show that he exercised due diligence and took all reasonable precautions when arriving at the designation.
  4. Prohibition of zero hours contracts

    Zero hours contracts will be prohibited unless used in specific exceptional circumstances of genuine casual employment and where they are essential for the needs of the business in the short term or in emergency situations.

  5. Continuity of employment

    Employees who are given a series of fixed term contracts will be deemed as being on layoff and will accumulate ‘continuous service’ for the purpose of protections from various employment law statutes.

  6. New minimum payment

    There will be a new minimum payment entitlement for employees who are not called into work on any given week. The employee will be entitled 25% of their weekly contracted hours.

  7. Strong penalties for employers

    The bill provides strong sanctions against employers for penalising employees who seek to enforce their rights under this bill and also strong penalties for not implementing the provisions of this bill.

New minimum wage rates from 4th March, 2019

Rates on or after 4 March 2019

Min hourly rate% of min wage
Minimum wage9.80100
Aged under 186.8670
Aged 187.8480
Aged 198.8290


Since 4 March 2019 trainee rates are abolished.

You can learn more about the Employment (Miscellaneous Provisions) Bill 2017 here.

Here is the Employment (Miscellaneous Provisions) Act 2018.