Contracts of Employment: The Cornerstone of the Working Relationship and Reducing Your Risk

Contracts of Employment: The Cornerstone of the Working Relationship and Reducing Your Risk

The contract of employment is the basis of the employment relationship.  It sets out in writing the terms and conditions of that relationship as well as expectations in the form of the duties associated with the position.  It affords clarity and protection to both employers and employees with information in relation to employee rights, notice periods, restraint of trade provisions and confidentiality clauses.

Despite the advantages of having a written contract of employment, we frequently come across scenarios where employees are unaware of their rights because of ambiguity in a contract or employers fail to utilise provisions such as confidentiality clauses, often because they run a relaxed workplace environment where issues are dealt with personally.

We have set out below a helpful summary of the information which employers are legally obliged to furnish to employees at the commencement of employment or very shortly thereafter.

 

The Employment (Miscellaneous Provisions) Act 2018

The Employment (Miscellaneous Provisions) Act 2018 came into force in December 2018.  With effect from the 4th March 2019, employers must notify each new employee in writing within 5 days of the commencement of employment of the following core terms of employment:

  • The full names of the employer and the employee;
  • The address of the employer;
  • The expected duration of the contract, in the case of a temporary contract, or the end date if the contract is a fixed term contract;
  • The rate or method of calculation of the employee’s pay; and
  • The number of hours the employer reasonably expects the employee to work per normal working day and per normal working week.

 

The Terms of Employment (Information) Act 1994 – 2014

Section 3 of the Terms of Employment (Information) Act 1994 – 2014 requires that the following terms and conditions be provided to an employee not later than 2 months after the commencement of the employment:

  • The full names of the employer and employee;
  • The address of the employer in the State or, where appropriate, the address of the principal place of the relevant business of the employer in the State or the registered office;
  • The place of work or, where there is no fixed place of work, a statement specifying that the employee is required or permitted to work at various places;
  • The title of the job or the nature of the work for which the employee is employed;
  • The date of commencement of the contract of employment;
  • In relation to temporary, fixed term or specified purpose contracts, the expected duration and the expected expiration of the contract;
  • The rate or method of calculation of the employee’s pay and the pay reference period for the purposes of the National Minimum Wage Act 2000;
  • A statement setting out that the employee may, under Section 23 of the National Minimum Wage Act 2000, request from the employer a written statement of the employee’s average hourly rate of pay for any pay reference period as provided in that section;
  • The frequency of pay;
  • The terms and conditions in relation to hours of work, including overtime;
  • The terms and conditions applicable to sick pay and pension schemes, if any;
  • The terms and conditions relating to paid leave, if any;
  • The period of notice required from each party to terminate the contract;
  • Reference should be made to any collective agreement affecting the terms of the contract, whether or not the employer is a party to the agreement, including information about the institutions or organisations which drew up any collective agreement which affects the terms of the contract to which the employer is not a party.

 

The Unfair Dismissals Act 1977 (as amended)

The Unfair Dismissals Act 1977 provides that an employer shall give to the employee a notice in writing setting out the procedure which the employer will observe before and for the purpose of dismissing the employee not later than 28 days after entering the contract of employment.

 

SI 146/2000 Industrial Relations Act 1990 (Code of Practice on Grievance and Disciplinary Procedures) (Declaration) Order 2000

This Code of Practice requires that a copy of the grievance and disciplinary procedures be furnished to an employee at the commencement of employment.

 

SI 49/1998 Terms of Employment (Additional Information) Order 1998

SI 49/1998 Terms of Employment (Additional Information) Order 1998 provides that where under the Terms of Employment (Information) Act 1994 an employer is required to furnish written particulars of employment, it must include times and duration of rest periods and breaks referred to in Sections 11, 12 and 13 of the Organisation of Working Time Act 1997 that are being allowed to an employee.  This means that you must provide details of daily rest breaks, rest and break periods at work and weekly rest periods which are being afforded to the employee.  These details can be set out in the employee handbook.

 

The Pensions (Amendment) Act 2002

Employers who do not provide an occupational pension scheme for employees are legally obliged to provide access to a Personal Retirement Savings Account (PRSA) and to facilitate deductions from payroll where requested by an employee.  The employer is not obliged to contribute to the pension.  This is information which should also be expressly set out in the contract of employment.

 

As can be seen from the above summary, the time periods within which information must be furnished to an employee can be very onerous and burdensome on employers.  It is best practice to furnish information in relation to workplace policies and procedures at the same time.   In order to ensure a smooth transition into the workplace, we advise that all information be set out in a contract of employment as well as an employee handbook, which should be signed and returned to the employer in advance of the employee starting work.  This practice will go a long way towards reducing risk and setting good standards for the future working relationship.

 

*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.

**In contentious cases, a solicitor may not charge fees as a percentage or proportion of any award or settlement.

Cara Walsh
Partner
Michelle Loughnane
Senior Associate