How this 'draconian' new employment law could destroy small businesses
The so-called ‘Banded Hours Bill’ is a step too far for employers.
A DRACONIAN NEW employment bill is advancing rapidly through the Oireachtas, which will significantly damage small firms and erode our competitiveness.
The legislation – the so-called ‘Banded Hours Bill’ – contains alarming obligations for employers on the allocation of part-time hours and reduction of bands of hours.
It oversteps the line in dictating to owner-managers how to run their businesses and the fallout for small firms will be devastating.
From the outset, we have had serious concerns that the proposed legislation is totally out of touch with the reality facing many small businesses.
It seeks to wipe out much of the flexibility available in employment relationships – flexibility which is, in many cases, demanded by customer expectations, individual employee circumstances and the sustainability of the business.
As flawed as the approach was in the initial Employment (Miscellaneous Provisions) Bill, a number of amendments introduced by TDs and senators at committee stage in Leinster House have outraged small firms even further.
In particular, the bill now states that where additional hours become available in a workplace, they must be offered to existing part-time employees first, before any new employees can be taken on to carry out the work.
No consideration is given to whether the part-time employee is capable of carrying out the work on offer. It may well be that they lack the skills, qualification or expertise to do the additional hours.
There are a whole range of reasons why an owner-manager may decide to allocate the work to a new employee, but the bill would remove their capacity to decide what is best for their business.
This is a step too far.
Red tape
Existing regulation, legislation and red tape already place a heavy burden on businesses, especially small firms where the owner-manager and sometimes a couple of key employees are responsible for all areas of the company.
Employment law in particular is a complex area that companies have to spend a lot of time getting right. SFA members, however, understand the need for some regulation in this area and are keen to ensure they are compliant.
However, there must be a limit to politicians dictating how an entrepreneur or owner-manager should run their business. The section newly added to the ‘Banded Hours Bill’ is completely unacceptable and may even be unconstitutional in this regard.
When we recall where this bill originated, its scope and level of disruption to management practices is astonishing.
It was published as the government’s response to the perception that ‘zero hours’ arrangements were a growing problem in the Irish economy and that there was regular exploitation of variable hours contracts in Irish workplaces. Its progress has been driven by minority government dynamics and a false distinction between ‘good’ and ‘bad’ jobs.
In fact, the study commissioned by government from the University of Limerick, published in 2015, showed that there were so few zero hours arrangements in the Irish economy as to be almost non-existent as a feature of Irish employment.
The study also found that a small number – in the region of 5% of Irish employees – worked constantly variable hours. This includes the emergency services and other similar areas where unpredictability will always be a central feature.
The low rate of variable hours work suggests that employers only rely on such arrangements where the business needs require it or where employees favour it as a working arrangement.
Employees’ perspective
Flexible employment suits many people at different stages of their lives, including students, artists, parents and carers. There is often a desire within these groups to stay connected to the workforce, developing skills and earning, but they also want the option to decline shifts when it does not suit them to work.
Equally, from the perspective of the owner-manager, they can only continue to employ and pay people to the extent that there is demand from customers for their product or service.
In the case of home care service, for example, families often want two to three hours of home care for their relatives in the morning and/or evening.
In a city, it is easy to see how carers could see a number of patients in one day, but in rural areas this is not always the case.
And when the family goes on holidays for a week or two, there may be no work at all, meaning no income for the home care business with which to pay the carer.
The more real-life scenarios that are considered, the clearer it becomes that flexibility is needed by both employees and employers.
Removing this flexibility could leave certain cohorts of workers isolated from the labour market and could wipe out many small businesses.
Finally, the key terms used in the bill and the small number of exemptions available are so vague that the SFA believes that the legislation is completely impractical.
There is still time for any TDs that understand the reality of business to take a stand against this draconian bill. The small firms of Ireland urge them to do so.
Sven Spollen-Behrens is director of the Small Firms Association (SFA).
