by Gemma O’Connor, Services and Operations Manager at Peninsula
A contract of employment can be a tricky HR document for business owners who aren’t familiar with Irish employment laws.
When preparing or updating an employment contract, there are certain key terms and conditions to consider.
In this article, we cover what a contract of employment is, the key terms and conditions to include, and some considerations if you need to make changes to an existing contract.
What is a contract of employment in Ireland?
A contract of employment in Ireland is an agreement between an employer and employee that sets out the essential terms and conditions of the employment relationship.
The type of contract a new starter receives should reflect the details of their role and confirm certain information in writing as required under various Irish employment laws.
The 5 Day Statement
All employers must provide staff with a ‘5 Day Statement’ in writing. This document notifies each new employee within five days of commencing employment of specified core terms of employment.
Under the Transparent and Predictable Working Conditions Regulations (introduced in December 2022), the core terms to be included in the 5 Day Statement are:
- The full name 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 of the contract if it is a fixed-term contract.
- The rate or method of calculation of the employee’s pay.
- The number of hours the employer reasonably expects the employee to work per normal working day/week.
- The duration and conditions relating to a probationary period, if applicable.
- 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 contract of employment.
- Any terms and conditions relating to hours of work (including overtime).
Once the 5 Day Statement has been issued, employers are required to provide full written terms of employment in line with the Terms of Employment (Information) Act 1994 within one month of commencement of employment.
What are the essential elements of an employment contract?
Three types of contractual terms tend to make up a contract of employment. We explore them in more detail below:
Express terms
The express terms of an employment contract are those that are drawn to the attention of the employee. These can be written into the contract or communicated to the employee verbally.
Implied terms
Other terms of an employment contract may be implied into the employment relationship through custom and practice. They haven’t been put in writing or communicated to the employee but it is so obvious to both parties from custom and practice that it doesn’t need to be specified in writing.
Statutory terms
Some terms are inserted into a contract of employment through statute.
For instance, if a payment of wage clause sets out a rate below the national minimum wage rate, the clause in the contract will be rendered void and the national minimum wage rate will apply.
How can I update an employment contract?
Unless a change you want to make to an employment contract is required by legislative updates, administrative provisions, or collective agreements referred to in the contract, you will need to ask the employee for their agreement to any proposed changes and get their confirmation in writing.
If the change applies to either an express or implied term and you don’t seek the employee’s consent, the question becomes one of reasonableness. To confirm a change, it must be reasonable for you to make the change and reasonable for the employee to accept it.
You may have a variation clause in your contract permitting you to make certain unilateral changes to a contract. Even in these circumstances, it may be possible for an employee to refuse to agree to a change if it would be unreasonable for them to accept it.
