Banded Hours – Possible Legislation Change & Payroll Impact

By Anne Reilly, founder and CEO of PaycheckPlus

In my previous article, Zero Hour Contracts, I highlighted the impact of a Zero Hour Contract ban on employers and payroll professionals, which would come into effect if the bill “Employment (Miscellaneous Provisions) Bill 2017” passes in its current state. In addition to this I noted that a crucial aspect of the bill would also be enforced, called “Banded Hours”. This Banded Hours provision will also have a significant impact on employers and payroll professionals.

Below I explain what Banded Hours are, the proposed bands, how to find the correct band, how to change between bands, when an employer can refuse to change an employee’s band and find 8 key new requirements for employers and payroll professionals.

What is “Banded Hours”

Banded Hours is a provision in the proposed Employment (Miscellaneous Provisions) Bill 2017. Banded Hours refers to the groups / bands of weekly working hours and legislation that the bill proposes. If this bill passes in its current state, employees on low-hour contracts will be entitled to be placed on a band of working hours if their contract does not specify and reflect the number of working hours that they typically work each week. The band that the employee falls under will be ascertained by averaging the weekly working hours for a period not less than 18 months. Employees in a band are essentially guaranteed the minimum number of hours in that band.

Currently, as of writing, the Employment (Miscellaneous Provisions) Bill 2017 is before Dáil Éireann, in the Second Stage – view the current status of the bill here: status of Employment (Miscellaneous Provisions) Bill 2017.

What Are the Proposed Banded Hours

The bands of weekly working hours are broken into 4 groups / bands as follows:

How Can Employees Change Between Bands?

If an employee believes that they are in an incorrect band a request must be made to the employer in writing. If employees are unhappy with their band and the employer refuses to change their band a claim can be lodged with the Workplace Relations Commission (WRC) in accordance with Part 4 of the Workplace Relations Act 2015. The employer or employee can appeal a decision to the Labour Court in accordance with the Workplace Relations Act 2015 (Section 44).

When Can An Employer Refuse A Banded Hour Adjustment Request?

According to the proposed Employment (Miscellaneous Provisions) Bill 2017, an employer may refuse to place an employee on the band requested:

(a) where there is no evidence to support the claim in relation to the hours worked in the reference period,

(b) where there has been significant adverse changes to the business, profession or occupation carried on by the employer during or after the reference period,

(c) in circumstances to which section 5 applies, or

(d) where the average of the hours worked by the employee during the reference period were affected by a temporary situation that no longer exists.

(Source: oireachtas.ie)

8 Key New Requirements for Employers and Payroll Professionals

Below I have identified 8 key new duties that employers, and specifically payroll professionals, would/could be responsible for if the bill passes in its current state:

1. Determine the correct band for appropriate employees – to do this, find their average weekly working hours for a period of 18 months or more and place them in the corresponding band (see table above)
2. Ensure each employee works at least their minimum working hours or compensate appropriately
3. Determine if a Banded Hour request change should be approved or denied
4. Place the employee, if appropriate, in the correct band within 2 months of their request
5. Put a case together for the denial of a Banded Hour request change
6. Manage band request communications and potential conflicts, including WRC inspections if necessary
7. Ensure all Banded Hours employer obligations are met, for more details visit the Banded Hours section in the Employment (Miscellaneous Provisions) Bill 2017
8. Develop and implement Banded Hours contracts.